SEI Investments Held at Outperform - Analyst Blog

Top 5 Small Cap Stocks To Buy For 2014

On Jul 3, 2013, we reiterated our long-term recommendation on SEI Investments Co. (SEIC) at Outperform based on its encouraging capital deployment activities and robust asset inflows. Additionally, significant improvement in its organic revenue generation capacity over the past several quarters is expected to act as a positive catalyst.

Why Outperform?

SEI Investments is a sound asset for yield-seeking investors. Over the past several years, the company has been increasing its dividend every year. In May 2013, the company hiked its semi-annual dividend by 25% to 20 cents per share. It also extended the share repurchase program by $100 million, which increased the total shares to be repurchased to $139 million.

Apart from broad diversification and organic growth prospects, SEI Investments has a strong presence across the globe mainly in North America and Europe. Moreover, the company's diversified products and revenue mix is expected to enable it to adapt easily to the changing needs of the clients and continue to boost its top line.

SEI Investments maintains a robust asset inflow. In the past several years, the company recorded a rising trend in its assets under management and administration. Moreover, due to the current stabilization of the equity markets, asset inflows are expected to significantly contribute to its earnings growth.

Moreover, SEI Investments' first-quarter 2013 earnings surpassed the Zacks Consensus Estimate. Results benefited from top-line growth, partially offset by higher expenses.

For SEI Investments, the Zacks Consensus Estimate for 2013 remained unchanged at $1.44 per share over the last 60 days. For 2014, the Zacks Consensus Estimate advanced 0.6% to $1.75 per share over the same time frame. This company currently carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Some other ! banks that are worth considering include Noah Holdings Limited (NOAH) with a Zacks Rank #1 (Strong Buy) and Ameriprise Financial, Inc. (AMP) and Artisan Partners Asset Management Inc. (APAM) with a Zacks Rank #2 (Buy).

Daily ETF Roundup: BJK Slumps After Wynn Resorts ...

Hot Bank Stocks To Watch For 2014

Wall Street started off the week on a sour note as investors remained cautious ahead of a slew of economic news slated for this week, most notably the Federal Reserve's policy-setting committee statement on Wednesday as well as Friday's monthly jobs report. In corporate news, biotech company Elan announced it that it will be acquired by U.S. based healthcare company Perrigo (PRGO). Also announcing an acquisition, Saks (SKS) agreed to be bought by Canada's Hudson Bay. Meanwhile, Omnicom (OMC) and Publicis merged over the weekend to create the world's largest advertising holding company. In economic news, pending home sales declined 0.4% in June .



Global Market Overview: BJK Slumps After Wynn Resorts Earnings, XLE SlipsAhead of this week's slew of economic reports, all three major U.S. equity indexes fell to close in positive territory. The Dow Jones Industrial Average ETF fell 0.15% as its underlying index traded in a narrow 75-point range. The tech-heavy Nasdaq ETF slipped 0.24%, while the S&P 500 ETF shed 0.31%.

In Europe, markets closed flat; the Stoxx Europe 600 rose less than 0.1%. Meanwhile, Japan's Nikkei Stock Average tumbled 3.3% on a stronger yen, and China's Shanghai Composite shed 1.7% after the National Audit Office ordered a review of overall government debt.

Bond ETF Roundup

U.S. Treasuries fell today ahead of the Federal Reserve's policy-setting committee statement due on Wednesday. Yields on 10-year notes rose 2.5 basis points, while 30-year bonds and 5-year note yields rose 4 and 0.5 basis points, respectively .

Commodity Roundup

Crude oil futures traded lower today, settling below $105 a barrel, as growing demand concerns in China put pressure on the commodity. In other energy trading, natural gas and gasoline futures also traded lower. Meanwhile, gold futures rose 0.5% to settle ! at $1,328.40 a troy ounce.

ETF Chart Of The Day #1: The Market Vectors Gaming ETF was one of the worst performers today, shedding 0.79% during the session. After Wynn Resorts (WYNN) missed second quarter earnings expectations, this ETF gapped significantly lower at the open. BJK eventually settled at $41.57 a share .

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ETF Chart Of The Day #2: The Energy Select Sector SPDR ETF also posted a weak performance, shedding 0.93% during the session. Energy shares were among today's biggest laggards, forcing this ETF to gap slightly lower at the open. XLE fell lower during the morning hours, then slid sideways, eventually settling at $82.31 a share .

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ETF Fun Fact Of The DayThe best-performing regional strategy year-to-date has been the Global Titans ETFdb Portfolio  which has gained 7.58%.



Disclosure: No positions at time of writing.

SEC, FINRA Enforcement: Radio Personality Fined Over ‘Buckets of Money’

Among recent enforcement actions by the SEC were a bar against radio personality Raymond Lucia associating with any investment advisor, broker or dealer, as well as other penalties, for his “Buckets of Money” violations; a freeze on the proceeds of illegal distributions of Biozoom stock; and a freeze on insider trader assets in the case of Onyx Pharmaceuticals. Also, a $9.5 million fine was levied by FINRA and exchanges on Newedge for failing to supervise trading by clients.

'Buckets of Money' Violations Bring Bar, Fines

Radio personality Raymond Lucia Sr., who in September of last year was the target of an SEC administrative proceeding over promoting his “Buckets of Money” strategy while never having backtested it despite claims to the contrary, is the focus of another ruling.

Cameron Elliot, SEC administrative law judge, barred Lucia from associating with any investment advisor, broker or dealer. The judge also revoked investment advisor registrations for him and his firm, Raymond J. Lucia Cos. (RJLC), and also imposed a $50,000 penalty against him and a $250,000 penalty against RJLC. The judge’s decision found that that RJLC had violated investment advisor antifraud statutes and that Lucia had aided and abetted RJLC’s violations.

Until the SEC got onto his case, Lucia had given investment seminars at which he touted his “Buckets of Money” strategy. At those seminars he claimed that extensive backtesting over extensive bear-market periods proved the strategy’s validity. In fact, however, he and his firm had done little, if any, backtesting to verify those claims.

FINRA, Exchanges Hit Newedge With $9.5M Supervisory Fine

FINRA along with BATS Exchange, New York Stock Exchange, NYSE Arca and NASDAQ censured and fined Newedge USA of Chicago $9.5 million for failing to supervise trading by clients that directly accessed U.S. equities markets through Newedge's order routing platform and/or internet service providers (known as "direct market access," or "DMA") or routed orders directly to market centers (known as "sponsored access," or "SA").

