Bank of America Fighting to Keep Dividend Hike After $4 Billion Blunder

Bank of America Corp. (BAC) Chief Executive Officer Brian T. Moynihan won permission last month for the firm's first dividend increase since the financial crisis. Now he's under pressure to salvage the payout after the company mistakenly inflated capital levels by about $4 billion.

One leading option: scrapping a $4 billion share repurchase, said a person briefed on the deliberations. That could allow the Charlotte, North Carolina-based bank to resubmit its request to boost the quarterly dividend to 5 cents, said the person, asking not to be identified because the process is confidential.

Moynihan, 54, has a month to draw up plans that will win Federal Reserve approval after the regulator asked the bank to freeze buybacks and dividend increases. The boost approved in March was heralded as a symbolic victory for Moynihan and the bank, which has had a token penny-a-share payout since 2009.

“This is a step backwards for them, it raises credibility issues for management,” said Jonathan Finger, whose family-owned investment firm, Finger Interests Ltd., owns 900,000 shares of the lender and stands to lose about $144,000 in annual income if Moynihan fails to increase the dividend. “Shareholders have suffered a significant period with no dividends, so some respite from that would be welcomed.”

Bank of America, the nation’s second-largest bank, views the dividend as linked to the company’s ability to generate regular earnings, which was unaffected by the mistake, said the person. The firm isn’t yet certain what payout it will request and may refine the proposal until the due date, the person said.

Outside Review

The predicament arose after the bank found an error in how it valued structured notes inherited in its 2009 acquisition of Merrill Lynch. The Fed responded by asking the firm to resubmit parts of its stress-test capital plan, which is designed to prove that a bank is strong enough to survive an economic shock. Bank of America disclosed the situation yesterday, saying it was hiring an outside firm to review its processes before the resubmission.

The bank’s estimate of Tier 1 capital under coming rules fell to $130.1 billion from $134.2 billion because of the error, the firm said yesterday in a regulatory filing.

The resubmission probably will face closer Fed scrutiny and a higher risk of rejection, said Erik Gordon, a professor at the Ross School of Business at the University of Michigan in Ann Arbor.

Lower Payouts

The bank’s blunder doesn’t necessarily mean the Fed will reject a revised capital plan on qualitative grounds, as the regulator did with Citigroup Inc.’s proposal, said another person with knowledge of the process. Examiners can’t check all the data provided by banks, the person said.

The Fed regards the incident as bolstering the case for the stress tests because the discovery was handled swiftly, said Barbara Hagenbaugh, a spokeswoman for the central bank. Before the stress tests, finding and fixing the error probably would have been a drawn-out process, she said.

The bank said the revised proposal probably will include lower payouts than the earlier plan, which was already modified once to win Fed approval during the stress tests. At stake are $1.68 billion in annual dividend payments for a company that earned more than $10 billion last year. Before the financial crisis, stockholders were getting quarterly payments of 64 cents a share.

Bank of America shares swung to a loss for this year by tumbling 6.3 percent yesterday to $14.95, the biggest drop since November 2012. They were little changed today at 9:35 a.m. in New York.

Raising Doubts

The slide was overdone in light of the firm’s capital levels, wrote Betsy Graseck, a bank analyst at Morgan Stanley. Bank of America probably will forgo buybacks while keeping the dividend increase in the resubmission, Graseck predicted. Mike Mayo, who covers banks at CLSA Ltd., said the mistake raises doubt about controls and reiterated his sell recommendation.

Bank of America discovered the mistake late last week while preparing a quarterly regulatory report and immediately notified the Fed, said a person with direct knowledge of the process. The error had gone undetected since the firm’s acquisition of Merrill Lynch, said the person.

The bank, in its calculation of regulatory capital, erroneously included a credit for structured notes that had matured, said the person. The company had about $30 billion in the securities at the end of 2013, the person said.

Banks create structured notes by packaging debt with derivatives to offer customized bets to retail investors while earning fees and raising money. Derivatives are contracts with values derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.

Citigroup’s Rejection

Even after correcting the mistake, Bank of America has a 9% common equity Tier 1 capital ratio as of March 31, beyond the 8.5% required by 2019 under the latest international rules set by the Basel Committee on Banking Supervision.

The firm, led by Moynihan since 2010, has worked for years to resolve headaches inherited with his predecessor’s decision to buy Merrill Lynch and mortgage-lender Countrywide Financial Corp. during the financial crisis. The company reported a $276 million deficit for the three months ended March 31, its fourth quarterly loss under Moynihan.

Terry Laughlin, Bank of America’s former chief risk officer who last week was named president of strategic initiatives, will help manage the resubmission, according to one of the people. Laughlin will establish the scope of what must be resubmitted and work with Chief Financial Officer Bruce Thompson and Geoffrey Greener, Laughlin’s successor as risk officer.

The Fed rejected Citigroup’s plan last month by faulting the quality of the New York-based firm’s processes. Citigroup, the nation’s third-largest bank, also was seeking its first dividend increase since the crisis as well as a stock buyback.

 

Markets Playing Tetherball With F5 Networks

When I last wrote on F5 (Nasdaq:FFIV) in early June, I still liked the prospects for the company and its shares, but I warned that it was likely to be a volatile holding. In the intervening two months or so, the shares have lived up to that prediction – initialing falling another 15%, before rebounding 30% and ending up with a net 11% gain since that June 3 article.

I see little reason to believe that these shares won't remain highly volatile. Although the company should see meaningful benefits from new product launches and a spending recovery in the coming quarters, there is still the spectre of greater competition and a slowing core market looming over the shares. While I continue to believe that F5 is the premier application delivery controller (ADC) company, and that the ADC market is slowing (not declining), the market's uncertainty regarding the company's future is likely to play out in outsized reactions in the stock price.

SEE: Market Cycles: The Key To Maximum Returns

A Good Beat For Fiscal Q3
There was quite a bit of pessimism going into this quarter, but F5 delivered a surprisingly strong set of results. Although those analysts who'd been bullish going into the report certainly celebrated the outperformance, more than a few bearish analysts tried to tamp down the excitement by claiming it was just an aberration.

Revenue rose 5% from the year-ago quarter and 6% from the prior quarter. Product revenue declined 5% and rose 6%, respectively, while service revenue rose 19% and 5%. Sales were boosted by a strong recovery in the telecom market, and though management cited good uptake for non-ADC products like the Advanced Firewall Manager and Application Security Manager, there wasn't much specificity there.

Margin performance was a good news/bad news proposition – better than expected (and not trivially so), but still not so good on a comparative basis. Gross margin fell about 70bp from the year-ago period and 40bp from the prior quarter. GAAP sales and marketing expenses rose about 9% from last year, helping push GAAP operating income down about 5%. On a non-GAAP basis, income was down 2% and up 10%, good for a six-cent operating beat.

