SEC’s White Pleads for Advisor Exam Funds; Rep. Waters ‘Pushing Hard’ for User Fees Bill

As Securities and Exchange Commission Chairwoman Mary Jo White gave lawmakers on Tuesday stark statistics about the limited number of examiners the agency has to oversee advisors, Rep. Maxine Waters, D-Calif., said that she was “pushing very hard” to secure support for her user fees bill to fund advisor exams.

During her testimony before the House Financial Services Committee, White reiterated the agency’s need for adequate resources.

“I need funding to carry out my job, which I do not have now,” White told lawmakers. “Bottom line is that we are under-resourced for the responsibility that we have, and it’s a great concern to me.”

White underscored the importance of boosting the number of advisor exams, stating that from fiscal 2001 to fiscal 2014, advisors’ assets under management jumped almost 200% to $55 trillion. In 2004, the SEC, she said, “had 19 examiners per trillion dollars in investment adviser assets under management. Today, we have only eight.”

Last year, White said that the SEC was in a position to only examine 9% of registered investment advisors. “More coverage is plainly needed, as the industry itself has acknowledged,” she said.

In fiscal year 2013, examiners conducted approximately 1,615 examinations, including 438 broker-dealers, 964 investment advisors, 99 investment company complexes, 42 transfer agents, 17 clearing agencies and five municipal advisors. The staff also conducted 50 market oversight program inspections.

Last year, White also said that the SEC filed 140 actions against investment advisors, “several” of which resulted from risk-based investigations, which she described as “proactive measures to identify misconduct at an early stage so that timely action can be taken and investor losses minimized.”

But White told ThinkAdvisor in a recent interview that while the risk-based exams allow the agency to be “a lot smarter” in singling out advisors to examine, she said “that’s just not sufficient coverage.”

President Barack Obama’s 2015 budget proposal would give the SEC $1.7 billion, a 26% boost from the agency’s 2014 enacted level, and would allow the agency to add 316 staffers to the agency’s Office of Compliance Inspections and Examinations, with 240 of those examiners devoted solely to overseeing advisors.

The SEC’s fiscal year 2015 budget request, White told lawmakers, “would permit the SEC to increase its examination coverage of investment advisors who everyday investors are increasingly turning to for investment assistance with retirement and family needs.”

Rep. Waters’ user fees bill, the Investment Adviser Examination Improvement Act of 2013, H.R. 1627, would allow the SEC to collect user fees to fund advisor exams. Waters, ranking member on the committee, reintroduced the bill last April; it has garnered little support among the Republican-controlled committee.

Neil Simon, vice president of government affairs for the Investment Adviser Association, said in early March that IAA and other planning groups are “working hard” to get a bipartisan user fees bill introduced in the Senate that mirrors Waters’ bill.

Rep. Spencer Bachus, R-Ala., the former chairman of the House Financial Services Committee who now serves as chairman emeritus, told White during the Tuesday hearing that despite his failed attempts to get a bill passed supporting a self-regulatory organization to help boost advisor exams, that she continue exploring options to increase advisor exams.

The "advisor community," Bachus said, "seems to embrace" the user fees concept. "I would urge you to continue to keep this [advisor exams issue] as a priority, and that all of us will work together to resolve this."

During the nearly three-hour hearing, White also said the she has spoken with Labor Secretary Thomas Perez about the SEC’s fiduciary rulemaking process as well as the department’s rule to amend the definition of fiduciary under the Employee Retirement Income Security Act.

Rep. Gwen Moore, D-Wis., told White that while the DOL appears to be “plowing ahead” on its fiduciary rule, “it’s my opinion that there’s more expertise within the SEC” and the two agency’s rules “should be harmonized.”

Moore asked White if the SEC is providing its expertise to the DOL. White replied that the SEC is providing its expertise concerning impacts of a DOL fiduciary rulemaking on the broker-dealer model. “I’ve ratcheted up that collaboration” between the SEC and DOL, White said, adding however that “at the end of the day, we are two different agencies” operating under two different statutes.

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Check out Mary Jo White: The 2014 IA 25 Extended Profile on ThinkAdvisor.

In Toyota Restructuring, California's Loss Is Texas' Gain

Reed Saxon/APToyota's North American headquarters in Torrance, Calif. As part of a companywide overhaul, Toyota Motor (TM) is planning to move its sales and marketing headquarters to suburban Dallas from Torrance, Calif., according to reports. The company will restructure its marketing arm, which currently is based in Torrance in southern California, and houses about 5,300 employees, who are being offered a redundancy package under the reorganization that is set to begin Thursday. The move would put Toyota's management closer to its operations that produce cars for the U.S. market and would reduce production costs. It is still unclear how many employees will be asked to move from the Torrance unit and how much time would elapse before the transition is complete. Employees "whose positions are significantly different in the new organization have been provided with several options, including applying for opportunities within the new marketing organization or in other departments at [Toyota Motor Sales] or Toyota Financial Services," the company said, according to the Wall Street Journal. The Japanese automaker has vehicle assembly plants in Kentucky, Indiana, Texas and Mississippi, along with technical centers in Michigan and California, while its manufacturing operations headquarters for the U.S. market is based in Erlanger, Ky. About 71 percent of the vehicles Toyota sells in the U.S. are manufactured at its 14 manufacturing facilities, up from 55 percent in 2008 and, last year, Toyota sold 2.24 million cars and light trucks, down from a record 2.62 million sold in 2007, reports said. Related According to Los Angeles Times, Torrance's Mayor Frank Scotto didn't know of Toyota's plans to move base but added that he knew that the company was supposed to make a corporate announcement Monday. "When any major corporation is courted by another state, it's very difficult to combat that," Scotto said, according to the Times. "We don't have the tools we need to keep major corporations here," he said. States such as New York and Texas have been promising financial incentives to convince California-based companies to move, using the west coast state's higher cost of operations, such as higher labor compensation and liability insurance, as an incentive, according to Scotto. Toyota Motor Sales U.S.A. and Toyota Financial Services, both of which are based in Torrance, together employ more than 9,400 people in the U.S. Toyota isn't the first to desert California in search of lower operating costs. In 2006, Nissan Motor shifted its headquarters to Nashville, Tenn., from Gardena, Calif. while Honda Motor (HMC) moved a small number of top-level employees to Columbus, Ohio, from Torrance in 2013, reports said.

Is Best Buy’s Comeback For Real?

Best Buy's (NYSE:BBY) stock price has more than doubled since hitting a low of $11.20 in December. The stock has quickly become a darling of Wall Street: Its charismatic new CEO, Hubert Joly, has fueled recent investor optimism. But with the highly competitive dynamic of the consumer electronics retail space and mixed reviews out on Best Buy's first-quarter earnings report, does the stock justify its impressive price climb? Let's use our CHEAT SHEET investing framework to decide whether Best Buy is an OUTPERFORM, WAIT AND SEE, or STAY AWAY?

C = Catalysts for the Stock's Movement

The biggest catalyst for Best Buy's historic price climb has been the marriage between Wall Street analysts and newly appointed Joly. Despite intense competition in the consumer electronics retail industry, Best Buy has outlined a restructuring effort, known as "Renew Blue," which is streamlining its operations by selling off its European division, cutting costs, and introducing a price-matching initiative. So far, the company has seen little material results on this program but investors and analysts are optimistic.

E = Excellent Performance Relative to Peers?

Best Buy is actually trading at a reasonable forward price-to-earnings multiple relative to its main competitors, Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN), and Costco (NASDAQ:COST). A potential reason for this may be because Best Buy does not have high growth potential. On the other hand, the company could still have more room to go up in price and is undervalued at the moment. Currently, Best Buy enjoys a healthy return on assets percentage and operating margin — even though this margin has declined due to its recent price cutting initiative.

	BBY	WMT	COST	AMZN
Forward P/E	12.41	12.85	21.96	88.76
Operating Margin	2.15%	5.93%	2.91%	1.04%
ROA	4.62%	8.73%	6.59%	1.71%

E = Earnings and Revenues Are Decreasing

To investors who have bought in to Best Buy, the following table should serve as a caveat: The company has not shown year-over-year growth earnings in the past five quarters. Best Buy reported a 1.3 percent decline in comparable store sales in the first quarter of fiscal year 2014. Management attributed the average performance last quarter to the shift in the Super Bowl holiday and to fewer major product launches. Additionally, it wrote down a $200-million loss for its European division and should benefit from having that off the balance sheet in future quarters. A bright spot in its earnings was online sales growth, which increased 16 percent during the quarter. Joly has made good on his cost-cutting promise, but there is certainly a trend in negative year-over-year earnings growth.

	2014 Q1	2013 Q4	2013 Q3	2013 Q2	2013 Q1
Qtrly. EPS YoY Growth	-88.57%	-71.46%	-22.22%	-21.67%	-2.78%
Qtrly. Revenue YoY Growth	-19.21%	38.12%	-5.23%	-3.59%	-26.20%

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*All data sourced from YCharts.

T = Technicals Are Strong

Best Buy is currently trading at $29.42, above both its 200-day moving average of $20.96 and its 50-day moving average of $27.14. Best Buy has experienced a definitive uptrend since the beginning of the calendar year. The stock is trading right around its 52-week high of $29.91. The last time Best Buy traded at this price? Two years ago, in July 2011. The aftermath was a sharp correction downward followed by a one-and-a-half year downtrend. If the stock's growth is truly driven by fundamentals, rather than speculation, it should not suffer the same fate.

Conclusion

While Best Buy has enjoyed an impressive run over the past six months, there is just not enough solid financial performance to buy the stock right now — especially since it is trading right at its 52-week high. It will probably take a few more quarters of mixed earnings reports for Best Buy to really establish a solid strategy. CEO Joly certainly has a strong vision for the future of the company, and he's the right man for the job to steer the company in the right direction — but the consumer electronics retail space is just too competitive right now. Best Buy is a WAIT AND SEE.

3 Stocks for a Royal Baby Boy

An 8-pound, 6-ounce package captured the world's attention this week. Prince George Alexander Louis, the newest heir to the British throne, arrived Monday at St. Mary's Hospital, London. With a net worth measured in the tens of billions, this baby boy could use some stock picks to keep his empire pulling profits. Here are three stock ideas for the prince's portfolio.

1. Boy toy
Royal or not, every boy needs a toy. Mattel (NASDAQ: MAT  ) is a worldwide leader in the toymaking business, and its operations have pulled in major profit for investors over the past few years. Since our Motley Fool Income Investor newsletter recommended the company in August 2011, shares have bounded up 93%, 38% more than the S&P 500's (SNPINDEX: ^GSPC  ) remarkable 54.8% total return. In the past ten years, Mattel has managed a whopping 200% gain, versus the S&P 500's 108% rise .

MAT Total Return Price data by YCharts

While George might not go bananas for Barbie or American Girl, he can hop on board with Hot Wheels and Fisher-Price, as well as licenses for Thomas & Friends, Toy Story, and Cars. 