Newedge also violated Regulation SHO and SEC Emergency Orders concerning short sales, and failed to obtain and retain books and records.

FINRA and the exchanges found that Newedge did not have sufficient procedures, adequate surveillance tools, or necessary information to monitor DMA and SA client trading. Newedge's supervisory violations occurred over a four-year period, during which numerous internal documents noted the firm's deficiencies. Even after these "red flags" were raised, Newedge did not take adequate steps to satisfy its supervisory obligations, FINRA found.

Purse Maker-Turned-Biomed Developer Is Focus of Insider Trading Case

Eight Argentine citizens have been charged, and their U.S. brokerage accounts frozen, on allegations of insider trading in the unregistered sale of millions of shares of Biozoom. Two other Argentine citizens who owned Biozoom shares but had not yet sold them have also seen the assets in their U.S. brokerage accounts frozen. Trading in the company’s shares was suspended the last week of June on concerns that insider trading was taking place.

In April, Biozoom, formerly Entertainment Art, announced that it was changing its name and making a drastic change in its business model; instead of producing leather bags, it was going to develop biomedical technology. The ten defendants, from March to June 2013, received more than 20 million shares of Entertainment Art; that amounted to one-third of the company’s total outstanding shares. The defendants claimed to have acquired the bulk of the shares in March from Entertainment Art shareholders who had bought them in private placements that began in 2007.

Gold at Crest: Investors abandoning yellow metal

Gold has always enjoyed an edge over other metals in terms of its value and prestige, being the best investment option. Investors generally buy gold as a hedge or harbor against economic, political, or social fiat currency crises. The sudden surge in gold prices tends to create a standstill in the bullion market.

Last fortnight saw great volatility in gold, with gold reaching its life time high at Rs. 30,400 per 10gm in the physical market, then dropping again by almost 1000 rupees per 10 gm and then nearing back to its life time high.

As on Thursday, Indian gold prices in the bullion market created a new high of Rs. 30,450 per 10 grams.

With China's economy slowing in addition to the euro zone's debt problems, the USA payrolls data added to worries of a global economic slowdown. The May employment report was quite weak, and it does raise the odds of Federal Reserve to launch another round of monetary stimulus to support the U.S. economy, known as "Operation Twist," at the its next policy meeting on June 19-20. The Twist program extends the maturity of the central bank's Treasuries holdings in a bid to bring down long-term borrowing costs like mortgage rates. The program is set to expire at the end of June.

On Domestic front, India is reeling under the pressure of depreciating currency i.e. Indian Rupee. A currency's external value declines when their import weighs more than its general exports because it expands the trade gap and increases pressure on the economy as a whole. In the case of India, nearly 70 percent of its oil demand is met by imports. As a result, the plummeting currency will eventually increase import bill and will lead to a rise in oil prices and contribute to inflation. Absence of Government decisions on various policy matters is creating a vacuum in India's economic growth.

Such factors are paving way for new highs in Gold prices, as it is considered as a safe haven.

This uncertainty in price leaves the short term investors with a risk during making their investment decisions. As the market does its daily job of balancing fear and greed, it becomes increasingly apparent that fear predominates. Investors are abandoning anything with the slightest hint of risk.

On the other hand, an investor would buy the yellow metal at any point, if he/she has a futuristic goal. As also a domestic need for jewelery would trigger the purchase. Jewellers would in turn buy only during dips, preparing for the upcoming festive season. Thus bullion houses would witness lesser demand owing to the plummeting price of gold.

The writer is Managing Director of Riddisiddhi Bullions

Abbott Adds Two Promising Products

Abbott Labs (NYSE:ABT) has never been shy about using M&A to build its business, and it was generally assumed that more deals would follow in the wake of the company's split with AbbVie (Nasdaq:ABBV). While Monday is often the preferred day to announce deals, Abbott went above and beyond this week with two acquisition announcements – both of which could be highly promising down the line.

A Better Mousetrap For The Legs?
Peripheral vascular treatment is still a high-growth market, as clinicians have an increasing array of effective tools at hand to treat blockages in the arteries of the legs – blockages that can lead to falls and amputations if not treated. Major coronary stent players like Abbott, Medtronic (NYSE:MDT), and Boston Scientific (NYSE:BSX) also develop stents for the peripheral vasculature (where they also compete with the likes of Covidien (NYSE:COV), Bard (NYSE:BCR), Johnson & Johnson (NYSE:JNJ), and Cook), but stents have long been problematic in these narrower, twisting vessels, and stents have to compete with various arthrectomy devices sold by companies including Covidien, Cardiovascular Systems (Nasdaq:CSII), and Spectranetics (Nasdaq:SPNC).

Abbott is bulking up its business here with the acquisition of IDev Technologies for $310 million. IDev has developed its SUPERA Veritas peripheral stent system, and it looks quite promising. These stents use a proprietary interwoven wire technology that attempts to mimic a more natural motion.

So far, it looks like there's something to this technology. While peripheral stents have historically had fracture rates approaching 50% and high incidiences of restenosis (though more modern versions are much, much better), studies of the VERITAS have shown solid long-term patency and as little as zero fractures, even in what should otherwise be very difficult cases. If the data hold up, this could be a compelling peripheral platform for Abbott in a relatively short amount of time, but the stent is not yet approved for the U.S.

SEE: A Checklist For Successful Medical Technology Investment

A New Approach To A Common Procedure
Abbott has also announced the acquisition of OptiMedica, a privately-held med-tech company that has developed the Catalys Precision Laser System for cataract surgery. The Catalys uses a combination of a laser, optical coherence tomography, and pattern scanning technology to replace many of the manual steps in a cataract surgery procedure. While cataract surgery has become relatively routine, complications do tend to be associated with the various manual steps of the process, and this system could offer improvements in throughput and patient outcomes. Better still, it fills that sweet-spot in tech of "new ways of doing old things".

Abbott will be paying $350 million upfront, with milestones worth as much as $150 million tied to sales. This acquisition should fit in well with Abbott's existing eye care business, and with the recent Valeant (NYSE:VRX) acquisition of Bausch & Lomb, this could be a good opportunity to gain share in the cataract surgery market.