SEE: A Look At Corporate Profit Margins

Will New Intros Leverage An Improving Spending Environment?
IT hardware companies seem to be getting a little more optimistic about the spending environment, particularly in the telecom sector. What's more, multiple sell-side surveys seem to support the idea that ADC purchases still rank relatively high as a priority for enterprise customers.

F5 could further leverage that with the introduction of two new products (the 5000 and 7000) late in this past quarter. New production introductions have been a powerful catalyst for sales growth in F5's past, and bulls are hoping for a repeat performance.

Market And Competition Fears Are Not Going Away
Although F5 continues to score well in a variety of surveys, there is still a lot of fear in the market regarding F5's future prospects. Rival Citrix (Nasdaq: CTXS) has also been showing strong momentum in this market, and it still looks as though the Citrix-Cisco (Nasdaq: CSCO) partnership is moving most of Cisco's former ADC customers to Citrix. It also doesn't help matters that Citrix still retains a significant market share edge in virtual ADCs, a market that continues to grow at the traditional ADC market's expense.

Competition from companies like Citrix, Radware (Nasdaq: RDWR), and A10 is bad enough, but those aren't the only concerns on the Street regarding F5. Some investors question F5's ability to compete with companies like Cisco, Check Point (Nasdaq:CHKP), and Juniper (Nasdaq: JNPR) in security, and not unlike what has happened to Check Point, others fear that F5 may be too high-end for its own good (leading customers to go with cheaper alternatives).

The Bottom Line
I do wonder if F5 isn't going to be more of a trader's stock than an investor's stock for the remainder of 2013. More growth (and more detail) in markets like security, storage, and traffic management would certainly help, as would signs that F5 is taking away some of those former Cisco customers from Citrix.

Even with modest future growth expectations (roughly 4% to 5% long-term free cash flow growth), a fair value of around $100 seems appropriate for these shares. That said, so long as the market remains worried that F5's core market growth is slowing and that margins are likely to shrink, it will be a challenging stock to hold. Investors who can tune out the noise will likely be happy with the long-term returns, but seeing the shares touch $70 again doesn't seem out of the question.

Disclosure – As of this writing, the author has no positions in any of the stocks mentioned.

Micron: The Best Stock To Buy After The Sell-Off

Top Consumer Service Stocks To Watch Right Now

It is not a rare phenomenon that a company's financial figures rally at a rocket speed because of some favorable changes at the industry-level. Well, Micron (MU) is one such case where the company has gained well in revenue because of an increase in the overall prices of DRAM modules complemented by a reduction in industry supply because of a fire at one of the factories owned by SK Hynix. Also, the acquisition of Elpida gave the much required leverage to Micron in terms of expansion of production capacity.

The strong quarterly result

The first quarter saw reasonably good results because of a robust combination of Elpida and Micron that was aided by a consistent increase in the demand for DRAM chips. The giant reported a quarterly revenue of approximately $4 billion and an EPS of 77 cents per share, which beat the Street estimates by a sizable margin. As highlighted by the management in the earnings call, these record results were achieved because of timely amalgamation and efficient execution of Elpida's operations.

Heavy insider activity

Lately, there has been an unusually high amount of insider activity on Micron's shares as some big stakeholders have diluted their stake in the company in a span of approximately 30 days. Traditionally, heavy insider selling is a point of worry because it becomes a big judging point for investors and the stock price then becomes a subject of erratic actions driven by psychology rather than factual analysis. Though Micron has not succumbed to a high amount of volatility on the stock exchange, the recent insider selling should not be made a reasoning point by investors.

It is quite clear that Micron reaped huge gains from the buoyancy in DRAM demand with Elpida's production capacity on its side but the coming year can see a bit of a slowdown in demand. Additionally, the peak pricing would take a hit as the SK Hynix facility has commenced its production after recovering from the fire accident.

Industry demand and peers

Micron's biggest competitor, Samsung (SSNLF) had stepped up its DRAM production in wake of huge demand and there has been no guidance from the company on its retraction. Thus, such an expansion in overall level of production will definitely exert a downward pressure on the average price of DRAM chips and also pave way for fierce competition. Samsung's semi-conductor division recently posted a decrease of 3% in operating profits on a sequential basis but for the coming quarters the company is optimistic on the industry's potential.

As leading experts have pointed out, mobile is going to be the big thing in technology for next few years and this is going to pump up the demand for DRAM chips. Samsung is already the global leader in smartphone production and if the company is able to implement cost-effective innovation in production of DRAM chips, it would pose a considerable threat for Micron.

A discussion on NAND

Since the beginning of this article I have focused on DRAM chips in the analysis of Micron's future revenue potential but a considerable chunk of its revenue also comes from the NAND memory segment. As per reports, the company is set to test the 3D NAND memory in the first half of the year which will definitely generate reasonable activity on the Street. Samsung is the largest player in this segment and has already commenced mass production of its 3D V-NAND product making Micron a pretty late entrant to the party.

The NAND memory industry is expected to boom in the next few years because of growing demand for reliable and compact memory that is offered by Solid State Drives. This report from Trefis highlights the increasing importance of SSD offerings because massive corporations are working on colossal amount of data which requires adequate storage mechanism. As of now, Micron has good exposure to both enterprise SSD and consumer SSD markets and a huge scope to effect exponential growth by sampling with different technology. For instance, the company shipped its first 20 nanometer enterprise drive to a large OEM in the first quarter.

Final words

The quarterly results of Micron have been impressive and the acquisition of Elpida at a bargain price has catapulted the semiconductor devices giant to a better position in the industry. Additionally, the company also has a robust financial position with cash and short-term investments over $3 billion and a D/E ratio of around 0.63. The management of Micron did a commendable job with Elpida's acquisition without the requirement of incurring additional cash outlay in developing its facilities.

As I already mentioned, Micron has been subject to reasonable insider selling activity over the past month but it should not be a judging point for investors as the company has strong fundamentals and reasonable financial position. The memory industry will see some swings in demand and prices over the year but there is huge long-term potential and it is prudent to have Micron in your portfolio.

Currently 0.00/512345 Rating: 0.0/5 (0 votes)

Subscribe via Email Subscribe RSS Comments BEL-AIR - 7 hours ago

MU looks like it is topping, any good chart reader can see that.... It's latest base is wide and sloppy, plus it is a late stage base, classic signs it is topping. It had a nice run, up 600% in the last 3 years, but nothing goes straight up forever.

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Buy Skechers For The Long Run

Top Media Stocks To Buy Right Now

U.S. retail sales inched up 0.2% in December. This increase followed a 0.4% jump in Nov., resulting in retailers' merriment. Although this was driven by the highly promotional environment and deep discounts, this shows that consumers are willing to open their wallets. In fact, there are some standout companies that have performed much better than expected, making the most of increased consumer spending.

