Top 5 Blue-Chip Stocks To Buy for February in 2012

These top five stocks for February have the immediate growth potential and are seeing exceptional buying pressure. I want to make certain you’re not missing out on these wonderful opportunities.
Two of the top five stocks for February are returning veterans from January and other months, but I’ve added some new stocks as well. Let’s get started:

Alexion Pharmaceuticals

Top 5 Blue-Chip Stocks To Buy for February in 2012 - Alexion (NASDAQ:ALXN) remains the No. 1 stock on my buy list. This stock has been surging higher in recent weeks, and shares responded very positively to the news that the company is expanding its product portfolio through its $1 billion bid for Enobia Pharma, a developer of therapies for serious genetic bone disorders. The company currently is working to get its hypophosphatasia treatment, asfotase alfa, approved in the United States. To date, there is no approved treatment for this life-threatening disease. So, if approved, the company would have a tremendous first-mover advantage. Alexion, who will acquire full worldwide development and commercial rights to asfotase alfa, is confident the drug can obtain approval. Analysts currently expect Alexion to grow sales by 41.4% and earnings by 30.8% in the fourth quarter. ALXN reports Thursday, Feb. 9.
AutoZone
Top 5 Blue-Chip Stocks To Buy for February in 2012 - AutoZone (NYSE:AZO) has taken off on its next leg higher because it is the perfect stock for the current automobile market. Although consumers are buying new cars when necessary, they also are extending the lives of those vehicles and getting as much mileage as they can for their buck. And companies like AutoZone do this superbly by supplying the parts to keep well-worn cars in top condition. Looking forward to the company’s next quarterly earnings report, expected in late February, analysts currently estimate AutoZone will announce 7% growth in sales and 19.8% growth in earnings. The stock should be a solid performer in the coming weeks. AZO is a strong buy.

Dollar Tree

Top 5 Blue-Chip Stocks To Buy for February in 2012 - Dollar Tree (NASDAQ:DLTR) knows one of the best ways of coping with thinning wallets is to stretch each and every dollar. So, while lean times hit other retailers particularly hard, Dollar Tree stores flourished. The company is the largest and most successful single-price-point retailer in the U.S. — everything in its 4,000 locations is just $1. The company has continued its success even as the U.S. economy improves, and I don’t believe the desire of consumers to save money will be disappearing anytime in 2012. In fact, analysts currently expect the company to report 11.5% sales growth and 22.5% earnings growth in its Feb. 22 earnings announcement.

McDonald’s

Top 5 Blue-Chip Stocks To Buy for February in 2012 - McDonald’s (NYSE:MCD) is the world’s No. 1 fast-food company and a solid winner for this buy list. Analysts expected the company to report 9.1% sales growth and 11.2% earnings growth this week. McDonald’s answered back by beating earnings expectations for 14th time in the past 16 quarters. Although this did not push the stock higher, I still believe the positive earnings report will be a catalyst for further gains. McDonald’s plans to invest in store expansions around the globe in 2012, with two-thirds of its new stores to be located in Asia.
Ross Stores
Top 5 Blue-Chip Stocks To Buy for February in 2012 - Ross Stores (NASDAQ:ROST) is the nation’s largest off-price apparel and home fashion retailer and continues to benefit from value-focused customers. The stock has been a solid performer so far in the new year. In December, ROST reported that its same-store sales jumped 9.2%, over double the 4% estimate! I’m looking forward to the company’s Q4 earnings announcement and finding out how these exceptional sales affected the company’s earnings. Analysts are currently expect the company to report 10.9% sales growth and 20.3% earnings growth, and a solid surprise could be just the ticket to the stock’s next leg higher.

5 $200-Plus Stocks Worth Every Cent to invest in 2013

There are some low-priced stocks out there that really catch Wall Street’s fancy. There’s some kind of love affair with a cheap stock — with investors fooling themselves into thinking that it’s easier for a $1 stock to get to $2 than it is for a $100 stock to get to $200.
But the bottom line is still the bottom line. A stock succeeds or fails on the merit of its business, not logistical nonsense like shares outstanding or the headline value of stock.
Take the 50-to-1 stock split that Berkshire Hathaway (NYSE:BRK.B) executed in 2009 to bring its “Baby B” stock down from more than $3,000 a pop to a manageable amount under $100 per share. Did it change the company? Did Warren Buffett become any smarter or dumber as a result?
And on a more basic level, you make the same amount of money owning one share of a $3,000 stock as you do with 3,000 shares of a $1 stock. Either way, you have the same amount of money invested — it’s just divided up differently.
So if you’re afraid of high-priced stocks or in love with bargain picks, take a moment to consider these five stocks with $200-plus price tags — and the potential to move even higher in the months ahead:
5 $200-Plus Stocks Worth Every Cent to invest in 2013 - Intuitive Surgical (NASDAQ:ISRG) makes the innovative da Vinci surgical systems that have revolutionized operations used to treat cancer and heart disease, among other things. Without getting too technical, Intuitive Surgical gear allows doctors to operate on a patient with fewer incisions, speeding up recovery time and reducing the risk of complications. ISRG is up 400% in five years — taking the recession in stride thanks to powerful growth as its technology has caught on and as aging baby boomers create increased demand for surgeries. The company has seen nine straight quarters of year-over-year profit increases and has seen a streak of revenue increases even longer than that. Health care is one of the few growth areas in the American economy, and ISRG is well positioned to capitalize on this trend.
5 $200-Plus Stocks Worth Every Cent to invest in 2013 - Apple (NASDAQ:AAPL) is the $400 gorilla of Wall Street that dares you to bet against it. Yeah, shares dropped 15% from October to November — but Apple has bounced back in a big way, hitting an all-time high Wednesday, and seems ready to move even higher. The iPad 3 could come as recently as February, if you believe the rumors, and Apple clearly is looking to maintain its stranglehold on the tablet market. Wall Street is admittedly ga-ga for Apple, so you have to beware of the hype. Still, a forward price-to-earnings ratio of less than 11 hints that there still is time to buy Apple for the continued march upward.
5 $200-Plus Stocks Worth Every Cent to invest in 2013 - MasterCard (NYSE:MA) is at the center of a macro trend that is tough to ignore: the death of paper money. Per-swipe transactions continue to rise even in America, since as much as 40% of transactions in the U.S. still take place with cash or paper checks. But the real growth for MasterCard is coming from emerging markets, where a rising middle class is getting access to bank accounts and debit cards. Remember, MasterCard is not a debt issuer, but more of a toll-taker on the e-commerce superhighway. Every time you make a purchase, MasterCard gets paid — and it’s hard to believe that the number of people using plastic is going to decline anytime soon.
5 $200-Plus Stocks Worth Every Cent to invest in 2013 - Priceline (NASDAQ:PCLN) and its iconic pitchman William Shatner have taken over the travel business with an innovative “name your own price” model for airfares, hotels, rental cars and a host of other services. However, the real growth isn’t at home from people booking trips to Florida to see the grandparents — it’s internationally. PCLN offers hotel room reservations in about 100 countries and more than 40 languages. That has allowed for big growth despite the fact that Priceline is competing with internet travel sites like Kayak that have popped up in recent years. Profits are on track to double from 2010 to 2011, and grow an additional 25% in 2012.
5 $200-Plus Stocks Worth Every Cent to invest in 2013 - W.W. Grainger (NYSE:GWW) is a rather un-sexy company when compared to the others on this list. It is engaged in “facilities maintenance,” a glorified way to refer to distributing pumps, tools, motors and other gear that allow businesses to … well, do business. That might not sound exciting, but a 60% surge in GWW stock since the summer is worth taking note of. The company has seen eight consecutive quarters of year-over-year revenue increases. EPS numbers jumped 29% from 2010 to 2011 and are set to surge another 17% in 2012. W.W. Grainger is expanding in China and Panama, too, which could add even more momentum to shares. You might want to wait for a pullback after the red-hot run recently, however.

