Hot Canadian Companies To Own For 2014

Even as the market hits new highs, there are still plenty of good stocks out there to invest in these days. With oil prices still rather elevated and natural gas off its recent lows, energy stocks are a great place to place your hard-earned investing dollars. That's why the following three companies -- which have above-average shareholder payouts, excellent long-term growth prospects, and solid balance sheets -- top my list of the best stocks to invest in today.

ConocoPhillips (NYSE: COP  )
Among the large independent exploration and production companies, ConocoPhillips has the characteristics I look for in a long-term investment. The company has a steady growth plan, which will see it boost its production and margins by 3%-5% annually through 2017, with multiple opportunities to keep growing beyond that date. In addition to its exceptional growth opportunities here in the states, Conoco's operations span the globe, including positions in the Canadian oil sands, Australian natural gas exports, and European offshore oil. That diversification has helped keep the company from suffering the fate of many of its landlocked U.S.-based peers.�

Hot Canadian Companies To Own For 2014: CenturyLink Inc.(CTL)

CenturyLink, Inc., together with its subsidiaries, operates as an integrated communications company. The company provides a range of communications services, including voice, Internet, data, and video services in the continental United States. Its services include local exchange and long distance voice telephone services, as well as enhanced voice services, such as call forwarding, caller identification, conference calling, voicemail, selective call ringing, and call waiting; wholesale local network access services; and data services, including high-speed Internet access services, data transmission services over special circuits and private lines, and switched digital television services, as well as special access and private line services. The company also offers fiber transport, competitive local exchange carrier, security monitoring, and other communications, as well as professional and business information services. In addition, it provides other related services, such as leasing, selling, installing, and maintaining customer premise telecommunications equipment and wiring; payphone services; and network database services, as well as participates in the publication of local telephone directories. Further, the company offers printing, direct mail services, and cable television services; and wireless broadband Internet access services and satellite television services. As of December 31, 2010, it operated approximately 6.5 million telephone access lines. CenturyLink, Inc was founded in 1968 and is based in Monroe, Louisiana.

Advisors' Opinion:

• [By Selena Maranjian]

  Telecom company CenturyLink (NYSE: CTL  ) shed 4%, and recently yielded 6.1% (which reflects a dividend cut of about 25% as the company focuses more on share buybacks). The company landed a hefty Pentagon contract in April, with a possible 10-year value of $750 million, and has been moving into promising arenas such as cloud computing (via its purchase of SAVVIS). The company has substantial debt, though, topping $19 billion, but also significant free cash flow, near $3 billion�annually. Its EPS has been rising �in the past few years, but revenue growth is mixed.

• [By Sue Chang and Polya Lesova]

  CenturyLink Inc. (CTL) �shares rose 3%. The stock is one of the top net payout yield stocks so far in October, according to Seeking Alpha.

Hot Canadian Companies To Own For 2014: Airgas Inc.(ARG)

Airgas, Inc., through its subsidiaries, distributes industrial, medical, and specialty gases, as well as hardgoods in the United States. The company offers various gases, including nitrogen, oxygen, argon, helium, and hydrogen; welding and fuel gases, such as acetylene, propylene, and propane; and carbon dioxide, nitrous oxide, ultra high purity grades, special application blends, and process chemicals. Its hardgoods products comprise welding consumables and equipment, safety products, and construction supplies, as well as maintenance, repair, and operating supplies. The company also engages in the rental of gas cylinders, cryogenic liquid containers, bulk storage tanks, tube trailers, and welding and welding related equipment. In addition, the company manufactures and distributes liquid carbon dioxide, dry ice, nitrous oxide, ammonia, refrigerant gases, and atmospheric merchant gases. It serves repair and maintenance, industrial manufacturing, energy and infrastructure co nstruction, medical, petrochemical, food and beverage, retail and wholesale, analytical, utilities, and transportation industries. The company operates an integrated network of approximately 1100 locations, including branches, retail stores, packaged gas fill plants, specialty gas labs, production facilities, and distribution centers. Additionally, it provides retail solutions to retail customers, such as florists, grocers, restaurants and bars, tire and automotive service centers, and others. The company markets its products through multiple sales channels, including branch-based sales representatives, retail stores, strategic customer account programs, telesales, catalogs, e-business, and independent distributors. Airgas, Inc. was founded in 1982 and is based in Radnor, Pennsylvania.

Advisors' Opinion:

• [By Monica Gerson]

  Airgas (NYSE: ARG) is expected to report its Q2 earnings at $1.22 per share on revenue of $1.28 billion.

  The Boeing Company (NYSE: BA) is estimated to report its Q3 earnings at $1.55 per share on revenue of $21.68 billion.

Top 10 Warren Buffett Stocks For 2014: Enerplus Corporation (ERF)

Enerplus Corporation, together with subsidiaries, engages in the exploration and development of crude oil and natural gas in United States and Canada. As of December 31, 2011, it had 322 MMBOE of proved plus probable reserves. The company also held a portfolio of approximately 380,000 net acres of land comprised of 75,000 net acres at Fort Berthold targeting the Bakken and Three Forks; 65,000 net acres in the Duvernay; 33,000 net acres in the Montney; 67,000 net acres in the Stacked Mannville; 30,000 net acres in the Cardium and other emerging oil plays in Canada; and 110,000 net acres in the Marcellus. In addition, it had 120 gross producing wells. The company was founded in 1986 and is headquartered in Calgary, Canada.

