4 Best Mutual Funds at Vanguard Now

In the mutual fund industry, Vanguard founder Jack Bogle is a legend.  After college, he got a job at Wellington Management Company and quickly rose up the ranks, becoming the company’s chairman.  However, he was eventually fired because of a bad merger. But this turned out to be fortuitous since he started the mutual fund giant Vanguard in 1974.
His laser-like focus at Vanguard was on the interests on investors.  To this end, he developed low-cost mutual funds that focused on indexing.  Hey, why should investors spend high amounts on fees when many portfolio managers underperform the market?
Now, thanks to this legacy, Vanguard is a mutual fund investing powerhouse.  There are $1.4 trillion in assets, with 160 U.S. funds and 50 international funds.  And while many are strong, there are some that are standouts above the rest. Let’s take a look:

Vanguard International Growth (VWIGX)

Started in the early 1980s, the Vanguard International Growth Fund (MUTF: VWIGX) now has $18.8 billion in assets.  The portfolio is diversified across the world, with 11.58% in the Americas, 53.81% in Europe and 34.61% in Asia.  There is also 21.11% in emerging markets.
The Vanguard fund is composed of a variety of best-of-breed international money managers, from firms like Schroder Investment Management, Baillie Gifford and M&G Investment Management.   The general approach is to focus on high quality companies with strong growth prospects.
As should be no surprise, the expense ratio is only 0.49% and the turnover is 44%. Top holdings now include Baidu (NASDAQ: BIDU), Petrobras (NYSE: PBR) and SAP AG (NYSE: SAP).

Vanguard Small Cap Growth Index (VSGIX)

The MSCI U.S. Small Cap 1750 Index tracks the performance of a diverse set of small capitalization stocks in the US.  It is widely followed and a good barometer of the category.
If you want to invest based on this index, then a good mutual fund choice is the Vanguard Small Cap Growth Index Fund (MUTF: VSGIX), which has $8.8 billion in assets.  True, there has been volatility — which is to be expected.  Although, the index has a good amount of mid-cap stocks, which helps with the swings.
For the past three years, the average annual return was 10.33%. Top holdings include JDS Uniphase (NASDAQ: JDSU), Informatica (NASDAQ: INFA)  and Brigham Exploration Company (NASDAQ: BEXP).

Best Energy Stocks Pick For 2012

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 2012#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 2012 #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 2012 #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 2012 #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.

Best Cheap Stocks to Buy For 2012

This has been quite a winter.
From Arab states falling to Twitter revolutions, to U.S. states finally owning up to their own fiscal shortfalls, to natural disasters in New Zealand, Australia and now Japan, stock markets around the world have been swinging up and down in manic runs from hope to despair.
And one other thing is true: The markets hate uncertainty. That means, in our current circumstances, smart investors are looking for real assets — tangible commodities and resources that the world has to have to survive or hedge against uncertainty.  In 2010, I picked silver miner Silver Wheaton (NYSE: SLW) as my top stock for the year. It doesn’t get much more tangible than silver, and with the metal’s run higher, the stock was up more than 150%.
This year, I’ve found a couple more standouts in the real asset sector.
This duo is a real asset play on the same megatrend that’s been building since the dawn of man: The world’s need for food…

Best Cheap Stocks For 2012: Agricultural demand is growing

China, for instance, has a lot of mouths to feed — 1.3 billion at last count, or 15-20% of the world’s population. Unfortunately, it only has 7% of the planet’s arable land (and most of that is relatively unproductive).
On a per-capita basis, China has just a fraction of the available farmland as most other countries. And the gap is getting wider. Population is growing by around 10 million per year, while millions of acres of prime agricultural land are lost to soil erosion, urban construction, and heavy metals pollution.
This dire situation presents ongoing challenges for farmers — but unique opportunities for companies whose products can boost crop yields.
That’s where Yongye (Nasdaq: YONG) comes in. The firm is an emerging leader in the “green” agriculture movement, specializing in organic crop nutrients and animal feed supplements. The company has several advantages over the competition.
First, its chief marketing officer literally wrote the book on reaching out to rural farmers.
Second, its Shengmingsu brand’s liquid nutrient has proven to increase output by 22% and reduce harvest time by up to two weeks.
Finally, Yongye has been negotiating with independently owned supply stores to prominently display (and push) the Shengmingsu brand. The company has a year-end goal of 30,000 stores selling its product.
Ordinarily, you’d have to pay a rich premium for all this — but Yongye is trading at just five times forward earnings, a sharp discount to its expected 40%-plus growth rate. This stock could double in the next 12 months.

Best Cheap Stocks For 2012: Prices for agricultural staples are rising

The bureaucrats can say all they want about benign inflation. Apparently, they haven’t been to a grocery store lately.
And prices are still rising at the wholesale level, which means more retail markups in the weeks and months ahead. According to the U.S. Department of Agriculture, producers fetched higher prices for corn, soybeans, eggs, milk and apples last month.
Some of the blame (or credit, depending on your perspective) belongs to the Fed‘s dollar debasement policies. By definition, a depreciating dollar boosts the prices of dollar-denominated agricultural commodities.
But old-fashioned supply/demand imbalances are also playing a major role. A bad Russian winter wheat harvest and subsequent export ban sent prices skyrocketing. Here in the United States, torrential rains in the Corn Belt have left supplies at the lowest levels in 15 years.
Growing demand and shrinking supplies intersect at rising prices. Corn futures have spiked more than 70% since June. Wheat prices have spiked 35% so far this year. Soybeans and sugar are the same story.
And, because beef, pork and dairy producers have to buy mountains of feed for their livestock, rising grain prices will likely spill into the meat aisle as well (there’s typically a six-month lag).
With all this in mind, I strongly recommend readers fight back against the relentless price hikes by converting a few dollars into bacon and cereal — or at least pork bellies and corn.
==========================    Part 2    ==========================
Large pharmaceutical companies are facing a crisis. The industry spent a record $65 billion on research and development (R&D) in 2009, but approval rates for new drugs have fallen 44% during the past decade and continue to drop. Also in 2009, drugs launched in the previous five years accounted for only 7% of all sales, meaning that older drugs closer to patent expiration make up the vast majority of sales. The failure rate of drugs in the final stages of development has doubled in recent years.

Best Cheap Stocks For 2012: PFE,GSK

These facts are sobering proof that productivity levels for bringing successful drugs to market have declined severely in recent years. It is leading to soul searching in the industry and large cutbacks in R&D expenditure. Pfizer (NYSE: PFE), one of the largest of the Big Pharma firms, is cutting R&D from 2010 levels of $9.4 billion to between $6.5 billion and $7 billion by 2012. European drug giant GlaxoSmithKline (NYSE: GSK) will cut spending by up to $4 billion and plans to radically change how it tries to bring new drugs to market. One industry source found it extremely troubling that the market sees R&D as destroying shareholder value.
Part of Glaxo’s shifting approach will be to outsource the initial stages of drug development. These earlier stages are the riskiest, as failure rates are high and are also costly, given the large number of compounds that must be tested. Finding the needle in a haystack is an understatement when it comes to bringing successful drugs to market. Other companies are following suit.The general belief is that Big Pharma will eventually outsource most of its drug development work to outsiders, be they university laboratories, smaller development-stage pharmaceutical and biotech startups, or companies known as contract research organizations (CROs).
Below is a list of the leading CROs…

Covance (NYSE: CVD) is the largest CRO in terms of sales and market capitalization, but not by a wide margin compared to Pharmaceutical Product Development Inc. (Nasdaq: PPDI). Charles River Labs (NYSE: CRL) and Parexel (Nasdaq: PRXL) are similar in terms of sales, while Icon plc (Nasdaq: ICLR), out of Ireland, is the smallest.
Here is an overview of the two that look most compelling to me from an investment standpoint.

Best Cheap Stocks For 2012: Icon plc (Nasdaq: ICLR)

Hands down, Icon has been the fastest growing of the CROs. In the past three, five, and 10-year periods, sales growth has averaged more than 20% annually, as has profit growth. 55% of its business stems from long-term contracts that are fixed in price, which provides a fair level of revenue stability. The company also counts the top 20 pharmaceutical companies in the world as clients and boasts more than 650 clients total.
Icon is one of the most globally diversified CROs and is also impressively profitable. The company posted operating margins of 11.2% and returns on invested capital (ROIC) in the mid-teens (see table above) in its latest fiscal year. The stock looks a bit expensive looking at the forward P/E and trailing free cash flow, but the company is using this year to invest in its business and expects profits to take a short-term dip, after which growth has a solid chance of returning to historical levels and generating impressive returns for investors.
Best Cheap Stocks For 2012: Pharmaceutical Product Development Inc. (Nasdaq: PPDI)
Pharmaceutical Product Development Inc., or PPDI for short, has been another consistent grower over time that is impressively profitable. The company has been around for more than 25 years, which makes it one of the oldest CRO firms, allowing it time to extend its services to 43 countries. It has strong capabilities in the earliest stages of drug development, such as Phase I clinical trials.

Best Cheap Stocks For 2012: Merck (NYSE: MRK)

PPDI trades for one of the lowest free cash flow multiples and also boasts double-digit returns on invested capital. The company has a reputation for low client turnover, and counts Merck (NYSE: MRK) as a key strategic client. It is also the only CRO to pay a dividend, which demonstrates its confidence in generating stable and consistent profits. Its current dividend yield is 2.1% and should appeal to income-oriented investors.