The 5 Best ETFs to Invest for 2013

Buying targeted dividend ETFs is easier than buying high-yield dividend stocks.
Dividend stocks were red-hot last year as the über-volatile market sent investors headlong into what has traditionally been the most stable segment of the equity universe. And while it isn’t likely we’ll see quite as much volatility in 2012 as we did in the final four months of 2011, powerful unknowns, such as Europe’s unresolved debt issues and China’s economic slowdown, could put real pressure on global economic growth — and by extension, the fate of the world’s equity markets. That means we could be in for an extended period of volatility and more capital inflows into the dividend space.
As investors, we can buy a well-thought-out group of solid, high-profile dividend stocks to gain exposure to the segment. But it’s easier to buy targeted dividend ETFs that already contain baskets of the best — and highest-yielding — dividend-paying securities.
The 5 Best ETFs to Invest for 2013 - iShares Dow Jones Select Dividend Index
The iShares Dow Jones Select Dividend (ETF) (NYSE:DVY) is an ETF pegged to the Dow Jones index bearing its name. This ETF really saw gains during the final three months of 2011, perhaps the most volatile time for stocks all last year. The fund surged 11% over that period, and that gain came with a 3.44% annual yield (as of Jan. 13). DVY counts among its top holdings such stellar corporate names as Lorillard (NYSE:LO), Chevron (NYSE:CVX), Kimberly-Clark (NYSE:KMB) and McDonald’s (NYSE:MCD), to name just a few. The fund’s expense ratio is only 0.40%, making the cost of owning these high-end performers very attractive.
SPDR S&P International Dividend
International stocks were by no means the best performers last year, but that didn’t stop the SPDR S&P International Dividend (ETF) (NYSE:DWX) from delivering a solid dividend yield of 4.02%. DWX’s expense ratio is 0.45%, just slightly higher than the domestic-equity focused DVY. For this modest cost, you get diversified exposure to international dividend stocks in income sectors such as telecommunications, utilities and financials.
The 5 Best ETFs to Invest for 2013 - WisdomTree Equity Income Fund
WisdomTree Equity Income Fund (NYSE:DHS) enjoyed a good year, and it performed particularly well in the final quarter. The fund is up almost 8% over the past three months, and that comes with an annual yield of 3.31%. Its holdings are based on WisdomTree’s Equity Income Index, which reads like a Who’s Who of dividend stalwarts. Companies such as AT&T (NYSE:T), General Electric (NYSE:GE), Johnson & Johnson (NYSE:JNJ) and Procter & Gamble (NYSE:PG) top the list of payout performers you get when you own DHS. And at an expense ratio of just 0.38%, you get these great companies on the cheap.
The 5 Best ETFs to Invest for 2013  - iShares S&P U.S. Preferred Stock Index Fund
The iShares S&P U.S. Preferred Stock Index Fund (NYSE:PFF) is an ETF that gives you exposure to preferred stocks. I like this fund primarily because of its outstanding 6.99% yield, but I also like it because it diversifies your income portfolio by owning the preferred shares of some of the world’s best companies. HSBC Holdings (NYSE:HBC), General Motors (NYSE:GM), Wells Fargo (NYSE:WFC) and many others have issued high-yield preferred shares, and the easiest and cheapest way to own these equities — at an expense ratio of just 0.48% — is to have PFF in your portfolio.
The 5 Best ETFs to Invest for 2013 - Claymore/Zacks Multi-Asset Income Index
Clamymore/Zacks Multi-Asset Income Index (ETF) (NYSE:CVY) is perhaps the most eclectic fund of my five best ETFs for 2012. CVY has had a great run over the past three months, vaulting nearly 6% while offering an annual yield of 5.42%. One huge reason to love CVY is that it contains a host of different types of high-yield securities. In addition to domestic and international stocks, the fund holds real estate investment trusts, master limited partnerships, closed-end funds, Canadian royalty trusts and traditional preferred stocks. Owning CVY gives you the best of the best when it comes to income securities at a quite acceptable 0.78% expense ratio

Top 5 Emerging Growth Stocks to Buy for January in 2012

If you have cash to invest this month, I highly recommend these five below. Here they are, in no particular order:
Taiwan-based Silicon Motion Technology (NASDAQ:SIMO) has its hand in lots of hot markets and is a big player in flash memory storage — flash memory cards, USB flash drives, card readers and solid-state hard drives. In fact, most of the NAND flash and next-generation flash products on the market — whether produced by Samsung (PINK:SSNLF), SanDisk (NASDAQ:SNDK), Toshiba, Micron (NASDAQ:MU) or Intel (NASDAQ:INTC) — are supported by Silicon Motion controllers. Silicon Motion also produces multimedia chips including embedded graphics processors, image processors and TV tuners. Lastly, it has been increasingly focused on controllers for smartphones, tablets and notebook PCs, as well as wireless transceivers for 4G LTE smartphones and tablets.
In the third quarter, Silicon Motion’s sales rose 25% to $63.2 million compared with $50.5 million in the second quarter. Looking forward, the analyst community is expecting annual fourth-quarter sales growth of 51% and 88.9% earnings growth. In the past three months, the analyst community has revised their consensus earnings estimate 32% higher — a phenomenon that typically precedes blowout earnings surprises.
Top 5 Emerging Growth Stocks to Buy for January in 2012 - Questor Pharmaceuticals (NASDAQ:QCOR) likes a challenge. As a specialist of difficult-to-treat central nervous system disorders, the company has been particularly successful with its multiple sclerosis treatment, H.P. Acthar Gel. The company also makes Doral, which is used for the treatment of insomnia. In the massive biotechnology industry, Questcor is top-notch in terms of earnings per share growth and return on equity.
For the fourth quarter, the analyst community is expecting 127.4% annual sales growth and 265.7% earnings growth of 38 cents per share. In the past three months, the analyst community has revised their consensus earnings estimate 32.6% higher. Typically, such positive analyst earnings revisions precede future earnings surprises.
Top 5 Emerging Growth Stocks to Buy for January in 2012 -Hansen Natural (NASDAQ:HANS) is the mastermind behind Monster, a dominant energy drink in the U.S. Looking at a can of Monster Energy drink, the flashy staple of sleep-deprived college students, one wouldn’t think that the company’s humble beginnings stem back to just one father and three sons working with a juicer in Southern California. In fact, although Hansen sells supercharged drinks like Monster and Java Monster, most of its drink roster is actually very wholesome. For example, it has 30 real fruit and spice soda flavors, a number of immune system-boosting drinks, vitamin waters and an array of teas and lemonades.
In recent quarters, Hansen Natural has reported “monster” sales and profit growth. Third-quarter sales jumped 24% from $381.5 million last year to $474.7 million this quarter. Over the same period, net income also rose 24% to $82.4 million, or 88 cents per share. Plus, speculation is heating up that Monster might be an acquisition target by Red Bull or one of the major soft drink companies. With Red Bull’s recent decision to pull out of NASCAR as a sponsor, a “monster” acquisition might be just what the energy drink maker needs to capture additional U.S. market share.
Top 5 Emerging Growth Stocks to Buy for January in 2012 - Spectrum Pharmaceuticals Inc. (NASDAQ:SPPI) is familiar pharmaceutical company I once discussed in the Top 5 Emerging Growth Stocks for December. Spectrum specializes in oncology — the treatment of cancer — and currently has two cancer treatments on the market: Fusilev, a treatment for advanced colon cancer, and Zevalin, a treatment for a type of lymphoma.
But what really excites me about this company is what it has in its pipeline: Spectrum has more than 10 drugs in either late-stage development or development! This includes Apaziquone, a treatment for bladder cancer, Belinostat, another lymphoma treatment and Ozarelix, a treatment of prostate cancer. This is a midsize biotechnology company already at the top of the industry — in terms of return on equity — and is about to experience blowout growth.
Top 5 Emerging Growth Stocks to Buy for January in 2012 - Jazz Pharmaceuticals Inc. (NASDAQ:JAZZ) has two flagship drugs — Xyrem, the only narcolepsy treatment approved by the World Anti-Doping Agency, and Luvox CR, its obsessive compulsive disorder treatment. But there are a number of exciting developments on the near horizon, including Jazz’s massive buyout of Dublin-based Azur Pharma Ltd., which should close within the next couple of weeks, and the company’s subsequent moving of its headquarters to Dublin. After the move, Jazz will be able to take advantage of Ireland’s competitive tax rate.
The company’s sales climbed 63.3% and earnings surged 115.6% in the third quarter, and for the fourth quarter, the analyst community is expecting 54% annual sales growth and 70.5% earnings growth. Jazz Pharmaceuticals is flush with cash and recently prepaid $33 million in long-term debt, and I’m excited to see how developments play out in the company’s next earnings release. Also, despite those who might think that Jazz Pharma’s bullish run looks tapped out, I remain optimistic.

Top 6 Stocks to Buy for February in 2012

With business inventories low, manufacturing up in December, an increase in housing starts in November, consumer confidence up, and the unemployment rate falling, the economy appears to be slowly improving. But global issues and especially problems in the EU still plague the market.
January started on a positive note with the Dow up over 3%, thus the familiar saying, “As goes the first week of the new year, so goes the month and so goes the year,” was frequently repeated. But on Jan. 26, the Dow and the S&P 500 executed “daily reversals,” and since then prices have been falling. All of our internal and sentiment indicators are overbought, and so the market could end the month on a negative yet still have delivered one of the most impressive bullish performances in years.
It is important for investors to focus on high-quality stocks that pay dividends and/or have a history of regular dividend increases. Some also have stock buyback programs in place to use part of their cash and reduce the number of shares trading. Both strategies should have a positive long-term impact on the companies’ stocks.
Here are your top stocks to buy for February:

Top Stock to Buy #1 – Barrick Gold Corp. (ABX)

Barrick Gold Corp. (NYSE:ABX), an acquirer, explorer and developer of gold, copper, silver and zinc, is charted using monthly rather than daily data. This long-term chart clearly shows a bullish cup-and-handle formation. But for the stock to break out it must close above $55. If ABX breaks $55, look for a major rally to $75 to $80.
Earnings are estimated at $4.94 in 2011 and $5.58 in 2012. The dividend yield is 1.21%. This stock is rated a “five-star strong buy” by S&P with a 12-month target of $80.

Top Stock to Buy #2 – Chevron Corp. (CVX)

Chevron Corp. (NYSE:CVX) primarily engages in exploration, refining, transportation and storage of crude oil and natural gas. The stock has formed a neckline at $110 after establishing a double-bottom. The overall pattern is an inverse head-and-shoulders — a very bullish development. All that is required to trigger a strong buy is for the stock to close above the neckline. This is a huge bullish formation with a technical target of $132.
S&P has CVX rated a “five-star strong buy” with a target of $132. The consensus estimated earnings for 2011 are $14.02 and $13.65 for 2012. The annual dividend is $3.24, providing a yield of 3.12%. The company is expected to continue to increase dividends and is executing a share buyback program.
Top Stock to Buy #3 – H.J. Heinz Co. (HNZ)
H.J. Heinz Co. (NYSE:HNZ), a producer of a wide variety of food products, has a new, more aggressive corporate strategy. Acquisitions in “emerging markets” began two years ago, and in 2011 that new direction accounted for 16% of total sales. Earnings for FY 2011 were $3.06 and are estimated to be $3.30 in FY 2012. HNZ has a dividend yield of 3.71% and a history of increasing dividends. The fundamental target for HNZ is $60.
Technically the stock has double-bottomed at $48 and formed a neckline of resistance at $54.50. A recent buy signal from our proprietary indicator, the Collins-Bollinger Reversal (CBR), tells us to buy now for a breakout and run to $62.

