Leveraged ETFs have become very popular among active traders looking to increase their exposure to a given index without buying on margin. While the SEC has warned of their risk on multiple occasions, many traders continue to utilize these ETFs without taking into account all of the associated risks. For example, the daily compounding they employ means that a 10 point move down one day and a 10 point move up the next may actually produce a loss .
In this article, we'll take a look at how to reduce the risks associated with leveraged ETFs by using stock options.
Why Are Leveraged ETFs So Scary?Leveraged ETFs are exchange-traded funds that use derivatives and debt to amplify the returns of an underlying benchmark. For instance, the ProShares Ultra S&P 500 utilizes swap agreements and forward contracts to produce twice the daily performance of the popular S&P 500 benchmark index. While they provide traders with useful leverage to capitalize on short-term movements, the same leverage could make them dangerous in the wrong hands .
There are two primary factors that make leveraged ETFs dangerous for inexperienced and uneducated traders – compounding effects and reset periods. Most leveraged ETFs are reset on a daily basis, which means that exposure to the index is reset at the end of every trading day and returns can be compounded in the wrong direction. For example, in a seesaw market an underlying index can post a modest gain with the associated leveraged ETF posting big losses .
Options on Leveraged ETFs: A Recipe For Disaster?Given the many risks associated with leveraged ETFs, trading their options may be seen as a recipe for disaster, especially given that options themselves are often misused by inexperienced traders and investors. In some cases, however, options can actually help tame the volatility seen in leveraged ETFs in order to make them less risky. And in other cases, they can be used in order to achieve or control more specific outcomes.
F! or example, traders looking to short a leveraged ETF must not only find enough shares to short sell but also scrape together a significant margin requirement. An easier alternative may be to purchase deep in-the-money put options that don't require margin or hard-to-borrow shares in order to capitalize on the same downside. Perhaps even more importantly, the most that trader could lose is the premium paid, which could significantly de-risk the position.
Options Strategies For Leveraged ETF TradersCovered calls and protective puts are the two simplest strategies that can help reduce risk by either generating an immediate income that offsets costs or securing the right to sell at a certain price in order to establish a price floor for the position. Traders can enter into these positions by either writing a call option or buying a put option against an existing position, thereby limiting the position's total profit and/or loss potential .
Spread strategies can be utilized to even more tightly control risk by setting an upper and lower limit on the price action. For example, a trader could write one call option at a higher strike price and buy another call option at a lower strike price, both with the same expiration date, to create a bull call spread. The written call helps pay for the purchased call's upfront costs, while the two strike prices provide a ceiling for maximum profit and maximum loss.
Traders can also take advantage of the differences between leveraged ETFs and traditional ETFs focused on the same underlying index. For instance, traders concerned about their leveraged ETF holdings diverging from the index's performance can purchase call options on the traditional ETF to hedge some of their exposure. Of course, call options on these traditional ETFs could also be used to generate leverage without the use of leveraged ETFs altogether.
The Bottom LineLeveraged ETFs are a great tool for active traders seeking leveraged exposure to an underlying index, but daily! resets a! nd compounding makes them risky for the inexperienced. Adding options to the mix may seem like only adding another layer of complexity, but in reality, they can be used to better control risks and outcomes. Active traders should consider common equity option strategies when developing their leveraged ETF strategies.
Disclosure: No positions at time of writing.
Thursday, October 31, 2013
Wednesday, October 30, 2013
Why Calix Shares Plunged
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Calix (NYSE: CALX ) dropped more than 30% during intraday trading Wednesday after the communications equipment supplier reported mixed third-quarter results and weak forward guidance.
So what: Quarterly revenue increased 27%, to a record $103.6 million, which translated to adjusted net income of $10.2 million, or $0.20 per share. Analysts, on average, were expecting lower adjusted earnings of $0.14 per share on higher sales of $104.35 million.
What's more, Calix stated that while spending from its tier 2 and tier 3 customers has been strong so far this year, those customers have indicated spending will slow down in the fourth quarter. As a result, management expects Q4 revenue to fall sequentially to a range of $97 million to $103 million, which will result in adjusted earnings per share in the range of $0.03 to $0.08.
Top 10 Cheap Stocks To Invest In Right Now
By contrast, analysts were calling for fourth-quarter sales of $115.52 million, with earnings of $0.20 per share on the same basis.
Now what: No matter how you slice it, that's a big discrepancy from what investors were hoping for, and doesn't bode well for Calix stock over the short term. Even so, you've got to applaud management for being prudent in its guidance and, next year, Calix should still remain nicely positioned to benefit from the broader rollout of gigabit-speed services.
While I wouldn't be surprised if the stock has more downside over the next few months -- even with shares currently trading at a reasonable 13 times next year's estimated earnings -- I think investors would do well to at least add Calix to their watchlists.
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Tuesday, October 29, 2013
Can GlaxoSmithKline Get Past This Hiccup and Head Higher?
With shares of GlaxoSmithKline (NYSE:GSK) trading around $51, is the stock an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s MovementGlaxoSmithKline is global health care group engaged in the creation and discovery, development, manufacture, and marketing of pharmaceutical products, including vaccines, over-the-counter medicines, and health-related consumer products. GlaxoSmithKline's principal pharmaceutical products include medicines in these areas: respiratory, antivirals, central nervous system, cardiovascular and urogenital, metabolic, antibacterials, oncology and emesis, dermatology, rare diseases, immuno-inflammation, vaccines, and HIV. The company operates in three primary areas of business: pharmaceuticals, vaccines, and consumer health care. Through its areas of business, GlaxoSmithKline is able to positively affect the lives of many consumers around the world that require their medications.
T = Technicals on the Stock Chart are MixedGlaxoSmithKline stock has been coasting higher over the past several years. The stock is now pulling back a bit after breaking higher earlier this year. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, GlaxoSmithKline is trading between its key averages, which signals neutral price action in the near term.
(Source: Thinkorswim)
Taking a look at the implied volatility and implied volatility skew levels of GlaxoSmithKline options may help determine if investors are bullish, neutral, or bearish.
| Implied Volatility (IV) | 30-Day IV Percentile | 90-Day IV Percentile | |
| GlaxoSmithKline Options | 19.21% | 30% | 27% |
What does this mean? This means that investors or traders are buying a minimal amount of call and put options contracts, as compared to the past 30 and 90 trading days.
| Put IV Skew | Call IV Skew | |
| July Options | Flat | Average |
| August Options | Flat | Average |
As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a minimal amount of call and put option contracts and are leaning neutral to bullish over the next two months.
E = Earnings are Decreasing Quarter-Over-QuarterRising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on GlaxoSmithKline’s stock. What do the last four quarterly earnings and year-over-year revenue growth figures for GlaxoSmithKline look like and more importantly, how did the markets like these numbers?
| 2013 Q1 | 2012 Q4 | 2012 Q3 | 2012 Q2 | |
| Earnings Growth (Y-O-Y) | -28.21% | -26.92% | -15.12% | 12.86% |
| Revenue Growth (Y-O-Y) | -7.20% | -1.91% | -6.99% | -6.76% |
| Earnings Reaction | 0.01% | 0.73% | -0.99% | -1.21% |
GlaxoSmithKline has seen decreasing earnings and revenue figures over the past four quarters. From these numbers, the markets have had mixed feelings about GlaxoSmithKline’s recent earnings announcements.
P = Excellent Relative Performance Versus Peers and SectorHow has GlaxoSmithKline stock done relative to its peers, Merck (NYSE:MRK), Novartis (NYSE:NVS), Pfizer (NYSE:PFE), and sector?
| GlaxoSmithKline | Merck | Novartis | Pfizer | Sector | |
| Year-to-Date Return | 18.29% | 16.29% | 12.26% | 12.36% | 14.81% |
GlaxoSmithKline has been a relative performance leader, year-to-date.
ConclusionGlaxoSmithKline is involved in the discovery and development of pharmaceutical drugs that tackle many known health care problems. The stock has been steadily trading higher but is now pulling back a bit as gains are being digested. Over the past four quarters, investors in the company have had mixed feelings about earnings announcements since earnings and revenue figures have declined. Relative to its peers and sector, GlaxoSmithKline has been a year-to-date performance leader. WAIT AND SEE what GlaxoSmithKline does in coming quarters.