Source: Mattel.com.

Naysayers (understandably) point to the demise of physical toys, but Mattel has made its mark with strategic partnerships such as an Angry Bird board game. If Mattel can adapt to the changing child-entertainment world, its 3.3% dividend yield will keep George in golden diapers for plenty of years past potty-training.

2. Gimme those car keys
Sniff ... they grow up so fast. Before we know it, little Georgie's going to be ready to sit his royal tuckus in the driver seat. Tata Motors (NYSE: TTM  ) offers a flashback to the days of British colonialism, although this time it's India with the ownership. Although the South Asian automaker is most famous for its Tata Nano, the world's cheapest car, Prince George would probably have his eyes set on Tata's Jaguar Land Rover subsidiary.

Source: Jaguar.com. 

The company bought the failing British business from Ford (NYSE: F  ) in 2008 for a paltry $2.3 billion, and sales have skyrocketed ever since. It's now Tata's most profitable entity, and it has enjoyed major sales growth in Asia. With its new entry into the Australian market, this might be George's best ticket to reliving the British Empire's heyday.

3. Power to the people
If the current royal regime is any evidence, George is going to be around for a long time to come. Although it's not as fun as a toy or as fast as a car, the prince needs to consider long-term income earners as well. British-American utility PP&L (NYSE: PPL  ) puts electricity in the homes of his subjects, while offering a delectable 4.7% dividend on the side. With share prices still wobbling around recession-level lows, you and George could benefit from a long-term value grab as economies (eventually) pick up in the years to come.

PPL data by YCharts

Its U.K. regulated division pulled in more than half of the company's Q1 profits, and PP&L's newly submitted eight-year plan is designed to keep the company pulling profits well into the future.

Fit for a king?
The newest addition to the royal family has a long life ahead of him, but it's never too early to start planning for a profitable future. Make your smart stock picks today, and you'll be well on your way to a royal retirement.

If PP&L's potential is any evidence, dividend stocks can make you royally rich. It's as simple as that. While they don't garner the notability of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of the only nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

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America's best and worst airlines

As an industry, airlines received the fourth-worst score in the American Customer Satisfaction Index (ACSI) rankings of customer satisfaction. Only pay TV, social media companies and Internet service providers rank lower. Even wireless carriers and car dealers rank higher. That may not be an indictment of the industry, but it does indicate a lot of room for improvement.

Overall customer satisfaction with the airline industry in the 2014 ACSI survey totals just 69. The biggest contributors to the low ranking are uncomfortable seating and poor in-flight service. Checked baggage fees also play a significant role in the satisfaction indexes. For customers who don't check any baggage, the index reading is 71, compared with 66 for those who do check bags. ACSI notes that the percentage of passengers checking baggage has dropped from 35% in 2013 to 31% this year.

Among the six carriers ACSI ranked by name, JetBlue and Southwest continue to lead in customer satisfaction, although both saw their scores drop compared with a year ago. Higher fuel costs and higher costs for wages and general inflation contributed to the lower ratings this year.

Among the four legacy carriers, Delta Air Lines holds the lead, following a collapse to an ACSI score of 56 after Delta's 2010 merger with Northwest Airlines. Airline mergers typically take several years to sort out because, among other things, it is so difficult to switch from two reservation systems to one. Measured by market share and profit, Delta's comeback appears to be complete.

United Continental, created by the merger of United and Continental, still suffers from the effects of its merger of three years ago. The creation of American Airlines Group from last year's merger of American and U.S. Airways has a long road ahead of it before the combined airline runs smoothly. Neither scored well on the 2014 ACSI, and it is difficult to believe that a combined score will improve significantly.

MORE: Airline demand hits record level

Market! share data come from the Bureau of Transportation Statistics of the Research and Innovative Technology Administration of the U.S. Department of Transportation. The data reported cover the period from February 2013 through January 2014. JetBlue's high customer satisfaction ranking is a testament to its low fares and fees; its low market share is evidence of the difficulty of expanding its gate counts as the larger airlines consolidate.

Overall satisfaction with on-time arrivals has dropped from an index reading of 81 to 79, but that is still a fairly high score, compared with 63 for seat comfort, the lowest scoring category. Ease of check-in and ease of making reservations rank at the top, with index scores of 82.

In addition to the six carriers identified by name, ACSI also grouped several carriers in an "All Others" group that included Alaska Air Group, Spirit Airlines and Frontier Airlines. The All Others group posted an index score of 70.

ACSI surveys 70,000 customers annually about products and services they use most often. The researchers then use the data to benchmark more than 230 companies in 43 industries and 10 economic sectors.

In addition to ACSI, we have considered data from AirfareWatchdog.com for additional fees charged by the six major airlines ranked in survey. The total fees are the amount a passenger would pay if he or she paid at least the minimum fee in each of 14 fee categories. We did not include data related to frequent flyer programs and fees. Low-cost carriers Southwest and JetBlue keep their fees low so that they don't lose their image as lower cost alternatives to the bigger airlines. They have to keep afloat the idea that no matter what they charge it will always be the lowest fare available.

Revenue and net income reflect data reported by the airlines for the fiscal year ended in December 2013. Revenue and net income for American Airlines and U.S. Airways is consolidated to reflect results for American and American Eagle for all of 2013 and re! sults for! U.S. Airways for the final 23 days of December.

These are America's best and worst airlines.

6. United Airlines

> 2014 ACSI score: 60
> Total additional fees: $935
> Market share: 15.6%
> Revenue: $38.28 billion
> Net income: $571 million

The merger between legacy carriers United and Continental closed in October 2010, and the combined company continues to have issues with the unions and the reservations system. The largest flight attendants' union, for example, has threatened legal action over an involuntary furlough proposal and a plan to move some flight attendants from United to Continental. In a recent study by U.S. PIRG Education Fund, United ranked third in customer complaints behind Spirit and Frontier. Among the six carriers, it ranks fourth highest for additional fees. United's market share has dipped from 16% in 2012 to 15.6%.

5. U.S. Airways

> 2014 ACSI score: 66
> Total additional fees: $985
> Market share: 8.5%
> Revenue: $26.74 billion
> Net income: $1.83 billion loss

The merger between U.S. Airways and American has not really had much chance to take hold yet. On its own, U.S. Airways' ACSI score rose two points in the latest survey. The revenue figure for last year is also a bit misleading. If you combine the two airlines revenues for 2013, the total is $35.5 billion, up 4.7% from 2012's combined total, and now the best in the airline industry. Of the legacy carriers, U.S. Airways claimed the smallest market share. U.S. Airways, like the other legacy airlines, sports added fees right around $1,000, nearly double the level of JetBlue and about triple the level of Southwest.

4. American Airlines

> 2014 ACSI score: 66
> Total additional fees: $1,093
> Market share: 12.7%
> Revenue: $26.74 billion (2013 pro forma)
> Net income: $1.83 billion loss

The bankruptcy of American Airlines' former parent, AMR Corp., led to the completion of the latest round of! mergers ! among the legacy carriers. American, United and Delta, along with non-legacy Southwest, now combine for nearly 70% of the U.S. domestic market. The company's fees add up to the highest total among these carriers. American's market share slipped a bit from 15.9% in 2012, but the addition of U.S. Airways' 8.5% share more than makes up for the slight loss.

3. Delta Air Lines

> 2014 ACSI score: 71
> Total additional fees: $969
> Market share: 16.3%
> Revenue: $37.77 billion (2013)
> Net income: $10.54 billion

Delta's market share did not change from 2012, remaining at 16.3%, the highest among all the carriers. The company's added fees were the second lowest among the legacy group, and its 2013 revenues put it second behind United and ahead of American. Delta's massive net income is the result of an $8 billion income tax benefit, but even so the company posted $2.5 billion in profit last year, up by $1.5 billion from the previous year. It has the highest ACSI score among the legacy carriers, and its total fees are third highest among the six carriers.

MORE: Boeing, Airbus battle for Delta order

2. Southwest Airlines

> 2014 ACSI score: 78
> Total additional fees: $338
> Market share: 15.7%
> Revenue: $17.7 billion (2013)
> Net income: $754 million

Southwest's additional fees are the lowest in the entire industry, more than 40% lower than JetBlue's. The airline has no fees for checked bags (up to two) and the lowest per-bag fee for more than two bags. The company's CEO has hinted that fees may be coming, but so far nothing has changed. Southwest's market share grew from 15.1% in 2012 to 15.7%. The airline has also had its own issues trying to absorb AirTran, but its customers are sticking with it, very likely because of Southwest's low fares and fees.

MORE: America's fastest growing (and shrinking) economies

1. JetBlue

> 2014 ACSI score: 79
> Total additional fees: $595
> Market sh! are: 5.1%!
> Revenue: $5.44 billion (2013)
> Net income: $168 million

JetBlue is the smallest of the six carriers named in the ACSI survey, and its size is both a benefit and a curse. Its market share is essentially flat with a year ago, and the company started offering premium seating (at premium pricing) on some of its coast-to-coast flights last year. Just last week, brand research firm Brand Keys named JetBlue the top airline in its Customer Loyalty Engagement Index. Low fares and the second lowest fee schedule have a lot of appeal to customers and may forgive a multitude of sins. Just ask the folks at JetBlue or Southwest.

24/7 Wall St. is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

Apple, Microsoft, Amazon, Starbucks are stocks to watch

SAN FRANCISCO (MarketWatch) — Among the companies whose shares are expected to see active trade in Thursday's session are Apple Inc., Microsoft Corp., Amazon.com Inc., and Starbucks Corp.

In the spotlight Enlarge Image

After Wednesday's closing bell, Apple (AAPL)  said its second-quarter profit rose to $10.2 billion, or $11.62 a share, from $9.5 billion, or $10.09 a share, a year ago. Revenue also increased to $45.6 billion from $43.6 billion. Analysts surveyed by FactSet had forecast Apple to earn $10.19 a share on revenue of $43.67 billion. Apple also said it will expand its capital return program to more than $130 billion, boosting its buyback plan to $90 billion from $60 billion, and it will conduct a seven-for-one stock split effective June 9. Shares of Apple surged 7.5% in extended trading.