Gold and Silver Surge in First Trading Session of 2012

The new year started off with a bang in the financial markets.? Although many investors were cheerful of the big rally in the Dow Jones Industrial Average, precious metals out-shined the competition.

On Tuesday, the U.S. dollar declined as the euro currency and equities edged higher. Gold prices climbed $33 to settle back above $1,600 per ounce.? It was the biggest jump for gold in 10 weeks.? Meanwhile, silver prices surged $1.66 to close at $29.57 per ounce.? During the trading highs on Tuesday, silver surged the most in over three years.?  Fear trade is back because of Iran,  Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview.  Also, we are seeing buying across commodities because of the weaker dollar.

Investor Insight: How Did Gold and Silver Perform in 2011?

Tensions continue to build between the U.S. and Iran over the Strait of Hormuz, which is considered the world s most important oil choke-point.? It is estimated that 17 million barrels of oil pass through the strait on a daily basis.? On Tuesday, Iran’s army chief warned the U.S. Navy not to return an aircraft carrier back to the Persian Gulf after it was removed due to Iran’s naval exercises in the area.

In addition to uncertainty in Iran, gold continued to edge higher in late Tuesday trading after the most recent Federal Reserve announcement.? The central bank announced it will begin to publish policymakers  projections for its benchmark interest rate on overnight loans, and when officials expect the first rise to occur.? Such projections will be published for the first time when the Fed releases its quarterly economic forecasts following its January 24-25 meeting.?  Accommodating monetary policies throughout the developed world cause a renewed migration to hard assets by individual investors and sovereign-wealth funds,  Byron Wien of Blackstone explained.

Minutes from the last Federal Open Market Committee meet! ing show that a number of Fed officials believed economic conditions could  well  warrant a further easing of monetary policy, though a few others believed further stimulus would be a bad idea, and that an enhanced communications framework could make any policy shift more effective.? As we have warned our Premium Newsletter subscribers several times, interest rates are likely to remain near zero percent beyond mid-2013, which is very bullish for gold.? The latest Fed announcement will give the central bank another channel of communicating additional easing.? Although the Fed is seeking to provide more clarity in the markets, many investors have already realized that the Fed will be unable to raise interest rates due to massive debt levels.

If you would like to receive more professional analysis on equity miners and other precious metal investments,?we invite you to try our premium service free for 14 days.

Private Equity Firms Shovel Millions to Congress: MapLight Analysis

Political Action Committees and individuals connected to private equity and investment firms have given more than $17 million to lawmakers that have been serving since the 109th Congress adjourned in 2006, a report released last week by the nonpartisan political research firm MapLight shows.

From Jan. 1, 2007, to June 30, 2011, Democrats have taken in $10,871,919, while their Republican counterparts received $6,553,793, the report says. Of the Democrats’ total, President Barack Obama accounts for $1,921,490 while his 2008 Republican opponent for the White House, Sen. John McCain, R-Ariz., has accepted $1,246,575.

Mitt Romney, the current GOP presidential candidate front-runner, has been criticized by his rivals for his career in private business. Texas Gov. Rick Perry, Newt Gingrich and Jon Huntsman, who left the race on Monday, laid into Romney on Jan. 9 for his years at Bain Capital, the private-equity firm he ran until the mid-1990s. Both Perry and Gingrich accused Romney of having “looted” companies and firing workers for his own gain.

The accompanying chart reflects analysis conducted by MapLight, which shows contributions from private equity and investment firms to members of Congress. Contribution industry classification provided by OpenSecrets.

7 Marvelous Media Stocks to Watch in 2012

There’s no question the time is right to buy media stocks. Despite last year’s volatility and summer stock slam, media stocks have risen quite considerably. A lot of factors play into this, but one thing that is without a doubt is the race for the White House will prove to be a huge cash cow for media companies. With an estimated $8 billion worth of political ads to be played throughout the country, you can see why.
Now it’s time to choose which media stocks are the best for you. I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I’ve got seven media companies making positive headway over the past 12 months.
Here they are, in alphabetical order. Each one of these stocks gets an “A” or “B” according to my research.
7 Marvelous Media Stocks to Watch in 2012- CBS (NYSE:CBS) is a mass-media company, known best for its television stations. In the past year, CBS stock has jumped 47%. CBS stock gets an “A” for operating margin growth, a “B” for its ability to exceed the consensus earnings estimates on Wall Street, a “B” for the magnitude in which earnings projections have increased over the past month, a “B” for cash flow and a “B” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of CBS stock.
Comcast (NASDAQ:CMCSA) is a provider of video, high-speed Internet and phone services to residences and businesses. CMCSA is up 16% in the past year, compared to a gain of almost 7% for the Dow Jones in the same time. CMCSA stock gets an “A” for sales growth, a “B” for earnings momentum and a “B” for cash flow in my Portfolio Grader tool. For more information, view my complete analysis of CMCSA stock.
7 Marvelous Media Stocks to Watch in 2012-Discovery Communications (NASDAQ:DISCA) is a nonfiction media and entertainment company that provides programming across the world. In the last 12 months, DISCA has climbed nearly 11%. DISCA stock gets a “B” for sales growth, an “A” for operating margin growth, a “B” for earnings growth, a “B” for earnings momentum,  a “B” for its ability to exceed the consensus earnings estimates on Wall Street, a “B” for the magnitude in which earnings projections have increased over the past month, an “A” for cash flow and a “B” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of DISCA stock.
DISH Network (NASDAQ:DISH) is a satellite television provider with more than 14 million subscribers. In the past year, DISH stock is up more than 32%, compared to smaller gains by the broader markets. DISH stock gets an “A” for operating margin growth, a “B” for earnings growth, an “A” for cash flow and an “A” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of DISH stock.
7 Marvelous Media Stocks to Watch in 2012-News Corp. (NASDAQ:NWS) is a diversified global media company, known best for its controversial owner, Robert Murdoch, as well as for many popular prime time shows such as “American Idol” and “Family Guy”. NWS is up 16% in the past year, despite the controversy surrounding Murdoch. NWS stock gets a “B” for its ability to exceed the consensus earnings estimates on Wall Street, a “B” for the magnitude in which earnings projections have increased over the past month and a “B” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of NWS stock.
Sirius XM Radio (NASDAQ:SIRI) is a satellite radio provider that offers music, sports, news, talk, entertainment, traffic and weather channels. In the past year, SIRI stock has posted a significant gain of 28%. SIRI stock gets an “A” for operating margin growth, a “B” for earnings growth, an “A” for earnings momentum, an “A” for its ability to exceed the consensus earnings estimates on Wall Street, an “A” for the magnitude in which earnings projections have increased over the past month, a “B” for cash flow and an “A” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of SIRI stock.
7 Marvelous Media Stocks to Watch in 2012-Time Warner Cable (NYSE:TWC) is a cable operator that has customers in several markets across the U.S. TWC is up about 10% since last February. TWC stock gets a “B” for operating margin growth, a “B” for earnings momentum, an “A” for its ability to exceed the consensus earnings estimates on Wall Street, a “B” for the magnitude in which earnings projections have increased over the past month, a “B” for cash flow and an “A” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of TWC stock.

Cedar Fair, L.P made New 52 Week High Price - NYSE:FUN

Cedar Fair, L.P (NYSE:FUN) achieved its new price of $22.78 where it was opened at $22.20 UP 0.12 points or +0.54% by closing at $22.21. FUN transacted shares during the day were over 589,568 shares however it has an average volume of 131,160 shares.
FUN has a market capitalization $1.23 billion and an enterprise value at $2.73 billion. Trailing twelve months price to sales ratio of the stock was 1.21 while price to book ratio in most recent quarter was 6.21. In profitability ratios, net profit margin in past twelve months appeared at 0.94% whereas operating profit margin for the same period at 23.10%.
The company made a return on asset of 6.71% in past twelve months and return on equity of 4.83% for similar period. In the period of trailing 12 months it generated revenue amounted to $1.01 billion gaining $18.31 revenue per share. Its year over year, quarterly growth of revenue was 5.00% holding 101.60% quarterly earnings growth.
According to preceding quarter balance sheet results, the company had $96.31 million cash in hand making cash per share at 1.74. The total of $1.59 billion debt was there putting a total debt to equity ratio 805.85. Moreover its current ratio according to same quarter results was 0.77 and book value per share was 3.58.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated -0.86% where the stock current price exhibited up beat from its 50 day moving average price $20.22 and remained above from its 200 Day Moving Average price $19.76.
FUN holds 55.34 million outstanding shares with 43.74 million floating shares where insider possessed 21.66% and institutions kept 34.00%.

Why Tech Stocks Look Better—Even for the Risk Averse

The technology sector is known for two things: growth potential and risk.

Apple's trouncing of Wall Street earnings forecasts this past week suggests growth is still abundant. Yet Big Tech is looking less risky than it has in the past.

Here are four reasons conservative investors should consider adding exposure to tech stocks.

An Apple store in New York: Apple holds more than $97 billion in cash and securities.

Valuation. Tech stocks have had more than a decade to work off the bloated share prices from the dot-com stock bubble of the 1990s, says Cliff Hoover, chief investment officer of Dreman Value Management in Jersey City, N.J., which manages $5 billion. Many have become a good home for safety-oriented investors, he says.

