COH: Don’t Try to Catch Flailing Coach Stock

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Fashion is a fickle business. A brand can become a household name overnight if the right celebrity is seen wearing it. But all it takes is a single bad season, or a new fashion darling to catch the eye of the fashionistas, to torpedo a decades-old premium brand.

Unfortunately for handbag and accessory maker Coach (COH) — as well as the embattled holders of Coach stock — the winds of fashion appear to have shifted.

Shoppers — and particularly American shoppers — have fallen out of love with Coach’s wares. And COH has been powerless to stop rival Michael Kors (KORS) from cutting deeply into its market share.

A Quick Look at Coach Earnings

First-quarter Coach earnings just came out, and it wasn't pretty:

Sales were down 21% in North American stores open more than a year. Company-wide, sales were down 7% for the quarter, or 5% stripping out the effects of currency moves. Not surprisingly given the sluggish sales, COH's margins took a hit across the board; gross margin fell to 71.1% from 74.1% a year ago, and operating margins tumbled to 23.9% from 29.3% Earnings for the quarter declined from 84 cents per share in the first quarter of 2013 to 68 cents last quarter.

Investors didn't take the news well; shares of Coach stock are down more than 8% on the news.

Yet as dismal as the COH results were, there was a fair bit of good news buried in the press release.

For instance, Chinese sales rose 25%, and Chinese same-store sales rose at a double-digit rate — and this despite the slowdown in the Chinese economy. International sales grew at 14% and 20% if you strip out the effects of currency moves. Sales of men's products were also "strong," though specifics were not provided in the press release. And management maintained the dividend of Coach stock at 33.75 cents, offering a yield of 2.9% at current prices.

So … what’s an investor to do? Has Coach stock now become an attractive value play after the slide?

COH: One Big Hang-Up

At first glance, there is a decent bit to like. Coach stock is relatively inexpensive, trading for less than 15 times consensus 2014 earnings estimates of $3.13 per share. And while margins have slipped, COH is still a wildly profitable company. Coach's return on equity has consistently been above 30% since 2001. COH also has been a dividend-raising machine, more than tripling the quarterly payout to Coach stock since initiating a dividend in 2009.

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And let's not forget the success the company has had in China and in pushing new product lines, such as accessories for men.

There's one big problem, however.

COH is still very dependent on American women, the key demographic that has abandoned the brand. 543 of Coach's 1,011 stores are in North America, and the region accounts for 60% of sales. Another 199 stores are in Japan — a country with tepid domestic demand and a currency that I believe to be in terminal decline. COH has 147 stores in China and another 96 in other parts of Asia. Together, these make up nearly a quarter of Coach's store count.

So, an investment in Coach stock is essentially a bet that either the Coach brand stages a major comeback among American women, or that its popularity abroad surges ahead fast enough to compensate for declines in North America.

Sure, a fashion comeback could happen. However, accomplishing a turnaround in fashion is trickier than accomplishing one in, say, industrial machinery. Once a brand loses its cachet, it's hard to get it back.

What about international sales? Here, the outlook is better, and I expect Coach to benefit from a turnaround in emerging-market currencies. But if the brand has lost its appeal among American women, it might be just a matter of time before their sisters in China and other emerging markets follow suit.

Bottom line: It's probably best to sit this one out for now. Avoid Coach stock.

Charles Lewis Sizemore, CFA, is the editor of Macro Trend Investor and chief investment officer of the investment firm Sizemore Capital Management. As of this writing, he did not hold a position in any of the aforementioned securities. Click here to receive his FREE weekly e-letter covering top market insights, trends, and the best stocks and ETFs to profit from today's best global value plays.

Pending Home Sales Jump, End Losing Streak

Justin Sullivan/Getty Images WASHINGTON -- Contracts to buy previously owned U.S. homes rose in March for the first time in nine months, a sign the housing market could be stabilizing after suffering a setback from a rise in interest rates and a severe winter. The National Association of Realtors said Monday its pending home sales index, based on contracts signed last month, increased 3.4 percent to 97.4. The increase beat economists' expectations for a 1 percent advance. These contracts usually become sales after a month or two, and March's rise suggested home resales could rebound in the months ahead. Sales stumbled last summer after that the U.S. Federal Reserve signaled it would soon reduce its economic stimulus efforts, pushing interest rates higher. A harsh winter also helped keep potential buyers out of the market. "The stronger pending home sales report hints at resurgence in housing market momentum during the typically busier spring buying season," said Gennadiy Goldberg, a strategist at TD Securities. Goldberg said the data suggested housing would continue to support U.S. economic growth in the coming months. The U.S. economy hit a slow patch over the winter, which was particularly harsh in much of the country, but growth is expected to rebound during the rest of 2014. The U.S. Labor Department is expected to report on Friday the economy created 210,000 jobs in April. Prices for U.S. stocks opened higher Monday, while the yield on 30-year U.S. government bonds rose following the release of the housing data. Existing home sales had fallen to their lowest levels in more than 1½ years, but details of Monday's report suggested the downward trend in sales had probably run its course, with housing inventory rising and more first-time buyers coming into the market. Despite last month's surge, pending home sales were still down 7.9 percent compared to March of last year. Contracts increased in the Northeast, in the South and in the West. They fell in the Midwest.

Is JPMorgan Still Undervalued?

With shares of JPMorgan Chase & Co. (NYSE:JPM) trading at around $53.40, is JPM an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

The Financial sector is in an interesting position right now. On the positive side, home prices have been increasing, loan defaults have been decreasing, the stock market has consistently moved higher, interest rates are finally moving higher, monetary stimulus is now on a global level, and cost-cutting has led to increased profitability. However, while some of these are real positives, we should take a closer look at some others.

Are home prices increasing due to speculation? Much of the recent real estate boom has been in thanks to invest firms looking to make profits, not families going out and buying new homes because their pocketbooks are fat and they can afford an upgrade. The stock market is an important factor because financials almost always move with the market. The big question here is when (or if) Bernake will begin to taper. It could be later this year, but that's not likely. It's more likely that Bernake put that possibility out there to see how markets would react. With unemployment ticking up, it's less likely that he will move. This is good news for the stock market, but it also indicates that the economy is weaker than had been anticipated by many. Yes, it's an interesting and wacky world we live in at the moment. As far as cost-cutting goes, this is good for bottom lines, but considering much of this cost-cutting comes in the way of layoffs, this isn't going to boost consumer spending. This trend is taking place in many industries.

Looking closer at the interest rate situation, the cost of mortgages are increasing, and there has been a recent decline in refinancing old loans. On the other hand, mortgage applications are still on the rise. The big question here is whether or not interest rates and the economy can grow at the same time. Many economists are predicting this to be a possibility. That seems to be overly ambitious. In addition to domestic dilemmas, rising interest rates will lead to increased borrowing costs for other counties, which are currently dealing with massive debt burdens. The good news for those investing in the stock market is that interest rates have the potential to come back down. (Note: This isn't to say interest rates should remain at record lows. This is what caused many problems in the first place.)

Other negatives include Europe as well as domestic regulations. For JPMorgan, an added negative has been the London Whale debacle, which never seems to go away. CEO Jamie Dimon recently had an interesting quote regarding this issue: "We did what was the right thing to do. No hiding, no lying, no bullshit. Period!" He then went on to apologize for the trade that lost more than $6 billion – again.

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Speaking of Jamie Dimon, some investors love him and some don't. Those who happen to be unsure might want to know what 2,410 JPMorgan employees think of him. According to Glassdoor.com, 86 percent of employees approve of Jamie Dimon. This is a high number, and it shows that employees trust their leader. As far as company culture, employees have rated their employer a 3.3 of 5, and 64 percent of employees would recommend the company to a friend.

JPMorgan is currently trading at just 10 times earnings whereas Bank of America (NYSE:BAC) is trading at 41 times earnings, and Citigroup (NYSE:C) is trading at 18 times earnings. Profit margin is a great measure of efficiency. JPMorgan has a profit margin of 24.90 percent whereas Bank of America has a profit margin of 6.43 percent, and Citigroup has a profit margin of 13.81 percent. JPMorgan's profit margin has steadily improved since 2009, and it should continue to grow. So far, it looks as though JPMorgan is the best investment.

To further the strengthen the bull case for JPMorgan when being compared to peers, it currently yields 2.80 percent whereas Bank of America yields 0.30 percent, and Citigroup yields 0.10 percent. Bank of America and Citigroup would offer a higher yield if they felt comfortable doing so. In other words, it's a good sign that JPMorgan is comfortable offering a 2.80 percent yield.

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JPMorgan has seen a decline in revenue over the past three years, but the company's focus is the bottom line. Earnings have consistently improved on an annual basis. Financial sector earnings are also expected to improve in Q2.

Let's take a look at some important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

Despite all the drama, JPMorgan has been on a tear over the past year.

	1 Month	Year-To-Date	1 Year	3 Year
JPM	9.77%	23.84%	68.53%	50.81%
BAC	0.92%	13.28%	81.06%	-14.73%
C	2.71%	26.62%	89.29%	29.38%

At $53.40, JPMorgan is trading above its averages.

50-Day SMA	51.38
200-Day SMA	47.86

E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for JPMorgan is stronger than the industry average of 2.10.

	Debt-To-Equity	Cash	Long-Term Debt
JPM	1.58	954.87B	725.60B
BAC	1.36	502.26B	617.76B
C	1.46	754.95B	560.08B

E = Earnings Have Been Strong

Earnings have consistently improved on an annual basis.

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in millions	101,491	115,632	115,475	110,838	108,184
Diluted EPS ($)	1.37	2.26	3.96	4.48	5.20

Looking at the last quarter on a year-over-year basis, revenue declined, but earnings improved.

