Newest GuruFocus Investor - Paul Singer of Elliott Management

Paul Singer, founder of $17 billion hedge fund Elliott Management, is the newest investor GuruFocus has chosen to track. Singer has a background in law that set the stage for his formidable distressed debt tactics he has used to profit from bankrupt companies and sue sovereign nations. From 1977, the year he founded his firm (making it one of the oldest hedge funds), to November 2010, he had an annualized net return of 14.4%. As one of the few to foresee and warn of the pending housing crisis in 2008, his fund was only down 3.08% in 2008, compared to the S&P 500 which was down 37% the same year.

Singer graduated from the University of Rutgers with a B.S. in psychology and then obtained a J.D. from Harvard Law School. He practiced law for four years after graduation at corporate law firms and Donaldson, Lufkin & Jenrette, an investment bank.

As an example of Singer's distressed debt investing is his profitable stake in Delphi, the bankrupt auto parts supplier. According to the New York Post, Elliott Management and partner Silver Point Capital held an 18% stake in Delphi when it emerged from bankruptcy in October 2009. At the time that Delphi exited bankruptcy, the stake was worth $640 million. By October 2010 it had more than doubled to $1.54 billion.

When Elliott entered the Delphi deal, the company's bankruptcy had been stalled in court for four years, and GM, the Treasury and an auto task force wanted to privatize the company and sell it to a private-equity firm that would not have been profitable for lenders. Elliott Management and its partner instead bought $2.9 billion worth of Delphi loans for about 15 cents on the dollar and used the position to block the sale.

Singer 's team managed a deal with the government and lenders and told them, "You can either take it or try to fight it in court," the New York Post reported.

Singer had also bought debt of Chrysler and Lehman Brothers, and has taken activist equity stakes in Novell and Iron Mountain (IRM! ).

He sued his first nation in 1996, when his firm bought defaulted debt of Peru. After a lengthy legal battle and the overturning of a law that stood in his way, Elliott received a $58 million judgment on his $11 million investment, according to Fortune. He has also sued Congo-Brazzaville, Argentina, and several other countries using the controversial tactic that some say disenfranchises the people of the countries with indebted governments.

Elliott has strong opinions about the governments of the U.S., Japan and Europe as well. He often pens impassioned but heavily guarded quarterly letters expressing his thoughts on the economy and his extremely republican viewpoints. He is also a major donor to conservative political candidates. Staunchly opposed to Fed's handling of the financial crisis and stimulus plan, he said in one of his letters obtained by DealBook in August 2010:


"Instead of addressing the unsound financial system by deleveraging the banks, making them understandable and transparent, and modernizing the regulatory scheme, the bulk of the actions taken by the new government, starting in early 2009, consisted of an ideological wish-list and cronyism. Very little was oriented toward supporting the private sector, except for the surviving banks, which were nursed back to 'health' (that is, mostly as highly-leveraged trading shops) with lavish dollops of close-to-free money and blanket guarantees."

Some of Elliott Management's top equity positions in the first quarter 2012 are Brocade Communications Systems (BRCD), Delphi Automotive (DFG), Iron Mountain (IRM) and News Corp. (NWS).

Paul Singer's portfolio will be added to GuruFocus soon.

Exxon Mobil: Are All-Time Highs Imminent?

With shares of Exxon Mobil (NYSE:XOM) trading around $89, is XOM an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Exxon Mobil is a manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and a range of specialty products. The company has a number of divisions and affiliates with names that include ExxonMobil, Exxon, Esso or Mobil that operate or market products in the United States and other countries of the world. Exxon Mobil's principal business is energy, involving exploration for and production of crude oil and natural gas; manufacture of petroleum products; and transportation and sale of crude oil, natural gas, and petroleum products. Energy is essential to global growth and day-to-day operations of companies and consumers worldwide. So long as crude oil is a main source of energy, a bellwether like Exxon Mobil will continue to see rising profits well into the future.

10 Best Clean Energy Stocks To Buy For 2014

T = Technicals on the Stock Chart are Strong

Exxon Mobil stock has seen a consistent uptrend extending back several years. The stock is now consolidating slightly below all-time high prices. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Exxon Mobil is trading slightly above its rising key averages which signal neutral to bullish price action in the near-term.

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(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Exxon Mobil options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Exxon Mobil Options	21.16%	96%	92%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
July Options	Steep	Average
August Options	Steep	Average

As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bearish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Increasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Exxon Mobil’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Exxon Mobil look like and more importantly, how did the markets like these numbers?

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	6.00%	11.33%	-1.88%	56.42%
Revenue Growth (Y-O-Y)	-12.29%	-5.29%	-7.68%	1.5%
Earnings Reaction	-1.52%	0.07%	0.47%	1.5%

Exxon Mobil has seen increasing earnings and decreasing revenue figures over most of the last four quarters. From these numbers, the markets have generally been pleased with Exxon Mobil’s recent earnings announcements.

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P = Excellent Relative Performance Versus Peers and Sector

How has Exxon Mobil stock done relative to its peers, Chevron (NYSE:CVX), BP (NYSE:BP), Royal Dutch Shell (NYSE:RDSA), and sector?

	Exxon Mobil	Chevron	BP	Royal Dutch Shell	Sector
Year-to-Date Return	3.72%	10.89%	2.67%	-4.47%	2.79%

Exxon Mobil has been a relative performance leader, year-to-date.