The information-technology sector of the Standard & Poor's 500-stock index recently traded at 13 times estimated 2011 earnings, on par with the broad index, according to S&P data. The consumer staples and utilities sectors, typically considered safe and stodgy, fetch 14 times earnings. And Wall Street expects the tech sector to increase its earnings by almost 14% in 2012, versus 8% for consumer staples and 1% for utilities.

! Volatility. Over the past five years, large pockets of the tech sector, including hardware makers, systems software firms and consulting shops, have been no more volatile in terms of share-price changes than the broad S&P 500 index, according to S&P data.

Financial strength. The tech sector of the S&P 500 sits on $380 billion in cash and equivalents, more than any other sector and equal to 15% of its market value, according to Howard Silverblatt, senior index analyst at S&P. That doesn't include holdings in long-term securities. Apple holds a $67 billion portfolio that is "very liquid," Mr. Silverblatt says.

The two largest companies in the sector, Apple and Microsoft, have forward price/earnings ratios in single digits after deducting their cash and investments from their stock-market values. Microsoft and Intel now have fatter "dividend yields," or the percentage of share price paid out as dividends, than the 500 index average.

Mr. Hoover, who considers himself a "deep value" stock picker, likes Microsoft, Intel, Cisco Systems and Applied Materials. "They're big free-cash-flow generators and pretty good dividend payers," he says. Microsoft pays 2.7%, Cisco 1.2%, Intel 3.1% and Applied Materials 2.6%, versus 2% for the broad S&P 500.

Low expectations. With 37% of S&P 500 companies having announced December-quarter earnings results, 68% of the technology companies that have reported have beaten analysts' estimates, versus 59% for the index and 40% for consumer-staples companies, according to a Friday report from Thomson Reuters. (Only three utilities have reported, with one beating estimates.)

Tech outfits are doing well in part because companies that delayed technology purchases during the 2008 financial crisis are starting to spend, says David B. Armstrong, co-founder of Monument Wealth Management in Alexandria, Va., which oversees $200 million.

"Techno! logy has become more of a necessity, and companies can only delay investments for so long," he says. "That helps make the sector more stable."

When hunting for tech stocks, investors should consider not only traditional factors like valuation and income growth, but also the "network effect," says Kishore Rao, a research principal with Sustainable Growth Advisers in Stamford, Conn., which manages $3 billion in pension funds and other assets. The term refers to goods and services becoming more valuable as more people use them. For example, securities exchanges benefit from the network effect because as they attract more traders they become better able to handle additional trading volume.

Mr. Rao cites eBay's marketplace, Google's search advertising and Apple's community of mobile-application developers as examples of the network effect. "There's a high degree of predictability for these companies," he says. His firm, which tends to hold 25 to 30 stocks at a time, invests in all three companies.

Another factor to consider beyond financial results is "switching costs," says Grady Burkett, an analyst at Morningstar. The best companies are ones whose customers would find it a burden to switch to competitors, he says.

That typically means companies with plenty of large business customers, such as Cisco and Oracle, Mr. Burkett says. He calls Apple a rare example of a consumer-focused business with high switching costs because customers are attached to its music, photo and other applications. "They'll find it harder to give up their iPhones than they did their Motorola flip phones years ago," he says.

Of course, the technology sector remains exposed to sharp economic downturns, says David Roda, an investment strategist at Wells Fargo Private Bank. But breakthroughs in areas like mobile computing and Web-based, or "cloud," services are "just beginning," he says, and emerging markets have shown a voracious appetite for technology.

Mutual-fund investors who favor portfolios run by ! stock pi ckers should look for long-tenured management, solid returns and limited volatility, says Flynn Murphy, a mutual-fund analyst at Morningstar. He highlights two examples: Columbia Seligman Communications & Information, which has returned an average of 6.6% a year after expenses over the past 10 years, and Waddell & Reed Advisers Science & Technology, which has returned 7% a year, according to Morningstar data. The category average is 3.3% a year. Returns for both funds are for Class A shares, which carry upfront sales charges of up to 5.75% and yearly expenses of 1.36%.

For investors who chafe at high fees, exchange-traded funds like Vanguard Information Technology and Technology Select Sector SPDR offer broad exposure to technology at yearly expenses of 0.19% and 0.20%, respectively.

Another option is a more broadly focused mutual fund that happens to favor tech. The Oakmark Global fund, one of Morningstar's top picks, has 35% in tech, versus an average for world stock funds of 14%, Mr. Murphy says. It has returned 9.0% a year on average over the past decade, versus an average for world stock funds of 5.2%. There isn't an upfront sales charge, and yearly expenses are 1.16%.

3 Stocks That Are Better Than Facebook to buy in 2012

Chances are that you have to allocate your investing dollars wisely and where you think you’ll get the best payoff. So, should you put your money on Facebook? Or might it be another company?
I actually think investors can find some much better deals to choose from — without worrying about the fickleness of Internet fads, upstart competitors — which are getting tons of venture capital — as well as giant rivals like Google (NASDAQ:GOOG). Besides, in the Facebook S-1, Mark Zuckerberg does write: “we don’t build services to make money; we make money to build better services.” Yes, this may be scary for some investors.
So what might be some other stocks to consider? Here’s my shortlist of those with a market cap similar to Facebook’s estimated $100 billion:
3 Stocks That Are Better Than Facebook to buy in 2012 - ConocoPhillips (NYSE:COP) — $92 billion market cap.
Let’s face it, the world is having a tougher time finding oil reserves. Yet the demand continues to grow, especially in countries like China.
In the latest quarter, Conoco’s profits came to $3.39 billion while revenues increased by 17% to $62.39 billion. The company also plans to spin off its refining division, which will generate cash to pay down debt and allow for more focus on deepwater exploration.
Finally, Conoco has a juicy dividend, currently at 3.8%.  In other words, if you bought Conoco for $92 billion, your annual distribution would be $3.5 billion.  That should be enough for any kind of lifestyle.
Oh yeah, Berkshire Hathaway’s (NYSE:BRK.A) Warren Buffett, who is probably still worth more than Facebook’s Zuckerberg, holds 2.19% of the stock.
3 Stocks That Are Better Than Facebook to buy in 2012 - McDonald’s (NYSE:MCD) — $100 billion market cap.
As seen recently, the company has had some snafus with its social media marketing campaigns. But it’s something that Mickey D. will definitely learn from. When it comes to building a brand, few are better than McDonald’s.
And as InvestorPlace.com contributor Gene Marcial points out, the company is really the Apple (NASDAQ:AAPL) of fast food. And unlike Facebook, it also has a thriving business in China.
Despite the sluggishness in the global economy — especially in Europe — McDonald’s still finds ways to crank out growth. In November, global comparable sales growth came to 7.4%.
What about a dividend? The current yield is 2.8%.
3 Stocks That Are Better Than Facebook to buy in 2012 - QUALCOMM (NASDAQ:QCOM) — $103 billion market cap.
Yesterday, Qualcomm reported a blowout quarter. Revenues soared by 40% to $4.68 billion, with profits coming to $1.4 billion, or 81 cents per share. The company sees next quarter’s revenues at $4.6 billion to $5 billion, which compares to the analyst consensus of $4.51 billion.
Of course, Qualcomm is getting a lift from its Apple business, and it has lots of strength in India and China. So, in light of the expected momentum in the smartphone market, Qualcomm is likely to continue to post high-performance results. By contrast, Facebook makes virtually nothing from its mobile business.
Something else: Qualcomm even has a decent dividend yield of 1.5%.  Don’t expect a dividend from Facebook anytime soon.

Consider This Gasoline ETF As A Hedge (UGA)

The United States Gasoline Fund (NYSEARCA:UGA) is a way for investors and hedgers to manage their exposure to gasoline prices. This exchange traded fund is designed to reflect changes in percentage terms of the price of gasoline as measured by the change in the price of the gasoline futures contract traded on the New York Mercantile Exchange.
Let's take a look at the chart below. UGA formed a breakaway gap from a "Descending Triangle" pattern to start 2012. A descending triangle pattern shows demand at a fixed price level which is where I drew the blue horizontal trendline. It also shows increasing supply pressures with each rally off of support marked by the falling blue trendline.
Eventually either the demand or the supply is going to be depleted by the other. Normally this is a very bearish pattern, since once demand has been depleted; you can almost hear on the chart "look out below". The path of least resistance is lower below $45. Why? Traders who were buying and holding inside the triangle now have a losing position and potentially will be looking to cut losses. This increases supply. Bids become smart money doesn't like to catch a falling knife. Increasing supply with decreasing demand means down we go in price. Eventually the market hits a stopping price where the prior sellers are gone and long term investors now believe there is value and step in for a bargain. This is the reality of a two way auction.
The breakout that we see now on the other hand is not the most bullish indicator. What happened does signal a potential change in trend when the trendline is broken to the upside but you may still have some buy and hold investors at higher levels looking to get out. This can cause a false breakout. Volume was not that strong so this has potential to fill the gap.
I do not rely on technical indicators to make trading decisions, but it's worth pointing out that we had a MACD centerline crossover while UGA was inside the triangle as well as some prior positive bullish! diverge nce the last time UGA was bouncing on support. This was a signal to some technicians that momentum was building to the upside.
I would like to see Gasoline fill the gap and retest that backside of the falling trendline to see if any additional supply comes in. Any move back above this recent high afterward will be bullish and have me taking trades.
A longer term investor might find the horizontal support a great place to put a protective stop, but keep in mind this would be about a 10% move if you are proven wrong. Position sizing would be critical to keep losses to a minimum. Position sizing has everything to do with your account size and how much you are comfortable risking in capital (or how much you drive, since you may offset losses in your UGA hedge at the pump).
UGA often trades less than 100,000 shares so this is not a wise day trading vehicle.