Top Stock to Buy #4 – United Health Group (UNH)

The diversified United Health Group (NYSE:UNH) provides health care programs and retirement plans, has a life sciences group, and provides health plans to physicians, clinical services, etc.
Credit Suisse analysts consider UNH to be the best-positioned company in its field and look for earnings of $4.85 this year compared to $4.73 in 2011, and an increase to $5.60 in 2013. UNH has a dividend yield of 1.27%.
Technically the stock has consolidated in a broad cup. A break through $54 should produce a trading target of $62.
Top Stock to Buy #5 – Verizon Communications (VZ)
Verizon Communications’ (NYSE:VZ) earnings are expected to grow to $2.50 next year, up from $2.23 in 2011, and strong operating margins and network quality are expected to attract customers to its 3G and 4G networks.
The communications sector has been one of the strongest in the closing months of 2011, and VZ has been a leader of the group. But the sector, and Verizon, may have run too far too fast. An increase in sellers and a short-term sell signal from its stochastic warn that a correction is likely.
Buy VZ on a pullback under $38 for a longer-term advance to the mid-$40s.
Top Stock to Buy #6 – Whole Foods Market (WFM)
Whole Foods Market (NASDAQ:WFM), the operator of the largest chain of natural food supermarkets in theUnited States, appears headed to new highs. Sales are expected to increase by 15% in 2012, and earnings are estimated to increase to $2.27 from $1.93 in 2011 and $1.43 in 2010. The adoption of a new price strategy, more lower-priced offerings, and an expansion plan are expected to lead to better-than-average industry growth. The dividend will likely be increased from the current 56 cents per share, and the repurchase of shares is expected.
Technically WFM has been in a powerful bull channel for over a year, and while there is no reason to expect a change, the stock is currently in a correction and will most likely hold at the lower support line of the channel at the 50-day moving average at $70 where it should be bought. The target for a trade is $80 by the end of March. Longer-term buyers should expect continued growth and higher prices.

3 Undervalued Tech Stocks to Buy in 2012

When investors see the words “undervalued tech stocks,” the first companies that jump to mind are probably the mega-cap giants like Cisco (NASDAQ:CSCO) and Microsoft (NASDAQ:MSFT). The large-cap space certainly has more than its share of cheap tech stocks, but a look into mid- and small-cap territory reveals other, less talked-about opportunities. Computer Sciences (NYSE:CSC), Lexmark International (NYSE:LXK), and China Digital TV (NYSE:STV), are three such stocks that deserve more attention than they receive.
3 Undervalued Tech Stocks to Buy in 2012 - Computer Sciences
Shares of CSC, an IT-outsourcing company, have been pummeled from a February high above $56 to $37.20 on Wednesday. The stock has been hit by less-than-stellar earnings results and concerns that the U.S. government’s perilous fiscal situation will weigh on the 39% of CSC’s business that comes from federal contracts. That’s undoubtedly a legitimate worry, but also one that is well-known at this point. At 7.3 times 2012 estimates (and a price-to-earnings-to-growth ratio of 0.9) and a share price sitting at 0.8 times book value, it appears that the bad news is fully discounted in the stock. Two other key points regarding CSC: first, the stock yields 2.2% – much better than you’ll find with the average large-cap tech stock. Second, the company is cash-rich and is frequently mentioned as a target of a buyout. Betting on a takeover is always a dicey proposition, but CSC offers investors a solid risk-reward tradeoff even without the benefit of a buyout.
Keep in mind: The last time CSC’s P/E was at this level, the stock traded up 25% in less than two months.
3 Undervalued Tech Stocks to Buy in 2012 - Lexmark International
A maker of printers, ink, and imaging products, Lexmark has seen its shares come under heavy selling pressure since late 2010 – a trend that wasn’t helped by its May earnings miss. While the printing business is indeed in gradual decline, it may finally be time to say “enough is enough” regarding the downturn in Lexmark’s share price. After hitting a high above $47 in mid-October, the stock now stands at $28.62. At this level, the stock trades at forward P/E of less than 7x, and removing the net cash of $7 a share (about a quarter of its market cap) on its balance sheet brings the P/E below 5.5x. A low P/E can be a trap when growth is slowing, of course, but the company’s core ink business continues to generate substantial free cash flow. And like CSC, Lexmark has the added benefit of being a strong candidate for an eventual takeover.
Keep in mind: The recent selloff has driven LXK’s valuation to its lowest level in history.
3 Undervalued Tech Stocks to Buy in 2012 - China Digital TV
The smallest of the three companies discussed here, China Digital could offer big potential to patient investors. The company makes smart cards that allow the conversion of an analog signal to digital. A boring business perhaps, but consider that China is the world’s largest TV market with 377 million viewing households. Of these, 187 million have cable and only 90 million currently have a digital signal. This adds up to a stellar growth opportunity for a company with no debt and over 70% of its market cap accounted for by the $214 million of cash on its balance sheet. The stock trades for less than 7x 2012 earnings estimates and a PEG of just over 0.4. Chinese stocks are not without risk, as 2011 has taught us, but patient investors who tune into STV may be in for quite a show.

Keep in Mind: Like LXK, CSC trades at an all-time low P/E.
Technology investing has been no picnic for investors thus far in 2011, but these stocks provide a compelling margin of safety in the event of further volatility in the months ahead.

Best Energy Stocks Pick For 2013

President Obama made a speech where he announced a goal of cutting oil imports by a third over the next decade. He included a pledge to have federal agencies buy only alt-fuel vehicles by 2015 and a promise to expand U.S. oil exploration and production.
Transitioning half the cars and trucks in the U.S. to natural gas transportation over the next 5 to 10 years could reduce foreign oil imports by 5 million barrels every day.
So natural gas is an obvious play. Renewable/alternative fuels are other good choices.
Here are my four best picks that could make investors a bundle from  the President’s new policy:
Best Energy Stocks Pick For 2013#1—
Clean Energy Fuels (CLNE)
The company owns and/or supplies more than 200 natural gas fueling stations across the U.S. and Canada. It serves over 320 fleet customers operating over 20,000 natural gas vehicles. The customers can use Clean Energy’s fuel stations to tank up their vehicles with compressed natural gas (CNG) or liquefied natural gas (LNG).
Clean Energy Fuels also provides natural gas vehicle systems and conversions for taxis, limousines, vans, pick-up trucks, and shuttle buses through its BAF subsidiary in Texas. Clean Energy helps customers buy and finance natural gas vehicles and obtain government incentives.
The company buys CNG from local utilities and produces LNG at its two plants (in California and Texas) with a combined capacity of 260,000 gallons per day.
Clean Energy owns and operates an LNG liquefaction plant near Houston, Texas, which it calls the Pickens Plant, capable of producing up to 35 million gallons of LNG per year.
And investors who buy CLNE won’t be alone …
Founder and billionaire oilman T. Boone Pickens owns a sizeable chunk of Clean Energy.
Best Energy Stocks Pick For 2013 #2—
Westport Innovations (WPRT)
This company makes natural gas engines for forklifts, oilfield services engines, trucks and buses and automobiles. Its 50-50 joint venture Cummins Westport project builds natural gas vehicle engines for trucks and buses that could refill at the clean energy stations built by Clean Energy.
It made revenues of $154 million in the last year and isn’t close to profitability yet. But a concerted push toward natural-gas powered vehicles could change that.
WPRT is at the top of its 52-week range. So I’d wait for a pullback.
Best Energy Stocks Pick For 2013 #3—
Talisman Energy (TLM)
Talisman had 1.4 billion barrels of oil equivalent in reserves last year. It has material positions in three world-class, liquids-heavy shale plays in North America: The Marcellus shale (Pennsylvania), Montney shale (British Columbia) and Utica shale (Quebec). It is also expanding its Eagle Ford shale properties, in a 50-50 joint venture with Statoil.
The company also signed two $1.05 billion deals with Sasol of South Africa. This partnership is sketching out plans for a new multibillion-dollar facility near Edmonton that could process as much as a billion cubic feet of natural gas a day into 96,000 barrels of refined products through the Fischer-Tropsch process.
Fischer-Tropsch works by using heat and chemical catalysts to break down a substance like natural gas into its molecular basics and then rebuild those molecules into something else — such as diesel.
Why do that?
A barrel of oil contains roughly six times the energy content of a thousand cubic feet of gas. Since 6 thousand cubic feet of gas is worth about $24 (U.S.), and one barrel of oil is worth about $100, there is a tremendous profit margin if you can convert one to the other cost-effectively.
Best Energy Stocks Pick For 2013 #4—
PowerShares Wilderhill
Clean Energy Fund (PBW)
This is one of the largest alternative energy ETFs with over $500 million in assets. Large holdings include GT Solar, Yingli Green Energy, SunPower Corp., Trina Solar and more.

