Mortgage Markets in Transition

Housing stocks got a boost on Wednesday following the announcement from the Federal Open Market Committee (FOMC) that the Federal Reserve would continue its $85 billion monthly asset purchases. That total includes $40 billion in purchases of mortgage-backed securities.

The FOMC's reasoning was spelled out in the meeting announcement:

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee’s dual mandate.

The mortgage markets have slowed over the past several months as mortgage interest rates increased. Refinancings have dropped to around 60% of all new mortgages and could drop to around 36% next year. Lending for new purchases will make up only a portion of the decline.

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According to its September MarketPulse newsletter, CoreLogic Inc. (NYSE: CLGX) thinks the housing market needs to transition from a lending-rate driven model to a home value-driven model if there is to be a sound mortgage market in the future. Factors that will affect that transition include low long-term estimates for U.S. GDP growth of just 1.75%, higher mortgage rates slowing the pace of new housing construction, the impact of new lending requirements and a reduction in the number of all-cash sales.

CoreLogic notes:

The housing sector has played a pivotal role in driving GDP growth since late 2011, but rising rates will modestly temper the contribution going forward. Nonetheless, rising rated do not pose a burden that is insurmountable.

The housing sector contributed 17% to first-quarter 2013 GDP growth. That cannot contract much if the U.S. economy is going to recover. The Fed knows that, which is a big reason that a tapering of asset purchases has been delayed.

At the Open: Huntsman Gains 5% on Acquisition; Safeway Surges 9% on Shareholder Rights Plan

Stocks rose this morning as the Federal Reserve began the meeting that could bring the beginning of the end of its bond buying.

REUTERS

The Dow Jones Industrials have gained 0.2% to 15,531.54 at 9:43 a.m., while the S&P 500 has risen 0.2% to 1,700.99. The Nasdaq Composite has advanced 0.2% to 3,724.97.

Today, the Fed began its two-day policy meeting and tomorrow we’ll learn whether tapering will, in fact, as many in the market believe. Just as important, however, is what the Fed says about its future expectations for economic growth, inflation and rate hikes. This morning’s benign inflation data–the consumer price index rose just 0.1% in August from July–has increased the chances that the Fed could be more dovish. Deutsche Bank’s Alan Ruskin explains:

CPI components were very subdued outside of large 0.6% gain in medical care that looks to have accelerated of late after a soft start. The data provides a little more fuel for the doves on balance, with core inflation quiescent. There is market chatter on possibility that the Fed includes some new policy guidance that even if unemployment falls below 6.5% if the 2y forward inflation forecast is less than say 1.5% the Fed will not tighten. This kind of change is plausible (although not a DB central view) but is a little more likely in my opinion than simply changing the 6.5% unemployment rate number. Note that lowering the 6.5% unemployment rate threshold would make it more difficult to square with the Fed's projection of a slow path of Fed tightening once they start to raise rates, unless the Fed's views on the natural rate of unemployment also fall with the new unemployment threshold. The Fed is already having a hard time squaring the slow tightening cycle from mid-2015 with a late start to tightening, at least when these numbers are applied to a regular Taylor Rule.Never mind the loss of credibility attached to any regular fiddling with thresholds, for the above reason alone, a reduction in the 6.5% unemployment 'threshold' is very unlikely.

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Societe Generale’s Alain Bokobza warns investors not to underestimate the impact of the Fed’s tapering. He writes:

Few market participants realise that after five years of super easy money, the Fed will hike rates. After all, tapering will only last until March. We doubt that US assets can resist this perspective after their astonishing rise. We expect US bond yields have further to rise. US equities, which have already risen 170% since March 2009 lows (dividend included), may thus stay flat for the next two or three years, with a more volatile regime.

His recommendation: Buy Europe.

Nucor (NUE) has gained 1.8% to $49.99 after the steel producer said its third-quarter earnings would come in between 35 cents and 40 cents a share, in-line with forecasts for 38 cents.

Huntsman (HUN) has gained 4.5% to $20 after it said it would buy Rockwood’s (ROC) titanium dioxide business for $1.1 billion.

Mosaic (MOS) has dropped 1.1% to $45.07 after it cut its third quarter forecast for sales of potash.

Safeway (SWY) has gained 9.2% to $30.62 after the grocer said that it had initiated a shareholder rights plan following an investor taking a large position in the company.

Top Warren Buffett Stocks To Watch For 2014

In the following video, Motley Fool contributor John Reeves tells investors why he's not buying shares of Bank of America (NYSE: BAC  ) today. John discusses several shady practices the bank's former employees have accused it of, including using the Home Affordable Modification Program, or HAMP, as a tool to get as much money out of borrowers as possible before foreclosing. John frames this as a bank putting shareholder interests ahead of customer interests, something he would never touch as an investor.

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Top Warren Buffett Stocks To Watch For 2014: China Wind Power Intl Corp (CNW.V)

China Wind Power International Corp. focuses on development and operation of wind farm power plants in China. It indirectly holds the rights for wind energy development in Duerbert Mongolian Nationality Autonomous County, Heilongjiang Province, with an installed capacity of 1,150 megawatts of wind energy developable over an area of 612 square kilometers. The company is based in Toronto, Canada.

Top Warren Buffett Stocks To Watch For 2014: Nuveen Select Tax Free Income Portfolio III(NXR)

Nuveen Select Tax-Free Income Portfolio 3 is a closed-ended fixed income mutual fund launched by Nuveen Investments Inc. It is co-managed by Nuveen Fund Advisors, Inc and Nuveen Asset Management, LLC. The fund invests in the fixed income markets of United States. It invests in the investment-grade municipal securities rated Baa and BBB or better. The fund benchmarks the performance of its portfolio against the Standard & Poor?s (S&P) National Municipal Bond Index and Lipper General and Insured Unleveraged Municipal Debt Funds Average. Nuveen Select Tax-Free Income Portfolio 3 was formed on July 24, 1992 and is domiciled in the United States.

5 Best Gold Stocks To Own For 2014: Keynote Systems Inc.(KEYN)

Keynote Systems, Inc. provides Internet and mobile cloud monitoring and testing solutions worldwide. The company?s Internet cloud products and services comprise Transaction Perspective for visibility into the performance and availability of Web transactions; Application Perspective, a Web application monitoring service; Cloud Application Perspective that provides software-based performance monitoring; Private Agents for the performance of mission critical extranet and intranet applications; Streaming Perspective to measure, compare, and assure the performance of audio and video streams; and Performance Scoreboard, a custom dashboard to monitor Web performance. Its Internet cloud products and services also include Enterprise Adapters to integrate performance measurement data into enterprise systems management platforms; Keynote Internet Testing Environment, a desktop tool for real-time testing, diagnosing, and troubleshooting Web performance issues; LoadPro, a Web load tes ting service; Test Perspective, a self-service load testing service; Red Alert to test devices connected to the Internet; and consulting services, such as performance insights, Web site performance assessment, automated reporting, and custom competitive research. In addition, the company?s mobile cloud products and services primarily consist of System Integrated Test Environment System to test and measure the quality and reliability of mobile networks and applications, and content delivery for mobile operators; GlobalRoamer to certify and validate roaming agreements; Mobile Device Perspective to enhance the quality of mobile content, applications, and services; Mobile Web Perspective to monitor and troubleshoot the quality and performance for mobile Web sites; and Mobile Internet Testing Environment, a desktop tool. Further, it offers professional services, mobile competitive monitoring and analysis, and mobile insights. The company was founded in 1995 and is headquartered in San Mateo, California.

Top Warren Buffett Stocks To Watch For 2014: LodgeNet Interactive Corporation(LNET)

LodgeNet Interactive Corporation provides interactive media and connectivity services to the hospitality industry in the United States, Canada, and Mexico. The company designs, develops, and operates interactive television (TV) systems at hotel properties that provide guest entertainment and other interactive services, including on-demand movies, TV programming, and digital music programming; daily subscription sports programming; on-screen controls; and interactive guest marketing and merchandising. It also offers basic and premium cable TV programming to hotels; Envision, a platform that connects high-definition guest room TVs to Internet-sourced content and information; LodgeNet Mobile App, which enables travelers to control the in-room TV with their iPhone, Android phone, or iPad, as well as discover the on-demand content on its interactive TV system, and access hotel and local area information and services; and Internet access through the sale and installation of equi pment. In addition, the company designs, installs, and operates wired and wireless Internet access systems at hotel properties; sells interactive TV systems to international licensees, as well as provides system planning, technical installation, project management, and support services to hotels; markets and sells guest entertainment interactive systems to hotels with support services; sells and installs cable TV programming systems; provides interactive TV infrastructure and content to the healthcare industry; and engages in the sale of advertising-based media services in hospitality media and connectivity. As of December 31, 2011, it provided interactive media and connectivity services to approximately 1.6 million hotel rooms in North America and internationally; and installed systems in 68 healthcare facilities representing approximately 15,900 beds. The company was founded in 1980 and is headquartered in Sioux Falls, South Dakota.