Conclusion

Exxon Mobil is a global provider of essential energy products and services to companies and consumers operating in a multitude of industries. The stock has been steadily chugging higher and is now consolidating slightly below all-time high prices. Over the last four quarters, Exxon Mobil has seen increasing earnings and decreasing revenue figures what have maintained investors generally happy. Relative to its peers and sector, Exxon Mobil has been a year-to-date performance leader. WAIT AND SEE what Exxon Mobil does this coming quarter.

Top 5 Tech Companies To Own For 2014

The Department of Defense closed out last week with a massive $7.4 billion in new contract awards Friday. Nineteen separate companies shared in the Pentagon largesse, but one single set of companies took home the bulk of the winnings -- more than 93%.

On Friday, the Pentagon awarded a series of eight companies a massive $6.9 billion-maximum value, firm-fixed-price, multiple-award, indefinite-delivery/indefinite-quantity (ID/IQ) contract�for the supply of information technology products and services. The award fell under the umbrella Network Centric Solutions, or NETCENTS-2, program, and was issued to the following companies:

Publicly traded General Dynamics' (NYSE: GD  ) Information Systems and Technology division. Iron Bow Technologies LLC, a subsidiary of engineering company URS (NYSE: URS  ) .

These privately held names also took part in the spoils:

Top 5 Tech Companies To Own For 2014: Urban Communications Inc. (UBN.V)

Urban Communications Inc., a telecommunications company, develops and operates telecommunications networks for the delivery of video, telephone, and Internet services to commercial and residential customers in Vancouver and Victoria, British Columbia. The company engages in the construction and maintenance of fiber, cable, and wireless residential and commercial telecommunications networks to national and regional service providers. It also provides Ethernet services; and broadband services, including entertainment content and gaming portals. The company was formerly known as Boulevard Capital Ltd. and changed its name to Urban Communications Inc. in June 2001. Urban Communications Inc. was incorporated in 1988 and is headquartered in Burnaby, Canada.

Top 5 Tech Companies To Own For 2014: CyberOptics Corporation (CYBE)

CyberOptics Corporation supplies optical process control sensors and inspection systems to control the manufacturing process and ensure the quality of electronic circuit boards worldwide. The company also manufactures and sells sensors that assist with yield enhancement during semiconductor fabrication. Its products include surface mount technology (SMT) electronic assembly alignment sensors, including LaserAlign sensor that is incorporated into component placement machines used in the SMT production lines; BoardAlign camera, which identifies fiducial markings on a circuit board and aligns the board in the component placement machine prior to component placement; and InPrinter inspection camera that identifies fiducial markings on a circuit board to ensure accurate board registration prior to placement of solder paste. The company also offers photovoltaic and fuel cell alignment sensors, such as solar wafer alignment cameras for alignment measurements; and embedded process verification inspection technology products and solder paste inspection sensors. In addition, it provides SMT stand-alone inspection system products, which include solder paste inspection and automated optical inspection products; and WaferSense sensors that provide measurements of critical factors in the semiconductor fabrication process, as well as wafer mapping and alignment sensors, frame grabber products, and machine vision subsystems. The company sells its products to the manufacturers of electronic circuit board assembly equipment, manufacturers of semiconductor DRAM memory, and semiconductor capital equipment manufacturers, as well as end-user electronic assembly manufacturers, including original design manufacturers and electronic manufacturing service providers. CyberOptics Corporation markets its products through independent representatives and distributors. The company was founded in 1984 and is headquartered in Minneapolis, Minnesota.

Hot Canadian Stocks To Buy Right Now: Telephone and Data Systems Inc.(TDS)

Telephone and Data Systems, Inc., a diversified telecommunications service company, provides wireless and wireline telecommunications services in the United States. The company?s wireless services comprise postpaid and prepaid service plans, which consist of voice minutes, messaging, and data services; national consumer plans; business rate plans; smartphone messaging, data, and Internet services to access the Web, e-mail, social network sites, text, picture and video messages, and turn-by-turn GPS navigation, as well as to browse and download various applications; and data services, including news, weather, sports information, games, ring tones, and other services. It provides wireless devices, such as handsets, modems, and tablets; and a range of accessories comprising carrying cases, hands-free devices, batteries, battery chargers, and memory cards, as well as wireless device repair services. The company also offers voice services, including local and long-distance tel ephone service, voice over Internet protocol, voice mail, caller ID, and call forwarding services; broadband services comprising digital subscriber lines and other high-speed Internet data services; network access services; hosted and managed services consisting of co-location, hosting, hosted application management, and cloud computing services; and satellite and terrestrial video services to commercial and residential customers and carriers. In addition, it provides printing and distribution services. As of December 31, 2011, the company served approximately 5.9 million wireless customers and 1.1 million wireline equivalent access lines. It sells its products through retail sales and service centers, direct sales, and independent agents, as well as through Website and telesales. Telephone and Data Systems, Inc. was founded in 1968 and is headquartered in Chicago, Illinois.

Top 5 Tech Companies To Own For 2014: Travelzoo Inc(TZOO)

Travelzoo Inc., an Internet media company, together with its subsidiaries, publishes travel and entertainment deals from travel and entertainment companies, and local businesses in North America and Europe. Its publications and products include the Travelzoo Websites, such as travelzoo.com, travelzoo.ca, travelzoo.co.uk, travelzoo.de, www.travelzoo.es, and travelzoo.fr; the Travelzoo Top 20 e-mail newsletter; and the Newsflash e-mail alert service. The company also operates SuperSearch, a pay-per-click travel search tool; Travelzoo Network, a network of third-party Websites that list deals published by Travelzoo; and Fly.com, a travel search engine that allows users to find the best prices on flights from various airlines and online travel agencies. In addition, it provides Local Deals and Getaways services that allow its subscribers to purchase vouchers for deals from local businesses, such as spas, hotels, and restaurants through the Travelzoo Website. As of December 31, 2011, the company?s advertiser base included approximately 2,000 travel companies, entertainment companies, and local businesses, including airlines, hotels, cruise lines, vacations packagers, tour operators, destinations, car rental companies, travel agents, theater and performing arts groups, restaurants, spas, and activity companies. Travelzoo Inc. was founded in 1998 and is headquartered in New York, New York.