Top 10 High Dividend Growth Stocks for Long-Term Returns

Dividend growth stocks are one of the best-kept secrets in the investing world. After all, these are high-quality companies with strong competitive advantages that allow them to generate rising earnings over time. As a result, most of these companies generate so much in excess cash flow that they are able to pay a higher dividend over time without sacrificing long-term growth.
Companies that raise dividends at a high rate could easily generate double-digit yields on cost for investors who bought early and at the right time.
The following dividend champions have the highest consistent dividend growth rates:
Lowe’s (NYSE:LOW), together with its subsidiaries, operates as a home improvement retailer in the United States and Canada. The company has boosted distributions for 49 years in a row. Ten-year annual dividend growth rate: 27.6%. Yield: 2.8%. (analysis)
McDonald’s (NYSE:MCD), together with its subsidiaries, operates as a worldwide foodservice retailer. The company has increased distributions for 35 consecutive years. Ten-year annual dividend growth rate: 26.5% Yield: 2.8%. (analysis)
Raven Industries (NASDAQ:RAVN) manufactures various products for industrial, agricultural, construction and military/aerospace markets in the United States and internationally. The company has boosted distributions for 25 years in a row. Ten-year annual dividend growth rate: 18.2%. Yield: 1.5%.
Wal-Mart (NYSE:WMT) operates retail stores in various formats worldwide. The company has increased distributions for 37 consecutive years. Ten-year annual dividend growth rate: 17.8% Yield: 2.8%. (analysis)

High Dividend Stocks For 2013

Go Global for Bigger Dividends, Growth

How is a prudent, conscientious person supposed to retire these days? The mutual fund industry tells you to invest in their low-dividend (or no-dividend) funds and hope the capital gains will be enough to carry you through. As we’ve seen in the past decade, though, the gains don’t always materialize when you need them. What then?
High-dividend stocks. Rather than buying an index fund yielding only 1.8%, you should choose carefully among high-dividend stocks. And while there are dividend stocks on our own shores that may fit the bill, investors who are willing to look beyond our borders can find generous yields with greater growth potential.
Here are seven top global dividend stocks to buy:

High Dividend Stocks For 2013#1 – Cellcom Israel (CEL)

Recommended by: Richard Band, Editor, Profitable Investing
Cellcom Israel (NYSE: CEL), Israel’s largest wireless carrier with 34% of the market, just declared its first quarterly dividend for 2011 — the equivalent of 85.7 cents (U.S.) per share. Annualized, that works out to a super-sweet yield of almost 11%!
CEL hands over virtually all its profits to shareholders as dividends, so there’s a chance the company may have to trim the payout in future quarters if business hits a speed bump. On the other hand, this “pay it all out” policy (similar to the approach taken by most U.S. master-limited partnerships) imposes rigorous capital allocation discipline on management. In short, Cellcom execs don’t waste money.
Buy dividend stock CEL on a pullback below $33.

High Dividend Stocks For 2013 #2 – Aberdeen Chile Fund (CH)

Recommended by: Bryan Perry, Editor, Cash Machine
One of my mega-themes for 2011 (and beyond) is the emergence of certain South American countries toward becoming developed nations. At the forefront of this movement, most would argue for Brazil, but within the past year, it has become evident that Chile might be the first to become a comparable neighbor to that of its northern counterparts, the United States and Canada.
Because many of the companies that thrive in the Chilean economy are not listed here in the United States, I find it suitable to embrace the Chilean investment theme with the purchase of the Aberdeen Chile Fund (AMEX: CH), a closed-end fund that has been a star performer in 2010. CH traded ex-dividend on March 29, and after hitting $23, it is now trading back down to support near $21 where a good entry point can be established while locking in a 9.61% dividend yield. Shares of CH should make their way back to $26. Buy CH up to $22.

High Dividend Stocks For 2013#3 – Telkom Indonesia (TLK)

Recommended by: Richard Band, Editor, Profitable Investing
The mantra here is “free cash flow.” In recent years, Telkom Indonesia (NYSE: TLK), the dominant provider of both fixed-line and wireless communications in sprawling Indonesia, has poured huge sums into upgrading its networks. Now the company has the luxury of throttling back a bit.
Starting in 2011, each sales dollar (rupiah, actually) will generate more profit — along with a surge of cash that can be distributed to shareholders. I predict, in fact, that Indonesia’s largest telco will boost its dividend more than 30% by 2013 (from a 2010 base). That’s the kind of growth you want in retirement! Current yield, based on my estimate of 2011 dividends, is 4.8%. Buy TLK up to $36.

High Dividend Stocks For 2013 #4 – ING Asia Pacific High Dividend Equity Income Fund (IAE)

Recommended by: Bryan Perry, Editor, Cash Machine
We are witnessing the re-acceleration of the BRIC countries (Brazil, Russia, India and China) following a period of consolidated growth. The BRICs are enjoying renewed gross domestic product (GDP) expansion in the first quarter of 2011, especially China, and revving up for a strong year following a full six-month correction.
Pacific Rim countries will lead the way, making the ING Asia Pacific High Dividend Equity Income Fund (NYSE: IAE) an attractive buy after trading ex-dividend on April 1. With the stock sitting right on its 200-day moving average at $18.50, sporting a current dividend yield of 9.12%, it’s timely to pick up some shares. Buy IAE under $21.

High Dividend Stocks For 2013 #5 – CPFL Energia S.A. (CPL)

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Recommended by: Louis Navellier, Global Growth
It is a well-known fact that electricity consumption grows faster than the rate of growth of the economy. This is because as people build their wealth, they consume more. They buy bigger houses, they get more appliances and technology and such. Also, as industries enter a growth phase, they tend to use more power.
Because of the above characteristics, electric utilities in emerging markets are the first to see their businesses flourish. Brazil’s CPFL Energia S.A. (NYSE: CPL) distributes electricity to 6.4 million customers in about 570 communities, primarily in the states of Sao Paulo and Rio Grande do Sul. CPFL Energia also owns hydroelectric power plants and trades wholesale power in the open market and offers energy management services. Management estimates show that the company provides about 13% of Brazil’s electricity.
The company currently has a 6.9% dividend yield and should also benefit from a strong “currency tailwind” from the Brazilian real. The Brazilian real is a very strong currency as the central bank there maintains the highest real interest rates among major emerging economies. The shares offer a rare combination of both a high dividend yield and high growth rates, which makes them a great buy. Currently trading around $88, buy CPL on a pullback.

High Dividend Stocks For 2013 #6 – Telenor (TELNY)

Recommended by: Richard Band, Editor, Profitable Investing
Why would you want to own a telco in Norway? For one thing, as a hedge against the ruinous financial policies of the U.S. government. Thanks to prudent management of the country’s oil revenues, Norway has run a budget surplus every year since 1995. The Norwegian currency (krone), in which Telenor (OTC: TELNY) reports its profits (and pays its dividends), is sounder than both the euro and the U.S. dollar.
But there’s more to this story. TELNY has expanded far beyond its Norwegian base, with mobile and broadband operations in Sweden, Denmark, central and eastern Europe, plus five Asian countries. As a result, little-known Telenor is one of Europe’s fastest-growing telecom businesses. Sales will likely pass $19 billion in 2011. Current yield: 4.2%. Dividends have nearly quadrupled over the past seven years. This year’s dividend amounts to only about half of TELNY’s estimated 2011 profits, so an increase of 10% or so seems probable when the board declares next year’s payout. Buy TELNY on a pullback below $49.

High Dividend Stocks For 2013 #7 – SeaDrill (SDRL)

Recommended by: Bryan Perry, Editor, Cash Machine
SeaDrill Ltd. (NYSE: SDRL) is a unique opportunity for income investors seeking a pure play on deep-water drilling outside the post-BP spill in the Gulf of Mexico. The company was formed in 2005, and owns the most state-of-the-art drilling equipment in the entire industry that commands premium day rates. It is in big demand with utilization rates running near100% as big oil deposits become harder to find without going deep.
These guys operate all over the world in 15 countries on four continents, owning 54 rigs with exposure to only one rig in the Gulf of Mexico. Most of their drilling activity is off the coast of Norway and South Asia, so it has no exposure to the now unstable Middle East. However, news of ARAMCO in Saudi Arabia upping drilling production is hugely positive news for the oil and gas drilling sector. It confirms the belief that the worldwide drilling rig count will rise as well as day rates for the balance of 2011.
Shares of SeaDrill stand to trade significantly higher than its current price of $36.50, while paying a dividend yield of 7.5%. Buy SDRL under $40.

Is Cal-Maine the Perfect Stock?

Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want'
One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock, then decide if Cal-Maine (Nasdaq: CALM  ) fits the bill.
The quest for perfectionStocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

• Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.
• Margins. Higher sales mean nothing if a company can't produce profits from them. Strong margins ensure that company can turn revenue into profit.
• Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.
• Money-making opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
• Valuation. You can't afford to pay too much for even the best companies. By using normalized figures, you can see how a stock's simple earnings multiple fits into a longer-term context.
• Dividends. For tangible proof of profits, a check to shareholders every three months can't be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let's take a closer look at Cal-Maine.!

Factor

What We Want to See

Actual

Pass or Fail'

Growth
5-Year Annual Revenue Growth > 15%
14.2%
Fail
' 1-Year Revenue Growth > 12%
9.0%
Fail
Margins
Gross Margin > 35%
18.8%
Fail
' Net Margin > 15%
5.9%
Fail
Balance Sheet
Debt to Equity < 50%
20.3%
Pass
' Current Ratio > 1.3
3.28
Pass
Opportunities
Return on Equity > 15%
14.2%
Fail
Valuation
Normalized P/E < 20
14.04
Pass
Dividends
Current Yield > 2%
0.6! %
Fail
' 5-Year Dividend Growth > 10%
75.3%
Pass
' ' ' ' ' Total Score
' 4 out of 10

Source: Capital IQ, a division of Standard & Poor's. Total score = number of passes.