Advisors' Opinion:

• [By Rich Duprey]

  Canadian oil and gas producer�Enerplus� (NYSE: ERF  ) �announced yesterday�its June monthly dividend of $0.09 Canadian per share, which is equivalent to $0.09 U.S. per share at an exchange rate of 0.9699.

Hot Canadian Companies To Own For 2014: Gildan Activewear Inc.(GIL)

Gildan Activewear Inc. engages in the manufacture and sale of apparel products primarily in the United States, Canada, and Europe. It sells T-shirts, fleece, and sport shirts to wholesale distributors under the Gildan brand name. The company also provides its activewear products for work and school uniforms and athletic team wear, and other purposes to convey individual, group, and team identity. In addition, it offers undecorated products to branded apparel companies and retailers; and underwear products. Further, the company markets its sock products under the various brands, including Gold Toe, PowerSox, SilverToe, Auro, All Pro, GT, and the Gildan brand. The company was formerly known as Textiles Gildan Inc. and changed its name to Gildan Activewear Inc. in March 1995. Gildan Activewear Inc. was founded in 1984 and is headquartered in Montreal, Canada.

Advisors' Opinion:

• [By Eric Volkman]

  Gildan Activewear (NYSE: GIL  ) just bought itself a new wardrobe. The company announced it has acquired "substantially all of the assets" of privately held screen printing and apparel decoration specialist New Buffalo Shirt Factory for around $7 million.

• [By Tom Stoukas]

  Deutsche Lufthansa AG (LHA) and Allianz SE (ALV) led airlines and insurers lower, retreating at least 1.5 percent. Bayerische Motoren Werke AG (BMW) slid 1.6 percent. Deutsche Bank AG (DBK) rose after JPMorgan Chase & Co. boosted its recommendation on the shares. Gildemeister AG (GIL) added 3.4 percent after Deutsche Bank upgraded the maker of cutting tools.

Hot Canadian Companies To Own For 2014: Talisman Energy Inc.(TLM)

Talisman Energy Inc., an upstream oil and gas company, engages in the exploration, development, production, transportation, and marketing of crude oil, natural gas, and natural gas liquids. It primarily operates in North America, the North Sea, and southeast Asia. The company was founded in 1925 and is headquartered in Calgary, Canada.

Advisors' Opinion:

• [By Sue Chang , Saumya Vaishampayan]

  $TLM: Talisman Energy Inc. (TLM) �shares fell 2.5%. Activist investor Carl Icahn disclosed a 6% stake in the oil and gas producer on Monday. Icahn said in a tweet he might discuss strategic alternatives and board seats with the company.

• [By Sara Murphy]

  However, some are clearly more engaged than others. Encana (NYSE: ECA  ) and Talisman Energy (NYSE: TLM  ) have joined seven other natural gas producers to team up with the Environmental Defense Fund at the University of Texas at Austin to estimate their methane emission rates. It's too soon to know what they will do with this information, but the very fact that they're participating suggests that they intend to manage the problem.

• [By Value Digger]

  Manitok's competitive advantage is its management team, who knows well where the shallow opportunities exist, from years of bypassing many conventional reservoirs and drilling deeper targets for Talisman Energy (TLM).