Top Warren Buffett Stocks To Watch For 2014: Linde AG (LING.DE)

Linde AG is a German company engaged in the gases and engineering sector. It operates two divisions: Gases and Engineering, as core divisions, as well as Gist. The Gases Division includes Healthcare, producing medical gases; and Tonnage, as its two global business units; as well as the two business areas Merchant and Packaged Gases, offering liquefied and cylinder gases, and Electronics. The Company�� products are used in the energy sector, for steel production, chemical processing, environmental protection and welding, as well as in food processing, glass production and electronics. The Engineering division offers planning, project development and construction of turnkey industrial plants used in fields, such as petrochemical and chemical industries, in refineries and fertilizer plants, to recover air gases, to produce hydrogen and synthesis gases, to treat natural gas, and in the pharmaceutical industry. As of August 13, 2012, the Company acquired Lincare Holdings Inc.

Diversifying: The Chemicals Sector

Some say that specializing in one product is the path to success. Others argue that diversifying is a policy against economic recessions. Time has proved that neither strategy is wrong, and that each one has an expiration date. Here are two chemical companies that started with one product and have eventually diversified: DuPont (DD) and Air Products & Chemicals (APD). Let's take a look into their prospects for the years to come.

Adjusting the Scheme

At the moment, DuPont continues to experience weakness at end markets for titanium dioxide and photovoltaic products, resulting in lower sales volume. Also, sales have been negatively impacted by performance chemicals and electronics franchises, offsetting positive results displayed by the agricultural segment. Despite holding a solid balance sheet, management has leaked information concerning the future sale of performance chemicals.

DuPont continues to feed its R&D pipeline with enough cash to develop and introduce new products in the short term. Most efforts are currently focused on the photovoltaic, agriculture, alternative energy and other materials. During the last quarter alone, the company introduced 465 new products, setting a high bar for competitors. Also, the firm has entered the food ingredients and enzyme markets with the recent acquisition of Danisco, and expanded its presence in the biotechnology and biofuels industry.

A great plus for DuPont, in order to reduce negative end markets trends, has come from a committed cost-cutting strategy focused around fixed costs, personnel adjustment, work schedule restructuring and working capital improvements. Additionally, great performances for the agricultural segments in the Latin American region continue to push growth in booked orders. In the long term, the company expects a 7% growth for total sales and 12% growth for earnings per share, making a strong statement about future performance.

Currently trading at 23.1 times its earnings and packing a 19% premium to the ! industry average, the stock is overvalued. I still remain bullish about DuPont´s future, and several gurus do too. James Barrow, Jean-Marie Eveillard, Steven Cohen and PRIMECAP Management, the gurus with the largest holdings, have all increased their position within the last quarter. Most impressive are the increments seen on Evelliard and Cohen's position, well above the 1,500%.

Under Construction

Today, Air Products is looking at a downturn on performance. Higher taxes and the sequester have impacted growth in the U.S., while the European economic environment continues to struggle, and reforms in China are expected to cut growth short. At the same time, energy costs related to delivery methods continue to rise, further pressuring margins. At last, the company has yet to take decisive steps to reduce an already high debt.

When compared to industry peers, Air Products' return on capital and profitability remains behind. Analysts argue that excessive investment in industrial gases and a low-margin chemicals segment are at the root of the issue. They also point out that its strongest competitor, Praxair PX, has achieved better results by integrating all three distribution methods on-site, bulk and packaged gases. Management is fully aware of the advantages derived from an integrated structure, but has failed in its attempt at completing such business configuration.

A new attempt is expected to occur if current management for Air Products is displaced. The replacement is at the hands of guru Bill Ackman. After deceiving the market, the guru has increased the position of Pershing Square Capital Management to the very top of the major shareholders list with a total of 20,545,284 shares. If the board changes its composition, a new run at Airgas ARG to finally integrate product offering, and placed the company toe to toe with the industry leader Praxair PX.

Finances for Air Products are moderate. Trading at 22.3 times its earnings and carrying a 20% premium to the industry aver! age, the ! stock is slightly overvalued. I see with good eyes a change in management, because it may very well bring much needed fresh air. At the same time, a new opportunity to further strengthen the company may be opened with a new bid for Airgas ARG.

Last Thoughts

I have no option but to prefer DuPont. Air Products is going through some troubled times, and future direction is not clear. As I said, Ackman may give Air Products the push it needs to turn around current performance, but I still prefer to stay on the sidelines until a decision is taken.

Disclosure: Vanina Egea holds no position in any of the mentioned stocks.

Piwowar attacks SEC chairman at public meeting

It didn't take new Securities and Exchange Commission member Michael Piwowar long to make his presence felt.

Participating in his first open meeting Wednesday, Mr. Piwowar lambasted SEC Chairman Mary Jo White for not giving him enough time to review a rule that would require municipal advisers to register with the agency.

Mr. Piwowar's complaint was not related to the substance of the rule, which he voted to approve, but rather the process in which it came before the commission. He asked Ms. White, who sets the schedule, to postpone a vote on the reportedly 800-page rule one or two weeks to give him more time to digest it.

In unusually pointed remarks for the normally collegial SEC public meetings, Mr. Piwowar said that it had been 1,155 days since the Dodd-Frank measure, which contained the muni adviser provision, had been signed into law and 1,113 days since the SEC adopted a temporary rule.

“In this context, a seven- or 14-day delay would have had a de minimis impact on the rule's overall timeline and would have been an insignificant change to the commission's overall rule-making agenda,” Mr. Piwowar said. “Chair White, I hope that we can work together in the future to find ways to satisfy your personal desire to get stuff done and our shared obligation to get stuff done right.”

Ms. White said that she delayed consideration of the rule a couple weeks to allow Mr. Piwowar, a Republican, and another new commissioner, Democrat Kara Stein, to get acclimated to the agency. Mr. Piwowar and Ms. Stein were confirmed by the Senate in August.

Ms. White said she determined that the municipal adviser rule should not be further delayed.

“Believe me, I fully and personally understand that the workload here at the commission is very heavy,” Ms. White said in response to Mr. Piwowar. “But so is, obviously, the responsibility we all have. I recognize we demand a lot of the commissioners and a lot of the staff. I want to reiterate my appreciation to all of the commissioners — including, obviously, Commissioner Piwowar —and the staff for their incredibly hard work and dedication.”

Stock Market News Today

A few major mergers and acquisition deals are claiming headlines in stock market news today.

Last month, stocks suffered their biggest monthly decline in a year. But today stocks are kicking off September on a positive note after a three-day weekend. Stocks are rebounding from last week's selloff, stemming from fears of a U.S. strike against Syria.

Aside from major acquisitions - like Microsoft's deal with Nokia - investors have several economic indicators to monitor.

The U.S. manufacturing sectors showed moderate improvement in overall manufacturing business conditions as the Purchasing Managers Index fell to 53.1 in August from 53.7 in July.

Another manufacturing survey by the Institute for Supply Management revealed that U.S. manufacturers expanded by the fastest pace in more than two years. That ISM index rose to 55.7% from 55.4% in July, which is the highest level since June 2011. Economists had expected a decline to 54.1%.

Tech Stock News Today

Two major merger and acquisition deals in tech stock news today are pushing technology stocks, as well as the broader stock market, higher in morning trade.

First, Nokia Corp. (NYSE ADR: NOK) is holding substantial gains of about 35% on Microsoft Corp.'s (Nasdaq: MSFT) plan to acquire its cell phone business for more than $7 billion. The purchase includes most of Nokia's devices, including smartphones, as well as its services unit with mapping services and licenses for patents. MSFT is down about 6% on the news.

One of Microsoft's biggest weaknesses is its devices sales - as this chart explains...

In a second major deal in tech, Verizon Communications Inc. (NYSE: VZ) announced plans to buy Vodafone Group's (Nasdaq ADR: VOD) principal asset of 45% of Verizon Wireless for $130 billion in a cash and stock deal. VZ shares are down about 3% in morning trade.

Verizon expects the transaction to be immediately accretive to the company's earnings per share (EPS) by approximately 10%, without any one-time adjustments. The deal will close in the first quarter next year. VOD is down about 3%.

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In other tech stock news today, Blackberry Ltd. (Nasdaq: BBRY) is rallying more than 2% as investors anticipate that the Microsoft deal means Blackberry, too, may be acquired as it evaluates strategic alternatives.