Quarter	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012	Mar. 31, 2013
Revenue ($) in millions	26,712	22,180	25,146	23,653	25,122
Diluted EPS ($)	1.31	1.21	1.40	1.39	1.59

Now let's take a look at the next page for the Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

Conclusion

JPMorgan has weathered many storms throughout its history. It has always managed to survive and then thrive. With the right leadership in place, a focus on consistently improving the bottom line, strong margins, and a superb valuation, JPMorgan is an OUTPERFORM.

3 Takeaways You Might Have Missed When Netflix Reported Earnings

When Netflix (NASDAQ: NFLX  ) reported earnings on Monday night, investors expected big things. Share prices had soared 193% year to date when the report dropped in, but fell 5% on the news. Investors and analysts focused on 0.6 million new domestic subscribers during the quarter, worrying that it was too low a number.

That's the only number you've seen in most Netflix headlines this week, but there's much more to the story. Let's take a look at three important takeaways you may have missed.

Guidance? We don't need no stinkin' guidance!
Some analysts were hankering for more than 1 million new subscribers from the long-awaited extension of Arrested Development alone. Against that backdrop, 630,000 new American subscribers looks like a big miss. You can read it as Netflix losing subscribers this quarter if you back out the banana stand!

But then you're ignoring the company's own guidance for the quarter. Netflix set the guidance range for the second quarter between 230,000 and 880,000 net additions. 630,000 falls in the upper half of that range, which was set with Arrested's debut in mind.

Moreover, you might recall last year's second-quarter report. That time, Netflix shares plunged 25% overnight as seasonal effects held back subscriber additions over the summer. May I remind you how share prices nearly tripled over the next six months, when the fun and profitable half of the yearly growth cycle played out? The same seasonal effects are still in place, holding Netflix back in the summer with a commensurate boost around the holidays.

So the performance didn't blow guidance out of the water, but certainly shouldn't count as a big miss, either. And as a Netflix shareholder, I'm certainly looking forward to the third and fourth quarters this year.

The HBO limit doesn't apply to Netflix
Skeptics often scoff at Netflix's goal to become two or three times the size of Time Warner's (NYSE: TWX  ) premium cable channel HBO. That channel has been bumping against a glass ceiling for years, never breaking through the 30 million subscriber threshold. If a well-established consumer brand with the money and marketing might of Warner behind it can't move beyond this limit, why should we accept 60 million or 90 million as a destination for Netflix?

Well, Netflix is about to cross that illusory threshold. The low end of third-quarter guidance points to 30.4 million American subscribers. Pop goes the glass ceiling, unless you expect management to set unreachable short-term targets.

Don't forget that you're looking at a virtuous cycle. Once Netflix collects enough revenue to cover its content costs, every additional streaming member is almost 100% pure profit. The streaming delivery costs are minuscule.

What does this mean for the long-term growth trend? Here's how CEO Reed Hastings put it on the earnings call:

What happens is by the time we get to 40 million and 50 million, we get the content better and the service better. And so it's not 60 million or 90 million for the current service. It's 60 million or 90 million for the future service that's much improved with maybe a lot more originals and just incredible streaming.

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In other words, as Netflix makes more money from higher customer counts, the company will invest this cash in stronger content and better technology. And as long as you're building a better service, why wouldn't you expect subscribers to keep signing up?

Recommendations matter. A lot.
Here's one that caught me by surprise: More than 75% of the viewing hours on Netflix start with the recommendations system.

Room for improvement: My family has varied tastes. Image source: Author's screenshot of current recommendations.

That's a huge number, and it underscores the competitive advantage Netflix built over the last decade or so. In short, Netflix is pretty good at figuring out what you want to see. The company wants to become the ultimate cure for channel surfing, because that would mean gluing your eyeballs to the Netflix screen in a way that traditional TV channels just can't match. No, not even HBO.

It's an extension of what set TiVo (NASDAQ: TIVO  ) apart in the early days. Your channel-surfing taught TiVo's digital recording boxes a lot about your viewing habits, which allowed the box to present a list of recommended content. That guidance is arguably more valuable than the simple ability to record TV shows without worrying about VHS tapes, and is the foundation of TiVo's strategy even today.

Netflix digs even deeper. The company knows what you're watching, just like TiVo, and both systems come with star-based ratings systems. Netflix also combines this information with patterns culled from DVD and streaming customers since the beginning of red mailers. Mass psychology and big data analysis come into play. Netflix doesn't just know what you might like to see right now, but can also predict the kind of content it should buy or produce for people like you in the future.

This is a massive moat. Amazon.com can't match it, because the company has nowhere near the wealth of customer data that Netflix sports. HBO sure can't run in this race until its online HBO Go service gets a decade of operating data under its belt. The same goes for Hulu, no matter which media giant ends up taking control of that service.

TiVo does have a similar data library and aims to exploit it in the next phase of its checkered history. That's the main reason that I still own that stock: There's a solid advantage in play, and TiVo-less cable operators will find it hard to match this high-quality feature.

But nobody else can compete with Netflix's data trove. Not even TiVo. The fact that 75% of viewing hours come from recommendations is evidence that it works. It's an investable advantage that most people ignore.

But now you know. I own Netflix shares, and the stock is one of my most successful CAPScalls to date. This report did nothing to damage my long-term thesis for owning Netflix shares.

The television landscape is changing quickly, with new entrants like Netflix and Amazon disrupting traditional networks. The Motley Fool's new free report "Who Will Own the Future of Television?" details the risks and opportunities in TV. Click here to read the full report!

Samsung Keeps Hijacking Android

Samsung has leveraged Google (NASDAQ: GOOG  ) Android to become the dominant smartphone vendor in the world by a large margin. The South Korean giant has utilized its advantages in vertical integration, scale, and marketing, and due to its size has many more methods to differentiate itself from rival Android OEMs.

The company has the resources to focus more heavily on software and services, two areas that are critical to success nowadays. Commoditized rivals can't afford to do as much. When Samsung unveiled the Galaxy S4, Android wasn't even mentioned as the company focused entirely on what it was bringing to the table. Samsung followed up by launching a new content hub that competes directly with Google Play, where users can search for apps and entertainment tailored to its Galaxy devices.

Sammy's at it again. The company just announced its first-ever annual developers conference, in an effort to grow a developer base that's specialized for its products. That extends beyond just smartphones and tablets, and Samsung is gearing the event toward a wide range of platforms and devices. The developer conference will take place later this year in California, not too far from where the company just began construction on a new $300 million headquarters in Silicon Valley.

Typically the companies that directly operate the primary operating system platforms are the ones that host developer conferences. Google I/O, Apple WWDC, and Microsoft Build have all come and gone this year. Samsung is now making it clear that it wants to contend with the best of them on a platform level.

While the event should include a wide range of platforms, Android is by far Samsung's largest and most successful portfolio. The company could be expected to focus developers on its Galaxy brand, as opposed to other product families like its Windows brand ATIV or its upcoming Tizen operating system.

Samsung continues to hijack Android for its own good.

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Stocks fell today despite the lack of anything significant that would drive down the prices of Netflix (NFLX), Alexion Pharmaceuticals (ALXN) and Facebook (FB), among other high fliers.

Reuters

The S&P 500 fell 0.5% to 1,857.44 as Netflix plunged, 6.7% to $378.90, Facebook declined 4.7% to $64.10 and Alexion Pharmaceuticals dropped 6.3% to $149.76 as biotech stocks continued to sell off. The Dow Jones Industrial Average, however, dropped just 0.2% to 16,276.69 thanks to its lack of stocks like Netflix, Facebook and Alexion Pharmaceuticals. The Dow was also helped by the strong performance of International Business Machines (IBM), which rose 0.9% to $188.25 and Procter & Gamble (PG), which advanced 1.8% to $79.30.

Don’t blame global economic activity, says JPMorgan’s David Hensley, which is looking OK despite disappointment in China:

Top 5 International Companies To Own In Right Now: USell.com Inc (USEL)

usell.com, Inc. (uSel), formerly known as Upstream Worldwide, Inc., incorporated on November 18, 2003, is a technology-based company. The Company focuses on creating an online marketplace where individuals interested in selling small consumer electronics.

The Company through its wholly owned subsidiaries helps individuals monetize household items. Household items, such as small consumer electronics that they no longer using.

The Company competes with eBay.com, craigslist.com and BestBuy, Inc.

Advisors' Opinion:

• [By EquityOptionsGuru]

  Over the past decade, online marketplaces have been springing up at a rapid fire pace.� Consumers continue to seek new outlets to both buy and sell products at reasonable prices with high efficiency.� This need can be seen in the re-commerce industry, which represents an annual market of $57 billion.� Although eBay (NASDAQ: EBAY) has been the dominant player for the better part of a decade, it is facing increasing pressure from other marketplaces for cost and convenience reasons.� One such marketplace, uSell.com (OTC PINK: USEL), appears poised to rival eBay for years to come.