What Taper? Low Rates for Longer Is Key Fed Theme in 2014

Top 10 Biotech Companies To Buy For 2014

Andrew Harrer/Bloomberg via Getty ImagesFederal Reserve Chair nominee Janet Yellen. NEW YORK -- Debate over when the Federal Reserve could trim its bond purchases monopolized market talk this year, but as a new Fed chief takes charge, more participants believe the key theme to emphasize for 2014 is low rates for longer. For the bond market, which suffered a number of doomsday predictions for 2013 that never materialized, that means yields could also remain low. Even if they do rise, it might not be by much, since benchmark 10-year yields have already had a 100-plus basis point increase from lows hit in May. "The Fed under [Fed Chair nominee] Janet Yellen will be committed to a very low federal funds rate for several more years," said Jake Lowery, Treasury trader and portfolio manager for global interest rates at ING U.S. Investment Management. "That commitment to low rates is much more important than the precise timing of tapering," Lowery said, referring to potential reductions in the Fed's large-scale purchases of U.S. Treasuries and mortgage-backed securities. Fed Chair nominee Janet Yellen, testifying before the Senate Banking Committee this month, strongly defended the Fed's bold steps to spur economic growth, calling efforts to boost hiring an imperative. Outgoing Chairman Ben Bernanke also argued that case last week, saying the way to normalized policy in the future was through heavy stimulus now. "The FOMC, and especially a Yellen-led FOMC, will put a lot of weight on the employment side of its mandate and it's going to take a long time to get unemployment down to where the Fed wants it to be," said Goldman Sachs (GS) chief economist Jan Hatzius in a recent webcast. Hatzius said he expects the Fed to cut its threshold for unemployment to 6 percent from 6.5 percent. The U.S. unemployment rate currently stands at 7.3 percent. That means 2014 could be another good year for riskier assets, and a bumpier one for safer fixed income investments. "Returns of seven or eight percent on a fixed-income portfolio when the Fed pursues a zero percent interest-rate policy are just not possible," said Eric Stein, co-director of the global income group at Eaton Vance Investment Managers. In 2013, only junk bonds produced good returns. Investment grade corporates lost money as have most classes of Treasuries. The increased conviction that interest rates will remain lower for longer means investors will favor yield without duration. It also means bad economic news is good for stocks as it implies a longer period of Fed accommodation. "The economy is too weak for the Fed to consider a pullback in quantitative easing, let alone an abandonment of zero percent interest rates," said Jeffrey Rosenberg, BlackRock chief investment strategist for fixed income. Two misperceptions have kept some investment managers and traders from recognizing that rates will remain lower for longer than they think, said Robert Tipp, chief investment strategist at Prudential Fixed Income in Newark, N.J., with $400 billion in fixed-income assets under management. "First, investors underestimate the need for accommodation in the global monetary system," he said. The euro zone recovery is slow, driving a similar low-rates-for-longer policy at the European Central Bank, he said. Bank of Japan Governor Haruhiko Kuroda said on Monday the bank would further expand stimulus if growth wassn't strong enough to boost inflation to 2 percent. "Second, the U.S. economy also remains slack," Tipp said. After enduring a sell-off mid-year when the Fed intimated a small pullback in stimulus was on the way, bond rates dropped when the Fed decided to carry on purchasing bonds at its current rate. Yields since then have risen. The 10-year note now yields 2.75 percent. Higher long-term rates can potentially choke off a recovery, a hint of which can already be seen in the housing sector where sales of existing homes fell last month. "The Fed probably is not in love with this steep of a yield curve because of the impact on mortgage rates," said Jeffrey Kronthal, co-founder of KLS Diversified Asset Management. Fed Research Examines Forward Guidance Top Fed economists have also suggested the Fed might rely more on giving forward guidance on the path of interest rates by, for instance, adjusting its thresholds on inflation and unemployment to signal rates will stay low even as the recovery picks up. That guidance could compensate for some reduction in the Fed purchase program known as quantitative easing. This would give the Fed "a way of committing to keep interest rates lower for longer than would otherwise be the case under conventional policy, and thereby improve economic outcomes," Fed economists William English, J. David Lopez-Salido, and Robert Tetlow said in a paper presented earlier this month at a research conference hosted by the International Monetary Fund in Washington D.C. Some Are Skeptical Some policymakers and strategists worry monetary stimulus is already fueling inflated asset prices and higher leverage that could hurt the economy when reversed. The Bundesbank recently warned that the eurozone's record low interest rates posed risks to the financial sector if they remained in place for a long time. Some strategists think improved sentiment in purchasing managers surveys foreshadows recovery in the United States and elsewhere and that rates will rise in 2014. But even if they did, the risk of another 100-basis-point rise in 10-year yields is lower since those yields have already risen more than a percentage point from their 2013 low, said Zach Pandl, strategist at Boston-based Columbia Management, with $345 billion in assets under management. "We've already had a large valuation correction," he said.

Amazon.com, Inc. (AMZN) Q3 Earnings Preview: What To Expect?

Online retail giant Amazon.com, Inc. (NASDAQ: AMZN) will report its third quarter financial results on Oct.24 and hold a conference call on the same day at 2:00 p.m. PT/5:00 p.m. ET to discuss the operating performance.

Wall Street expects Amazon to report a loss of 9 cents a share, according to analysts polled by Thomson Reuters. In the same period last year, the company reported a loss of 60 cents a share.

Amazon's results have managed to top Street view only once in the past four quarters while missing them by a wide margin on three occasions. Analysts are more pessimistic on Amazon's earnings in the last three months, when the consensus estimate was a profit of 10 cents.

Quarterly revenue is expected to rise 21.4 percent to $16.77 billion from $13.81 billion in the same quarter last year. Amazon sees third quarter net sales between $15.45 billion and $17.15 billion, or to grow between 12 and 24 percent over the third quarter of 2012. The market could look at the contributions of North America and International markets.

Amazon is sacrificing near-term profitability to drive long-term growth as it is investing heavily in Kindle tablets, TV content, Video library and AWS. These heavy investments are weighing on gross margins resulting in losses. Amazon expects third-quarter operating loss to be between $440 million and $65 million, compared to $28 million in the third quarter of 2012.

The company recently began shipping of its third generation of Kindle Fire tablets dubbed the Kindle Fire HDX, which could be available for as low as $229. The company also announced the Kindle Fire HD for $139.

During the quarter, Amazon introduced Kindle MatchBook, a new benefit that gives customers the option to buy—for $2.99, $1.99, $0.99, or free—the Kindle edition of print books they have purchased new from Amazon. It also unveiled Kindle Paperwhite—the 6th generation of Kindle eReader.

The Kindle shipping timing difference versus last year, with both the 7" &! ; 8.9" versions pushed into the fourth quarter this year, could be mildly supportive to margins, at the expense of revenue growth.

"We would note that the low cost approach (Jeff Bezos meetings with the press) taken to introducing the new Kindle line would suggest a conservative approach to spending, potentially indicative of operating income pressures," UBS analyst Eric Sheridan said in a note to clients.

Meanwhile, increased fee revenues from 3P sellers should be supportive of gross margin expansion as Amazon raised 3P seller fees about 6 percent in the first quarter.

Investors could watch paid unit growth trends, which have been weakening as it has decelerated in each of the previous five quarters. That said, comps are approximately 400bps easier this quarter relative to last. This statistic has become of increasing importance given Amazon's increasing 3P mix and its impact on both reported revenue growth and gross profit margins.

"For Q3 2013, we estimate paid units grew slightly above the 29% growth seen in Q2 2013. The comparison continues to ease as we move into Q4 (32% paid unit growth posted in Q4 2012)," Sheridan noted.

There is potential for this number to reaccelerate given the combination of Amazon's recent Kindle store launches (China, Brazil, Mexico), 3P business launch in India, Amazon Fresh launch in Los Angeles, and the aforementioned easier compare.