Stock Market New Today: Healthcare

The following healthcare stocks are also moving on developing news today.

Isis Pharmaceuticals Inc. (Nasdaq: ISIS) this weekend announced interim data from an ongoing phase 2 study of ISIS-APOCIIIRx as a monotherapy in patients with very high to severely high triglycerides, or blood fat. Patients treated with ISIS-APOCIIIRx achieved statistically significant mean reductions of up to 79% in apolipoprotein C-III.

And, VIVUS Inc. (Nasdaq: VVUS) is up about 2% after the company quickly filled a leadership void. Anthony P. Zook has resigned as chief executive officer and from the VIVUS Board of Directors, effective Sept. 3, 2013, due to a medical condition. Seth H.Z. Fischer, a former senior executive at Johnson & Johnson, is to serve as chief executive officer, effective today. He will also join the VIVUS Board of Directors.

Finally, Avanir Pharmaceuticals Inc. (Nasdaq: AVNR) is up about 7% today after it settled with Actavis South Atlantic and Actavis Inc. (NYSE: ACT) to resolve pending patent litigation regarding ACT's seeking approval to market generic versions of AVNR's NUEDEXTA capsules. ACT is up about 1%.

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The settlement deal gives ACT the right to begin selling a generic version of NUEDEXTA on July 30, 2026, or earlier under certain circumstances. The settlement does not end AVNR's ongoing litigation against the other three Abbreviated New Drug Application filers.

Note: We're facing one of the most uncertain market stretches in memory - do you know the best investments to make now? Here are five.

Stock Market News Today: Earnings

In earnings news today, a few companies are reporting after the closing bell, including H & R Block Inc. (NYSE: HRB), which is up about 1%. Pike Electric Corp. (NYES: PIKE), Guidewire Software Inc. (NYSE: GWRE), and Sigma Designs Inc. (Nasdaq: SIGM) are also reporting quarterly earnings late this afternoon.

Today's Can't-Miss Article: Make These Moves Before the U.S. Hits Syria

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NEW YORK (TheStreet) -- On Thursday, by virtue of a 65-35 shareholder vote, Michael Dell and Silver Lake Partners won a green light to take Dell (DELL) private for $25 billion dollars -- effectively ending the long-term suffering of the company's faithful investors.

Now, I'm not going to go into details as to whether this was a fair deal. On more than one occasion, I've gone on record about Dell's perceived value. But now that this nine-month penny-pinching charade is over, I do wonder if/when the Street will ever again hear from Dell.

One of the advantages of privatization is that now Dell is free to operate without fear of public scrutiny. Aside from freeing the company from things like disclosure requirements, which are enforced by the Securities and Exchange Commission, I don't see what Dell actually gains by essentially delisting itself. [Read: Kass: Apple's Strategic Blunder]

Top 10 Penny Companies To Invest In Right Now: Helios Strategic Income Fd Inc (HSA)

Helios Strategic Income Fund, Inc. is a closed ended fixed income mutual fund launched and managed by Brookfield Investment Management Inc. It operates as a diversified and closed-end management investment company. The fund primarily invests in debt securities and equity securities. Its portfolio of investments includes investments in corporate bonds, home equity loans, commercial loans, franchise loans, equipment leases, manufactured housing, common stock, collateralized debt obligations, certificate-backed obligations, collateralized mortgage obligations, and government agency securities. It was formerly known as RMK Strategic Income Fund, Inc. Helios Strategic Income Fund, Inc. was founded in 2004 and is based in Memphis, Tennessee.

Top 10 Penny Companies To Invest In Right Now: Telecom Corporation of New Zealand Limited(NZT)

Telecom Corporation of New Zealand Limited, together with its subsidiaries, provides telecommunications services, as well as information, communication, and technology services in New Zealand and Australia. Its products and services include local, national, international, and value-added telephone services; mobile services; data, broadband, and Internet services; IT consulting, implementation, and procurement services; and equipment sales and installation services. The company also involves in the retail of telecommunications products and services. It serves residential, business, and government customers. Telecom Corporation of New Zealand Limited was founded in 1987 and is based in Auckland, New Zealand.

Top Value Stocks To Invest In 2014: Bristow Group Inc (BRS)

Bristow Group Inc., together with its subsidiaries, provides helicopter services to the offshore energy industry primarily in Europe, West Africa, North America, Australia, and internationally. Its helicopters are used principally to transport personnel between onshore bases and offshore platforms, drilling rigs, and installations, as well as to transport time-sensitive equipment to offshore locations. The company also offers helicopter flight training services to commercial pilots and flight instructors through its Bristow Academy with facilities in Titusville, Florida; Concord, California; New Iberia, Louisiana and Gloucestershire, England. In addition, it provides military training; and helicopter repair, engineering support, aircraft leasing, airport management, and search and rescue services. Bristow Group provides its helicopter services to integrated, national, and independent oil and gas companies. As of March 31, 2011, it operated a fleet of 569 aircraft. The comp any was founded in 1969 and is based in Houston, Texas.

Top 10 Penny Companies To Invest In Right Now: UMH Properties Inc.(UMH)

UMH Properties, Inc. (UMH) is a real estate investment trust. The firm engages in the ownership and operation of manufactured home communities. It leases manufactured home spaces to private manufactured home owners, as well as leases homes to residents. The firm invests in the real estate markets of New York, New Jersey, Pennsylvania, Ohio, and Tennessee. In addition, it invests in debt and equity securities of REITs. United Mobile Homes was incorporated in 1968. The company was formerly known as United Mobile Homes, Inc. UMH Properties is based in Freehold, New Jersey.

Top 10 Penny Companies To Invest In Right Now: Cowen Group Inc.(COWN)

Cowen Group, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides alternative investment management, investment banking, research, and sales and trading services for its clients. It manages separate client focused portfolio through its subsidiaries. Through its subsidiaries, the firm invests in equity and fixed income markets. It also invests in alternative investments markets through its subsidiaries. Cowen Group, Inc. was founded in 1994 and is based in New York, New York with additional offices in Boston, Massachusetts, Chicago, Illinois, Cleveland, Ohio, Dallas, Texas, and San Francisco, California.

Top 10 Penny Companies To Invest In Right Now: S1 Corporation(SONE)

S1 Corporation provides payments and financial services software solutions in the United States and internationally. The company operates in three segments: Banking: Payments, Banking: Large Financial Institution (FI), and Community Financial Institution (FI). The Payments segment provides ATM and retail point-of-sale driving, card management, and merchant acquiring solutions to financial institutions, retailers, and transaction processors of various sizes globally. The Banking: Large FI segment offers consumer banking, small business and corporate online banking, trade finance, and mobile banking solutions to large banks globally; branch and call center banking solutions to large banks outside of the United States; and software, custom software development, hosting, and other services to State Farm Mutual Automobile Insurance Company. The Banking: Community FI segment provides consumer and small business online banking, mobile banking, voice banking, and branch and call c enter banking solutions to community and regional banks, and credit unions in the United States. The company also provides various professional services, such as project management, implementation, custom software development, integration, educational, and Web design services; and customer support services. In addition, it offers hosting services comprising systems outsourcing, data center hosting, and operational management and control across a range of personal, small business and corporate Internet banking, mobile, voice, and payment processing applications. The company primarily serves banks, credit unions, retailers, and transaction processors. S1 Corporation was founded in 1934 and is headquartered in Norcross, Georgia.

Top 10 Penny Companies To Invest In Right Now: PC Connection Inc.(PCCC)

PC Connection, Inc. operates as a direct marketer of various information technology solutions. The company?s products include computer systems; software and peripheral equipment; networking communications; notebooks and personal digital assistants; video, imaging, and sound devices; desktops and servers; net/com products; printers and printer supplies; storage devices; memory and system enhancements; and other accessories, as well as digital cameras and digital media players. It also provides design, installation, configuration, and other services through its personnel and third-party providers. The company markets its products through pcconnection.com, moredirect.com, govconnection.com, pcconnectionexpress.com, and macconnection.com, as well as through catalogs. It serves small to medium-sized businesses; enterprise customers; federal, state, and local government agencies; and consumers and small office/home office customers, as well as educational institutions. PC Connec tion, Inc. was founded in 1982 and is headquartered in Merrimack, New Hampshire.

Top 10 Penny Companies To Invest In Right Now: Homeowners Choice Inc.(HCII)

Homeowners Choice, Inc., an insurance holding company, provides property and casualty insurance in Florida. The company provides property and casualty homeowners? insurance, condominium owners? insurance, and tenants? insurance to individuals owning property. It serves approximately 59,500 policyholders primarily through independent agents. The company was founded in 2006 and is headquartered in Tampa, Florida.

