Saturday, February 28, 2015

New Maserati aces crash test, but it hurts to see

Italian automaker Maserati says its Ghibli sedan has just received a Top Safety Pick rating from the Insurance Institute for Highway Safety.

Maserati is hoping the Ghibli can broaden its appeal and pull it from the outskirts of the auto market and more into direct competition with the likes of BMW and Mercedes-Benz. For that, it needs mainstream credibility. The good crash-test scores are a step in that direction.

Maserati requested the crash tests, the IIHS says, and the trade group picked at random from the Italian assembly line.

When an automaker asks for tests, it reimburses IIHS for the costs, including the price of the cars.

The automaker cannot censor the results. IIHS publishes the scores, good or bad. If an automaker makes significant changes, it can request a re-test.

TEST RESULTS: Ghibli gets top 'good' rating on all tests IIHS performed

The Ghibli, which went on sale in the U.S. in September, is a low-price model by Maserati standards, starting at about $66,000 for the rear-drive model with twin-turbocharged V-6 and about $76,000 for the Q4 all-wheel-drive model. Engines are from corporate affiliate Ferrari. Fiat owns Ferrari, Maserati and most of Chrysler Group.

The brand's main U.S. model is the Quattroporte, a four-door sedan that's about $104,000. A sleeker coupe model starts at about $126,000. Ghibli is 11 inches shorter than the Quattroporte flagship, but still is considered a full-size car.

Maserati has priced Ghibli to directly take on BMW 5-Series and Mercedes-Benz E-Class.

Maserati says the Ghibli ushers in "a new era of accessibility for the legendary Italian brand" and the Top Safety Pick rating should help make the Ghibli "a 'top pick' for sport sedan buyers."

But as good a rating as that is, it is a cut below the IIHS top score -- Top Safety Pick +. The "plus" is awarded only to vehicles pass the menu of IIHS crash tests and also perform well in the demanding "small overlap" front crash test.

The car pictured ab! ove went through the "moderate overlap" test, which is somewhat less demanding. Despite the fearsome damage, it would have protected occupants well, and got a top score.

The small overlap test slams 20% of the car's width, on the driver's side, into a barrier to see how much protection the passenger compartment gets when the impact is outside the frame and other impact-absorbing parts of the structure.

The IIHS website shows no results for that test. The results listed by IIHS for all the other test it performed on the Ghibli are "good," which is the best rating possible.

Friday, February 27, 2015

JPMorgan Reaches $4.5B Mortgage Settlement

NEW YORK (TheStreet) -- JPMorgan Chase  (JPM) reached a $4.5 billion settlement late Friday with 21 institutional investors in disputes over residential mortgage backed securities (RMBS).

As part of the deal, JPMorgan will make a binding offer to the investors in 330 different RMBS trusts issued by JPMorgan, Bear Stearns (acquired by JPMorgan in 2008) and Chase, according to an announcement from Gibbs & Bruns, a Houston-based law firm representing the investors.

The investors include Fannie Mae (FNMA), Freddie Mac (FMCC), Blackrock (BLK), Goldman Sachs (GS) and PIMCO, among others. The trustees of the RMBS trusts, including BNY Mellon  (BK), Wells Fargo  (WFC) and HSBC, among others, must still approve the deal and have 60 days to reach a decision. Claims of individual investors will not be affected by the settlement, which does not cover claims against RMBS sold by Washington Mutual, which JPMorgan acquired in 2008.

The deal is similar in many respects to a controversial 2011 RMBS settlement for $8.5 billion involving claims brought by many of these same investors against Bank of America  (BAC). That deal, approved by trustee BNY Mellon, is still being disputed by investors including AIG. Hearings have gone on for 32 days in New York State Supreme Court and a judge has yet to rule on the matter.

The settlement over bonds stuffed with mortgages that were fraudulent or in other ways didn't meet the criteria promised when the RMBS were sold to investors, is just one of various legal disputes tied to mortgage securities sold by JPMorgan or banks it acquired. 

-- Written by Dan Freed in New York.     

Monday, February 16, 2015

Does Procter & Gamble Support Rising Prices Post-Earnings?

With shares of Procter & Gamble (NYSE:PG) trading around $79, is PG 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

Procter & Gamble engages in the manufacture and sale of a range of branded consumer packaged goods. The company operates in five segments: Beauty, Grooming, Health Care, Fabric Care and Home Care, and Baby Care and Family Care. The products provided by Procter & Gamble are my regarded as essential to a large segment of the worldwide population. As populations continue to grow and adopt its products and as a leading provider, Procter & Gamble stands to see rising profits for many years. Worldwide demand for Procter & Gamble products will continue to drive profits for this huge conglomerate.

The stock reported earnings before the opening bell October 25, 2013, posting earnings per share of $1.05 and $21.21 billion in revenue, which are relatively in line with expectations. Jon Moeller, the company's CFO, was optimistic about the data, saying that he expects full-year adjusted earnings to rise to 7 percent growth in the second half of the year. The markets took in the news with a lukewarm attitude, with the shares trading down slightly after digesting the report. Not surprising, considering that the stock is already trading near all time highs.