A few additional items that may be brought up on the call or mentioned in some form include early progress related to the company's global expansion of the Kindle Appstore; early traction with 3P sellers in India; update around China strategy (Kindle, partnerships).

For the second quarter ended June 30, 2013, the Seattle, Washington-based company reported a net loss of $7 million or 2 cents a share, compared to net income of $7 million or 1 cent a share for the year-ago quarter. Net sales for the second quarter rose 22 percent to $15.70 billion.

Amazon has traded in a mixed manner following i! ts last t! wo third quarter earnings announcements, increasing 7 percent and declining 13 percent, respectively. That said, over a five year span, the average price change post third quarter results is a 5 percent gain.

Shares of AMZN have gained 8 percent since the last quarterly report and have climbed 41 percent in the last year. They have traded between $218.18 and $331.89 during the past 52-weeks.

British Petroleum - Gaining Momentum

I have been buying British Petroleum's (BP) shares for over a year but the stock, which is now up by 10.2% year to date, largely underperformed the S&P 500 index and most of its peers in the oil & gas industry. That said, the market sentiment seems to be finally turning thanks to better than expected results and management's promise of giving back more cash to shareholders. Let's take a look at this quarter's results and let's try to make an educated guess on what might be coming up in the future.

Earnings Well Above Expectations

British Petroleum is finally starting to shine. Adjusted earnings were down by "just" 28% year over year at $3.7 billion. This means that the company could generate earnings per ADR of $1.17, which was well above market consensus, at just $0.96 per ADR. The reasons can be found in a lower tax rate and good upstream results explained by higher prices.

Even when production was down by 2%, realization prices were up by 4% at $67.4 per barrel of oil equivalent (boe). Downstream was, by far, the weakest link of all. Downstream earnings declined aggressively by 76% year over year due to lower margins and the sale of two refineries in the U.S. As a matter of fact, earnings were 74% upstream, 14% Rosneft and 12% downstream. Earnings were good but they are still a reflection of a company that is trying to reshape itself.

The Future Ahead

British Petroleum has once again reassured investors that its committed to invest in order to re-build itself. The company issued a 2014 capex guidance of $24 billion to $25 billion and will complete 15 to 20 deep water exploration wells this year alone. Besides, in order to strengthen its downstream portfolio, British Petroleum plans to start up its Whiting refinery very soon, which is not a detail since the refinery is expected to generate annual cash flows of well over $1 billion.

All the facts stated above were expected by the market but what the market was not expecting was British Petroleum's plan to f! urther sell more than $10 billion of its assets through 2015. More importantly, the sale proceeds will be used to boost the company's share buyback plan – during this quarter, the company used $1.3 billion out of its $7 billion operating cash flow to fund buybacks. On top of this, British raised its quarterly dividend by 6%.

I strongly believe that for the foreseeable future British Petroleum will continue on this track of increasing dividends and buybacks as cash flows grow thanks to higher and more profitable production rates.

Valuation

British Petroleum's stock still remains undervalued. I think the sell-off that occurred after the platform explosion on April 2010 is still weighing on the shares. As a matter of fact, the company trades at just 8.1 times 2014 earnings and 1.1 times its book value. Meanwhile, other oil majors such as ExxonMobil (XOM) and Chevron (CVX) sell for considerably higher valuation levels. ExxonMobil trades at 11 times 2014 earnings and 2.3 times its book value while Chevron trades at 11.7 2014 earnings and 1.6 times its book value.

I will stay long British Petroleum's shares. In the meantime, I can enjoy the company's 5% cash dividend yield – ExxonMobil and Chevron pay 2.84% and 3.33%, respectively.

S&P 500 surges to record on Fed bets after debt deal

U.S. stocks rose Thursday, sending the Standard & Poor's 500 Index to a record, as speculation grew that the Federal Reserve will maintain the pace of stimulus after Congress ended the budget standoff.

American Express Co. rallied the most in nearly two years after reporting third-quarter profit that beat analysts' estimates. Newmont Mining Corp., the second-largest gold miner, jumped 4.6% as the price of the precious metal surged. International Business Machines Corp. sank 6.4% after posting its sixth consecutive drop in quarterly sales. Goldman Sachs Group Inc. dropped 2.4% as the bank reported a 20% drop in revenue.

The S&P 500 rose 0.7% to 1,733.15 at 4 p.m. in New York, surpassing the previous record of 1,725.52 from Sept. 18. The Dow Jones Industrial Average fell 2.18 points to 15,371.65, held down by IBM and Goldman Sachs. About 6.6 billion shares changed hands on U.S. exchanges, 12% above the three-month average.

“The taper seems a little bit further out, certainly than anybody expected eight weeks ago and maybe even just a couple of weeks ago,” Walter Todd, chief investment officer at Greenwood Capital Inc., said in a phone interview from Greenwood, S.C. He helps manage $950 million. “It keeps a lid on rates and provides more liquidity for risk assets like stocks. People are back to focusing on the individual company dynamics that occur during earnings season.”

The S&P 500 gained 2.4% during the 16-day government closure that ended Wednesday after President Barack Obama signed a bill to fund the government through Jan. 15 and extend the borrowing authority through Feb. 7.

Shutdown effects

Investors will now weigh the shutdown's effects on corporate earnings and economic growth as the impasse fueled bets that the Fed will delay reducing its $85 billion in monthly bond purchases.

Pacific Investment Management Co. said the central bank will postpone tapering. The Fed “may now have no choice but to stay longer in its intense policy experimental mode –- due both to the likelihood of weaker data and to a perceived need to take out insurance for the economy against future political dysfunction,” said Pimco Chief Executive Officer Mohamed El-Erian in a CNBC blog posting.