Top 10 Penny Companies To Invest In Right Now: China Nepstar Chain Drugstore Ltd (NPD)

China Nepstar Chain Drugstore Ltd. operates retail drugstores in the People?s Republic of China. The company?s drugstores provide pharmacy services and other merchandise, including prescription drugs; over-the-counter drugs; nutritional supplements, such as healthcare supplements, vitamins, minerals, and dietary products; herbal products, including drinkable herbal remedies and packages of assorted herbs for making soup; and private label products. Its stores also offer personal care products, such as skin care, hair care, and beauty products; family care products, including portable medical devices for family use, birth control products, and early pregnancy test products; and convenience products, such as soft drinks, packaged snacks, other consumables, cleaning agents, and stationeries, as well as seasonal and promotional items. The company operates its stores under the China Nepstar brand name. As of December 31, 2009, its store network comprised 2,479 retail drugstores located in approximately 71 cities in Guangdong, Jiangsu, Zhejiang, Liaoning, Shandong, Hunan, Fujian, Sichuan, and Hubei provinces, as well as in Shanghai, Tianjin, and Beijing municipalities of the People?s Republic of China. The company was founded in 1995 and is headquartered in Shenzhen, the People?s Republic of China.

Top 10 Penny Companies To Invest In Right Now: LSI Industries Inc.(LYTS)

LSI Industries Inc. provides corporate visual image solutions primarily in the United States, Canada, Australia, and Latin America. It operates in three segments: Lighting, Graphics, and Technology. The Lighting segment manufactures and markets outdoor and indoor lighting, canopy lighting, landscape lighting, light emitting diodes (LED) lighting, light poles, and photometric layouts products, as well as lighting analysis services. The Graphics segment manufactures and sells exterior and interior visual image elements for use in visual image programs. It offers signage and canopy graphics; pump dispenser graphics; building fascia graphics; decals; interior signage and marketing graphics; aisle markers; wall mural graphics; fleet graphics; prototype program graphics; and solid state LED video screens for the sports and advertising markets, as well as installation services for graphics products. The Technology segment designs, produces, and supports light engines and large fo rmat video screens using LED technology; and specialty LED lighting. Additionally, the company offers menu board systems. It serves commercial, industrial, and multi-site retail markets; petroleum/convenience stores; sports and advertising; and entertainment markets. The company sells its products through regional sales managers, independent sales representatives, and distributors. LSI Industries was founded in 1976 and is headquartered in Cincinnati, Ohio.

iPhone 5C doesn't wow Apple faithful

All five colors of the iPhone 5C were listed as available to ship in one to three business days. The gold 5S won't ship until next month.

NEW YORK (CNNMoney) Poor iPhone 5C. The flagship iPhone 5S got most of the love from the Apple diehards Friday.

CNNMoney interviewed about 15 of the hundreds of people in line outside Apple's flagship New York store, and all of them were waiting for the glass-and-aluminum 5S, which cost $199 with a contract.

None were there for the colorful plastic 5C, which sold for $99 with a contract. While the 5C was the only device available for pre-order a week early, the ability to pre-order hasn't stopped Apple fanatics from lining up in person for past devices like the iPhone 5.

Fortune's Philip Elmer-DeWitt, who counted more than 1,200 people on line at the flagship store a few minutes before the door opened, reported that everyone he asked was also "there to buy the iPhone 5S."

Some other customers waiting in lines around the world also dismissed the 5C. In London, 17-year-old student Waleed Tariq said "the 5C stands for 5 'cheap'. It's plastic and it looks cheap."

This is obviously a small sample size. It also may not be surprising that people willing to camp out for a phone would opt for the high-end model

  Inside Apple's new iOS 7

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But if more consumers shun the 5C, that could be bad news for Apple. Many analysts had hoped that the less-expensive 5C could boost Apple's profit margins since the phone is also a lot cheaper to produce.

And at first blush, it does look like demand for the 5C is weak, even from those who preferred to order new phones online instead of standing in line.

Waiting in line today? Share your story with CNN iReport

On Apple's U..S. website Friday morning, all five colors of the iPhone 5C were listed as available to ship in one to three business days.

The 5S was another story. The graphite and "space gray" models will ship in 7-10 days, while the new gold color isn't available until October.

Apple didn't release early pre-order figures for the 5C as it has done in past years. That led to specula! tion that the early iPhone 5C figures are disappointing.

Apple (AAPL, Fortune 500) did not immediately reply to a request for comment on the iPhone 5C's performance so far.

But Nicholas Cage, who lined up at the Apple Store in Atlanta's Lenox Square shopping mall at 3:30 a.m., planned to pick up two 5Cs: one in white, the other in yellow.

"I got kids," he said simply.

Still, he said he was also there to buy himself a gold 5S.

- CNNMoney's Virginia Harrison contributed reporting from London, and CNN's Todd Leopold reported from Atlanta.

Make This Oil Move Immediately

From the Editor: In yesterday's members-only message, you got a rare look at Kent's track record and why he averages 55% on every recommendation. Today, Kent recommends a short-term move, based on the latest developments in Syria...

Damascus may have dodged a bullet (or a cruise missile), but nothing else has changed very much. Not in terms of risk.

That explains why the "Syrian Premium" remains. It may be slightly reduced, as you'll see. But it is likely to stay with us even after the threat of a military solution has been averted.

At least for now...

But in addition to the ongoing uncertainty, there are other aspects of market pricing that are coming into focus. These pressures were building even before the latest round of Syrian intrigue.

They involve the traditional factors of supply and demand, with some regional wrinkles thrown in for good measure.

I will have more to say shortly about the best way you can profit from these opportunities. But for the moment, there's one move to make in the immediate aftermath of the latest Syrian developments.

Here's my full briefing...

The U.N. Chemical Weapons Report Emerges

The U.N. report on chemical weapons usage in Syria, released Monday, may not hold the Assad regime responsible for their usage directly. But the conclusions certainly supported the version put forward by Washington, Paris, and Riyadh.

The August attack on suburban Damascus employed massive amounts of sarin gas in a coordinated effort, one labeled a war crime in the report and the worst witnessed worldwide in 25 years. It required missile delivery systems, while the trajectories indicated launches from territory controlled by government forces. That combined with earlier intelligence discounting that the opposition had access to such nerve gas leaves little doubt.

Whether authorized by Syrian President Bashar al-Assad or some underling, this was a coordinated attack on civilians using a substance held in distain by the global community. Russia is continuing to question which side in the festering Syrian civil war bears responsibility.

On the other hand, Cyrillic lettering on casings points toward Moscow's hand in providing Assad with the weapons. They were also more potent than initially thought. The U.N. report concludes the gas was of higher quality than sarin found in Saddam Hussein's arsenal in Iraq.

A few weeks ago, all of this would have been enough for the U.S. to initiate a missile attack of its own on military installations inside Syria. The report may have been enough for the U.K. to come on board (the Parliament in London had refused to support a military move pending the report) and may have even attracted additional European support.

But the situation changed dramatically late last week...

A Deal for International Control

The Russian-brokered deal places Assad's chemical weapons under international control, with destruction of them set for the first half of 2014.

Now, those experienced in such matters flatly declare the time scale is unrealistic; accounting for 100% of the weapons is also not possible.

But the threat level is reduced. A powder keg situation had turned from a threatened military reprisal to a diplomatic initiative - one now likely to have a U.N. Security Council resolution to back it up.

Much is unresolved in this approach. But it does mean, at least for now, Washington has pulled back from an attack while Moscow has bought some time for its erstwhile ally.

Nonetheless, the reduction in tension, even if it turns out to be short-lived, will have an impact on oil prices.

How to Play the Next Big Oil Move

As the crisis escalated, what I have called a "Syrian Premium" (about $4 per barrel in New York and London) had been introduced into the pricing for crude. That premium had increased as the rhetoric on war increased.

As trade opened Tuesday morning, West Texas Intermediate (WTI, the benchmark crude traded on NYMEX) stood at a bit above $106 and Brent in London at more than $109. These levels were down 2.7% and 3.2% for the week, respectively.

Yet each still remained more than $3 a barrel above the anticipated pricing levels in the absence of a Syrian crisis.

In short, the prices have eased, but a premium remains.

That's because much uncertainty remains, as well.

Will the diplomatic approach succeed? Will the weapons be catalogued and destroyed? Will the Security Council step up and put some serious sanctions on Damascus? Will the new U.S.-Russian joint approach hold?

You can see why oil's volatility will continue even with chemical weapons use off the table. The Syrian mess remains even without the impending U.S. attack. The stability of the entire region is at issue, the conflict deepens, the Saudi-Iranian disagreement over surrogate plays in the Persian Gulf region is becoming worse, and the pressures on the global crude oil outlook remains pressured as a consequence.