Earnings Wall

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Discuss key earnings announcements before and after results come in. Learn more

This Chart Will Show Me When Inflation Really Heats Up

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 Inflation is heating up...   The Consumer Price Index (the "CPI") – a widely accepted measure of inflation – has been increasing at about 2% annually for the past few years. The Fed has been using that slow rate of inflation to justify keeping short-term interest rates low and pumping billions of dollars into the markets every month.   But as you can see from the following chart, even a small annual increase in the CPI can add up to a big move over time...     We don't really feel the pain as prices increase slowly. We're like the proverbial frog in the simmering pot of water.   But it looks like things are about to heat up...    Interest rates have spiked higher over the past few weeks. Rising long-term rates is an early warning sign the market is concerned about inflation. Here's an updated chart of the 30-year Treasury Bond Yield I first showed you last month...     The 30-year rate has broken out above the first resistance line and is now headed toward the next resistance line near 4.4%. It's 30% higher than where it was in May. And it's up 50% from its bottom last August. Rates don't rise like this if the market is comfortable with inflation.    Now take a look at this chart of the Baltic Dry Index (the "BDI")...     The BDI reflects the cost of shipping dry goods overseas. It's a good measure of economic activity. But it's an even better measure of pent-up inflationary pressures. The cost of shipping dry goods gets worked into the final cost of those commodities. After a three-year downtrend, the chart is poised to reverse to the upside.   The BDI has already rallied more than 50% so far in 2013. If it can break above resistance at about 1,200, it will be poised to make a run at the next resistance level near 2,000.   That will be one heck of a move for the BDI. And it will be a sure sign that inflation is heating up.   – Jeff Clark

Avoid Massive Money Mistakes With a Mid-Year Portfolio Checkup

With all the volatility in the markets lately, the middle of the year is a great time to take a step back and look at how your investments have done. But how should you conduct your own money checkup?

In the following video, Fool contributor Dan Caplinger discusses how you can avoid making big mistakes with your money by doing a mid-year portfolio review. With big gains in the early part of the year having given way to a correction in recent weeks, Dan notes that you have a good sense of where risks are in the market, with bonds in particular having surprised many investors with the magnitude of their declines. Dan talks about how simple, minor adjustments can usually get the job done, while also discussing some situations in which more dramatic action is warranted.

ETFs are a key part of many successful investment strategies. To learn more about a few ETFs that have great promise for delivering profits to shareholders, check out The Motley Fool's special free report "3 ETFs Set to Soar." Just click here to access it now.

Peeking inside Samsung's product torture chamber

SUWON, South Korea — And you thought your kids were hard on your smartphone.

It's nothing near the abuse Samsung Electronics inflicts on its Galaxy S5 and other products in the company's pipeline. Phones are dropped on purpose, subjected to heat, dust and water, and zapped with high-voltage electrostatic guns.

I'm visiting testing facilities at Samsung's headquarters, where the company is putting its latest flagship phone through the wringer. The idea is not simply to see how the phones might come through the rigors of human contact unscathed — though that's a big part — but also to figure out how external elements affect longevity and performance.

Some tests are automated, while others involve more personal interaction. For example, devices are placed into a chamber filled with dust to test for faulty circuits. They're dropped in water or shot with a nozzle of water to see if they corrode or go on the fritz. Phones are tested to see how they handle sweat. They're twisted to determine how far they can bend without breaking.

Samsung drops the devices off a platform from various heights and angles, and analyzes them for cracks, loose parts or other damage. It's a good way to tell if they can survive a clumsy owner.

Can they survive the kid who loves to press — and keep pressing — buttons? To test this, Samsung runs an automated machine with knobs that repeatedly press the home button — Samsung won't reveal how just many times — until that button finally fails.

Meanwhile, if you've ever broken a device by inadvertently sitting on it, you'll appreciate the automated butt test Samsung conducts. Yep, the dummy derriere that sits on exposed test phones wears jeans.

Samsung punishes competitor's phones, too, and puts other types of products through automated torture drills. Laptop lids, for example, are repeatedly folded and unfolded to test their durability, an exercise that conjures up images of a chorus line. Similar folder life-cycle tests are done wit! h flip-phone covers.

While many of the tests are about how the phones (and other products) will come through in one piece, there are others to gauge their impact on you and me. For example, Samsung employs thermal cameras to determine if devices are emitting too much heat. It also uses fluids that mimic the characteristics of the human body, which can help tell if the body will absorb too much radiation.

Cameras in phones are evaluated against a variety of measures — color, resolution, flash performance, etc. — with the tests adjusted for changing lighting environments.

Samsung uses spikes of absorbent foam in various antenna chambers to test reception and to determine how other electronic gadgetry may be affected.

Device acoustics are also tested, of course, with loud background noises (cars and trains, for example) simulating environments around the world. It seems noise levels in India or China, for example, differ from levels in Europe or the U.S.

4 Unusual-Volume Stocks in Breakout Territory

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

>>5 Stocks Ready to Break Out This Month

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

>>5 Stocks Set to Soar on Bullish Earnings

With that in mind, let's take a look at several stocks rising on unusual volume today.

CaesarStone Sdot-Yam

CaesarStone Sdot-Yam (CSTE) manufactures engineered quartz surfaces. This stock closed up 6.6% to $45.19 in Wednesday's trading session.

Wednesday's Volume: 845,000

Three-Month Average Volume: 280,482

Volume % Change: 247%

From a technical perspective, CSTE ripped sharply higher here right off its 50-day moving average of $42.38 with strong upside volume. This move pushed shares of CSTE into breakout territory, since the stock took out some near-term overhead resistance at $44.74. Market players should now look for a continuation move higher in the short-term if CSTE can take out some key near-term overhead resistance levels.

Traders should now look for long-biased trades in CSTE as long as it's trending above its 50-day at $42.38 and then once it sustains a move or close above Wednesday's high of $47.50 to its all-time high at $48.69 with volume that hits near or above 280,482 shares. If we get that move soon, then CSTE will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $55 to $60.

PowerSecure International

PowerSecure International (POWR) is a provider of products and services to electric utilities and to their large commercial, institutional and industrial customers. This stock closed up 5.9% at $19.62 in Wednesday's trading session.

Wednesday's Volume: 1.05 million

Three-Month Average Volume: 265,283

Volume % Change: 331%

From a technical perspective, POWR spiked sharply higher here with heavy upside volume. This move pushed shares of POWR into breakout and new 52-week-high territory, which is bullish technical price action. Market players should now look for a continuation move higher of POWER can tag a new 52-week high in the near-term.

Traders should now look for long-biased trades in POWR as long as it's trending above Wednesday's low of $18.72 and then once it sustains a move or close above Wednesday's high of $20.57 with volume that's near or above 265,283 shares. If we get that move soon, then POWR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $25 to $27.

Jazz Pharmaceuticals

Jazz Pharmaceuticals (JAZZ) is a specialty pharmaceutical company focused on developing and commercializing innovative products to meet unmet medical needs in neurology and psychiatry. This stock closed up 1.2% at $93.78 in Wednesday's trading session.

Wednesday's Volume: 1.14 million

Three-Month Average Volume: 701,478

Volume % Change: 95%

From a technical perspective, JAZZ spiked modestly higher here right above its 50-day moving average of $88.49 with above-average volume. This move briefly pushed shares of JAZZ into breakout and new 52-week high territory, since it took out some near-term overhead resistance at $95.24. Traders should now look for a continuation move higher if JAZZ can make a new 52-week high soon.

Traders should now look for long-biased trades in JAZZ as long as it's trending above $92 or Wednesday's low of $90.47, and then once it sustains a move or close above Wednesday's high of $97.44 with volume that's near or above 701,478 shares. If we get that move soon, then JAZZ will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $105 to $110

BioTelemetry

BioTelemetry (BEAT) provides ambulatory, continuous, real-time outpatient management solutions for monitoring relevant and timely clinical information regarding an individual's health. This stock closed up 16% at $10.44 in Wednesday's trading session.

Wednesday's Volume: 4.14 million

Three-Month Average Volume: 634,557

Volume % Change: 598%

From a technical perspective, BEAT exploded higher here and gapped up back above its 50-day moving average of $9.58 with monster upside volume. This move briefly pushed shares of BEAT into breakout and new 52-week-high territory, since it took out some near-term overhead resistance levels at $10.17 to $11.27. Market players should now look for a continuation move higher in the short-term if BEAT can make a new 52-week high.

Traders should now look for long-biased trades in BEAT as long as it's trending above Wednesday's low of $10.09 or its 50-day at $9.58 and then once it sustains a move or close above Wednesday's high of $11.40 with volume that hits near or above 634,557 shares. If we get that move soon, then BEAT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $14 to $15.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Stocks Under $10 Spiking Higher

>>5 Dividend Boosters That Could Really Pay Off

>>Buy These 5 REITs to Cash In This Year

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Retiree Health Care Costs to Surpass Social Security Payouts: Index

Everyone knows that health care costs in the U.S. are rising. An index introduced Thursday puts that rise into grim perspective.

HealthView Services’ new Retirement Health Care Cost Index shows that middle-class Americans are approaching the day when they will have to use their entire Social Security benefit to pay for their health care.

The index may serve as a useful tool for financial planners working with clients who are approaching retirement.

It measures the percentage of Social Security benefits required to pay for health care-related costs in retirement for a healthy couple receiving the average expected Social Security benefit at full retirement age.

Total retirement health care costs measured by the index include all Medicare premiums, including Parts B and D, Medigap premiums, as well as co-pays not covered by Medicare.

Those costs will increase from 69% of Social Security benefits for a couple retiring in one year to 98% of benefits for a healthy couple retiring in 10 years.

Couples retiring in 20 years will need 127% of their Social Security benefits to cover health care costs, and those retiring in 32 years will need 190%.

Translated into today’s dollars, that means an average healthy couple retiring in 2015 will face healthcare costs of approximately $366,599, according HealthView Services data.

In another 10 years, those costs will rise to approximately $421,083 in today’s dollars, reflecting estimated health care cost inflation and Social Security cost-of-living adjustments.

As a result, HealthView Services said in a statement, many Americans will have to earmark their Social Security benefits to pay for health care, and rely on other assets and sources of income to pay for living expenses in retirement, such as housing, transportation, travel, taxes and food.

“The index reveals an ugly truth that will come as a shock to many,” Ron Mastrogiovanni, founder and chief executive of HealthView Services, said in the statement.

“Many Americans believe that Medicare will cover most or all of their health care costs in retirement. This is simply untrue.”

The index draws on HealthView Services’ cost data from more than 50 million annual health care cases. According to the firm, it is calculated using an actuary- and physician-reviewed methodology that determines individual longevity and retirement health care costs based on age, gender, health and time to retirement. The index assumes that the primary income earner will generate the Social Security average of $1,294 per month in today’s dollars and the spouse $817 per month. While health care costs tend to increase as retirees age, the index measures the lifetime average of health care costs.

Escalating Costs

Better-off couples who receive less than $170,000 in retirement income will use a smaller portion of their benefits for retirement health care costs than those receiving average Social Security benefits. Even so, health care costs will still take up a sizeable portion of those benefits.

For a healthy couple retiring in one year with one spouse earning maximum Social Security benefits, but earning less than $170,000 in total income, 39% of benefits will be required to pay for care. This amount will rise to 52% if they retire in 10 years.

The burden becomes heavier if the same couple earns more than $170,000 in retirement, as they will be subject to the Medicare surcharge, which depending on their modified adjusted gross income raises Medicare Parts B and D premiums by between 35% and 200%.

An affluent couple retiring in one year who fall into Medicare’s top income bracket will be responsible for an additional $255,267 in lifetime Medicare surcharges.