Monday, October 28, 2013
Can 3M Continue to Impress Investors?
3M (NYSE:MMM) has become a beacon of American industry in its 111 years of existence. The stock has long been considered a solid “buy and hold” and dividend play for investors. After announcing impressive second quarter earnings on Thursday, the company looks poised for continued earnings and revenue growth. Let’s use our CHEAT SHEET investing framework to decide whether 3M is an OUTPERFORM, WAIT AND SEE, or STAY AWAY.
C = Catalysts for the Stock’s Movement3M announced stellar second quarter results on Thursday. The company reported earnings per share of $1.71 — beating analysts' estimates of $1.70, and 3 percent higher than the previous year's quarterly EPS. Additionally, sales rose across the board, with increasing revenue growth in the Health Care, Industrial, Consumer, and Safety and Graphics divisions. However, revenues from the Electronics and Energy division decreased on a year-over-year basis.
Most notable from the report was 3M's substantial free cash flow of $1.285 billion. The company has a strong return on invested capital at 19.07 percent*, and has used its cash flow to fund several recent acquisitions and internal research and development. The company bought Ceradyne, an industrial ceramics and ballistics armor company, late last year. So far, the acquisition has proven successful: Ceradyne sales grew 4.6 percent year-over-year, adding to 3M's Industrial division's 6.6 percent revenue growth for the quarter.
*Statistic sourced from Morningstar
E = Earnings are Increasing Year-over-yearThe second quarter of 2013 marks the fifth consecutive quarter of year-over-year earnings per share growth for 3M. The company has always paid special attention to its bottom line, and with a developing international supply chain, ongoing cost-cutting initiatives, and a $4 billion share repurchase program for 2013, earnings per share should continue to grow over the next several quarters.
Revenue growth has increased year-over-year in the last two quarters. One reason for this growth is its international presence — about 65 percent of sales come from overseas. Demand for healthcare and consumer goods products have increased in developing countries as disposable incomes have grown. Additionally, as governments improve their infrastructures, demand perks up for 3M's products — namely its window film and reflective sheeting used for road signs.
| 2013 Q2 | 2013 Q1 | 2012 Q4 | 2012 Q3 | 2012 Q2 | |
| Qtrly. EPS | $1.71 | $1.61 | $1.41 | $1.65 | $1.66 |
| EPS Growth YoY | 3.01% | 1.26% | 4.78% | 8.55% | 3.75% |
| Qtrly. Revenue | $7.634B | $7.387B | $7.497B | 7.534B | $7.486B |
| Revenue Growth YoY | 1.98% | 4.20% | -0.45% | -1.90% | 2.39% |
*Data sourced from YCharts
E = Excellent Performance Relative to Peers?The industrial conglomerates industry is usually characterized by steady growth and relatively high dividends. Additionally, industrial conglomerates are often used as bellwethers for global economic conditions. 3M stacks up well against two of its biggest competitors: General Electric (NYSE:GE) and Johnson & Johnson (NYSE:JNJ). All three companies are relatively expensive, given that their price to equity ratios are much higher than that of the industry. However, these companies earn this premium because of their ability to rebound from economic downturns, and because of their established dividend history.
3M's profit margin is second only to Johnson & Johnson's, mainly because of the differences between some of their business operations. However, the company reaps more profit per sales dollar than the industry, on average. While 3M has a weaker dividend yield than GE and Johnson & Johnson, it is still right in line with that of the industry. The company has not missed a dividend payment in 97 years, and has increased its dividend payment every year since 2003.
| MMM | JNJ | GE | Industry | |
| Trailing P/E | 18.30 | 20.46 | 18.19 | 13.4 |
| PEG Ratio | 1.83 | 2.70 | 1.45 | N/A |
| Profit Margin | 14.80% | 18.38% | 9.74% | 14.4% |
| Dividend Yield | 2.20% | 2.90% | 3.20% | 2.20% |
*Data sourced from Yahoo! Finance
T = Technicals on the Stock Chart are Strong3M opened Friday's trading day at a price of $116.55, above both its 200-day moving average of $106.68 and its 50-day moving average of $112.03. The stock has experienced a strong uptrend in the past year — up 27 percent in the last 12 months. A short-term uptrend is evidenced by the stock's high relative strength index of over 80. While a high RSI usually indicates the stock is overbought, a major pullback is unlikely given the fresh earnings beat. 3M currently trades right around its 52-week high of $117.30.
Given its strong history of successful research and development, as well as its substantial economies of scale in over 200 countries, 3M's competitive advantage should remain in tact over the long term. The company reported strong second quarter earnings, underscored by a continued ability to generate significant free cash flow. Moreover, the company is actively returning its cash balance to investors, in the form of share repurchases and dividend increases. Its investment in emerging markets is paying off, as healthcare and infrastructure spending in Latin America and Asia continue to grow. While the company is expensive relative to its historical price to earnings multiples, it is not likely to grow cheaper in the near-term, given its strong second quarter. Still, 3M's steady earnings and dividend growth make it a long-term buy. 3M is an OUTPERFORM.
Sunday, October 27, 2013
Does Procter & Gamble Support Rising Prices Post-Earnings?
With shares of Procter & Gamble (NYSE:PG) trading around $79, is PG an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s MovementProcter & Gamble engages in the manufacture and sale of a range of branded consumer packaged goods. The company operates in five segments: Beauty, Grooming, Health Care, Fabric Care and Home Care, and Baby Care and Family Care. The products provided by Procter & Gamble are my regarded as essential to a large segment of the worldwide population. As populations continue to grow and adopt its products and as a leading provider, Procter & Gamble stands to see rising profits for many years. Worldwide demand for Procter & Gamble products will continue to drive profits for this huge conglomerate.
The stock reported earnings before the opening bell October 25, 2013, posting earnings per share of $1.05 and $21.21 billion in revenue, which are relatively in line with expectations. Jon Moeller, the company's CFO, was optimistic about the data, saying that he expects full-year adjusted earnings to rise to 7 percent growth in the second half of the year. The markets took in the news with a lukewarm attitude, with the shares trading down slightly after digesting the report. Not surprising, considering that the stock is already trading near all time highs.
T = Technicals on the Stock Chart are StrongProcter & Gamble stock has been moving higher in the last couple of years. The stock is currently trading near all time high prices but may need a little more time at current prices. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Procter & Gamble is trading slightly above its rising key averages, which signal neutral to bullish price action in the near-term.
(Source: Thinkorswim)
Taking a look at the implied volatility (red) and implied volatility skew levels of Procter & Gamble options may help determine if investors are bullish, neutral, or bearish.
| Implied Volatility (IV) | 30-Day IV Percentile | 90-Day IV Percentile | |
| Procter & Gamble Options | 16% | 0% | 0% |
What does this mean? This means that investors or traders are buying a very minimal amount of call and put options contracts as compared to the last 30 and 90 trading days.
| Put IV Skew | Call IV Skew | |
| November Options | Flat | Average |
| December Options | Flat | Average |
As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very minimal amount of call and put option contracts and are leaning neutral to bullish over the next two months.
On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.
E = Earnings Are Increasing Quarter-Over-QuarterRising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Procter & Gamble’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Procter Gamble look like and more importantly, how did the markets like these numbers?
| 2013 Q3 | 2013 Q2 | 2013 Q1 | 2012 Q4 | |
| Earnings Growth (Y-O-Y) | 8.33% | -19.85% | 7.32% | 143.90% |
| Revenue Growth (Y-O-Y) | 2.25% | 0.86% | 2.00% | 1.98% |
| Earnings Reaction | -1.34%* | 1.66% | -6.56% | 4.01% |
Procter & Gamble has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings about Procter & Gamble’s recent earnings announcements.
* As of this writing
P = Weak Relative Performance Versus Peers and SectorHow has Procter & Gamble stock done relative to its peers, Johnson & Johnson (NYSE:JNJ), Kimberly-Clark (NYSE:KMB), Colgate-Palmolive (NYSE:CL), and sector?
| Procter & Gamble | Johnson & Johnson | Kimberly-Clark | Colgate-Palmolive | Sector | |
| Year-to-Date Return | 17.81% | 31.26% | 24.40% | 21.25% | 24.68% |
Procter & Gamble has been a poor relative performer, year-to-date.