The “fiscal shenanigans” undermined the case for tapering, Dallas Fed President Richard Fisher, an opponent to increasing stimulus, said today. Kansas City Fed President Esther George, who has voted this year against expanding stimulus, said the Fed has enough data to assess the economy's strength and should taper even amid fiscal “uncertainty.” The central bank next convenes Oct. 29-30.

Broad rally

The Fed stimulus has helped the equity gauge surge 156% from its March 2009 low. The index has jumped 22% this year and climbed to its previous intraday record of 1,729.86 on Sept. 19, a day after the Fed unexpectedly delayed tapering at its last policy meeting.

The rally i! n stocks this year has pushed valuations to a three-year high and is the broadest since at least 1990. The S&P 500 trades at 16.5 times reported operating profit, a 17% increase from the beginning of 2013, according to data compiled by Bloomberg. Some 445 stocks in the gauge have posted year-to-date gains through yesterday, data show. The second-broadest advance in the period was in 1995, when 434 stocks in the benchmark gained through Oct. 16.

Equities could come under pressure as companies from Knoll Inc. to NCI Inc. have said they expect the shutdown to affect revenue in the last three months of the year.

Revenue slowdown

“We are going to see a lower equity market and a longer period of lower rates” if corporate earnings start to deteriorate in the fourth quarter, BlackRock Inc. Chief Executive Officer Laurence D. Fink, who as head of the world's biggest money manager oversees $4.1 trillion in assets, said today on “Market Makers” with Erik Schatzker and Stephanie Ruhle.

Knoll, an officer furniture maker, estimates about $10 million of government business to be pushed into next year, CEO Andrew Cogan said. Stanley Black & Decker Inc.'s shares yesterday dropped 14%, the most since 1992, after the toolmaker reduced its full-year profit forecast in part because of the shutdown. Campbell Soup Co. has seen consumers pull back after a year that included higher payroll taxes, along with the impasse in Washington, CEO Denise Morrison said.

Growth impact

Profits for S&P 500 companies probably grew 8.8% in the fourth quarter, according to analysts' estimates compiled by Bloomberg as of Oct. 11.

S&P Ratings Services Wednesday said the shutdown has shaved at least 0.6% off of fourth-quarter 2013 gross domestic product growth, or taken $24 billion out of the economy. IHS Inc. of Lexington, Massachusetts, reduced its GDP growth estimate for the period to 1.6%, from 2.2% in September.

(Don't miss: Advisers disgusted with D.C. politics after budget drama)

The U.S. economy wi! ll expand! by 1.6% this year, according to economists surveyed by Bloomberg. That would be the slowest rate of annual growth since 2009.

Consumer pessimism

A report Thursday showed Americans in October were the most pessimistic about the nation's economic prospects in almost two years as concern mounted that continued political gridlock will hurt the expansion. The monthly Bloomberg Consumer Comfort Index expectations gauge plunged to minus 31, the lowest level since November 2011.

“So far, we think earnings will be resilient, even to what happened in Washington,” Andres Garcia-Amaya, global market strategist at JPMorgan Chase & Co.'s mutual funds unit, said in a phone interview. His firm oversees $400 billion. “Short term, you might still have the sour taste of what happened the last couple of weeks. Fundamentally, the economy still has plenty of pent-up demand. The balance sheets of the consumer are actually in decent shape.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, sank 8.4%, after falling yesterday by the most in more than two years. The index has retreated 25% this year.

Third-quarter results

Profits for companies in the S&P 500 probably increased 1.4% during the third quarter as sales rose 2%, according to analysts' estimates compiled by Bloomberg. Some 24 companies in the index reported results today.

Nine of 10 main groups in the S&P 500 advanced Thursday. Phone, utility and materials stocks rallied at least 1.3% to pace gains.

IBM plunged 6.4% to $174.83 for the biggest drop in the Dow. Third-quarter revenue fell 4% to $23.7 billion, $1 billion less than analysts had forecast in a Bloomberg survey.

Goldman Sachs fell 2.4% to $158.32. The world's most profitable securities firm before the financial crisis said earnings were little changed as the bank cut costs in response to a 20% drop in revenue. The firm increased its dividend 10%.

IBM and Goldman are the second and third-biggest weightings, res! pectively! , in the price-weighted Dow. Goldman was added to the gauge last month. The difference between today's move in the Dow and S&P 500 was the biggest since April, according to data compiled by Bloomberg.

(Bloomberg News) Like what you've read?

Finra booted 16 rogue brokers this year, targeted 26 more for 'action'

Bloomberg News

Finra has identified more than three dozen brokers since the beginning of the year for targeted, expedited investigations, the head of the organization told a senator in a recent letter.

The Financial Industry Regulatory Authority Inc. has zeroed in on 42 brokers, authorizing “fast-tracked regulatory actions” through the High Risk Broker program it established in February, wrote Richard G. Ketchum, chairman and chief executive of the broker regulator.

Of those brokers, 16 became the target of enforcement actions that led to their being barred from the industry. Finra's fraud unit flagged the brokers through indicators such as broker terminations, complaints, tips, arbitrations and field reports.

“The High Risk Broker initiative demonstrates that a concentrated effort on single brokers using expedited tactical techniques can achieve material results,” Mr. Ketchum wrote in a Nov. 13 letter to Sen. Edward Markey, D-Mass., that was released by Mr. Markey on Friday. “In 2014, we plan to expand the HRB program and create a dedicated enforcement team to prosecute such cases.”