With four points, Cal-Maine does better than laying a goose egg, but it's definitely not perfect. The egg producer faces many of the same problems that companies throughout the food and agricultural industries are dealing with.
A big challenge that agricultural companies have had to overcome is the rising price of food. That's a positive for companies that help farmers increase production, such as fertilizer makers Terra Nitrogen (NYSE: TNH  ) and PotashCorp (NYSE: POT  ) . But it's bad news for food producers that need feed grain. In the chicken segment, Sanderson Farms (Nasdaq: SAFM  ) , Tyson Foods (NYSE: TSN  ) , and Pilgrim's Pride (NYSE: PPC  ) have fought among themselves to maintain high production levels despite sagging demand.
Similar dynamics have Cal-Maine feeling the heat of lower margins. Earlier this week, the company announced that profits fell 35% despite a big jump in sales. Without hedges of the sort that Smithfield Foods (NYSE: SFD  ) put in place, Cal-Maine had no choice but to cut its dividend. Even worse, CEO Dolph Baker expects no respite until at least t! he middl e of next year.
Cal-Maine performed well during the last recession and could be a good play for investors expecting further turbulence in the market. But until feed prices moderate, it's not going to become a perfect stock.
Keep searchingNo stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.
Click here to add Cal-Maine to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
Finding the perfect stock is only one piece of a successful investment strategy. Get the big picture by taking a look at our 13 Steps to Investing Foolishly.

Daily Blogwatch: Gold, Silver, NBC, Taxes, and $20 Million

Below are some of the best reads for investors from around the Web:

Howard Ruff says:Forget gold: Invest in Silver and Uranium. This is perhaps the only time in the past ten years I've agreed with him.
___________

An interesting view of the growth in crayola colors.
___________

The guy who wrote The Annals of Gullibility: Why We Get Duped and How to Avoid It lost 30% of his retirement savings with Bernie Madoff.
___________Do debt-free stocks trading for under $10 do well?
___________

Broadcast.com billionaire and Dallas Mavs owner (and HDNet founder) Mark Cuban thinks Jeff Zucker and NBC are doing the right thing by moving Leno back to his spot at 11:30.
___________

The complete guide to investing in the MAVINS: Mexico, Australia, Vietnam, Indonesia, Nigeria, and South Africa
___________

Little-known investor Jim Cramer turns out to be quite the prolific author.
___________

Why just tax the banks? Here are 13 other taxes for old-fashioned family fun.
___________

Would you go to jail for a guaranteed $20 million?
___________

The greatest invention so far of the 21st century: This plate tells you if you are eating too fast.

Best Gold Stocks To Invest In 2013

Diamond Foods (DMND) fell 9.2% after hours as the Wall Street Journal reportedthat prosecutors have opened an investigation into payments the company made to walnut growers. The probe could result in criminal charges, the Journal notes, and could undo the company’s deal to buy Pringles from Procter & Gamble (PG).
The SEC has already been looking into the payments, and will coordinate with the U.S. Attorney’s office in San Francisco. The company is also conducting an internal inquiry.

Diamond Crushed on Prosecutor Report

Diamond Foods (DMND) fell 9.2% after hours as the Wall Street Journal reportedthat prosecutors have opened an investigation into payments the company made to walnut growers. The probe could result in criminal charges, the Journal notes, and could undo the company’s deal to buy Pringles from Procter & Gamble (PG).
The SEC has already been looking into the payments, and will coordinate with the U.S. Attorney’s office in San Francisco. The company is also conducting an internal inquiry.

CommVault Rallies As FY Q4 Revenues, Profits Top Street Ests

CommVault (CVLT) shares are trading higher on strong results for its fiscal fourth quarter ended March 31.
The storage systems company reported Q4 revenue of $73.4 million, up 4% sequentially, 31% higher than a year ago, and above the Street at $72.7 million. Non-GAAP profits of 21 cents a share beat the Street by two cents.
The company said that it is “entering fiscal 2011 with excellent momentum, driven by improving market conditions, stronger distribution capabilities and a best-in-class software platform.” CommVault added that it is “well-positioned for continued market share gains and consistent revenue growth.”
CVLT is up $1.59, or 7.6%, to $22.45.

New Wave of Foreclosures Will Sink the Housing Market Rebound

The long-anticipated housing market rebound will hit a speed bump this year as the number of foreclosures rises again.

With January's mammoth $26 billion settlement between five major banks and a group of state attorneys general, foreclosures that had been held up for a year or more are now moving forward.

The spike in foreclosures will arrive just as other data, such as the 5.1% increase in new construction permits reported on Tuesday, had begun to point to a housing market rebound.

"We expect to see foreclosure-related sales increase in 2012, particularly pre-foreclosure sales, as lenders start to more aggressively dispose of distressed assets held up by the mortgage servicing gridlock over the past 18 months," Brandon Moore, CEO of RealtyTrac, told CNN Money.

RealtyTrac's February report showed new default notices - the first step in the foreclosure process - were up 1% from January. Default notices increased dramatically in some states, such as Pennsylvania (35%), Florida (33%) and Indiana (37%).

"The pig is starting to move through the python," Daren Blomquist, director of marketing for RealtyTrac, told CNN Money.

Distressed sales already account for about one out of three U.S. home sales.

The National Association of Realtors (NAR) reported this week that 20% of home sales in February were foreclosures and 14% were short sales.

In a short sale, an owner who owes more on their home than it's worth agrees to sell for less, with the bank agreeing to accept the loss.

That's a far cry from a normal housing market, when distressed sales are less than 5%.

For 2012, RealtyTrac predicts a 25% increase in foreclosures, which will push the portion of distressed sales even higher.

And the picture doesn't figure to improve for quite some time. Paul Dales of Capital Economics estimates as many as an additional 3 million foreclosures over the! next se veral years.

The Uneven Impact on the Housing Market

However, the impact of this wave of foreclosures will be felt unevenly.

All of the states that saw increases in new default notices were those in which the courts play a role in foreclosures. The robo-signing issues addressed in the bank settlement occurred almost exclusively in such states.

States that don't use a judicial foreclosure process didn't accumulate a backlog. In fact, foreclosure activity in those states was down 5% in February from the previous month, and down 23% from the February 2011.

But among the 26 states that use a judicial foreclosure process, activity rose 2% in February from the month before. Foreclosure activity was up 24% from the previous year.

That leaves little room for optimism in hard-hit states such as Florida.

The loosening logjam in distressed sales will increase the downward pressure on prices by adding to inventory and lowering home values. Discounts on foreclosure sales typically range from 20%-30%.

And unlike some other housing market data, home prices haven't shown much evidence of turning upward. Home prices fell 4% in 2011 on top of the 30% decline since the peak of the housing bubble in June 2006.

Given the impact of the bank settlement, the outlook for home prices in 2012 isn't great.

"Enough homes are in the foreclosure pipeline to keep house prices falling through much of this year," Celia Chen, a housing economist atMoody'sAnalytics, told the Los Angeles Times.

While that may be good news for first-time homebuyers, it's terrible news for the 25% of homeowners who owe more on their mortgage than their homes are worth.

And it can only trip up the housing market rebound many analysts have been seeing in other recent housing data.

Construction of single-family homes is 18% above year-ago levels.! Permits for new single-family homes were up 4.9% in February. Existing home sales in February were up 8.8% from last year, and were up in 2011 to 4.26 million, from 4.10 million in 2010.

But none of that will be able to overcome a tsunami of foreclosures, at least for this year.

"While beginning to improve, a strong, sustained recovery in the housing market, especially the important single-family sector, still appears to be a ways off," Steven Wood, president of Insight Economics LLC, told Bloomberg News.

Spain, Italy weigh on Europe stocks; banks drop

LONDON (MarketWatch)'European stock markets ended lower in a choppy session as losses for banks weighed on sentiment Tuesday and Spanish and Italian bond yields surged on debt concerns.

The Stoxx Europe 600 index XX:SXXP 'closed down 1.1% at 264.29, after trading as high as 267.62 earlier in the day.

In Spain, the IBEX 35 index XX:IBEX 'tumbled 2.7% to 7,824.50, while yields on 10-year Spanish government bonds ES:10YR_ESP 'rose 9 basis points to 5.41%.

'One cannot say with any conviction that the euro zone is robust or recovering,' said Stephen Pope, managing partner at Spotlight ideas. He further added that bad news from Spain 'traveled to the next in line which from the markets perspective is Italy.'

Unemployment in the Spain rose 0.8% in March to 4.75 million, government figures showed. Separately, Spanish Finance Minister Luis de Guindos told The Wall Street Journal in an interview that there was 'no margin for error' with the government's 2012 budget announced last week. He said Spain's debt-to-gross-domestic-product ratio will likely rise to just over 78% this year from 68.5% in 2011.

Shares of Bankinter SA ES:BKT 'fell 5.9%, Banco Santander SA ES:SAN 'gave up 4%, while BBVA SA ES:BBVA '< span class="quotePeekContainer">BBVA 'shed 4.5%.

Yields were also rising for Italy's 10-year government bonds IT:10YR_ITA ,'adding 10 basis points to 5.14%. Bond prices move inversely to their yields.

In Milan, the FTSE MIB index XX:FTSEMIB 'traded 2% lower at 15,624.23, weighed down by Banca Popolare di Milano SCARL IT:PMI ,'off 6.6%, and Banco Popolare SC IT:BP , down 6.8%.

Click to Play

Gloomy data hit at austerity plans

Dire figures on unemployment and manufacturing activity in the euro-zone's weakest members on Monday highlighted the scale of the currency bloc's economic problems. (Photo: AFP/Getty.)

In the U.S., stocks were mostly lower on Wall Street, pivoting away from gains in the first session of the second quarter. Factory orders for the U.S. rose 1.3% in February, slightly below analysts' estimates, while orders for January were revised down to a 1.1% decline from a prior estimate of a 1.0% drop.