Top 5 International Companies To Own In Right Now: Waste Management Inc.(WM)

Waste Management, Inc., through its subsidiaries, provides waste management services to residential, commercial, industrial, and municipal customers in North America. It offers collection, transfer, recycling, and disposal services. The company also owns, develops, and operates waste-to-energy and landfill gas-to-energy facilities in the United States. Its collection services involves in picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility, or disposal site; and recycling operations include collection and materials processing, plastics materials recycling, and commodities recycling. In addition, it provides recycling brokerage, which includes managing the marketing of recyclable materials for third parties; and electronic recycling services, such as collection, sorting, and disassembling of discarded computers, communications equipment, and other electronic equipment. Further, the company e ngages in renting and servicing portable restroom facilities to municipalities and commercial customers under the Port-o-Let name; and involves in landfill gas-to-energy operations comprising recovering and processing the methane gas produced naturally by landfills into a renewable energy source, as well as provides street and parking lot sweeping services. Additionally, it offers portable self-storage, fluorescent lamp recycling, and medical waste services for healthcare facilities, pharmacies, and individuals, as well as provides services on behalf of third parties to construct waste facilities. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was incorporated in 1987 and is based in Houston, Texas.

Advisors' Opinion:

• [By Selena Maranjian]

  It can be good, though, with kids, to add a few individual company stocks to the mix, to keep things more interesting. A solid, dividend-paying blue chip such as Waste Management (NYSE: WM  ) can be a smart choice, in part because it's relatively easy to understand. It's reliable because garbage collection is likely to be in great demand for a long time, and the company has become a major recycler, too, even generating energy from some waste.

5 Best Clean Energy Stocks To Watch Right Now: CBOE Holdings Inc.(CBOE)

CBOE Holdings, Inc., through its subsidiaries, operates markets for the execution of transactions in exchange-traded options. The company offers marketplaces for trading of options on individual equities, various market indexes, exchange-traded notes, and exchange-traded funds, as well as futures contracts and cash equities. It has strategic relationships with Standard & Poor's Corporation; Dow Jones & Co.; NASDAQ; and Frank Russell Co. The company was founded in 1973 and is based in Chicago, Illinois.

Advisors' Opinion:

• [By Kaitlyn Kiernan]

  The Chicago Board Options Exchange(CBOE)�� Short-Term Volatility Index, which measures expectations for volatility over the next nine days, rose nearly twice as much Monday as the regular Volatility Index, the CBOE�� widely watched 30-day anxiety gauge. That divergence comes as investors prepare for additional fallout in U.S. stocks should military action in Ukraine escalate in the days ahead, but shows that they are less concerned about the longer-term consequences of the crisis.

• [By Roberto Pedone]

  Another stock that looks ready to trigger a near-term trade is CBOE Holdings (CBOE), which is engaged in the trading of options on individual equities, market indexes and exchange-traded funds. This stock has been on fire so far in 2013, with shares up sharply by 56%.

  If you take a look at the chart for CBOE Holdings, you'll notice that this stock recently formed a triple bottom chart pattern at $44.44, $44.58 and $44.86 a share. Following that bottom, shares of CBOE have started to uptrend modestly and move within range of taking out some key near-term overhead resistance levels.

  Traders should now look for long-biased trades in CBOE if it manages to break out above some near-term overhead resistance at $46.98 a share and then once it takes out its 50-day moving average of $46.98 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 612,798 shares. If that breakout hits soon, then CBOE will set up to re-test or possibly take out its next major overhead resistance levels at $49.59 a share to its 52-week high at $51.12 a share. Any high-volume move above $51.12 will then give CBOE a chance to tag $60 to $65 a share.

  Traders can look to buy CBOE off any weakness to anticipate that breakout and simply use a stop that sits right below $44 a share. One could also buy CBOE off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

• [By Dan Caplinger]

  Among exchanges, the action is beyond the stock market. With the rise in trading of futures, options, and other derivative investments, NYSE Euronext's ownership of the NYSE Liffe exchange in London was a key element of ICE's interest. CME Group (NASDAQ: CME  ) and CBOE Holdings (NASDAQ: CBOE  ) have worked hard to preserve their respective strength in futures and options, and rising market turbulence has made many of their products look a lot more enticing. Given that derivatives can help hedge market risk and reduce overall exposure, all of the exchange companies have an opportunity to bolster their presence in the derivatives market with innovative products that meet the new needs investors have in a more turbulent financial environment.

• [By Dan Caplinger]

  CBOE Holdings (NASDAQ: CBOE  ) offers micro-options on the Dow for which the price is based on a figure equal to 1% of the Dow's value. So for instance, at the close last Friday, you would have spent about $100 per contract to buy a put option with a strike price of 142 -- corresponding to a Dow value of 14,200 -- that expires in the middle of next month.

Top 5 International Companies To Own In Right Now: Prosperity Bancshares Inc (PB)

Prosperity Bancshares, Inc., incorporated on December 22, 1983, is a financial holding company. The Company operates through its bank subsidiary, Prosperity Bank (the Bank). The Bank provides a broad line of financial products and services to small and medium-sized businesses and consumers. As of December 31, 2012, the Bank operated 213 full service banking locations; 59 in the Houston area; 20 in the South Texas area including Corpus Christi and Victoria; 35 in the Dallas/Fort Worth area; 21 in the East Texas area; thirty-four 34 in the Central Texas area including Austin and San Antonio; 34 in the West Texas area including Lubbock, Midland-Odessa and Abilene; and 10 in the Bryan/College Station area. The Company added a net of two banking centers in Tyler, TX in connection with its acquisition of East Texas Financial Services (East Texas) on January 1, 2013, after consolidations. In November 2013, the Company announced that the completion of the merger of FVNB Corp.

On January 1, 2012, the Company acquired Texas Bankers, Inc. and its wholly owned subsidiary, Bank of Texas, Austin, Texas. On April 1, 2012, it acquired The Bank Arlington. Effective July 1, 2012, the Company announced the completion of the merger with American State Financial Corporation and its wholly owned subsidiary American State Bank (collectively referred to as ASB) whereby American State Bank was merged with and into Prosperity Bank. In October 2012, the Company announced the completion of the merger with Community National Bank, Bellaire, Texas. On January 1, 2013, the Company announced the completion of the merger with East Texas Financial Services, Inc. (ETFS) and wholly owned subsidiary First Federal Bank Texas. Effective April 1, 2013, Prosperity Bancshares Inc announced the completion of the merger with Coppermark Bancshares, Inc. and wholly owned subsidiary Coppermark Bank, whereby Coppermark merged with and into Prosperity and Coppermark Bank merged with and into Prosperity Bank.

The Company pr! ovides medical and hospitalization insurance to its full-time associates. The Company considers its relations with associates to be good. Neither the Company nor the Bank is a party to any collective bargaining agreement. In 2012, the Company added additional products and services including trust services, credit card, mortgage lending and independent sales organization (ISO) sponsorship operations.

Lending Activities

The Company, through the Bank, offers a variety of traditional loan and deposit products to its customers, which consist primarily of consumers and small and medium-sized businesses. At December 31, 2012, total loans were $5.18 billion. Loans at December 31, 2012, included $10.4 million of loans held for sale and consisted of residential mortgage loans that were acquired as part of the acquisition of ASB in 2012. As reflected in the table below, loan growth was also impacted by the acquisition of Texas Bankers, Inc., The Bank Arlington, ASB and Community National Bank. Excluding loans acquired in these acquisitions and new production at the acquired banking centers since their respective acquisition dates, loans held for investment grew approximately $234.9 million, or 6.2%. The Company offers a variety of commercial lending products including term loans and lines of credit. The Company offers a broad range of short to medium-term commercial loans, primarily collateralized, to businesses for working capital (including inventory and receivables), business expansion (including acquisitions of real estate and improvements) and the purchase of equipment and machinery.

The Company makes commercial real estate loans collateralized by owner-occupied and non-owner-occupied real estate to finance the purchase of real estate. The Company�� commercial real estate loans are collateralized by liens on real estate, typically have variable interest rates (or five year or less fixed rates) and amortize over a 15 to 20 year period. Company�� lending activities al! so includ! es the origination of 1-4 family residential mortgage loans collateralized by owner-occupied residential properties located in the Company�� market areas. The Company offers a variety of mortgage loan products which generally are amortized over five to 25 years. Loans collateralized by 1-4 family residential real estate generally have been originated in amounts of no more than 89% of appraised value or have mortgage insurance. The Company requires mortgage title insurance and hazard insurance. Other than with respect to mortgage banking activities acquired in the ASB acquisition, the Company has elected to keep all 1-4 family residential loans for its own account rather than selling such loans into the secondary market. By doing so, the Company is able to realize a higher yield on these loans; however, the Company also incurs interest rate risk as well as the risks associated with nonpayments on such loans. The Company makes loans to finance the construction of residential and, to a lesser extent, nonresidential properties. Construction loans generally are collateralized by first liens on real estate and have floating interest rates. The Company provides agriculture loans for short-term crop production, including rice, cotton, milo and corn, farm equipment financing and agriculture real estate financing.

Investment Activities

The Company uses its securities portfolio to manage interest rate risk and as a source of income and liquidity for cash requirements. At December 31, 2012, the carrying amount of investment securities totaled $7.44 billion. At December 31, 2012, securities represented 51.0% of total assets. At December 31, 2012 and 2011, the Company did not own securities of any one issuer (other than the U.S. government and its agencies) for which aggregate adjusted cost exceeded 10% of the consolidated shareholders equity .

Sources of Funds

The Company offers a variety of deposit accounts having a wide range of interest rates an! d terms i! ncluding demand, savings, money market and time accounts. The Company relies primarily on competitive pricing policies and customer service to attract and retain these deposits. The Company does not have or accept any brokered deposits. Total deposits at December 31, 2012, were $11.64 billion. Noninterest-bearing deposits at December 31, 2012, were $3.02 billion. The Company utilizes borrowings to supplement deposits to fund its lending and investment activities. Borrowings consist of funds from the Federal Home Loan Bank (FHLB) and securities sold under repurchase agreements.