The index shows how the gap between health care cost inflation of 5% to 7%, based on current HealthView data, and the 2% expected cost-of-living increases in Social Security will drive the increasing portion of Social Security required for future retirees’ healthcare costs.

It also underscores the range of factors that people need to take into account when planning for retirement. These include age, gender, marital status, health, where they live, number of years to retirement and when they elect to receive their Social Security benefits.

“For middle-class Americans who tend to rely more on Social Security benefits, the differential between the healthcare cost inflation rate and Social Security cost-of-living adjustments is a time bomb,” Mastrogiovanni said.

“The index highlights the need for a comprehensive and individualized approach to retirement planning that factors in expected health care costs.”

Mastrogiovanni said the index highlights the need for advisor tools that show how decumulation strategies — working longer, saving more, moving to a less expensive state and Social Security optimization — will influence retirement plans.

Benefit from the Housing Resurgence with These Stocks

Home Depot (HD) and Lowe's (LOW) are good stocks for those who want to invest in home-improvement companies. So, investors should keep a close watch on the recovery of the housing market if they wish to benefit from these two companies.

According to Home Improvement Research Institute, the housing market surged to six-year highs last November, growing 22.7% year over year. In addition, sales of existing homes also increased over 10% as compared to last year. This was almost in line with HIRI's projection of 20% growth in housing and 9.8% increase in existing home sales for 2013. Looking forward, these numbers are expected to be around 30% and 9.3%, respectively, for 2014.

Let us see in detail what the prospects are for these firms and how will they will benefit investors.

Taking a Close Look

Home Depot is the largest American retailer for home improvement and construction products and services. Its recent results were better than consensus estimates. This was mainly driven by a rebound in the seasonal categories due to the recovering housing market in the U.S. Revenue increased on account of strong growth in comps, with an increase in earnings over last year.

A similar trend was seen for Lowe's, which reported significant growth. Backed by a solid performance across all its products, Lowe's earnings beat the estimates. Its gross profit increased 11.6% year over year. This resulted in an increase in earnings that were ahead of analysts' expectations.

In accordance with the projections from HIRI, Fitch has also predicted higher spending on home improvement in 2014. According to the National Association of Home Builders, housing market activity in 52 of approximately 350 metro areas in the U.S. has returned to or exceeded pre-recessionary levels.

All these facts indicate that the housing market is expected to grow in the future and this is a big opportunity for companies like Home Depot, Lowe's and Lumber Liquidators. Home Depot is the largest of the three in terms of store count, and it is concentrating less on expanding store count but improving store efficiency with the help of technology.

Road Ahead

To increase its presence in California market, Lowe's has acquired Orchard Supply Hardware, which is offering stiff competition to Home Depot. This will add 72 more stores to its existing fleet.

Looking forward, both companies would benefit from the booming housing industry. Home Depot, being the largest, has an edge and is better positioned to maximize its gains from the opportunity. Home Depot is working hard to attract as many customers during the holiday season. Keeping this in mind, it recently launched a mobile app for customers which will make shopping easier. Also, it is enhancing its website to make its online operations even better.

In addition, it is launching new products such as the Nest Protect smoke detector, a carbon monoxide detector, the Cree True White bulb, and many other products. It is also improvising its products to attract more customers.

Talking about Lumber Liquidators (LL), it caters to the hardwood flooring market. Currently at a P/E ratio of 30, it is very expensive as compared to both Lowe's and Home Depot. Home Depot has a P/E ratio of 20 while Lowe's is slightly more expensive at 22 times earnings. It will be better on the part of investors to look for either Home Depot or Lowe's, as they are comparably cheaper.

Making a Choice

Among all three, Home Depot looks the best in class. It is the cheapest and has a strong market position along with a wide store network. Looking at all these factors Home Depot looks to be a better investment option.

Home Depot (HD) and Lowe's (LOW) are good stocks for those who want to invest in home-improvement companies. So, investors should keep a close watch on the recovery of housing market if they wish to benefit from these two companies.

According to Home Improvement Research Institute, the housing market surged to six year highs last November, growing 22.7% year over year. In addition, sales of existing homes also increased over 10% as compared to last year. This was almost in line with HIRI's projection of 20% growth in housing and 9.8% increase in existing home sales for 2013. Looking forward, these numbers are expected to be around 30% and 9.3%, respectively, for 2014.

Let us see in detail what the prospects are for these firms and how will they will benefit investors.

Taking a Close Look

Home Depot is the largest American retailer for home improvement and construction products and services. Its recent results were better than consensus estimates. This was mainly driven by a rebound in the seasonal categories due to the recovering housing market in the U.S. Revenue increased on account of strong growth in comps, with an increase in earnings over last year

A similar trend was seen for both Lowe's, which reported significant growth. Backed by a solid performance across all its products, Lowe's earnings beat the estimates. Its gross profit increased 11.6% year over year. This resulted in an increase in earnings that were ahead of analysts' expectations.

In accordance with the projections from HIRI, Fitch has also predicted higher spending on home improvement in 2014. According to the National Association of Home Builders, housing market activity in 52 of approximately 350 metro areas in the U.S. has returned to or exceeded pre-recessionary levels.

All these facts indicate that the housing market is expected to grow in the future and this is a big opportunity for companies like Home Depot, Lowe's and Lumber Liquidators. Home Depot, is the largest of the three in terms of store count, and it is concentrating less on expanding store count but improving store efficiency with the help of technology.

Road Ahead

To increase its presence in California market, Lowe's has acquired Orchard Supply Hardware, which is offering stiff competition to Home Depot. This will add 72 more stores to its existing fleet.

Looking forward, both companies would benefit from the booming housing industry. Home Depot, being the largest, has an edge and is better positioned to maximize its gains from the opportunity. Home Depot is working hard to attract as many customers during the holiday season. Keeping this in mind, it recently launched a mobile app for customers which will make shopping easier. Also, it is enhancing its website to make its online operations even better.

In addition, it is launching new products such as the Nest Protect smoke detector, a carbon monoxide detector, the Cree True White bulb, and many other products. It is also improvising its products to attract more customers.

Talking about Lumber Liquidators, it caters to the hardwood flooring market. Currently at a P/E ratio of 30, it is very expensive as compared to both Lowe's and Home Depot. Home Depot has a P/E ratio of 20 while Lowe's is slightly more expensive at 22 times earnings. It will be better on the part of investors to look for either Home Depot or Lowe's, as they are comparably cheaper.

Making a Choice

Among all three, Home Depot looks the best in class. It is the cheapest and has a strong market position along with a wide store network. Looking at all these factors Home Depot looks to be a better investment option.

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RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool

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JPMorgan Chase & Co. (JPM) Q1 Earnings Preview: Regulation Costs To Trim Guidance?

Best Investments For 2015

JPMorgan Chase & Co. (NYSE:JPM) will host a conference call to review first quarter 2014 financial results on Friday, April 11, 2014 at 8:30a.m. (Eastern). The results are scheduled to be released at 7:00a.m. (Eastern).

Wall Street anticipates that money center will earn $1.41 per share for the quarter, which is $0.18 less than last year's profit of $1.59 per share. iStock expects JPM  to miss Wall Street's consensus number. The iEstimate is $1.40, a penny less than expected; however, there could be some additional downside as the consensus within the last 30-days is $1.31 according to Zacks.com.

[Related -Citigroup Inc (C) Q1 Earnings Preview: Too Many Parts Heading South]

Sales, like earnings, are expected to slip, dropping 5% year-over-year (YoY). JPMorgan Chase's consensus revenue estimate for Q1 is $24.56 billion, lower than last year's $25.85 billion.

JPMorgan Chase & Co. is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands.

While the last 30-day outlook is underwater, analysts are mixed on Friday's results. Five analysts reduced their view in the last 30 days, and five raised their estimates during the same timeframe with two of the five in the last week. The estimate, however, has drifted lower during the quarter, starting at $1.49, then $1.48, then $1.43 and now $1.41.

[Related -Citigroup Inc (C): Stress Test – Who Win, Who Lose?]

Missing earnings would be something rare for the 215 year-old company. The Dow member has topped the street's consensus 19 of the last 20 quarterly checkups; so, we are out on a limb with the iEstimate.

However, we may not be that far off as a ton of new regulations for 2014 kicked in and require investments i.e. costs in the form of personnel and technology, not to mention all the fines JPM has faced.

In his letter to shareholders, Jamie Dimon, chief executive of JPMorgan Chase, wrote, "If you have to hold higher capital and higher liquidity and some of your costs are higher – all things being equal – your returns will obviously come down." He says the effects could substantially reduce performance and market returns for many banks.

Investors will want to know what the impact on JPM will be for 2014 and beyond.

On a more positive note, JPM upped its quarterly dividend for Q2 to $0.40 per share from $0.38 and authorized a share repurchase plan totaling $6.5 billion. The return of capital to shareholder could offset some of the negatives associated with the global regulatory environment.

Overall: JPMorgan Chase & Co. (NYSE:JPM) history suggests a bullish surprise; however, the iEstimate disagrees and recent estimates say something different. Either way, JPM's recent, post-EPS price-sensitivity shows remarkably little reaction to the quarterly profit review. In all likelihood, the tenor of Wall Street's reaction will be tied to the costs associated with complying with new regulations. Mr. Dimon has already said it could result in higher fees for customers, which usually don't go over too well – remember the ATM fee uproar? If JPM is unable to pass along higher costs to customers, then margins and the stock get hit, but that's probably a Q2/Q3 issue.

Voices: Greatest Generation's tax lessons

Just as classics, as Mark Twain said, are great books that people praise but don't read, members of the Greatest Generation are heroes who people praise but don't emulate – at least as far as debt and taxes go.

The federal debt, as a percentage of gross domestic product, hit an all-time high of 118.9% in 1946 because of government spending on World War II. It's now about 102% and projected to grow higher.

To address the debt, the Greatest Generation – those who grew up during the Great Depression and won World War II – did two things when they returned. They supported decreased federal spending, primarily defense, and higher taxes.

Reducing defense spending was, a function of the end of the war. Nevertheless, the Greatest Generation had less government than we do: No Department of Health and Human Services, no Housing and Urban Development, no departments of Transportation, Energy, Education, Veterans Affairs, Homeland Security.

And they paid more in taxes. The maximum tax rate in 1945 was 94% on taxable income over $200,000. Adjusted for inflation, that's $2.6 million. The top tax rate fell to 82.1% in 1948 but rose again to 91% in 1951 and stayed there through 1963.

By 1981, the debt had fallen to 31.7% of GDP – in part because the economy had grown an average 3.7% a year from 1951 through 1981 despite high tax rates. (It has grown at a 2.8% annual rate from 1981 through 2013.)

Members of the Greatest Generation also were willing to compromise. While no one likes higher taxes, they did so when national circumstances made it necessary, such as when President Johnson levied a 10% surtax to fund the Vietnam War. He also agreed, reluctantly, to a 10% reduction in discretionary spending.