Oil Trades Near One-Week High on Speculation U.S. Economy May Boost Demand

Oil traded near the highest price ina week in New York and is poised for the first weekly gain inthree amid signs of economic recovery in the U.S., the world sbiggest crude consumer.

Futures were little changed after climbing for a second dayyesterday. U.S. durable goods orders rose more than forecast inDecember, according to Commerce Department data, while a reportthis week showed gasoline demand increased the most in more thantwo months. Australia s crude production may have been cut by aquarter as Tropical Cyclone Iggy shut platforms. Brent oil spremium to New York-traded West Texas Intermediate widened.

 The data we ve seen out of the U.S. over the last fewmonths is indicating a recovery in the economy,  Michael McCarthy, a chief market strategist at CMC Markets Asia PacificPty in Sydney, said by telephone today.  The spread betweenBrent and West Texas has blown out again. That suggests thepotential for some supply disruption out of the Middle East isin the back of traders  minds.

Crude for March delivery was at $99.63 a barrel inelectronic trading on the New York Mercantile Exchange, down 7cents, at 3:29 p.m. Singapore time. Yesterday, the contractgained 30 cents to $99.70, the highest settlement since Jan. 19.Prices have climbed 1.2 percent so far this week and 16 percentin the past year.

Brent oil for March settlement on the London-based ICEFutures Europe exchange was at $110.68 a barrel, down 11 cents.The European benchmark contract was at a premium of $11.10 toWest Texas futures. The spread shrank to $9.90 on Jan. 18 andreached a record $27.88 on Oct. 14.
Technical Support

Crude in New York has technical support along its 50-daymoving average, around $99.28 a barrel today, according to datacompiled by Bloomberg. Futures slid to an intraday low yesterdayof $99.23. Buy orders tend to be clustered near chart-supportlevels.

 West Texas is in a key area between $99 and $102 so if wedo see it trade up through $102.50 in the next few sess! ions wec ould well get a bit of a gallop on,  McCarthy said.

U.S. bookings for durable goods, or products meant to lastat least three years, advanced 3 percent after rising 4.3percent the prior month, the biggest back-to-back gains inalmost a year, based on a Commerce Department report yesterdayin Washington. A median 2 percent increase was predicted by 78economists surveyed by Bloomberg News.

Fuel consumption rose 7.5 percent to 19.2 million barrels aday in the week ended Jan. 20, the largest gain since Nov. 4,the Energy Department said on Jan. 25.
Iran Sanctions

Oil has also risen this week amid concern European Unionsanctions on Iran will curb supplies. EU foreign ministersagreed on Jan. 23 to ban petroleum imports from the Persian Gulfnation from July 1 to pressure the country over its nuclearprogram. Iranian President Mahmoud Ahmadinejad said his countryis willing to revive talks on its nuclear plans and accusedWestern countries of dodging discussions, the state-run Farsnews agency reported yesterday.

Iran has threatened to close the Strait of Hormuz inretaliation against the embargo. The waterway is a transit routefor about a fifth of the world s crude, according to the U.S.Department of Energy.

More than 70 percent of investors in a quarterly BloombergGlobal Poll said an attack on Iran s nuclear facilities wouldcreate only a short-term disruption in crude markets. About athird of 1,209 global investors, traders and analysts surveyedfrom Jan. 23 to Jan. 24 said an attack could trigger an oilshock leading to a global recession.
Tropical Cyclone Iggy

Crude may rise next week on the EU embargo plan and afterthe Federal Reserve committed to keep interest rates near arecord low through 2014, according to a Bloomberg News survey.Fifteen of 32 analysts and traders, or 47 percent, forecast oilwill advance through Feb. 3. Ten respondents, or 31 percent,predicted prices will drop and seven estimated there will belittle change.

Tropical Cyclone Iggy! reduced Australian oil output thisweek by as much as 100,000 barrels a day, or about a quarter ofthe country s average production last fiscal year. The stormwill strengthen to Category 3 tomorrow, the third-strongest on afive-step scale, the Bureau of Meteorology said on its website.

Obama and Buffett Rule Make ¡®Good Tax Politics, Not Good Tax Policy,¡¯ Expert Says

President Barack Obama delivering the State of the Union address on Tuesday night. (Photo: AP)

A central focus of President Barack Obama’s State of the Union address Tuesday night was economic fairness, and requiring the wealthiest of Americans to pay more in taxes, but tax specialists and wealth managers say hiking taxes for the rich will do nothing to fix the tax code–which they say is a mess.
Obama’s proposal to cut $3.6 trillion from the deficit over the next decade through a measure called the Buffett rule, named for billionaire investor Warren Buffett, which increases taxes on wealthy Americans who earn $1 million or more per taxable year, is merely “good tax politics, not good tax policy,” says Christopher Bergin, president of Tax Analysts.
The fundamental problem with the tax code, Bergin says, is that “our tax system right now picks winners and losers.” The wages that average workers pay and are reported on their W-2s are taxed “differently” than the money Buffett and Mitt Romney, the current GOP presidential candidate, make, which is “not by working but by moving money around.” The way the law is written, Buffett and Romney “get a better tax rate than the rest of us.”
As Obama said during his speech on Tuesday, “Tax reform should follow the Buffett rule. If you make more than $1 million a year, you should not pay less than 30% in taxes.… Washington should stop subsidizing millionaires. In fact, if you’re earning a million dollars a year, you shouldn’t get special tax subsidies or deductions.” On the other hand, he said, “if you make under $250,000 a year, like 98% of American families, your taxes shouldn’t go up. You’re the ones struggling with rising costs and stagnant wages. You’re the ones who need relief.”
But “sticking it to the rich” will not fix the income tax code, “which is extremely problematic,” Bergin says. The tax system as it stands now “benefits the rich, and the poor–however you want to categorize them–lower income people do not pay federal income taxes. Some of them get refundable earned income tax credits for some of the payroll taxes they pay.” But it is the middle income folks–those generally earning $100,000 to $500,000 per year, Bergin says, that “really get hit; and are paying more of an effective [tax] rate than Romney.”
Obama also said he wants to let the Bush tax cuts expire. “When it comes to the deficit, we’ve already agreed to more than $2 trillion in cuts and savings. But we need to do more, and that means making choices,” Obama said. “Right now, we’re poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2% of Americans. Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary.”
Asked Obama: “Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else–like education and medical research; a strong military and care for our veterans? Because if we’re serious about paying down our debt, we can’t do both.”

Obama went on to say that America needs “to change our tax code so that people like me, and an awful lot of members of Congress, pay our fair share of taxes.”
But Bergin doubts Congress will make any headway in reforming the tax code this year. Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, and “his colleagues have to deal with things that are timed to blow up this year or have already blown up last year; there is no opportunity for tax reform this year.”
Lawmakers must grapple this year with the Alternative Minimum Tax, as the patch instituted last year has expired, as well as the estate tax. Bergin says he’s been hearing from wealth managers “who don’t know how to advise their clients” because the estate tax rules revert back to 2001 rates at the end of 2012.
Then there’s the payroll tax cut, which was extended for two-months before Congress’ holiday recess and that expires on Feb. 29. The Temporary Payroll Tax Cut Continuation Act of 2011 extends the two-percentage-point payroll tax cut for employees, continuing the reduction of the Social Security tax withholding rate from 6.2% to 4.2%.
Obama urged Congress during his speech to pass the payroll tax cut “without delay.” He said Congress’ “most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile.”
Bergin says there’s a danger for Social Security if Congress continues to “extend” the payroll tax cut as opposed to a long-term solution. “If [Congress] keeps extending this payroll tax cut there’s a threat to Social Security that no one is talking about, of it not becoming a separate system but just another budget item” for Congress.

The Reorganization Man - the government we have is not the government we need

The Washington rap on President Obama is that he's humorless, but that's unfair. He may not be Jay Leno funny, but his bit Friday on reforming and reducing government was great.
There he was in the East Room, explaining that "the government we have is not the government we need." That's for sure, and Mr. Obama even added the Gingrichian theme that "We live in a 21st-century economy, but we've still got a government organized for the 20th century. Our economy has fundamentally changed—as has the world—but our government, our agencies, has not."

President Obama delivers remarks on reforming the size of the federal government at the White House on Friday.

Alas, the President wasn't talking about modernizing Medicare or the entitlement state. He merely wants Congress to give him more power to reorganize the government. He says he wants his team to scrub down the executive branch looking for waste, duplication and bureaucratic complexity, and then to fast-track their proposals to Congress for an up-or-down vote within 90 days.
Mr. Obama's first targets for such "consolidation authority" are the six agencies related to business and the world economy, from the Commerce Department to the Export-Import Bank to the U.S. Trade Represen! tative. Maybe the White House chose to start there because, with an eye on the GOP campaign, Rick Perry wants to eliminate Commerce and a few other cabinet departments he can't remember.
Another way of putting it is that this new emphasis on streamlining the bureaucracy is Mr. Obama's version of the Texas Governor's "Oops." Having presided over the largest expansion of government since LBJ—health care, financial reregulation, spending 24% of GDP, the surge of industrial policy—Mr. Obama's pollsters must be saying that voters have the jimmy-legs about bigger government and that he thus can't run only as a Great Society man.