Two In, One Out
Although not packaged in with Monday's deal announcements, word has also come out that the company has ended its partnership with Stratec Biomedical. There was never all that much information on this partnership, other than that they were collaborating on some sort of automated analyzer systems for the diagnostics market. With Stratec attributing the decision to a change in Abbott's priorities, I wonder if this will lead to speculation that Abbott is deprioritizing the diagnostics business (though I'd think that's a bit of a leap at this point...).

The Bottom Line
With Abbott reporting later this week, I'll be back with a more complete discussion of valuation and Abbott's investment prospects at that time. For now, though, I would say that both of these acquisitions look like good uses of capital and both deals represent potentially transformative technologies in large and meaningful markets where Abbott already has a presence – a detail which should increase the odds of success down the line.

Cloud Peak's 2Q Shipment Falls - Analyst Blog

Hot Safest Stocks To Buy For 2014

U.S. coal producer Cloud Peak Energy Inc. (CLD) released its second quarter 2013 shipment details and also updated its annual adjusted earnings before interest tax depreciation and amortization (EBITDA) guidance.

The shipments from its three operated mines totaled 20.1 million tons versus 21.1 million tons in the first quarter of 2013 and 20.1 million tons in the second quarter of 2012. The decline in coal shipments in the first half of the year did not come as a surprise as the accumulated stockpiles at the utilities delayed fresh orders.

The sequential decline in shipment of 1 million ton was attributable to weather interruptions, unplanned power plant outages at major customers, and the impact of production interruptions due to planned maintenance outages.

Cloud Peak adjusted its EBITDA guidance for 2013 and expects second quarter EBITDA to be below first quarter results. As a consequence the company decided to lower its full year EBITDA guidance at the midpoint by $15 million. Cloud Peak now expects 2013 EBITDA in the range of $210 million to $250 million.

Coal demand for power generation is expected to revive gradually in the U.S. due to a steady rise in natural gas prices. Moreover, the projected addition of nearly 300 gigawatts of coal power units over the next five years globally will create additional demand for coal.

Cloud Peak Energy is a pure-play Powder River Basin (PRB) coal company. The company has recently received approval to start exploration and development work in a coal mine located in Crow Indian Reservation. The development of this mine will take 5 years and production is expected to touch 10 million tons annually.

Cloud Peak could utilize its increased production capability from the PRB mines to cater to the Asian markets where the demand for thermal coal continues to rise.

Another operator in ! the sector SunCoke Energy Inc. (SXC) disclosed its preliminary second quarter 2013 domestic coke production figure, which slipped moderately by 1.3% to 1,081 thousand tons from 1,095 thousand tons in the year-ago quarter. The decline in output is attributed to lower production activities in the company's Indiana Harbor coke making plant.

Cloud Peak Energy currently has a Zacks Rank #4 (Sell). However, other companies in the industry worth considering are Alliance Resource Partners LP (ARLP) and Hallador Energy Company (HNRG). Alliance Resource Partners presently holds a Zacks Rank #1 (Strong Buy) while Hallador Energy has a Zacks Rank#2 (Buy).

Why is contingency fund so important?

10 Best Undervalued Stocks To Invest In Right Now

Mr. X might stop investing for his financial goals till the time he finds a new job but his regular expenses such as household Expense of Rs. 25,000 p.m., medical Expense of Rs. 5,000 p.m., child School Fees of Rs. 10,000 p.m. and EMI on home loan of Rs. 15,000 p.m. has to be met in any case. Cumulating these entire expenses he cannot avoid paying a sum of Rs. 55,000 p.m. and other regular expenses.

Therefore, you see a need arises to primarily have a contingency fund to confront such a situation and embarrassments. Typically a contingency fund consists of 6 to 24 months of regular expenses. This includes all necessary expenses, but can exclude luxuries.

Contingency Fund Requirement of Mr. X
Expenses	Amount p.m. (Rs.)
Household Expense	25,000
Medical Expense	5,000
Child School Fees	10,000
EMI	15,000
Total Expenses	55,000
6 months Expenses	3,30,000
24 months Expenses	13,20,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In the case of Mr. X, 6 months of expenses would be Rs. 3,30,000, and 24 months of expenses if Mr. X chooses to be conservative in his outlook, would be Rs. 13,20,000.

Many a times when people first hear that it is important to keep at least 6 months and up to 24 months of expenses aside as a contingency fund, they tend to think of it as a large sum. Often the reasoning is, this money is just lying idle, and that means it is losing out on what it could earn if deployed into an asset classes such as equity, debt and gold. In order to utilize your contingency fund effectively, you can put your ideal money to use by opting to Sweep in and Flexi Deposit facilities offered by banks .

But that's not what a contingency fund is for.

You see, the purpose of having a contingency fund is to take care of your family and your expenses in an emergency situation, such as loss of job, markets crashing, medical emergency or any unfortunate event that come with an economic loss for some time.

Often there are financial obligations that are absolutely must to meet no matter what your professional or personal situation is. Loan EMIs are a prime example. This is why you must have a contingency fund. So that if for some reason, your cash inflows reduce or halt or your expenses suddenly shoot up more than your income, you don't have to worry because you have anticipated this and have set the funds aside. In the case of Mr. X, he chose to build a 1 year contingency fund because his cash flow uncertainty was higher, being a consultant. This 1 year of contingency fund will help him to take care of his regular expenses in case he really loses his job and will also give him time to find a suitable job in next 1 year without worrying much about his regular expenses.

So what to do if you don't have a contingency fund?

Your first step should be to start saving for at least 6 months of your regular expenses before investing for any financial goals and keep it in a savings bank account or if you want a better return than putting money into a savings bank account, then opt for sweep in account, flexi deposit or liquid funds. Once 6 months of your contingency funds are available then your next aim should be to increase it to 12 or 24 months of regular expenses which can be done in phased manner over a period of time. If you have any EMIs you must remember to include them in your regular expenses when building up your contingency fund.

Remember, there are events such as job loss or illness that can get in the way of your regular cash flows, but this should not get in the way of letting you achieve your life goals with consistent investments into the right investment avenues.

PersonalFN is a Mumbai based Financial Planning and Mutual Fund Research Firm.