Top 5 Tech Companies To Own For 2014: PTEK Holdings Inc.(PGI)

Premiere Global Services, Inc. provides virtual meeting solutions in North America, Europe, and the Asia Pacific. The company provides its virtual meeting solutions in the cloud, with a software as a service model used for various forms of meetings, such as investor relations presentations, training sessions, sales planning meetings, and project management and ad hoc meetings by allowing users to collaborate through video, Web, or audio conferencing technologies. It offers iMeet solution, which gives users their own personal meeting room online that combines video conferencing, social networking, and media and file sharing; and GlobalMeet, which brings Web and audio conferencing together into one solution for meetings with desktop audio controls and screen sharing delivered through the browser, with no software downloads. The company also provides ReadyConference, an enterprise class audio conferencing suite that includes automated conferencing with approximately 140 local access points and operator-assisted event conferencing. In addition, it offers a suite of mobile applications that integrate its solutions on a user?s mobile device. The company markets its solutions directly through its sales professionals and e-commerce Websites; indirectly through agents and resellers; and through strategic technology partners. Its customers include software and technology companies, commercial and investment banks, retailers, travel and hospitality firms, and healthcare companies. The company was founded in 1991 and is headquartered in Atlanta, Georgia.

Forget $1 Million. To Feel Wealthy, You Need $5 Million in Assets

High-net-worth and affluent investors define wealth as being able to live life with no financial constraints, and feel $5 million is the minimum needed to be considered wealthy, according to the recent UBS Investor Watch, a quarterly survey.

The survey of 4,450 investors found that 69% of those with more than $1 million in investable assets did not consider themselves wealthy.

Half of respondents defined wealth as having no financial constraints, while only 10% said it meant never having to work again and 9% said it was being able to afford a luxurious lifestyle.

While the ability to afford healthcare and long-term care was the top personal concern for 27% of investors, 20% said their children’s and grandchildren’s financial situations were most important, 14% listed the ability to afford retirement and 14% the potential to outlive their assets.

The survey found that 82% of respondents most enjoyed financially helping their grandchildren, 76% their adult children and 59% their parents. Two-thirds of those with adult children ages 18 to 39 currently supported them financially.

Twenty-three percent of investors continued to hold high levels of cash, and used these holdings as a way to reduce their risk level.

“Investors are using significant cash holdings as a type of ‘security blanket’ to give themselves peace of mind, but also to allow them to feel comfortable getting out there and participating in the market again,” Emily Pachuta, head of investor insights at UBS Wealth Management Americas, said in a statement.

Top 5 Clean Energy Companies To Own In Right Now

“This has translated to a greater confidence—and faith—in the economy over the long term despite investors’ expectations of continued market volatility in the near term.”

Eighty-five percent of respondents said they felt more confident when their financial plan was dedicated to long-term healthcare expenses and to providing financial support across multiple generations. Confidence dropped to 57% with a more traditional financial plan.

Investor Watch found that 80% of investors thought about their assets as different buckets, with varying risk/return profiles, based on their expected use, such as savings, necessary purchases and recreational spending. 

Respondents viewed the Fed’s ending stimulus as positive for the long term, albeit with a short-term negative effect. Fifty-nine percent said they were not changing their investment strategy as a result of the Fed’s announcement.

Other key findings include:

BP to Appeal Over Deepwater Payouts - Analyst Blog

British energy giant BP plc (BP) announced that it would appeal in a U.S. court over settlement payments relating to the 2010 Deepwater Horizon oil spill. In 2012, a settlement of $7.8 billion was reached over the reimbursements to be made for the 2010 Gulf of Mexico (GoM) oil spill.

As a reminder, on April 20, 2010, offshore driller Transocean Ltd's (RIG) ultra-deepwater Horizon drilling platform, contracted to BP, sank following an explosion while operating in the U.S. GoM off the coast of Louisiana. The incident killed 11 workers and spewed more than 200 million gallons of crude in what was touted as the country's worst oil spill ever. Subsequently, a moratorium was imposed on offshore drilling at water depths of more than 500 feet in the region, which was lifted on Oct 12, 2010.

The breach of Clean Water Act along with other laws led the U.S. government to take legal action against the main defendants in the trial – BP, Transocean and Halliburton Company (HAL). Several other companies are also involved in the trial.

The appeal from BP would be heard in the 5th U.S. Circuit Court of Appeals. The company will plead to revise the earlier settlement, citing concerns that it might to compensate companies unaffected by the disaster.

London, England-based BP plc is one of the world's largest energy companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemical products. It operates in three segments: Exploration and Production, Refining and Marketing, and Other Businesses and Corporate.

Even though the company remained active in its strategic development during the first quarter, it expects lower production in the upcoming quarter due to normal seasonal turnaround activity, particularly high margin production in the Gulf of Mexico and the North Sea, as well as higher costs. For the second quarter,the company expects refining margins to be subdued.