T = Technicals on the Stock Chart are Strong

Procter & Gamble stock has been moving higher in the last couple of years. The stock is currently trading near all time high prices but may need a little more time at current prices. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Procter & Gamble is trading slightly above its rising key averages, which signal neutral to bullish price action in the near-term.

PG

(Source: Thinkorswim)

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

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Procter & Gamble Options

16%

0%

0%

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

Put IV Skew

Call IV Skew

November Options

Flat

Average

December Options

Flat

Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very minimal amount of call and put option contracts and are leaning neutral to bullish 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 Procter & Gamble’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Procter Gamble look like and more importantly, how did the markets like these numbers?

2013 Q3

2013 Q2

2013 Q1

2012 Q4

Earnings Growth (Y-O-Y)

8.33%

-19.85%

7.32%

143.90%

Revenue Growth (Y-O-Y)

2.25%

0.86%

2.00%

1.98%

Earnings Reaction

-1.34%*

1.66%

-6.56%

4.01%

Procter & Gamble has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings about Procter & Gamble’s recent earnings announcements.

* As of this writing

P = Weak Relative Performance Versus Peers and Sector

How has Procter & Gamble stock done relative to its peers, Johnson & Johnson (NYSE:JNJ), Kimberly-Clark (NYSE:KMB), Colgate-Palmolive (NYSE:CL), and sector?

Procter & Gamble

Johnson & Johnson

Kimberly-Clark

Colgate-Palmolive

Sector

Year-to-Date Return

17.81%

31.26%

24.40%

21.25%

24.68%

Procter & Gamble has been a poor relative performer, year-to-date.

Conclusion

Procter & Gamble provides a variety of essential products to consumers in a multitude of countries around the world. A recent earnings release has investors expecting a little more from the company. The stock has been moving higher in recent years and is now consolidating near all time high prices. Over the last four quarters, earnings and revenues have been on the rise, however, investors have had mixed feelings about the company. Relative to its peers and sector, Procter & Gamble has been a weak year-to-date performer. WAIT AND SEE what Procter & Gamble does at current prices.

Friday, February 13, 2015

4 Nearly Painless Ways to Save on College Costs

If the idea of putting yourself into indentured servitude in order to obtain a college degree galls you, you should know there are alternatives to those gargantuan levels of debt many are incurring these days. A $35,000 debt load upon graduation is no small thing, so anything you can do to chip away at the burden that 70% of your college-graduate peers are taking on will put you ahead of the game.

With that in mind, here are four fairly straightforward methods to slash your college bills down to the bone, meaning you'll likely begin your post-graduate career virtually debt-free.

1. Start your college career at a community college, then transfer to a 4-year institution. Community colleges offer great educational value, costing thousands less per year than a typical four-year school, while giving students an excellent skill set and knowledge base. In fact, recent research shows that some two-year degrees enabled graduates to score higher salaries than their four-year-diploma-wielding counterparts.

If your goal is to attain a bachelor's degree, however, you can save a bundle by putting in the first two years at the community college level. For the 2010-2011 school year, two-year colleges averaged just under $9,000 per year, while four-year institutions charged an average of $22,000.

Know the rules before you sign up. Choose a major that fits in with a college transfer program, and find out whether the four-year school of your choice will accept your community college credits. You won't save much money if you wind up having to take several courses over again after you transfer.

2. Pick a state school over a private institution. The average yearly costs at a private college, at over $32,000, is more than double that for a public four-year school, which averaged just under $16,000 annually for the 2010-2011 academic year. If you can't find a college in your state that has the curriculum you desire, don't fret. Most states have academic reciprocity programs, which allow out-of-state students to attend schools in neighboring states without paying the higher costs.

Currently, there are the following programs to choose from: Southern Region, Midwestern Region, Western Region, and New England. Check out the details of each at NASFAA.org.

3. Save on textbooks. These necessities of college life are expensive, but you don't always have to buy new books at your college's onsite bookstore. Take that syllabus and book list and sit down at your computer -- and start shopping.

Websites that cater to college students and their textbook-acquisition needs abound these days, and I'm not just talking about Amazon and Alibris. Ebay, half.com, and sites that specialize in book rentals can help take a big bite out of that huge textbook bill -- without your having to endure downtime while your out-of-stock books are back-ordered. Check out a passel of good hits on Mashable.

4. Use your student discount. Flourishing your student ID can net you discounts of up to 20%, depending upon the store or vendor . Many major clothing retailers, such as J. Crew and Banana Republic, offer discounts of 15%, while food vendors like Pizza Hut and Papa John's give students a deal that varies from one location to another. Many local businesses will give you a break on price, as well. Many specials are unadvertised, so get into the habit of asking about a particular store or business's policy beforehand.