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But let's go to the videotape. One measure of government size is the federal work force, measured by the White House budget office as civilian full-time equivalent employees, excluding the military and Post Office. The executive branch had about 1.875 million workers in 2008 when the financial crisis hit, a number that held relatively constant throughout the post-9/11 Bush Administration. That number climbed to 2.128 million two years later under the 111th Congress—or growth of 13.5%. That's the largest government since 1992, when the Clinton Administration began to slash defense! spendin g.
This jobs boom is projected to decline slightly this year, to 2.116 million public employees, and the Administration says the Commerce unwind will take it down by another 1,000 or so. Yet even that would come through attrition, which usually means the competent people leave when they've had it with the lifers.
Proposals for government reorganization are the elevator music of politics, always present but never leaving much of an impression. Newt Gingrich says he's running in part to apply Lean Six Sigma best practices to the bureaucracy. Al Gore famously drew up a scheme for "reinventing government" in the late 1990s. He abandoned it after the airline unions revolted amid his attempt to reinvent the Federal Aviation Administration.

Joe Rago on President Obama's proposal to merge agencies within the Commerce Department.

Reshuffling agencies rarely works because what's important in government isn't where the bureaucrats sit but their mindset. The incentives are for inertia, turf protection and blame-shifting—unless change is imposed from the top. Mr. Obama has made it clear with his priorities over three years that his preference is for the government status quo, only more of it.
But Mr. Obama is now at least bowing to the principle of smaller government, and our advice to Congress is to weigh his proposals and extract some concessions to see if the President means what he says.
A major concern is the office of the U.S. trade rep, which Mr. Obama wants to subsume within the Commerce monolith. But the trade rep office is one of the best in government precisely because it is small, reports to the White House, and is focused on the single mission of trade expansion. As part of Commerce it may be drowned out by protectionist voices.
Another priority ought! to be r eforming the 47 separate job retraining programs, all but three of which overlap. The Government Accountability Office calls this wasteful with "no measurable benefit," but the White House has rebuffed any meaningful change.
This is a President who last year promised a review of all regulations while riding the greatest rule-making wave in American history. Now he's calling for leaner government without mentioning ObamaCare and Dodd-Frank, which create so many new boards and commissions that government auditors (literally) can't even count them. We suspect many in the White House were laughing themselves when they came up with this one.

Chapter 7 Or 13 on Personal Bankruptcy in 2012

Bankruptcy laws in the United States are made to ensure the interests of the borrower are safeguarded, and are formed by the federal government and addressed accordingly by various US Bankruptcy Courts, and it is believed that each year as many as one million Americans go bankrupt and are found filing for bankruptcy. Most of these individuals that file for bankruptcy do so under different personal bankruptcy laws that include chapter thirteen and also chapter 7, and in a few instances, they can even qualify for chapter twelve, especially if they are anglers or farmers and business is owned by the family.

Filing Under Chapter Seven

You can file personal bankruptcy and at the same time do so under chapter seven in which case it is necessary for you to provide a list of all your assets to the court and also have to assign a trustee who will liquidate items in order to pay off creditors. Furthermore, filing personal bankruptcy is allowed once in seven years and the cost of filing personal bankruptcy is approximately three hundred dollars which goes towards filing fee.

If you plan on filing personal bankruptcy under chapter thirteen, it will help in reducing your debt though unlike chapter seven, does not cancel out your debt. And, chapter thirteen personal bankruptcies also means having to set out a plan for repayment with creditors and courts and assigning trustee who will make monthly payments after paying them the money. The trustee will receive payments from you and apportion them to various creditors, and an advantage to using chapter thirteen for filing personal bankruptcy is that unlike in chapter seven, under this chapter you may hold on to everything that would have been lost under chapter seven.

However, both these types of personal bankruptcy allows the debtor to rid him or herself of debts, though remember when filing chapter thirteen bankruptcy, you need to have debt that is not more than two hundred fifty thousand dollars and that such debt is uns! ecured, while debts that are secured should not exceed seven hundred and fifty thousand dollars.

The bottom line is that before filing for personal bankruptcy, makes sure to know what the ramifications of different chapters are and in most instances it may be better to file for chapter thirteen instead of chapter seven as the latter shows that you are a person that does not pay your debts.

Marathon Petroleum Corp (NYSE: MPC) May Soon Be the World¡¯s Richest Refiner

There's an oil price trend that's giving some oil refining companies a huge competitive edge.

Specifically I'm referring to Marathon Petroleum Corp. (NYSE: MPC).

You see, production from North Dakota's Bakken oil shale formation - the largest known reserve of light sweet crude in North America - is soaring. It went from a mere 3,000 barrels a day in 2005 to 225,000 in 2010, and could hit 350,000 barrels a day by 2035, according to the Energy Information Administration.

Currently, there aren't many ways to ship oil out of the basin, and supply in the region is outpacing refining capacity. That's helped keep the price of West Texas Intermediate (WTI) crude lower than the price of Brent crude in London, with the spread now around $17.

Since U.S. East Coast refineries usually source Brent-priced crude oil, their input costs have skyrocketed. This is one of the reasons major integrated oil companies have shed their refining capacities.

But Midwest refineries have been able to save money by running WTI-priced oil, getting crude at significantly cheaper prices than globally sourced locations.

With the Bakken formation ramping up production in coming years to meet growing demand, the region's refineries will continue to enjoy low input costs. It also means refineries that have access to Bakken oil will have a steady supply that's cheaper than their competitors.

This is why Marathon Petroleum Corp., the largest Midwest refiner, is a "Buy." (**)

Marathon Petroleum Corp.

Ohio-based Marathon Petroleum Corp. was formed July 1, 2011 when Marathon Oil Corp. (NYSE: MRO) spun off its highly profitable refinery and gas station business. It's the fifth largest petroleum refiner in the United States, with its six refineries offering a combined capacity of 1,142,000 barrels of oil per day.

G! ary R. H eminger, Marathon's new chief executive officer, said his company has built a strong enough refining position in the Midwest to ward off competition. He doesn't expect new pipelines and rail yard capacity bringing oil from the Bakken to the Gulf Coast to soften his competitive edge. The oil still needs a high-volume consumer and his refineries are the most obvious choice.

"If you look at Midwest refineries, we already have plenty of pipeline capacity into our plants," Heminger said at the Reuters Global Energy and Climate Summit. "It really comes back to (West Texas Intermediate) and lighter-type crudes that are in and around Cushing [Oklahoma, where WTI is priced]. They're looking for a home."

Marathon also will profit from its operations beyond the Midwest.

It's negotiating with pipeline companies to use its Texas refinery to process more crude from the new Eagle Ford Shale. The new Eagle Ford is unconventional shale oil that's extremely light, and can be mixed with another cheap blend - a heavy, sour crude - to make a more expensive finished product.

Marathon's Detroit refinery is undergoing a $2.2 billion overhaul that'll let it process heavy Canadian crude, which currently is priced even cheaper than WTI.

Marathon also has a profitable retail footprint. It operates 5,100 Marathon-branded gas stations in 18 states and 1,350 Speedway-branded convenience stores in seven states. It has more than 9,600 miles of pipelines into and out of its facilities.

The new refining company has a market cap of $13.3 billion with an enterprise value of $14.6 billion once net cash and debt is taken into consideration. The company reported $66.8 billion in revenue over the last trailing 12 months.

Third quarter earnings released Nov. 1 showed a 309% increase in net income from 2010's third quarter to $1.13 billion. Earnings per diluted share rose to $3.16 from $0.77 last year. Marathon also announced Oct. 26 a 25% div! idend in crease, for a yield of 2.6%.

The company has historical price/earnings (P/E) ratio of 7.2 over the last 12 months with an estimated forward P/E ratio of 5.6.

Its stock has soared more than 17% in the past month, closing yesterday (Wednesday) at $37.02.

Action to Take: Buy Marathon Petroleum Corp. (NYSE: MPC) (**).

It's time to buy Marathon Petroleum Corp. as it positions itself to profit from low input costs and high refining capacity.

I would buy half of our position now at market price, with an eye toward selling naked puts contracts for the other half of the position. This would give you a chance to be exposed to the upside move while increasing the overall cash yield on your first-half position.

(**) Special Note of Disclosure: Jack Barnes has no interest in Marathon Petroleum Corporation. (NYSE: MPC).

See what happens when the dead cat doesn't bounce in 2012

In Monday’s Daily Market Outlook, we examined charts of the S&P 500 and Nasdaq — two indices with a focused nature. The S&P 500 is generally considered to be the “best” 500 companies, while the Nasdaq is heavily weighted toward the technology sector. I concluded that it was likely that Friday’s rally resulted from the expiration of April options and was therefore a forced short-covering rally that could quickly turn into a dead cat bounce.
Today, we’ll look at charts of two of the broadest-based indices, the NYSE Composite, which is composed of all common stocks traded on the New York Stock Exchange, and the Russell 3000, which measures the performance of the largest 3,000 U.S. companies representing about 98% of all stocks traded in the United States.


The NYSE Composite chart shows a clear break of the 20- and 50-day moving averages following a strong sell signal from our internal indicator, the Collins-Bollinger Reversal (CBR). This coupled with a Moving Average Convergence/Divergence (MACD) sell signal (lower right) indicates that Friday’s rally was not sustained.
The only remaining bit of evidence to fully wrap it up for the bears would be a close under the green support line at about 8,220. A close under that line would confirm a breakdown from a double-top with a trading objective of about 7,900.