! For 2013, the company expects refining margins to experience a downfall from the 2012 level due to turnaround activity. The company's petrochemicals margins are also expected to remain weak during 2013.

BP carries a Zacks Rank #2 (Buy). However, there are other Zacks Ranked #1 (Strong Buy) stock like PetroQuest Energy Inc. (PQ) which are expected to perform even better over the short term.

Ask The Expert: When Is The Best Time Of Year To Invest?

If you'd like us to answer one of your investing questions in our weekly Ask The Expert Q&A column, email us at editors@investinganswers.com. (Note: We will not respond to requests for stock picks.)

Question: When's the best time of year to invest?

--Valerie V., Seattle

Investors have become well acquainted with the phrase "Sell in May and go away," which suggests that stocks only generate gains until Memorial Day, after which they slip in value before rising again after Labor Day. Is this axiom on the mark, or is it a myth?

Well, in an analysis of 100 years' worth of monthly returns, Bespoke Investment Research couldn't find any such trend. The Dow Jones Industrial Average (DJIA) rose 0.37% on average every June, 1.39% each July, and 1.01% every August. Then again, the market tends to modestly rise in most months, with February and September being the only months that have traditionally generated negative returns. What do February and September have in common? Nothing.

So why do we still hear the phrase "Sell in May and go away?" Perhaps it's due to the fact that a clear summer swoon has been affecting the market in recent years. In 2010, 2011 and again in 2012, stocks got off to a great start, fell swiftly in the spring and then posted solid gains after pullbacks ranging from 9% to 17%. The sell-off has come a bit later in 2013, but stocks again appear to be hitting a rough patch, with the S&P falling nearly 4% from its late May 2013 peak. Recent history suggests the market may fall further in coming weeks before its next upward move.

Sadly, we can't point to any unifying factors that account for these repeated periodic pullbacks. In each instance, a series of external events appeared to cause the markets to fall, from the tsunami in Japan to the economic crisis in Greece to threats of a U.S. government shutdown. In 2013, it's the fears of an eventual end to the Federal Reserve's stimulus, along with signs of a slowing U.S. economy, that are creating he! adwinds.

The Tech Exception
Yet a case can be made to proceed with caution with technology stocks during the summer months, thanks to a pair of factors.

First, many Europeans take extended vacations in August, and European corporations tend to slow down their orders in June and July in anticipation of factory shutdowns. (The technology sector has a greater exposure to Europe than any other sector).

Second, professional stock traders tend to take time off during the summer, which generates smaller trading volumes and higher volatility. And volatility is to be avoided, as far as many investors are concerned. Tech stocks, as measured by beta, are more volatile than any other kinds of stocks.

The Year-End Rally
So what's the best month for investing? December, which has typically generated a 1.42% annual gain for the DJIA, according to Bespoke Research. In fact, the market has risen in December 73 times in the past 100 years.

What explains this phenomenon, known as the "December effect"?

Many investors sell stocks in October and November to make sure that they have generated trading losses to offset trading gains in order to minimize their capital gains tax bite. This is known as tax-loss selling.

Those sold-off stocks, which have likely already performed poorly in prior months, tend to become oversold, and far-sighted investors start snapping them up in December before the crowd pivots back to these bargains early in the new year.

The second-best month for stocks? January, which has shown a gain on 64 occasions over the past 100 years. On average, the DJIA rises roughly 2.5% in those two months, which is the best two-month pair of anytime during the year.

One final thought: Should you try to time the market and buy in ahead of strong months and sell ahead of weak months? The answer is mixed.

On the one hand, market performance is driven off of specific events (such as good economic news or a bad hurricane season), and it's foolhar! dy to sim! ply ignore the external investing environment when making investment choices. Then again, recent history has shown that it is wise to take profits after the market has delivered an extended period of solid gains. That was the case in the spring of 2010, 2011 and 2012, and may again be the case in 2013.

This article was originally published at InvestingAnswers.com
Ask The Expert: When Is The Best Time Of Year To Invest?

How women can invest wisely to minimise tax outgo

Best Warren Buffett Stocks To Buy For 2014

Below is the verbatim transcript of Roongta's interview with CNBC-TV18.

Q: It is an International Women's Day today, so it is appropriate that we focus on the investment needs of women. How can a woman invest wisely to minimise her tax outgoes? Is it wise to invest in the women oriented schemes offered by mutual funds or should a woman go for asset allocation according to her risk profile?

A: I think woman investor is an investor first and woman later. So, whatever applies to other investors as much applies to women. She must look at what risks she can take what goals she has. If they are long-term then ability to take risk increases and therefore allocates to specific assets whether it is equity, debt or whatever.

As far as specific schemes are concerned, mutual fund industry has not come out with too many specific schemes. There is UTI Mahila Unit Scheme , which is a hybrid debt aggressive scheme. Performance has not been anything to write home about. It is not among the top quartile.

There are a lot of woman oriented insurance policies. However, what applies to regular investors that not to mix insurance and investment, applies to woman investors as well. Therefore, I think no specific schemes that are good are available for woman.

Women entrepreneurs looked upon as glorified housewives

Therefore, a woman needs to invest just like any other investor. It is possible that the risk profile might be different. For example in some cases if it is an income that it to be used to create wealth then your ability to take risk is higher and therefore you can have higher allocation to equity.

New Feature Added: Valuation Box

If you have been checking out stocks on GuruFocus by looking up any stock ticker, you should notice that we added a valuation box that shows the stock prices relative to a few valuation matrices. For instance, this is the valuation box for Wal-mart (WMT):

[ Enlarge Image ]

The valuation box shows the current price of Wal-Mart at $67.59 relative to the following parameters. Put your mouse of the chart to see the values for each parameter.