By the time President George H.W. Bush agreed to higher taxes because he felt it was the right thing to do, given the nation's finances, he couldn't get Congress to agree on reducing spending. He signed the tax increase anyway, and paid for it with his job in 1992.

To! day, members of Congress willing to give up a something to get something for the greater good are rare. In part, that's the fault of the people who elect them.

The Greatest Generation also had a sense of shared sacrifice. America has fought two wars since 2000, and most of us haven't paid an extra dime in taxes for the wars or for the care of the small percentage of the population who did the fighting. Most Americans – particularly wealthy people who have benefited most from tax cuts – feel overtaxed, according to a Gallup poll released Monday.

Unfortunately, cutting government spending involves sacrifice, an unpleasant notion. The most popular suggestion for cutting spending is foreign aid, yet it accounts for just 1% of the federal budget.

Popular programs such as health care, income for the elderly (such as Social Security), and defense, account for 73% of the budget. All other government functions combined total $908 billion. Most likely, only a combination of cuts to the most popular programs and tax increases will bring the budget closer to balance.

The Greatest Generation isn't entirely blameless in our nation's fiscal woes. The government's involvement in income and health care for the elderly was largely their idea. Having lived through the Great Depression, the Greatest Generation realized that anyone could fall upon hard times.

And having lived through World War II, they knew that the world is a dangerous place, and that the cost of a large military is an enormous debt to the men and women who do the fighting, bleeding and dying. What we can learn from the Greatest Generation on Tax Day is that there are far worse things in the world than making compromises and sharing sacrifices.

Why Scientific Games' Investors Won the Lottery

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Scientific Games (NASDAQ: SGMS  ) jumped 10% in late trading today after signing an important customer.

So what: The company announced that it has signed a contract extension to provide lottery gaming and instant ticket services for the Oklahoma Lottery. This was actually disclosed earlier this year, but investors bid up shares leading up to the announcement and nearly five times the three-month average volume of shares traded hands today.  

5 Best Solar Stocks To Watch Right Now

Now what: This is definitely not a game changer for Scientific Games, and I'd still be worried about the company's continued losses and vast underperformance of expectations. Revenue and income from operations were both down in the first quarter of 2013, and this contract won't add to either going forward. I just don't see a reason to buy the stock today and won't consider buying until the company can prove it can make a long-term profit while growing revenue.

Interested in more info on Scientific Games? Add it to your watchlist by clicking here.

Double-Digit (or More) Profits in This Market Are About to Rocket

It's not often a new kid makes it onto the commodities block.

So I'm going to step beyond the realm of regular resources to discuss one that's burgeoning.

But like most new things that push existing boundaries, it's controversial.

Change can be disrupting... but it can also - in this case - be hugely profitable.

It's acquiring the marketplace qualities of long-traded commodities... one that has the opportunity to be its best performer for years to come.

You may have guessed I'm talking about cannabis.

And its controversial past is leaving a massive upside on the table to add double-digit (or more) gains to your 2014 portfolio now...

The Market Is Taking Shape and Stabilizing Profit Plays

We all know the Netherlands has decriminalized marijuana possession, allowing it to be sold in so-called "coffeeshops."

But April 1st brought important changes on the marijuana front in Uruguay. On that day, it became the first nation to allow the growing, sale, and consumption of pot, breaking totally new ground in the process.

Uruguayans of legal age can now purchase up to 1.4 ounces monthly from licensed pharmacies, and they will be monitored by a government database. Effectively, the country has legalized the entire process, from production to consumption, something no other nation has ever tried.

The Uruguayan government has done so in part to fight drug trafficking. Their hope is to gain the upper hand by regulating and taxing a market currently dominated by criminals.

The small nation of 3.3 million has evolved into a passage route for marijuana from Paraguay and cocaine from Bolivia. That has translated into a Uruguayan prison population where fully one-third of inmates are doing time for narcotics-related charges.

Enforcement and incarceration are both very expensive for governments.

But it's not just the cost of arresting, prosecuting, and jailing growers, dealers, and users that's motivating the legalization of pot.

At a time when government budgets are already overstretched, lawmakers are slowly recognizing that they're losing their so-called "war on drugs."

Pair that with medical benefits, and legalization is gaining traction in the U.S.

So far, 20 states plus the District of Columbia have legalized medical marijuana use with a doctor's recommendation. Of those, Colorado and Washington have gone a step further, allowing the use of marijuana for recreational purposes as well.

According to WebMD, the main use of medical marijuana is to treat pain typically caused by headaches, a disease like cancer, or even glaucoma or nerve pain.

And it appears those medical benefits can be significant, not to mention still massively underexplored.

Two Booming Markets in One

Of the nearly 500 compounds contained in cannabis, some 80 are used for scientific and medicinal purposes.

According to Agriconsultant, five of the most commonly used compounds are:

Tetrahydrocannabinol (THC): Psychoactive effects, but relieves mild pain, induces sleep, is antioxidant Cannabinol (CBN): May limit spread of cancer cells, reduces muscle spasms, fibromyalgia, and insomnia Cannabidiol (CBD): A primary compound for medical marijuana, proven to relieve convulsion, inflammation, anxiety, cough, congestion, and nausea and inhibits cancer cell growth Beta-Caryophyllene: Reduces inflammation Cannabigerol: Relieves intraocular eye pressure, used in glaucoma treatment

There are two main marijuana plant species, sativa and indica. Sativa has more stimulative effects, lifting appetite and energy, while indica tends to relax muscles, lessen pain, and encourage sleep.

In order to gain the benefits of both strains, growers have created hybrid plants. Most of the medical marijuana today is sourced from hybrid indica.

As for consumption for medical purposes, smokeless vaporizers that are mostly odor-free are becoming more popular than smoking. And the benefits are considerable; 95% of cannabinoids are used, the medicinal effects happen within seconds, few if any delicate cannabinoids are destroyed, and toxins are minimal.

In Canada, for example, medical marijuana is used to treat severe arthritis, spinal cord injury, aids/HIV infection, multiple sclerosis, spinal cord disease, cancer, and epilepsy.

Leverage the $100+ Billion Projected Growth Opportunity

Some estimates call for total cannabis sales (medical and recreational combined) in the U.S. market to eventually reach as much as $120 billion annually, perhaps rivaling alcohol and tobacco, which had combined sales of $263 billion in 2008.

With increased acceptance and legalization of marijuana for both recreational and medical purposes, this is one resource whose production and use are sure to grow exponentially, perhaps for decades.

Which, of course, has left no shortage of penny stocks jumping into the fray...

The Marijuana Index was set up to track 36 cannabis-related companies listed on the various U.S. exchanges. To say the index has been volatile would be the understatement of the year.

The Index's 52-week low was nearly a year ago at $0.66, but saw a blistering 10,500% run up to nearly $70 in late February, for a performance reminiscent of Bitcoin. It has cooled off considerably since then, giving back more than 72%, to trade near $19 more recently.

My colleague Michael Robinson, Money Morning's Tech Specialist, recently highlighted GW Pharmaceuticals PLC- ADR (Nasdaq: GWPH), and it's my top choice within this sector.
With a $840 million market cap, GWPH is in its own cannabis class.

The company is developing a portfolio of cannabinoid medicines. Its lead product, Sativex, is approved to treat spasticity from multiple sclerosis in more than 20 countries, and it boasts a pipeline of cannabinoid drugs in development.

MediSwipe Inc. (OTCMKTS: MWIP) is an interesting but much smaller play. The company mainly offers secure transaction processing and security solutions for the medical and healthcare industries. The interesting angle is the company's turnkey solutions for electronic transaction processing in the medical marijuana sector, and cloud-based patient data management. Furthermore, they provide equipment leasing and credit facilities for large-scale grow and retail operations and even sublease parcels of land in Colorado to fully licensed and compliant growers.

An intriguing but very high-risk play is a company called Republic of Texas Brands Inc. (OTCMKTS: RTXBQ). Use extreme caution, as it's actually looking to emerge from a Chapter 11 reorganization soon. Most attractive is the company's Chillo Hemp energy drink, sales of which could help achieve that goal. A cannabis-based tea drink is also in the works. It could get interesting, as the company has partnered with Amazon.com to sell Chillo.

Marijuana has long been associated with so-called "potheads" and shunned as an illegal drug.
But I'd like to leave you with a thought-provoking quote from Dr. Sanjay Gupta, CNN's chief medical correspondent and neurosurgeon:

"It doesn't have a high potential for abuse, and there are very legitimate medical applications. In fact, sometimes marijuana is the only thing that works. We have been terribly and systematically misled for nearly 70 years in the United States, and I apologize for my own role in that."

As the wider public comes around to similar conclusions, this is one commodity that's sure to flourish.

Microsoft Seizes Control of the Computer Industry

On this day in economic and business history...

Microsoft (NASDAQ: MSFT  ) took its biggest step toward consolidating the fast-growing PC industry under its operating system on May 22, 1990, when it released Windows 3.0 to the public. It had been five years since Microsoft's first Windows release, which introduced a graphical user interface to compete with Apple's (NASDAQ: AAPL  ) Macintosh systems. However, earlier versions of Windows were barely used -- Microsoft itself didn't introduce Excel on the platform until 1987, and Word wasn't available on Windows until version 3.0 was nearly finished. That finally began to change with the launch of 3.0, especially once Windows 3.1 hit the market two years later.

Key to 3.0's success was Microsoft's ability to convince many early PC-makers to pre-install the operating system on machines before they reached consumers. Although IBM (NYSE: IBM  ) and Compaq (now part of Hewlett-Packard) refused to commit to pre-installs -- IBM was still trying to push its 3-year-old OS/2 (an early Windows competitor), and Compaq's general policy opposed all pre-installs at the time -- Microsoft still managed to assemble a lineup of 30 computer makers, virtually none of which still make computers today, to include Windows 3.0 on machines out of the box. The $150 operating system sold 100,000 copies in its first two weeks on the market, and 4 million PCs were running Windows 3.0 by the end of its first year on the market.

Windows 3.0 didn't kill off the Mac -- Apple's market share actually grew slightly during the early '90s as second-tier systems like the Amiga and the Atari died off -- but it nevertheless closed the door on any real competition for the IBM-compatible PC in homes and offices. Windows 3.1 would sell at a brisker pace, with 3 million copies moved in its first three months, and Windows 95 provided all the fuel necessary to send Microsoft into the stratosphere: 40 million copies sold in its first year alone.

The difference between Microsoft's stock and Apple's over the remainder of the turbocharged 1990s is telling: From the launch of Windows 3.0 to the end of the decade, Microsoft shareholders enjoyed a return of about 5,800%, while Apple shareholders saw only 160% price growth. This underwhelming performance failed to beat the Dow Jones Industrial Average (DJINDICES: ^DJI  ) , which gained 300% over the same time period, and which would induct Microsoft to its ranks right at the close of the decade -- one of its worst decisions, for the software maker would depress the index for more than a decade afterward. Windows 3.0's success also nearly undid IBM by rendering OS/2 irrelevant, resulting in the largest loss in corporate American history by 1992.