Top 10 Clean Energy Companies To Own For 2014

Investors were bullish on CYS Investments (NYSE: CYS  ) early on Wednesday, apparently expecting great news from the mortgage REIT's second-quarter earnings report. Later in the day, their hopes were quashed, as CYS announced a loss of $402.3 million, or $2.32 per share, compared with a $17.7 million loss, or $0.10 per share, in the previous quarter. One year ago, CYS declared net income of $101.7 million, or $0.87 per share.

Second-quarter upset
As if that news wasn't bad enough, book value took a nasty hit, too. The drop from $12.87 at the end of March to $10.20 at the end of June was huge, even considering the $0.34 dividend paid on June 10. Earlier in the day, Deutsche Bank had downgraded a handful of mREITs, including Western Asset Mortgage (NYSE: WMC  ) , based on book value declines of up to 16% during the second quarter. CYS, even factoring in its payout, suffered a drop of closer to 19%.

Top 10 Clean Energy Companies To Own For 2014: Castle Brands Inc. (ROX)

Castle Brands Inc. develops and markets beverage alcohol products. The company provides rum, whiskey, liqueurs, vodka, tequila, and wine. It offers its products under various brands, including Gosling�s Rum, Gosling�s Dark �n Stormy, Jefferson�s, Jefferson�s Reserve and Jefferson's Presidential Select, Jefferson�s Rye, Clontarf, Pallini, Boru, Knappogue Castle Whiskey, Tierras, Celtic Honey, Brady's Irish Cream, Travis Hasse�s Original Pie, Gozio, A. de Fussigny, and CC. The company offers its products through a network of wholesale distributors and state-operated agencies in the United States, Ireland, Great Britain, Northern Ireland, Germany, Canada, South Africa, Bulgaria, France, Russia, Finland, Norway, Sweden, and China, as well as in continental Europe and Latin America. Castle Brands Inc. is based in New York, New York.

Top 10 Clean Energy Companies To Own For 2014: Hilltop Holdings Inc. (HTH)

Hilltop Holdings Inc., through its subsidiary, NLASCO, Inc., operates as a property and casualty insurance company in the United States. The company�s personal product line includes homeowners, dwelling fire, manufactured home, flood, and vacant insurance policies; and commercial product line consists of commercial, builders risk, builders risk renovation, sports liability, and inland marine insurance policies. It distributes its insurance products through a network of independent agents and managing general agents. The company was formerly known as Affordable Residential Communities Inc. and changed its name to Hilltop Holdings Inc. in July 2007. Hilltop Holdings Inc. was founded in 1948 and is headquartered in Dallas, Texas.

10 Best Gold Stocks To Own Right Now: Charter Pacific Corporation Ltd(CHF.AX)

Charter Pacific Corporation Limited, through its subsidiaries, operates primarily in the financial services sector in Australia. The company provides corporate advisory services related to mergers and acquisitions, divestments, IPO?s and private placements, restructures, portfolio review, strategic alliances, and joint ventures, as well as debt advisory and American depositary receipts. It also operates an e-commerce portal in the United Kingdom, which features online libraries of Bollywood and south Asian movies in Hindi, Tamil, Kannada, Marathi, Malayalam, and Bengali; clips; and music videos, as well as various Pakistani dramas. In addition, the company offers coatings and equipment technology in both powder and liquid paints. Additionally, it purchases and sells listed investment securities. Charter Pacific Corporation Limited was incorporated in 1987 and is headquartered in Surfers Paradise, Australia.

Top 10 Clean Energy Companies To Own For 2014: Csm Systems Corp (CKX.V)

CSM Systems Corp., through its subsidiary, Visionstate Inc., develops, installs, and customizes interactive touch screen customer service technology suitable for various types of public spaces. Its core software platform is known as ViCCi, an acronym for virtual customer care interface. The company offers building digital display networks and digital sales assistants to customers, including shopping centers, recreation centers, office buildings, and other places that require wayfinding. It also provides mobile iphone applications; and sells its kiosks to home development project for displaying information about the project. In addition, the company offers consulting, graphic, and Web design and related services and support. CSM Systems Corp. is based in Edmonton, Canada.

Top 10 Clean Energy Companies To Own For 2014: Kermode Resources Ltd. (KLM.V)

Kermode Resources Ltd. engages in the acquisition, exploration, and development of natural resource properties. It primarily explores for gold and silver deposits. The company's principal assets include the Eastgate Gold Project located east of Fallon in Churchill County, Nevada, the United States; the Buzz Lake Gold Project situated in the famed Snow Lake Camp in central Manitoba, Canada; and the Jackson's Arm Gold Deposit located in Newfoundland, Canada. The company is based in Vancouver, Canada.

Top 10 Clean Energy Companies To Own For 2014: Moss Bros Grp(MOSB.L)

Moss Bros Group PLC, together with its subsidiaries, engages in the retail and hire of formal wear and fashion products for men in the United Kingdom. It sells its products through online; and through operating 98 Moss and Savoy Taylors Guild branded stores and 33 outlet stores, as well as through 125 Moss Bros Hire outlets; 9 Cecil Gee branded stores; and 15 Hugo Boss franchised stores. The company is headquartered in London, the United Kingdom.

Top 10 Clean Energy Companies To Own For 2014: Xiaoxiao Education Limited(XXL.AX)

Xiaoxiao Education Limited operates as a preschool education institution in China. It has 10 kindergartens and 1 professional comprehensive training school for children. The company?s schools provide parenting education for 0 to 3 year old children, preschool education for 3 to 6 year old children, and professional training programs for 2 to 12 year old children. Xiaoxiao Education Limited has 4,000 enrolled students and 4,000 additional children attending extra-curricular programs out of school hours and during holiday periods, as well as approximately 6,570 students attending short courses at its Hangzhou Binjiang Art Training school. The company was founded in 1996 and is based in Hangzhou, China.