1. Net Cash of - $26.5 a share
2. Net Current Asset Value (NCAV) of $16.1 a share
3. Intrinsic Value (DCF Projected) of $58.65 a share
4. Graham Number of $38.9 a share
5. Median P/S Value of $76.94
6. Peter Lynch Fair Value of $45.2

The valuation box we display will in no way replace your valuation process of the company, but it gives a rough idea of where the company is traded relative to its value. For instance, from the valuation box above we can see that Wal-Mart is traded slightly above the valuation of the DCF model. It is below the historical median relative to sales. Peter Lynch would think Wal-Mart is overvalued because the earnings growth rate is about 9%; it would only deserve a P/E ratio of 9. But Wal-Mart is currently at a P/E ratio of almost 14.5.

We have discussed in detailed how to achieve each valuation in Methods for Arriving at the Fair Value of Companies. Here is a summary:

Valuation Methods	Asset Based	Earning Power Based	Combination of Asset & Earnings Power	Growth Considered	Comment
Net Cash	X			No	Cash & Cash Equivalents + Short Term Investments – Total Liabilities
Net Current Asset Value (NCAV)	X			No	Cash and Short-Term Investments + (0.75 * Accounts Receivable) + (0.5 * Inventory) - Tot! al Liabilities
Intrinsic Value (DCF Projected)			x	Yes	Value = (Growth Multiple)*FCF(6 year avg) + 0.8*Total Equity(most recent) Details here
Graham Number			x	No	SquareRoot of (22.5 * Tangible Book Value * Earnings per share)
Median P/S Value		X		No	Historical range traded relative to sales.
Peter Lynch Fair Value		X		Yes	PEG * 5-Year Earnings Growth Rate * Earnings. Only applies to companies with consistent growth rate between 8% to 25%. If growth rate is higher than 25%, we use 25%.

Not all parameter will apply. For instance, Peter Lynch's fair value method is only applicable to companies that have relatively consistent growth. The Graham number is only applicable to companies that have positive tangible book value and earnings per share.

Another example is Berkshire Hathaway (BRK.A)(BRK.B). We can see that Berkshire is also traded at below its historical median P/S ratio, but above its tangible book of $77,000 a share and Graham number of $106,000 a share.

[ Enlarge Image ]

Also see the Apple (AAPL) valuation box below:

[ Enlarge Image ]

Because of its tremendous growth, Apple is traded above all the valuation parameters such as DCF, tangible book, etc. But Peter Lynch may think it is still undervalued because its growth value is far higher, even if we cap the growth rate at 25% a year, which is far below its actual growth rate.

The valuation box will also clearly indicate it if a company is traded at below its net current asset value (NCAV). Please see the valuation box for Telestone (TSTC) below! .

! [ Enlarge Image ]

It is obvious the Chinese wireless network company is currently traded at far below all of its valuation matrix. It is even a Ben Graham Net-Net because it is traded at below its net current asset value.

As discussed in Methods for Arriving at the Fair Value of Companies, a company can be evaluated according to its asset value, its future earnings power, or the combination of both. Please do read its annual/quarter reports to understand more about which will apply.

Disclosure: The author owns Berkshire Hathaway.

Please let us know how you think about this feature and feel free to give us suggestions.

Another Red Robin Outlet in Maryland - Analyst Blog

Casual dining restaurant operator, Red Robin Gourmet Burgers Inc. (RRGB), is set to unveil a new restaurant in Baltimore, MD shortly. This is the sixth outlet of the company's targeted opening of 20 outlets in 2013 and bears evidence to its strategy of expanding in the lucrative domestic market.

The restaurant will be located at the famous Waugh Chapel Shopping Center. Red Robin's value offerings and the contemporary ambience will drive its sales, going ahead.

As per the National Restaurant Association, Maryland's restaurant industry contributes considerably to the state's revenues. According to the research organization, Maryland's restaurants are expected to record $10.3 billion in sales in 2013. High demand and high spending ability in Maryland are favorable to the sector's growth.

Maryland's capital, Annapolis, and its largest city, Baltimore, already boast a host of renowned restaurant operators like The Wendy's Company (WEN), McDonald's Corp. (MCD) and Burger King Worldwide, Inc. (BKW).

Currently, Red Robin operates only 13 units in Maryland, which makes it a relatively newer market for the company as compared with California which has as many as 70 Red Robin restaurants. Hence, the company has decided to further expand in Maryland.

The Colorado-based restaurateur is also exploring development opportunities in several underpenetrated markets such as Florida, New York, New Jersey, Chicago and Texas to further strengthen its presence in the U.S. Recently, the company opened a unit in Chicago which has strong growth prospects and potential to record $21.7 billion in sales 2013.

Moreover, this Zacks Rank #3 (Hold) company, which currently boasts more than 470 restaurants across the United States and Canada, is keen on establishing the presence of its smaller prototype restaurants, Red Robin's Burger Works. The company's smaller format restaurants will likely accelerate its growth in non-traditional locations and also improve return on ! invested capital, going ahead.

Musk Talks Revenue and Shareholder Value at Tesla Meeting

At its annual shareholders meeting tonight, Tesla Motors' (NASDAQ: TSLA  ) Co-Founder and CEO Elon Musk said that the Model S was the top-selling electric car in Q1 2013 and that its revenue was more than all the U.S. electric car revenue in the U.S. combined.