Who owns flight?
Behind many great inventions is often a fierce patent war. Few were so consequential to American enterprise as that waged by the Wright brothers, who had filed a patent on their flying machine months before making the first successful flight in Kitty Hawk. When it was granted on May 22, 1906, it became a cudgel the brothers would use against all competitors. Wilbur Wright opined several years later: "It is our view that morally the world owes its almost universal use of our system of lateral control entirely to us. It is also our opinion that legally it owes it to us." It's no wonder that they so fiercely defended the patent, if they believed in the originality of their creation with such religious fervor.

The Wright aircraft patent war dragged on for years, restricting development of new aviation innovations before World War I. The Wrights were relentless in their pursuit of Glenn Curtiss, another early aviation pioneer. The Curtiss company would avoid legal and financial repercussions for years through legal delays, stalling tactics, or outright refusal to pay licensing fees, but few other early aviation tinkerers could amass the resources to fend off a Wright legal assault. By the eve of America's entry into World War I, the Wrights and Curtiss had a tight patent chokehold on the domestic aviation industry, which would have prevented the construction of a useful American air force if not for government intervention.

In 1917, the two major aircraft manufacturers were forced into a patent pool that would offer modest licensing terms for prospective upstarts. By this point, the Wrights were out of the industry. Wilbur had died years earlier, and Orville had sold his stake to outside investors, leaving Curtiss with an easier path to the dominance previously denied him. The Wrights' reputation was badly damaged, and competition came to the industry despite their efforts. Years later, on the eve of the Great Depression, Curtiss gained a final measure of victory when his company and the Wrights' namesake business merged to become Curtiss-Wright (NYSE: CW  ) , which was at the time the largest aviation company in the United States. This company was also briefly a part of the Dow (from 1928 to 1930), making it the first aviation component in the index's history.

More on Microsoft
It's been a frustrating path for Microsoft investors, who have watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, the company is looking to make a splash in this booming market. In a new premium report on Microsoft, a Motley Fool analyst explains that while the opportunity is huge, so are the challenges. The report includes regular updates as key events occur, so be sure to claim a copy of this report now by clicking here.

Micron Technology, Inc. (MU) Q2 Earnings Preview: A Big Surprise Coming?

Micron Technology, Inc. (NASDAQ:MU) will issue the company's financial results for its fiscal 2014 second quarter on Thursday, April 3, 2014, after the market close. Management will hold a conference call at 4:30 p.m. eastern time. The call will focus on the company's results for the second quarter and year-to-date as well as future expectations.

Wall Street anticipates that the memory-chip maker will earn $0.76 per share for the quarter, which is $1.04 more than last year's loss of $0.28 per share. iStock expects MU  to top Wall Street's consensus number. The iEstimate is $0.81, a bullish surprise of a nickel.

[Related -Micron Technology, Inc. (MU) Should Record Higher Margins, Profitability In 2014]

Sales, like earnings, are expected to explode, rising 91.8% year-over-year. Micron's consensus revenue estimate for Q2 is $3.99 billion, up from last year's $2.08 billion. That's impressive with a capital IMPRESSIVE.

Micron is a global manufacturer and marketer of semiconductor devices, principally NAND Flash, DRAM and NOR Flash memory, as well as other memory technologies, packaging solutions and semiconductor systems for use in computing, consumer, networking, automotive, industrial, embedded and mobile products. In addition, the Company manufactures semiconductor components for CMOS images sensors and other semiconductor products. The Company operates in four segments: NAND Solutions Group (NSG), DRAM Solutions Group (DSG), Wireless Solutions Group (WSG) and Embedded Solutions Group (ESG).

[Related -Micron Technology, Inc. (NASDAQ:MU) Q1 Earnings Preview: High Inventory and Low Prices = Uh Oh?]

We aren't alone in expecting a bullish earnings surprise from MU. Jefferies analysts, Sundeep Bajikar and Mark Lipacis told interested investors, "We expect price stability in DRAM to continue to be a source of upside surprises. In NAND, we believe a combination of factors including SDN, is creating a large Cloud opportunity for Enterprise SSD, from which Micron is well positioned to benefit. We expect stable earnings to drive higher valuation."

Now, exceeding the consensus outlook has been a bit of a rarity of Micron. The tech company has produced just three quarters of better than expected EPS in the last 13 quarterly checkups. Two of the three saw the stock climb 11.11% and 15.48% (last quarter), as a result. Meanwhile, shares gave up -1.56 for the third.

If the first quarter is any indication, then MU's margins could expand. Revenue was up 120.39% year-over-year  (YOY) in Q1, but cost of goods sold grew at a much slower 70.75%; selling, general and administrative at an ever slow pace of 47.9%; and research and development at 42.86%. If Q2's income statement looks like the first quarter's, fat margins are coming.

What absolutely remarkable is inventory was down 7.17% YOY, despite triple digit revenue growth. Normally, the relationship means the company; MU in this case, has strong pricing power, which should be another plus for the bottom line.

Overall: Pricing power, plus rising sales, plus costs shrinking as a parentage of sales equals a dominating quarter, which is what we expect from Micron Technology, Inc. (NASDAQ:MU).  If history holds, shareholders could be in for an enjoyable Friday of gains from the semiconductor. 

Top 10 Building Product Stocks For 2014

Since the beginning of the year, fuel cell makers Plug Power Inc. (NASDAQ: PLUG) and FuelCell Energy Inc. (NASDAQ: FCEL) have posted share price gains of around 289% and 76%, respectively, with most of the spike coming since the middle of February. A year ago, Plug Power stock was trading at $0.25 on its way down to $0.15. The stock closed Monday night at $5.69, after peaking at $11.72 on March 10.

The story is roughly the same for FuelCell Energy. Shares traded at $0.97 a year ago and are up 150% since then, closing last night at $2.49, after peaking at $4.74 on March 10.

What is a fair value for these two hot stocks? We start with the belief that these stocks are (probably) worth somewhere between their 52-week lows and their 52-week highs. As earnings are still elusive, or will be low for the sake of growth, we’ll use revenue as a guidepost.

Plug Power posted 2013 revenues of $26.6 million and is forecast by Thomson Reuters to post sales of $65.0 million in 2014 and $116.3 million in 2015. Note that the consensus estimate is based on only two analysts’ forecasts. Is it conceivable that Plug Power’s 2014 revenues will be 144% higher than 2013 revenues — and that 2015 revenues will rise another 79%? That is what the consensus estimates say, so that is what we’ll use, but a word to the wise here.

Top 10 Building Product Stocks For 2014: PetroLogistics LP (PDH)

PetroLogistics LP owns and operates propane dehydrogenation (PDH) facility. The Company is located in the vicinity of the Houston Ship Channel. As of April 23, 2012, the Company had an annual production capacity of approximately 1.45 billion pounds of propylene. Its PDH facility uses a CATOFIN dehydrogenation technology pursuant to a fully-paid license from CB&I Lummus. It derives its sales from three different sources: propylene sales, hydrogen sales, and mixed stream of butane and butylenes (C4 mix stream) and heavier hydrocarbons (C5+ stream) sales.

Contracted Propylene Sales

The Company has propylene sales contracts with The Dow Chemical Company (Dow), Total Petrochemicals USA, Inc. (Total), and INEOS Olefins and Polymers USA (INEOS), each of which use the propylene it supplies in the acrylic acid, polypropylene and acrylonitrile plants. Effective January 1, 2012, it added BASF Corporation (BASF) and LyondellBasell Industries N.V. (LyondellBasell) as additional contracted customers. It delivers propylene to these customers through its integrated pipeline system, which connects its facility to the Dow and Total plants and the LyondellBasell system, and through interconnected third-party pipelines, which connect its facility to INEOS and BASF and to other potential propylene customers.

Spot-Market Propylene Sales

Through the Company�� integrated pipeline system, the Company accesses other consumers of propylene, which it is able to supply on a spot basis with its excess production capacity. It manages its contract and spot portfolio.

Hydrogen Gas Sales

As part of the PDH process, the Company produces commercial quantities of hydrogen. Hydrogen is consumed in refinery processes, including fuel desulphurization.

C4 Mix/C5+ Streams Sales

The Company produces commercial quantities of C4 mix/C5+ streams. It sells the C4 mix stream to specialty chemical consumers or refiners and these customers tran! sport the purchased volumes from its facility by truck. The C5+ stream, which is heavy in aromatics, is transported by its pipeline to a Kinder Morgan terminal, and then sold to Texas Aromatics for use in the chemical or gasoline markets.

The Company competes with Enterprise, Chevron Phillips, ExxonMobil Chemical, Shell Chemical, Flint Hills and the Williams Companies.

Advisors' Opinion:

• [By Seth Jayson]

  Calling all cash flows
  When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on PetroLogistics (NYSE: PDH  ) , whose recent revenue and earnings are plotted below.

Top 10 Building Product Stocks For 2014: FirstEnergy Corporation(FE)

Firstenergy Corp. operates as a diversified energy company. The company, through its subsidiaries and affiliates, involves in the generation, transmission, and distribution of electricity, as well as energy management and other energy-related services. It serves approximately 6 million customers within 67,000 square miles through 10 utility operating companies in Ohio, Pennsylvania, New Jersey, West Virginia and Maryland. The company was founded in 1996 and is headquartered in Akron, Ohio.

Advisors' Opinion:

• [By Justin Loiseau]

  As coal prices regain their competitive edge, investors should watch TECO Energy (NYSE: TE  ) , Great Plains Energy (NYSE: GXP  ) , and FirstEnergy (NYSE: FE  ) .

• [By Justin Loiseau]

  Cutting out coal
  FirstEnergy (NYSE: FE  ) announced this month that it plans to shutter two coal-fired power plants in Pennsylvania by October. Coal plants are no lightweights when it comes to capacity, and the closure will knock 2,080 MW (around 10%) off FirstEnergy's total generation capacity.

• [By Lu Wang]

  Exelon tumbled 9.6 percent to $31.34. The largest U.S. operator of nuclear reactors was cut to hold from buy at Deutsche Bank AG. FirstEnergy (FE) Corp. slid 8.5 percent to $39.01. The utility company was cut to neutral from outperform at Credit Suisse Group AG.

5 Best Rising Stocks To Own For 2014: Sarepta Therapeutics Inc (SRPT)

Sarepta Therapeutics Inc., formerly AVI BioPharma, Inc., incorporated on July 22, 1980, biopharmaceutical company focused on the discovery and development of ribonucleic acid (RNA)-based therapeutics for the treatment of rare and infectious diseases. The Company�� product candidates include Eteplirsen, AVI-6002, AVI-6003, and AVI-7100. As of December 31, 2011, the Company primarily focused on advancing the development of its Duchenne muscular dystrophy drug candidates, including its lead product candidate, eteplirsen, which is in a Phase IIb trial. The Company is also focused on developing therapeutics for the treatment of infectious diseases, including its lead infectious disease programs aimed at the development of drug candidates for the Ebola and Marburg hemorrhagic fever viruses. The Company's program focuses on the development of disease-modifying therapeutic candidates for Duchenne muscular dystrophy (DMD). The Company initiated a Phase IIb trial for eteplirsen in August 2011 with an objective of initiating a pivotal trial subsequent to 2011.