Footwear retailer Skechers (SKX) recently reported a blockbuster quarter. Results far surpassed the Street's expectations, pushing the stock price north.

Great performance indeed

High demand for products drove revenue up to $450.7 million, an increase of 14% over last year's quarter. Demand for winter wear, such as boots, surged mainly due to a colder holiday season. On the other hand, warm weather in the West led to higher sports footwear sales.

All of Skechers' segments did well, which led to staggering growth in the top line. Both its wholesale and retail businesses grew substantially as the shoe retailer launched new products. Revenue from the retail segment increased 18.6% over last year; the company opened 20 new stores. However, store additions were not the only reason for the performance. Same-store sales grew 12.8%, which boosted total revenue.

Additionally, the footwear retailer's e-commerce operations grew by 9% due to stronger marketing efforts. The company's earnings more than tripled to $0.28 per share from $0.08 per share a year-ago. Skechers' efficient inventory management and cost-savings efforts paid off, resulting in a margin expansion of 190 basis points.

Strong recovery from the past

Although the shoe retailer's performance has been remarkable, this isn't the case when we look at its stock price. Over the last five years, Skechers did not perform as well as peer Crocs, as evidenced by returns. However, it did manage to outperform Nike during the same period.

Crocs' stock price grew 1,180% over the last five years, much higher than Skechers (522.6%) and Nike (297.9%). This is mainly because Crocs' stylish and colorful footwear attracted customer in hordes. Moreover, its products were comfortable, which lured people to its stores.

Skechers, on the other hand, lacked innovation, which is why it lost customers' interest, especially in the domestic market. Also, its inability to manage rising input costs added to Skechers' woes. However, with increased efforts to grow its geographical presence and new product developments, Skechers outpaced its peers.

Skechers' stock price has appreciated by 61.7% over the last year, whereas Crocs shares have fallen 3.2%. Crocs' performance has been deteriorating since it is unable to attract many customers. In fact, in Crocs recently reported fourth-quarter, revenue increased by only 1.6% since demand for its colorful clogs declined. Same-store sales fell 4%, forcing the retailer to move into more fashionable footwear.

Nike remains in the second position with returns of 43.9%. Nonetheless, Nike's efforts have been quite fruitful; the company experienced a revenue increase of 8% to $6.4 billion. The company's products resonate with customers because of Nike's focus on comfort and innovation.

Nike's products such as Nike+ FuelBand and Flyknit technology have not only attracted more customers but also led to expanding margins. Moreover, the company has been marketing its products well by promoting them at various sports events such as the Olympics and the World Cup.

Way to go

Therefore, it is clear that Skechers has recovered over the years and seems to be a strong player. It also has some good reasons to be hopeful. For example, it plans to open a number of new stores in the future in order to grow its top line. For 2014, the footwear company expects to add 60 to 70 new stores, which will enhance its presence.

Skechers also plans to expand its footprint internationally, where demand for its products has been attractive. Lastly, it plans to continue to innovate and launch new products, which will provide more reasons for customers to enter its stores.

Conclusion

After having a difficult time, Skechers seems to be making a great comeback. Its diversified product portfolio, which includes items catering to needs ranging from winter wear to sportswear, has been luring customers in. Moreover, the marketing tools it has chosen to use have been helpful. Its ability to outpace other players and its plans for a bright future make me believe in this company. Investors should not ignore this growing retailer.

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An SEC Official Says These Government-Backed Investments Are Headed For 'Armageddon'

An official with the Securities and Exchange Commission -- an agency not given to hyperbolic statements -- said this $3.7 trillion market is facing an "Armageddon." 

In June alone, $5.4 billion flooded out of this market -- more than was invested in all of 2012. Rising interest rates will likely depress the value of this market over the next few years. Not only that, but President Barack Obama wants some investors in this market to face an unprecedented penalty.

Why should you give it even a cursory glance?

In 2012, this market finished a two-year run with an average 20% gain, according to Bank of America Merrill Lynch. It is one of the most trustworthy places to put your money, especially if you're a retiree.

 

I'm talking about U.S. municipal bonds.

Municipal bonds are issued by non-federal governmental entities to build roads, schools, hospitals and the like. In 2012, 6,600 tax-exempt municipal bonds financed more than $179 billion worth of infrastructure projects, according to National Association of Counties.

Nearly three-quarters of these bonds are held by individual investors, according to the SEC.

With about 50,000 local bond issuers across the country and more than 1.5 million bonds outstanding, no two municipal bonds are exactly alike. Yet right now they're all being tarred with the same brush.

Here are three key reasons they're in the headlines.

	The Federal Reserve signaled that it might begin easing off its bond purchases in a "tapering" of its quantitative easing program later this year. After the Fed's signal, investors dumped anything with the word "bond" in it. That selling drove up the yield on the benchmark 10-year Treasury from 1.63% in early May to a recent 2.74%. That, in turn, has pushed up long-term rates on municipal bonds.
	The City of Detroit defaulted on two bond payments before declaring bankruptcy this week. The defaults were a pretty minor event for individual investors because those specific bonds were insured. As for the bankruptcy, Detroit will negotiate repayment terms that will delay repayment for some for the highest-rated bonds, will hit the insurers, not the bond holders or the individual funds. Detroit's plan for getting its finances in order calls for bondholders to shoulder some of the burden. The possibility of that turn of events is what had SEC Commissioner Dan Gallagher invoking the end of the world. He was not saying that municipal bonds have become bad investments -- he was referring to the change in how different bond classes are handled in restructurings could make it more difficult and expensive (because of higher insurance rates) for municipalities to issue bonds in the future. And he was right. Hundreds of millions of planned municipal bond issues have been canceled or postponed.
	For the first time, the U.S. Treasury said it would support the measure to tax higher-income investors who hold tax-free bonds to help close the budget gap.

Some Comforting Facts
As far as the individual investor is concerned, none of the fundamentals of municipal bond investing has changed. This market is still one of the most trustworthy places to put your money.

Municipal defaults are rare. According to Moody's, there was an average of 4.6 a year from 2008 through 2012. Although that is up from an average of 1.3 per year from 1970 to 2007, in a universe of 1.5 million bonds outstanding, it's minuscule.

	The City of Detroit defaulted on two bond payments before declaring bankruptcy this week.

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As for defaults this year, Merrill Lynch expects that $573.2 million worth of municipal bonds will not meet their obligations. In context, that is 0.6% of the $3.7 trillion of municipal bonds outstanding, compared with 1.01% for all of last year.

Municipal bonds offer higher income than investment banking. For example, an AAA-rated tax-free bond maturing in 10 years yields 2%. For an investor in the 35% federal tax bracket, that's equivalent to 3% from a taxable bond. Not bad when you're lucky to get 1% from a CD.