Banks were also lower in France. BNP Paribas SA FR:BNP 'gave up 2.8%, Soci't' G'n'rale SA FR:GLE 'lost 3.7%, while Credit Agricol! e SA FR:ACA 'fell 3.2%. The CAC 40 index FR:PX1 'closed 1.6% lower at 3,406.78.

And in the U.K., shares of Royal Bank of Scotland Group PLC UK:RBS 'RBS 'declined 3.1% and Barclays PLC UK:BARC 'BCS 'lost 2.6%.

The FTSE 100 index UK:UKX 'was 0.6% off at 5,838.34, further pressured by Compass Group PLC UK:CPG , off 1.8%, after Morgan Stanley downgraded the food-service firm to equalweight from overweight. FTSE 100 gives up gains

Bucking the trend, Cairn Energy PLC UK:CNE added 4% outside London's main index. The oil and gas producer bought Agora Oil & Gas, a private Norwegian company, for $450 million in shares and cash.

In Germany, the DAX 30 index DX:DAX gave up 1.1% to 6,982.28, as Commerzbank AG DE:CBK 'shed 3.4% and Deutsche Bank AG DE:DBK ! 'lost 3%.

K+S AG DE:SDF also'weighed on the index, down 1.4% after Nomura Securities downgraded the potash producer to reduce from neutral.

Nomura also downgraded Dutch specialty-chemicals firm Akzo Nobel NV NL:AKZA , down 2.7%, to neutral from buy.

Among notable gainers, Novo Nordisk AS DK:NOVOB , up 2.4%, provided the biggest support in Europe as Bank of America Merrill Lynch added the stock to its Europe 1 list. The Danish firm was also among the biggest gainers on Monday after saying it owns 4.71% of its total share capital, as part of a buyback plan. The Danish OMX Copenhagen 20 index rose 1.3% to 465.15.

Swiss biotech firm Lonza Group AG CH:LONN 'added 1.6%. The company said Richard Ridinger has been appointed as new chief executive effective May 1.

In Brussels, drug maker UCB SA BE:UCB 'added 1.5% after the U.S. Food and Drug Administration approved its Neupro drug for Parkinson's disease treatment.

Slow GDP Growth Sets Stage for Fed& Next Round of Quantitative Easing

The U.S. economy continued to struggle to grow in the third quarter, most likely giving government officials enough cover to pump more liquidity into the financial system to stimulate hiring.

Gross domestic product (GDP), the value of all goods and services produced, increased by 2% in the third quarter, the Commerce Department reported Friday. Economists polled by Dow Jones Newswires were expecting GDP to rise by 2.1% in the July to September period, The Wall Street Journal reported.

The gain was slightly more than the second quarter's 1.7% growth but not enough to revive a moribund job market, according to most economists.

The report was the final important economic indicator the government will release before midterm elections tomorrow and the next meeting of the Federal Reserve Board, which will conclude on Wednesday.

Even though the economists have said the recession ended more than a year ago, the unemployment rate remains stubbornly high at 9.6%. The sluggish economy could sweep Republicans into power in the Congressional elections and push the Fed to resume buying Treasury bonds in a renewed move towards quantitative easing.

The report also showed inflation cooled to 0.8%, well below the Federal Reserve's preferred threshold of 2%, giving policy makers room to pump more money into the world's largest economy.

The GDP report also showed that spending by Americans, accounting for about 70% of demand in the U.S. economy, rose at a 2.6% rate, the best quarter of the recovery that began in June 2009. That's up from a 2.2% increase in the April to June period and 1.9% in the first quarter

"Consumer spending is growing, business demand is still OK," Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. (NYSE: JPM) in New York, told Bloomberg News.

"We need to do better than this to get a real recovery in the labor market. The report leaves everything in place for more asset purchases by the Fed next week." said Feroli, who accurately forecast the gain in household purchases.

Fed Chairman Ben S. Bernanke announced in August the central bank "will do all that it can" to keep the economy growing. Most analysts have said they are expecting policy makers to launch another round of Treasury purchases after the bank bought $1.7 trillion in debt from December 2008 through March.

The U.S. government needs to consider selling assets to boost the economy and reduce the deficit, Mexican billionaire Carlos Slim told Bloomberg Friday.

"Most aggressive monetary and fiscal policies are not enough," Slim said at the George Washington University Global Forum in New York City. "They are temporary measures."

The gain in consumer spending, the biggest since the end of 2006, compared with a 2.5% median forecast in the Bloomberg survey of economists. Spending added 1.8 percentage points to growth.

Even though they are improving, consumer purchases remain well below levels seen following previous U.S. recessions. In the four quarters after the last deep U.S. recession in 1982, consumer spending posted increases of between 4% and 8%.

Americans' wealth and incomes were badly hit by the collapse in home prices and the extremely weak jobs market that followed the financial crisis. GDP growth in the 2.5% percent to 2.8% range is needed to generate enough jobs to meet population growth and keep the jobless rate stable, according to policy makers' forecasts.

The latest report of tepid GDP growth is causing investors to exercise caution heading into next week's midterm elections and breeding uncertainty about the size of economic stimulus measures the Federal Reserve is expected to announce ne! xt week.

Most investors expect the Fed to announce plans to buy U.S. Treasury bonds worth a few hundred billion dollars over several months to keep interest rates low in an effort to spark growth.

Wells Fargo Doubles Recruiting; Starts a New Ad Campaign

Wells Fargo Advisors Recruited 545 veteran financial advisors in the first eight months of 2008 and has nearly doubled that figure in the same period of 2009, attracting 1,054 experienced FAs.
In addition, the majority -- 80 percent -- of those recruited in 2009 are from the wirehouses, the company says.
Last year, it recruited a total of 766 experienced financial advisors. If it is able to keep recruiting at the current pace, Wells Fargo Advisors could recruit about 1,500 veteran advisors or more.

"The first months of 2009 were extraordinary," says Chip Walker, who has been leading the firm's integration and recruiting efforts. "
There's been an incredible amount of dislocation of advisors in the wirehouse model," Walker says. That has to do with the fact that there "are so many advisors in the wirehouses," whereas, in the past, many of them were with regional firms, he explains.
In addition, many advisors have been "forced to look at their options," Walker adds. "We have had a lot of success recruiting experienced FAs from the wirehouses. There's no question about it."
The average industry length of service of recruited veteran FAs is now close to 16.5 years, he says, vs. about 13.5 in 2004. "The increase in the length of service has spiked dramatically in 2009," Walker explains. Average trailing-12-month fees and commissions have held up well, he adds, and have even increased in some of the brokerage's FA channels.
As of June 30, the Wells Fargo brokerage business included 15,500 financial advisors in the United States and Latin America and 6,100 licensed financial specialists with roughly $1 trillion in client assets. The firm's private client group has 11,600 financial advisors, and the bank group has about 2,800 financial advisors. Most of the remaining FAs are in the firm's independent group.
"We peel the onion," the recruiting executive says, when it comes to looking at potential recruits. Beyond fees and commissions, other factors the brokerage firm looks at include an advisor's ability to grow his or her business before the economic downturn and how well he or she held up during the crisis.
As for the firm's recruiting and sales practices, "We have a consistent, repeatable due diligence process," he explains, that emphasizes putting the client and the client's interests first.
Walker also says Wells Fargo Advisors, formed by Wells Fargo's purchase of Wachovia earlier this year, is now focused on growing as a good operator rather than as a good integrator.
"It's been over two years since we announced the merger with A.G. Edwards," he explains, "and in October, it will be exactly two years ago that the merger was finalized." Some rivals, Walker notes, "are just entering the integration phase."
Through the legacy A.G. Edwards training program, Wells Fargo Advisors is likely to hire 400-500 new advisors in 2010, according to the executive. "This is a great growth lever," Walker notes.
"We can compete with any firm out there," says Walker. "We have the scale and scope of products, services, technology and human capital. We are firmly positioned with a great corporate parent."
Its corporate parent, Wells Fargo, can help advisors grow their business by providing them with "a steady source of leads and referrals," he explains. Plus, the brokerage business has a strong regional culture.
"We feel very good when we look at the number of FAs that we're having conversations with and the responses we get to our multi-channel business model," explains Walker. The combined financial advisory businesses of Wells Fargo and Wachovia unveiled a new national advertising campaign in mid-September, after introducing the Wells Fargo Advisor brand in May.
"The new advertisements allow us to emphasize Wells Fargo Advisors' position as the financial advice arm of Wells Fargo, while reengaging with our clients and demonstrating how our union with Wells Fargo creates a brokerage firm that is even more qualified to help our clients achieve their life goals," says David Monday, executive director of marketing, innovation and growth.
The TV ads can be seen on Sunday morning talk shows, NFL football games and select cable television stations, including CNN, CNBC, Fox News, MSNBC, the Weather and Travel channels and ESPN. In addition, a sponsorship message will appear on select PBS programs. Print and online ads will also appear in various publications and on websites.

Sees Significant Glass Price Declines in 2012

Shares of Corning (GLW) are down $1.02, or almost 7%, at $13.60 after the company this morning reported Q4 revenue slightly ahead of expectations and profit per share in line with estimates, but said prices for glass this quarter continue to fall “significantly.”
Revenue in the three months ended in December rose 7%, year over year, to $1.9 billion, yielding EPS of 33 cents a share. Analysts had been expecting $1.84 billion and 33 cents.
CEO Wendell Weeks said 2011 had seen the company’s best sales performance in its 161-year history.
But he also remarked that “In the fourth quarter, we experienced significant LCD glass price declines due to a confluence of factors in the display market,” and that falling prices in the solar panel industry, a result of lower demand and the drastic decline in pricing of polysilicon materials, had hurt the profit of its Dow Corning venture.
CFO James Flaws remarked Corning had to cut glass prices and clear inventory to adjust to weakening global demand:

We are working closely with our customers to reduce glass prices to help them with their immediate financial strains. To that end, price declines will be significant in the first quarter of 2012, as they were in last year's fourth quarter. We expect significant double-digit price declines over the cumulative two-quarter period. We are hopeful that our pricing actions, combined with our capacity decisions, will help us get back to more stable price declines in the coming quarters.