The Company is also leveraging the capabilities of its RNA-based technology platforms to develop therapeutics for the treatment of infectious diseases. The Company's RNA-based drug programs are clinically evaluated for the treatment of DMD and have also demonstrated anti-viral activity in infectious diseases such as Ebola, Marburg and H1N1 influenza in certain animal models. The Company's lead product candidates are at various stages of development.

Duchenne Muscular Dystrophy Program

The Company's lead program is designed to address specific gene mutations that result in DMD by forcing the genetic machinery to skip over an adjacent contiguous piece of RNA and, thus, restore the ability of the cell to express a new, truncated but functional, dystrophin protein.

Eteplirsen is an antisense PMO-based therapeutic in clinical development for the treatment of individuals with DMD who have an error in the gene codi! ng for dystrophin that can be treated by skipping exon 51. Eteplirsen targets the frequent series of mutations that cause DMD. Eteplirsen has been granted orphan drug designation in the United States and European Union. In addition to the Company's lead product candidate, eteplirsen, the Company is actively pursues development of a product candidate that skips exon 45 through an IND-enabling collaboration.

Anti-Viral Programs

The Company is implementing its RNA-based technology platforms in its anti-viral programs for the development of therapeutics to treat viruses, such as Ebola, Marburg and influenza. The Company's arrangement with DoD supporting the development of the Company's Ebola and Marburg virus drug candidates provides funding for all clinical and licensure activities necessary to obtain approval of a New Drug Application (NDA), by the United States Food and Drug Administration (FDA), if DoD exercises all of its options under the arrangement. During the year ended December 31, 2011, the Company paused its clinical development efforts on AVI-7100 and is exploring funding opportunities or partnerships with DHHS and industry collaborators to advance its development.

The Company's anti-viral therapeutic programs use the Company's translation suppression technology and applies its PMOplus chemistry backbone, an advanced generation of its base PMO chemistry backbone that selectively introduces positive backbone charges to improve selective interaction between the drug and its target. The Company's translation suppressing technology is based on Translation Suppressing Oligomers (TSOs), which are PMO-based compounds that stop or suppress the translation of a specific protein by binding to their specific target sequence in mRNA.

The Company is pursuing development and regulatory approval of its Ebola and Marburg hemorrhagic fever virus product candidates under the FDA's Animal Rule. The Company's lead product candidate against the Ebola virus infec! tion is A! VI-6002. For Marburg virus infection, the Company's lead product candidate has been AVI-6003. In February 2012, the Company announced that the Company received approval from the FDA to remove one of the two oligomers composing AVI-6003 and proceed with a single oligomer approach, AVI-7288, given that efficacy in non-human primates has been demonstrated to be attributable to this single oligomer. The Company is exploring the feasibility of alternate routes of administration of its Ebola and Marburg drug candidates, and at DoD's invitation, the Company is developing a proposal to be submitted for a study to demonstrates feasibility of the intramuscular route.

AVI-6002, which is a combination of AVI-7537 and AVI-7539, is designed for post-exposure prophylaxis after documented or suspected exposure to the Ebola virus. The Company is evaluating the feasibility of developing AVI-7537 as a single agent for the post-exposure prophylaxis after documented or suspected exposure to Ebola virus. AVI-6003, which is a combination of AVI-7287 and AVI-7288, is designed for post-exposure prophylaxis after documented or suspected exposure to Marburg virus. In February 2012, the Company announced that the Company received approval from the FDA to proceed with AVI-7288 as a single agent against Marburg virus infection. The Company intends to proceed with dosing AVI-7288 in the Phase I multiple ascending dose studies and in non-human primate studies.

Influenza Program

The Company's anti-viral therapeutic programs are also focused on the development of the Company's product candidates designed to treat pandemic influenza viruses. AVI-7100 is the Company's lead product candidate for the treatment of influenza and employs its PMOplus technology. In June 2011, the Company initiated dosing of AVI-7100 through intravenous infusion in single-ascending doses in up to 48 healthy adult volunteers. As of December 31, 2011, the Company paused its clinical development efforts on AVI-7100 and are exp! loring fu! nding opportunities or partnerships to advance its development.

The Company has developed three new phosphorodiamidate-linked morpholino oligomers (PMO)-based chemistry platforms in addition to its original PMO-based technology. The Company's PMO-based molecules are designed to sterically block the access of cellular machinery to pre-mRNA and mRNA without degrading the RNA. Through this selective targeting, two distinct biologic mechanisms of action can be initiated: modulation of pre-mRNA splicing and inhibition of mRNA translation.

The Company competes with GlaxoSmithKline plc, Toyama Chemical, Alnylam Pharmaceuticals, Inc., Tekmira Pharmaceuticals Corp., Isis Pharmaceuticals, Inc., Prosensa, and Santaris Pharma A/S.

Advisors' Opinion:

• [By MONEYMORNING.COM]

  Sarepta Therapeutics Inc. (Nasdaq: SRPT)is developing a drug for Duchenne muscular dystrophy (remember all those Jerry Lewis Telethons?). The CDC estimates the disease affects about one out of every 5,600 to 7,700 males age 5 to 24 in the United States. By age 24, about 9 out of 10 of the 58% still alive at age 24 are wheelchair-bound. Not a pretty picture.

Top 10 Building Product Stocks For 2014: Coach Inc (COH)

Coach, Inc. (Coach), incorporated in June 2000, is a marketer of fine accessories and gifts for women and men. Coach�� product offerings include women�� and men�� bag, accessories, business cases, footwear, wearables, jewelry, sunwear, travel bags, watches and fragrance. The Company operates in two segments: Direct-to-Consumer and Indirect. Accessories include women�� and men�� small leather goods, novelty accessories and women�� and men�� belts. Women�� small leather goods, which coordinate with its handbags, include money pieces, wristlets, and cosmetic cases. Men�� small leather goods consist primarily of wallets and card cases. Novelty accessories include time management and electronic accessories. Key rings and charms are also included in this category. Men�� handbag collections include business cases, computer bags, messenger-style bags and totes. Footwear is distributed through select Coach retail stores, coach.com and about 1,000 United States department stores. Wearables category is comprised of jackets, sweaters, gloves, hats and scarves, including both cold weather and fashion.

The Company�� Jewelry category is comprised of bangle bracelets, necklaces, rings and earrings offered in both sterling silver and non-precious metals. Marchon Eyewear, Inc. (Marchon) is the Coach�� eyewear licensee. Coach sunglasses are sold in Coach retail stores and coach.com, department stores, select sunglass retailers and optical retailers in major markets. The travel collections are comprised of luggage and related accessories, such as travel kits and valet trays. Movado Group, Inc. (Movado) is the Company�� watch licensee, which develops a collection of watches.

Estee Lauder Companies Inc. (Estee Lauder), through its subsidiary, Aramis Inc., is Coach�� fragrance licensee. Fragrance is distributed through Coach retail stores, coach.com and about 4,000 United States department stores and 500 international locations. Coach offers four women�� fragrance col! lections and one men�� fragrance. The women�� fragrance collections include eau de perfume spray, eau de toilette spray, purse spray, body lotion and body splashes.

Direct-to-Consumer Segment

The Direct-to-Consumer segment consists of channels that provide the Company with immediate, controlled access to consumers: Coach-operated stores in North America; Japan; Hong Kong, Macau, and mainland China, Taiwan, Singapore and the Internet. This segment represented approximately 89% of Coach�� total net sales during the fiscal year ended June 30, 2012 (fiscal 2012), with North American stores and the Internet, Coach Japan and Coach China contributing approximately 63%, 18% and 6% of total net sales, respectively. Coach stores are located in regional shopping centers and metropolitan areas throughout the United States and Canada. The retail stores carry an assortment of products. Its stores are located in locations, such as New York, Chicago, San Francisco and Toronto.

Coach�� factory stores serve as a means to sell manufactured-for-factory-store product, including factory exclusives, as well as discontinued and irregular inventory outside the retail channel. These stores operate under the Coach Factory name. Coach�� factory store design, visual presentations and customer service levels support. Coach views its Website as a key communications vehicle for the brand to promote traffic in Coach retail stores and department store locations. Its online store provides a showcase environment where consumers can browse through a selected offering of the latest styles and colors.

Coach Japan operates department store shop-in-shop locations and freestanding flagship, retail and factory stores, as well as an e-commerce Website. Flagship stores offer an assortment of Coach products that are located in select shopping districts throughout Japan. Coach China operates department store shop-in-shop locations, as well as freestanding flagship, retail and factory sto! res. Flag! ship stores, which offer an assortment of Coach products, are located in select shopping districts throughout Hong Kong and mainland China. Coach Singapore and Taiwan operate department store shop-in-shop locations as well as freestanding flagship, retail and factory stores. Flagship stores, which offer a range of assortment of Coach products, are located in select shopping districts in Singapore and Taiwan.

The Reed Krakoff brand represents New American luxury primarily for handbags, accessories and ready-to-wear. Reed Krakoff operates department store shop-in-shop locations, freestanding flagship stores, as well as an e-commerce Website at reedkrakoff.com. Flagship stores, which offer an assortment of Reed Krakoff products, are located in select shopping districts in the United States and Japan.

Indirect Segment

The Indirect segment represented approximately 11% of total net sales in fiscal 2012, with United States Wholesale and Coach International representing approximately 6% and 4% of total net sales, respectively. The Indirect segment also includes royalties earned on licensed product. U.S. Wholesale channel offers access to Coach products to consumers who prefer shopping at department stores. Coach products are also available on macys.com, dillards.com, bloomingdales.com, lordandtaylor.com, belk.com, vonmaur.com and nordstrom.com. Coach�� products are sold in approximately 990 wholesale locations in the United States and Canada. Its U.S. wholesale customers are Macy�� (including Bloomingdale��), Dillard��, Nordstrom, Lord & Taylor, Carson�� and Saks Fifth Avenue.

Coach International channel represents sales to international wholesale distributors and authorized retailers. Coach has developed relationships with a select group of distributors who sell Coach products through department stores and freestanding retail locations in over 20 countries. Coach�� network of international distributors serves various markets: South Korea, US & T! erritorie! s, Taiwan, Malaysia, Hong Kong, Mexico, Saudi Arabia, Thailand, Japan, Australia, Singapore, UAE, France, China, Macau, Indonesia, Kuwait, Bahamas, Aruba, Vietnam, New Zealand, Bahrain, India and Brazil.