A key benefit of municipal bonds: The steady income stream doesn't fluctuate with the "value" of the bond in the resale market. And, if you hold an individual bond to maturity, you get back the face value if the issuer can make good. Rising interest rates will not affect you. 

Types Of Muni Bond Risks
Credit risk: Even with Detroit's defaults and bankruptcy, default remains extremely rare. However, you can further insulate yourself from credit risk by concentrating on two things: The type of bond and its credit rating. 

The safest type of municipal bond is the general obligation bond, which is paid back with tax revenue the municipality collects. General obligation bonds in general have the lowest default rate. According to Moody's, only five general obligation defaults have occurred in the past 41 years, and no state has defaulted since 1933.

Conversely, investors should generally avoid revenue bonds, which are paid back by a project's fees. 

Source: FMS Bonds

Investors should consider municipals with the highest credit rating, AAA. Credit ratings are no guarantee, but no credit rating is a red flag. Part of what helps bonds achieve an AAA rating is that they are insured, which will help make investors whole in the event of a default. 

Fund investors should stick to funds that hold securities rated A to AAA. Consider Vanguard Intermediate-Term Tax-Exempt Fund (MUTF: VWITX), as its duration is about five years. Moreover, 95% of its portfolio is rated A or better. 

Interest rate risk: Rising interest rates only affect the value of municipal bonds selling in the market. The cash flow (income) remains unaffected. Furthermore, interest-rate risk increases the longer a bond is held. 

Note that risk can be extreme. A 1-point rise in the interest rate could cut 10% of a municipal bond's value with a long duration. 

Consider bonds with relatively short-term maturities if you need to cash out. For example, if market rates rise, a bond maturing in two years will decline less than a bond maturing in five years. However, by owning shorter-term bonds, you'll earn less interest income, so you're trading yield for less volatility.

Fund owners should know their fund's duration. This is also a good time to snap up bargains. Consider Vanguard Limited Term Tax Exempt Fund (USMF: VMLUX). 

Call Risk: The call option has a huge impact on why municipal bonds are so interest rate-sensitive. Call risk is primarily an issue if you don't want to receive your principal early and are counting on the cash flow. Note that bond calls are less likely when interest rates are stable or moving higher. 

Research a bond's call provisions if you're purchasing to secure steady income. A typical 10- to 12-year muni bond will have a 5% coupon, which means it will almost certainly be called within three to four years. That is, as soon as the issuer can refinance the bonds. 

Tax Risk: For the past 100 years, there has been a federal tax exemption for purchasers of municipal bonds. If a new tax on tax-free bonds is passed, this will obviously make municipal bonds less appealing. Many investors have been willing to accept lower interest rates because of the exemption. Mitigating this risk may mean a complete overhaul of your financial portfolio.

Action to Take --> With the municipal bond market undergoing changes -- even if it's not an Armageddon -- there is a silver lining for committed buyers. Any increase in rates will ultimately pare back new issues, supporting prices and allowing investors to build income streams with higher coupons. Bonds are not immune to risks, but investors can continue using them as a conservative tool for steady income and (for now) a tax-efficient portfolio.

P.S. -- Does Detroit's bankruptcy have you thinking the market is ripe for a pullback? An eccentric Texas woman who dodged the 2008 financial collapse would agree. This is the same analyst who's produced annual returns of up to 510%, and has picked winning investments roughly 85% of the time. To learn how she's protecting her portfolio today, click here.

Stocks dip as investors hope for 7-day win streak

U.S. stocks, which are looking to post their first seven-session winning streak since September, opened lower Wednesday as investors digested mixed earnings reports, weak new home sales in March and sluggish stock performance abroad.

In morning trading, the Dow Jones industrial average and Standard & Poor's 500 stock index are down about 0.2% each, while the Nasdaq composite is off 0.6%

Losses picked up after March new homes sales fell 14.5%, a big miss.

Americans love winning streaks, whether it's their favorite sports team or biggest stock holding. Profit-loving investors are watching to see if the suddenly hot S&P 500 can extend its winning ways to seven days.

NEW: USA TODAY's markets blog

The benchmark U.S. stock index notched its sixth straight session win Tuesday, a rally that has pushed its shares up 3.5% to 1879.55 and within 11 points from its all-time closing high of 1890.90 from April 2.

The last time the S&P 500 had a seven-day winning streak was last September, when it rallied 3.4% from Sept. 3 through Sept. 11.

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If the broad market index can notch a new high, it will be driven by earnings, as major U.S. companies such as aerospace giant Boeing, Procter & Gamble and Dow Chemical, reported earnings that topped expectations, although P&G and Dow Chemical fell short of revenue projections.

Boeing shares were up 1.7% in early trading, Dow Chemical was 2% higher, while shares of P&G, which trimmed its full-year outlook, were down 0.9%.

So far earnings season has been solid yet unspectacular, as expectations were low due to a tough winter that hurt business. Of the 141 companies in the S&P 500 that have reported earnings, 65% have topped expectations, which is better than the 63% long-term average, according to Thomson Reuters.

But tepid sales and resulting revenues conti! nue to weigh down sentiment. Only 54% of companies have topped revenue forecasts, far below the 61% long-run average.

"Continuing on our theme of the last few days, revenues beats have been much less frequent than EPS (earnings-per-share) beats this season," Bespoke Investment Group said.

Wall Street will be closely watching earnings reports after the bell from iPhone-maker Apple and social media darling Facebook.

Most European bourses were trading lower Wednesday. London's benchmark FTSE 100 was down 0.2%, Germany's DAX was off 0.3% and the CAC 40 in Paris was down 0.5%.

Investors were also reacting to a reading on Chinese manufacturing from HSBC that showed a contraction for the fourth straight month. The HSBC China "Flash" PMI for April came in at 48.3, according to Barclays, slightly above a reading of 48 in March. Any number below 50 suggests contraction.