The Russell 3000 chart is similar to the NYSE, but shows twin CBR sell signals (strong bearish indicators). However, we require a close under the green support line at 770 to fully confirm a breakdown.
Neither chart supports the bulls, and both charts, as well as the ones of the S&P 500 and Nasdaq that we examined yesterday, closed below their respective 20- and 50-day moving averages.
Conclusion: The stock market is headed lower with objectives close to their respective 200-day moving averages (red solid line.)
Investors should remain on the defensive, selling into rallies, and traders should actively pursue bearish strategies. For one stock to sell or short, see the Trade of the Day.

A123 Systems Expands Partnership With IHI Corporation to Meet Increasing Demand for Lithium Ion Battery Technology in Japanese Transportation Market

IHI to License A123’s Nanophosphate(R) Battery System Technology to Develop Solutions for Passenger and Commercial Electric Vehicles in Japan; IHI Will Make $25 Million Equity Investment in A123
WALTHAM, Mass., Nov. 7, 2011 (CRWENewswire) — A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate(R)lithium ion batteries and systems, today announced that it has expanded its business development partnership with IHI Corporation, one of the largest industrial equipment manufacturers in Japan, to more strategically meet increasing demand for A123’s solutions in the Japanese transportation market. A123 will license its battery system technology to IHI, which will develop solutions for passenger and commercial electric vehicles in Japan using A123 battery cells. In addition, IHI will make a $25 million equity investment in A123.
“Since first partnering with A123 in 2009, we have seen increasing interest in A123’s advanced lithium ion battery technology for transportation and other applications. We believe that expanding our partnership enables IHI to address this growing market opportunity by commercializing innovative solutions powered by A123’s batteries,” said Taizo Suga, Associate Director, General Manager, Corporate Development Division at IHI. “A123’s Nanophosphate lithium ion chemistry has proven to be among the highest-performing, most durable and longest lasting battery technologies we’ve seen, which we feel makes them optimal for vehicle electrification. We look forward to working closely with A123 as a technology partner, and we also believe our equity investment in A123 will demonstrate a meaningful commitment to our expanded strategic business relationship.”
Under the terms of a technology license agreement, IHI will be the exclusive provider of A123 battery systems and modules in the Japanese transportation market, licensing A123’s advanced battery system technol! ogy and systems integration expertise to manufacture solutions for electric vehicles. It is expected that this will enable A123 to leverage the customer relationships IHI has developed with leading Japanese automakers. A related product supply agreement also establishes A123 as the exclusive supplier of lithium ion battery cells to IHI for transportation as well as non-transportation applications that IHI may develop as a future value-added reseller, which has the potential of creating new market opportunities for A123 technology across IHI’s global businesses.
“IHI is a well-established technology supplier to the Japanese auto industry , so we believe that expanding our relationship provides us with a strong strategic partner to help us more effectively and efficiently deliver our solutions to the Japanese transportation market,” said Jason Forcier, vice president of the Automotive Solutions Group at A123. “Additionally, we believe that we have a competitive advantage as the exclusive provider of lithium ion battery cells to IHI for the licensed applications as well as potential additional applications beyond transportation, allowing us to capitalize on new market opportunities introduced by IHI’s robust global network of businesses.”
About A123 Systems
A123 Systems, Inc. (Nasdaq:AONE) is a leading developer and manufacturer of advanced lithium-ion batteries and energy storage systems for transportation, electric grid and commercial applications. The company’s proprietary Nanophosphate(R) technology is built on novel nanoscale materials initially developed at the Massachusetts Institute of Technology and is designed to deliver high power and energy density, increased safety and extended life. A123 leverages breakthrough technology, high-quality manufacturing and expert systems integration capabilities to deliver innovative solutions that enable customers to bring next-generation products to market. For additional information please vis! it www.a 123systems.com.
Safe Harbor Disclosure
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors, including statements with respect to the anticipated benefits of the expanded strategic business relationship, the market for alternative energy transportation in Japan and the timing of expected production and availability of IHI’s solutions based on A123’s system technology and their anticipated performance, benefits and features, as well as the expected demand by IHI for battery cells to be supplied by A123, and the expected performance of A123’s battery technology and lithium ion battery cells . Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: delays in customer and market demand for and adoption ofIHI’s battery system products, delays in the development, production and supply of IHI’s products, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which A123 and IHI operate and other risks detailed in A123 Systems’ 10-Q for the quarter ended June 30, 2011 and other publicly available filings with the Securities and Exchange Commission. All forward-looking statements reflect A123’s expectations only as of the date of this release and should not be relied upon as reflecting A123’s views, expectations or beliefs at any date subsequent to the date of this release.

McCann and His Team: Lots of Merrill Lynch

Bob McCann, the former head of Merrill Lynch's brokerage force, joined UBS in November 2009, when it had about 7,300 advisors in the Americas. And the recently hired head of wealth management for the Americas is now putting together a team to help him boost results.
In a January 19 memo, in which he describes his effort in forming a "Renewal Team," McCann says that leaders are being hired to make changes "in how we interface with our clients and financial advisors, with particular focus on streamlining processes, increasing efficiencies and driving the business forward."
The new hires and leadership shifts include:
- Bob Mulholland, formerly of Merrill Lynch, will now head UBS Americas' Wealth Management Advisor Group (replacing Jamie Prince);
- Brian Hull, another ex-Merrill Lynch executive, will head Wealth Management Partnerships;
- John Brown, head of Wealth Management Solutions;
- David Satler, chief of staff - as well as head of Human Resources; and
- Paula Polito, another Merrill Lynch veteran, is now chief marketing officer.
Other executive changes effect:
- Jamie Price, who moves to an advisory role for the firm, "working with Bob Mulholland and his team, while he considers new career opportunities;"
- Jim Hausmann, who has been serving as interim head of Products and Services for the past six months, will assume a leadership role in the new Wealth Management Solutions organization, reporting to John Brown; and
- Kim Jenson takes on a new senior role and will be responsible for Wealth Management Advisor communications, reporting to Paula Polito.

China Wants Its Money Back in 2012

Late word is that the China Development Bank may pass on putting $2 billion into Citigroup (C) as was planned. According to The Wall Street Journal the Chinese government may be blocking the deal.
As China puts more and more money into US government debt and invests in troubled financial institutions it would be well to remember that one of its earlier deals, an investment in BlackStone (BX), turned out to be about as bad as an investment could get. Shares in the firm have gone from $38 to $20.
China wants it money back. Maybe then it will put in some more.
Douglas A. McIntyre

A broad band of support at S&P 500 1,124 to 1,225 will likely slow the decline

A fall in the euro sent equity and commodity markets into a downward spiral yesterday. Sentiment against the euro strengthened following Germany��s stand that its government is against raising the lending limit for a euro zone bailout.
In response, Italy��s 10-year bond yield rose 7%-plus, and Spain and France saw their bond yields jump as well. The U.S. dollar rose, of course, and the rise was accentuated by a series of better-than-expected economic reports.
Commodities fell sharply in response to the stronger dollar. The CRB Index fell 3.4%, and gold settled at $1,587.70 an ounce, down 4.6%, and silver lost 7.6%.
The Dow Jones Industrial Average closed at 11,823, off 1.1%, the S&P 500 ended at 1,212, down 1.13%, and the Nasdaq closed at 2,539, down 1.55%. The NYSE traded 928 million shares, and the Nasdaq crossed 512 million. Decliners were ahead of advancers on the Big Board by 3-to-1 and on the Nasdaq by 2-to-1.
Yesterday, every major index violated its near-term support as the dollar rocketed to new highs.
The breakdown of the S&P 500 is significant because it confirmed the failure of the index to break higher at its bearish resistance line (June/July, October and November highs); it turned down from its 200-day moving average — a confirmation that the long-term bear market is intact; and it crushed the near-term support provided by the conjunction of the 20-day and 50-day moving averages.
The question is: How low will it go?
The answer may surprise you: Not very far, at least initially. There is a broad band of support at 1,124 to 1,225 that will more than likely slow the decline, and the uptrend line of a major trading triangle rests at 1,175.
Additionally, the Fibonacci numbers off of the November low to the December are: 50% = 1,212 (yesterday��s close), 61.8% = 1,200.
Finally, we are approaching the holiday period when trading traditionally slows and volume falls until we enter the New Year.
! Yesterda y��s higher close in the PowerShares DB US Dollar Index Bullish Fund (NYSE:UUP) confirmed the bull market in the U.S. dollar, and that conclusion is backed by the MACD buy signal. But volume on the breakout is not as high as the average volume of the October sell-off.
Conclusion: The most followed indices have broken from major support levels, indicating that the bear market is intact and that prices should head modestly lower.
But European politicians are no less nimble than our own. When our credit markets were in jeopardy (not that they still aren��t), the Feds sprang TARP, then QE1 and QE2 while dropping interest rates to near zero. And each move was immediately greeted with a rebound in stocks.
The Europeans have followed the same pattern and will, in desperation, scramble to turn an outgoing tide with each attempt triggering a rally in equities. Thus, shorts should expect violent rebounds. Take profits when you can. (Check out my colleague John Jagerson who turned a 67% profit overnight last week.) And protect positions with stop-loss orders.
The trend is down, but expect more volatility and less predictability.