Finra barred 1,342 individual brokers between January 2011 and Sept. 30, Mr. Ketchum wrote.

He was responding to an Oct. 25 letter that Mr. Markey sent to Finra and the Securities and Exchange Commission calling on the agencies to crack down on brokers who violate securities rules and continue to practice.

Top Gold Stocks To Invest In 2014

“The fact that dozens of brokers have been designated high-risk and 16 brokers have been barred from the securities industry in mere months underscores the urgent need for Finra and the SEC to engage in much more vigorous enforcement of rogue brokers,” Mr. Markey said in a statement Friday.

In his letter, Mr. Markey referred to a Wall Street Journal article showing that 5,000 brokers who work for firms that were thrown out of the industry by Finra are still in the business.

He asserted that it is too easy for brokers to clear their records of disciplinary actions in the BrokerCheck database and avoid paying arbitration awards to harmed investors.

In his response, Mr. Ketchum wrote that Finra is making improvements in each of the areas.

More than half of his eight-page letter concentrated on so-called expungement, which allows brokers to request that disciplinary actions be removed from their BrokerCheck profiles.

“We are presently reviewing the overall expungement process,” Mr. Ketchum wrote. “We are also considering additional rule changes to address the practice of conditioning settlements upon the investor's agreement not to op! pose expungement.”

A recent study by the Public Investors Arbitration Bar Association shows that expungement was granted more than 90% of the time that it was requested by brokers in arbitration cases between 2007 and 2011.

In response to that report, Finra said that it had granted 838 expungements following court orders during that time period, or in less than 5% of the 17,635 arbitration cases filed.

Royce Select Fund I - Valuation and Emerging Quality

Why is valuation so important to our investment and risk management process, and how does Royce Select Fund I Portfolio Manager Lauren Romeo determine if a potential investment has the ability to appreciate over time?Royce Select Fund I is part of a suite of limited portfolios here at Royce that accentuate high quality and attractive valuation in the stock selection process. It marked 15 years of history on November 18, 2013.

The Fund invests primarily in micro-cap, small-cap, and mid-cap stocks with market capitalizations up to $5 billion. It also may invest in both long and short positions, though it has been a long-only portfolio throughout most of its history.

Hot Warren Buffett Stocks To Own Right Now

Portfolio ProcessTypically investing in less than 100 positions, the Fund is a limited portfolio that looks for companies with underlying financial strength. Portfolio Manager Lauren Romeo uses a disciplined value approach by emphasizing the following metrics:

A strong balance sheetHigh returns on invested capitalStrong free cash flowAn established history of earningsA durable business modelValuation is also a key component in our investment and risk management process. A great company will not become a great investment if we overpay. So Lauren also analyses a company to establish its value as a business and determines if its troubles appear reparable. This stage includes meeting with management teams and typically entails contact with a company's competitors, customers, suppliers, and industry experts.

The goal is to buy companies when perception of the nature of their struggles is worse than their financial or operational reality; such perceptions often cause a company's valuation to decouple from its intrinsic value. Throughout the firm, we want to buy when companies are trading at a 30-50% discount to our estimate of their true worth. Doing so gives us a measure of a! ssurance that a company's share price is reflecting both bad news and low expectations when we are considering a purchase.

This phase of the vetting process, then, sees us working to determine whether a business is out of favor for cyclical or temporary, company-specific reasons that are fixable (ideally within a short time period), which would allow the company to return to normalized earnings power over time, or whether there is a structural change that has permanently altered its business so that previous successes may not be achievable going forward.

Lauren's methodology also often centers on a search for "emerging quality." These are companies that have the potential to boost their returns on invested capital to above-average levels due to a change in either their industry's structure—consolidation leading to a more rational competitive environment, for example—or at the company level, such as a new management team, divestiture of an underperforming asset, or exiting an unprofitable line of business.

[ Enlarge Image ]Important Performance and Expense Information

All performance information reflects past performance, is presented on a total return basis, reflects the reinvestment of distributions, and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, so that shares may be worth more or less than their original cost when redeemed. Shares redeemed within 180 days of purchase may be subject to a 1% redemption fee, payable to the Fund, which is not reflected in the performance shown above; if it were, performance would be lower. Current month-end performance may be higher or lower than performance quoted and may be obtained here. Operating expenses reflect the Fund's total annual operating expenses ! for the I! nvestment Class as of the Fund's most current prospectus and include management fees and other expenses.


[ Enlarge Image ]
1 Average return shown is the average of all month-end trailing one-, three-, five-, and 10-year total returns.

We have been pleased with the Fund's long-term results on an absolute basis. While on a relative scale the Fund has underperformed of late, its results in monthly rolling return periods have been terrific. On a monthly basis, the Fund outperformed the Russell 2000 in 100% of all 10-year periods, 96% of all five-year periods, 85% of all three-year periods, and 66% of all one-year periods.

For 100% of the periods, the Fund's 10-year average annual total returns were greater than 5%, and for 93% of the periods, 10-year average annual total returns were greater than 10%.