ConclusionProcter & Gamble provides a variety of essential products to consumers in a multitude of countries around the world. A recent earnings release has investors expecting a little more from the company. The stock has been moving higher in recent years and is now consolidating near all time high prices. Over the last four quarters, earnings and revenues have been on the rise, however, investors have had mixed feelings about the company. Relative to its peers and sector, Procter & Gamble has been a weak year-to-date performer. WAIT AND SEE what Procter & Gamble does at current prices.
Friday, October 25, 2013
4 Big Stocks to Trade (or Not)
BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.
>>5 Big Stocks to Trade for Big Gains
From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. It's a concept that's known as "crowdsourcing," and it uses the masses to identify emerging trends in the market.
Crowdsourcing has long been a popular tool for the advertising industry, but it also makes a lot of sense as an investment tool. After all, the market is completely driven by the supply and demand, so it can be valuable to see what names are trending among the crowd.
While some fund managers are already trying to leverage social media resources like Twitter to find algorithmic trading opportunities, for most investors, crowdsourcing works best as a starting point for investors who want a starting point in their analysis. Today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market today.
>>5 Stocks Under $10 Set to Soar
These "most active" names are the most heavily-traded names on the market -- and often, uber-active names have some sort of a technical or fundamental catalyst driving investors' attention on shares. That's especially true now that earnings season is officially underway. And when there's a big catalyst, there's often a trading opportunity.
Without further ado, here's a look at today's stocks.
Sirius XM Radio
Nearest Resistance: $4.20
Nearest Support: $3.80
Catalyst: Earnings
>>5 Stocks Poised to Pop on Bullish Earnings
Shares of satellite radio stock Sirius XM Radio (SIRI) are trading more than 1.5% lower this afternoon, following the firm's mixed third-quarter earnings release this morning. SIRI added more than a half-million subscribers in the quarter, boosting its total subscriber count to 25.6 million listeners, a record high. Net income fell more or less in line with analysts' estimates, but 2014 guidance fell short, which is why shares are showing traders a modest decline.
From a technical standpoint, SIRI still looks bullish. Shares are pulling back down to trendline support at the 50-day moving average, a level that's acted as a floor for shares since the middle of the summer. For investors in search of a good entry opportunity, it doesn't get much better than this.
Symantec
Nearest Resistance: $24.25
Nearest Support: $21.50
Catalyst: Earnings
>>3 Tech Stocks Spiking on Big Volume
Symantec (SYMC) is another earnings-driven stock that's getting pushed lower in today's session on earnings news. The big difference is that this stock is down double-digits on the heels of its earnings call. Symantec actually beat EPS estimates by 6 cents, earning 50 cents per share for the quarter -- but poor guidance for the quarter ahead is the reason for SYMC's 11.6% selloff this afternoon.
The technical picture for SYMC doesn't look great, but it could certainly be worse. Shares are catching a bid at the $21.50 support level that shares bottomed at earlier this summer. Still, the uptrend that started in November is definitively broken right now, so technically, it makes sense to exit Symantec while most of your capital is still intact.
Lloyds Banking Group
Nearest Resistance: N/A
Nearest Support: $5
Catalyst: Technical Setup
>>4 Financial Stocks Rising on Big Volume
London-based Lloyds Banking Group (LYG) is up almost 3% this afternoon on big volume following some huge orders that hit the financial services giant's shares overnight. With earnings not due to be reported until next week, LYG is a technical setup pure and simple. And today's price action is shoving this stock to new highs above the key $5 level that just got taken out this month.
Making new highs is significant from an investor psychology standpoint because it means that everyone who has bought shares in the last year is sitting on gains. As a result, the "back to even" mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses. Now's not a bad time to come into LYG, but I'd recommend keeping a tight stop in place.
Cemex
Nearest Resistance: $11
Nearest Support: $10.50
Catalyst: Earnings
>>5 Rocket Stocks to Buy Now
A 16th straight quarterly loss at Mexican cement giant Cemex (CX) isn't enough to scare investors away from shares this morning -- Cemex is up more than 3% this afternoon after the loss was reported to shareholders. The buying pressure is coming as a result of better than expected results from CX's U.S. business; Cemex is proof that when Wall Street isn't expecting much, "less worse" results can help buoy shares.
Technically, CX is in no-man's land right now, in between resistance at $11 and a strong support level at $10.50. Buyers should wait for $11 to get taken out before taking a position in this stock.
To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.
RELATED LINKS:
>>5 Stocks in Breakout Territory With Big Volume
>>5 Dogs of the Dow to Stomp the Market
>>5 Hated Earnings Stocks You Should Love
Follow Stockpickr on Twitter and become a fan on Facebook.
At the time of publication, author had no positions in stocks mentioned.
Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to
TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.Follow Jonas on Twitter @JonasElmerraji
Wednesday, October 23, 2013
Is RadioShack a Buy Post-Earnings?
With shares of RadioShack (NYSE:RSH) trading around $2, is RSH an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s MovementRadioShack engages in the retail sale of consumer electronics goods and services through its store chain. The company operates in two segments, U.S. RadioShack company-operated stores and Target Mobile centers. It offers postpaid and prepaid wireless handsets, tablet devices, home entertainment, wireless, computer, and music accessories, as well as general purpose and special purpose power products. RadioShacks all supplies laptop computers, personal computing products, digital music players, residential telephones, global positioning system devices, cameras, digital televisions, and other consumer electronics products.
RadioShack reported earnings results for the third quarter ended September 30, 2013, including total net sales and operating revenues of $805 million and net loss of $112 million. Joseph C. Magnacca, chief executive officer, said, “We are moving forward quickly and as planned with our turnaround efforts. As we have said, we expect our work to take several quarters and during that time our results will vary quarter to quarter as we make strategic changes to improve our long-term financial performance. This quarter reflects our strategic decision to accelerate the improvements to the product assortment in our stores by removing duplicate and unproductive inventory. The lower inventory valuations for these products and projected disposal costs resulted in an expected increase to our cost of products sold this quarter.”
T = Technicals on the Stock Chart Are MixedRadioShack stock has not done very well in recent years. The stock has seen lower highs and lower lows and looks poised to continue this path. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, RadioShack is trading below its key averages, which signal neutral price action in the near-term.
(Source: Thinkorswim)
Taking a look at the implied volatility (red) and implied volatility skew levels of Radioshack options may help determine if investors are bullish, neutral, or bearish.
| Implied Volatility (IV) | 30-Day IV Percentile | 90-Day IV Percentile | |
| Radioshack Options | 105.13% | 63% | 61% |
What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts as compared to the last 30 and 90 trading days.
| Put IV Skew | Call IV Skew | |
| November Options | Steep | Average |
| December Options | Steep | Average |
As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bearish over the next two months.
On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.
E = Earnings Are Decreasing Quarter-Over-QuarterRising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on RadioShack’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for RadioShack look like and more importantly, how did the markets like these numbers?
| 2013 Q3 | Top 5 Penny Companies To Watch In Right Now2013 Q2 | 2013 Q1 | 2012 Q4 | |
| Earnings Growth (Y-O-Y) | -136.17% | -152.38% | -437.50% | -634.57% |
| Revenue Growth (Y-O-Y) | -10.31% | -0.48% | -7.04% | -6.47% |
| Earnings Reaction | -20.46%* | -5.11% | 0.95% | 0.32% |
RadioShack has seen decreasing earnings and revenue figures over the last four quarters. From these numbers, the markets have been disappointed with RadioShack’s recent earnings announcements.
* As of this writing
P = Excellent Relative Performance Versus Peers and SectorHow has RadioShack stock done relative to its peers, Best Buy (NYSE:BBY), Wal-Mart (NYSE:WMT), Aaron’s (NYSE:AAN), and sector?
| RadioShack | Best Buy | Wal-Mart | Aaron’s | Sector | |
| Year-to-Date Return | 32.08% | 264.50% | 11.75% | 1.77% | 15.19% |
RadioShack has been a relative performance leader, year-to-date.
ConclusionRadioShack offers a variety of consumer electronics and services to a growing population. A recent earnings release has investors sour about the company. The stock has declined in recent years and is currently trading near the lower-end of its yearly range. Over the last four quarters, earnings and revenues have been decreasing which has left investors disappointed with the company. Relative to its peers and sector, RadioShack has been a year-to-date performance leader. WAIT AND SEE what RadioShack does this quarter.