Netflix Set to Raise Prices for New Customers

Melinda Sue Gordon/APKevin Spacey stars as U.S. Congressman Frank Underwood in the Netflix original series, "House of Cards." SAN FRANCISCO -- Netflix is preparing a sequel unlikely to be a hit with its subscribers. The Internet video service is about to raise its prices for the first time in three years to help pay for more Internet video programming such as its popular political drama "House of Cards." The increase, to take place sometime before July, will hike prices by $1 or $2 a month for new customers. The company's nearly 36 million current subscribers will continue to pay $8 a month for at least the next year, Netflix CEO Reed Hastings said in a Monday interview. "When we look at the shows and movies that we will be able to get if we have a bigger budget, it's exciting," Hastings told The Associated Press. "We want to make the service better and better so more people will join." Netflix (NFLX) announced the looming price increase as part of a solid first-quarter earnings report. Financial pressures have been mounting on Netflix as it grapples with the rising costs of licensing compelling video for its service. The company has been spending more to compete against traditional cable-TV channels such as HBO and Showtime, as well as technology companies such as Amazon.com (AMZN), Hulu.com, Microsoft (MSFT) and Yahoo (YHOO), which are planning to buy more Internet video programming from Hollywood studios. "I think they need to raise the price to remain profitable," Wedbush Securities analyst Michael Pachter said of Netflix. Amazon recently raised the price of its Prime service, which includes an expanding Internet video library, from $79 to $99 annually. Investors evidently like the prospect of Netflix bringing in more revenue. Netflix's stock surged $23.01, or 6.6 percent, to $371.50 in extended trading after the company announced its plans. Price increases pose a risk for Netflix. The Los Gatos, Calif., company was stung by a customer backlash in 2011, when it boosted rates by as much as 60 percent for U.S. customers who wanted to continue to subscribe to both its Internet video and DVD-by-mail services. Netflix lost about 800,000 subscribers after the 2011 pricing change was announced, rattling investors so much that the company's stock plunged more than 80 percent before starting to rebound in August 2012. The shares hit a new peak of $458 last month before sliding amid investor concerns that some technology stocks had soared too high, too quickly. Netflix's market value nearly quadrupled last year. The upcoming price increase is coming in a much different situation than the last one. Besides giving current subscribers an extended grace period, Netflix has more firmly established itself as the Internet's equivalent of HBO with an expanding slate of programming that can only be found on its service. The economy also is in better shape than three years ago, lessening the pain to people's pocketbooks, said S&P Capital IQ analyst Tuna Amobi. "The timing may not be as precarious as it was last time," Amobi said. "They designed it to do the least amount of damage and protect themselves with potential upside." The company ended March with 35.7 million Internet video subscribers in the U.S. after adding another 2.25 million customers in the country during the first quarter. That's up nearly 50 percent from 23.9 million U.S. subscribers in July 2012 while the company was still trying to sooth customers irked by the last price increase. The company attracted another 1.75 million subscribers in Canada and overseas, leaving it with 12.7 million international customers. Meanwhile, Netflix's DVD-by-mail service is slowly dying. Through March, Netflix had 6.7 million DVD customers, a 52 percent drop from 13.9 million just two years ago. Netflix isn't changing its DVD prices, despite rising postal costs. Netflix's comeback has been propelled by the company's increasing emphasis on exclusive programming such as "House of Cards," an acclaimed series starring Kevin Spacey as a cunning politician with a ruthless plan to become President of the United States. Netflix released all 13 episodes in "House of Cards'" second season on Feb. 14, midway through the first quarter. Another popular Netflix series, "Orange Is The New Black," is returning with new episodes June 6, toward the final month of the current quarter. Even with "Orange Is The New Black," Netflix is only expecting to attract 511,000 U.S. subscribers from April through June before prices rise for new customers. That would be down from an increase of 630,000 U.S. subscribers at the same time last year. Netflix Inc. earned $53 million, or 86 cents a share, during the first three months of the year. That compared to $2.7 million, or 5 cents, last year. The latest quarterly earnings exceeded the average estimate of 81 cents a share among analysts surveyed by FactSet. Revenue rose 24 percent from last year to $1.3 billion to match analyst projections.

How To Calculate Profit And Loss On A Nadex Binary Option Contract

Nadex binaries are unique in that you can open or close all Nadex binaries before expiration.

But like other binaries, Nadex binaries can be held until expiration and will settle either in the money or out of the money. In addition, they do not just offer one at the market binary per expiration but offer binaries at multiple strike levels for each expiration.

These choices provide many opportunities for traders to take advantage of contracts available throughout the day and week. At the same time, it can confuse newcomers to Nadex binary options.

Related: Binary Options Trading Volume On Nadex On Track To Grow 400 Percent In 2014

To take advantage of these trading opportunities, it is important for a trader to be able to easily understand and calculate the profit and loss on a Nadex binary.

How is profit or loss calculated if the binary is closed before expiration?

First, remember a simple rule. You want to sell higher than you buy. If you sell to enter, you want to buy back lower than you sold. In the end, the rule is simple: buy low, sell high.

If you buy at $30 and sell at $60, then you will make $30. If you buy at $30 and sell at $15, you will lose $15.

If you sell at $70 and buy back at $40, you will make $30. If you sell at $70 and buy back at $85, you will lose $15.

How is profit or loss calculated if the binary is held to expiration?

A binary must expire in the money to be profitable. What does in the money (ITM) mean?

If you buy the binary, the settlement price of the underlying market at the expiration time must be greater than the strike that was bought.

For example, if you bought the US Tech 100(NQ) > 3620 @ 4:15 PM on 4/21/2014, then what does it take for it to settle in the money? By buying the binary, you're stating that this statement will be true at expiration, that NQ will be > 3620 at 4:15 PM ET.

The US Tech 100 follows the NQ CME NASDAQ 100 Emini Futures. The settlement price is calculated by taking the last 25 trades right before expiration and the average of the middle 15 of those 25 trades to reach the settlement price. In this case, since the binary expires at 4:15 PM ET, the settlement would look at the last 25 trades on NQ and average the middle 15 trade prices right before 4:15 PM ET.

So, if the settlement price was 3636 as of 4:15 PM ET on 4/21/2014, then you would be profitable on the trade. The settlement price (3636) is greater than the binary strike you bought which was 3620.

At settlement, since you were in the money, you would receive an email stating your payout is $100 per binary contract. Payout and profit are different. On Nadex all trades are fully collateralized. So, if you put up $50 to buy the binary and you received a payout of $100, then your profit would be $50.

If NQ had settled at or below your strike when you bought, then you would lose the $50 you put up to place the trade and there would be no further debit from your account.

If you sell the binary, the settlement price of the underlying market at the expiration time must be less than OR equal to the strike that was sold.

For example, if you sold the US Tech 100(NQ) > 3620 @ 4:15 PM on 4/21/2014, then what does it take for it to settle in the money? Since you sold the binary, you're saying the statement is false. That NQ will be < or = 3620 @ 4:15 PM ET.

So, if the settlement price was 3615 as of 4:15 PM ET on 4/21/2014, then you would be profitable on the trade. The settlement price (3615) is less than or equal to the binary strike you bought which was 3620.

At settlement since you were in the money, you would receive an email stating your payout is $100 per binary contract. Payout and profit are different. On Nadex all trades are fully collateralized. So if you put up $50 to sell the binary and you received a payout of $100 then your profit would be $50.

If NQ had settled above your strike when you sold, then you would lose the $50 you put up to place the trade and there would be no further debit from your account.