Alamos Gold PT Trimmed At CIBC Reflecting Higher Costs in 2012

CIBC World Markets Inc. cut its price target on Alamos Gold Inc. (TSX:AGI.TO) to $23.00 from $24.00, reflecting higher costs for 2013 estimates.
Barry Cooper, an analyst at CIBC, cut his 2012 EPS estimates for thecompany to US$1.33 from US$1.47 and 2013 estimates to US$1.72 fromUS1.77.
Production in the fourth quarter was essentially in line with ourexpectations of 43,000 ounces, Cooper said. The 46,500 ounces producedincluded 3,000 ounces of non-commercial production from the Escondidazone.
Cooper wrote that the start up of the mill associated with Escondidaore will be a major milestone for the operation. The boost will comefrom both grades and costs and partially offset total cash costs thatare expected to be approaching $600/oz for the heap leach operationalone, he said.
"Grades are expected to be down 23% at the Mulatos pit year-over-yearand follow a previous decline of 18% in 2011. This should be a lowpoint relative to the reserve grade, although higher gold prices will beaffecting reserve figures for AGI as well as others as low gradesbecome economical," Cooper said.
"Throughput for Mulatos may prove difficult to achieve given the17,500 TPD avg that has been forecast. About 500 TPD will come from milltailings, but to avg 17,000 TPD for the main crusher facility may beaggressive," Cooper wrote. "We think that there could be a cushion inthe grade estimate that could help."
The stock is currently trading 0.12% lower at $17.31. The shares havebeen trading in the 52-week range between $13.26 and $20.15.
{$end}

(AEHR,TIII, ASTX, CLNO, SHOR) Stock to Watch by DrStockPick.com

Aehr Test Systems (Nasdaq:AEHR), a worldwide supplier of semiconductor test and burn-in equipment, announced financial results for the first quarter of fiscal 2012 ended August 31, 2011.
Net sales were $4.1 million in the first quarter of fiscal 2012, compared with $2.2 million in the first quarter of fiscal 2011. Aehr Test reported net income of $124,000, or $0.01 per diluted share, in the first quarter of fiscal 2012, compared to a net loss of $1.5 million, or $0.17 per diluted share, in the first quarter of fiscal 2011. The Company’s net income for first quarter fiscal 2012 included a gain of $990,000 from the sale of its investment in ESA Electronics PTE Ltd.
Commenting on the results of the first quarter, Rhea Posedel, chairman and chief executive officer of Aehr Test Systems, said, “We are pleased to have started fiscal 2012 off with a profitable first quarter. Our revenues for the quarter grew 90% year-over-year and were up 10% sequentially. A major contributor to this growth was the shipment of a number of FOX(TM)-1 WaferPak contactors for full wafer, one touchdown sort testing of flash memory wafers. We also had an increase in ABTS(TM) revenues in the quarter, reflecting the inroads we are making in adding new customers. At the same time, we gained a new customer in China for our ABTS product and booked follow-on ABTS system orders from existing customers.
“Looking ahead, we are seeing a higher level of interest in our broad base of products,” continued Posedel. “We remain focused on penetrating key production accounts with our ABTS and FOX products to grow our business.”
Headquartered in Fremont, California, Aehr Test Systems is a worldwide provider of systems for burning-in and testing DRAMs, flash and other memory and logic integrated circuits and has an installed base of more than 2,500 systems worldwide. Aehr Test has developed! and int roduced several innovative products, including the ABTS, FOX and MAX systems and the DiePak(R) carrier. The ABTS system is Aehr Test’s newest system for packaged part test during burn-in for both low-power and high-power logic as well as all common types of memory devices. The FOX system is a full wafer contact test and burn-in system. The MAX system can effectively burn-in and functionally test complex devices, such as digital signal processors, microprocessors, microcontrollers and systems-on-a-chip. The DiePak carrier is a reusable, temporary package that enables IC manufacturers to perform cost-effective final test and burn-in of bare die.
For more information, please visit the Company’s website at www.aehr.com.
Tii Network Technologies, Inc (Nasdaq:TIII) a leader in designing, manufacturing and marketing network products for the communications industry, announced the appointment of Stacey L. Moran as Vice President - Finance, Chief Financial Officer, Secretary and Treasurer.
Tii Network Technologies, Inc., together with its subsidiaries, designs, manufactures, and sells products for use in the networks to service providers in the communications industry in the United States.
Astex Pharmaceuticals, Inc. (Nasdaq:ASTX) announced that preclinical data demonstrating that AT13387, a novel non-ansamycin Heat Shock Protein 90 (HSP90) inhibitor, is active in in vitro gastrointestinal stromal tumor (GIST) models (Abstract #9407) was presented at the 2011 ECCO (European Cancer Organization) European Multidisciplinary Cancer Congress in Stockholm, Sweden.
Astex Pharmaceuticals, Inc., a pharmaceutical company, engages in the discovery, development, and commercialization of novel therapeutics with a focus on oncology and hematology.
Cleantech Transit, Inc. (CLNO)
Cleantech Transit Inc. was founded to capitalize on technology advances and manufacturing opportunities in the gro! wing cle an energy public transportation sector. The Company has expanded its focus to invest directly in specific green projects. Recognizing the many economic and operational advances of converting wood waste into renewable sources of energy, Cleantech has selected to invest in Phoenix Energy (www.phoenixenergy.net). This project could benefit the Company’s manufacturing clients worldwide.
Cleantech Transit, Inc. (CLNO) is pleased to announce it has met its funding requirement to secure the Company’s ability to earn in 25% of the 500KW Merced Project.
The Company is in the final stages of closing its initial interest in the Merced Project and is currently working on completing the necessary documentation and expects closing the transaction soon. As previously announced Cleantech has the option to earn up to 40% of the Merced Project and the Company plans to continue to work towards increasing its interest in the Merced Project as they move ahead.
Biomass is made from plants and is essentially a form of solar energy. Plants absorb energy from the sun as they grow through the process of photosynthesis. Plants use the sun’s energy to break carbon dioxide and water molecules apart into their basic elements, hydrogen, carbon and oxygen. The hydrogen and carbon are used to build the molecules that the plants are made of. Most of the oxygen is released back into the atmosphere.
For more information about Cleantech Transit, Inc. visit its website www.cleantechtransitinc.com
ShoreTel, Inc. (Nasdaq:SHOR) the leading provider of brilliantly simple IP phone systems with fully integrated unified communications (UC), welcomes Sunnyvale Mayor Melinda Hamilton, as she visits ShoreTel headquarters in recognition of the company’s success.
Shoretel, Inc., together with its subsidiaries, engages in the development and sale of Internet protocol (IP) communications systems for enterprises in the United States and internationally.

Lehman Forced to Revise Bankruptcy Exit Plan

After some creditors rejected Lehman Brothers' Chapter 11 proposals, the company revised its plan to exit bankruptcy, filing a new plan in New York, Bloomberg reported Wednesday.
The plan didn't list a voting deadline for creditors or propose a date for the confirmation hearing, Bloomberg reports. Lehman will start soliciting votes for the plan after the summer, and final court approval may be near the end of the year.
Lehman plans to raise $61 billion by selling assets and reducing allowable claims to $322 billion, Bloomberg reports. The average Lehman creditor would receive 18.6 cents on the dollar, and senior bondholders would receive 21.4 cents. Creditors with general unsecured claims would receive a 19.8% return, according to Bloomberg.
Derivatives creditors, which include Goldman Sachs, Morgan Stanley, Credit Suisse, Deutsche Bank and Bank of America, would get 22.3 cents, Bloomberg reports. As of the third quarter of 2010, Lehman had settled over 45% of derivatives transactions made by the Lehman Brother Special Financing unit. When Lehman filed for bankruptcy it was involved in 1.2 million derivatives transactions.
Hedge fund Paulson & Co. and other creditors with large claims against Lehman Brothers argued that Lehman's original plan "created conflict among creditors of Lehman's units," and offered their own plan in December, Bloomberg reports. In that plan, bondholders received 24.5 cents, and derivatives creditors received 25.7 cents. The group, which includes the California Public Employees’ Retirement System, PIMCO and Canyon Partners LLC, a Los Angeles-based $19 billion hedge fund, hold $80 billion in claims against Lehman, Bloomberg writes.
Lehman's revised plan incorporates elements of the Paulson plan and offers bondholders more money than the original plan, which proposed giving creditors 17 cents. If the Paulson group opposes the revised plan, their payout will be reduced to the original amount, Bloomberg reports.
“We think this is the fairest way to deal with all the legal issues,” Lehman President John Suckow told Bloomberg by phone Wednesday. “We’re hoping to get people to rally around this plan in coming weeks and months.”
At the end of 2010, Lehman held $24 billion in cash and $37 billion in real estate, private equity and other assets, Bloomberg writes.

A Hidden Reason Why the Future Looks Bright for FEI

Here at The Motley Fool, I've long cautioned investors to keep a close eye on inventory levels. It's a part of my standard diligence when searching for the market's best stocks. I think a quarterly checkup can help you spot potential problems. For many companies, products that sit on the shelves too long can become big trouble. Stale inventory may be sold for lower prices, hurting profitability. In extreme cases, it may be written off completely and sent to the shredder.
Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized.
Is the current inventory situation at FEI (Nasdaq: FEIC  ) out of line? To figure that out, start by comparing the company's figures to those from peers and competitors:

Company	TTM Revenue Growth	TTM Inventory Growth
FEI	32.7%	20.0%
Hitachi (NYSE: HIT  )	0.4%	11.6%
Cognex (Nasdaq: CGNX  )	25.6%	19.8%
FARO Technologies (Nasdaq: FARO  )	31.4%	73.6%

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. TTM = trailing 12 months.