Apple: Sterne Agee Ups iPad Estimate, Dismisses Rumors of Cuts

Sterne Agee’s Shaw Wu this morning writes that he’s been receiving questions from some Apple (AAPL) investors about rumored cuts in iPad production, inquiries he believes are “misplaced” given that the issue for the iPad appears to be supply of the “Retina Display” being limited, not anything about declines in demand.
“What we are picking up are strong follow-up demand trends for the new iPad despite a very strong start of 3 million units sold in the first few days,” writes Wu.
Wu thinks display supplies may improve, and he’s also unfazed by reports there may have been cuts in work hours at supplier Foxconn:

we anticipate supply to improve over the course of the next few quarters as additional production lines and suppliers are added. In addition, what could also be causing concern is news that Hon Hai Foxconn employees have had their individual working hours cut. This is not due to a slowdown in production but rather conforming to more sound labor practices where there will be a cap on overtime hours per month per employee. This is in an effort to improve working conditions. From our understanding, the irony is that many employees prefer to work more overtime.

Wu actually raised his estimate for iPad sales for fiscal Q2 that ended last month to 12.3 million from a prior 11.5 million. He sees the company selling 63 million units this calendar year, up from a prior 60 million estimate. That should produce revenue of $161.2 billion and EPS of $44.50 this fiscal year, up from a prior $160 billion and $43.80.
Apple shares today are down $1.45 at $626.99.

10 income-paying stocks to Invest in 2012

MARKETWATCH FRONT PAGE

A wealth of U.S. economic data and another week of major earnings will be the markets' focus in the week ahead.

10 income-paying stocks that beat the crowd

Stock investors no longer have doubts about dividends, and that's reason for some doubt, as many of these income-producing stocks have been discovered. Better to look for dividends among cash-rich companies that slip under yield-hunters' radar.

10 income-paying stocks that beat the crowd

Stock investors no longer have doubts about dividends, and that's reason for some doubt, as many of these income-producing stocks have been discovered. Better to look for dividends among cash-rich companies that slip under yield-hunters' radar.

How to file your taxes for free

Want to file your taxes for free' You can go with the IRS's Free File Alliance, or you can just go directly to some of the top tax-prep sites, many of which offer their basic services for free.

Tax deductions: Enjoy them while you can

Most taxpayers claim the standard deduction, but if ever there was a time to make the most of valuable tax deductions and credits, it might be now, before they disappear.

MARKETWATCH COMMENTARY

Instead of a! cknowled ging that banks have become a part of government, we keep pretending they are private institutions, writes David Weidner.

MARKETWATCH PERSONAL FINANCE

What's the State of Retirement in the U.S.' It's plagued with problems involving Social Security, contribution rates and more that need fixing now.

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Tags: 2014 Best Stocks ,Best Asia Stocks ,Best Asia Stocks To Buy ,Best Stocks To Buy In 2014 ,EURUSD ,JPM ,Best China Stocks 2012

1 Best Stock Warren Buffett Should Own in 2012

The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Brendan Byrnes and analyst Jason Moser discuss topics across the investing world.
Jason and Brendan are heading to Omaha! That's right, the Berkshire Hathaway annual meeting awaits, and in preparation, Jason asks Brendan to pick a company with characteristics consistent with the Buffett style of investing that could make a great fit for Berkshire's portfolio. Brendan thinks that an underappreciated company -- United Technologies -- could be an ideal fit. The company has a wide moat around it, has demonstrated strong and consistent earnings and ROE for the past decade-plus, and is currently selling for cheap.
Can't make it to Berkshire 2012? The next best thing to attending the annual shareholder meeting is letting us bring the experience to your digital doorstep. You can sign up for our free trip dispatches from Berkshire 2012. We'll even throw in a special free report: "2 Stocks Warren Buffett Wishes He Could Buy." The report features two of our favorite ideas for new money right now. Register here for the free trip dispatches and the special free report.

Eagle Rock Soars With These 2 Metrics

Eagle Rock Energy Partners (Nasdaq: EROC  ) carries $111.3 million of goodwill and other intangibles on its balance sheet. Sometimes goodwill, especially when it's excessive, can foreshadow problems down the road. Could this be the case with Eagle Rock?
Before we answer that, let's look at what could go wrong.
AOL blows up
In early 2002, AOL Time Warner was trading for $66.27 per share.
It had $209 billion of assets on its balance sheet, and $128 billion of that was in the form of goodwill and other intangible assets. Goodwill is simply the difference between the price paid for a company during an acquisition and the net assets of the acquired company. The $128 billion of goodwill in this case was created when AOL and Time Warner merged in 2000.
The problem with inflating your net assets with goodwill is that it can -- being intangible after all -- go away if the acquisition or merger doesn't create the amount of value that was expected. That's what happened in AOL Time Warner's case. It had to write off most of the goodwill over the next few months, and one year later that line item had shrunk to $37 billion. Investors punished the stock along the way, sending it down to $27.04 -- or nearly a 60% loss.
In his fine book It's Earnings That Count, Hewitt Heiserman explains the AOL situation and how two simple metrics can help minimize your risk of owning a company that may blow up like this. Let's see how Eagle Rock holds up using his two metrics.
Intangible assets ratio
This ratio shows us the percentage of total assets made up by goodwill and other intangibles. Heiserman says he views anything over 20% as worrisome, "because management might be overpaying for the acquisition or acquisitions that gave rise to the goodwill."
Eagle Rock has an intangible assets ratio of 6%.
This is well below Heiserman's threshold, and ! a sign t hat any growth you see with the company is probably organic. But we're not through; let's also take a look at tangible book value.
Tangible book value
Tangible book value is simply what remains after subtracting goodwill and other intangibles from shareholders' equity (also known as book value). If this is not a positive value, Heiserman advises you to avoid the company because it may "lack the balance sheet muscle to protect [itself] in a recession or from better-financed competitors."
Eagle Rock's tangible book value is $935.2 million, so no yellow flags here.
Foolish bottom line
To recap, here are Eagle Rock's numbers, as well as a bonus look at a few other companies in its industry:

Company	Intangible Assets Ratio	Tangible Book Value (millions)
Eagle Rock Energy Partners	6%	$935
DCP Midstream Partners LP	14%	$388
Enterprise Products Partners LP	11%	$7,660

Data provided by S&P Capital IQ.

Eagle Rock appears to be in good shape in terms of the intangible assets ratio and tangible book value. You can never base an entire investment thesis on one or two metrics, but there are no yellow flags here. If any companies you're researching do fail one of these checks, make sure you understand the business model and management's objectives. I'll help you keep a close eye on these ratios over the next few quarters by updating them soon after each earnings report.

The Frosty, Festive World Of Investing

see photosForbes Images

Click for full photo gallery: What Makes Emerging Markets Great Investments?

by�Andrew Beattie
The store windows are frosted with artificial snow, the eggnog is flowing, and frantic shoppers are crowding the malls – that’s right, it’s Christmas time. In keeping with the yuletide spirit, let’s take a look at the investing vocabulary that goes along with this credit card-shattering time of year.

Tutorial: Seven�Reasons To Pick ETFs Over Stocks
Santa Claus Rally
He’s bearded, he’s jolly and he’s permanently associated with Coca-Cola – yep, that’s Santa Claus. Santa’s origins are a matter of speculation, but according to popular belief, he is derived from a Dutch mythical character based on the historical figure Saint Nicholas, who supposedly gave presents to the poor. The modern-day Santa spends his time spreading cheer and promoting world peace by delivering gifts all over the globe.
In the investing world, Santa brings investors a “gift” in the form of a jump in the price of stocks, known�as the�Santa Claus rally. This rally usually occurs between Christmas and New Year’s day. There are many theories as to why this happens. Some people believe it is a result of year-end tax considerations, while others say it’s because all the market pessimists are away on holidays or because people are buying stock in anticipation of the�January effect. Those of us who believe in the magic of Christmas think the rally may be due to seasonal cheer infecting the usually dour inhabitants of�Wall Street – a true Christmas miracle.
Boston Snow Indicator
In 1942, Irving Berlin wrote a song cal! led R 20;White Christmas”, which Bing Crosby brought to life in an immensely popular recording. Since then, a snowy landscape�is the�ideal place to spend Christmas day.
The�Boston�snow indicator is a market theory that posits that a white Christmas in�Boston�will cause stock prices to climb. This is one of several dubious indicators that, while it may appear to be accurate, teaches us more about the fallibility of statistics than the behavior of the market. Other popular indicators of this sort include the�skirt-length indicator and the attention paid to the ties worn by�Alan Greenspan (the Federal Reserve Board’s�former chairman). The accuracy of the�Boston�snow indicator is perhaps best summed up by its nickname: “BS indicator.”

5 Top Price-Compare Apps - SmartMoney.com

With fast-ending sales, stackable coupons and online-only discounts, in-store shoppers often have good reason to question whether the price they see is really the best deal out there. More are turning to a growing roster of price-comparison apps for an answer -- and getting mixed results.