To simplify the process of calculating profit and loss, you can use the free live data binary scanner available at ApexInvesting.com. It will show you the profit and loss on a binary contract and the risk and reward as of expiration. It can also show you a simulation based on a move in the market to a specific price at that moment.

To view an enlarged image of the binary scanner follow this link HERE

What about fees?

Fees are an important part of trading. On Nadex there are no broker commissions. There is one simple fee for placing a trade. The cost is $0.90 a contract for entry and $0.90 a contract for exit. The fees are capped at 10 contracts.

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This is a huge advantage over other option contracts and many other types of trading. Even if you trade 10 contracts in a single order, your fee will be $9.00. If you place 100 contracts in the same order without changing the price, the exchange fee will still only be $9.00.

The contracts may be partially filled or filled all at once. As long as you don't edit the order, you will not be billed additional fees to place the trade on subsequent fills of the original order past 10 contracts.

If the trade expires out of the money with no value, then there is no fee at settlement. If the trade expires in the money, then the fees are the same as if you had exited before expiration. The fees are $0.90 a contract for settlement and the fees again are capped at 10 contracts for a maximum of $9.00 for a single position on the same contract at settlement.

They keep things simple! The above examples do not include fees since the fee gets smaller as you exceed 10 contracts because the fee is capped at $9.00 for 10 or more contracts on a single order.

(This information is current as of 4/3/2014. Check Nadex.com for the current fee structure.)

But what about the broker who said he didn't Charge fees to trade binaries?

Some over-the-counter binary bucket shop brokers will claim they have no fees. However,

Chart: How Many Homes Does NVR Sell?

Sometimes the most important data is the hardest to come by. In this case, I'm referring to historic sales figures from homebuilder NVR (NYSE: NVR  ) , the nation's fourth largest builder by units sold and the proprietor of Ryan Homes, NVHomes, Fox Ridge Homes, and Heartland Homes. As I've noted previously, while this is arguably the single most accurate reflection of a homebuilder's performance, not to mention the overall housing market, a comprehensive data set containing the data is nowhere to be found.

It's for this reason I decided to collect the information and share it in the chart below -- to see similar figures for D.R. Horton, PulteGroup, and Lennar, click here, here, and here, respectively. While researching the health of the broader economy, I dug through the quarterly filings of the largest homebuilders. My purpose was to gauge how well the market for new homes had recovered. While the market had struggled to date, the chart below, along with Lennar's stellar earnings yesterday, show that things are on the mend.

Source: Quarterly filings.

As I've noted before, there are two reasons to care about this: First, if you own shares of NVR or another major homebuilder, it goes without saying that the more new homes that are built and sold, the higher that shares in these companies will climb. And second, it's estimated that two to three jobs are created by every home built. As a result, an uptick in this sector could very well trigger a more robust economic recovery overall.

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Sony Throws GameStop a Bone -- but Will It Be Enough?

GameStop (NYSE: GME  ) appears initially to have caught a break with Sony (NYSE: SNE  ) .

Unlike Microsoft's (NASDAQ: MSFT  ) restrictive Xbox One, where publishers will have more say in the way that their games are or are not able to be transferred between players, Sony made it a point on Monday night to emphasize that PS4 buyers will be able to trade in, sell, or lend their disc-based games.

It may not be enough, as longtime Fool contributor Rick Munarriz points out in this video.

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IPO market is casualty of stock market pullback

Weibo, better known as China's answer to Twitter, was the big winner among five initial public offerings that made their debuts Thursday. Yet, it wasn't exactly a high-flying performance to make investors chirp.

The IPO market, which is coming off its best year since 2000, is showing unmistakable signs of returning to earth — the latest casualty of last week's stock market plunge, which prompted investors to dial back risk-taking.

That slowdown may take some of the excitement out of the coming IPO for Chinese e-commerce giant Alibaba, which could submit its official filing to U.S. regulators as early as next week. . It's being widely touted as the biggest IPO since Facebook raised more than $16 billion in May 2012.

The five IPOs that started trading Thursday posted an average return of just 8.7%, below the average 17% first-day pop so far this year and for 2013, according to IPO investment advisory firm Renaissance Capital.

Chinese microblogging site Weibo jumped 19.1%. Three of the deals were priced below their projected range, while two priced at the low end of the range. Chinese real estate site Leju rallied 18.6%, but travel industry player Sabre, sporting goods retail chain Sportsman's Warehouse and drugmaker Vital Therapies all finished flat or with low single-digit percentage gains.

The fact that Weibo had to price its IPO at $17, which was the bottom end of the $17 to $19 range, and slash the number of shares it was offering by more than 3 million, signals that the IPO market is coming back to earth, says Kathleen Smith, a principal at Renaissance Capital. She called it a "necessary correction."

The days of eye-opening day one pops, such as the 206.7% gain that Dicerna Pharmaceuticals posted on Jan. 30, and Castlight Health's 148.8% jump on March 14, seem to be fading.

The IPO market has lost some of its luster since a major correction in high-price biotech and Internet stocks last week. As the stock market goes, so goes the IPO market, says John Fi! tzgibbon, founder of IPOScoop.com. Last week, the Nasdaq suffered its worst weekly swoon in nearly two years and was down 9% from its recent high before rebounding.

"You need a healthy stock market to have a good IPO market," says Fitzgibbon. "The market (turbulence) is what put this (IPO rally) to bed this week. Without the wind at your sails, you can't go anywhere."

The more bearish tone is best illustrated by the recent performance of the Renaissance IPO Exchange Traded Fund. At its 2014 high on March 5, it was up 8.4% for the year. But it has since given up all

In the past week, the IPO market has gone from a seller's market favoring the bankers to a buyer's market that favors individual investors, says Josef Schuster, founder of IPOX Schuster.

The IPO window, he adds, hasn't closed completely, but if bankers want to get deals done, they'll have to price the shares more conservatively going forward. Alibaba's IPO might not be as gargantuan as many analysts believe due to the recent market jitters, he adds.

"It is definitely going to hurt Alibaba on its initial valuation," said Schuster.

Ford's Mustang Made It To The Top Of Empire State Building

Disclosure: I own F shares

Fifty years after Ford's (NYSE:F) first Mustang model made its debut at the 1964 World's Fair in New York City, the new 2015 model has made it to the top of the Empire Empire State Building.

No, it didn't climb the walls like King Kong. It wasn't airlifted up there either. Engineers cut up one of the cars and took the pieces to  to the top of the Empire State Building where it was reassembled for the buzz.

Yes, the buzz.

Ford chose the right place and the right time to launch their message about  the new Mustang, in our opinion.

Buzz is very important for helping a new product succeed. Especially when it comes to consumer products like automobiles whereby buzz brings the traffic into showrooms.

But buzz doesn't usually happen by accident. It is the result of a well-orchestrated marketing campaign that follows several steps: Begin with the consumer; be innovative; target the right group; create the right message; and find the right social context to launch the message.