Tuesday, October 22, 2013
Obamacare: Rough Rollout, Assured Profits
10 Best Small Cap Stocks For 2014
Since the new health insurance exchanges mandated by the Patient Protection and Affordable Care Act (PPACA) went live on October 1, nearly 15 million people have visited the related web sites, exposing design flaws and frustrating many consumers with error messages and slow loading times. An estimated 7 million people visited the sites over the first weekend they were live.A major part of the problem is the requirement that each of the exchange web sites must reconcile millions of pieces of information pulled from databases from the US Department of the Treasury, Centers for Medicare and Medicaid Services and the Department of Health and Human Services. The web sites also use code and databases built by 55 contractors, virtually guaranteeing compatibility issues.
While the Obama administration has yet to release the numbers, it’s estimated that nearly half a million people have successfully applied for health coverage through the exchanges so far, despite the problems. Still, because of these technical glitches, it’s an open question as to whether the program with hit the 7 million sign-ups the Congressional Budget Office expected during the first six-month sign-up period.
Implementing the exchanges has already cost the government more than $400 million and the repairs will likely cost tens of millions more. Despite the high cost, contractors are skeptical that they will be able to hit the administration’s November 1 target date for having the glitches corrected and are worried that they might not have the sites operating properly until after the December 15 enrollment deadline for January coverage.
In the end, will these hiccups matter? Not really. Remember, Medicare experienced similar problems, when it was implemented in the mid-1960s.
Despite ! the plethora of implementation issues, a number of health care industry players will benefit from the uptick in patient volume the Obamacare exchanges will ultimately create.
Managed care organization WellPoint (NYSE: WLP) will be one of the biggest gainers. It currently operates in 20 states under Blue Cross/Blue Shield, giving it unparalleled name recognition across the country. It also already serves about 35 million consumers with more than 10,000 participating primary care doctors across the country.
WellPoint currently plans to participate in exchange plans in 14 states, all of which it already operates in and holds average market share of 32 percent. While its name recognition will certainly work in its favor, WellPoint’s plans also offer superior value given the company’s large provider network and nationwide economies of scale. It also plans to participate in the Medicaid programs in the 20 states where it currently operates and is considering how to leverage the opportunities created based on its expectation that the majority of states will participate in Medicaid expansion by next year.
WellPoint won’t report third quarter results until the middle of this week and any impact from the exchanges won’t begin showing up until the fourth quarter, but in the second quarter total revenue was up 15.5 percent. That was largely driven by a more than 50 percent increase in government membership thanks to its Amerigroup acquisition.
Express Scripts (NASDAQ: ESRX), the nation’s largest pharmacy benefit manager (PBM), will also be a major player in the larger market created by the exchanges.
Essentially a middleman negotiating drug pricing among insurance plans, drug manufacturers and pharmacies, Express Scripts became the largest PBM following its acquisition of Medco last year. In 2012, it processed more than 1.3 billion prescription claims.
Express Scripts is able to leverage its size to negotiate some of the most favorable pricing ! schemes o! f any PBM, resulting in some of the lowest administration costs and highest profits per claim. As a result, many of the patients the managed care plans pick up will find themselves covered under Express Scripts’ pharmacy programs, boosting Express Scripts’ prescription volumes.
Express Scripts enjoys low marginal costs for each newly added patient, because of its nationwide scope and largely automated systems. That means most of the revenue realized from the higher volumes will flow to the bottom line and to investors in the form of higher earnings per share.
So despite the rocky rollout of the insurance exchanges, there’s still plenty of money to be made from their implementation. While it is tough to put a finger on just how many new enrollees will emerge, the huge interest the public has shown so far is a major plus for companies such a WellPoint and Express Scripts, which will be able to generate strong margins on any increase.
Uninsured Americans eager to get health coverage just may save Obamacare from itself.
Monday, October 21, 2013
Most Affordable Places to Buy a Home
Although mortgage rates are currently low, the nation's home ownership rate is at 65.4%, the lowest it has been in 16 years. Homeownership is integral to the American Dream (polls show that it is important to 96% of Americans), however the recession led to reduced job security and lower salaries, pulling this dream out of reach for many Americans.
NerdWallet took a look at over 100 U.S. metro areas to determine where homeownership is feasible for the average consumer. By dividing the home sale price by the median household income in each city, we determined how expensive homes are in terms of salaries. In South Bend, the average home costs just 1.5 years of a household's pre-tax income, while in Honolulu, a home price equates to almost 9 years of pre-tax income. This is a simplistic, back-of-the-envelope measure that does not take into account local tax rates, mortgage rates, credit scores or the ability to make a down payment, but the numbers show the relative difference between cities in home affordability.
Hot Casino Companies To Buy Right Now
As evidenced in this chart, the difference between the five least affordable and most affordable cities to buy a home is striking:
For more information, check out our cost of living calculator.
Most Affordable Places to Buy a Home| 1 | South Bend-Mishawaka, IN | $67,600 | $44,372 | 1.52 |
| 2 | Lansing-E.Lansing, MI | $81,500 | $48,524 | 1.68 |
| 3 | Rockford, IL | $80,600 | $47,183 | 1.71 |
| 4 | Toledo, OH | $74,200 | $43,418 | 1.71 |
| 5 | Kankakee-Bradley, IL | $92,400 | $48,208 | 1.92 |
| 6 | Appleton, WI | $116,800 | $57,874 | 2.02 |
| 7 | Topeka, KS | $98,900 | $48,421 | 2.04 |
| 8 | Dayton, OH | $93,500 | $45,765 | 2.04 |
| 9 | Elmira, NY | $99,200 | $48,046 | 2.06 |
| 10 | Atlanta-Sandy Springs-Marietta, GA | $115,100 | $55,280 | 2.08 |
| 11 | Davenport-Moline-Rock Island, IA-IL | $103,200 | $48,904 | 2.11 |
| 12 | Saint Louis, MO-IL | $111,000 | $52,388 | 2.12 |
| 13 | Cleveland-Elyria-Mentor, OH | $101,000 | $47,147 | 2.14 |
| 14 | Gulfport-Biloxi, MS | $92,500 | $42,351 | 2.18 |
| 15 | Wichita, KS | $108,400 | $49,458 | 2.19 |
| 16 | Syracuse, NY | $114,700 | $51,528 | 2.23 |
| 17 | Akron, OH | $108,300 | $48,395 | 2.24 |
| 18 | Cincinnati-Middletown, OH-KY-IN | $121,000 | $53,302 | 2.27 |
| 19 | Rochester, NY | $118,100 | $51,729 | 2.28 |
| 20 | Springfield, IL | $121,700 | $52,925 | 2.30 |
As a contrast, here are the least affordable places to buy a home.
Least Affordable Places to Buy a Home| 1 | Honolulu, HI | $625,800 | $70,166 | 8.92 |
| 2 | San Jose-Sunnyvale-Santa Clara, CA | $705,000 | $86,278 | 8.17 |
| 3 | San Francisco-Oakland-Fremont, CA | $593,890 | $74,927 | 7.93 |
| 4 | New York-Wayne-White Plains, NY-NJ | $432,800 | $63,973 | 6.77 |
| 5 | San Diego-Carlsbad-San Marcos, CA | $412,320 | $61,247 | 6.73 |
| 6 | Los Angeles-Long Beach-Santa Ana, CA | $345,540 | $58,900 | 5.87 |
| 7 | New York-Northern New Jersey-Long Island, NY-NJ-PA | $368,200 | $63,973 | 5.76 |
| 8 | Barnstable Town, MA | $307,900 | $58,551 | 5.26 |
| 9 | Seattle-Tacoma-Bellevue, WA | $312,600 | $65,452 | 4.78 |
| 10 | Miami-Fort Lauderdale-Miami Beach, FL | $219,900 | $46,592 | 4.72 |
| 11 | Boston-Cambridge-Quincy, MA-NH | $332,200 | $70,454 | 4.72 |
| 12 | Burlington-South Burlington, VT | $278,400 | $60,229 | 4.62 |
| 13 | Bridgeport-Stamford-Norwalk, CT | $360,100 | $79,408 | 4.53 |
| 14 | Portland-Vancouver-Beaverton, OR-WA | $246,500 | $55,598 | 4.43 |
| 15 | Denver-Aurora, CO | $261,200 | $60,452 | 4.32 |
| 16 | Sarasota-Bradenton-Venice, FL | $189,900 | $46,519 | 4.08 |
| 17 | Washington-Arlington-Alexandria, DC-VA-MD-WV | $348,700 | $87,653 | 3.98 |
| 18 | Riverside-San Bernardino-Ontario, CA | $216,720 | $54,629 | 3.97 |
| 19 | Atlantic City, NJ | $210,100 | $53,288 | 3.94 |
| 20 | Gainesville, FL | $157,700 | $40,421 | 3.90 |
Data came from the National Association of Realtors and the U.S. Census.