So here's what to do...

1. Take a profit.

It's time to pull back a bit on exchange-traded fund (ETF) holdings allowing moves playing the WTI-Brent crude pricing spread. I have suggested previously the two primary plays here are PowerShares DB Energy (NYSE Arca: DBE) and United States Brent Oil Fund (NYSE Arca: BNO).

DBE provides a play on both the WTI-Brent spread as well as crack spreads (the difference between the crude oil prices and those for selected oil products). BNO is a straight entry into dollar-denominated Brent pricing in London.

Both have made gains during the Syrian run up, and some of that profit needs now to be creamed.

2. Redeploy the proceeds.

It's time to position yourself for regional variations in price. They're approaching. Fast. Here, the strategy will offset companies controlling large amounts of oil availability in certain global areas with the pricing variations emerging.

Simply put, this approach will be locating where the difference is pronounced enough to generate an added premium.

Much more on this as we move forward...

Loving Your Stocks? Don't Take This Cliché To Heart

Joachim Goldberg, a German behavioral finance specialist and co-author of the book "Behavioral Finance," which was first published in 1999, often warns people not to "fall in love with shares." Women, he argues, are better investors than men, partly because they are better able to get rid of stocks (and presumably men, too) that are no longer financially worth keeping.

The love analogy is an appealing one, but more is going on here than the cliché would suggest.

Is It Really Love?

It is certainly possible to become attached to a particular stock (rather than really loving it) if what the company does and stands for is genuinely appealing. If you really like cars, you may develop a similar affection for auto stocks. Or if you think a certain company is particularly ethical, you may even love it for that, even if the numbers don't really add up. Also, a portfolio inherited from a loved one may have true sentimental value, so you might hang on to it for emotional rather than financial reasons. As for the rest, the motives for holding on to a stock too long are many and varied.

Other Reasons People Keep Dud Stocks

The most simple reason is pure apathy. It is easier to do nothing than something, and people often just don't bother to manage their investments. Brokers may not bother either, and there is certainly no love involved in such a situation, neither of the stock nor of the client.

A desire to avoid taking a loss is another classic reason. It is human nature to hope that one will at least get back the purchase price, but this often won't happen, or it would take so long that the opportunity cost is enormous. It is financially better to cut one's losses.

Then there is greed. If you have made a 100% profit, you may think you can double your money again or even more. This may or may not be greed. After all, there is nothing to stop the stock from going up another 500% if the company and the markets play along. Is this really greed or economic rationality and simple risk-friendliness? A desire to earn as much money as possible from an investment is not in itself greed. It is only when such a desire is or becomes excessive, leading to irrationally holding the stock for far too long, that greed has taken over. But it isn't always easy to know when the time has come to part company, just as in human relationships.

In line with the above point, uncertainly about the future is also relevant and all-pervasive. There is that old saying that "no one ever went broke from taking a profit." On the other hand, it is upsetting when the profit could have been 10 times higher. Cutting a stock loose at the first sign of trouble can lead to serious regrets. Again, whether hanging in there waiting for the big payoff is really greedy or imprudent is subjective and even depends partly on luck. Perhaps one should at least "take some money off the table," but not all. Who knows for sure?

The Impact of All This On the Market

Of particular importance is the fact that if a stock is "everyone's darling," this passion may be justified simply by the pressure it applies on the price from all those admirers. Journalists tend to warn that "your stocks won't love you back," but if everyone else loves them, they can. Such sentiments may result in an intrinsically unsound stock not declining in market value, or at least not as much as the inherent value of the underlying company would suggest. Psychology plays an enormous role in the financial markets, both on the seller and buyer sides. When enough people cling to suboptimal investments, this impacts market performance and returns.

Conclusions

Generally speaking, it is financially imprudent to keep stocks for any reason other than that they are likely to bring a good return in the future.

There are, however, many reasons why people keep stocks that, objectively speaking, they should sell. One of these reasons is the notorious "falling in love" phenomenon, but the prevalence of this phenomenon is probably overstated. People may keep a dud stock out of apathy, greed, ignorance, going with the masses or because they inherited it from their dad. Or they may be perfectly willing to take a risky punt. Furthermore, if a stock is loved enough by enough people, that will prop up the price.

Will Pepsi Be Salty or Sweet for Investors?

With shares of Pepsico (NYSE:PEP) trading at around $81.20, is PEP an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

There are two main themes for the Pepsi story.

One, it's going to move more towards snacks in the future. This has a lot to do with a health-conscious society that is moving away from soda. There are also rumors that a tax could be imposed on sodas. This would be downright absurd. The problem is that most stores now sell larger sizes of soda. This helps sales, but it also leads to bad habits. If more 8 oz. sodas were on the shelves, or in those little refrigerators you see prior to checking out at a retail store, then the health concerns wouldn't be as broad. Consuming too much of anything is a bad idea, and there is too much sugar in a 20oz. soda, especially considering humans shouldn't consume more than 40 grams of sugar in one day. The irony here is that snacks aren't exactly healthy, either. However, the problem with most snacks is calories, not sugar. Pepsi does offer healthy snacks as well, including Quaker products and yogurt. Pepsi is now expanding its yogurt operation.

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The other theme for Pepsi is emerging markets. With incomes growing in emerging markets, there is more discretionary income available for consumers to spend on Pepsi products. Another big plus is that competition in these markets is limited. Pepsi's market share in emerging markets is expected to grow as high as the low double-digits. One concern here is the health of the global economy.

Pepsi is a well-managed company, and it's highly focused on cast savings. This is a company that's always looking to improve the bottom line. For example, Pepsi is using strategic agricultural and packaging techniques that will cut costs.

In regards to top-line growth, Pepsi is expanding its marketing to increase exposure for existing products, and it's always looking for great acquisition opportunities.

Yet another positive is that Pepsi consistently returns capital to shareholders via dividends and buybacks. In regards to dividends, Pepsi currently yields 2.80 percent. The Coca-Cola Company (NYSE:KO) also yields 2.80 percent, and Dr Pepper Snapple Group (NYSE:DPS) yields 3.30 percent. This doesn't mean Dr Pepper Snapple is the best option of the three. It has underperformed Pepsi and Coke over the past three years. It's also not as resilient as Pepsi and Coke in bear markets. For example, Dr Pepper declined approximately 50 percent in late 2008/early 2009 whereas Pepsi and Coke declined approximately 30 percent.

Getting back to Pepsi, there are several other positives to consider:

Strong brand portfolio Geographic diversity Solid cash flow

Revenue and earnings declined last year after several years of consistent gains. This is concerning, especially the revenue. Earnings can be improved using many different tactics. The good news in regards to revenue is that there was a year-over-year increase last quarter.

The chart below compares fundamentals for Pepsi, Coke, and Dr Pepper.

	PEP	KO	DPS
Trailing P/E	20.80	21.27	15.50
Forward P/E	16.99	17.37	13.96
Profit Margin	9.33%	18.19%	10.53%
ROE	27.15%	26.59%	28.14%
Operating Cash Flow	9.87B	10.63B	843.00M
Dividend Yield	2.80%	2.80%	3.30%
Short Position	0.80%	0.90%	3.90%

Let's take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Mixed

Pepsi has been a steady performer for not just years, but decades. However, the last month has been disappointing.

	1 Month	Year-To-Date	1 Year	3 Year
PEP	-1.28%	20.35%	24.79%	44.78%
KO	-3.76%	12.95%	14.11%	72.86%
DPS	-5.51%	6.14%	17.50%	39.75%

At $81.20, Pepsi is trading below its 50-day SMA, but above its 200-day SMA.

50-Day SMA	82.48
200-Day SMA	75.80

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E = Equity to Debt Ratio Is Weak

The debt-to-equity ratio for Pepsi is weaker than the industry average of 0.60.  However, it’s likely to improve going forward.

	Debt-To-Equity	Cash	Long-Term Debt
PEP	1.31	7.01B	29.40B
KO	1.07	18.44B	35.12B
DPS	1.25	220.00M	2.80B

E = Earnings Had Been Steady

Earnings had been steady on an annual basis until 2012. But earnings are an easy fix for a company like Pepsi. The real concern is the top line.

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in millions	43,251	43,232	57,838	66,504	65,492
Diluted EPS ($)	3.21	3.77	3.91	4.03	3.92

Top 5 Financial Companies To Watch For 2014

Looking at the last quarter on a year-over-year basis, revenue improved and earnings declined. This should be looked at as more of a positive than a negative.