How is FEI doing by this quick checkup? At first glan! ce, pret ty well. Trailing-12-month revenue increased 32.7%, and inventory increased 20%. Over the sequential quarterly period, the trend looks healthy. Revenue dropped 2.7%, and inventory dropped 5.5%.
Advanced inventory
I don't stop my checkup there, because the type of inventory can matter even more than the overall quantity. There's even one type of inventory bulge we sometimes like to see. You can check for it by examining the quarterly filings to evaluate the different kinds of inventory: raw materials, work-in-progress inventory, and finished goods. (Some companies report the first two types as a single category.)
A company ramping up for increased demand may increase raw materials and work-in-progress inventory at a faster rate when it expects robust future growth. As such, we might consider oversized growth in those categories to offer a clue to a brighter future, and a clue that most other investors will miss. We call it "positive inventory divergence."
On the other hand, if we see a big increase in finished goods, that often means product isn't moving as well as expected, and it's time to hunker down with the filings and conference calls to find out why.
What's going on with the inventory at FEI? I chart the details below for both quarterly and 12-month periods.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FQ = fiscal quarter.

Let's dig into the inventory specifics. On a trailing-12-month basis, raw materials ! inventor y was the fastest-growing segment, up 42.6%. On a sequential-quarter basis, finished goods inventory was the fastest-growing segment, up 0.2%. FEI seems to be handling inventory well enough, but the individual segments don't provide a clear signal. FEI may display positive inventory divergence, suggesting that management sees increased demand on the horizon.
Foolish bottom line
When you're doing your research, remember that aggregate numbers such as inventory balances often mask situations that are more complex than they appear. Even the detailed numbers don't give us the final word. When in doubt, listen to the conference call, or contact investor relations. What at first looks like a problem may actually signal a stock that will provide the market's best returns. And what might look hunky-dory at first glance could actually be warning you to cut your losses before the rest of the Street wises up.
I run these quick inventory checks every quarter. To stay on top of the inventory story at your favorite companies, just use the handy links below to add companies to your free watchlist, and we'll deliver our latest coverage right to your inbox.

• Add FEI to My Watchlist.
• Add Hitachi to My Watchlist.
• Add Cognex to My Watchlist.
• Add FARO Technologies to My Watchlist.

5 Undervalued Recession-Proof Stocks

Markets were crushed Thursday on signs of slowing growth in China and Germany and a gloomy economic outlook from the Federal Reserve, reported CNBC. In response, investors fled to the safety of the U.S. dollar and government bonds.
The U.S dollar climbed 1.36%, which pushed down U.S crude oil prices by more than 5%. Gold dropped nearly $50/ounce and European stocks fell 4% to a two-year low, "dragging an index of global equities to a one-year trough." This was all before 11 a.m.
Market volatility isn't going anywhere, and more cloudy days may still be ahead for the global economy.
So how can you prepare yourself for more market losses?
For ideas, we went back into time, and identified a list of stocks that outperformed the market during each of the last three big market downturns over the last decade (Oct. 1, 2007 to March 2, 2009, April 19, 2010 to June 28, 2010, and July 18, 2011 to the present).
In addition, all of these stocks appear to be undervalued, when comparing levered free cash flow to enterprise value.
Considering the track record of these companies during downturns, are they being underestimated by the market?
List sorted by each stock's average alpha relative to the S&P 500 during the three downturns over the last decade. (Click here to access free, interactive tools to analyze these ideas.)
1. Arch Capital Group (Nasdaq: ACGL  ) : Provides insurance and reinsurance products worldwide. Between Oct. 1, 2007 and March 2, 2009: Price changed from $25.16 to $17.52, a price return of -30.37% (alpha of 24.33%). Between April 19, 2010 to June 28, 2010: Price changed from $25.29 to $25.47, a price return of 0.71% (alpha of 10.98%). Between July 18, 2011 and Sept. 18, 2011: Price changed from $32.32 to $33.65, a price return of 4.12% (alpha of 10.97%). [Average Alpha: 15.43%] Levered free cash flow at $527.50M vs. enterprise value at $4.15B (implies an LFCF/EV ratio at 12.71%).
2. Mea dowbrook Insurance Group (NYSE: MIG  ) : Operates as a specialty commercial insurance underwriter and insurance administration services company in the United States. Between Oct. 1, 2007 and March2, 2009: Price changed from $8.72 to $5.58, a price return of -36.01% (alpha of 18.69%). Between April 19, 2010 to June 28, 2010: Price changed from $7.97 to $8.77, a price return of 10.04% (alpha of 20.3%). Between July 18, 2011 and Sept. 18, 2011: Price changed from $9.49 to $9.51, a price return of 0.21% (alpha of 7.06%). [Average Alpha: 15.35%] Levered free cash flow at $53.57M vs. enterprise value at $527.85M (implies an LFCF/EV ratio at 10.15%).
3. Synopsys (Nasdaq: SNPS  ) : Provides technology solutions used to develop electronics and electronic systems worldwide. Between Oct. 1, 2007 and March 2, 2009: Price changed from $27.47 to $17.94, a price return of -34.69% (alpha of 20.01%). Between April 19, 2010 to June 28, 2010: Price changed from $23.03 to $21.96, a price return of -4.65% (alpha of 5.62%). Between July 18, 2011 and Sept. 18, 2011: Price changed from $24.15 to $25.99, a price return of 7.62% (alpha of 14.47%). [Average Alpha: 13.37%] Levered free cash flow at $294.70M vs. enterprise value at $2.56B (implies an LFCF/EV ratio at 11.51%).
4. MKS Instruments (Nasdaq: MKSI  ) : Provides instruments, subsystems, and process control solutions that measure, control, power, monitor, and analyze parameters of manufacturing processes worldwide. Between Oct. 1, 2007 and March 2, 2009: Price changed from $19.35 to $11.75, a price return of -39.28% (alpha of 15.42%). Between April 19, 2010 to June 28, 2010: Price changed from $20.7 to $20.26, a price return of -2.13% (alpha of 8.14%). Between July 18, 2011 and Sept. 18, 2011: Price changed from $24.86 to $24.65, a price return of -0.84% (alpha of 6.01%). [Average Alpha: 9.86%] Levered fr! ee cash flow at $128.07M vs. enterprise value at $707.26M (implies an LFCF/EV ratio at 18.11%).
5. Fresh Del Monte Produce (NYSE: FDP  ) : Produces, transports, sources, markets, and distributes fresh and fresh-cut fruit and vegetables worldwide. Between Oct. 1, 2007 and March 2, 2009: Price changed from $28.97 to $17.88, a price return of -38.28% (alpha of 16.42%). Between April 19, 2010 to June 28, 2010: Price changed from $20.89 to $20.84, a price return of -0.24% (alpha of 10.03%). Between July 18, 2011 and Sept. 18, 2011: Price changed from $26.19 to $23.8, a price return of -9.13% (alpha of -2.28%). [Average Alpha: 8.06%] Levered free cash flow at $167.94M vs. enterprise value at $1.43B (implies an LFCF/EV ratio at 11.74%).
Interactive chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.

Wall Street Too Lazy To Sleep

Stocks poised themselves for a higher opening Thursday, but it may be that Wall Street simply has gotten too indifferent to care about the recent selloff.
Stocks have fallen in four straight sessions, but only one of them amounted to anything of any consequence. Aside from Tuesday’s 20-point selloff by the S&P 500 Index(SPX), Wall Street has behaved much the way it did Wednesday, when the index hugged the flatline for most of the session before finishing just 3 points lower on the close.
Futures suggest an eight-point improvement from the open, which would push the S&P back above the 1000-point mark, a level that has manifested a bit of psychological – if not actually technical – resistance.
On the other hand, the market has been – and can be expected to continue – battling a host of headwinds: Sluggish trading, owing to seasonal factors. An uptick in risk aversion. A speculative bubble forming that’s formed in some financials. And a rise in the kind of momentum moves in individual issues that smacks of day traders with no real commitment to fundamentals.
The one thing that has been working the bulls’ corner has been the economic data. This week’s reading on industrial trends showed the manufacturing sector of the domestic economy improved for the first time since the recession started. Wednesday’s release of the minutes of the last FOMC meeting suggested the central bank had evidenced increased confidence the recession has ended.
The stumbling block could be the consumer, especially as an iteration of the labor market. Friday brings the release of the monthly nonfarm payrolls report, expected to show that job losses persisted in August, but at a slower pace than in prior months; the forecast calls for a decline of 233,000 jobs, versus a loss of 247,000 in July.
The weekly unemployment claims reading came in just about where expected, showing 566,000 people without jobs filed claims for t! he week, down from 570,000 the prior week.
Monthly same-store sales figures from retailers can be expected to show the reticence of consumers amid the persistent weakness in the labor markets.
Furthering the bearish case, risk aversion has percolated over the course of the week’s action. Treasuries have risen in price for much of this week, although they have retreated a bit Thursday on some profit-taking. The decline in risk appetite has manifested itself more dramatically in the gold market, a conventional safe-haven for the inflation bugs. Gold prices broke out Wednesday, and continued to rally Thursday.
The session’s equity action has a constructive look on the open, but there’s a real chance that, with dwindling trading levels in the last week of the summer season, investors could opt to book some profits on any improvement, and think about answering the call of the open road.