Thursday, October 17, 2013
5 Small-Cap Stocks Poised to Pop When the Shutdown Ends
Popular Posts: 5 Small-Cap Stocks Poised to Pop When the Shutdown Ends4 Sizzling Stocks That Analysts HateSHLD: Same Fate as JCPenney, It’s Just Taking a Different Route Recent Posts: 5 Small-Cap Stocks Poised to Pop When the Shutdown Ends What to Know Before eBay Earnings 4 Sizzling Stocks That Analysts Hate View All Posts 
There is good news, though — once the political posturing is done, the budget is approved, and the debt-limit raised, the hardest-hit names should rally back equally well. Budget approval is how this will all end sooner or later, so a recovery is simply a matter of time.
These five small-cap stocks are particularly well-positioned to snap back from their recent slump.
DryShips
However, there’s an indirect consequence on the shipping industry when certain government offices are shuttered. The closure of the National Agriculture Statistic Service, for instance, has meant farmers and commodity buyers don’t have access to their usual demand, supply, and price reports. In turn, since these growers don’t know what their goods are worth, they’re not selling many, if at all. Ditto on the buying end.
But what does that have to do with maritime shipping, and dry-bulk shipping in general? If the food commodity market has ground to a halt, then the need to ship dry-bulk goods has also been crimped. Once the key agricultural offices reopen and price information starts flowing again, demand for transportation services will ramp up.
Best Medical Companies To Watch For 2014
First in line for that rebound is small cap shipper DryShips (DRYS), which has seen its shares slide 13% since their late-September peak.
American Public Education
See, with the shutdown now lasting more than a week, the number of people processing federal aid has been reduced due to furloughs, which in turn means there’s a backlog of aid applications. It won’t affect students who are already enrolled in the fall semester; they’ve all received their aid already. Not every for-profit school follows the traditional two-semester calendar though, and a few of them cater to a student base that relies heavily on this now-backlogged aid.
American Public Education (APEI) has been one of the biggest victims of the DOE’s partial shutdown. The 41,000 individual online classes scheduled to begin a few days ago were reduced by 13,000 when many military and government employees lost their tuition assistance as of October 1st.
APEI has been under plenty of selling pressure of late, but the mere whiff of a budget deal has already prodded the stock upward again. Given time for the effects of an approved budget to kick in, the stock should continue to climb as more students flock back to school, spurred by freely flowing financial aid.
Lifeway Foods
The primary worry is that Congress will greatly alter the usual terms of the bill in order to come to some sort of budget consensus, leaving the dairy business unable to support itself. The lesser worry is that the shutdown will last through the December 31st deadline, preventing the introduction of any kind of new farm bill in the meantime, which means law from 1949 will be re-instituted by default. Either way, the price of milk for consumers would theoretically skyrocket and end up pricing dairy products right out of the market for these small-cap stocks.
Once the budget impasse is wrapped up though, a new Dairy Stabilization Act should be right around the corner. That’s good news for a small-cap company like dairy farm Lifeway Foods (LWAY), which saw its shares fall nearly 25% over the course of August and September when the budget impasse was shaping up.
Carrols Restaurant Group
Larger restaurant chains can handle the lull. A less liquid small-cap name like Carrols Restaurant Group (TAST), however, feels the pain pretty intensely. That’s why shares are down about 8% this month.
Once those 800,000 furloughed employees start getting a paycheck again though, Carrols shares should work their way right back up to where they came from.
The Ryland Group
The reduction in the number of loan approvals as well as a reduction in the length of time to get a loan approved certainly hasn’t helped homebuilders like The Ryland Group (RYL); RYL shares are down almost 5% in October.
But the bigger threat to Ryland is the sheer uncertainty of buying a home in a foggy real estate environment. Once the shutdown ends and the lending gears get oiled again, however, Ryland and other small cap stocks in the industry should perk right back up.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
Wednesday, October 16, 2013
Three Quantitative Standouts
Our stock-rating system, Quadrix, considers more than 80 variables in seven categories—Momentum, Quality, Value, Financial Strength, Earnings Estimates, Performance, and Volume Metrics, writes Richard Moroney in Upside Stocks.
Used together, these scores can help you find winners and avoid losers. We do not use Quadrix exclusively, since there is much that cannot be captured by a numerical system. Still, Quadrix is designed to help ensure that we are fishing in the right waters.
Anaren (ANEN), a leading maker of microwave components for wireless communications and defense electronics, has bright growth prospects.
The space and defense division is benefiting from strong demand for radar equipment. The wireless division is benefiting from increased demand for cellular infrastructure equipment.
Anaren earns an impressive Quadrix® Overall score of 95, driven by outstanding ranks for Momentum (91) and Earnings Estimates (94).
The stock has rallied 27% since April 15, partly because of an unsolicited takeover offer that month of $23 per share—a price that management considered inadequate.
For the year ending June 2014, consensus estimates project per-share profits will rise 17% and sales 7%. Considering the strong operating momentum, shares seem reasonably valued at 18 times trailing earnings, a 17% discount to the five-year average P/E of 22.
Credit Acceptance (CACC) provides financing for auto purchases through a national network of nearly 4,500 car dealers. Its programs help dealers sell cars by attracting credit-challenged consumers unable to get conventional loans.
Credit Acceptance is benefiting from healthy volume growth and improved loan collections. For 2013, Wall Street expects per-share earnings of $10.34, up 20%. Revenue is expected to climb 11%. In 2014, the consensus calls for per-share earnings of $11.52.
Credit Acceptance earns an Overall score of 98. Trading at 10 times estimated 2013 earnings, shares seem cheap considering the profit-growth potential.
Gran Tierra Energy (GTE) ranks among the very best stocks in Quadrix. Shares earn the maximum Overall score of 100, ranking them Number One among the 165 energy exploration stocks in our research universe.
The stock earns scores of 98 or higher for Momentum, Value, Quality, and Financial Strength. Based in Canada, Gran Tierra explores for oil and gas in South America.
Gran Tierra cranks out a lot of cash flow, and a large cash position provides flexibility to expand its footprint. Cash flow from operations totaled $430 million in the 12 months ended June, up 44% from a year earlier. On June 30, the balance sheet was debt-free and held cash per share of $1.00.
Wall Street forecasts 30% higher revenue in 2013 and 80% growth in per-share profits. Shares seem unduly cheap, with a cash-adjusted trailing P/E of eight.
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Tuesday, October 15, 2013
Sizing up the Permian Basin
You may have noticed that the US is in the midst of a dramatic turnaround in oil production. This turnaround is often referred to as the “shale revolution.” Certainly the marriage of the decades-old techniques of hydraulic fracking and horizontal drilling had a huge role in this reversal as shale plays across the country became economical prospects for the first time.
In 2008 US oil production reversed a decades-long decline. From 5.1 million barrels per day (bpd) in early 2008, US crude oil production has now reached 7.5 million bpd. Two shale oil plays are widely credited with driving the resurgence.
The first is the Bakken Formation in the Williston Basin beneath North Dakota. Since 2008, oil production in North Dakota has increased from under 150,000 bpd to nearly 900,000 bpd. North Dakota has now become become the country’s second largest oil producer, trailing only Texas.
The second is the Eagle Ford Shale. Like the Bakken, the Eagle Ford is a tight oil formation rendered economical by high crude prices and the application of fracking and horizontal drilling. The Eagle Ford stretches across south Texas, and is projected to grow even faster than the Bakken. In the past five years Eagle Ford oil production has grown from essentially zero to 600,000 bpd in the first half of 2013. Projections have production reaching 930,000 bpd this year and well beyond 1 million bpd by mid-2014.