Musk also spoke briefly about the company's latest round of financing, saying, "We raised more money than we think we need." Musk stressed that if a future supply disruption occurred because of a natural disaster or a supplier bankruptcy, the company would still have money to keep going.

During the meeting's question-and-answer session, Musk said, "We're in great shape from a cash standpoint. Even if we suck at cash management, we'll be OK." He went on to say that the company wouldn't be poor at managing its cash.

Toward the end of the meeting, Musk fielded a shareholder question about how the company can build shareholder value while mass-producing electric vehicles at the same time. Musk said that he wouldn't do anything to compromise the company's long-term goals in order to bring short-term shareholder value, but that the two goals were aligned in the long term. He said, "There are obviously things we could do that would have a short term effect on the stock price, but I think those would ultimately be disadvantageous in the long term."

4 Of Today’s Finance Undergraduates Share Their Experiences ...

Have you ever wondered how other finance students' experiences compare to yours? Do they share the same fears and aspirations? How does your coursework and job experience measure up? In this article, we'll take a look at what four real-life finance students are studying this fall, what jobs and internships they've held, and what they consider to be their dream jobs. We'll also tell you about the challenges they expect to encounter in finding jobs after graduation and in their future careers. Finally, we'll share their advice to students contemplating a career in finance.

Coursework
Michael Bruno, who will be a senior at Boston University in the fall of 2013, says he has finally finished his general education requirements and can focus on the classes he wants to take. Because he is majoring in business administration with concentrations in finance and law, he is taking Money, Financial Markets and Economic Activity; Corporate Financial Management; Advanced Business Law; and Strategy and Policy.

Ashley Panessa, who will be a junior this fall at Villanova University in Villanova, Pennsylvania, will be taking biology, principles of managerial accounting, intermediate corporate finance, international organization and global political economics this fall. All of these classes either are required for her finance major or are part of the business school's requirements, she says.

Zak Leedom, who will be a sophomore this fall at West Virginia University, says his fall class schedule consists of a couple of basic business classes along with some psychology and general education classes. "I am trying to get the basic requirements out of the way, and following my advisor's recommendations has led me to these classes," he says.

College Jobs and Internships
"I have held a couple on-campus jobs during the school year just to get some pocket money," Bruno says. "However, I also interned at Merrill Lynch during my junior year. I was really interested in wealth management as a career, so I was excited to get that opportunity," he says. Bruno says he is still unsure, however, of which field he wants to pursue within finance, so experience in any area is helpful.

Panessa is currently interning at TD Ameritrade Institutional in the wealth management department. "This internship has definitely widened my perspective on all the possibilities a finance degree can offer," she says. While she still isn't sure what area of finance she wants to work in, she says this internship has given her a perspective on the industry that cannot be taught in school.

Leedom plays soccer for WVU. "Being a full-time athlete leaves no room in my schedule for any jobs or internships," he says. This summer, however, he interned at Libertas Wealth Management Group in Dublin, Ohio. He says his internship has helped support his decision to go into finance and will help him feel more comfortable in the financial field and in his future finance classes.

Dream Jobs
Matthew Lenhard, a sophomore studying finance at the University of Delaware, is unlike our other three interviewees, in that he has gone off the typical finance student's path. "When I first came to Delaware, I had dreams of working in investment banking or on Wall Street," he says. He was drawn to it by the prestige and the salary. "As time passed and I learned more about finance, my goals moved away from a job in the financial sector and more towards entrepreneurship," he says. "I realized just how competitive the job market is in the financial sector and saw how much more lucrative entrepreneurship can be."

Lenhard says he realized that although his school has a respectable business program, it was nowhere near the top 10 programs that most investment banking jobs and other prestigious positions are recruited from. He was also tired of taking classes that weren't related to his career but which took up a huge portion of his time.

"It felt as if I was almost wasting my time putting countless hours into studying when I knew that if I put the same amount of time into my own business the rewards would be much greater than just an A in the class," he says.

While he's still taking finance classes, Lenhard launched a mobile website development firm, Shine Mobile, as a way to follow through with his new dream of entrepreneurship.

Panessa, on the other hand, doesn't yet know where she wants to work, but says she hopes her finance classes next semester will lead her toward a specific area in finance. "I would like to figure out my career path as I go along," she says. "I think it is very important to stay flexible and adapt to the changing industry." She says that someone who planned their entire career path before graduating from college might find himself trapped in a dying part of the industry or become disappointed if they didn't reach a certain goal.

Bruno says his dream job would probably be to work as a sports agent. "I love sports and being able to have a career that revolves around them would be one of the coolest things ever," he says. This career path would make use of his interests in both finance and law.

Leedom says his dream job after graduating would definitely be playing professional soccer, but working at Libertas Wealth Management, where he did his summer internship, would be a close second.

Future Challenges
"I think my biggest challenge in getting a job will be standing out from the crowd," Bruno says. "More than 3,000 students graduate from BU alone each year. When you think of all the universities in the U.S. and the thousands of students graduating from each one, it really adds up, and all of them are looking for jobs at the same time. Being able to stand out from them and prove what I have to offer to an employer is the biggest challenge." He says he is excited, however, to see where his career path will take him, even though he doesn't yet know where he'll be after graduating.

Panessa also says she thinks that the biggest challenge in getting a job will be successfully differentiating her resume from that of every other college graduate with the same major and GPA.

In addition to the challenges of finding that first finance job out of college come the long-term challenges that face anyone working in the finance industry.