Top 10 Clean Energy Companies To Own For 2014: North Central Bancshares Inc.(FFFD)

North Central Bancshares, Inc. operates as the holding company for First Federal Savings Bank of Iowa that offers banking services in the central, north central, and southeastern parts of Iowa. The company offers various deposit products, including noninterest-bearing demand accounts, interest bearing accounts, savings accounts, money market savings, certificates of deposit, and individual retirement accounts. It also provides a loan portfolio of one-to-four family residential real estate loans, multifamily residential and commercial real estate loans, and construction and land development loans, as well as consumer loans, which consists primarily of one-to-four family second mortgage loans, including home equity lines of credit. In addition, the company offers real estate title abstracting services in Webster and Boone counties of Iowa. Further, it sells life insurance on mortgage loans, credit life and accident, and health insurance on consumer loans; and annuity product s, mutual funds, and other noninsured products. Additionally, the company engages in acquiring, developing, and managing low and moderate income housing for residents of the Fort Dodge area. It operates 10 branch offices in Fort Dodge, Nevada, Ames, Perry, Ankeny, Clive, West Des Moines, Burlington, and Mount Pleasant, Iowa. The company was founded in 1995 and is headquartered in Fort Dodge, Iowa.

Top 10 Clean Energy Companies To Own For 2014: ChinaNet Online Holdings Inc.(CNET)

ChinaNet Online Holdings, Inc. offers business-to-business integrated Internet service provider services for small and medium enterprises? sales networks in the People?s Republic of China. Its multi-platform advertising network consists of the Website 28.com, an Internet advertising portal; ChinaNet TV, a television production and advertising unit; and bank kiosk advertising unit, which is primarily used as an advertising platform for clients in the financial services industry. The company, through its Internet portal 28.com, enables companies and entrepreneurs to advertise their business information, brands, products, services, and business opportunities, as well as to build sales channels and develop relationships directly with franchisees, sales agents, distributors, and/or resellers. The 28.com also offers campaign management tools, including lead generation and capture, advanced tracking, search engine marketing and optimization, resource scheduling, and content man agement for the company?s clients. The company, through its ChinaNet TV, creates and distributes television shows comprising advertisements similar to infomercials, as well as promotions for various clients during the allotted time; and produces Web video advertisements for clients to be placed on 28.com. Its bank kiosks provide advertising services and Internet access to perform non-cash banking functions, such as transferring money, purchasing annuities and/or insurance, and paying bills. In addition, it offers cloud-based management tools. As of December 31, 2010, the company provided advertising, marketing, and lead generation services to approximately 1,200 clients in various consumer focused business categories comprising 883 clients. It serves customers in food and beverage; cosmetics and healthcare; footwear, apparel, and garments; home goods and construction materials; and environmental protection equipment industries. The company was founded in 2003 and is headqua rtered in Beijing, China.

Top 10 Clean Energy Companies To Own For 2014: Victoria Gold Corp (VIT.V)

Victoria Gold Corp. engages in the acquisition, evaluation, exploration, and development of gold mineral properties in Canada and the United States. Its principal property is the 100% owned Dublin Gulch property, which hosts the Eagle Gold Deposit, covering an area of approximately 650 square kilometers situated in central Yukon Territory, Canada. The company was formerly known as Victoria Resource Corporation and changed its name to Victoria Gold Corp. in July 2008. Victoria Gold Corp. was founded in 1981 and is based in Toronto, Canada.

Bank of America and Citigroup: How Stable, Really?

The debate over whether the nation's largest banks are too big to fail rages on, as does the question of just how much in implicit subsidies these banks enjoy because of this notion. When it comes to Bank of America (NYSE: BAC  ) and Citigroup (NYSE: C  ) , the two megabanks have been found to be much more dependent on TBTF-generated backstops than peers JPMorgan Chase (NYSE: JPM  ) and Wells Fargo (NYSE: WFC  ) , particularly when it comes to profits -- which would dip into the negative zone for both B of A and Citi if funding subsidies were removed.

Indirect TBTF support aids debt ratings, too
Not surprisingly, tacit advantages exist when it comes to ratings on the biggest banks' debt, as well. A new report by Bloomberg shows that, without such backup, the debt of Wells and JPMorgan would be much less attractive for investors -- and, for Bank of America and Citi, pretty much its entire debt load would make even the pluckiest of investors run for the hills.

What constitutes this particular subsidy? Much as the belief that none of these huge banks will be allowed to fail gives them a funding advantage -- since investors are willing to take lower yields in exchange for lower risk -- a similar boost occurs when it comes to corporate debt. So certain are bank bondholders that the government will always be at the ready to step in if problems arise, that they are willing to accept lower bond yields.

According to World Bank economist Deniz Anginer, the author of a new study that highlights this particular phenomenon, this subsidy has infused an extra $82 billion into the coffers of Goldman Sachs (NYSE: GS  ) and Morgan Stanley (NYSE: MS  ) , as well as B of A, Citi, JPMorgan, and Wells. That's a lot of extra dough, and it's notable that, without it, Moody's estimates that essentially all of Bank of America's and Citigroup's holding company debt would sink below junk status. Things are less dire for Morgan Stanley's and Goldman's debt, but still pretty dicey; JPMorgan would suffer, as would Wells, but they both would still have plenty of investment grade debt to float.

On the plus side, both B of A and Citi got some good news when The Wall Street Journal reported that the cost of insuring against a default at the two bank holding companies dropped this month to its lowest point since the financial crisis. But, as the Bloomberg articles shows, these two banks still have a long way to go.

Wells Fargo's dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the industry, is there still room to buy, or is it time to cash in your gains? To help figure out whether Wells Fargo is a buy today, I invite you to download our premium research report from one of The Motley Fool's top banking analysts. Click here now for instant access to this in-depth take on Wells Fargo.

Is the Utica Just Full of Hot Air?

Unlike the quarterly production updates given by most energy producing states, Ohio only releases its statewide production numbers once a year. Investors finally received those much-anticipated production numbers from the state's Utica Shale last  week. Unfortunately, the overall results were rather disappointing -- from all appearances the Utica appears to be filled with natural gas instead of oil.

While the numbers being reported by producers have been hinting that this would be the case, the report by the state's Department of Natural Resources really confirms this to be true. The good news is that it would appear that there is significant natural gas in the Utica; however, unless the price for gas rises significantly this won't turn into the $500 billion economic powerhouse that producers like Chesapeake Energy (NYSE: CHK  ) originally envisioned.

The state's report included data from the 87 wells drilled last year and showed average oil output of 1,742 barrels per day against 35 million cubic feet of natural gas per day. With numbers like that, a play that was once viewed as the next Eagle Ford Shale because of its three distinct windows isn't likely going to live up to the hype. That still doesn't mean that the play is a dud.