These two formations come to mind first because their development was enabled by fracking, and they are two of the biggest contributors to the shale revolution. But there is more to the US resurgence in oil production than shale oil.
The Permian Basin beneath west Texas and southeastern New Mexico receives a fraction of the press coverage accorded the Bakken and Eagle Ford, but it has more production potential than these two shale formations combined. The reasons it’s often overlooked are that the Permian is not just a shale oil play, nor is it a recently developed basin.
The geology of the Permian Basin is complex, with numerous oil-producing plays in stacked layers. The Permian has commercial accumulations of oil and gas at depths ranging from 1,000 feet to more than 25,000 feet. The Permian currently produces some 900,000 bpd of crude, about 12 percent of US oil production. Some analysts expect Permian production to more than double by 2018 to 2 million bpd — a level last reached during the 1970s.
By the time the shale oil revolution started, the Permian had already produced billions of barrels of oil. The area has been pumping crude since 1921, and made boomtowns out of cities like Midland and Odessa long before fracking became a household word. According to the Texas Railroad Commission, the Permian Basin has already produced more than 29 billion barrels of oil and 75 trillion cubic feet of natural gas. To put these numbers in perspective, US consumed 6.8 billion barrels of oil and 25 trillion cubic feet of natural gas in 2012.
More importantly, the Permian Basin is projected to still contain recoverable oil and natural gas resources exceeding what has already been produced. Industry experts estimate that, at current prices, more than $3 trillion worth of oil and more than $300 billion of natural gas are yet to be extracted. These projections dwarf the combined estimated reserves for the Bakken and Eagle Ford, and indicate that there are still many fortunes to be made in west Texas.
There are numerous drillers making major investments in the Permian Basin. The list is long, but it includes Occidental Petroleum (NYSE: OXY), Chevron (NYSE: CVX), Devon Energy (NYSE: DVN), Pioneer Natural Resources (NYSE: PXD), Concho Resources (NYSE: CXO), ConocoPhillips (NYSE: COP) and Apache (NYSE: APA).
Occidental Petroleum is the largest producer of crude oil not just among the more than 1,500 operators in the Permian Basin, but in all of Texas. Last year, Occidental produced an average of 207,000 bpd in the Permian, which amounted to ~ 16 percent of total Permian production.
Concho Resources is a smaller operator, but a purer Permian play. Concho’s core operating areas within the greater Permian Basin are the New Mexico Shelf, the Delaware Basin and the Texas Permian. Since the company went public, its share price has risen 746 percent (although the past 12 months have seen a relatively modest 16 percent gain).
For more conservative investors, the pipeline companies operating there are well-positioned to make money. Expansions are underway, but the present takeaway capacity in the Permian Basin is pretty tight given the growing crude supply:
Source: RBN Energy
In last week’s Energy Strategist, I took a more in-depth look at some of the drillers operating in the Permian Basin. In next week’s Energy Strategist I will review the pipeline projects aiming to capitalize on the Permian’s expected production boom over the next five years.
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Sunday, October 13, 2013
10 Best Undervalued Stocks To Invest In 2014
Paul Sakuma/AP Amgen is close to buying Onyx Pharmaceuticals $125 a share, or more than $10 billion, in a deal that is expected to be announced as soon as Monday, two people familiar with the matter said Saturday. A deal, which is still being finalized and would require board approval from both companies, would represent the fifth-largest biotechnology deal in history. The proposed takeover would value Onyx at 13 times the company's expected revenues for next year, one of the richest valuations in biotech takeovers, one of the people said. The people asked not to be identified because the matter isn't public. Representatives for Amgen (AMGN) and Onyx (ONXX) couldn't be immediately reached for comment. The acquisition of Onyx would give Amgen full rights to Kyprolis, the new multiple myeloma drug that analysts expect to reach annual peak sales in excess of $2 billion. Amgen would also gain a revenue stream from the liver and kidney cancer drug Nexavar that Onyx shares with Bayer, as well as royalty payments on Bayer's much newer colon cancer drug Stivarga and potential future royalties on an experimental breast cancer drug being developed by Pfizer (PFE). A deal in the $10 billion range would be Amgen's biggest since its $16 billion acquisition of Immunex in 2001 that gave it the rheumatoid arthritis drug, Enbrel, which is one of Amgen's most important, biggest-selling products. It would be by far the biggest deal under CEO Bob Bradway, who took over the top spot in May 2012. He has done a handful of much smaller deals, the biggest to date being a $1.16 billion acquisition of Micromet. Focus on Oncology Onyx shares closed Friday at $116.96. Amgen offered to pay $120 a share for the company in June but Onyx said that bid significantly undervalued the company and put itself up for sale. An Onyx deal would also give Amgen a much higher profile in oncology. Several of its current drugs offer supportive care for cancer patients, such as to treat anemia or decreases in white blood cells caused by chemotherapy. Another of its newer medicines, Xgeva, helps prevent fractures in patients whose cancers have spread to the bone. Its one product that treats cancer, the colon cancer drug Vectibix, has largely been a disappointment. Analysts are expecting Onyx revenue to reach $878 million in 2014, according to Thomson Reuters I/B/E/S. Geoffrey Porges, long-time biotech analyst for Sanford Bernstein, projected that an Onyx acquisition would boost Amgen revenue by 5 percent to 6 percent near term, rising to 20 percent by 2021. He sees Amgen earnings per share declining by 3 percent to 4 percent in 2014 with the purchase of Onyx, but increasing by 8 percent in 2016 and growing to an increase of 22 percent in 2019. Two of Amgen's biggest products -- the anemia drugs Aranesp and Epogen -- have been in decline for years, while others are fairly mature at this point.
10 Best Undervalued Stocks To Invest In 2014: Caterpillar Inc.(CAT)
Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.
Advisors' Opinion:- [By Dan Caplinger]
Finally, Caterpillar (NYSE: CAT ) rounded out the list of declining Dow stocks, falling 0.6%. The dollar's persistent strength spells trouble for the company's international sales, as the currency's strength make Caterpillar's exports more costly in local currency terms. With competitors from Japan and elsewhere gaining a competitive advantage, Caterpillar will have to work that much harder in an already-challenging environment of slowing economic growth and weak commodity prices.
10 Best Undervalued Stocks To Invest In 2014: Tupperware Corporation(TUP)
Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.
Advisors' Opinion:- [By Dan Caplinger]
Where growth will come from
One area that Newell Rubbermaid still has to tap fully is emerging markets. The company has done a good job of expanding overseas, with 17% annual growth in Latin America. But with barely a quarter of its sales coming from outside the U.S. and Canada, the company has a lot further to go. Storage rival Tupperware (NYSE: TUP ) gets fully 60% of its total revenue from emerging markets, and it too has seen impressive gains in South America as well as the Asia-Pacific region. - [By John Udovich]
Everyone is familiar with�the Tupperware brand from�consumer products stock Tupperware Brands Corporation (NYSE: TUP) and you are probably familiar with the brands�of mid cap stock Jarden Corp (NYSE: JAH) along with small cap stocks Libbey Inc (NYSEMKT: LBY) and Lifetime Brands Inc (NASDAQ: LCUT); but what about the stocks themselves? Chances are, their brands or products are right under your nose at home and you probably don�� know anything about the mid cap or small cap stock behind them.
- [By Eric Volkman]
Tupperware Brands (NYSE: TUP ) is reaching into its corporate bowl for a fresh payout to shareholders. The company has declared a quarterly dividend of $0.62 per share. This will be paid on July 8 to stockholders of record as of June 19. That amount matches the firm's previous distribution, which was paid in early April. Prior to that, Tupperware Brands was rather less generous, handing out $0.36 per share.
Top 5 Low Price Stocks To Watch For 2014: Dollar Tree Inc.(DLTR)
Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.
Advisors' Opinion:- [By Brendan Byrnes]
Brendan: Not a problem at all. What about the surprising amount of dollar-store companies that are public? You have Family Dollar (NYSE: FDO ) , Dollar Tree (NASDAQ: DLTR ) , Dollar General (NYSE: DG ) . You mention, in particular, Family Dollar, which is the lowest market cap out of all of those, as doing the best, an exceptional company. Why?