The right social context is the set of conditions and the circumstances that make it more likely for the product message to reach quickly a critical mass of consumers. It is like the magnifying lenses that lets consumers zoom in on something, seeing it in ways they never saw it before, or paid attention to it before. Consumers can imagine things they never imagined before, stirring up emotions and schemes of action that create a passion for the product.

The same message can make different impressions in different times and places, i.e, Conditions. These are the specific socio-geographic characteristics of a place that make it ideal for promoting product awareness and igniting WOM and buzz–which feed into a "contagion," the copying and mimicking of the behavior of others. Among the characteristics that come to play are reputation, visibility, population density, frequency of interaction, social structure, and geography.

Circumstances is about the prevailing ideology at the time the marketing campaign is launched, the prevailing trends and controversies that stir interest and desire in a product, seducing the fantasy of a critical mass of consumers and fueling a contagion, the herd-like mentality that has consumers rushing to get a hold of the product.

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Obviously, New York City–and the Empire State, in particular–meets all the characteristics of the condition of spreading the message about the new Mustang model, especially, geography, visibility, and population density. And April 16, in the the middle of  the NYC World Fair, is the ideal circumstance.

We predict it will stir vivid memories of the first launch of the iconic brand.

Will the campaign work?

It remains to be seen.

BMW gets serious with plug-ins for N.Y. auto show

WOODCLIFF LAKE, N.J. -- Even as it continues to develop its prowess in diesel engines, BMW is getting more serious about plug-in hybrids.

It gave a sneak peek at how a plug-in hybrid system that could work in the popular X5 midsize SUV. The system can power the car on electric drive alone for up to 20 miles, has the potential for being rated at 40 miles a gallon using the government's protocol for electric-car equivilent driving and can run electric-only at speeds up to 75 miles per hour.

The concept will be shown at the New York Auto Show preview this week.

"It's a connecting step" between BMW's i-Series plug-in electric models and its conventional models, Gerhard Thiel, project director for the X5 plug-in told a group of journalists at BMW's North American headquarters here Tuesday.

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While no announcement has been made about production version of the Concept X5 eDrive plug-in, BMW spokesman Manfred Poschenrieder says the brand is aiming at having a hybrid alternative in each of its major model ranges.

At present, its plug-in electric cars consist of an i3 electric city car, with an optional gas extender engine, and a soon-to-arrive i8 hybrid sports car on the way.

Poschenrieder says BMW could stand out in the market by giving plug-in capability to the X5 because it larger than most of the electrified cars out there. It holds more potential for better gas mileage without sacrifices -- adding weight, eating up passenger space for batteries or ending up cost well above competitive vehicles.

"It totally makes sense for us to hybridize such a car," he says.

If the concept becomes a production vehicle, however, it won't likely show up for more than a year.

Best Value Companies To Buy Right Now

No one knows if the market is just letting off a little steam prior to its next run or further deflation of stock prices is in the cards. After a run-up in many stocks seen in 2013, it�� normal and healthy for investors to take money off the table and tempting for others looking for too-good-to-pass-up opportunities.

Granted, if a sell-off comes as a result of a collapsing industry, economic downturn, or a profits-altering event specific to a company, a downturn in share price should raise a red flag. But I don�� see that today, especially in the technology sector where so many companies offer value, growth, stability and products and services that have become necessities in today�� consumer and IT worlds.

That said, here are five tech stocks that look very appetizing at current prices. They are all well below their 52-week highs and down a decent clip in 2014. I�� hit the trigger as fast as you can on these; the sale won�� last long.

Apple Current Price: $512 YTD: -8% Percentage below 52-week high: 12%

Shareholders weren�� very happy when Apple (AAPL) reported fewer-than-expected iPhone sales in the first quarter of fiscal 2014. After all, 56% of Apple�� revenue is attributed to smartphones and coming up 4 million short did make a dent in year-over-year growth in that segment.

Best Value Companies To Buy Right Now: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:

• [By John Kell]

  Among the companies with shares expected to actively trade in Wednesday’s session are Dow Chemical Co.(DOW), Tupperware Brands Corp.(TUP) and Yahoo Inc.(YHOO)

Best Value Companies To Buy Right Now: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:

• [By Dan Caplinger]

  Next Monday, Caterpillar (NYSE: CAT  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever surprises inevitably arise. That way, you'll be less likely to have an uninformed, knee-jerk reaction that turns out to be exactly the wrong move.

• [By Dan Caplinger]

  Rather than focusing on big market milestones, it's important on quiet days to look at which stocks are making more dramatic moves. Today, for instance, Caterpillar (NYSE: CAT  ) is leading the Dow's gainers with a rise of 1.7%. Quietly, the construction equipment giant has seen its shares bounce 10% off their April lows, even though prospects for the overall global economy haven't begun to rebound markedly. Caterpillar has a long way to go to recover its highs from earlier in the year, but greater investor optimism about cyclical stocks could lead to a new leg for the bull market, given its reliance until now on more defensive stocks like consumer products companies.

Top 10 Medical Companies To Buy Right Now: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:

• [By Dan Caplinger]

  One potential thing for Core Labs shareholders to watch out for is the prospect for a takeover bid. With a market cap of $6 billion, Core Labs would be a substantial acquisition for most industry players. But both Schlumberger (NYSE: SLB  ) and Halliburton (NYSE: HAL  ) are large enough to at least consider adding Core Labs to their respective oil-services portfolios, and both companies have fairly healthy balance sheets that could arguably withstand taking on more debt for a buyout.

• [By Seth Jayson]

  Schlumberger (NYSE: SLB  ) reported earnings on July 19. Here are the numbers you need to know.

  The 10-second takeaway
  For the quarter ended June 30 (Q2), Schlumberger met expectations on revenues and beat expectations on earnings per share.

• [By Dan Caplinger]

  Halliburton's share-price gains began early in the quarter after the company reported its first-quarter results. Although the company took a massive $637 million charge related to the 2010 Gulf disaster, Halliburton managed to hold its own on the domestic front in a weak environment. Internationally, the company cleaned up, with sales rising 21% and at more than twice that rate in the Eastern Hemisphere. But, perhaps most importantly, Halliburton looked favorably on the near-future for domestic drilling, noting gains in margins, and some pricing power expected to enhance profitability from rising well production. That's consistent with the results we saw from Schlumberger (NYSE: SLB  ) this morning, as the industry leader beat earnings expectations with a nearly 50% jump in its net profits, coming largely from overseas activity, but also posting a 2% revenue increase in North America.

Best Value Companies To Buy Right Now: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:

• [By ANUP SINGH]

  Dollar Tree (NASDAQ: DLTR  ) is among the most successful single-price-point retailers in the U.S. It operates more than 4,842 stores across 48 states in the U.S. and five Provinces in Canada. The chart below shows that the company has been performing consistently well over the past five years.