Important Disclosure Information

This material is not authorized for distribution unless preceded or accompanied by a current prospectus. Please read the prospectus carefully before investing or sending money. The Fund invests primarily in micro-cap, small-cap, and mid-cap stocks, which may involve considerably more risk than investing in larger-cap stocks. (Please see "Primary Risks for Fund Investors" in the prospectus.) The Fund may sell securities short which involves selling a security it does not own in anticipation that the security's price will decline. Short sales present unlimited risk on an individual stock basis since the Fund may be required to buy the security sold short at a time when the security has appreciated in value. The Fund also invests primarily in a limited number of stocks, which may involve considerably more risk than a less concentrated portfolio because a decline in the value of these stocks would cause the Fund's overall value to decline to a greater degree. (Please see "Primary Risks for Fund Investors" in the prospectus.) The Fund may invest up to 15% of its net asse! ts in for! eign securities, which may involve political, economic, currency, and other risks not encountered in U.S. investments. (Please see "Investing in Foreign Securities" in the prospectus.) Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. The Russell 2000 is an unmanaged, capitalization-weighted index of domestic small-cap stocks. It measures the performance of the 2,000 smallest publicly traded U.S. companies in the Russell 3000 index. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.


Also check out: Chuck Royce Undervalued Stocks Chuck Royce Top Growth Companies Chuck Royce High Yield stocks, and Stocks that Chuck Royce keeps buying
Track Gurus' Stock Purchases Daily – Real Time Guru Picks GuruFocus "Real Time Picks" reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 3 days after the date of the transaction. This is just one of the features provided with GuruFocus Premium Membership.

Click Here to Try It Free!

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

.social_network_button{ +float: left; } Subscribe via Email Subscribe RSS Comments Please leave your comment:
More Gurufocus Links

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool

180,839 Users
Have Received Their FREE 12-Page Warren Buffett Portfolio Report Get Yours FREE Here MORE GURUFOCUS LINKS

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool

SPY STOCK PRICE CHART 178.47 (1y: +26%) $(function() { var seriesOptions = [], yAxisOptions = [], name = 'SPY', display = ''; Highcharts.setOptions({ global: { useUTC: true } }); var d = new Date(); $current_day = d.getDay(); if ($current_day == 5 || $current_day == 0 || $current_day == 6){ day = 4; } else{ day = 7; } seriesOptions[0] = { id : name, animation:false, color: '#4572A7', lineWidth: 1, name : name.toUpperCase() + ' stock price', threshold : null, data : [[1353650400000,141.35],[1353909600000,141.05],[1353996000000,140.33],[1354082400000,141.46],[1354168800000,142.12],[1354255200000,142.16],[1354514400000,141.45],[1354600800000,141.25],[1354687200000,141.5],[1354773600000,141.98],[1354860000000,142.42],[1355119200000,142.47],[1355205600000,143.44],[1355292000000,143.51],[1355378400000,142.63],[1355464800000,142.11],[1355724000000,143.77],[1355810400000,145.37],[1355896800000,144.29],[1355983200000,145.12],[1356069600000,142.79],[1356328800000,142.35],[1356501600000,141.75],[1356588000000,141.56],[1356674400000,140.03],[1356933600000,142.41],[1357106400000,146.06],[1357192800000,145.73],[1357279200000,146.37],[1357538400000,145.97],[1357624800000,145.55],[1357711200000,145.92],[1357797600000,147.08],[1357884000000,147.07],[1358143200000,146.97],[1358229600000,147.07],[1358316000000,147.05],[1358402400000,148],[1358488800000,148.33],[1358834400000,149.13],[1358920800000,149.37],[1359007200000,149.41],[1359093600000,150.25],[1359352800000,150.07],[1359439200000,150.66],[1359525600000,150.07],[1359612000000,149.7],[1359698400000,151.24],[1359957600000,149.53],[1360044000000,151.05],[1360130400000,151.16],[1360216800000,150.96],[1360303200000,151.8],[1360562400000,151.77],[1360648800000,152.02],[1360735200000,152.15],[1360821600000,152.29],[1360908000000,152.11],[1361253600000,153.25],[1361340000000,151.34],[1361426400000,150.42],[1361512800000,151.89],[1361772000000,149],[1361858400000,150.02],[1361944800000,151.91],[1362031200000,151.61],[1362117600000,152.11],[1362376800000,152.92],[1362463200000,154.29],[1362549600000,154.5],[1362636000000,154.78],[1362722400000,155.44],[1362978000000,156.03],[1363064400000,155.68],[1363150800000,155.91],[1363237200000,156.73],[1363323600000,155.83],[1363582800000,154.97],[1363669200000,154.61],[1363755600000,155.69],[1363842000000,154.36],[1363928400000,155.6],[1364187600000,154.95],[1364274000000,156.19],[1364360400000,156.19],[1364446800000,156.67],[1364533200000,156.67],[1364792400000,156.05],[1364878800000,156.82! ],[1364965200000,155.23],[1365051600000,155.86],[1365138000000,155.16],[1365397200000,156.21],[1365483600000,156.75],[1365570000000,158.67],[1365742800000,158.8],[1366002000000,155.12],[1366088400000,157.41],[1366174800000,155.11],[1366261200000,154.14],[1366347600000,155.48],[1366606800000,156.17],[1366693200000,157.78],[1366779600000,157.88],[1366866000000,158.52],[1366952400000,158.24],[1367211600000,159.3],[1367298000000,159.68],[1367384400000,158.28],[1367470800000,159.75],[1367557200000,161.37],[1367816400000,161.78],[1367902800000,162.6],[1367989200000,163.34],[1368075600000,162.88],[1368162000000,163.41],[1368421200000,163.54],[1368507600000,165.23],[1368594000000,166.12],[1368680400000,165.34],[1368766800000,166.94],[1369026000000,166.93],[1369112400000,167.17],[1369198800000,165.93],[1369285200000,165.45],[1369371600000,165.31],[1369630800000,165.31],[1369717200000,166.3],[1369803600000,165.22],[1369890000000,165.83],[1369976400000,163.45],[1370235600000,164.35],[1370322000000,163.56],[1370408400000,161.27],[1370494800000,162.73],[1370581200000,164.8],[1370840400000,164.8],[1370926800000,163.1],[1371013200000,161.75],[137109960000

Is a CEO-Led Buyout Ethical?