In fact, the industry expects it will have drilled 360 wells by the end of this year while bringing 1,000 wells on line by the end of 2015. That's quite heady growth for a play that just started development in 2011. What we are likely to see is a shift in which companies are bringing all those wells on line.

Chesapeake, which was the top producer last year with 10 Bcf of gas is already looking to scale back its operations; it has 100,000 acres up for sale. Meanwhile, Devon Energy (NYSE: DVN  ) which didn't produce anything from its five wells last year, is already packing up and moving on. The company has put its entire acreage position up for sale.

Other top producers in the play last year include Hess (NYSE: HES  ) and Gulfport Energy (NASDAQ: GPOR  )  which produced 923 million and 767 million cubic feet of gas, respectively. What's interesting here is that Gulfport, which is very much a liquids-focused company, is still betting big on the Utica. This year the company is planning to spend $499 million of its total $580 million capital budget in the Utica.

Gulfport is certainly seeing some of the best producing wells in the play. Its first 14 wells averaged an initial rate of production of 807 barrels of condensate, 7.8 million cubic feet of natural gas and 946 barrels of natural gas liquids per day. While many of its peers have been shedding acreage in the Utica, Gulfport increased its acreage in the play by about 20% by spending $220 million to add 22,000 acres to its position.

So, while it would appear that there is much more gas than oil in the Utica, that doesn't mean the play is a complete disappointment. Sure, this doesn't suit the liquids-growth strategies of both Devon and Chesapeake, but the high-value liquids it does have represent a solid opportunity for Gulfport. The company and several smaller peers, including Magnum Hunter Resources (NYSE: MHR  )  which just started drilling its first well this year, believe that ample profit can be made by drilling the liquids sweet spot in the play. While that means that the Utica might not be the best thing to hit Ohio since the plow, for the right producers it still looks like it will be a very profitable play.

Finally, even though Chesapeake is scaling back its Utica operations, it is not pulling out like Devon. It has a large position in the play, which remains important for its plans for liquids growth. To learn more about Chesapeake and its enormous potential, you're invited to check out The Motley Fool's brand-new premium report on the company. Simply click here now to access your copy.

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Can Visa Stock Outperform the Market?

One of the best competitive advantages a company can create is built using what's called a network effect. The more users a company has, the more users it attracts, which attracts more users and the cycle continues. Visa (NYSE: V  ) has created one of the best network effects in the world with its massive payment processing system, building a lead over Mastercard (NYSE: MA  ) and American Express (NYSE: AXP  ) , who are the two other big players in the business.

One result of this has been strong revenue growth since Visa stock went public.

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Source: V Revenue TTM data by YCharts.

Visa's hold on payment processing is so strong that merchants were forced to sue in 2005, a lawsuit that was settled in 2012 and resulted in the lower profit you see above. Merchants have little choice but to accept Visa and even though they're now allowed to charge more for using a credit card, they're unlikely to do so.  

Competition is growing
Plenty of competitors can see Visa's success and are eyeing the company's dominance. Mastercard has made inroads and grew gross dollar volumes by 12% in the first quarter to $947 billion and now generates 69% of its revenue overseas. Visa only grew 7% to $1,025 billion in payment volume so Mastercard is taking share. American Express processes less than a quarter what Mastercard and Visa do in a year and it isn't growing as quickly as either company so it's a two-horse race at the top.

There's also the electronic competition from PayPal, eBay's payment unit. But even PayPal accepts Visa, recognizing the company's dominance in debit and credit cards.

Competition may try to encroach on Visa's space, but it will continue to hold either first or second place in payment processing for years to come.

To buy or not to buy Visa stock?
The challenge is that Visa isn't a cheap stock by any measure. It trades at 49.9 times trailing earnings and 20.8 times forward earnings estimates. That's slightly more than Mastercard's 18.4 forward P/E multiple but isn't outrageous considering its competitive advantage.

I think Visa's stock can outperform the market and I'll give an outperform call over the next five years. If shares slip and become a better value, it would even be worth doubling down on.

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UnitedHealth's Results Sicken the Dow

Stock markets are down once again today, driven lower by weak economic data and less-than-inspiring earnings. The Conference Board said its Leading Economic Index fell 0.1% in March, whereas economists had expected 0.2% growth. The index is a weighted gauge of 10 indicators designed to give an indication of business cycles, so it's a broader reading than most -- and that's why investors are concerned by the reading. This is one of the bits of bad news driving the Dow Jones Industrial Average (DJINDICES: ^DJI  ) and the S&P 500 (SNPINDEX: ^GSPC  ) down 0.57% and 0.72%, respectively, near the end of trading.

UnitedHealth Group (NYSE: UNH  ) is the biggest decliner on the Dow, falling 3.4% after reporting earnings. Revenue rose 11% in the first quarter to $30.34 billion, but net income fell 14% to $1.19 billion, or $1.16 per share. Those numbers weren't wildly out of line with expectations, but when management said full-year revenue would be $122 billion, well below a previous estimate of $123 billion to $124 billion, the sell-off was on. 

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Bank of America (NYSE: BAC  ) is the only stock that came close to matching UnitedHealth Group, falling 3% on continued earnings worry. The megabank was the biggest loser yesterday, and after a night to digest the company's first-quarter earnings report, investors aren't feeling any better about it. To make matters worse, Morgan Stanley reported earnings this morning, and after you strip out accounting charges, its profit fell from $0.71 a year ago to $0.61 in the first quarter. Banking stocks have been on a tear in 2013, and that bullishness seems to be reversing quickly now that earnings are out.

On the positive side of the market, shares of Verizon Communications (NYSE: VZ  ) are up 3.1% today after the company announced first-quarter revenue of $29.4 billion and net income of $1.95 billion, or $0.68 per share. Revenue was a touch lower than expected, but EPS beat expectations by $0.02, and shares were off to the races. Not surprisingly, results were driven by Verizon Wireless, which added 677,000 new devices to its rolls this quarter. The momentum continues for Verizon Wireless, and this is the only cell carrier I'd bet on today.  

You'll Never Guess What Americans Consider the Least Concerning U.S. Problem

The average American has certainly had a full plate of concerns and problems to contend with over the past five years. The U.S. economy has thrown us the deepest recession in 70 years, complete with a housing bubble and credit crisis, all while the government lowered and then re-raised payroll taxes. In addition, if health-care coverage wasn't part of their everyday lives, then the Patient Protection and Affordable Care Act, known better as Obamacare, which is set to go into full effect for individuals on Jan. 1, will ensure that one way or another people obtain health insurance or pay an end-of-the-year penalty.