Quarter	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012	Mar. 31, 2013
Revenue ($) in millions	12,428	16,458	16,652	19,954	12,581
Diluted EPS ($)	0.71	0.94	1.21	1.06	0.69

Now let's take a look at the next page for the Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

Conclusion

Pepsi has been a steady winner for decades. This trend is likely to continue. Even if the stock gets slammed, it should present an opportunity to buy more at discounted prices. The generous yield would also help ease the pain a little.

Analyst Upgrades and Downgrades Keep Coming: Corning, LeapFrog, Dean Foods and More

Many research reports were delayed in their normal times on Tuesday, likely due to a post-Labor Day drag as employees may have been taking their kids to school or simply coming in later than normal. 24/7 Wall St. reviews dozens of Wall Street analyst research reports each and every morning to find fresh ideas for investors and traders, for stocks to buy and stocks to sell. We already released Tuesday’s normal analyst upgrades and downgrades, and these are some additional calls to peruse as well.

Coca-Cola Enterprises Inc. (NYSE: CCE) was raised to the prized Conviction Buy List from Neutral with a $47 price target at Goldman Sachs, sending shares up almost 3% to $38.50 on the upgrade.

Best Stocks To Buy For 2014

Constellation Brands Inc. (NYSE: STZ) was raised to Buy from Neutral with a $65 price target at Goldman Sachs.

Corning Inc. (NYSE: GLW) was downgraded to Perform from outperform at Oppenheimer, taking out 0.3% of the value of shares down to $14.00 on the news.

Cvent Inc. (NYSE: CVT) was started as Buy with a $41 price target at Stifel Nicolaus, started as Outperform with a $40 price target at Pacific Crest and started as Buy with a $42 price target at Needham & Company. Shares are up about 1.5% at $36.15

Dean Foods Co. (NYSE: DF) was downgraded to Neutral from Buy at Goldman Sachs, taking out about 2% of the value of the shares on Tuesday.

Fox Factory Holding Corp. (NASDAQ: FOXF) saw its quiet period end: started as Outperform with a $23 price target at Baird, started as Overweight with a $21 price target at Piper Jaffray and started as Buy with a $23 price target at SunTrust. Shares are down about 0.5% at $18.05 as the implied upside is not that stellar for recent IPO coverage.

LeapFrog Enterprises (NYSE: LF) was downgraded to Market Perform from Outperform and the price target was slashed down to $10 from $15 by BMO Capital Markets, taking out almost 7% of the value based up glitches or issues with its new tablet product.

Owens-Illinois Inc. (NYSE: OI) was upgraded to Overweight from Neutral by J.P. Morgan, sending shares up almost 4%.

Also see a guide to oil and stocks based up military action in Syria  prepared by UBS.

Intel: Dispelling A Dangerous Misconception

It is my belief that there is a very dangerous misconception with respect to Intel's (INTC) 22 nanometer FinFET process being propagated on the internet. Normally, I would not bother responding to it, particularly as these days I find that I just don't need the headache, but as somebody who has kept his readers well informed about the Intel story, I feel that it is my responsibility to address it.

So, what is this "dangerous misconception" that I refer to? The notion that Intel's 22 nanometer process was not a "full shrink" from the prior 32 nanometer node, and that the "22 nanometer" node was largely a "focus on implementing FinFETs" without the attendant transistor size decrease. In this article, I lay out a counter-argument that I hope investors will appreciate.

Intel's 22 Nanometer Was A Full Die Shrink

The whole idea behind "Moore's Law" is economics - not chip performance. The "law" essentially states that every two years or so, IC designers would be able to put twice as many transistors in a given physical area. Of course, a corollary to this "fact" is that the cost per transistor goes down significantly in each generation thanks to these die shrinks. Now, let me be clear, the actual cost of the wafer goes up, but the area savings (which means more chips per wafer) on a per chip basis should be enough to more than offset the wafer cost increase.

Note that Moore's Law breaks down (that is, cost per transistor no longer goes down) if one does not "shrink" the transistors (which are what integrated circuits are made of). So if you're an investor in a semiconductor company and you start to hear that each process node does NOT provide a full node shrink, then the economics of what that company is doing are in serious trouble. Fortunately, the rumors that Intel's 22nm node was not a full shrink over 32nm are patently false, as I will now demonstrate.

So, the tough thing about comparing "process density" is that the size of a given IC isn't just dependent on th! e "process node" - the "name" (such as "22 nanometer") really just refers to the minimum feature size that you'll find, rather than the "average" feature size. Also, IC vendors often make trade-offs when designing a particular chip that may mask the "true capabilities" of a given process. However, luckily for investors, Intel's development cycle essentially involves building a design on a given process node, and then shrinking essentially that same design to a next generation node. From there, since the designs are very similar, it becomes mostly a process comparison.

To prove my point, I give two exhibits. First, here is Intel's "Sandy Bridge" die. It weighs in at 216mm^2 and sports 995 million transistors:

(click to enlarge)

Now, here's Intel's "Ivy Bridge" die, which weighs in at 160mm^2 and packs 1.3B transistors:

(click to enlarge)

So, let's do some basic math, shall we?

Chip	Process Node	Die Size	# Transistors	Billion Transistors/mm^2 (i.e. DENSITY)
Sandy Bridge	32nm	216mm^2	0.995B	.0046
Ivy Bridge	22nm	160mm^2	1.3B	.008125

So, with the 32nm implementation of a given design, we get 0.0046 billion transistors/mm^2 and in the 22nm implementation, we get a much better 0.008125 billion transistors/mm^2. This is a density improvement of roughly 76% generation-over-generation. Not quite 2x the transistors in a givne area, but scaling is never quite perfect and certain design decisions may have kept the chip from scaling as well as it could have in theory. But you ! see the v! ery real economic benefits here, right? For what is likely a 5-10% increase in wafer costs, Intel can sell a much more feature-rich enhancement of an older design, but at the same time sell less silicon. All of this for the same price that it was selling the previous chips! Nifty, eh?

But Wait, Was Intel's "32nm" Inferior To The Foundries'?

In a world in which Intel's product lines and those of the many semiconductor companies that utilize external foundries now seem to compete (particularly in the mobile battleground), process technology (from many standpoints - performance, power, density, etc.) is now something that investors really care about, particularly in trying to guess the competitive landscape several years out.

While I do not intend to make any such comparison in this article, I do realize that the above comparison is an "Intel to Intel" comparison, and that Intel's "32nm" starting point may not be comparable to, say, 32nm from the likes of Global Foundries/IBM Common Platform Alliance. Note that densities across different designs (which again may be optimized for different targets), we can get a ballpark estimate as long as we use somewhat similar designs. I wouldn't want to compare a pure GPU or an FPGA to a CPU, but I would be happy to compare a "pure" CPU to a "pure" CPU.

To that end, let me bring out my two examples: the first is Intel's "Sandy Bridge-EP" die - this is an 8 core, server oriented chip that weighs in at 416mm^2 and packs in 2.263 billion transistors. Built, of course, on Intel's 32nm process:

(click to enlarge)

In the other corner, I have AMD's (AMD) "Vishera". This is a 4 module/8 core CPU product that has roughly the same cache-to-logic mix that the Sandy Bridge-EP does (although, again, this is not a perfect comparison):

(click to enlarge)

This bad-boy weighs in at 315mm^2 and packs in 1.2B transistors. Using basic mathematics, we get the following densities:

So, let's do some basic math, shall we?

Chip	Process Node	Die Size	# Transistors	Billion Transistors/mm^2 (i.e. DENSITY)
Sandy Bridge-EP	Intel 32nm HKMG	416mm^2	2.26B	.0054
Vishera	Common Platform/GloFo 32nm HKMG	315mm^2	1.2B	0.0038

The Intel chip looks a bit denser, but again - these are NOT the same designs (and the AMD one looks a lot more automated, which can often dent density in exchange for easier design), so a pure "Apples to Apples" process density comparison is not possible. We can, however, see that these designs are roughly in the same ballpark. This means that Intel's "32nm" was about on-par with the competing "32nm" process from the Common Platform Alliance at the time in real designs. This also means that if 32nm -> 22nm for Intel gave a "full shrink" worth of density improvements, then Intel's "22nm" really was a "full node move".

Source: Intel: Dispelling A Dangerous Misconception

Disclosure: I am long INTC, AMD. 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...)

Is Yamana a High-Risk Play?

With shares of Yamana Gold (NYSE:AUY) trading at around $12.39, is AUY an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

Yamana needs higher gold prices for higher margins and profits. Therefore, the price of gold is important. We'll get to that in the Trends section. For now, there are some important points for Yamana. One, it has boosted production via expansion and acquisitions. Two, it always seems to have gold mining projects in the works, which has the potential to lead to increased growth. Three, Yamana is known for its below average production costs. Four, revenue has steadily increased on an annual basis. In addition to that, analysts love the stock: 18 Buy, 0 Hold, 1 Sell.