Q: I work for a publicly traded company that is struggling, depressing the share price. Now our longtime CEO and several senior executives have joined with a private-equity firm in a bid to take our company private. They're offering shareholders—including me and a lot of my fellow employees—a modest premium over the recent share price. Our board of directors seems inclined to accept it, but I think the whole thing smells. What do you think?

See Also: Should Execs Return Bonuses They Don't Merit?

A: I'm with you. The buyout bid might turn out to be a fair price, but the CEO and other brass have a serious conflict of interest. As employees of your company, they have a duty to fix the problems and boost its value for everyone—even if it takes a while and causes some pain and volatility in share price along the way.

But as participants in the buyout bid, they have a contrary interest in paying as little as they can for the stock. They hope to share in a huge gain from engineering a fast turnaround and, ironically, possibly taking the company public again in an IPO. Key question for the CEO: "If you have a great plan for saving our company, why haven't you done it already?"

An even bigger issue is why your board is going along with this. If the members have any guts—and independence from your CEO—they should demand his resignation (and that of his fellow execs on the buyout team) as a precondition for considering the buyout offer. Then, while interim leadership runs the company, the board should solicit competing bids and also explore a turnaround plan as a public company.

Too many publicly traded companies have been taken private for too low a price in recent years, enriching the new private-equity owners at the expense of the former stockholders, especially small investors. Big institutional shareholders—university endowments, pension funds and mutual funds—should side with the small shareholders and push back against sweetheart deals like this.

Top 10 Dividend Companies To Buy For 2014

Have a money-and-ethics question you'd like answered in this column? Write to editor in chief Knight Kiplinger at ethics@kiplinger.com.

Geithner takes private equity job

Tim Geithner, who stepped down as Treasury Secretary in January, will start in March as president and managing director of private equity firm Warburg Pincus.

NEW YORK (CNNMoney) Former Treasury Secretary Tim Geithner, who has spent virtually his entire career working for the government, is taking a job in finance.

Warburg Pincus, a firm engaged in buying and selling companies, said Saturday that Geithner will start at the firm as president and managing director in March.

Geithner told the Wall Street Journal, which first reported the move, that he will play a "substantive role in helping ... manage the firm."

In a statement, Warburg Pincus said Geithner will "work closely" with its co-chief executives on strategy, management and investing.

A mainstay of President Obama's first-term cabinet, Geithner was an architect of the government's response to the financial crisis.

Geithner was widely associated with the TARP bank rescue, which was ushered through Congress by former Treasury Secretary Henry Paulson and then managed by Geithner after the Bush-Obama transition.

The controversial TARP was seen by some as a bailout of fat cat bankers. And some credited it with stabilizing the economy and helping avoid a deeper recession.

The day word leaked that Obama would name Geithner to lead Treasury, in the tumultuous period after the 2008 election, the Dow gained nearly 500 points.

When the crisis began, Geithner was president of the New York Federal Reserve, which helps oversee Wall Street. All told, he ran the New York Fed from 2003 until 2009.

Geithner, 52, left Washington in January 2013 and was succeeded by Jack Lew as Treasury chief. He first went to work at Treasury in 1988 and was later a top deputy to Treasury secretaries Robert Rubin and Larry Summers.

Hot Energy Companies To Buy Right Now

Reports surfaced after he left office that Geithner is writing a book about the financial crisis.

Warburg Pincus, established nearly 50 years ago, is a top player in private equity and manages $35 billion in assets.

In a deal this summer, Warburg sold eyecare specialist Bausch & Lomb to Valeant Pharmaceuticals for $8.7 billion. Years earlier, Warburg had led a private takeover of Bausch & Lomb.

Warburg did not disclose Geithner's compensation.

Market Wrap-Up for Sept. 11 (AAPL, IBM, DIS, PM, more)

The major U.S. indices were mixed in early trading this morning, following the lead of the global markets, and cooling off after a bullish start to the week. However, stocks eventually regained some steam as the day’s trading went on and the Dow added to its recent rally, led by IBM (IBM), Walt Disney (DIS), and Microsoft (MSFT). The S&P 500 edged only slightly higher and the NASDAQ edged lower, as these indices were dragged down by the likes of Apple (AAPL), Qualcomm (QCOM), and others.

Stocks on the Rise

There were a number of stocks that saw positive action today for various reasons. As mentioned above, IBM shares are rallied after the company announced that it closed a deal to sell its customer care business for $505 million. Disney shares got a boost from an analyst upgrade at ISI Group. Furthermore, Philip Morris International (PM) rose higher in the day’s trading due to its announcement of a 10.6% dividend increase.

Top 5 Biotech Companies To Watch In Right Now

Other stocks rising higher today due to Wall Street analyst upgrades are Marriott International (MAR), Wynn Resorts (WYNN) and Covidien plc (COV).

Stocks on the Decline

Some of the stocks in the red today were Citigroup (C), after it was reported that it will layoff more than 2,000 employees in its mortgage unit, and Legg Mason (LM), after it reported a decline in its assets under management in August.

Furthermore, following Wall Street analyst downgrades, shares of BlackRock (BLK), Apache (APA