Taking advantage of these cost-saving measures will cost you some time and effort, but the payoff is stellar: When you toss your cap into the air on graduation day, you'll be celebrating not only the attainment of your degree, but the fact that you also got the best value for your education dollars.

Start Planning for the Rest of Your Life
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How Yahoo! Topped Google in Web Visitor Rankings

After five years at the top of the heap, Google Inc. (NASDAQ: GOOG) has relinquished its top spot in comScore Inc.'s (NASDAQ: SCOR) ranking of the top 50 U.S. Web properties. The new leader is Yahoo! Inc. (NASDAQ: YHOO) in what can only be called a stunning upset.

The comScore rankings are based unique visitors to all the sites owned by a brand. Yahoo's climb in July from about 189 million uniques in June to more than 196 million in July topped Google's slight decline of about 250,000 unique visitors.

More interesting perhaps, is where the million additional visitors might have come from. The total number of unique visitors grew by about 1 million, from 224 million to 225 million. Among the top five properties the big loser was Facebook Inc. (NASDAQ: FB), which dropped from about 144.7 million uniques in June to 142.3 million in July. Sites owned by Microsoft Corp. (NASDAQ: MSFT) gained about 4.6 million to 179.6 million uniques in July, and AOL Inc. (NYSE: AOL) gained about 4 million to 117.4 million total unique visitors in July.

The dramatic increase in Yahoo!'s traffic may be due to its May acquisition of Tumblr.com, but it is not clear what portion of Tumblr traffic is being counted for Yahoo! At least since March comScore's ranking of Tumblr includes the cryptic footnote, "Entity has assigned some portion of traffic to other syndicated entities." What that means is left up to the imagination.

Tumblr had 29.3 million unique footnoted visitors in March and 38.4 million in July. The July total is 2.6 million higher than the June number, so it is not a stretch to assign more visitors to those other entities.

The rankings are worth more than just bragging rights too. Yahoo! has taken over the top spot in comScore's Ad Focus rankings as well with an 87.2% reach. That means that a page owned by a Yahoo! site was viewed by 87.2% of the 225 million total Web visitors in July. That is well ahead of Google's 80.6% reach. And that translates into higher ad rates and more revenue for Yahoo!

Shares of Yahoo! are up 2.2% in early trading Thursday morning, at $27.65 in a 52-week range of $14.59 to $29.83.

Wednesday, February 11, 2015

Repeal of Muni Tax-Exempt Status Would Devastate Counties: Report

“Municipal bonds enable state and local governments to build essential infrastructure projects, such as schools, hospitals and roads,” The National Association of Counties helpfully reminds readers in a recent pitch to preserve the tax-exempt status of municipal bonds.

Congress and the administration are currently debating federal tax reform, including a cap or a repeal of the tax-exempt status of municipal bond interest. The group’s analysis of the municipal bond market and of the estimated impact of a 28% cap and a repeal of their tax-exempt status on the 3,069 county governments reveals that:

The tax exemption of municipal bond interest from federal income tax represents one of the best examples of the federal-state-local partnership, they argue.

“Because of the federal tax exemption, investors are willing to buy municipal bonds that pay less interest relative to other securities.”

With a cap or a complete elimination of the exemption, the group says, investors will want to receive greater interest payments, which would be borne by the counties, states, localities and state/local authorities. Finally, all Americans, as taxpayers securing the payment of municipal bonds, will incur the cost.

---

Check out 5 Reasons Muni Bonds Will Outperform in 2013 on AdvisorOne.

Tuesday, February 10, 2015

Google's Chromebooks Are a Hit, After All

You might not have guessed it, but Google's (NASDAQ: GOOG  ) Chromebooks are a hit after all.

There hasn't historically been a lot of readily available data on Chromebook shipments, as Google doesn't disclose them nor do OEMs. Only recently did Chrome OS show up in Internet usage statistics from Net Market Share -- with a measly 0.02%. Chromebooks are the new netbooks, and netbooks are already on their deathbed thanks to low-cost tablets, nearly all of which run Android.

Well, a recent Bloomberg report citing data from NPD says that Chromebooks are gobbling up the low-end laptop market. Over the past eight months or so, Chromebooks have grown and now comprise 20% to 25% of the market for laptops priced at $300 or less. The market researcher goes as far as to call this segment the fastest-growing subset of the broader PC market.

Laptops under $300 are expected to grow at least 10% this year, well above the 14% and 11% declines the worldwide PC market has experienced in the first two quarters of 2013. Gartner pegs Chromebook's share of the U.S. market at 4% to 5% in the first quarter.

NPD believes that after some initial searching, Chromebooks have found a niche spot in the market after the first batch of the devices were priced too high (closer to $500). Excluding the super high-end Chromebook Pixel that costs $1,300, the current Chromebook lineup is priced between $199 and $330. Samsung kicked things off in October, Acer followed suit a month later, and PC giant Hewlett-Packard joined the fray with its first Chromebook in February.