"I think that the finance industry is currently experiencing a lot of change that has the potential of altering the way everyone has been working," Panessa says. While this transformation may create new job opportunities, it will also phase out old ones. "I think that a big challenge is going to be anticipating where change is going to take place in the industry and then successfully capitalizing on the changing movements," she says.

Leedom says the biggest challenges for him will be completing all of the certifications such as the CFP and getting the required licenses in order to succeed in the financial field. But, he says, "I feel very confident in my future in the financial field because I am a good learner, a hard worker and above all I am very competitive at everything that I do."

Words of Wisdom
"My advice to anyone thinking of studying finance is to open your mind to other classes and majors," Bruno says. "Take classes in other subjects in a completely different area as well as other types of business classes. If you combine finance with another major or minor, it becomes so much more valuable. You not only have that finance background you wanted, but you also have a complementary skill set that other finance students may not have, further distinguishing yourself."

Panessa's advice for anyone already studying or planning to study finance is to start familiarizing yourself with the industry by reading newspapers or talking to people who work in finance. "This will help them figure out if finance is really the area they want to study or help them in school if they decide to stick with finance," she says.

The Bottom Line
While some of today's finance students know exactly what they want to do for a living—or are already doing it—others are leaving their future plans wide open for now. Many have gained work and/or internship experience that will inform their decisions. Some are confident in their ability to find jobs—or create their own—but others are concerned about the competition. While these four students' experiences and thoughts provide just a snapshot and shouldn't be construed as a representative sample, they offer an interesting glimpse into what today's finance students are going through.

Hyundai's Surprising Electric-Car Gambit

Hyundai (NASDAQOTH: HYMTF  ) hasn't been much of a player in the green-car wars. It offers a hybrid version of its Sonata sedan, but it's just so-so -- not up to the standard set by class leaders Toyota (NYSE: TM  ) and Ford (NYSE: F  ) , say reviewers.

But Hyundai is looking past hybrids, and past battery-powered electrics -- and could be poised to leap to the fore of the field with the first-ever, mass-produced, fuel-cell vehicle. In this video, Fool.com contributor John Rosevear looks at Hyundai's surprising plans for a fuel-cell-powered electric SUV -- one that the company hopes to be selling in a big way in just a couple of years.

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Top 10 Clean Energy Companies To Watch For 2014

Bernanke's Losing Battle?

The following video is from Wednesday's Investor Beat,  in which host Chris Hill and analysts Matt Koppenheffer and Matt Argersinger dissect the hardest-hitting investing stories of the day.

Federal Reserve chief Ben Bernanke testified before Congress today and said that the U.S. job market is still weak. Bernanke said it's too soon for the Fed to end its stimulus program. What do Bernanke's comments mean for investors? Where can investors find value when the Fed does begin winding down its quantitative-easing policies? In this installment of Investor Beat, Motley Fool analysts Matt Koppenheffer and Matt Argersinger tackle those questions, as well as take a look at the four biggest movers on Wednesday's market, and highlighting two stocks that they're going to be watching closely later this week.

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MAKO Surgical - Rebuilding Credibility, But They Need To Rebuild More Knees

When I last wrote on MAKO Surgical (MAKO), I thought investors would be well-served by slowly building a multi-part position. With the stock up 38% since that piece (and 43% over the last three months), I'm feeling relatively good about that call. What's more, MAKO management has helped itself and rebuilt some credibility with the Street when it comes to guidance and financial performance. With the shares back in the mid-teens, it's going to take better utilization numbers for me to get more excited about the shares, and the trend there is not nearly so positive.

Doing What It Needed To In Q2

MAKO's fiscal second quarter was what I'd call "workmanlike" - the company's procedure count and system placement guidance were enough to cheer the Street immediately afterwards, and the company's cash burn seems to be on a reasonable trajectory.

Revenue rose 19% as reported, with system revenue basically flat (about 30% of the total) and procedure revenue up 26%. Although these numbers were below the average estimates, it wasn't a particularly large miss.

On the margin side, gross margin fell about 14 points as reported, but an inventory charge tied to the company's hip business was largely responsible. Net of the charge, gross margin would have been around 74%, slightly higher than a year ago. Although the company posted a larger operating loss for the quarter, it looks like here too the company would have been flat if not for the impact of the excise tax and inventory write-down. I'm normally pretty harsh with companies that indulge in a lot of "well, if you exclude, this, this, and that..." massaging, but in this case I think it's relevant as the company actually is doing a pretty good job of controlling underlying voluntary expenses.

But Utilization Is Still Troubling...

The financials are as far as I go in making excuses for MAKO, as I think the company's utilization experience is still worrisome.

MAKO saw 26% more procedures than last ! year and 10% more than in the first quarter, which absolutely blows away the "flat to up a little" growth reported by major ortho recon companies like Biomet, Stryker (SYK), Johnson & Johnson (JNJ), and Zimmer (ZMH). Unfortunately, utilization was still down year-on-year, and that continues a troubling trend.

By my calculations (which are different than the company's reported numbers, but directionally similar), overall utilization declined 9% from last year and rose 5% sequentially. Knee utilization continues to decline, dropping another 14% and marking six straight negative/non-positive quarters. On a brighter note, hip procedures more than doubled from the year-ago period (and rose almost one-quarter sequentially), with utilization jumping about 50%.

All told, my calculations suggest that MAKO's system is used less than seven times per month per user (MAKO's own numbers say 7.0 times per month). Clearly that's not enough utilization to drive additional system sales to existing clients, something that has very definitely benefited Intuitive Surgical (ISRG) over the years. Moreover, my due diligence with docs suggests that there's still a significant "feast or famine" lumpiness to the utilization - some facilities/docs use it often, others use it only in cases where the doctor believes that there are other factors in play that would make a partial knee replacement or hip procedure too risky without the system.