Advisors' Opinion:

• [By George Acs]

  One of last week's earnings related selections played true to form and dropped decidedly after earnings were released. Coach (COH) rarely disappoints in its ability to display significant moves in either direction after earnings and in this case, the disappointment was just shy of the $52.50 strike price at which I had sold weekly puts. However, with the week now done and at its new lower price, I think Coach represents a good entry point for new shares. With its newest competitor, at least in the hearts of stock investors, Michael Kors (KORS) reporting earnings this week, there is a chance that Coach may drop if Kors reports better than expected numbers, as the expectation will be that it had done so at Coach's expense. For that reason, I might consider waiting until Tuesday morning before deciding whether to add Coach to the portfolio.

Top 10 Building Product Stocks For 2014: CIENA Corporation(CIEN)

Ciena Corporation provides equipment, software, and service solutions that support the transport, switching, aggregation, and management of voice, video, and data traffic on communications networks worldwide. Its product portfolio consists of packet-optical transport that includes optical transport solutions to increase network capacity and enable delivery of a broader mix of high-bandwidth services; and packet-optical switching, which comprise optical switching platforms incorporating multiservice and multi-protocol switching systems that enable automated optical infrastructures for the delivery of various enterprise and consumer-oriented network services. The company also offers carrier Ethernet solutions, including service delivery switches and service aggregation switches to support the access and aggregation tiers of communications networks, as well as to support wireless backhaul infrastructures and business data services; and software solutions to track individual s ervices across multiple product suites, facilitating planned network maintenance, outage detection, and identification of customers or services affected by network troubles. In addition, Ciena Corporation provides consulting and support services, such as project management, deployment, maintenance support, consulting, and training services, as well as network analysis, planning, design, optimization, and tuning. Its packet-optical transport, packet-optical switching, and carrier Ethernet solutions products are used individually or as part of an integrated solution in communications networks operated by communications service providers, cable operators, governments, enterprises, and other network operators. The company sells its communications networking solutions directly, as well as through strategic channel relationships. Ciena Corporation was founded in 1992 and is headquartered in Linthicum, Maryland.

Advisors' Opinion:

• [By Lauren Pollock]

  Among the companies with shares expected to actively trade in Thursday’s session are Lululemon Athletica Inc.(LULU), Ciena Corp.(CIEN) and Facebook Inc.(FB)

Top 10 Building Product Stocks For 2014: Northern Dynasty Minerals Ltd (NAK)

Northern Dynasty Minerals Ltd. (Northern Dynasty) is engaged in the exploration of mineral properties. The Company holds 650 square miles of mineral claims in southwest Alaska, United States. As of December 31, 2011, the Company owned 50% interest in the Pebble Limited Partnership (the Pebble Partnership). The Pebble Partnership owns the Pebble Copper-Gold-Molybdenum Project (the Pebble Project). Its principal mineral property interest is located in Alaska, United States. The Pebble property (Pebble) is located in southwest Alaska, 19 miles (30 kilometers) from the villages of Iliamna and Newhalen, and approximately 200 miles (320 kilometers) southwest of the city of Anchorage. The Company�� wholly owned subsidiaries include 3537137 Canada Inc., Northern Dynasty Partnership and U5 Resources Inc. In December 2013, the Company announced that it has completed the re-acquired 100% ownership and control of the Pebble Partnership. Advisors' Opinion:

• [By Paul Ausick]

  Stocks on the move: Boise Inc. (NYSE: BZ) is up 26% at $12.55 following the company�� acquisition by Packaging Corporation of America Inc. (NYSE: PKG) for $12.55 a share ($1.28 billion). Omeros Corp. (NASDAQ: OMER) is up 68.2% at $8.56 following an analyst upgrade. Northern Dynasty Minerals Ltd. (NYSEArca: NAK) is down 33.3% at $1.48 following an announcement from Anglo American plc that it was withdrawing from a massive copper mining project in Alaska.

• [By Ben Kramer-Miller]

  This article is about Northern Dynasty Minerals (NAK). Northern Dynasty Minerals has a market capitalization of $190 million. It is a 50% owner of the Pebble Mine in Alaska.

• [By Rich Duprey]

  Canadian mineral exploration and development company Northern Dynasty Minerals (NYSEMKT: NAK  ) has approved an $80 million budget for 2013 to advance its Pebble project in Alaska.

Top 10 Building Product Stocks For 2014: Redrow PLC (RDW)

Redrow PLC is a United Kingdom-based company engaged in residential development, which includes mixed use development. The Company�� operations are primarily focused on house building. Its completed projects include Signature, In the City/Regeneration and Debut. The Company's land holdings consist of both a current and forward land bank. As of June 30, 2010, the current land bank consisted of 11,600 plots owned with planning and 1,570 contracted plots, and its forward lank bank stood at around 22,000 plots. Its subsidiaries include Redrow Homes (Scotland) Ltd, Redrow Homes (Yorkshire) Ltd, Redrow Homes (Lancashire) Ltd, Redrow plc & Redrow Homes (NW) Ltd, Redrow Homes (Midlands) Ltd, Redrow Homes (South Midlands) Ltd, Redrow Homes (South West) Ltd, Redrow Homes (South Wales) Ltd and Redrow Homes (Eastern) Ltd. Advisors' Opinion:

• [By Namitha Jagadeesh]

  Redrow Plc (RDW) rallied 3.2 percent to 245.6 pence as Deutsche Bank AG increased its 12-month share-price estimate and profit forecasts for 2013 and 2014. The U.K. builder yesterday jumped the most in five months after saying pretax profit for the year ended June will beat analysts��estimates.

Top 10 Building Product Stocks For 2014: Kayne Anderson Energy Total Return Fund Inc (KYE)

Kayne Anderson Energy Total Return Fund, Inc. (the Fund) is a non-diversified closed-end investment company. The Fund�� investment objective is to obtain a high total return with an emphasis on current income. The Fund seeks to achieve this objective by investing primarily in securities of companies engaged in the energy industry, principally including publicly-traded energy-related master limited partnerships and limited liability companies taxed as partnerships (MLPs), MLP affiliates, energy-related United States and Canadian royalty trusts and income trusts and other companies that derive at least 50% of their revenues from operating assets used in, or providing energy-related services for, the exploration, development, production, gathering, transportation, processing, storing, refining, distribution, mining or marketing of natural gas, natural gas liquids (including propane), crude oil, refined petroleum products or coal.

Effective December 31, 2006, Kayne Anderson assigned the Investment Management Agreement to its subsidiary, KA Fund Advisors, LLC (the Adviser). The Fund focuses on investing at least 80% of the aggregate of its net assets and borrowings (total assets) in securities of Energy Companies. The Fund invests in equity securities, such as common stocks, preferred stocks, convertible securities, warrants, depository receipts, and equity interests in MLPs, MLP affiliates, royalty trusts and other Energy Companies.

Advisors' Opinion:

• [By Robert Rapier]

  We got several questions about Kayne Anderson Energy Total Return Fund (NYSE: KYE) during the chat. The main advantage of closed-end MLP funds is the diversification they provide, along with the convenience of a 1099 miscellaneous income tax form instead of having to deal with K-1 forms from each individual MLP. This makes a closed-end MLP fund a more attractive option for an IRA.

Top 10 Building Product Stocks For 2014: TESARO Inc (TSRO)

TESARO, Inc. (TESARO), incorporated in March 2010, is a development-stage, oncology-focused biopharmaceutical company for cancer patients. The Company focuses on rolapitant and TSR-011 product. The Company�� marketed products and product candidates in development treat cancer through non-specific damage to cellular components or alter cell metabolism or internal repair mechanisms to the demise of cancer cells.

Rolapitant

Rolapitant is a potent and long-acting neurokinin-1, or NK-1, receptor antagonist is in Phase III clinical trials for the prevention of chemotherapy induced nausea and vomiting (CINV). It is in Phase III clinical trials. CINV, if not prevented by prophylaxis, has the potential to afflict up to 90% or more of cancer patients undergoing chemotherapy, depending upon the type of chemotherapy administered the dosing schedule of the chemotherapy, and the patients' age and gender, among other predisposing factors. Prolonged nausea and vomiting may result in unwanted weight loss, dehydration and malnutrition, as well as hospitalization. The Company has in-licensed the rights to rolapitant from OPKO Health, Inc.

TSR-011

TSR-011 is an orally available ALK inhibitor in preclinical development. ALK is known to be involved in certain types of cancers, including subsets of NSCLC, neuroblastoma and lymphoma. For patients in these subsets, the ALK gene is fused to an activating partner or contains point mutations, resulting in constitutive activation of ALK and the growth of cancer cells and tumor development. Inhibition of ALK in these cancer cells results in cell death and tumor growth inhibition or regression. In August 2011, the United States Food and Drug Administration approved the first ALK inhibitor, developed by Pfizer Inc., Xalkori (crizotinib), which was approved for the treatment of patients with locally advanced or metastatic NSCLC that are ALK positive.

The Company competes with GlaxoSmithKline plc, Roche Holding Ltd! . and Sanofi S.A.

Advisors' Opinion:

• [By Brian Orelli]

  Tesaro (NASDAQ: TSRO  ) is also up today after announcing that it established a partnership with clinicians to run the phase 3 development of its PARP inhibitor, niraparib. The trial will enroll about 300 breast cancer patients with BRCA mutations, comparing niraparib to investigators' choice of other breast cancer treatments.

• [By Keith Speights]

  Positive response
  Clovis wasn't the only company to bring good news about an ovarian cancer drug to ASCO. TESARO� (NASDAQ: TSRO  ) announced phase 1 results for�niraparib. Shares of the biotech jumped 16% for the week.

Top 10 Building Product Stocks For 2014: Baoye Group Co Ltd (BKG)

Baoye Group Company Limited is engaged in the provision of construction service, manufacture and distribution of building materials and development and sale of properties. The Company three segments: construction, which includes provision of construction services; property development, which includes development and sale of properties, and building materials, which includes manufacture and distribution of building materials. Its subsidiaries include Zhejiang Baoye Construction Group Co., Ltd., Zhejiang Baoye Curtain Wall Decoration Co., Ltd., Zhejiang Baoye Infrastructure Construction Co., Ltd., Zhejiang Guangyi Construction and Decoration Co., Ltd., Zhejiang Baoye Real Estate Group Co., Ltd., Shaoxing Baoye Four Seasons Garden Real Estate Co., Ltd., Zhejiang Baoye Building Materials Industrialisation Co., Ltd., Zhejiang Baoye Steel Structure Co., Ltd. and others. During the year ended 31 December 2011, the Company acquired three parcels of new land in Wuhan, Shanghai, and Henan. Advisors' Opinion:

• [By Inyoung Hwang]

  Berkeley Group Holdings Plc (BKG) surged 8.3 percent after saying first-half profit rose 22 percent. London Stock Exchange Group Plc (LSE) climbed 2.4 percent after Bank of America Corp.�� Merrill Lynch unit recommended buying the stock. Givaudan SA (GIVN) lost 1.3 percent after Nestle SA said it will sell $1.27 billion of shares in the world�� largest flavorings maker.