Advisors' Opinion:

• [By Rich Duprey]

  Houston-based bank holding company�Prosperity Bancshares� (NYSE: PB  ) �announced today its second-quarter dividend of $0.215 per share, the same rate it paid the last two quarters after raising the payout 10% from $0.195 per share.

• [By Chuck Carnevale]

  Next, I run graphs on liquidity ratios and additional data on various valuation ratios to include price to book value (pb), price to cash flow (pcfl), price to free cash flow (pfcfl) and others that can be seen as options on the navigation bar to the left of the sample graph which only plots the current ratio (cr), a quick ratio (qr) and for those diehards concerned with volatility [size=11.0pt;line-height:115%; font-family:"Calibri","sans-serif";mso-ascii-theme-font:minor-latin;mso-fareast-font-family: Calibri;mso-fareast-theme-font:minor-latin;mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman";mso-bidi-theme-font:minor-bidi; mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA">��/p>

Top 5 International Companies To Own In Right Now: Boulder Brands Inc (BDBD)

Boulder Brands, Inc., incorporated on May 31, 2005, is a supplier of gluten-free and health and wellness products in the United States and Canada. The Company distributes its products in all retail channels, including natural, grocery, club and mass merchandise. The Company also has a presence in the foodservice and industrial channels. The Company�� product portfolio consists of spreads, milk and other grocery products marketed under the Smart Balance, Earth Balance and Bestlife brands, and gluten-free products sold under the Udi's, Glutino and Gluten-Free Pantry brands. The Company operates in two segments: Smart Balance and Natural. The Smart Balance segment consists of its branded products in spreads, butter, grocery and milk. The Natural segment consists of its Earth Balance, Glutino and Udi's branded products. In December 2013, the Company announced that it has acquired 100% interests of Phil's Fresh Foods, LLC, owner of EVOL Foods (EVOL).

Smart Balance Products

The Smart Balance line of products is available in a range of categories, formats and sizes in the supermarket, mass merchandise and convenience store channels of distribution. Some of the Company�� buttery spreads are also available in bulk and individual serving formats for use in the industrial and foodservice channels. The Company�� Smart Balance buttery spreads are made from a patented blend of natural oils to help balance fats in the consumer's diet and to help improve the good-to-bad cholesterol ratio when used as part of the Smart Balance Food Plan. Smart Balance Spreadable Butters, available in original, light and extra virgin olive oil varieties, are a blend of creamery fresh butter and canola oil that contain less saturated fat than butter, as well as functional ingredients like EPA/DHA Omega-3 and plant sterols.

The Company offers a range of enhanced milk products, with different varieties containing EPA/DHA Omega-3s, plant sterols, and added levels of calcium and protein. The Comp! any use low and fat-free milks enhanced with non-fat milk solids to give the taste and texture of whole or reduced fat milk. The Company�� milk varieties include fat-free milk, 1% lowfat milk and lactose-free milk and are available in markets across the United States. The Company�� peanut butter products contain ALA Omega-3 from flax oil. The Company�� cooking oil and cooking sprays are designed for use in cooking, baking and salads to aid in avoiding trans fat and hydrogenated oils. The Company also markets a Smart Balance Buttery Burst Spray. The spray has zero calories, zero carbs and zero fats per serving and can be used as a pan spray or as a topping.

The Company�� Smart Balance Light Mayonnaise Dressing has half the fat of regular mayonnaise, is non-hydrogenated, contains zero grams of trans fat and contains natural plant sterols and ALA Omega-3. The Company created the Smart Balance Food Plan, incorporating many of its Smart Balance products, in order to help consumers achieve a healthy balance of natural fats in their daily diet. The plan includes menus, as well as numerous recipes.

Natural

The Earth Balance line of products offers a range of buttery spreads, sticks, soymilks, nut butters and vegan mayo dressings formulated for consumers interested in natural, plant based and organic products. Glutino offers a range of shelf stable and frozen gluten-free products, including snack foods, frozen baked goods, frozen entrees and baking mixes, throughout the United States and Canada. Glutino also offers a range of fresh breads under the Genius brand name. Based in Denver, Colorado, Udi's markets gluten-free products under the Udi's Gluten Free Foods brand in the retail market. The Company owns and operates a health and wellness, subscripton-based Website at www.thebestlife.com, which is based on the philosophies of Bob Greene.

The Company competes with Unilever, ConAgra Foods, Dean Foods, Land O' Lakes, Hain Celestial Group, Inc., Food for L! ife, Van'! s, Nature's Path, Mary's Gone Crackers, Enjoy Life, Pamela's Gluten Free, Rudi's Gluten-Free, French Meadow Bakery, Schar, Kinnikinnick, Amy's Gluten Free, Snyder's, Blue Diamond Gluten-Free, Bob's Red Mill Gluten-Free and Food Should Taste Good.

Advisors' Opinion:

• [By Pendulum]

  Gluten-free products are the growth engine for Boulder Brands (BDBD). Certain consumers require gluten-free products for medical reasons, but Boulder Brands believes that the potential for gluten-free products is much wider. Bulls argue that the benefits of gluten-free foods extend to the broader population and consumers will gravitate toward gluten-free over time. Bears argue that only a small segment of the population really requires gluten-free food and the much hyped gluten-free diet (for the broader population) is a fad. In the near term, the company has the potential to benefit from new gluten-free labeling as well as broader distribution and an expanded product offering. With the company trading at a high valuation, after a nice rally, is the optimism about gluten-free already priced-in or is there more upside?

• [By Ben Levisohn]

  Shares of Hain have gained 2.2% to $79.91 today at 11:13 a.m–and trumping other health-food stocks today.� Annie’s Homegrown (BNNY) has ticked up 0.4% to $49.61, Boulder Brands (BDBD) has risen 0.6% to $15.96 and Whitewave Foods (WWAV) has dropped 1.3% to� $18.93.

• [By John Udovich]

  However and not helping the stock around that time was a very�lengthy article by the�Prescience Point Research Group on Seeking Alpha entitled: Fleetmatics Group PLC: Accounting Shenanigans Are Inflating Its Financials, While Insiders Sell Aggressively. Investors and shorts alike can read the article and make their own judgment, but some of the commenters have pointed out that similar attack articles from Prescience Point Research Group on stocks like the Active Network Inc (NYSE: ACTV) and Boulder Brands Inc (NASDAQ: BDBD) have backfired on the shorts. With that said, the article does highlight some of the risks investors face with the stock.

• [By Selena Maranjian]

  Boulder Brands (NASDAQ: BDBD  ) gained 38%, and though you may think you don't know the company, it used to be Smart Balance until recently, and sports healthy-leaning brands, such as Smart Balance, Udi's, Glutino, Earth Balance, and Best Life. (The company is based�in New Jersey, not Colorado, too.) Boulder recently bought 80% of GlucoBrands, owner of Level Life Foods, which specializes in blood-sugar-managing products such as bars and shakes. Boulder Brands is free-cash-flow positive�and enjoying double-digit�revenue growth.

Qualcomm Inc. Shares Stumble After Disappointing Guidance

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Image source: Qualcomm.

Shares of Qualcomm (NASDAQ: QCOM  ) fell 3.9% in after-hours trading, following the release of mixed results for the second quarter of fiscal year 2014. Guidance for the coming quarter also raised more questions than it answered.

Qualcomm's sales increased 4% year over year to $6.4 billion, driving a 12% increase in non-GAAP earnings per share. Landing at $1.31 per share, the earnings result exceeded Wall Street's $1.22 target by a fair margin, while revenues fell just short of the $6.5 billion consensus.

Semiconductor sales increased by 8% year over year while licensing revenues grew by 1%.

In the third quarter, Qualcomm expects to see adjusted earnings of approximately $1.20 per share on $6.5 billion in sales. Both of these numbers sit below the current analyst view. Nevertheless, management held full-year revenue guidance steady while bumping up the earnings range by $0.05 per share. The $5.15 midpoint of the new 2014 earnings guidance is just a hair richer than current analyst projections.

In a prepared statement, CEO Steve Mollenkopf celebrated "another solid quarter" with strong demand for combined 3G/LTE wireless chipsets. "We continue to see increasing demand for our industry-leading chipsets and strong growth in calendar year 2014 of 3G/4G smartphones around the world," Mollenkopf added.

Western Digital Buys VeloBit

Irvine, Calif.-based Western Digital (NASDAQ: WDC  ) has a new subsidiary.

On Wednesday, Western Digital announced that it has acquired privately held I/O optimization software maker VeloBit for an undisclosed sum. Western Digital intends to incorporate its new holding into its HGST subsidiary.

In a press release, Western Digital said Lincoln, Mass.-based "VeloBit enhances storage system performance with its software technology by adding a transparent acceleration layer utilizing solid state drives (SSDs) ... dramatically accelerat[ing] applications and increase[ing] server density." The company characterized the acquisition as helping to expand its presence in the enterprise (i.e. corporate, as opposed to consumer) solid-state disk storage market.

Solid-state drives store data on microchips rather than the magnetic platters that power conventional hard drives. They are generally considered faster and more reliable, though at a higher price. The company said the deal builds on its plans to buy data storage device maker sTec Inc. for about $320.7 million in cash.

Investors appear to be responding positively to today's announcement, bidding up Western Digital shares by 0.3% on a rather flat day for the market.

-- Material from The Associated Press was used in this report.

link

2 Numbers That Explain Why Fox Wants to Make Mark Millar’s 'Superior' Into a Movie

Co-creators Mark Millar and Leinil Francis Yu have sold the movie rights to the indie comic book, Superior. Credit: ICON/Marvel Entertainment.