… Despite Good Data

What makes the MAKO experience more frustrating is that the data on the system are good for both knees and hips. The "MAKO vs. Oxford" study showed statistically significant improvements in accuracy, alignment, and post-op pain, as well as a significant increase in the number of patients achieving a functional score of 160 or better (57% versus 31%). Given that the inclusion criteria for the study didn't seem all that unusual, it's disappointing that MAKO's own installed base doesn't use the system more than they! do.

In any case, the data are good for both knees and hips, as a recent hip study showed the outcome benefits for avoiding cup misalignment in hip procedures. The key now is marketing that data and selling the physicians on it. Although hospitals have been pushing back hard on implant and instrument prices, MAKO's per-procedure cost is not uncompetitive, so it really should come down to simply convincing doctors that the procedure is worth doing.

That's not necessarily the simplest task when companies like Zimmer, Biomet, JNJ, and Stryker (SYK)

continue to push hard with their own tools and cutting guides (which are, for the most part, more familiar to docs and less challenging to their egos). What's more, many orthos prefer to stick with the hip and knee implants that they're familiar with, and that can be an obstacle to adoption. Likewise, unicondylar knee implants are still a "niche" procedure for many facilities and physicians.

Absent Better Usage, This Is Far Enough For Now

MAKO's performance since January has led me to raise my fair value estimate, but not by a very significant amount. I'm still looking for 18-19% long-term revenue growth, which is a bit below the implied growth (21%) if MAKO can get 20% share of its addressable markets. Likewise, I still look for MAKO to deliver a mid-teens free cash flow margin in 2017 and move into the low 20%'s a few years after that.

All told, and including the full impact of options in the sharecount, I think MAKO's fair value is a bit above $14 today. Likewise, the company's 4.6x multiple to 2014 revenue is already in the range that growth med-tech stories get these days, though clearly names like Heartware (HTWR) and Novadaq (NVDQ) show that there's plenty of upside there if MAKO can reach that next level of growth.

The Bottom Line

At this point, I'm not too worried about competitors like BlueBelt's Navio, though I can see how/why that company's open system (which allows doctors to use the implant of their ! choice) w! ould unnerve some investors. Instead, I think there's still work to be done in convincing doctors (and marketing to patients) that partial knee replacements and robot-assisted hip procedures are worthwhile.

Given the rebound in the shares already seen so far, I'm not inclined to jump in here, but I wouldn't rule out a run into the high teens if those knee utilization figures can beat estimates and turn around over the next few quarters.

Source: MAKO Surgical - Rebuilding Credibility, But They Need To Rebuild More Knees

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

Things Go From Bad to Worse for Jamie Dimon

Things aren't looking so good for JPMorgan Chase (NYSE: JPM  ) CEO Jamie Dimon right now. In the following video, Motley Fool contributing writer John Maxfield discusses the latest setback for the head of the nation's largest bank by assets.

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering whether this is the new normal, or if finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, check out The Motley Fool's premium research report on the company. Click here now for instant access!

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Exxon Mobil's Earnings: The Long-Term Investor's Take

Another day of gains for U.S. stocks, with the S&P 500 (SNPINDEX: ^GSPC  ) and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) up 0.4% and 0.2%. That puts the S&P 500 within a hair's breadth of erasing last week's losses.

The VIX (VOLATILITYINDICES: ^VIX  ) , Wall Street's fear gauge, was virtually unchanged today, gaining just a hundredth of a point to close at 13.62. (The VIX is calculated from S&P 500 option prices and reflects investor expectations for stock market volatility over the coming 30 days.)

Drilling for value
Dow component -- and world's most valuable company -- ExxonMobil (NYSE: XOM  ) reported its first-quarter results this morning. I'm not even going to mention whether the company missed, met, or beat expectations, as my sole perspective is that of a a long-term, fundamentally driven investor (the same approach I encourage you to adopt, if you want to have even a chance of beating the market).

Although quarterly profits rose relative to the year-ago period, oil and natural gas production fell 3.5% year on year for the seventh consecutive quarter, to 4.4 million barrels of oil equivalent per day. In fact, total production is virtually unchanged since 2002, as the output from older fields slows and the competition for large new oil and gas fields has become merciless. The latter factor is partially a result of an explosion in energy demand from emerging economies, particularly China. Nevertheless, the company said production will ultimately increase by as much as 4% annually, beginning in 2014 through 2017, as more than two dozen major projects come online.

With growth harder to come by, investors may be disappointed to learn that ExxonMobil will reduce its share repurchases by 20% to $4 billion in the coming quarter. In the first quarter, the company bought back a whopping $5.6 billion worth of its shares. ExxonMobil had the the largest share-buyback program (in terms of aggregate purchases, not just authorizations), of any company in the S&P 500, whether it be in the most recent quarter or over the trailing 12 months (although Apple is set to overtake it).

Even at a run rate of $16 billion per year, however, buybacks would remain significant for a firm with an market capitalization of roughly $380 billion; more importantly, those purchases are likely to be adding to, rather than destroying, shareholder wealth at shares' current valuation. ExxonMobil faces a challenging environment, yes, but there is no evidence it is anything but laser-focused on creating shareholder value, and at just 11 times the next 12 months' earnings-per-share estimate, investors remain well positioned to reap the fruits of those efforts.

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Best Tiny Stocks For 2015

Best Tiny Stocks For 2015