In sum, the past five years have resoundingly transformed a somewhat predictable economy into a cauldron of uncertainty.

Keeping this in mind, I was very intrigued with a Gallup poll conducted last week that questioned some 2,000-plus respondents on what they considered the top problem in the U.S. to be. The choices the respondents were given to select from were as follows (in no particular order):

Government/Congress/Politicians Federal deficit Economy in general Poor leadership/The president/Corruption/Abuse of power Health care Education Unemployment/Jobs Immigration Ethics/Moral-religious-family decline/Dishonesty

Now just imagine you were given this question: "What is the most important problem in the U.S. right now?" What would your answer be?

Here's how America responded :

What's the Most Important Problem in the U.S.?

% Respondents

Economy in general	23%
Unemployment/jobs	19%
Health care	11%
Government/Politics/Politicians	10%
Federal deficit	8%
Ethics/Moral-religious-family decline/Dishonesty	7%
Poor leadership/The president/Corruption/Abuse of power	6%
Immigration	6%
Education	5%

Source: Gallup. Figures do not add to 100% because of rounding.

This makes sense
Some factors here do make a lot of sense. Take, for instance, the "economy in general," which is still the biggest concern in the minds of Americans. Slow growth in consumer spending is still keeping many small businesses from ramping up expansion plans for fear of wasting their hard-earned money, and it's a primary factor that's keeping the economy from kicking into that next gear. Even with the Federal Reserve having targeted interest rates at historically low levels for years now, the American growth engine hasn't taken off.

Despite this big fear, worries about the economy have been abating on a steady basis since late 2008, when the same Gallup poll at the time noted 58% of respondents selecting the economy in general as America's top concern. One key component to that end has been the stabilizing power of the U.S. stock markets. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) , an iconic symbol of American multinational companies, and the broader-based S&P 500 (SNPINDEX: ^GSPC  ) have both more than doubled from their lows set in March 2009. As a strong basis for investment in this country, these indexes have helped add credence in the psyches of investors to the belief the past can indeed stay in the past, and that investors should be focusing on the bright future.

It also hasn't hurt that the housing sector, which crippled so many family households, is finally on the mend, with home prices rising by 12% in the United States' 20 largest cities in June, according to the Case-Shiller Composite Index -- the fastest rate of growth since 2006.

But one particular answer among these respondents had me scratching my head, as it made little sense.

Source: White House on Flickr.

What's wrong with America?
Why, oh, why is education dead last among the problems that we need to address? I'm not in any way saying that Congress, immigration, health care, or any of the other issues listed above aren't important, so don't misconstrue my words; but the top two concerns smashed together -- the economy in general and unemployment/jobs -- can both be solved by improving education in this country.

In other words, you improve education and you essentially eradicate HALF of the problems in this country, according to the respondents of this survey (49%).

Just last week we examined the single biggest problem with America's labor force: underemployment. Based on U-6, a U.S. Department of Labor Statistics measurement that factors in the unemployment rate as well as workers who have accepted part-time employment but wish to work full-time, 14.3% of the American workforce, or one in seven, is currently underutilized!

The onus of wrongdoing as is related to underutilization isn't necessarily on the students here entirely, but on both employers and colleges as well for failing to prepare students for real-world challenges and guiding academia on what degrees they're currently looking for.

Before the recession, broad-based degrees helped establish versatility, which opened the door to multiple career paths for college grads. That isn't the case anymore, with enterprises looking for specialized skill sets in a very difficult full-time job environment. Your degree can mean the difference between finding a good-paying job quickly, or being forced to seek a paycheck in a situation where you'd be considered underemployed or overqualified.

Now for the good news
Whether you believe it or not, education -- be it a lack thereof or the wrong type of education -- is at the root of a majority of America's problems. But there's still hope.

A recent study conducted by Georgetown University's Center on Education and the Workforce highlighted some of the worst degrees in terms of unemployment but also pointed out in the process some of the most in-demand degrees. From an economic, investable, and personal perspective, boosting education and awareness in these degree areas would be beneficial for everyone involved.

Nursing: Nursing is a huge winner, with an unemployment rate of a mere 4.8% -- nearly 3% below the national average unemployment rate. Nursing demand is only expected to increase, with baby boomers beginning to hit retirement age and Obamacare set to shuffle millions of newly insured Americans into the health-care system. To put it another way, the medical system is going to have its hands full for decades to come, and it will need as many trained staff members as it can get.

UnitedHealth Group (NYSE: UNH  ) , the nation's largest health-care provider, for instance, has plans to hire close to 600 people in the Carolinas alone, with a good chunk of that hiring being nurses and nurse practitioners. These health-benefits organizations aren't hiding the fact that Obamacare will keep them busy, which should give colleges and the public a clue to start thinking in terms of nursing degrees. 

Marketing and market research: Just hearing about this degree makes me cringe, as it immediately brings up memories of telemarketers calling me at all hours of the night to sell me their wares. However, marketing has evolved far beyond just traditional cold-calling these days. With the world having gone global in scale over the past two decades thanks to the advent of the Internet and far better infrastructure in burgeoning emerging markets like China, Brazil, Russia and India, a degree in marketing can translate into something as simple as a strategic marketing or advertising job with a multinational corporation to something as complex as a financial market analyst with a Wall Street firm. Because of the diversity of the degree and the need for marketing even at the simplest of businesses, it's a degree with an unemployment rate of just 6.6%.

Last year, for examples, a Forbes report identified Sears Holdings (NASDAQ: SHLD  ) as one of the nation's largest companies seeking marketing help, with, at the time, 123 job openings in marketing -- far and away higher than any other major corporation. To me that isn't too surprising, as the struggling retailer needs fresh ideas and a new image to help transform it into a company that can once again attract younger consumers without having to get into pricing wars with its competition.

Veterinary medicine: For this last one I'm going rogue from Georgetown's list and introducing a third area of undermet educational needs with high growth potential -- veterinary medicine. I know this firsthand, since I was about halfway through a veterinary medicine degree in college 14 years ago before switching majors to economics. Between 2010 and 2020, veterinarian job growth is forecast to increase by 36% thanks to the growing acceptance of pets into the American household and as part of the family. To that end, veterinarians have an unemployment rate of just 0.6% (that's right ... zero point six percent!) according to U.S. News. 