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Nearly 40% of smartphone owners use their phones for in-store price comparisons, making it the top mobile shopping-related activity, according to Nielsen. And even those with regular cell phones run price checks: During the 2011 holiday shopping season, 19% of consumers used their phone to compare products or prices in store, up from 15% in 2010 and 3% in 2009, according to customer service research firm ForeSee. "It's such a great development for consumers," says Deborah Mitchell, executive director for the Center of Brand and Product Management at the University of Wisconsin-Madison.
Experts warn, however, that the apps may not always be so effective and some stores are determined to thwart them. "Retailers obviously don't like them," says Brad Spirrison, the managing editor for review site Appolicious. To keep customers from making an easy comparison, some now use store-specific barcodes that the apps can't scan, or negotiate with manufacturers for exclusive model numbers -- which means a fast search won't turn up any results.
Apps are also only as good as their underlying price-search engine, says Edgar Dworsky, the founder of ConsumerWorld.org. Some stores or sites may be excluded from results, and partner retailers may be given preference in the listings. The software may update pri! ces only sporadically or fail to include shipping, which can distort results, he says. And local search results are often limited to big-box retailers, with no mom-n-pop listings. "Maybe I'm being a little old-fashioned, but I tend to do my homework on a computer at home before I go to the store," he says. "That makes it easier to check a few sites for comparison."
Still, having a reliable price-comparison app or two on your phone can be a smart spot-check. Some stores may even be willing to match deals the apps find. Here are five the experts say are worth the download:

RedLaser

• iPhone, Android, Windows

One of the big names in mobile price checks, RedLaser lets shoppers scan barcodes or conduct manual searches by typing in a product's name, Spirrison says. Experts say it tends to read product barcodes more easily and accurately than other apps, which may cut down search time. Searches for a $200 Microsoft Xbox 360 4GB turned up an extensive 99 online results, including eBay auctions (eBay acquired the startup in 2010), and listed a few independent shops in local results, too. Cheapest prices: $144 on eBay, $190 at a nearby Dell store. Local results are sorted by proximity rather than price, however, so be prepared to scroll through to find the cheapest deals. A spokeswoman says the cheapest local price is noted at the top of overall search results, but it's worth looking through them all -- Toys R Us allows users to link through the app to reserve items for in-store pickup, and Best Buy will too at some point this spring.

Decide.com

• iPhone, Android

Not only will this free app find gadget prices online and nearby, it also notes whether there's a new model due out soon or other factors that could impact pricing. "It'll tell you whether you should buy the item now or wait," Dworsky says. A new 2012 model 42" Panasonic Viera, for example, gets a "buy" rati! ng, sinc e the site expects prices to hold steady. It found sets for $600 at a nearby Best Buy, and online as cheap as $470 at PCConnection.com. App users can scan barcodes or type in a product name to find items, and sign up for price-drop alerts if they decide to wait. But check the confidence rating on predictions about price changes -- Decide.com claims 77% turned out to be accurate on average. "It's a bit like the weather," says spokesman Michael Paulson. "But an 80% chance is still good buying information."

Google Shopper

• iPhone, Android

"One scan and it will show you all the places an item is available online, and near you," says Michelle Madhok, the founder of SheFinds.com. Shoppers can also hunt for a product by snapping a picture some items, or saying its name. A hunt for the game "The Elder Scrolls V: Skyrim" on PlayStation 3, regularly $60, turned up a new copy for as little as $36 online -- and a note that the seller didn't have any reliability rating. Local results were plentiful, too, although none were below sticker price. Google Shopper also integrates with other Google products, letting users get Google Maps directions to that local store or check the latest daily deals via Google Offers, she says. Local listings note availability, although Madhok says it's still a good idea to call and confirm. (Clicking on a store listing includes the option to call.) A Google spokeswoman says the feeds are updated on a regular basis.

Price Check by Amazon

• iPhone, Android

"As a consumer it pays to keep track of what Amazon is doing," says Mitchell. If there's a cheaper price online, they're often the site that has it, she says, so it's worthwhile to try the free price-check app, which lets users search by scanning a barcode, snapping a picture or saying or typing in the product name. (Users on other platforms, including BlackBerry and Windows, can try the ! Amazon M obile app, which offers the same price-checking capabilities, but requires an extra click or two to access them among other features in the app.) A $450 Dyson AM02 tower fan at Sears came up as cheap as $339 on the site. The catch with both Amazon apps, of course, is that they only check prices on Amazon. The company did not respond to requests for comment.

Consumer Reports Mobile Shopper

• iPhone, Android

At $5 for one-year access, Consumer Reports' offering is among the priciest price-compare apps. But users also get the group's expert ratings, reviews and buying advice, which cost $30 a year to see online, says Dworsky. Shoppers can scan a barcode, type in a product or look for top picks by category. Searches for a "best buy"-rated $60 Expert Finish steam iron, for example, turned up online prices as cheap as $49 at TechLoops.com, and also pointed to a local Best Buy that had it in stock. App users can also access brand reliability ratings for single-brand retailers like Gap or Cole Haan. Users can't access auto ratings, however, and complaints about the app on iTunes say some ratings aren't up-to-date. Spokesman Kevin McKean says the ratings are CR's latest, but because the nonprofit buys and tests everything itself, some categories may not have ratings for every item, or have them immediately.

1.3 Million Reasons to Like Sirius XM

Sirius XM Radio (Nasdaq: SIRI  ) initiated its subscriber guidance last week. The satellite radio giant expects to close out 2012 with 1.3 million more subscribers than it has now.
Some investors aren't impressed. Didn't Sirius XM tack on 1.7 million net accounts last year and 1.4 million more subs the year before that? Auto analysts see 2012 as the strongest year for new car sales in years. If new car smell is the lifeblood for satellite radio growth, why is CEO Mel Karmazin being so conservative?
Well, let's go over why closing out this year with 23.2 million subscribers won't be so shabby after all.
There's no such thing as an immaterial price increase
Sirius XM initiated a price increase last month. The company estimates that it will take 18 months for the hike to work its way through its existing members, but new accounts are getting hit with the 12% increase right away.
How can that not influence the conversion decision?
Let's set aside Netflix's (Nasdaq: NFLX  ) poorly received summertime plan to split its DVD plans from its streaming service. The move -- which essentially boosted prices by as much as 60% -- led to a flood of defections during the third quarter, and DVD plan subscribers continue to move on.
Let's look at the more modest increases at Costco (Nasdaq: COST  ) and Coinstar's (Nasdaq: CSTR  ) Redbox.
Warehouse club giant Costco bumped its annual memberships 10% higher in October. Redbox increased the price of its DVD rentals by 20% to $1.20 a night a few weeks later.
Redbox parent Coinstar still pulled through with blowout quarterly results during the holiday quarter. Analysts see modest growth out of Costco when it reports later this month. However, the strong numbers don't mean that the hig! her pric es didn't scare away at least some customers. Price matters. How can it not?
Applause for 1.3 million
There is a finite number of potential Sirius XM subscribers, and it's not simply the number of cars on the road. There is certainly potential for Sirius XM on boats, planes, and even at home, but let's look at the auto market where radio is largely consumed.
Peer-to-peer auto-sharing leader RelayRides claims that the average driver spends an average of just an hour a day on the road. Paying $14.49 a month -- or nearly $16 a month after tacking on the unpopular $1.42 monthly U.S. music royalty fee -- isn't going to be the same value proposition for a driver that's just using the car to shuttle the kids to school or make a short commute to work as it is for trucker or a courier. The higher the price, the smaller the potential market.
Sirius XM made it clear during last week's call. Karmazin claims that churn will increase from 1.9% last year to 2.1% this year based on the increase alone.
Let's work the math here. Churn is essentially the monthly rate of users canceling the service. At 2.1%, we're talking about roughly 460,000 cancellations a month for Sirius and XM services. The difference between 2.1% and 1.9% is close to 44,000 members. This isn't a big number, but over the course of the year we're talking about more than 500,000 subscribers canceling because of the price increase.
If it wasn't for the increase, one can argue that Sirius XM would be targeting 1.8 million net new subscribers this year.
Off the assembly line
More cars do mean more factory-installed receivers. That's great. Unfortunately, conversion rates -- the number of drivers who turn into paying subscribers once their free trial offers end -- have been inching lower over the past year. Just 44% of drivers are sticking with satellite radio, compared to 45% during the fourth quarter of 2010 and 46.4% during the fourth quarter of 2009.
Is it the pop! ularity of free streaming alternatives for smartphone owners? Pandora (NYSE: P  ) struck several new deals last month, bringing its tally to 23 automotive partners for seamless digital listening. Is it the maturing market? It can be rightfully argued that many of today's new cars are simply being bought by owners replacing their existing service.
Regardless of the reason, conversion rates at this year's higher price points are likely to continue to inch lower.
This isn't the end of the world for Sirius XM. This is a scalable model, and we're talking about simple math. Fewer additions paying more is still good business. There's a reason why Sirius XM expects revenue to climb 10% this year, while targeting adjusted EBITDA to rise by nearly 20%.
We also can't forget that Karmazin has been historically conservative in his outlooks. A year ago at this time, Sirius XM was only expecting to add 1.4 million more subscribers to its rolls in 2011. Reality delivered 1.7 million new members.
So cheer up, investors. The subscriber guidance isn't that bad based on the headwinds -- and it's probably too low based on Sirius XM's history of where it sets the bar.
Running of the bulls
I remain bullish on Sirius XM's future. It should come as no surprise that I'm promoting the CAPScall initiative for accountability by reiterating my bullish call on Sirius XM for Motley Fool CAPS.
XM Satellite Radio was a Rule Breakers recommendation before the Sirius XM merger. It's now gone from the scorecard, but if you want to discover the newsletter service's next Rule-Breaking multibagger, a free report reveals all.