Comic books and comic book movies have rarely been more popular, which explains why Twenty-First Century Fox (NASDAQ: FOXA  ) picked up the movie rights to creator Mark Millar's Superior. But will the deal pay off for the studio? Or has the market become overcrowded with niche adaptations?

Host Ellen Bowman puts these questions to analysts Nathan Alderman and Tim Beyers in this week's episode of 1-Up On Wall Street, The Motley Fool's web show in which we talk about the big-money names behind your favorite movies, toys, video games, comics, and more.

The story is clever enough, and could play well with moviegoers. An M.S.-stricken young boy longing to regain his athleticism wishes to become a superhero dubbed "Superior." Soon after, the creature that granted the wish -- a demon monkey from Hell -- reveals to the boy that he'll have to sell his soul if he's to retain his new, more powerful form.

There's also history to consider. When looking at estimated return on investment, Nathan found that six of the 10 most profitable comic book movies were sourced from independent properties. The Mask tops the list with a better than 409% return, followed closely by the original Teenage Mutant Ninja Turtles at 398%. Distributor New Line Cinema, now part of Time Warner, was independent at the time these movies were released.

Now big studios such as Fox want a bigger piece of the indie action, and they're turning to proven performers like Millar. Movies adapted from his independent comics have earned an estimated 9.2% return on investment after factoring in budget, marketing, and distribution, Nathan says. That's a huge difference from the average indie, which checks in at a 6% box office loss.

Tim adds that there's also parallel track emerging wherein different studios are tackling different aspects of the genre. Marvel and DC are pursuing the PG-13 crowd, and enjoying big grosses as a result. Indies, by contrast, tend to carve out darker, R-rated stories.

Investors shouldn't presume that these properties are going to drive huge profits because R-rated properties almost never do -- unless the movie in question is cheap to make, like a good horror flick. Or, The Mask. Or the original Teenage Mutant Ninja Turtles. Fox needs to be thinking similarly when it comes to Superior and other indies it acquires.

Now it's your turn to weigh in using the comments box below. Would you be buying stock in media companies that are betting bigger on indie comics properties? Why or why not? Click the video to watch as Ellen puts Nathan and Tim on the spot, and then be sure to follow us on Twitter for more segments and regular geek news updates!

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As if fears over rising interest rates and months of mass selling weren't enough of a head wind for municipal bond investors, Puerto Rico now appears to be running out of time to get its fiscal house in order. The commonwealth was put on review by another major ratings agency, paving the way to what could be a shock to the municipal bond market.

Moody's Investor Services Inc. became the second of the three major ratings agencies to put Puerto Rico general obligation municipal bonds and related securities officially on watch for a downgrade to below-investment grade Wednesday. The review follows a similar action by Fitch Ratings Inc. in mid-November.

“Downward pressure on the rating arises from the commonwealth's weakening liquidity, increasing reliance on external short-term debt and constrained market access, within the context of a weakened and now sluggish economy,” Moody's said in a rating action note announcing the review.

Top 5 Healthcare Equipment Stocks To Buy For 2015: India Fund Inc (IFN)

The India Fund, Inc. (the Fund), incorporated on December 27, 1993, is a non-diversified, closed-end management investment company. The Fund�� investment objective is long-term capital appreciation. It invests in Indian equity securities. At least 80% of the Fund�� total assets are invested in equity securities of Indian companies. Its portfolio includes common stocks, warrants and short-term investments. The India Fund, Inc. operates through a branch in the Republic of Mauritius.

The India Fund, Inc. invests in a range of industries, including computer software and programming, computer services, finance, diversified industries, building and construction, cement, chemicals, electronics and electrical equipment, extractive industries, engineering, diversified financial services, petroleum-related industries, pharmaceuticals, steel and telecommunications. Aberdeen Asset Management Asia Limited is the Fund�� investment manager.

Advisors' Opinion:

• [By Jon C. Ogg]

  WisdomTree�India Earnings Fund (NYSEMKT: EPI) is down yet another 2.7% at $13.05, and it hit a new low of $13.00 on Wednesday against a high of $20.50. The PowerShares India (NYSEMKT: PIN) is down another 2.5% at $13.54, and it hit a new low with its 52-week range now at $13.50 to $19.66. The India Fund Inc. (NYSE: IFN) is a closed-end fund rather than an exchange traded fund (ETF), and it is down almost 1.75% at $16.95, with its shares hitting a new multiyear low of 416.88, against a 52-week high of $24.10.

• [By Jon C. Ogg]

  The India Fund Inc. (NYSE: IFN) is a closed-end fund that trades often at severe discounts or premiums to the net asset value. Its gain is only 0.9% to $18.03, and the 52-week trading range of $16.88 to $24.10 implies that it has recovered only 7% off of its recent lows. It currently trades at a discount of 11% to its NAV according to CEFA.com.

• [By Jon C. Ogg]

  The India Fund Inc. (NYSE: IFN) is down another 5% at $17.55 against a 52-week range of $17.53 to $24.10. CEFA.com shows that it trades at roughly a 9.4% discount to its net asset value.

Top 5 Healthcare Equipment Stocks To Buy For 2015: Macquarie Group Ltd (MQG)

Macquarie Group Limited acts as a non-operating holding company (NOHC). The Company�� segments include Macquarie Funds Group, Corporate and Asset Finance, Banking and Financial Services Group, Macquarie Securities Group, Macquarie Capital, Fixed Income, and Currencies and Commodities. The Company is a financial services provider of banking, financial, advisory, investment and funds management services. The Company's products and services include Asset and Wealth Management, which is engaged in distribution and manufacture of funds management products; financial markets involves trading in fixed income, equities, currency, commodities and derivative products; capital markets include corporate and structured finance. In February 2014, Endeavour Mining Corporation announced that Macquarie Group Ltd and its controlled bodies corporate ceased to be a shareholder in the capital of the Company. Advisors' Opinion:

• [By Adam Haigh]

  Esprit Holdings Ltd. (330), a Hong Kong-based clothier that counts Europe as its biggest market, climbed 2.4 percent. Macquarie (MQG) Group Ltd. surged 11 percent, its biggest gain in four years, as profit at the Australia�� largest investment bank topped estimates. Fletcher Building Ltd., a manufacturer of construction products, sank 6.5 percent in Wellington as Goldman Sachs Group Inc. cut its outlook for building-material shares.

Top Casino Companies To Buy Right Now: Schawk Inc.(SGK)

Schawk, Inc., together with its subsidiaries, provides graphic services and solutions in the Americas, Europe, and the Asia Pacific. The company?s graphic services encompasses a range of creative and executional service offerings, including traditional premedia business services, as well as digital photography, color retouching, large format digital printing, and sales and promotional samples under the Schawk brand name; and digital three-dimensional modeling of prototypes or existing packages for its consumer products clients. Its brand and package strategy and design services include brand consulting and creative design for packaging applications to consumer products companies, food and beverage retailers, and mass merchandisers under the Brandimage and Anthem brands. The company also offers digital promotion and advertising services to the digital communications markets under the Untitled and Real Branding brand names. In addition, it provides software products, such a s graphic lifecycle content management systems comprising digital asset management, workflow management, online proofing, and intelligence performance management modules; and support services, which include implementation, on-site management, validation for regulated environments, and support and training for the marketing services departments of consumer products, pharmaceutical/life sciences, and retail companies. The company serves direct purchasers of graphic services, including end-use consumer product manufacturers of food, beverage, non-food and beverage, and pharmaceutical products; groceries, pharmacies, department, and mass merchant retailers; converters; and advertising agencies. Schawk, Inc. was founded in 1953 and is headquartered in Des Plaines, Illinois.

Advisors' Opinion:

• [By Seth Jayson]

  There's no foolproof way to know the future for Schawk (NYSE: SGK  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

Top 5 Healthcare Equipment Stocks To Buy For 2015: Fifth Street Finance Corp (FSC)

Fifth Street Finance Corp. is a specialty finance company that lends to and invests in small and mid-sized companies in connection with investments by private equity sponsors. The Company�� investment objective is to maximize its portfolio's total return by generating current income from its debt investments and capital appreciation from its equity investments. As of September 30, 2011, 90.9% of its portfolio consisted of debt investments that were secured by first or second priority liens on the assets of its portfolio companies. As of September 30, 2011, it held equity investments consisting of common stock, preferred stock or other equity interests in 27 out of 65 portfolio companies. It is managed and advised by Fifth Street Management LLC. In June 2013, Fifth Street Finance Corp. announced that it has closed its portfolio company acquisition of Healthcare Finance Group, LLC (HFG).

Investments

The Company tailors the terms of its debt investments to the facts and circumstances of the transaction and prospective portfolio company. As of September 30, 2011, it directly originated a majority of its debt investments. It is focusing its origination efforts on first lien, second lien and subordinated loans. Its first lien loans have terms of four to six years, provide for a variable or fixed interest rate, contain prepayment penalties and are secured by a first priority security interest in all existing and future assets of the borrower. Its first lien loans may take many forms, including revolving lines of credit, term loans and acquisition lines of credit. Its second lien loans have terms of four to six years, provide for a fixed interest rate, contain prepayment penalties and are secured by a second priority security interest in all existing and future assets of the borrower. Its second lien loans often include payment-in-kind (PIK), interest, which represents contractual interest accrued and added to the principal that generally becomes due at maturity. Its unsecured inve! stments have terms of five to six years and provide for a fixed interest rate. It may make unsecured investments on a stand-alone basis, or in connection with a senior secured loan, a junior secured loan or a one-stop financing. Its unsecured investments may include payment-in-kind (PIK), interest, which represents contractual interest accrued and added to the principal that becomes due at maturity, and an equity component, such as warrants to purchase common stock in the portfolio company.