We only need to look so far as PetSmart (NASDAQ: PETM  ) to see how transformative this change has been. PetSmart, which offers an array of retail pet products in its stores, as well as grooming and veterinary services, has delivered 126% revenue growth since 2003 -- consistently growing its top line every year, even when the economy hit a major roadblock in 2009. 

We've got college-educated people out there. Fix it!
Simply put, education should be a bigger emphasis in this country, but it's not. Within these studies we have the knowledge to exact change that will lower unemployment and underemployment and create a happier and more productive workforce. Ultimately, this should improve economic growth and boost the top-line results of big corporations that could lead to a sustainable long-term rally in the Dow Jones and S&P 500. Without a big shift toward correcting our underutilization and educational problems, I don't see this rally as sustainable for much longer.

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Will Digital Realty's Crisis Of Confidence Persist?

Trading 30% lower than it did around a year ago and with a short float of around 20%, data services provider Digital Realty (DLR) has developed into the REIT industry's most controversial stock. Short interest has more than doubled over the past six months, aided largely by a highly publicized bearish position taken by Highfield Capital's Jonathan Jacobsen. Though the stock trades at a fairly low multiple based on current operating expectations, investors appear about as motivated to buy a piece of DLR as they would a beach house with a hurricane approaching.

In this article, we will take up brief discussion of Jacobson's bear thesis, management's rebuttal and struggle with regaining investor confidence, the bullish counterpoint, and some general long-term industry observations and speculations.

The Bear Case

As part of a presentation at the Ira Sohn Investment Conference in May, hedge fund manager Jacobson contended that DLR is not including enough recurring maintenance expenditure when it calculates its AFFO. He says as a result DLR's yield is "illusory," and that stock offerings are being used to pay for an uncovered company dividend. Further, Jacobson said he sees low barriers to entry, competition, and generally weak fundamentals affecting the company's bottom line going forward. He thinks the stock is worth in the neighborhood of $20 a share.

Company Rebuttal

In a half hour presentation (listen here) at a REIT conference in June, Digital Realty management addressed each and every issue Jacobson brought to the forefront. Most importantly the company declared that its dividend was "well covered and will continue to grow," with DLR CEO Michael Foust calling Highfield's accounting contention "ridiculous."

Management went on to extol the virtues of its building portfolio, noting a 3-year mean property age, and the long e! xpected life of both its buildings and the components it utilizes in the buildings.

DLR CEO Michael Foust

However, somewhat acquiescing to Jacobson's competition concerns, company management did acknowledge that a fragmented and emerging competitive landscape was starting to build, with both public and opportunistic private entities entering the fray. Further, the company admitted that it anticipates a flattish rent environment over the next several years.

Despite its assurances in June, and what would probably be considered an uneventful quarter operationally, the company announced recharacterization of capex, which seems to have put more of a damper on investor attitude. Citigroup, in a research note, went so far to say that DLR has "damaged its credibility and lost investors' confidence." The stock has traded down as a result.

Current Bull Case

As I mentioned at the outset, from a quantitative standpoint, DLR shares appear cheap, selling at about 12X this year's FFO with expectations for 10 percent FFO growth next year. Leverage sits at a manageable 35% of enterprise value. REIT cohort Brad Thomas pounded the table on DLR in a recent writing, with mainly a valuation tilt, arguing that the market is missing the big picture with its focus on the inconsequential nature of the accounting flap at DLR.

Bulls further tend to point towards general technology growth and IT outsourcing trends as a bullet point for investment in this space and specifically DLR.

My Take

Though I have no current position in the stock, I am intrigued by the sell off and the continuing controversy surrounding the company's accounting and growth prospects. I will start by saying that in so far as REITs go, Digital Realty's risk/reward profile appears much higher than its peers solely due to the business it is engaged it. Let's face it, while DLR owns ! real esta! te and its income is rent and services based, it is a quasi-participant in the evolution of technology, which in and of itself raises the risk bar in my opinion.

While a more conservative triple net REIT like Realty Income (O) engages in leaseback transactions with time tested, mundane industries such as drug stores, auto parts distributors, and restaurants, DLR, a public entity for less than 10 years, is building somewhat specialized structures with raised floors to accommodate miles of wiring and hundreds of electronic components. Looking long-term, though trends would indicate that growth here will sustain, I'd argue that technological evolution and data compaction could lessen the need for gigantic data centers at some point in the future.

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Digital Realty's business harkens me back to the height of the Internet frenzy when Exodus Communications ramped up its server farms and was a darling of technology analysts and day traders. The company expanded too quickly, had a number of credit-unworthy "dot bombs" as customers, and ultimately collapsed shortly after the 9/11 tragedy. While DLR is no Exodus from an expansion or client perspective, technology is a fickle, ever changing space, and its inherent risks are certainly relevant to those looking for a dependable income investment.

Touching on the Highfield's argument for a moment, I find the assertion that DLR is worth only $20 a share sensationalistic. Keep in mind that the goal of a short seller is to stoke fear in the minds of investors, which the firm certainly has accomplished. While a short-sell strategy may be profitable longer-term if data centers indeed are entering a period of secular decline, which is part of Highfield's contention, it's not something that is going to ! happen ov! ernight. On the accounting issue, there don't appear to be many red flags waving, although the investment community doesn't seem totally satisfied with the way in which management is addressing the situation.

Until the market seems convinced one way or another, I suspect the stock will tread water, with aggressive income investors looking closely at its ever growing dividend yield. Despite its attractive valuation, unlike Brad, I'm personally not inclined to go rushing into Digital Realty right now, given the elevated risk profile I perceive and better alternatives in the REIT space. I do think the stock presents an opportunity for ultra aggressive total return players, however. If the company assumes a more rigid footing with the investment community and regains a higher FFO multiple, the stock could race higher as short sellers are forced to cover. But that might be a big if at this point.

Source: Will Digital Realty's Crisis Of Confidence Persist?

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Additional disclosure: Disclaimer: The above should not be considered or construed as individualized or specific investment advice. Do your own research and consult a professional, if necessary, before making investment decisions.