On the other hand, Yamana has missed earnings expectations for two consecutive quarters, and the miners didn't hold up well in 2008, most of them dropping between 40 percent and 60 percent. Therefore, resiliency is very questionable.

Now let's take a look at some comparative numbers. The chart below compares fundamentals for Yamana Gold, Goldcorp (NYSE:GG), and Barrick Gold (NYSE:ABX). Yamana has a market cap of $9.15 billion, Goldcorp has a market cap of $23.92 billion, and Barrick Gold has a market cap of $20.93 billion.

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	AUY	GG	ABX
Trailing   P/E	24.37	16.82	N/A
Forward   P/E	Top Safest Stocks To Buy Right Now 10.95	12.63	5.67
Profit   Margin	16.18%	30.14%	-5.98%
ROE	4.81%	7.02%	-3.35%
Operating   Cash Flow	$1.04 Billion	$2.05 Billion	$5.15 Billion
Dividend   Yield	2.20%	2.10%	4.00%
Short   Position	N/A	N/A	N/A

 

Let's take a look at some more important numbers prior to forming an opinion on this stock.

E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for Yamana is stronger than the industry average of 0.20.

	Debt-To-Equity	Cash	Long-Term Debt
AUY	0.11	$347.84 Million	$860.51 Million
GG	0.10	$2.01 Billion	$2.28 Billion
ABX	0.59	$2.34 Billion	$14.80 Billion

 

T = Technicals Are Weak    

Yamana, as well as the rest of the industry, has grossly underperformed the market over the past year.

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	1 Month	Year-To-Date	1 Year	3 Year
AUY	-13.31%	-27.26%	-9.17%	20.50%
GG	-4.51%	-16.93%	-14.90%	-26.90%
ABX	-19.82%	-38.48%	-42.31%	-47.69%

 

At $12.39, Yamana is trading below all its averages.

50-Day   SMA	13.66
100-Day   SMA	15.13
200-Day   SMA	16.43

 

E = Earnings Have Been Inconsistent                   

In regards to growth, earnings can be classified as inconsistent. When it comes to actual numbers, earnings are consistent. In other words, there is a predictable range. Revenue has shown slow yet steady improvements on an annual basis.

	2008	2009	2010	2011	2012
Revenue   ($)in   billions	949.36M	N/A	1.69	2.17	2.34
Diluted   EPS ($)	0.62	N/A	0.63	0.74	0.59

 

When we look at the last quarter on a year-over-year basis, we see a decline in revenue and earnings. Revenue and earnings have also declined on a sequential basis.

	3/2011	6/2012	9/2012	12/2012	3/2013
Revenue   ($)in   millions	559.74	535.70	611.81	629.50	534.87
Diluted   EPS ($)	0.23	0.06	0.08	0.22	0.14

 

Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Might Support the Industry

Gold is currently trading at 1464.50/oz. It had been as high as 1920/oz. in September of 2011. And it has dipped below 1400/oz. recently. Societe Generale has a year-end price target of 1375/oz. However, there are bullish and bearish gold predictions coming from every angle.

What we do know is that QE has led to some inflation, but not rampant inflation. Many arguments have been made that debt, interest rates, and QE will still lead to rampant inflation. However, it's only a matter of time before debts are paid off, interest rates increase, and QE ends. Therefore, this argument isn't forward looking.

As far as the potential collapse of the U.S. dollar, humans have a tendency to wait until their backs are against the wall before fixing a problem they don't really want to fix. Bernanke is human. In other words, the dollar will become a priority once it becomes a very dangerous situation.

It's also important to keep in mind that Bernanke is more worried about deflation than inflation. What if Bernanke, due to outside pressures, is forced to make moves that will lead to him losing that battle? This wouldn't be a good scenario for gold.

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Conclusion

Yamana is a well-run company with steadily increasing revenues, solid margins, and top-tier management. On the other hand, there are considerable downside risks considering industry trends.

Can Verizon Move Higher After a Recent Deal?

With shares of Verizon (NYSE:VZ) trading around $45, is VZ an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework: With shares of Verizon (NYSE:VZ) trading around $45, is VZ 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

Verizon is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. It operates in two primary segments: Verizon Wireless and Wireline. Verizon Wireless's communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the United States. Wireline's communications products and services include voice, Internet access, broadband video and data, Internet protocol network services, network access, long distance, and other services.

Verizon has moved forward with readying investments to purchase Vodafone's (NASDAQ:VOD) stake in Verizon Wireless, which will cost Verizon Communications $130 billion. Verizon has begun syndicating a $61 million bridge loan, sources told Reuters. The acquisition is expected to close in the first quarter of next year. Verizon will pay Vodafone $58.9 million in cash and will back the rest of the deal with loans, the sources said.

T = Technicals on the Stock Chart Are Weak
Verizon stock has struggled to make positive progress in the last several months. The stock is currently trading near opening prices of the year. 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, Verizon is trading below its key averages which signal neutral to bearish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-IV Percentile	90-Day IV Percentile
Verizon Options	23.68%	93%	90%

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. Verizon is a provider of communications, information and entertainment products and services to consumers, businec0al?

	Put IV Skew	Call IV Skew
September Options	Steep	Average
October 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 Verizon’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Verizon look like and more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	14.06%	15.25%	-107.21%	14.29%
Revenue Growth (Y-O-Y)	4.32%	4.17%	5.66%	3.92%
Earnings Reaction	-1.51%	2.76%	0.58%	2.37%

Verizon has seen rising earnings and revenue figures over the last four quarters. From these numbers, the markets have generally been pleased with Verizon’s recent earnings announcements.

P = Weak Relative Performance Versus Peers and Sector
How has Verizon stock done relative to its peers AT&T (NYSE:T), T-Mobile (NASDAQ:TMUS), Sprint (NYSE:S), and sector?

	Verizon	AT&T	T-Mobile	Sprint	Sector
Year-to-Date Return	-13.20%	-8.28%	35.66%	22.88%	10.17%

Verizon has been a poor relative performer, year-to-date.

Conclusion

Verizon provides communications products and services through a variety of mediums to consumers and companies around the world. The company is reportedly ready to pursue the purchase of Vodafone’s stake in Verizon Wireless. The stock has struggled in the last several months and looks to be trending lower. Over the last four quarters, earnings and revenues have been rising which have generally pleased investors in the company. Relative to its peers and sector, Verizon has been a weak year-to-date performer. WAIT AND SEE what Verizon does this coming quarter.

Vodafone Seen as AT&T Prey Amid $130 Billion Verizon Deal

Simon Dawson/Bloomberg

Vodafone is poised to get as much as $130 billion from Verizon Communications Inc. for its 45 percent stake in the companies' mobile joint venture, according to people with knowledge of the matter.

As Vodafone Group Plc (VOD) nears an exit from its 14-year-old U.S. wireless venture with Verizon Communications Inc. (VZ), Europe's biggest mobile-phone company may have to make a tough choice: buy or be bought.

AT&T Inc., which has scoured Europe for potential acquisitions this year, would examine assets that remain after Vodafone sells its 45 percent stake in Verizon Wireless, people familiar with the matter said. The U.S. company is only interested in wireless and would be deterred if Vodafone expands in cable and fixed-line businesses, said one of the people, asking not to be named discussing internal deliberations.

Vodafone and Verizon are discussing a price of about $130 billion for the stake, people with knowledge of the talks said. AT&T could pay about 80 billion pounds ($124 billion) for what's left of Vodafone, according to Robin Bienenstock, an analyst at Sanford C. Bernstein, basing her estimate on a valuation of six times earnings before interest, tax, depreciation and amortization.

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"Were somebody to buy Vodafone, AT&T would be the primary candidate," said James Barford, a telecommunications analyst at Enders Analysis in London. "AT&T would both be likely to summon the financial resources and has already expressed an interest in Europe."

Europe Attraction

Vodafone is one of Britain's most global non-financial companies with assets from Sydney to Johannesburg overseen from a bucolic headquarters outside London. To revive its European business, where wireless mergers are hampered by regulation, Chief Executive Officer Vittorio Colao has started acquiring wireline assets, agreeing in June to pay $10 billion for Germany's largest cable-television provider.

AT&T has examined takeover candidates including Vodafone's assets, U.K. mobile carrier EE -- a venture of Deutsche Telekom AG (DTE) and Orange SA (ORA) -- and parts of Spain's Telefonica SA (TEF), people familiar with the company's plans said in June. AT&T is attracted to Europe because of its relatively recent introduction of faster, fourth-generation networks, which have been available for years in the U.S.