- [By Dan Moskowitz]
The shiniest dollar
Many investors and analysts like to debate which dollar store offers the best investment opportunity. The truth is that Dollar General, Dollar Tree Stores (NASDAQ: DLTR ) , and Family Dollar Stores (NYSE: FDO ) are all likely to be quality long-term investments. - [By John Maxfield]
If you're anything like me, two things went through your head when you saw this. First, you regret that you missed out on the investment opportunity. Since the end of 2009, shares in all three of these companies, led by Dollar Tree (NASDAQ: DLTR ) , have simply trounced the broader market. Even the worst performer of the bunch, Family Dollar (NYSE: FDO ) , beat it by nearly a factor of two.
- [By ANUP SINGH]
Dollar Tree (NASDAQ: DLTR ) is among the most successful single-price-point retailers in the U.S. It operates more than 4,842 stores across 48 states in the U.S. and five Provinces in Canada. The chart below shows that the company has been performing consistently well over the past five years.
10 Best Undervalued Stocks To Invest In 2014: Schlumberger N.V.(SLB)
Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.
Advisors' Opinion:- [By WALLSTCHEATSHEET.COM]
Schlumberger is best of breed in its industry, but the industry�� potential might not be as strong as advertised. There is a theory that decreasing energy prices will lead to increased demand, but that�� like saying someone flushed the toilet and then went to the bathroom. The truth is that global demand is on shaky ground, and if it falters, it will lead to a chain reaction that won�� benefit Schlumberger. In a somewhat related matter of importance, Schlumberger�� stock was hit hard during the financial crisis. The fact that it was deemed the financial crisis isn�� important in this case. What�� important is that it was a deflationary environment and Schlumberger couldn�� maintain its strength in that�environment. If the Federal Reserve removed all monetary stimulus, would a deflationary environment present itself once again? Nobody knows for sure, but it�� a possibility. In the meantime, potential rewards outweigh downside risks for Schlumberger. Therefore, Schlumberger is an OUTPERFORM.
Ford board meeting ends with no word on Mulally
Ford's board of directors ended a two-day quarterly meeting Thursday in Detroit without issuing a public statement on the future of CEO Alan Mulally.
Microsoft is reportedly considering Mulally as a replacement for CEO Steve Ballmer, who is due to step down next year.
Ford spokesman Jay Cooney said the automaker wouldn't comment on the board's discussions. But he said there is no change in Mulally's plan to remain at Ford through at least the end of 2014.
Ford also wouldn't say whether Microsoft is talking to Mulally.
It's not unusual for the board to make significant decisions that aren't announced until later.
A year ago, the board met and nothing was announced. But weeks later, on Nov. 1, the automaker disclosed the appointment of an heir-apparent to well-liked CEO Mulally, who squired the car company through the recession without the wrenching Chapter 11 bankruptcy reorganizations required by General Motors and Chrysler in 2009.
A year ago, directors had approved a new position, COO, reporting directly to Mulally and in effect running the automaker day-to-day. Mark Fields, head of Ford's operations in North and South American, was named to that job.
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The board did announce Thursday that Ford would pay a 10-cent dividend in the fourth quarter. Ford doubled its quarterly dividend to 10 cents in the first quarter of this year.
Ford Motor's shares rose 31 cents, or nearly 2%, to close at $16.93.
Friday, October 11, 2013
SHLD: Same Fate as JCPenney, It’s Just Taking a Different Route
Popular Posts: If You Have to Trade Gold, Know ThisThe Market Says Obamacare Is Here to StaySHLD: Same Fate as JCPenney, It’s Just Taking a Different Route Recent Posts: SHLD: Same Fate as JCPenney, It’s Just Taking a Different Route If You Have to Trade Gold, Know This Secondary Offerings: Friend or Foe? View All Posts The common thread between JCPenney (JCP) and Sears Holdings (SHLD) isn’t exactly a big secret. Both department store chains are struggling, largely due to misguided management. Between the two, though, there’s little doubt that one’s assumed to have a reasonable shot at survival (Sears), while the other (JCPenney) is destined to careen off a cliff.
Take a closer look at SHLD, however, and you might find both are headed for their ultimate demise. They’re just taking different routes.
JCPenney Is Bad …JCPenney’s woes have been more than adequately documented. Ron Johnson effectively drove the company into the ground in an effort to make the value-oriented retailer look and feel like Apple (AAPL) stores, and it didn’t work. While he was finally ousted and former CEO Mike Ullman stepped back into the role in April, by that time it was too late.
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Yes, Ullman seems intent on restoring JCPenney to the semi-successful department store chain it was just a few years ago, but we’ve yet to hear any plausible plans that will actually make that happen. So far, we’ve only heard an “all is well” assurance from the company … a company that just went to the open market to raise $785 million, tapped into $850 million worth of a revolving credit line, and took out a $2.25 billion loan earlier in the year.
It certainly alleviates the liquidity concern; the retailer expects to be sitting on $2 billion in cash at the end of the year. But, if every bit of the cash on hand (and then some) was borrowed or raised in just the past few months, it’s difficult to say Penney’s is in a viable financial condition.
JCPenney is still very much on life support, and could easily slip away if sales continue to fall short.
Fortunately for Sears, it’s not in the same liquidity crunch, right? Well, it might not have the same illness, but it doesn’t appear to be any less terminal.
… But Sears Is No BetterIn some ways you have to admire Eddie Lampert’s willingness to make tough decisions. On the other hand, when Lampert is the only person on the planet who can’t see the forest for the trees, it’s got to be exasperating for SHLD shareholders.
The folks who originally said Eddie Lampert — hedge fund manager, major SHLD shareholder, and now acting Sears CEO — was mostly viewing Sears Holdings as a real estate play have since been vindicated. In addition to the spinoff of Orchard Supply Hardware (OSHWQ) in 2011 and last year’s spinoff of the relatively successful Sears Hometown and Outlet Stores (SHOS), Lampert is now finally getting serious about shedding SHLD department store units. Last year he sold or closed 46 of the company’s 1,300 or so full-line mall stores, vs. letting go of less than 10 in any year since he became a major shareholder back in 2006.
Why? Because selling these stores puts much-needed money into the struggling retailer’s bank account.
While SHLD isn’t particularly forthcoming with details in the operation or sale of individual stores, we do know that Sears has garnered $277 million through the first six months of the current fiscal year via the sale of units or the exit of leases. That number lines up with the company’s aim of pulling in $500 million this year by axing some of its real estate.
Sears Holdings firmly implies that it’s just trying to cull the stores that are a drag on profits, but at least a couple of the stores Lampert has let go of recently are among the organization’s most profitable units located in some of the country’s highest-traffic malls. Why would he let go of such assets? Because the offers — to Lampert, anyway — are just too good to refuse.
There’s just one problem with the approach … it’s not viable for the long haul. Indeed, given enough time, it’s almost a guaranteed loser.
Even if most of the stores Sears is cutting loose of are dead weight, the 80/20 rule largely applies in the world of retail — 20% of Sears’ department stores provide 80% of … well, we can’t say “profits” because the company is habitually losing money; it lost $985 million last year, and is on pace to lose nearly twice that this year. Let’s just say 20% of the company’s units make up 80% of the company’s value. Booting even just a handful of the very best stores (because the payoff is strong) still knocks out a huge chunk of the company’s ability to produce revenue, and more important than that, the ability to produce profits.
It’s a nice short-term fix, but the whole point of retailing is to build a machine that produces recurring — and growing — revenue for years to come. Booting even just a few of your best profit centers makes things worse, not better.
Bottom LineAs long as Lampert is willing to sell Sears stores to raise cash, the company won’t need to make any kind of secondary offer the way JCPenney just did. SHLD had $681 million in cash on the books as of the end of last quarter, and seems to collect tens of millions (though the amount can vary widely) each time a store is sold. But, until Sears can actually address the reason it’s bleeding money, carving out pieces of itself only buys time.
And, therein lies the problem … Sears Holdings doesn’t seem to have any understanding of why it’s losing money, and therefore doesn’t have a viable plan to turn business around.
Eventually Lampert is going to run out of attractive stores/locales to sell. It might take a while, but it’s going to happen sooner or later. That’s when the company is going to face a serious JCPlike cash crunch, which for retailers usually marks their final days.
Hopefully Lampert will give up on the whole thing and abdicate his position before he chops off too many of the organization’s most vital organs, as someone else who “gets” retailing could still save the company
Lampert appears to be entrenched, though; the outlook for SHLD doesn’t look encouraging.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
Wednesday, October 9, 2013
Opening Print and S&P Levels to Watch
The Asian markets closed mostly higher and Europe (except for the Greek Athex) is trading lower across the board. Today's economic calendar starts with the MBA purchase applications, ADP employment report, Gallup U.S. job creation index, and API. We'll have some Fed speak out of Eric Rosen, plus Federal Reserve Chairman Ben Bernanke and St. Louis Federal Reserve Bank President James Bullard's opening remarks at the St. Louis Fed's Community Banking Research Conference.
Yesterday's letdown by and shutdown of the government ended up a positive for the S&P. That is how the game is played. Everyone sells into the event and once the news is out the markets go back up. While part of yesterday's buying was new money being put to work on the first trading day of the new quarter, most of the buying was the shorts getting squeezed out again. Guess what? It's not over yet. After yesterday's early afternoon selloff and bounce back up, we just do not get the feeling that it's going to be a one-day rally.
The current government shutdown is completely unnecessary and does not help the case of the U.S. dollar around the world. There are so many things in play and we are not talking about the Army/Navy game being canceled. There are many unanswered questions:
How will the federal government shutdown affect the U.S. economy?
How long will the federal government shutdown last?
What will be the effects on business and consumers?
What about this Friday's employment number?
What about the debt ceiling and the government running out of money on Oct. 17?
What about the Fed's taper?
As traders we are always questioning and probing. Whether it's the latest headline or a big move down in the gold we are always searching for answers. Right now traders are searching for answers from the government and not getting any. While this is not looking like just a one-day event, we do think this will end up like all the "I can't buys" over the las! t few months- going higher.
The most important thing a trader can do when looking at the government shutdown is to remember that the news is out and the short sellers have already voted. After all the huffing and puffing, the ESH (e-mini S&P) was trading 1692 in Globex at 6:00 pm Tuesday evening, only eight handles off the "big figure" at S&P 1700, but back down hard this morning.
Sure, the S&P will be susceptible to headlines, but at the end of the day we just don't think a prolonged government shutdown serves either party's interest. Expect a two-way trade but lean to buying weakness. Lastly, one would have to think that the current shutdown (especially if followed by a debt ceiling fight) will affect the Fed's taper plan, if you can call it a plan. If the shutdown continues, it will drag the U.S. into a downgrade and that will keep the Fed printing presses going well into next year.
As always, use stops and keep an eye on the 10-handle rule. Don't forget to catch MrTopStep on The Closing Print video found under the OptionsTV page (top bar). We report directly from the SPX pits, wrapping up the day and positioning for trade tomorrow.
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Tuesday, October 8, 2013
5 Stocks Spiking on Big Volume
DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.
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Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."
Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.
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With that in mind, let's take a look at several stocks rising on unusual volume today.
Hain Celestial Group
Hain Celestial Group (HAIN) manufactures, markets, distributes and sells natural and organic products. This stock closed up 1.7% to $79.56 in Monday's trading session.
Monday's Volume: 801,000
Three-Month Average Volume: 521,395
Volume % Change: 50%
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Shares of HAIN moved higher on Monday after a Piper Jaffray analyst upgraded the stock from neutral to overweight on rising demand for organic, natural, gluten-free foods, as well as those that have been genetically modified. Piper said that Hain Celestial is well-positioned to capitalize on these trends and raised their price target to $94 from $80.
From a technical perspective, HAIN spiked modestly higher here right above its 50-day moving average of $77.49 with above-average volume. This stock has been uptrending for the last few weeks, with shares moving higher from its low of $75.81 to its intraday high of $80.40. During that move, shares of HAIN have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of HAIN within range of triggering a near-term breakout trade. That trade will hit if HAIN manages to take out Monday's high of $80.40 and then more resistance at $81.55 with high volume.
Traders should now look for long-biased trades in HAIN as long as it's trending above its 50-day at $77.49, and then once it sustains a move or close above those breakout levels with volume that hits near or above 521,395 shares. If that breakout hits soon, then HAIN will set up to re-test or possibly take out its next major overhead resistance levels at $83 to its 52-week high at $85.48.
ExOne
ExOne (XONE) is a global provider of 3D printing machines and printed products to industrial customers. This stock closed up 9.3% at $48.32 in Monday's trading session.
Monday's Volume: 1.81 million
Three-Month Average Volume: 879,349
Volume % Change: 93%
Shares of XONE skyrocketed higher on Monday after FBR Capital Markets reiterated its outperform rating and a $75 price target on the stock.
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From a technical perspective, XONE exploded higher here right above some near-term support at $42.16 with strong upside volume. This stock has been downtrending badly for the last month and change, with shares moving lower from its high of $72.90 to its recent low of $42.16. During that move, shares of XONE have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of XONE look ready to see an end in the short term to their downside volatility -- and potentially start a new uptrend.
Traders should now look for long-biased trades in XONE as long as it's trending above Monday's low of $44.02 and then once it sustains a move or close above Monday's high of $49.48 with volume that hits near or above 879,349 shares. If we get that move soon, then XONE will set up to re-test or possibly take out its next major overhead resistance levels at $56 to its 50-day at $60.21.
eHealth
eHealth (EHTH) is a health insurance exchange through which individuals, families and small businesses can compare health insurance products and purchase and enroll in coverage online. This stock closed up 2.3% at $33.98 in Monday's trading session.
Monday's Volume: 208,000
Three-Month Average Volume: 124,817
Volume % Change: 115%
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From a technical perspective, EHTH trended modestly higher here right above some key near-term support levels at $32 and $31 with above-average volume. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $26.68 to its recent high of $35.92. During that uptrend, shares of EHTH have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of EHTH within range of triggering a major breakout trade. That trade will hit if EHTH manages to take out Monday's high of $34.06 to its 52-week high at $35.92 with high volume.
Traders should now look for long-biased trades in EHTH as long as it's trending above key support at $32 or at $31, and then once it sustains a move or close above those breakout levels with volume that's near or above 124,817 shares. If we get that move soon, then EHTH will set up to enter new 52-week-high territory above $35.92, which is bullish technical price action. Some possible upside targets off that move are $40 to $43.
Darling International
Darling International (DAR) is a recycler of food and animal by-products and provides grease trap services to food service establishments. This stock closed up 2.3% at $20.80 in Monday's trading session.
Monday's Volume: 1.97 million
Three-Month Average Volume: 676,482
Volume % Change: 215%
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From a technical perspective, DAR spiked higher here back above its 50-day moving average of $20.52 with strong upside volume. This move is quickly pushing shares of DAR within range of triggering a big breakout trade. That trade will hit if DAR manages to take out some near-term overhead resistance at $21.49 and then once it clears its 52-week high at $22.20 with high volume.
Traders should now look for long-biased trades in DAR as long as it's trending above some key near-term support at $20.17 or at $19.75 and then once it sustains a move or close above those breakout levels with volume that's near or above 676,482 shares. If that breakout hits soon, then DAR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $25 to $27.
Dunkin' Brands Group
Dunkin' Brands Group (DNKN) is a franchisor of quick-service restaurants serving hot and cold coffee and baked goods, as well as hard-serve ice cream. This stock closed up 1% at $45.20 in Monday's trading session.
Monday's Volume: 1.48 million
Three-Month Average Volume: 846,494
Volume % Change: 145%
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From a technical perspective, DNKN jumped higher here right above its 50-day moving average of $43.98 with above-average volume. This move briefly pushed shares of DNKN into breakout territory, after the stock flirted with some near-term overhead resistance at $45.55. Shares of DNKN closed just below that breakout level at $45.20 with volume that was well above its three-month average action of 846,494 shares. Shares of DNKN are now starting to move within range of triggering a major breakout trade. That trade will hit if DNKN manages to take out Monday's high of $45.49 and then once it clears its all-time high at $46.50 with high volume.
Traders should now look for long-biased trades in DNKN as long as it's trending above its 50-day at $43.98 or above more near-term support at $43.44 and then once it sustains a move or close above those breakout levels with volume that's near or above 846,494 shares. If that breakout hits soon, then DNKN will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that breakout $50 to $55, or even $60.
To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.
RELATED LINKS:
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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.
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