Much like how Linux posed a threat on the low-end to Microsoft (NASDAQ: MSFT  ) Windows during the first era of netbooks, Chrome OS does likewise. The software giant faces the same dilemmas since the low price points don't give OEMs as much room to pay Microsoft a Windows license fee. Hardware margins on the low end are already slim enough as it is.

Microsoft is aggressively targeting this market segment this year with smaller devices like the Acer Iconia W3, an 8-inch Windows 8 tablet. The software giant has no choice but to offer concessions and discounts to OEMs though, which could pressure margins and put the brand at risk.

The netbook is dead. Long live the Chromebook?

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Monday, February 9, 2015

Why PetSmart Is Poised to Bounce Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, pet food and products retailer PetSmart (NASDAQ: PETM  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at PetSmart and see what CAPS investors are saying about the stock right now.

PetSmart facts

 

 

Headquarters (founded)

Phoenix, Ariz. (1986)

Market Cap

$7.2 billion

Industry

Specialty stores

Trailing-12-Month Revenue

$6.8 billion

Management

CEO David Lenhardt (since June 2013)

COO Joseph O'Leary (since June 2013)

Return on Equity (average, past 3 years)

29.1%

Cash/Debt

$262.1 million/$525.6 million

Dividend Yield

1%

Competitors

PETCO Animal Supplies Stores

Target 

Wal-Mart Stores 

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 93% of the 784 members who have rated PetSmart believe the stock will outperform the S&P 500 going forward.   

A couple of months ago, one of those Fools, Gregory63, succinctly summed up the PetSmart bull case for our community:

Buying dog food over the Internet is not convenient. Now that people aren't losing their houses as often, PETM is more recession-resistant (people will cut back on a lot before they neglect the family dog). Valuation isn't too high (not quite a value stock), dividend growth is good, growth rate is good, largest pet retailer. If it goes lower, I will buy more. Long-term play.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, PetSmart may not be your top choice.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of the last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.

Sunday, February 8, 2015

Today's 3 Best Stocks

Everyone brace yourselves because the broad-based S&P 500 (SNPINDEX: ^GSPC  ) is set to end the week down for the first time in a month. A mixture of profit-taking and concern that the Federal Reserve may wind down its bond-buying program sooner than expected has investors spooked.

The Fed's bond purchases create a sort of catch-22 for investors. On one hand, winding down its purchases would signal strength in the U.S. economy and point to it becoming more self-sufficient. Alternatively, fewer bond purchases could potentially move lending rates higher even with the Fed targeting record-low lending rates through 2015. In short, investor uncertainty has yielded another choppy, but modestly lower, reaction in the S&P 500.

When all was said and done, the S&P 500 ended lower by 0.91 points (-0.06%) to close at 1,649.60. There were few catalysts to send the market higher today, but the following three stocks certainly found the will to buck the downtrend in a big way.

Ascending to the top of the pack was robotic surgical device maker Intuitive Surgical (NASDAQ: ISRG  ) , which gained 4.8% after winning a lawsuit involving its da Vinci surgical system. The plaintiff in the case was a family that sued for $4.9 million following complications from a 14-hour prostate cancer surgery. The jury's verdict isn't too important from a monetary perspective for Intuitive so much as it reinforces the safety of its surgical devices, which are currently under investigation by the federal regulators. I certainly feel there could be further upside in Intuitive shares from here.

The world's largest consumer products maker, Procter & Gamble (NYSE: PG  ) , surged higher by 4% after announcing that Bob McDonald was retiring as CEO. More interestingly, former CEO A.G. Lafley, who was head of P&G from 2000 to 2009, has rejoined the company as its new CEO. Lafley was responsible for steadily growing P&G's core brands during his tenure, so shareholders seem very pleased to have him back. I can't help but be a bit excited as well because P&G's huge advertising campaign really hasn't hit home with consumers as of yet. I'd suspect the readdition of Lafley could move the company's marketing in a completely different direction, which would ultimately be beneficial to its bottom line.

Finally, advertising and marketing services company Omnicom Group (NYSE: OMC  ) added 3.4% despite no company-specific news today. However, earlier in the week, Omnicom announcement that it was keeping its dividend steady at $0.40 in the upcoming quarter certainly invigorated shareholders, who are digging Omnicom's 2.5% yield. Personally, I can't help but be a little skeptical of ad and marketing consultants in a slow-growing global environment, but shareholders are definitely enjoying a solid end to the week.

Are stories of this demise greatly exaggerated?
Recently, some investors have questioned Intuitive Surgical's future. However, Intuitive Surgical expert Karl Thiel believes a visible path to long-term growth persists. Will Intuitive capitalize or be crushed by unforeseen pitfalls? His report highlights all of the key opportunities and risks facing the company -- and includes a full year of ongoing updates as key new hits -- so be sure to claim your copy by clicking here now.

Saturday, February 7, 2015

George Soros Is Buying J.C. Penney Stock: Should You?