• [By Traders Reserve]

  I do believe as Wal-Mart gets hurt, the dollar stores will do a little better ��especially Dollar General (DG), but don�� overlook� Dollar Tree (DLTR). Wall Street is worried about Costco (COST) but I believe it will actually outperform expectations. Costco seems to have figured out how to grow much faster than Wal-Mart and still provide affordable health insurance for most employees.

• [By Ben Levisohn]

  Shares of Supervalu have dropped 8.3% to $6.31 at 2:59 p.m., within spitting distance of Goldman’s $6 target price, while competitors Family Dollar Stores (FDO) has gained 0.2% to $70.16,�Dollar General�(DG) has fallen 0.4% t0 $59.02,�Dollar Tree (DLTR) is off 1% to $59.33 and Wal-Mart (WMT) is little changed at $79.19.

• [By Jon C. Ogg]

  Dollar Tree Inc. (NASDAQ: DLTR) was maintained as a Buy but was removed from the prized Conviction Buy list at Goldman Sachs.

  Duke Energy Corp. (NYSE: DUK) was raised to Buy from Hold with a $79 price target at Argus.

Why Quindell Portfolio, Telford Homes, and Torotrak Should Beat the FTSE 100 Today

LONDON -- The FTSE 100 (FTSEINDICES: ^FTSE  ) is slumping again today, dropping 102 points to 6,660 by mid-morning, all but wiping out yesterday's 108-point gain -- and so the erratic see-sawing continues from last week, when fears abounded that economic stimulus measures were coming to an end. But while some may be poring over day-to-day moves and looking for the reasons, what really counts is that the index is still up nearly 7% since early April and up about 24% over the past 12 months.

But which individual shares are moving today? It's mostly smaller companies from the various FTSE indexes. Here are three in positive territory.

Quindell Portfolio
The Quindell Portfolio share price has been through dramatic swings of late, and the software and consultancy firm is quick to deny rumors of active shorting. Today the price is up 4.2% to 8.9 pence on the announcement of a new contract with Honda to provide a number of accident management services in the U.K. The deal builds on a cooperation period that started in January this year and will run for three years.

Quindell shares were trading at about 14 pence before the recent slump, and they're now on a forward price-to-earnings ratio of only about four based on current forecasts for the year to December 2013. If recent fears are indeed unfounded, that could be a nice bargain. (LSE: TRK  )

Telford Homes
Telford Homes shares, like those of the whole homebuilding sector, have had a great year: The price is up more than 130% over the past 12 months. That includes a 1% rise to 271 pence this morning, after the firm released preliminary results showing a 75% rise in sales for the year to 803 properties.

Telford's operating margin is up to 9.7% from 6.2% a year ago, and that contributed to a tripling of pre-tax profit to £9 million. The annual dividend was boosted by 60% to 4.8 pence per share. That's a yield of less than 2% on the current share price, but it's headed in the right direction, and we should see another significant rise next year.

Torotrak
Final results from Torotrak gave the company's shares a 2.5% boost to 30.5 pence this morning after the automotive drive transmissions pioneer announced a 74% rise in revenue and a pre-tax profit of £30,000 -- that might not sound a lot, but it marks significant progress from last year's £1.6 million loss. Chief executive Jeremy Deering said, "We are now in a better position than ever to deliver sustainable growth in value for shareholders."

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It's still a couple of years before significant profits are expected, mind, and current P/E valuations are pretty meaningless. It's one for high-tech growth fans, perhaps.

Finally, if you're looking for investments that should take you all the way to a comfortable retirement, I recommend the Fool's special new report detailing five blue-chip shares. They'll be familiar names to many, and they've already provided investors with decades of profits. But the report will only be available for a limited period, so click here to get your hands on these great ideas -- they could set you on the road to long-term riches.

Is It Time To Sell The Rips Instead Of Buying The Dips?

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During major sell-offs over the last few years, the mainstream media will feature guests or analysts that preach "buy the dip."

It is hard to argue that this strategy has not been profitable, as the market has continued with its impressive run. These are many of same analysts, however, that said the same thing from mid-2007 and all of 2008.

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Eventually they were correct, but how many investors threw in the towel during that time period and never came back to the market? Of course, it is nearly impossible to time the market, but there are times to adjust your trading strategies and take a different approach.

Now just be may be the time to sell the rips, instead of buying the dips.

Keep in mind that the nature of all bull markets, whether it be tulips, commodities or stocks, all end the same way. Months and years of slow incremental gains can be wiped out in a matter of days or months. The old saying "up like an escalator, down like an elevator" is applicable to almost any bull market over the course of time.

Related: When It Comes To Drug Stocks, Do Not Always Buy The News

Do not take the commonplace approach to the markets.

In other words, most investors who bought a stock at $20, watch it go to $80 and then pull back at $60, will not view their investment as a potential $40 gain.

Instead, investors will view exiting at $60 as taking a $20 loss (since that was its high) as opposed being content with a $40 gain. Taking on the mentality, when that stock gets back to $80, that will be the time to exit.

That is fine and dandy if and when the stock returns to that level. However, they do not make a contingency plan if the issue continues to decline. Perhaps if the issue drops to $50.00, they will lower their target to $70.00. But if the same catalysts are not in place that were present during its initial run, the issue may never return to its previous levels.

Case in point: Bank of America.

Another important factor that investors may ignore, is that during an issues decline, there are other investors or shorter-term traders that will pile into the issue. Following the "buy the dip" mentality, these investors will have much lower price targets for the issue and may be quicker to exit the issue on any further declines.

This further exacerbates the downward momentum as the process repeats itself time and time again. For example, Bank of America (NYSE: BAC), which made an all-time high of $55.08 in February 2006 before declining to $2.53 in February 2009, has so much overhead supply than no matter what the company does, it will never recover to its all-time high.

The huge overhead supply in this issue, coupled with high-frequency traders that identify any huge sell orders and trade ahead of it, creates a wall resistance that may never allow the issue to return to $30 or $40, let alone $55.08.

So what does "sell the rips" really mean?

It means if an issue in your portfolio has retreated from its high, pick a few levels for an exit. One level on the upside -- before its all-time high -- where you would be content with the profit, and another one on the downside, where you can secure some gain instead of allowing the investment to turn into a loss.

If not willing or able to implement this strategy, one may want to consider a variety of options strategies that may lock-in gains and or prevent any further losses. Just have a plan, because there is only one prediction that always rings true: the markets are unpredictable.

Posted-In: Bank of America financial crisis Great RecessionEducation Long Ideas Short Ideas Technicals Psychology Economics Markets Trading Ideas General Best of Benzinga

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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