In addition, the Company from time to time non-control, equity co-investments in connection with private equity sponsors. It structures equity investments, such as direct equity co-investments, to provide the Company with minority rights provisions and event-driven put rights. The Company make investments in the private equity funds of certain of its equity sponsors. It makes these investments where it has a long term relationship and is comfortable with the sponsor�� business model and investment strategy. As of September 30, 2011, it had investments in six private equity funds, which represented less than 1% of the fair value of its assets as of such date.

Portfolio Management

As a business development company, the Company offers managerial assistance to its portfolio companies and to provide it if requested. It monitors the financial trends of each portfolio company to assess the appropriate course of action for each company and to evaluate overall portfolio quality. It has several methods of evaluating and monitoring the performance of its investments, which includes review of monthly and quarterly financial statements and financial projections for portfolio companies; periodic and regular contact with portfolio company management; attendance at board meetings; periodic formal update interviews with portfolio company management, and assessment of business development, including product development, profitability and the portfolio company�� overall adherence to its busine! ss plan.

In addition to various risk management and monitoring tools, the Company uses an investment rating system to characterize and monitor the credit profile and expected level of returns on each investment in itd portfolio. It uses a five-level numeric rating scale. In the event that it determines that an investment is underperforming, or circumstances suggest that the risk associated with a particular investment has significantly increased, it monitors the effected portfolio company.

Valuation of Portfolio Investments

As a business development company, the Company invests in illiquid securities, including debt and equity investments of small and mid-sized companies. The Company perform valuations of its debt and equity investments on an individual basis, using market, income, and bond yield approaches as appropriate. Under the market approach, it estimates the enterprise value of the portfolio companies, in which it invests. To estimate the enterprise value of a portfolio company, it analyze various factors, including the portfolio company�� historical and projected financial results. It requires portfolio companies to provide annual audited and quarterly and monthly unaudited financial statements, as well as annual projections for the upcoming fiscal year.

Under the income approach, the Company prepares and analyze discounted cash flow models based on projections of the future free cash flows of the business. Under the bond yield approach, it uses bond yield models to determine the present value of the future cash flow streams of its debt investments. It reviews various sources of transactional data, including private mergers and acquisitions involving debt investments with similar characteristics, and assess the information in the valuation process.

Advisors' Opinion:

• [By Dan Caplinger]

  But one concern is that investors are paying too much for BDCs. Like Ares, peers Prospect Capital (NASDAQ: PSEC  ) and Fifth Street Finance (NASDAQ: FSC  ) also carry share prices that are higher than the net value of the assets on their books. Yet Ares trades at a substantially higher premiums to NAV than Prospect or Fifth Street, suggesting that they're more comfortable with the quality of Ares' assets compared to its rivals.

• [By Eric Volkman]

  Fifth Street Finance (NASDAQ: FSC  ) is about to expand its capital base. The company has launched a fresh issue of 13.5 million shares of its common stock in an underwritten public offering. It also intends to grant its underwriters a purchase option for an additional 2.025 million shares.

• [By Bryan Perry] Popular Posts: Trade of the Day: Groupon (GRPN)Lloyds (LYG): A Sweet Stock Across the PondDoes Fifth Street Finance (FSC) Deserve a Spot in Your Portfolio? Recent Posts: Does Fifth Street Finance (FSC) Deserve a Spot in Your Portfolio? Trade of the Day: Groupon (GRPN) Trade of the Day: U.S. Steel (X) View All Posts

  If you’re holding Fifth Street Finance (FSC), criticism that it’s not covering its dividend with net investment income and is not projected to do so in 2014 might have you second-guessing its place in your lineup.

Top 5 Healthcare Equipment Stocks To Buy For 2015: Sunshine Heart Inc (SSH)

Sunshine Heart, Inc., incorporated on August 22, 2002, is an early-stage medical device company focused on developing, manufacturing and commercializing its C-Pulse Heart Assist System for treatment of Class III and ambulatory Class IV heart failure. The C-Pulse Heart Assist System utilizes the scientific principles of intra-aortic balloon counter-pulsation applied in an extra-aortic approach to assist the left ventricle by reducing the workload required to pump blood throughout the body, while increasing blood flow to the coronary arteries. As of December 31, 2011, the Company was in the process of obtaining regulatory approvals necessary to sell its product.

The Company has developed tools to allow the C-Pulse to be implanted through a small pacemaker-like incision between the patient�� ribs and sternum rather than a sternotomy. Patients implanted through its minimally invasive procedure require a hospital stay of four to seven days in connection with implantation of the C-Pulse System, after which they return home. During the year ended December 31, 2011, the Company completed enrollment and implantation of 20 patients in the North American feasibility phase of its trial. In April 2011, the Food and Drug Administration (FDA) approved an expansion protocol to allow the Company to implant up to 20 additional patients and add two additional centers to its feasibility study.

The Company competes with Thoratec Corporation, HeartWare International Inc., CircuLite, Inc., CardioKinetix, Inc., AbioMed, Inc., Jarvik Heart, Inc., MicroMed Technology, Inc., SynCardia Systems, Inc., Terumo Heart, Inc., WorldHeart Corporation in the United States and Europe, and Berlin Heart GmbH in Europe.

Advisors' Opinion:

• [By John Udovich]

  Small cap heart stocks Sunshine Heart Inc (NASDAQ: SSH), Abiomed, Inc (NASDAQ: ABMD) and AtriCure Inc (NASDAQ: ATRC) each find different ways go to the heart of the problem for cardiac�patients and have all been good performers for investors this year. After all and according to statistics collected by the CDC, heart disease is the leading cause of death for both men and women as about 600,000 people die of heart disease in the United States every year���accounting�for 1 in every 4 deaths. Moreover, roughly 715,000 Americans have a heart attack every year and�ff these, 525,000 are a first heart attack and 190,000 happen to people who have already had one. In other words, there is a big market for the following small cap heart stocks to address:

"Monsters University" Keeps Pixar Hit Streak Alive; Rakes in $82 Million

2013 is shaping up to be a very good year for Hollywood. Early estimates show Monsters University set to take in $82 million at the box office this weekend. That left the film well clear of a surprisingly strong performance from Brad Pitt's World War Z, which collected $66 million. Last week's winner, Man of Steel eased back 65% from its performance last weekend; posting about $41.2 million in box office receipts over the weekend. 

Overall, the weekend box office is 43% above the same weekend last year. 

Pixar's Winning Streak Survives

Monsters University is Pixar's 14th major film, and maintains the studio's record of all its features hitting number one on their opening weekend. While the film scored a 78% on film review aggregator Rotten Tomatoes, below Monster's score of 96%, audiences liked the film enough to award it an 'A' CinemaScore. The opening weekend total is also Pixar's second largest total ever, behind Toy Story 3's $110 million. 

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The excellent early results from Monsters University, both financially and from audience reviews, is a boon for parent company Disney  (NYSE: DIS  ) . Pixar will release a new film next year titled The Good Dinosaur and has two films in the pipeline for 2015, including a sequel to Finding Nemo. With Finding Nemo having grossed $339 million domestically back in 2003 and remaining one of the most beloved films in Pixar's library, 2015 could be a studio's most successful year yet. 

Zombies remain hot 

Paramount, a subsidiary of Viacom  (NASDAQ: VIA  ) , was right to expect the worst from World War Z. Despite the presence of a strong leading man in Brad Pitt and the ability to ride a zombie phenomenon that's led to Walking Dead becoming the break-out hit of cable TV, the film has long looked troubled. After executives first screened the movie, they famously deemed the last third of the movie so incoherent (and bleak) that the entire last 40 minutes of the film was reshot. The end result was terrible buzz around the film and a production budget reportedly clocking in around $190 million. 

Yet, reviews of the new ending were far more forgiving and a last minute marketing push also helped the film's fortune. The $66 million the film took in this weekend domestically is well above earlier forecasts which had pegged the film in the $40 million range. Add in international markets and the film's box office rises to $112 million. At the end of the day, the film's performance is more a sigh of relief for its financial backers and also evidence the craze around zombies remains very hot. 

Superman keeps flying high

Time Warner's (NYSE: TWX  )  Man of Steel slid 65% back to $41 million this weekend, but still remains a success story for the studio. The key area of focus this weekend was international markets. The film kept expanding, and through just two weekends has $188 million in international markets. 

That's a very key storyline to focus on. Consider that Disney's Iron Man 3 has about $400 million domestically, but over $800 million in foreign markets. That leaves its international haul at about 2/3 of its total box office. Time Warner's last breakout hit in the DC comic book universe was its Dark Knight trilogy. In that trilogy The Dark Knight's box office was only 47% international. The final film in the series, The Dark Knight Rises saw its international total expand to 59% of the box office. That's a comparable level of international sales to Disney's The Avengers. 

With talks heating up that Time Warner plans on focusing on a Justice League film in 2015 that will use its arsenal of DC comic book characters to compete with The Avengers, Man of Steel's expanding international total and the final film of the Dark Knight trilogy scoring well overseas point toward Justice League film scoring an eye-popping global box office total. 

Overall, not a lot of bad news out of Hollywood this weekend. 

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Top 5 Defensive Companies To Buy Right Now

Our favorite idea for 2014 for more speculative investors is a company that operates and manages gaming and entertainment facilities; it is well-placed to benefit from, not only a revival of consumer sentiment in Australia, but the emergence of a middle class in China as well, notes David Dittman, editor of Australian Edge.

Crown Resorts Ltd. ((AU:CWN), (OP:CWLDF), (ADR:CWLDY)) holds assets in Melbourne and Perth that continue to deliver solid and relatively defensive earnings.

Crown's two established casinos—the Crown Melbourne in Victoria and the Crown Perth in Western Australia—have long histories of stable cash generation, with demonstrated resilience during economic downturns. These assets are the company's main cash flow generators, and there is some concentration risk.

This ability to endure global macro volatility is, in part, a reflection of relatively stable and predictable local markets. Stable cash generation also reflects Crown's position as the sole licensed casino operator in the respective regions.

Top 5 Defensive Companies To Buy Right Now: Accor SA (AC)

Accor SA is a France-based hotel operator. The Hotels division manages more than 531,000 bedrooms in more than 4,200 hotels across 90 countries. Accor's portfolio consists of such hotel brands as Sofitel, Pullman, Novotel, Mercure, Suite Novotel, Adagio, ibis Styles, all seasons, Etap Hotel, Formule 1, hotelF1, Studio 6 and Motel 6, and its related activities, Thalassa sea & spa and Lenotre that provide an offer ranging from luxury to budget class. It operates through a number of subsidiaries, including SH Danton Michelet, Ste De Constructiondes Holets Suites, SIET, The Newgen Hotels, Chammans, Profid, SPFH, IBL, Soluxury HMC and SNC SH 61 QG; LA THERMALE DE FRANCE, PIH and HOTEXCO, among others. On July 30, 2012, it divested its stake in Ascendas Australia Hospitality Fund and Beijing Sanyuan Novotel and Ibis. In February 2013, it sold the Sofitel Paris Le Faubourg. In August 2013, it opened a new hotel in Thailand. In September 2013, it opened new resort in Dubai. Advisors' Opinion:

• [By Corinne Gretler]

  Accor (AC) dropped 4.4 percent to 27.52 euros, the biggest loss since June 2012. Europe�� largest hotel operator posted first-half earnings before interest and taxes of 198 million euros ($265 million), missing the average analyst projection of 212 million euros. The company predicted 2013 Ebit of between 510 million euros and 530 million euros, compared with the average 534 million-euro analyst estimate.

Top 5 Defensive Companies To Buy Right Now: Ever-Glory International Group Inc.(EVK)

Ever-Glory International Group, Inc., together with its subsidiaries, engages in the manufacture, distribution, and sale of apparel for women, men, and children. Its products include coats, jackets, slacks, skirts, shirts, trousers, vests, skiwear, down jackets, knitwear, and jeans. The company offers its products to the casual wear, sportswear, and outerwear brands, as well as retailers, such as department stores, flagship stores, stores-within-a-store, and specialty stores primarily in Europe, the United States, Japan, and the People?s Republic of China. As of December 31, 2010, it operated 293 retail stores in the People?s Republic of China. The company is based in West Covina, California.

Advisors' Opinion:

• [By John Udovich]

  Small cap apparel stock G-III Apparel Group, Ltd (NASDAQ: GIII) has been making bullish moves lately plus the stock is up 97.1% since the start of the year, making it the third best performing apparel stock (according to stock screener Finviz)�after small cap�Ever-Glory International Group Inc (NYSEMKT: EVK) and mid cap Fifth & Pacific Companies Inc (NYSE: FNP) followed by mid cap Hanesbrands Inc (NYSE: HBI). But is the G-III Apparel Group dressed for long term success for investors?

Top Oil Service Companies To Buy Right Now: Essex Property Trust Inc. (ESS)

Essex Property Trust, Inc. operates as a self-administered and self-managed real estate investment trust in the United States. It engages in the ownership, operation, management, acquisition, development, and redevelopment of apartment communities, as well as commercial properties. As of March 31, 2012, the company owned or had interests in 158 apartment communities; and 5 commercial buildings, as well as 5 development projects. Its communities are located in Los Angeles, Orange, Riverside, San Diego, Santa Barbara, and Ventura counties in southern California; and the San Francisco Bay area in northern California, as well as in the Seattle metropolitan area. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. Essex Property Trust, Inc. was founded in 1971 and is headquartered in Palo Alto, California.

Advisors' Opinion:

• [By Sean Williams]

  To get a better idea of how RealPage is doing, it's always best to look at occupancy rates for some of the nation's biggest residential-REITs. In AvalonBay Communities' (NYSE: AVB  ) most recent quarter, the company reported a 5% increase in revenue attributable to a 4.7% boost in prices in established communities, and a 0.3% uptick in occupancy. For Equity Residential (NYSE: EQR  ) it was much of the same, with revenue rising 5.4% in the fourth-quarter as occupancy rates rose 40 basis points to 95.4% from the year-ago period. Finally, Essex Property Trust (NYSE: ESS  ) delivered some of the strongest occupancy results of all, with 96.9% of its units occupied as of the end of January. The point is that with occupancy rates at their lowest levels in more than a decade, these residential REITs are driving growth by boosting prices because of rent scarcity.

• [By Jayson Derrick]

  Bloomberg reported�Essex Property Trust Inc. (NYSE: ESS) has made an offer to acquire BRE Properties for about $5 billion.

  BRE Properties Chief Executive Office Constance B. Moore had publicly hinted earlier this year that the company would consider ��ny legitimate proposal��after an investment firm Land & Buildings had made a $4.6 billion offer valued at $60 a share.

Top 5 Defensive Companies To Buy Right Now: Dassault Systemes SA (DSY)

Dassault Systemes SA provides software solutions and consulting services. The Company�� global customer base includes companies primarily in 11 industrial sectors: Aerospace & Defense, Transportation & Mobility, Marine & Offshore, Industrial Equipment, High Tech, Architecture, Engineering & Construction, Consumer Goods Retail, Consumer Packaged goods Retail, Life Sciences, Energy, Process & Utilities, Financial & Business services. To serve these industries, the Company has developed a broad software applications portfolio, organized in brands, in order to provide comprehensive solutions responding to the extensive requirements of product development: Design, Realistic Simulation, Virtual Manufacturing and Production, Collaborative Innovation, Lifelike Experiences and Information Intelligence. In July 2013, it acquired Apriso. In September 2013, it acquired Safe Technology Ltd. In January 2014, the Company acquired 84% interest in Realtime Technology AG. Advisors' Opinion:

• [By Julia Leite]

  The FTSE/JSE Africa All Shares Index fell 1.8 percent, the most since July 5. Discovery Ltd. (DSY), South Africa�� largest medical-insurance provider, sank 9.1 percent after saying profit will be as much as 10 percent lower than the previous period.

Top 5 Defensive Companies To Buy Right Now: Donegal Group Inc.(DGICB)

Donegal Group Inc., through its subsidiaries, offers personal and commercial lines of property and casualty insurance to businesses and individuals in the United States. The company?s personal lines of insurance products include private passenger automobile insurance, which provides protection against liability for bodily injury and property damage arising from automobile accidents, and protection against loss from damage to automobiles owned by the insured; and homeowners insurance that offers coverage for damage to residences and their contents from a range of perils, including fire, lightning, windstorm, and theft, as well as covers liability of the insured arising from injury to other persons or their property. Its commercial lines of insurance products comprise commercial automobile policies that provide protection against liability for bodily injury and property damage arising from automobile accidents, and protection against loss from damage to automobiles owned by the insured; commercial multi-peril policies, which offer protection to businesses against various perils primarily combining liability and physical damage coverages; and workers? compensation policies that provide benefits to employees for injuries sustained during employment. Donegal Group Inc. markets its insurance products through a network of approximately 2,200 independent insurance agencies. As of December 31, 2010, it wrote business in 22 states of the United States. The company was founded in 1986 and is headquartered in Marietta, Pennsylvania.

Advisors' Opinion:

• [By Luke Jacobi]

  Donegal Group (NASDAQ: DGICB) closed up 14.86 percent to $23.95 after Gregory Shepard offered $33-$37 per share for Donegal Group.

  The ExOne (NASDAQ: XONE) gained 4.13 percent to closed at $48.32 as 3D printing stocks once again were spotlighted for today's trading session.

• [By Jake L'Ecuyer]

  Shares of Donegal Group (NASDAQ: DGICB) got a boost, shooting up 16.24 percent to $23.22 after Gregory Shepard offered $33-$37 per share for Donegal Group.

12 Reasons Why New Zealand's Economic Bubble Will End In Disaster

New Zealand's economy has been hailed as one of world's top safe-haven economies in recent years after it emerged from Global Financial Crisis relatively unscathed. Unfortunately, my research has found that many of today's so-called safe-havens (such as Singapore) are experiencing economic bubbles that are strikingly similar to those that led to the financial crisis in the first place.

Though I will be writing a lengthy report about New Zealand's economic bubble in the near future, I wanted to use this column to outline key points that are helpful for those who are looking for a concise explanation of this bubble.

View from Mission Bay, Auckland, New Zealand (Photo credit: Jaafar Alnasser Photography)

Here are the reasons why I believe that New Zealand's economy is heading for a crisis:

1) Interest rates have been at all-time lows for almost a half-decade

Ultra-low interest rate environments are notorious for fueling credit and housing bubbles, which is how the U.S. housing and credit bubble inflated last decade. New Zealand's interest rates have been at record lows for nearly five years, which is more than enough time for economic bubbles and related imbalances to form.

Here is the chart of New Zealand's benchmark interest rate:

Source: TradingEconomics.com

New Zealand's three-month interbank rate, base lending rate, and 10 year government bond yield are also at or near all-time lows. Like many countries that are experiencing bubbles in recent years, New Zealand's low interest rates are a byproduct of global "hot money" flows from the United States and Japan, which have both had zero interest rates and quantitative easing programs to boost their economies after the Global Financial Crisis.

Low interest rates in the U.S. and Japan encouraged capital to flow into higher yielding investments in countries such as New Zealand, which led to reduced bond yields and an 85 increase in the value of the New Zealand dollar against the U.S. dollar since 2009. To combat the export-harming currency appreciation and bolster the economy during the financial crisis, New Zealand's central bank reduced its short-term interest rates to all-time lows.

2) Property prices have doubled since 2004

Following the pattern of many nations outside of the hard-hit U.S., peripheral Europe, and Japan, New Zealand's housing prices have doubled in the past decade, forming a property bubble:

Source: Global Property Guide

3) New Zealand has the world's third most overvalued property market

The doubling of New Zealand's housing prices in the past decade far surpassed household income and rent growth, making the country's property market the third most overvalued in the world. New Zealand's home price-to-rent ratio is 77 percent above its historic average and its home price-to-income ratio is 26 percent above its historic average.

5 Stocks Insiders Love Right Now

DELAFIELD, Wis. (Stockpickr) -- Corporate insiders sell their own companies' stock for a number of reasons.

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They might need the cash for a big personal purchase such as a new house or yacht, or they might need the cash to fund a charity. Sometimes they sell as part of a planned selling program that they have put in place for diversification purposes, which allows them to sell stock in stages instead of selling all at one price.

Other times they sell because they think their stock is overvalued and the risk/reward is no longer attractive. Some even dump their own stock because they have inside knowledge that a competitor is eating their lunch and stealing market share.

But insiders usually buy their own shares for one reason: They think the stock is a bargain and has tremendous upside.

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The key word in that last statement is "think." Just because a corporate insider thinks his or her stock is going to trade higher, that doesn't mean it will play out that way. Insiders can have all the conviction in the world that their stock is a buy, but if the market doesn't agree with them, the stock could end up going nowhere. Also, I say "usually" because sometimes insiders are loaned money by the company to buy their own stock. Those loans are often sweetheart deals and shouldn't be viewed as organic insider buying.

At the end of the day, it's large institutional money managers running big mutual funds and hedge funds that drive stock prices, not insiders. That said, many of these savvy stock operators will follow insider buying activity when they agree with the insider that the stock is undervalued and has upside potential. This is why it's so important to always be monitoring insider activity, but it's twice as important to make sure the trend of the stock coincides with the insider buying.

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Recently, a number of companies' corporate insiders have bought large amounts of stock. These insiders are finding some value in the market, which warrants a closer look at these stocks. Here's a look five stocks whose insiders have been doing some big buying per SEC filings.

Synta Pharmaceuticals

One biotechnology player that insiders are jumping into big here is Synta Pharmaceuticals (SNTA), which focuses on the discovery, development and commercialization of small molecule drugs for treating severe medical conditions, including cancer and chronic inflammatory diseases. Insiders are buying this stock into major weakness, since shares are down by 39% so far in 2014.

Synta Pharmaceuticals has a market cap of $342 million and an enterprise value of $273 million. This stock trades at a premium valuation, with a price-to-book of 7.10. Its estimated growth rate for this year is 8.7%, and for next year it's pegged at -6%. This is a cash-rich company, since the total cash position on its balance sheet is $91.48 million and its total debt is $23.40 million.

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A director just bought 1,250,000 shares, or about $5.01 million worth of stock, at $4.01 per share.

From a technical perspective, SNTA is currently trending well below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last month and change, with shares falling sharply from its high of $7.22 to its recent low of $3.91 a share. During that downtrend, shares of SNTA have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of SNTA have recently formed a double bottom chart pattern at $3.91 to $3.93 a share. If that bottom can hold, then SNTA could be setting up for a near-term breakout trade.

If you're bullish on SNTA, then I would look for long-biased trades as long as this stock is trending above those double bottom support zones or above some past support at $3.70 and then once breaks out above some near-term overhead resistance at $4.25 to just above $4.50 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 2.58 million shares. If that breakout materializes soon, then SNTA will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $5.18 to its 200-day moving average of $5.56 a share.

Conns

Another stock that insiders are loading up on here is Conns (CONN), which is engaged in the specialty retail of durable consumer products in the U.S. Insiders are buying this stock into massive weakness, since shares have fallen sharply so far in 2014 by 42%.

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Conns has a market cap of $1.6 billion and an enterprise value of $1.9 billion This stock trades at a cheap valuation, with a trailing price-to-earnings of 17.7 and a forward price-to-earnings of 10.4. Its estimated growth rate for this year is 37%, and for next year it's pegged at 23.3%. This is not a cash-rich company, since the total cash position on its balance sheet is $5.73 million and its total debt is $536.05 million.

A beneficial owner just bought 152,746 shares, or about $5.99 million worth of stock, at $39.23 per share. Another beneficial owner also just bought 106,034 shares, or about $4.18 million worth of stock, at $39.50 per share.

From a technical perspective, CONN is currently trending above its 50-day moving average and well below its 200-day moving average, which is neutral trendwise. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $31.17 to its intraday high of $45.99 a share. During that uptrend, shares of CONN have been consistently making higher lows and higher highs, which is bullish technical price action.

If you're in the bull camp on CONN, then I would look for long-biased trades as long as this stock is trending above its 50-day at $40.41 and then once it breaks out above its intraday high of $45.99 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 2 million shares. If that breakout hits soon, then CONN will set up to re-fill some of its previous gap-down-day zone from February that started at $58.34 a share.

General Moly

One rare earth materials player that insiders are in love with here is General Moly (GMO), which explores for, develops and mines molybdenum properties primarily in the U.S. Insiders are buying this stock into notable weakness, since shares are off by 33% so far in 2014.

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General Moly has a market cap of $100 million and an enterprise value of $60 million. This stock trades at a reasonable valuation, with a price-to-book of 0.74. Its estimated growth rate for this year is 58.3%, and for next year it's pegged at -140%. This is a cash-rich company, since the total cash position on its balance sheet is $22.31 million and its total debt is just $801,000.

The CEO just bought 140,000 shares, or about $128,000 worth of stock, at 92 cents per share. A vice president also just bought 100,000 shares, or about $96,000 worth of stock, at 97 cents per share.

From a technical perspective, GMO is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock hit a new 52-week low recently at 82 cents per share. Since hitting that low, shares of GMO have started to rebound sharply higher to its current price at around $1.10 a share. That rebound is now pushing shares of GMO within range of triggering a near-term breakout trade.

If you're bullish on GMO, then I would look for long-biased trades as long as this stock is trending above some key near-term support levels at $1 or at 90 cents per share and then once it breaks out above some near-term overhead resistance levels at its 50-day moving average of $1.11 to more resistance at $1.12 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 379,742 shares. If that breakout triggers soon, then GMO will set up to re-test or possibly take out its next major overhead resistance levels at $1.30 to $1.40 a share. Any high-volume move above those levels will then give GMO a chance to tag its 200-day moving average at $1.45 to $1.54 a share.

Navistar International

One industrial player that insiders are snapping up a huge amount of stock in here is Navistar International (NAV), which manufactures and sells commercial and military trucks, diesel engines and school and commercial buses; and provides service parts for trucks and diesel engines worldwide. Insiders are buying this stock into notable weakness, since shares are off by 9.5% so far in 2014.

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Navistar International has a market cap of $2.8 billion and an enterprise value of $6.4 billion. This stock trades at cheap valuation, with a forward price-to-earnings of 18.4. Its estimated growth rate for this year is 64.2%, and for next year it's pegged at 149%. This is not a cash-rich company, since the total cash position on its balance sheet is $1.10 billion and its total debt is $4.86 billion.

A beneficial owner just bought 1,027,789 shares, or about $34.20 million worth of stock, at $33.28 per share. A director also just bought 911,774 shares, or about $30.20 million worth of stock, at $33.13 per share.

From a technical perspective, NAV is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently formed a double bottom chart pattern at $31.51 to $31.72 a share. Following that bottom, shares of NAV have started to uptrend and move within range of triggering a near-term breakout trade.

If you're bullish on NAV, then I would look for long-biased trades as long as this stock is trending above those double bottom support levels and then once it breaks out above its 50-day at $34.79 and its 200-day at $35.79 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 1.36 million shares. If that breakout starts soon, then NAV will set up to re-test or possibly take out its next major overhead resistance levels at $39.50 to $42 a share.

Callon Petroleum

One final stock with some with some decent insider buying is Callon Petroleum (CPE), which is engaged in the acquisition, exploration, development and production of oil and gas properties in the Permian Basin in West Texas. Insiders are buying this stock into major strength, since shares are up sharply by 41% so far in 2014.

Callon Petroleum has a market cap of $371 million and an enterprise value of $426 million. This stock trades at a cheap valuation, with a forward price-to-earnings of 17.67. Its estimated growth rate for the next quarter is 450%, and for next year it's pegged at 64.5%. This is not a cash-rich company, since the total cash position on its balance sheet is $3.01 million and its total debt is $75.75 million.

A vice president just bought 14,616 shares, or about $121,000 worth of stock, at $8.30 per share.
From a technical perspective, CPE is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last four months and change, with shares moving higher from its low of $5.70 to its intraday high of $9.30 a share. During that uptrend, shares of CPE have been consistently making higher lows and higher highs, which is bullish technical price action.

If you're bullish on CPE, then look for long-biased trades as long as this stock is trending above some key near-term support levels at $8.15 to $8 and then once it breaks out above its 52-week high at $9.30 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 587,418 shares. If that breakout triggers soon, then CPE will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $12 to $13 a share.

To see more stocks with notable insider buying, check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

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

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.