Last Thursday, famed investor George Soros filed a disclosure with the SEC, stating that he had acquired 7.9% of J.C. Penney (NYSE: JCP  ) . Soros' investment comes at a time of substantial turmoil for J.C. Penney, after former CEO Ron Johnson's plan to transform the company into a "specialty department store" led to a steep sales decline and heavy losses last year. Johnson was replaced with his predecessor, Mike Ullman, who is expected to undo many of the recent changes to J.C. Penney while maintaining some elements of Johnson's strategy.

While Soros is a savvy investor, ordinary investors probably should not follow him into J.C. Penney stock. Penney is still a very speculative investment, because there is no guarantee that Ullman will be able to win back enough shoppers to return the company to profitability. Competitors such as Macy's (NYSE: M  ) made a strong effort to win business from disgruntled J.C. Penney shoppers last year, and Macy's will work hard to keep those consumer dollars. Soros has a net worth of nearly $20 billion, so he can afford to risk losing a significant amount of money in a long-shot bet on recovery. For most investors, though, it would be unwise to invest in a company as risky as Penney.

Challenges remain
Since Ullman returned as CEO, J.C. Penney has gained breathing room through a five-year, $1.75 billion term loan announced on Monday, secured primarily by the company's real estate. This provides a much more stable source of long-term liquidity than Penney's revolving credit line, from which the company recently borrowed $850 million to fund working capital needs. With this additional financing, Penney should have enough cash to fund operations and necessary capital expenditures for the next year or two, which mitigates the threat of bankruptcy (for the time being). On the other hand, it now seems unlikely that Penney will be able to create value through the sale or spinoff of real estate assets, because those assets are now being used as collateral.

However, improving liquidity only addresses one of J.C. Penney's symptoms; it does not cure the company's fundamental problems. Penney experienced a 25% drop in sales last year, while total U.S. retail sales grew slightly. As a result, the company lost significant market share to mall-based competitors like Macy's. Unfortunately, bringing back coupons and returning to a "high-low" pricing strategy is probably not enough on its own to bring back former customers. J.C. Penney experimented with using more promotions during the fourth quarter last year, but still experienced its worst sales decline in that period.

Moreover, J.C. Penney has a long road to climb to bring revenue up to a point where the company could break even. Most analysts expect revenue to decline again in the first half of fiscal year 2013, reflecting the further erosion of traffic late last year and extensive renovations in the home section, which have closed off a significant amount of floor space. The average analyst estimate for fiscal year 2013 revenue is $12.26 billion, almost 30% below the fiscal year 2011 total, and nearly 40% below the all-time peak before the Great Recession.

By contrast, J.C. Penney probably needs to generate revenue of $15 billion at a gross margin of 36% (in line with fiscal year 2011 gross margin performance) to break even. This reflects additional cost savings compared to last year, offset by higher depreciation expense due to the company's heavy capital spending and higher interest expense from J.C. Penney's recent borrowings. Given the level of competition in the department store segment, it will be very difficult for Penney to close that gap in less than three years. Moreover, the company's customers tend to be very price-motivated, which could force the company to discount especially heavily in the next few years in order to recapture previous customers. This could push gross margin even lower than 36%, making it harder to break even. Thus, while J.C. Penney has some breathing room, it is by no means out of the woods yet.

Foolish bottom line
Soros has not publicly stated why he purchased J.C. Penney stock, and the investment appears to be a high-risk gamble. Penney now has adequate liquidity to execute a turnaround strategy, but even after its recent cost cuts, it will need to regain a significant portion of the revenue it lost last year just to reach breakeven. Even in a best-case scenario, this will take several years to play out, and failure could lead to substantial losses. For most ordinary investors, the risks far outweigh the potential rewards of investing in J.C. Penney.

More Foolish perspective on Penney
J.C. Penney's stock cratered under Ron Johnson's leadership, but could new CEO Mike Ullman present the opportunity investors have been waiting for? If you're wondering whether J.C. Penney is a buy today, you're invited to claim a copy of The Motley Fool's must-read report on the company. Learn everything you need to know about JCP's turnaround -- or lack thereof. Simply click here now for instant access.

Friday, February 6, 2015

Howard Lutnick donates $25 million to college

howard lutnick NEW YORK (CNNMoney) This isn't just any donation from a big money Wall Street CEO to his alma mater.

Howard Lutnick's philanthropic efforts -- especially since the September 11 attack that claimed hundreds of his New York employees -- got $25 million deeper this weekend.

The gift is his largest to Haverford College. Lutnick's mother died when he was in high school, and his father passed in his freshman year. The school covered his tuition, and Lutnick graduated in 1983.

The donation is the cornerstone of a $225 million capital improvement project and brings his total contributions to the Philadelphia-area liberal arts college to $65 million, the school said.

Lutnick has become known for his donations, and those of the brokerage Cantor Fitzgerald.

Each year on 9/11, the company donates that day's profits to charity. The firm says it has so far made contributions totaling $101 million.

Wednesday, February 4, 2015

3 Stocks Under $10 Making Big Moves

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Stocks Set to Soar on Bullish Earnings

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Rocket Stocks to Buy for June Gains

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside.

Prana Biotechnology

Prana Biotechnology (PRAN) researches and develops therapeutic drugs for the treatment of neurological disorders in Australia. This stock closed up 6.8% to $2.03 in Tuesday's trading session.

Tuesday's Range: $1.88-$2.05

52-Week Range: $1.47-$13.29

Tuesday's Volume: 1.46 million

Three-Month Average Volume: 1.97 million

From a technical perspective, PRAN spiked sharply higher here closed just above its 50-day moving average of $2.02 with decent upside volume. This sharp spike higher on Tuesday is quickly pushing shares of PRAN within range of triggering a major breakout trade. That trade will hit if PRAN manages to take out Tuesday's intraday high of $2.05 to some more key overhead resistance at $2.24 with high volume.

Traders should now look for long-biased trades in PRAN as long as it's trending above Tuesday's low of $1.88 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.97 million shares. If that breakout kicks off soon, then PRAN will set up to re-test or possibly take out its next major overhead resistance level at $2.47. Any high-volume move above $2.47 will then give PRAN a chance to re-test or take out its gap-down-day high from March that started at $3.24.

Bio Telemetry

Bio Telemetry (BEAT) provides cardiac monitoring, cardiac monitoring device manufacturing and cardiac core laboratory services. This stock closed up 1.9% to $7.50 in Tuesday's trading session.

Tuesday's Range: $7.14-$7.56

52-Week Range: $4.51-$11.98

Thursday's Volume: 345,000

Three-Month Average Volume: 381,695

From a technical perspective, BEAT spiked modestly higher here and broke out above some near-term overhead resistance at $7.48 with decent upside volume. Shares of BEAT tagged an intraday high of $7.56, before it closed just below that level at $7.50. This spike higher on Tuesday is quickly pushing shares of BEAT within range of triggering another big breakout trade. That trade will hit if BEAT manages to take out some more near-term overhead resistance at $7.64 to its 50-day moving average of $8.17 with high volume.

Traders should now look for long-biased trades in BEAT as long as it's trending above some near-term support at $7 and then once it sustains a move or close above those breakout levels with volume that hits near or above 381,695 shares. If that breakout hits soon, then BEAT will set up to re-test or possibly take out its next major overhead resistance levels at $8.83 to its 200-day moving average of $9, or even $9.35.

Atossa Genetics

Atossa Genetics (ATOS) operates as a health care company that focuses on the development and marketing of cellular and molecular diagnostic risk assessment products for breast cancer in the U.S. This stock closed up 8.2% to $1.58 in Tuesday's trading session.

Tuesday's Range: $1.46-$1.68

52-Week Range: $1.15-$7.75

Tuesday's Volume: 1.22 million

Three-Month Average Volume: 457,130

From a technical perspective, ATOS spiked sharply higher here right above its 50-day moving average of $1.40 with strong upside volume flows. This spike higher on Tuesday pushed shares of ATOS into breakout territory, since the stock took out some near-term overhead resistance levels at $1.52 to $1.60. Shares of ATOS are now quickly moving within range of triggering another big breakout trade. That trade will hit if ATOS manages to take out Tuesday's intraday high of $1.68 to more near-term overhead resistance at $1.72 with high volume.

Traders should now look for long-biased trades in ATOS as long as it's trending above $1.52 or above Tuesday's low of $1.46 and then once it sustains a move or close above those breakout levels with volume that hits near or above 457,130 shares. If that breakout hits soon, then ATOS will set up to re-test or possibly take out its next major overhead resistance levels at 1.90 to $2.36.

To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.


RELATED LINKS:



>>5 Health Care Stocks to Trade for Gains in June



>>3 Big Stocks Everyone Is Talking About



>>5 Stocks Poised to Break Out

Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

CNBC.com and Forbes.com.

You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zeros


Tuesday, February 3, 2015

Chipotle authors fast-food twist

Chipotle has added some unlikely best-sellers to its roster: authors.

The Mexican, fast-casual dining chain has signed 10 best-selling writers to create ultra-short stories -- up to 250 words each -- that will appear, at least temporarily, on its bags and cups.

The move comes at a time chains in the intensely competitive fast-food industry will do just about anything to distinguish themselves. One method requiring little investment: packaging.

The story concept was the brainchild of best-selling author Jonathan Safran Foer, whose books include Extremely Loud and Incredibly Close, Eating Animals, and Everything is Illuminated. Among other top authors whose work will appear on Chipotle packaging: Toni Morrison (Beloved), Malcolm Gladwell (The Tipping Point) and Michael Lewis (Moneyball).

They pieces are aimed as two-minute readings and could tweak the concept of what fast-food packaging is for. "Packaging in fast food restaurants is typically sold to advertisers, or used to promote new, limited time menu items," says Mark Crumpacker, chief marketing officer at Chipotle. Instead, he says, "we have used it to entertain our customers using wit, humor and design."

Foer, the author who co-created the promo, says the concept is simple. "The idea of creating a small pocket of thoughtfulness right in the middle of a busy day was inspiring to me."

Chipotle spokesman Chris Arnold says he doesn't know how long the promo will last. "It's something that could certainly be replicated, and we think it could be cool to refresh every few months"

But author wannabes need not send manuscripts to Chipotle.

"We're not encouraging that, at least not now," says Arnold. "The idea here is essays from writers, authors, and other thought leaders. There really isn't a mechanism for customers to submit works of their own."

Pickups, Small SUVs Fuel Auto Sales Rebound in April

April Auto Sales Carlos Osorio/APDodge cars on display at a Chrysler dealership in Bloomfield Hills, Mich. DETROIT -- U.S. car buyers came out of hibernation in April to spend on pickup trucks and SUVs, fueling an auto sales rebound that analysts expect to last the rest of the year. Nissan led the way with an 18.3 percent increase over a year ago, with sales of the redesigned Rogue small SUV up almost 27 percent. Chrysler posted a 14 percent gain, boosted by a big jump in sales of Jeep SUVs. Both companies reported record April sales. Toyota (TM) sales grew by 13 percent, led by a double-digit gain in truck sales. General Motors (GM), which has suffered through bad publicity from a string of embarrassing safety recalls, posted a 7 percent gain, led by the Buick Encore small SUV and the Chevy Silverado pickup truck. And Hyundai sales rose a little more than 4 percent on strong SUV sales. Analysts are expecting an industrywide sales gain of at least 8.5 percent compared with last April. That would mark the best April since 2005. But there were some soft spots. Ford's (F) sales fell 1 percent. Its car sales sputtered, although sales of its F-Series pickup, the best-selling vehicle in the U.S., rose 7.4 percent. Sales at Volkswagen dropped 8.4 percent. U.S. consumers bought 15.6 million new cars and trucks in 2013. The industry entered 2014 with expectations of selling more than 16 million cars for the first time since 2007. But sales dropped 3 percent in January and were flat in February. March started slowly, but finished with a flourish. "Sales momentum from March rolled into April, pushing the industry to its best back-to-back monthly sales pace since fall of 2007," Toyota vice president Bill Fay said in a statement. Analysts expect that April's sales pace was slightly slower than the rate in March, but should still translate into full-year sales of more than 16 million cars and trucks. "It appears we are in a more stable environment, and the sun is shining," said Jesse Toprak, chief analyst for Cars.com. "We are now finally not stuck in first gear anymore." Toprak expects April sales to rise 9 or 10 percent over a year ago and run at an annual rate of 16.2 million. He expects that pace to hold through the rest of the year. U.S. buyers have continued their shift toward small SUVs. At Ford, smaller SUVs accounted for 16 percent of U.S. sales in April, 2 percentage points higher than the same month last year, said Erich Merkle, the company's top sales analyst. Small-car sales fell two percentage points and midsize car sales were flat. "It is our estimation that both the midsize ... and small-car segments are being adversely impacted by continued really strong performance in the small utility category this year," he said. Small SUVs are stealing sales from other parts of the market as well, especially with baby boomers who are downsizing from larger SUVs but like the maneuverability and high seating position of the smaller ones, Toprak said. Ford's sales report was eclipsed by the news that company CEO Alan Mulally will retire July 1. He'll be replaced by Chief Operating Officer Mark Fields.

Monday, February 2, 2015

Beware Of The Walking Dead In Your Portfolio

Pop culture often reflects the more insidious trends at work beneath the surface of society. Take America's current fascination with zombie shows like The Walking Dead. I manage a large portfolio of corporate bonds, but when I peer into my Bloomberg Terminal, I am confronted by the walking dead daily. I am referring to zombie credits–seemingly healthy bonds issued by institutions with dubious economic net worth and unsustainable business models.

The animator of these corporate corpses is none other than the Federal Reserve and its quantitative easing program. No industry outside banking has benefited more from the Fed's largesse, and the yield hunger of investors, than retailers.

Screams and moans. Cries of despair. The smell of burning cash. Voracious appetites for capital that can never be satiated. Those should be the sounds coming from the boardrooms of two legacy retailers, J.C. Penney and Sears Holdings Sears Holdings. Yet these zombies somehow continue to anchor shopping malls.

Indeed, both retailers have tapped capital markets post-2008 despite materially deteriorating financials. It's a popular trend among legacy retailers–layer on debt to live another day.

The Government Is About to Turn This Beast Loose on You

Do you know Ally Financial Inc.?

You've no doubt seen their commercials. They used to be all over the tube hawking their high-yielding certificates of deposit. Now they're all over the tube with their "no hidden fees" campaign.

Ally FinancialI like the one where the woman is afraid to try new things because she's had bad experiences before. Her mechanical dog sparks a fire when he drinks water and her trainer hooks her up to electrodes that zap her. I like these commercials; they're funny.

But Ally isn't funny.

It recently announced that it's launching an initial public offering (IPO) of its stock at a price per share of $25 to $28. The shares will be offered by the U.S. Treasury as part of its planned exit of its investment in Ally during the subprime crisis in 2008.

I've heard some analysts say this could be a good deal for investors.

But I can't believe the U.S. government wants to unleash this on the public.

The Truth About Ally Financial

Ally was formerly GMAC (General Motors Acceptance Corporation), a finance unit of General Motors. They got stupid-greedy and got into subprime-mortgage lending instead of sticking to their auto-financing knitting.

GMAC looked clever for a while.

And all-too-clever Cerberus Capital Management (the giant hedge fund/private equity shop) bought a 51% interest in them in 2006. (Then Cerberus bought Chrysler. Not two of their better moves.)

GMAC imploded mostly because its subprime unit, Residential Capital LLC, sunk the company.

GMAC had to be rescued. The government bailed it out with $17.2 billion in TARP money. But it needed another $3 billion more (no one seems to remember that) in "liquidity" backstopping, which it got from the U.S. Federal Reserve after it begged to become a bank-holding company to feed at the Fed's free-money-for-failures trough.

Do you know what they did next, in a feeble attempt to give themselves a makeover and regain the public's trust?

They changed their name to the friendly-sounding Ally Financial (as in "I'm your ally") on May 15, 2009.

Then, with the government's backstop, Ally began to grow its deposit base. Investors weren't putting money into the company, which is why the government had to come in. But the weak bank was allowed to advertise for depositors.

They shilled for themselves, offering high-rate CDs. You know about high-rate CDs, right? They caused the S&L crisis. They are high-interest payments to depositors to lend the bank money, which it then lends out at higher rates for a profit.

Okay, if you have to pay high rates to get deposits into your bank, where are you going to find borrowers that are going to pay higher than market interest rates so your bank turns a profit?

Oh, that would be subprime all over again.

Only, this time Ally is playing the game with subprime auto loans.

Good for them. They've gone back to their auto-lending roots. Too bad that's potentially bad for you if you're dumb enough to invest in Ally when it goes public.

Most of Ally's loan book is auto loans. And most of those are probably subprime. We'll see how much of their book is autos and how much is subprime when we get a look at their S1 IPO filing documents.

In the meantime, Bloomberg reported that LTV, that's loan-to-value, for subprime autos rose from 112% in 2012 to 114.5% at the end of 2013. That means lenders are lending 14.5% more than the automobile being purchased and financed is worth!

Seriously? Why are lenders lending more than a car is worth? Is there some new math I don't know about that adds depreciation back onto the value of an asset that makes it worth more when you drive it out of the showroom? Or better yet, off the used car lot?

Exeter Finance, which was bought by Blackstone Group, recently said they're seeing an increase in late payments on up to 7.8% of outstanding loans, up from 5% in 2012.

And about GM, their auto dealers with the weakest finances owed them $12 million at the end of 2012. At the end of 2013 the amount those dealers owed GM had risen to $1.6 billion, according to Bloomberg.

So, now the U.S. government, which coddled GMAC, stroked it back to health, let it borrow from depositors at high rates to lend out at higher rates in order to make more money to pay it back and look profitable... wants to unleash it on the public?

That's going to be a winner, for sure.

And by the way, there are other short-selling opportunities about to float to the top of the "let's make money on this crap falling" game, as more subprime auto lenders are getting deeper and deeper into the swamp.

Next: Everyone's talking about Michael Lewis' new book "Flash Boys" and high-frequency trading, but here's the real reason the stock market is rigged...

Sunday, February 1, 2015

With Ukraine fear subsiding, jobs in focus

NEW YORK -- With Russia backing away from its war games in Ukraine — at least for now — an old Wall Street worry is back in focus: jobs.

On Friday, the government issues its February employment report. How many jobs were created, and what the new unemployment rate is, have implications for Federal Reserve policy. It also provides an update on the health of the economy and could influence investor confidence, says Kristina Hooper, U.S. investment strategist at Allianz Global Investors.

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Wall Street is forecasting 150,000 new jobs in February, up from a disappointing 113,000 in January, PNC says. Economists expect the jobless rate to remain unchanged at 6.6%.

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Getting a true measure of the health of the job market may prove difficult, due to last month's "snowpocalyptic" weather, which likely had a negative impact on job growth, Hooper says. "It's unclear how big a role weather will play," she says. For the same reason, Friday's jobs report most likely won't "factor too heavily into Fed policy." New Fed chair Janet Yellen reiterated last week that it will take lots of bad news for the Fed to reconsider its current timetable to withdraw its market-friendly stimulus.

The wild card? Another weak jobs number could turn the mood of consumers to the dark side. "Consumer psyches remain somewhat fragile," Hooper says. "Further labor market weakness or escalating tensions in Ukraine could short-circuit the recent surge" in confidence.