Brad Burns, a spokesman for Dallas-based AT&T, declined to comment on any potential M&A targets. Ben Padovan, a spokesman for Newbury-based Vodafone, declined to comment on whether the carrier may become a takeover candidate.

Vodafone gained 0.7 percent to close at 206.25 pence in London, adding to yesterday's 8.2 percent jump. Verizon lost 0.9 percent to $47.40 at 12:24 p.m. in New York. AT&T (T) added 0.2 percent to $33.71.

Cash Conundrum

Vodafone would fit AT&T's global strategy, and the cash proceeds from the Verizon Wireless stake sale could make it more interesting for an acquirer, Bienenstock said.

Verizon is working with several banks to raise $10 billion from each, or enough to finance about $60 billion of the buyout, people familiar with the plans have said. In a statement yesterday, Vodafone said there's no cert! ainty an agreement with Verizon will be reached.

"With 30 to 40 billion pounds cash in its pocket, Vodafone would quickly look an attractive target," Bienenstock wrote in a note. "Alternatively, Vodafone could use the cash to build a bigger business itself. This would be more risky and time consuming, but it could be more fun and, depending on one's view, more value creating."

AT&T's likely strategy would be to accelerate Vodafone's 4G rollout, Enders's Barford said. Vodafone switched on its 4G service in the U.K. yesterday, while consumers in some other European markets are still waiting for speedier connections.

Low Valuations

The U.S. carrier is unconvinced of the advantages of running combined fixed-line and wireless networks, and would be more interested in Vodafone were it to remain a primarily mobile provider, said one of the people.

Vodafone has already expanded beyond wireless service, and in June beat John Malone's Liberty Global (LBTYA) Plc to take over Germany's Kabel Deutschland Holding AG. (KD8) Vodafone and Verizon accelerated talks on the stake sale after the Kabel Deutschland offer, which put additional pressure on the British company's finances, a person familiar with the matter said.

If 51-year-old Colao opts to step up acquisitions, the Verizon Wireless stake sale would supply the funds to buy almost any company in the industry at a time when valuations of European telecommunications firms are at an all-time low. At the end of its last financial year ended in March, Vodafone had about $11.8 billion in cash and cash equivalents. It reported net debt of 24.9 billion pounds as of June 30, including its joint ventures.

Cash Pile

Vodafone's cash pile alone, including the Verizon Wireless proceeds, would be worth more than the combined market capitalization of France's Orange, at $27 billion, and Telecom Italia SpA (TIT), at almost $12 billion. Liberty Global, which has cable operations in countries including G! ermany an! d the Netherlands, is valued at about $30 billion.

Vodafone is now heavily focused on mature European markets such as Italy, the U.K. and Germany. It also has operations in Asia and Africa.

Expansions into fixed-line businesses have two primary advantages for mobile operators. Selling so-called triple- and quadruple-play packages that combine mobile, landline, TV and broadband services makes customers more reluctant to upend their entire digital lives by switching providers. Owning high-capacity fiber-optic networks helps carriers deal with the demands of surging mobile-data traffic.

Broadband Expansion

Last year, Vodafone bought Cable & Wireless Worldwide Plc, an operator of U.K. fixed-line networks, for $1.8 billion. Its deal for Kabel Deutschland is adding a formidable fixed-line operation that Vodafone will combine with its mobile business in Germany.

Vodafone was also considering an acquisition of Italy's Fastweb SpA, people familiar with the matter told Bloomberg News in June. Other European cable companies that aren't part of a larger multinational group include Spain's Grupo Corporativo ONO SA, France's Numericable SAS and Zon Multimedia SGPS SA in Portugal.

"Both the U.S. and European telecommunication markets stand to face some tough competition with the increasing move towards converged, triple-play offers," said Ronald Klingebiel, a professor at the Warwick Business School. "To weather these impending storms, Vodafone is right to sell the stake so it can concentrate on its priority markets in Europe."

Worried About a Pullback? Think Dividends

For those concerned the market might pull back, one strategy worth considering is to shift money into dividend-focused investments; here are four dividend ETFs to weather a possible stock market drop, says Geoffrey Mrema and Todd Rosenbluth, of S&P Capital IQ.

We believe that when pullbacks happen, dividend stocks fare better than others because their yields provide downside protection.

While there are more than 100 stocks ranked by S&P Capital IQ as buy or strong buy that offer a 2.5% or greater yield, an ideal way for investors to get diversification to many of these stocks is through exchange traded funds (ETFs).

We ran a screen of the dividend-focused domestic equity ETFs with an Overweight ranking from S&P Capital IQ and a 12-month yield over 2.5%.

We excluded those ETFs that were focused on a specific sector, like utilities, since sector diversification provides its own benefits.

While S&P Capital IQ does not base ETF recommendations on yield alone, the consistency of dividend payments is a key component to the S&P Capital IQ Quality Ranking, which is a component of the risk considerations portion of our ranking methodology.

Our screen yielded seven results, and we chose the top four in terms of assets.

The SPDR S&P Dividend ETF (SDY) is the largest of the four. It owns companies that have increased dividends every year for at least 20 years. Its portfolio has 83 individual stocks with a median market capitalization of $13 billion.

On a sector basis, the fund's largest exposure is to consumer staples (18% of total assets), followed by financials (17%), and industrials (13%). For the year to date, the fund has attracted $1.3 billion in new cash, with $580 million coming in July according to IndexUniverse.

Vanguard High Dividend Yield Index Fund (VYM) is the second largest fund by assets, with holdings selected by its benchmark based on having the highest yields.

VYM holds 396 stocks and has an average market cap of just $3.1 billion, lower than the three other ETFs we profile. Its largest sector exposures are to consumer staples (17% of assets), followed by energy (13%) and industrials (12%). It has attracted $1.4 billion in inflows so far this year.

The iShares high Dividend ETF (HDV) has holdings that are chosen based on providing relatively high yields on a consistent basis, and it offers the highest overall yield of the four.

Its 77 stocks have a median market cap of $11.2 billion. The largest sector weightings are to health care (21%), consumer staples (18%), and telecom services (14%).

The smallest of the four ETFs is WisdomTree LargeCap Dividend Fund (DLN) which owns the 300 largest US dividend paying companies; their median market capitalization is $20 billion.

It is dividend weighted, to reflect the proportionate share of the aggregate cash dividends of each component company. Its largest sector weightings are in consumer staples (15%), information technology (14%), and financials (13%).

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Oak Ridge Micro-Energy Completed $2.5M Private Placement by Global Fund (OTCBB:OKME, OTCMKTS:CRWE)

Oak Ridge Micro-Energy, Inc. (OKME)

Today, OKME has surged (+6.67%) up +0.050 at $.800 with 10,090 shares in play thus far (ref. google finance Delayed: 10:52AM EDT July 18, 2013).

Oak Ridge Micro-Energy, Inc. previously reported a strategic US $2.5M investment by Precept Fund Management SPC's on behalf of Prescient Fund SP into the revitalised US battery company Oak Ridge Micro-Energy.

Mr. Steve Barber, Principal of Precept Investment Management Limited, the investment manager of Precept Fund Management SPC said:

Best Stocks To Buy For 2014

"Globally the energy storage sector is projected to be a US$60 Billion market by 2020. Precept's $2.5m placement into OKME is a strategic move by the fund to secure a significant share of this exciting company and the growth potential of the battery market. Our opinion is that OKME has a world leading technical and commercial team, a focused business development strategy and the reputation to be a key player in the US and global battery market. OKME is one of only two investment targets the Fund identified after an in-depth analysis of the energy storage market. The other is a Swiss battery company named Leclanche. Precept is a long-term, active participation, value investor, and we look forward to a long and rewarding relationship with OKME."

Oak Ridge Micro-Energy, Inc. (OKME) 5 day chart:

Crown Equity Holdings Inc. (CRWE)

Together with their digital network of Websites, Crown Equity Holdings Inc. (OTCMKTS:CRWE) (www.crownequityholdings.com ) offers advertising branding and marketing services as a worldwide online multi-media publisher. The company focuses on the distribution of information for the purpose of bringing together a targeted audience and the advertisers that want to reach them.

Today, CRWE remains (0.00%) +0.000 at $.0250 with 15,210 shares in play thus far (ref. google finance Delayed: 12:39PM EDT July 18, 2013).

CRWE's daily range thus far is at ($.025 – $.025) currently at $.0250 would be considered a (+1566.66%) gain above the 52 wk low of $.0015. The stock is up +0.02 ( +733%) since the concerning dates of January 24, 2013 – July 18, 2013. +733% is the 6 month high and rightly so.

June 26, the Company filed 10-Q http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9371051, and 10-K http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9371048

Crown Equity Holdings Inc. (CRWE ) 5 day chart: