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Here's How La-Z-Boy Is Making You So Much, So Fast

Pasternak — 2011-12-16 22:50:42

It takes money to make money. Most investors know that, but with business media so focused on the "how much," very few investors bother to ask, "How fast?"

When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to La-Z-Boy (NYSE: LZB ) .

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Let's break this down
In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.

Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.

To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better.

Here's the CCC for La-Z-Boy, alongside the comparable figures from a few competitors and peers.

Company	TTM Revenue	TTM CCC
La-Z-Boy	$1,219	?92
Tempur-Pedic International (NYSE: TPX )	$1,344	?47
Sealy (NYSE: ZZ )	$1,257	?42
Leggett & Platt (NYSE: LEG )	$3,584	?77

Source: S&P Capital IQ. Dollar amounts in millions. Data is current as of last fully reported fiscal quarter. TTM = trailing 12 months.

For younger, fast-growth companies, the CCC can give you valuable insight into the sustainability of that growth. A company that's taking longer to make cash may need to tap financing to keep its momentum. For older, mature companies, the CCC can tell you how well the company is managed. Firms that begin to lose control of the CCC may be losing their clout with their suppliers (who might be demanding stricter payment terms) and customers (who might be demanding more generous terms). This can sometimes be an important signal of future distress -- one most investors are likely to miss.

While I find peer comparisons useful, I'm most interested in comparing a company's CCC to its prior performance. Here's where I believe all investors need to become trend-watchers. Sure, there may be legitimate reasons for an increase in the CCC, but all things being equal, I want to see this number stay steady or move downward over time.

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Because of the seasonality in some businesses, the CCC for the TTM period may not be strictly comparable to the fiscal-year periods shown in the chart. Even the steadiest-looking businesses on an annual basis will experience some quarterly fluctuations in the CCC. To get an understanding of the usual ebb and flow at La-Z-Boy, consult the quarterly period chart below.

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

On a 12-month basis, the trend at La-Z-Boy looks good. At 91.5 days, it is 2.3 days better than the five-year average of 93.8 days. The biggest contributor to that improvement was DSO, which improved 2.2 days compared to the five-year average. That was partially offset by a 1.6-day increase in DPO.

Considering the numbers on a quarterly basis, the CCC trend at La-Z-Boy looks good. At 87.5 days, it is little changed from the average of the past eight quarters. With both 12-month and quarterly CCC running better than average, La-Z-Boy gets high marks in this cash-conversion checkup.

Though the CCC can take a little work to calculate, it's definitely worth watching every quarter. You'll be better informed about potential problems, and you'll improve your odds of finding the underappreciated home run stocks that provide the market's best returns.

Top China Stocks To Buy

Jonas — 2011-12-16 20:49:08

I recently wrapped up a 10-day tour of China, visiting Beijing, Shanghai, Shenzhen, Hong Kong and Macau and observing the current state of the Chinese economy. And let me just say, China is on the road to recovery.

In general, my observations indicate that China’s economy is already in the recovery phase. The real estate sector is improving, as the volume of home sales doubled in March from the previous month. This bodes well continued strength in China’s recovery in the upcoming months, as the property sector is one of the most important segments in the Chinese economy.

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And real estate isn’t the only area that’s helping to support the Chinese economy. State-owned enterprises (SOEs) are benefiting from the Chinese government’s stimulus plan and banks’ increase in lending. Their strength is providing employment opportunities and is keeping money flowing into the Chinese economy. As a result, many of these SOEs have seen their share prices increase dramatically.

So outside of exports, the Chinese economy continues to exhibit robust growth with government-controlled and domestic consumption sectors showing strength and supporting the economy. And that’s why I continue to believe the Chinese economy will fully recover in the second half of this year and continue to provide us with incredible opportunities to profit from its strength. Here are my top China stocks to buy now.

Top China Stocks To Buy: KongZhong Corporation (KONG)

KongZhong Corporation, together with its subsidiaries, provides wireless interactive entertainment, media, and community services to mobile phone users in the People's Republic of China. It also involves in the development, distribution, and marketing of consumer wireless value-added services, including wireless application protocol, multimedia messaging services, short messaging services, interactive voice response services, and color ring back tones. In addition, it offers interactive entertainment services, such as mobile games, pictures, karaoke, electronic books, mobile phone personalization features, entertainment news, chat, and message boards; and through Kong.net offer news, community services, games, and other interactive media and entertainment services; and sells advertising space in the form of text-link, banner, and button advertisements. Further, the company develops and publishes mobile games, including downloadable mobile games and online mobile games consisting of action, role-playing, and leisure games. As of December 31, 2009, it had a library of approximately 300 internally developed mobile games. Additionally, it develops online games; and provides consulting and technology services, as well as media and net book services. The company was formerly known as Communication Over The Air Inc. and changed its name to KongZhong Corporation in March 2004. KongZhong Corporation was founded in 2002 and is headquartered in Beijing, the People?s Republic of China.

Advisors' Opinion:

Louis Navellier2011-9-10

Thanks largely to the country’s tremendous economic growth, there’s a new middle class in China. They have more leisure time than ever before, and that means big opportunity for entertainment provider KongZhong Corporation (KONG).

The company provides wireless interactive entertainment, media and community services to mobile phone users, but it also offers interactive entertainment services, including mobile games, pictures, logos, karaoke, electronic books and mobile phone personalization features such as ring tones. The Chinese love their cell phones, and KongZhong provides much of the content that goes on those phones.

Investors certainly haven’t been hesitant to dial up shares of KONG, as the stock is up over 218% in the last 12 months.

I rate KONG an A, making it a strong buy.

Wyatt Research Staff 2011-8-30

As a Chinese ADR, KONG is the leading provider of 2.5G wireless interactive entertainment, media and community services in terms of revenue to customers of company China Mobile. Institutions snatched up shares at an alarming rate with an increase of 26.7% in institutional ownership over the past three months.

A consensus of analysts expect earnings to increase by 16.9% in 2011 and 19.6% in 2012. Company earnings are estimated to increase by 62.1% this year.

Top China Stocks To Buy: eLong Inc. (LONG)

eLong, Inc. operates as an online travel service provider in the People?s Republic of China. The company provides its customers with travel information and the ability to book rooms, air tickets, vacation packages, and other travel related services utilizing call center and Web-based distribution technologies. It facilitates the customers to book rooms in approximately 10,000 hotels in 450 cities across China, and fulfills air ticket reservations in approximately 80 cities across China. In addition, the company offers the ability to book rooms at approximately 100,000 hotels outside of China; and provides the customers informative content relevant to hotel and air travel decisions, including tourist and event site destination information, hotel facility information, and photos. eLong markets its services through online marketing, traditional media advertising, co-marketing with established brands of other companies, and direct marketing. The company was founded in 1999 and is headquartered in Beijing, the People?s Republic of China. eLong, Inc. operates as a subsidiary of Expedia Asia Pacific Limited.

Advisors' Opinion:

cnAnalyst2011-9-10

eLong, Inc. (ADR) (NASDAQ:LONG) is the 10th best-performing stock last month in this segment of the market. It was up 62.09% for the past month. Its price percentage change was 17.47% year-to-date.

Top China Stocks To Buy: BioScrip Inc. (BIOS)

BioScrip, Inc. provides pharmacy and home health services in the United States. It operates in two segments, Infusion/Home Health Services and Pharmacy Services. The Infusion/Home Health Services segment engages in the intravenous administration of medications treating a range of acute and chronic conditions, such as infections, nutritional deficiencies, various immunologic and neurologic conditions, cancer, pain, and palliative care; and provides various types of home infusion therapies, such as parenteral nutrition, enteral nutrition, antimicrobial therapy, chemotherapy, immune globulin therapy, pain management, hemophilia, and respiratory therapy/home medical equipment. This segment also provides home healthcare services to adult and pediatric patients, including those suffering from chronic and acute illnesses, those in recovery from surgical procedures, and those who require monitoring or care for other reasons. Its services and programs include skilled nursing, wound care, oncology nursing and infusion nursing, rehabilitation, occupational therapy and speech language pathology, medical social services, and home health aide services, as well as private duty nursing care and intermittent nursing care. The Pharmacy Services segment owns and operates 34 specialty pharmacies. It provides traditional and specialty medications to treat people with various diseases and medical conditions, such as rheumatoid arthritis, Crohn?s disease, multiple sclerosis, psoriasis, immune mediated diseases, and HIV/AIDS, as well as hepatitis A, B, C, and related complications. This segment also offers specialty therapy management, prescription discount card programs, and pharmacy data services. As of March 31, 2011, BioScrip had 111 locations in 29 states and the District of Columbia, including 30 community pharmacy locations, 33 home nursing locations, 3 mail service facilities, and 45 home infusion locations. The company was founded in 1993 and is based in Elmsford, New York.

Advisors' Opinion:

Goodwin 2011-9-11

BioScrip, Inc. is a specialty pharmaceutical healthcare organization that partners with patients, physicians, healthcare payors and pharmaceutical manufacturers to provide access to medications and management solutions to optimize outcomes for chronic and other complex healthcare conditions. Its EPS forecast for the current year is 0.15 and next year is 0.45. According to consensus estimates, its topline is expected to grow 9.46% current year and 4.71% next year. It is trading at a forward P/E of 10.47. All four analysts covering the company are positive and have buy recommendations.

cnAnalyst2011-9-10

BioScrip Inc. (NASDAQ:BIOS) is the 8th best-performing stock last month in this segment of the market. It was up 65.94% for the past month. Its price percentage change was 46.27% year-to-date.

Top China Stocks To Buy: China Mobile (Hong Kong) Ltd. (CHL)

China Mobile Limited, an investment holding company, provides mobile telecommunications and related services primarily in the Mainland China. It offers various services comprising local calls, domestic long distance calls, international long distance calls, domestic roaming, and international roaming. The company also provides voice value-added services, including caller identity display, caller restrictions, call waiting, call forwarding, call holding, voice mail, and conference calls; customer-to-customer messages and corporate short message services; and mobile Internet access services. In addition, it engages in other data businesses, which primarily include multimedia messaging services; color ring services that enable users to customize the answer ring tone from various selection of songs, melodies, sound effects, or voice recordings; and mobile reading, mobile gaming, mobile video, mobile payment/wallet, mobile TV, mobile market, and Internet data center services. Further, the company offers telecommunications network planning, design, and consulting services; roaming clearance services; technology platform development and maintenance services; and mobile data solutions, and system integration and development services, as well as operates a network and business coordination center. Additionally, China Mobile Limited sells mobile phone handsets and devices. As of March 31, 2011, it served approximately 600.8 million customers. The company was formerly known as China Mobile (Hong Kong) Limited and changed its name to China Mobile Limited in May 2006. China Mobile was founded in 1997. The company is based in Central, Hong Kong, and is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. China Mobile Limited is a subsidiary of China Mobile Hong Kong (BVI) Limited.

Advisors' Opinion:

Mark 2011-11-8

I’m living in China and I know what’s going on here. I’ve been here for 9 years so I’d better. A lot of companies are overpriced but China Mobile isn’t one of them. They are going to be selling a lot 3G plans, which is very new in China, over the next several years. The smart phone boom is going nuts here and China mobile is the leader in setting up these plans. They aren’t cheap but the rising middle class can afford them. I’m not Chinese but I’m going to get a good plan tomorrow. I’ve checked into all the options and this is the best one. Amazing pick that pays a solid 3.6% dividend.

James K. Glassman 2011-10-21

Also impressive in 2010 was Matthews China Fund, the source of my New Oriental Education selection. As readers know, I am hugely enthusiastic about the stocks of what I call aspiring nations. Matthews has long-term expertise in China, with a knack for picking winners among firms focused on the domestic market, my favorite theme these days. Among the fund's holdings, I especially like Lianhua Supermarket, China's largest grocery retailer, but I can't include it in my top ten because it doesn't trade on a U.S. exchange. So I'll go with the fund's biggest holding, China Mobile (CHL), which owns about three-fourths of the market in a country of 1.3 billion, of whom only about half have a wireless phone. Thus, China Mobile has plenty of room to grow.

Stephen 2011-10-6

China Mobile Limited provides telecommunications services in all 31 provinces across mainland China as well as some areas of Hong Kong. As of April 30, 2010, the Company’s total number of customers reached approximately 544.2 million. It offers GSM networks on division-synchronous code division multiple access (TD-SCDMA) standard as well as operates 3G network for smartphones & iPads. Although this company is headquartered in Hong Kong, you can buy shares on the New York Stock exchange as it trades as an American Depositary Receipt (ADR).

The company's stock is currently trading at 11 times earnings (p/e ratio) and sports a dividend yield of 3.86%. The company pays dividends twice a year and the payout ratio equals 40% which is really good. The company is sitting on 217 billion Chinese Yuan in Cash & Short Term investments which shows its strong cash flows & ability to pay a continued dividend. The stock has a $192 billion market capitalization making it among the top 100 largest listed companies in the world.

Top China Stocks To Buy: E-House (China) Holdings Limited (EJ)

E-House (China) Holdings Limited, through its subsidiaries, operates as a real estate services company in China. It provides primary real estate agency services, secondary real estate brokerage services, real estate information and consulting services, real estate advertising services, real estate online services, and real estate investment fund management services. The company offers primary real estate agency services to real estate developers of residential properties. Its secondary real estate brokerage services include offering advisory services on choices of properties; accompanying potential buyers on house viewing trips; drafting purchase contracts; negotiating price and other terms; and providing preliminary proof of title, as well as coordinating with the notary, the bank, and the title transfer agency. The company also provides market information to buyers and sellers based on its research, as well as listing and brokerage services comprising sales and rentals. Its real estate consulting services include land acquisition consulting and land development consulting. The company?s real estate information services comprise the sale of online subscriptions to its proprietary CRIC system to support its primary and secondary real estate agency services. Its real estate advertising services comprise advertising design and sales in print and other media. The company?s real estate online services include real estate news, information, property data, and access to online communities to real estate consumers and participants through local Web sites. Its real estate investment fund management activities consist of investments in China?s real estate sector. E-House (China) Holdings Limited was founded in 2000 and is headquartered in Shanghai, the People?s Republic of China.

Advisors' Opinion:

Louis Navellier2011-9-10

China’s massive citizenry has to be housed, and that’s the job of E-House (China) Holdings (EJ). The company provides primary real estate agency services, secondary real estate brokerage services and real estate consulting and information services.

Its secondary real estate brokerage services include offering advisory services on choices of properties, accompanying potential buyers on house viewing trips, drafting purchase contracts and negotiating purchase prices and other terms. You might say that E-House (China) Holdings is the go-to real estate agent for the Chinese people.

Hey, the housing boom may have fizzled out here in America, but in China housing is all the rage. And judging by the 134% gain in EJ shares over
the past 12 months, investors certainly think this fire-breathing dragon is hot.

I rate EJ an A, making it a strong buy.

ChemTrade2011-8-28

Founded in 2000, E-House (EJ) is a leading real estate service company in China. It has a large scope of services, good brand recognition and a strong geographic presence. The company provides primary real estate agency services, secondary real estate brokerage services as well as real estate consulting and information services.

Checking an Important, Overlooked Metric at Zep

Atlantic — 2011-12-16 12:58:57

Here at The Motley Fool, I've long cautioned investors to keep a close eye on inventory levels. It's a part of my standard diligence when searching for the market's best stocks. I think a quarterly checkup can help you spot potential problems. For many companies, products that sit on the shelves too long can become big trouble. Stale inventory may be sold for lower prices, hurting profitability. In extreme cases, it may be written off completely and sent to the shredder.

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Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized.

Is the current inventory situation at Zep (NYSE: ZEP ) out of line? To figure that out, start by comparing the company's figures to those from peers and competitors:

Company	TTM Revenue Growth	TTM Inventory Growth
Zep	13.6%	15.0%
Scotts Miracle-Gro (NYSE: SMG )	(2.1%)	9.7%
Ecolab (NYSE: ECL )	7.4%	10.6%
Ashland (NYSE: ASH )	13.3%	106.9%

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. TTM = trailing 12 months.

How is Zep doing by this quick checkup? At first glance, OK, it seems. Trailing-12-month revenue increased 13.6%, and inventory increased 15%. Over the sequential quarterly period, the trend looks healthy. Revenue grew 3.5%, and inventory dropped 14.8%.

Advanced inventory
I don't stop my checkup there, because the type of inventory can matter even more than the overall quantity. There's even one type of inventory bulge we sometimes like to see. You can check for it by examining the quarterly filings to evaluate the different kinds of inventory: raw materials, work-in-progress inventory, and finished goods. (Some companies report the first two types as a single category.)

A company ramping up for increased demand may increase raw materials and work-in-progress inventory at a faster rate when it expects robust future growth. As such, we might consider oversized growth in those categories to offer a clue to a brighter future, and a clue that most other investors will miss. We call it "positive inventory divergence."

On the other hand, if we see a big increase in finished goods, that often means product isn't moving as well as expected, and it's time to hunker down with the filings and conference calls to find out why.

What's going on with the inventory at Zep? I chart the details below for both quarterly and 12-month periods.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FQ = fiscal quarter.

Let's dig into the inventory specifics. On a trailing-12-month basis, raw materials inventory was the fastest-growing segment, up 54.1%. On a sequential-quarter basis, each segment of inventory decreased. With inventory segments moving opposite directions for the periods we're considering, this one is a toss-up.

Best Tech Stocks To Buy In 2012

Hedge — 2011-12-15 12:55:03

The International Consumer Electronics Show (CES) held every year in Las Vegas is currently the largest consumer technology tradeshow in the world. This year’s show featured 2,700 exhibitors, and it is estimated that over 140,000 industry professionals were in attendance. Such craze underscores the importance of understanding the future of technology and consumer electronics through this venue, which we believe provides very valuable information for investing in the technology segment. And just for the record, the hype surrounding this show almost does not do it justice: the innovation on display at many of the exhibits was simply remarkable. It’s almost as if you have taken a time machine into the future 3 years to see what the mainstream consumer electronics world will look like. This year, the innovations at CES ranged from “smart” phones to “smart” cars, the majority of which encompassed the idea of connecting with “the cloud.” And while many of these new technologies will probably need a fair amount of fine-tuning before they are sold in mass amounts to consumers, we got a pretty good idea about where consumer electronics and technology markets are heading. CEA President Gary Shapiro said the consumer electronics industry is expected to grow 3% in 2011 to $186 billion – its highest mark ever – on the fast-growing success of tablets, smartphones, e-readers, and other connected devices. It is our goal with this report to give you a better understanding of these underlying trends, as well as a list of companies which we believe have interesting opportunities to capitalize best tech stocks to buy in 2012 .

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It’s All About the Tablets!

As extensively reported, the biggest wave of new products at CES centered around the tablet device. While north of 100 tablet introductions had been expected, the actual number came in around 80 – still very impressive considering this product category is in its infancy with only one such successful launch thus far (iPad). However, with 17 million tablets sold worldwide in less than 9 months in 2010, and millions of consumers aching to get their hands on one, manufacturers everywhere have quickly realized that capturing even a small piece of this burgeoning market would be worth the risk and investment. The exhibits at CES were proof of that. Asus, Acer, LG, Samsung (SSNLF.PK), Research in Motion (RIMM), Motorola (MMI), Lenovo (LNVGY.PK), and others all introduced their tablet devices during the show, with the majority running on the Android platform (a fair amount of the others ran on Windows 7). Part of the reason why the tablet is gaining so much traction is that devices of this screen size have gone relatively missing to date, with smartphones dominating the 3-5 inch size, PCs dominating the 15-25 inch size, and TV dominating the 25-60 inch size. Thus, devices of 5-15 inches have been relatively non-existent until recently (at least in a mass market sense), and it appears consumers are voting for tablets over netbooks. Tablets provide a screen big enough to surf the net and watch quality videos (as opposed to watching them on a minute 4 inch smartphone screen) but without the added hardware weight that comes with a PC.

And as we learned from experts of the CEA, if you can dominate a screen size, you have the potential to sell tens of millions of units per year [as Apple’s (APPL) iPad has already shown]. In fact, tablet sales are already expected to double in 2011, based on conservative projections. And by 2014, tablets are expected to account for 32% of all computer shipments. It appears to be a consensus expectation that tablet devices are here to stay, unlike many other devices introduced at CES in past years (i.e. DigiScents’ iSmell). However, we must point out that CEA chief economist Shawn DuBravac predicted that growth estimates for tablets in the coming year or two are overstated and show little regard for supply chain dynamics. He believes that tablet sales will follow more of an S-shaped adoption curve, like all consumer electronic products have done in the past (current market projections dictate more of a linear production curve for tablets). But while this may make for some rocky movements in tablet sales predictions, the long-term projections are intact, and it would be silly to not try to gain exposure to this market at such an early point in the game. We will talk further about potential investment ideas towards the end of the report.

Wait a Second … What About Best Tech Stocks To Buy In 2012?

While tablets were the hottest product at CES because of their “new-ness,” that does not take away from the fact that there were also an abundance of new smartphones introduced by many industry stalwarts (LG, HTC, Samsung, Motorola, etc). But the most exciting news surrounding these devices was not only the hardware (i.e. the Motorola Atrix smartphone sports an Nvidia (NVDA) dual-core microchip – more processing power than the laptop you owned four years ago), but also revolves around their ability to access 4G networks as well as the further development of Applications. Verizon (VZ), for example, introduced several new smartphones that will run on its LTE-based 4G network, which runs at speeds up to 10 times faster than 3G. In addition, these phones enjoy a new Skype app, which allows for video conferencing. Other creative apps were also introduced at the show, including ones that can read your blood pressure when your phone is connected to a device that fits around your arm. Another app we saw would turn your smartphone into a remote control for your television. The primary trend underlying all of this app development is the personalization of consumer electronics. Manufacturers and software developers are striving to make the smartphone experience more useful to each and every consumer. This can happen as the smartphone learns to serve more of your needs and learn “who you are” as a consumer so that it can be a real-life guide that adds value to many aspects of your life. The last major development connected with smartphones illustrated at the show is the type of sensors integrated into each device which allow for different functions: capacitative and resistive touchscreens, microphones, cameras, accelerometers, gyroscopes, compasses, pressure sensors, etc. We believe this will be an area of significant innovation and adoption going forward as the smartphone has become the most popular consumer electronics device in the world today. CEA experts agree, noting that smartphones have reached 39% penetration in the U.S. in just a few short years, but still have plenty of growth opportunities as standard feature cell phones have a penetration rate of 91%. The CEA expects smartphone units to grow at an annual rate of roughly 12% through 2014.

Best Tech Stocks To Buy In 2012: Into the 3rd Dimension

Also in abundance at CES were 3DTV’s, a technology which is producing an awe-inspiring experience. Toshiba even introduced a 3DTV that did not require glasses. For 2011, CEA experts expect 1.9 million 3DTVs to be sold, up 67% from 2010. However, 3DTV is not even close to mass adoption, as the content available is limited. In fact, based on a market survey conducted by CEA, 37% of shoppers said they are unsure if they would ever purchase a 3DTV, 19% said they would never purchase one, and only 25% said they would purchase a 3DTV in the next 3 years. The limited 3D content does not justify purchasing the TV let alone the inconvenience of wearing expensive 3D glasses. Therefore, while we are in awe of the 3D experience, and expect to see 3D gain more popularity over the coming years, a mass-adoption of the product appears to be quite a few years away, hinging on the availability of content. One thing that could speed that process is the adoption of 3D gaming, which essentially redefines the gaming experience.

Best Tech Stocks To Buy In 2012: The Smart Era of TV

Another type of TV in abundance at CES, which already offers a fair amount of content and therefore seems poised to grab hold of the consumer market in the nearer future, was the “connected” TV, meaning TV connected to the internet. Unit sales increased over 150% in 2010, to 3.2 million – a reassuring sign. In all actuality, “connected” devices – not just TVs – were the most prominent theme throughout the whole show, an exciting development that we think will materialize rapidly in the decade to come. Imagine this: A world where every device is connected to the internet; whether it’s a washing machine, refrigerator, camera, phone, TV, radio, clock, car, air conditioning, home security system, etc. Now imagine the possibilities. All of these devices will be able to seamlessly transfer data to the cloud (since they are all “connected”), which will allow you to do things like manage your energy consumption, transfer photos to Facebook or to a printer directly from your camera, download a song that you hear on your car radio directly to your playlist in the cloud, or view ingredients on your smart grocery cart needed to make a recipe a friend just recommended. The key word here is “connected.” The TV will more than likely play a pivotal role in this circle of connected devices, while the smartphone will likely be the central device, as it is the most convenient to carry around. Connected TV unit shipments are expected to grow at an annual rate of approximately 47% through 2014, according to CEA experts, following an S-shaped adoption curve.

All of these connected devices will require faster, stronger, and larger networks, much more software innovation, and a way to integrate them on a platform that allows for easy communication with the cloud. And the exciting thing is, the more we use these connected devices, the more in tune they will become with our lifestyles, and will therefore be able to make recommendations to make our lives easier and our experiences more enjoyable.

Companies at the Forefront of the “Smart” Trends

Now we’ve given you a respectable view from the clouds (no pun intended) of all that is going on in the consumer electronics world, we would like to identify companies that impressed at CES and/or are well-positioned to benefit from these trends. Please see the list below:

Best Tech Stocks To Buy In 2012: MRVL – Although Marvell is not among the most chased companies at CES, we believe there is something to be said about the “unsexy” components made by Marvell which allow these ramping devices to run smoothly. What we like most about Marvell is that its chips allow for connectivity of devices and communication between devices – a trend that should begin to catch storm as more applications are developed.

Best Tech Stocks To Buy In 2012: CSCO - At CES, Cisco unveiled its solution for service providers, which seamlessly pulls together free and paid programming, video on demand, and videoconferencing, all in a single unit, which plugs right into your set-top box. However, this is a product that we believe still needs some fine-tuning, though it could still end up having a very significant market presence. The more important idea to note is that Cisco is still the dominant vendor in 6 of the 16 main networking technologies. And if one thing is for sure, with all of these “connected” devices being introduced and becoming mainstream, an incredibly powerful network is needed to support it all. Cisco, in its leadership position, is capable of providing the powerful network and poised to benefit.

Best Transport Stocks For 2012

Elmerraji — 2011-12-15 7:14:59

Best Transport Stocks For 2012:

top US freight railroad Union Pacific (NYSE: UNP)
railcar maker Greenbrier (NYSE: GBX)
tanker operator Knightsbridge Tankers (Nasdaq:VLCCF)
container shipper Seaspan (NYSE: SSW)

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The Takeaways:

Union Pacific is benefiting from strong demand for coal, grain, and gains pricing power when oil goes up
Greenbrier has seen a recovery in orders and could use the proceeds of a recent share offering to pay down debt
Knightsbridge is mostly shielded from the current tanker glut and should benefit from rising rates next year
Seaspan is also all but locked up for 2011 and is a play on growth in the global container trade

By the Numbers:

Union Pacific operates more than 50,000 miles of track; buy under $100. (Shares closed below $95 Friday)
Greenbrier leases 8,000 railcars and makes 60% of North American boxcars. Buy under $24. (Closed below $22)
Knightsbridge shares are yielding 8.7% and are a buy under $25. (Closed shy of $23)
Seaspan yields 3.6%. Long Beach, CA container volumes rose 25% in 2010. Buy under $14. (Closed at $13.94)

Quotable:
“Shipping remains the lifeblood of the economy. US railcar loadings have recovered to pre-recession levels, a sure sign that the economic recovery continues apace. The pulse of the global economy is also strong.”

Boston Beer Company (NYSE: SAM) produces the popular Samuel Adams Lager and Twisted Tea, as well as a huge variety of seasonal offerings. The company is headquartered in Boston and has breweries in Massachusetts, Ohio, and Pennsylvania.

While the stock is not likely to double in the next year as it did during 2010, it has been a constant performer, and the recent pullback from $100 to around $90 represents a good opportunity.

The company has a record of profitability, with analysts expecting 10% revenue growth and 11% earnings per share growth in 2011. During the quarter ended in September, revenue increased 14.5% from the comparable three months of 2009. The company also increased shipments by 13%.

Consumers are becoming increasingly interested in the small-scale craft brewing segment. And they're buying those beers instead of the mass produced offerings.

I began covering the US beer market this past summer after hearing reports of yet another blockbuster year for the Vermont Brewers Festival. With over 30 different breweries from the region participating, the turnout was strong and the beers varied.

I've since noticed the massive amount of shelf-space dedicated to craft and micro brews at my local gas stations, convenience stores and liquor stores. After realizing that I was a huge fan of many of these frothy offerings I began researching growth stock investment opportunities in the craft brewing industry.

Boston Beer is growing fast enough that it may soon outgrow craft beer status. The brewer expects to sell more than 2 million barrels by 2012. But just because the company may outgrow the 'craft brewer' definition doesn't mean it isn't a compelling investment. It may just be in the sweet spot—small enough to gain greater popularity as a top-quality brewer but large enough to gain distribution efficiencies and greater shelf space.

Best Transport Stocks For 2012:Atmos Energy (NYSE: ATO)
At companies with large fixed-asset bases, including utilities like Atmos, the need to efficiently manage costs is vital. Atmos manages its employee count and expenses account so well that it is an industry leader in both categories. Atmos serves 678 customers per employee, outperforming the industry average of only 622. And Atmos spends only $116 per customer, compared to an industry average of $225. Atmos Energy is quickly returning to trend. Buy before it gets there.

Best Transport Stocks For 2012:NuStar Energy (NYSE: NS)
Every day, crude oil is pumped from Texas, Oklahoma, Colorado, and Kansas into pipelines owned by NuStar. Refineries in Sunray and Leroy, Texas, and Ardmore, Oklahoma, turn the crude into gasoline, diesel, jet fuel, petrochemicals, and other refined petroleum products and send it back out along NuStar-owned pipelines that distribute the refined products to the Midwest and mid-continent states. NuStar transports hundreds of thousands of barrels a day in this cycle. My rate-of-change chart shows a steady positive trend for NuStar's price as it has stabilized and begun to grow in the second half of 2011.

Best Transport Stocks For 2012:Aqua America (NYSE: WTR
Private water utilities own only about 16% of the nation's water supply infrastructure. That leaves 84% of the nation's waterworks in the hands of America's cities and towns. The long-term trend in the water utility business will be toward their privatization, and Aqua America will continue to grow through smart acquisitions of mismanaged utilities, both public and private. You can see Aqua America's strong upward trend since the middle of June. After its breakout over its November 2008 highs, the next point of resistance is near $25 a share.

The Impact Custom Wine Labels Have On Businesses

Leo — 2011-12-14 23:46:10

Usually, conducting product testing is the most popular strategy that businessmen do when they want to introduce a new product to the market. But what else can be done for a certain good to be well known in the public? Aside from advertising and testing, what else can help do the job of enhancing a brand’s image?

It is actually simple – labeling. This is especially true to those who want to go into the wine business because they can make their own custom wine labels. Today, this is even easier because digital printing is available and there are programs to use to design them. To come up with the right label, just sit down, relax and think

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A label, to begin with, carries pieces of important information about your product. It states its content helps enhance the flavor of your wine. This is because with custom wine labels, you also target consumers psychologically. With the label itself, you or your product may be judged. Remember that looks can change many things and the more attractive your label design is, the more favorable the item becomes in the eyes of the public. Another thing that you should also consider is that customers are made up of demographics, most specifically generation. Therefore, make sure your label is appropriate to the market being targeted. When you target the senior age group, for example, have your label reflect attributes of antiquity.

You should be able to understand the significance of custom wine labels. Your wine label can also contain pieces of information on the country where the product came from or probably the processes it went through and so on and so forth. Aside from these reasons, the label accentuates the uniqueness of your wine. Labels can also have a positive effect on your customers which can turn into a word of mouth advertisement. You should also remember that regardless of the uniqueness of your wine, it should not be limited. You can sell it even more if it is innovative.

When personalized wine labels were introduced, they made a dramatic change in the wine industry. Because of the introduction of wine labels, many new markets were opened. For example, wines having customized labels are being used as wedding giveaways or corporate gifts. After all, the industry competition is stiffer than ever. This is one of the reasons why businessmen continue to find other ways to be able to have an edge over their competitors. And personalized wine labels is a sure hit.

Wouldn’t it be nice to give away wines with personal wine labels on it to your loved ones during special celebrations? Because of technological advancement these days, this ca be done easily. But you still have to make your research so you know which among those that offer custom label services is the best for you.

During your friend’s wedding, wouldn’t it be great to give a personal wedding wine label to the newly weds? These days, it’s so easy to have custom wine labels. But you still have to make your research so you know which among those that offer custom label services is the best for you.

Best Global Investment Banks 2012

Atlantic — 2011-12-14 18:55:33

The investment banks that barely survived the financial crises are back on their feet. According to a recent Bloomberg report, the total fees charged by the industry increased by 6% to $49.1 billion. JPMorgan Chase (JPM) ranks at the top, followed by Morgan Stanley (MS) and Goldman Sachs (GS). JPMorgan was also the most profitable company in stock equities and bond underwriting. Goldman Sachs took the top spot in advisory fees (fees from mergers and acquisitions advice). Here, is a fundamental analysis of the top 10 global investment banks:

Best Global Investment Banks 2012 In USA: Citigroup (C), JPMorgan Chase (JPM), Morgan Stanley (MS), Goldman Sachs (GS), Bank of America (BAC)

Citigroup (C) - USA: Thanks to the huge U.S. bailout program Citigroup financial services barely survived the financial crises. Price to book ratio of 0.79 is below the industry average of 0.99. The debt/asset ratio of 32.46% is higher than that of UBS. Net profit margin in 2010 was 12.65%. Citibank is among the most favorite hedge fund stocks.

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JPMorgan Chase (JPM) - USA: JPMorgan is one of the oldest financial institutions in U.S. With total assets of $2 trillion, JPMorgan is a global investment titan that operates in 70 countries. Last year's operating margin was 24.21% with a net profit margin of 16.91%. Earnings per share increased by 50%; from 0.75 in the last quarter of 2009 to 1.12 in the last quarter of 2011. (SPY) is the largest holding in JPMorgan's portfolio followed by Yanzhou Coal Mining (YZC), and Apple (AAPL).

Morgan Stanley (MS) - USA: Morgan Stanley is another truly global financial holding. The current P/E ratio of 12.48 is below the industry average. Forward P/E ratio of 8.48 indicates higher growth expectations. The gross margin of 68.74% is one of the best among investment banks. (SPY) is the largest holding in Morgan Stanley's portfolio followed by iShares Russell 2000 (IWM) and Apple (AAPL).

Goldman Sachs (GS) - USA: In 2010, Goldman Sachs' sales increased by 26.20%. EPS growth was an impressive 147%. The gross margin of 68.74% and net profit margin of 14.36% is well above industry standards of 23.03% and 4.24%. SPY is the largest holding in Goldman Sachs' portfolio followed by Microsoft (MSFT) and Apple (AAPL).

Bank of America (BAC) - USA: Bank of America Corporation is a financial holding company and is also involved in commercial banking. The company is one of the few banks that still has not fully recovered from the economic depression. In 2010, both operating and net profit margins were negative. Price to cash flow ratio of 445.71 is well above the industry average. Warren Buffett sold his entire stake in the company. One might need to be careful with Bank of America, since its beta value of 2.21 shows extreme volatility.

Best Global Investment Banks 2012 In Germany: Deutsche Bank (DB),

Deutsche Bank (DB) - Germany: Deutsche Bank AG is a Germany based global investment bank that offers a range of investment products worldwide. While sales did not grow much in the last year, the company paid dividends at a yield of 1.83%. The current operating margin of 14.30% and net profit margin of 8.38% show mediocre profitability.

Best Global Investment Banks 2012 In Switzerland: UBS (UBS), Credit Suisse (CS),

UBS (UBS) - Switzerland: UBS is another financial service company that operates on a global scale. The P/E ratio of 8.96 is below the industry average. UBS has a strong balance sheet with a debt/asset ratio of 18.72%. The net profit margin increased by 23.29% in 2010.

Credit Suisse (CS) - Switzerland: Credit Suisse operates in three segments; private banking, investment management and asset management. The current P/E ratio of 9.34 is below the industry average. Net profit margin is 19%. Credit Suisse one of the few dividend players among investment banks with a current yield of 3.32%.

Best Global Investment Banks 2012 In UK: Barclays Capital (BCS)

Barclays Capital (BCS) - UK: Barclays is another non-US based international financial services provider. Barclay's metrics are similar to that of Credit Suisse. The current P/E ratio of 9.78 is below industry average. With a gross profit margin of 18.84 %, and dividend yield of 1.91%, Barclays is more profitable than Deutsche Bank.

Best Global Investment Banks 2012 In Japan: Nomura Holdings (NMR)

Nomura Holdings (NMR) - Japan: Nomura is a financial services provider located in Tokyo. Nomura was the only Asian based investment bank that made into the top 20 list. However, the stock price slumped after the massive earthquake disaster. Current price is below the 52 week-low which might offer a good opportunity for contrarian investors.

New Stocks To Buy 2012

FundTrader — 2011-12-14 12:31:19

Ever since the SEC's 13F form, which requires institutional investment managers to disclose holdings, fell into public purview in the late 1970s, "standing on the shoulders of giants" has become a popular investment option. By seeing what the professionals are buying, individual investors can invest alongside them, even if their portfolios aren't big enough to catch the investment manager's attention.

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With a renewed focus on finding diamonds in the rough of the equity market, it makes sense to pay attention to what Miller's LMCM is buying right now -- particularly new additions to the firm's portfolios.

With that, here's a glimpse at a handful of their largest newly initiated positions.

New Stocks To Buy 2012: Research in Motion(RIMM)

2011 is starting out to be a strong year for Research in Motion(RIMM), the company behind the BlackBerry smartphone line. Already, shares have seen a 14% rally to start the year -- a welcome change for the company's shareholders.

Just five or six years ago, RIM enjoyed an enviable market position, with a hefty share of the business smartphone market under its belt, and designs on taking the consumer market too as smartphone purchases climbed.

But the iPhone and Android platforms have largely usurped RIM's domination of the smartphone market. Instead of focusing on its niche, the company attempted to compete head on with offerings like the BlackBerry Storm, which wasn't particularly well received by buyers - and the company ceded valuable market share to its new competitors. That said, there's still considerable reason to bet on the BlackBerry...

While competition has yanked the smartphone crown from RIM, overall the company has been a major beneficiary of the huge shift to smartphones in the U.S. and abroad. So while there are other big players in the space now, RIM's sales have continued to climb. And because RIM focuses on the more-lucrative enterprise market, the company is able to collect software licensing fees from IT departments as well as from carriers, two revenue streams that do a good job of buoying handset sales. With a bulletproof balance sheet, and a defensive position in a harder-to-enter market, this stock could see continued success in 2011, particularly if management continues to spend cash on innovation.

Legg Mason Capital Management bought 2.99 million shares of RIMM per its latest quarterly filing, a nearly $200 million stake at current price levels.

New Stocks To Buy 2012: General Motors(GM)

For the leaner, meaner General Motors(GM), the adjustment to become a profitable automaker has been much less painful than most of Wall Street anticipated. Now that the company's shares are publicly traded once again, mutual funds are piling on shares of what's essentially a completely new company that happens to own all of GM's brands and production capabilities.

Miller and LMCM are no exception -- the firm bought a 2.6 million-share stake in GM in the last quarter, an $86.3 million stake at current prices.

In all fairness, it's not just GM's operating structure that's changed. The cars have too. Quality is at an all-time high for the Detroit-based carmaker, and the company's models are seeing success domestically for the first time in years. While Ford (F) is still the leader of the big three, both in terms of quality and financial strength, GM's still the biggest automaker in the U.S. by sales volume, and the company's work to close the other gaps has paid off considerably.

As a result of the bankruptcy, GM is still owned in large part by the U.S. and Canadian governments, as well as the auto unions. That's not likely to change in the near-term, as the sheer percentages owned by these interests make the holdings difficult to liquidate.

Even so, history suggests that these groups (particularly the first two) will remain relatively hands-off, and allow GM's new management team to keep up their work. This is definitely a stock worth watching in 2011. That said, politics and the economic recovery will both play a major role in GM's operations. Investors will want to watch these factors closely.

New Stocks To Buy 2012: BlackRock(BLK)

BlackRock(BLK) has treated investors well in the last several years, consistently hiking its dividend payouts and repurchasing shares to help owners share in the successes of what's become the largest asset manager in the world. Even with share repurchases on hold (so that the company can be included in the S&P 500 Index), analysts expect that cash to be diverted to dividend payouts instead. Fees from $3.5 trillion in assets under management should do a good job of keeping those payouts afloat.

BlackRock's product offerings are one of its most attractive attributes for investors. The company has a sticky, massive institutional client base, a factor that's helped keep AUM at such high levels of late. And the acquisition of Barclays Global Investors has added significant exposure to the retail investor market, thanks in large part to the group's attractive iShares family of exchange-traded funds.

Although BlackRock has traditionally been thought of as a fixed-income shop, it was one of the first firms to switch its emphasis to equities (others, such as Pimco, have decided to do the same, citing a less attractive fixed-income environment). That has helped attract equity investors to the firm in recent years, as conservatism became a hard-to-come-by attribute for asset managers.

Bill Miller's firm took a sizable stake in BlackRock (despite its rival status with Legg Mason) in the last quarter. All told, LMCM initiated a $67 million position in the company.

Top Stocks To Buy For January 2012

Jonson — 2011-12-14 7:19:13

Despite the market's recent resuscitation, many stocks are still trading at fire-sale prices-no surprise given the immense decline that preceded the advance. But which stocks should you buy?

Between July and now, Standard & Poor's 500-stock index surged 34%. Beaten-down "value" stocks and stocks of smaller companies have been the best performers during the recovery.

Top Stocks To Buy For January 2012: Wells Fargo & Company (WFC)

Wells Fargo & Company, through its subsidiaries, provides retail, commercial, and corporate banking services primarily in the United States. The company operates in three segments: Community Banking; Wholesale Banking; and Wealth, Brokerage, and Retirement.

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The Community Banking segment offers deposits, including checking, market rate, and individual retirement accounts; savings and time deposits; and debit cards. Its loan products comprise lines of credit, auto floor plans, equity lines and loans, equipment and transportation loans, education loans, residential mortgage loans, health savings accounts, and credit cards. This segment also provides equipment leases, real estate financing, small business administration financing, venture capital financing, cash management, payroll services, retirement plans, loans secured by autos, and merchant payment processing services; purchases sales finance contracts from retail merchants; and a family of funds, and investment management services. The Wholesale Banking segment offers commercial and corporate banking products and services, including commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, international trade facilities, trade financing, collection services, foreign exchange services, treasury and investment management, institutional fixed-income sales, commodity and equity risk management, insurance, corporate trust fiduciary and agency services, and investment banking services. This segment also provides banking products for commercial real estate market, and real estate and mortgage brokerage services. The Wealth, Brokerage, and Retirement segment offers financial advisory, brokerage, and institutional retirement and trust services. As of December 31, 2010, the company served its customers through approximately 9,000 banking stores in 39 States and the District of Columbia. Wells Fargo & Company was founded in 1929 and is headquartered in San Francisco, California.

Advisors' Opinion:

Philip 2011-11-8

Wells Fargo's (WFC) forward P/E was 7.9, based on Friday's closing price of $25.40 and consensus 2012 EPS estimate of $3.22. The shares trade just over the company's reported book value of $24.13, as of Sept. 30.

Out of 895 publicly traded U.S. bank and thrift stocks -- excluding those trading on the Pink Sheets -- 273 trade for less than $5 a share, according to data supplied by SNL.

We narrowed down the list down to 21 names with three-month daily average trading volume of more than 50,000 shares.

We further pared the list to the five names with the most upside implied by mean price targets among analysts polled by FactSet, limiting the group to bank and thrift holding with "Buy" ratings from at least half the covering analysts.

Sherry Jim 2011-10-30

Miller had $361 Million WFC shares at the end of December. WFC gained 24.7% during the last 12 months and outperformed the SPY by 3.2 percentage points. Stock holdings increased by 18.5% during the last quarter and WFC returned 9.1% since then. Warren Buffett was extremely bullish about Wells Fargo during the fourth quarter, adding another 6+ Million shares to his $11+ Billion WFC holdings.

James K. Glassman 2011-10-21

Bill Miller's incredible streak of beating the S&P 500 for 15 straight calendar years came to an end in 2006, but the CEO of Legg Mason Capital Management is still worth listening to. He always has interesting, contrarian ideas, and right now he's high on what many investors despise: bank stocks. He especially likes Wells Fargo (WFC), which is down about one-fourth since May and is trading at a modest 11 times estimated earnings.

Top Stocks To Buy For January 2012: Transocean Inc. (RIG)

Transocean Ltd. provides offshore contract drilling services for oil and gas wells worldwide. It offers deepwater and harsh environment drilling, oil and gas drilling management, and drilling engineering and drilling project management services. The company also offers well and logistics services. In addition, it engages in oil and gas exploration, development, and production activities primarily in the United States offshore Louisiana and Texas, and in the United Kingdom sector of the North Sea. As of February 10, 2011, the company owned, had partial ownership interests in, and operated 138 mobile offshore drilling units, including 47 high-specification floaters, 25 midwater floaters, 9 high-specification jackups, 54 standard jackups, and 3 other rigs, as well as 1 ultra-deepwater floater and 3 high-specification jackups under construction. Transocean Ltd. was founded in 1953 and is based in Zug, Switzerland.

Advisors' Opinion:

John Paulson 2011-10-6

Transocean LTD., formerly Transocean Inc., is an international provider of offshore contract drilling services for oil and gas wells. Transocean Ltd. has a market cap of $24.06 billion; its shares were traded at around $75.41 with a P/E ratio of 13.11 and P/S ratio of 2.51. Transocean Ltd. had an annual average earnings growth of 12.7% over the past 10 years. GuruFocus rated Transocean Ltd. the business predictability rank of 2.5-star.

Transocean stock has not quite recovered from the market crash of 2008, when it plunged from a $160 range to the low $40 range. As of April 25, 2011, it is selling at $73.40, with a 52-week high of $90.53. Year to date, it is up 5.6%.

Paulson initiated his stake in the company in the fourth quarter of 2010. He bought 7.2 million shares at an average price of $67.17. The stock has gained 12.3% since then.

Transocean owned the right that exploded in the Gulf of Mexico oil spill in April, 2010. From 2006-2009, the company earned net income of $1 billion to over $5 billion. In 2010, the year of the oil spill, it took a dramatic hit, earning $961 million in net income. In the fourth quarter of 2010, it lost $799 million in net income. Transocean had a gross profit margin of 46.5% in 2010.

In April, Transocean’s ultra-deepwater drillship set the record for deepest water drill in history: 10,194 feet off the coast of India. The company will also pay the first installment of a proposed dividend of approximately $1 billion in June.

Brian Stoffel 2011-10-6

Finally, a list of energy stocks wouldn't be complete without a pure-play rig maker. Though the company took some hits for its role in the Deepwater Horizon disaster in 2010, that didn't stop Jim Mueller and Michael Olsen from adding Transocean to their portfolios.

Jim picked the stock back in November 2010 because he thought the market's expectations for the stock were simply messed up. Using a discounted cash flow model, Jim said the stock's price "implies the company can grow [free cash flow] by just 0.7% for each of the next five years, then by 0.4% for the following five years, followed by no more growth forever."

A quick look at history showed him what a silly assumption this was: "Over the past five years, Transocean has grown free cash flow by an average of 41.7% per year."

Shares are 19% cheaper than they were when Jim made his original recommendation, which means expectations must be downright outrageous by now.

Top Stocks To Buy For January 2012: Rackspace Hosting Inc (RAX)

Rackspace Hosting, Inc. operates in the hosting and cloud computing industry. It provides information technology (IT) as a service, managing Web-based IT systems for small and medium-sized businesses, as well as large enterprises worldwide. The company?s service suite includes dedicated hosting comprising customer management portal and other management tools that manage data center, network, hardware devices, and operating system software; and cloud computing that enables customers to provide and manage a pool of computing resources, as well as delivery of computing resources to business when they need them. It offers cloud servers, cloud files, and cloud sites, as well as cloud applications, such as email, collaboration, and file back-ups; and hybrid hosting that provides a combination of dedicated hosting and cloud computing services. The company also offers customer support services. It sells its service suite through direct sales teams, third-party channel partners, and online ordering. The company was formerly known as Rackspace.com, Inc. and changed its name to Rackspace Hosting, Inc. in June 2008. Rackspace Hosting, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

Advisors' Opinion:

Sherry Jim 2011-8-26

This computing specialist that provides web-based IT systems has soared 60%+ in the past year. With a P/S above 3 and Price to Cash of 10 this stock is poised to continue to soar and outperform it’s peers. $25 in a year is a realistic bet.

Hutchinson 2011-8-26

Top Stocks To Buy For January 2012: EarthLink Inc. (ELNK)

EarthLink, Inc. provides communications services to individual and business customers in the United States. It operates in two segments, Consumer Services and Business Services. The Consumer Services segment offers Internet access and related value-added services. It provides dial-up Internet and narrowband access, broadband access, and voice-over-Internet-protocol services, as well as value-added services that include products for protection, communication, and performance, such as security products, premium email only, home networking, email storage, and Internet call waiting. This segment offer its products and services primarily through its call centers, search engine marketing, affinity marketing partners, resellers, and marketing alliances. The Business Services segment offers integrated communications services, such as secure IP-based networks, virtual private networks, Internet access, local telephone and long distance services, enhanced services, access trunks, private line services, asynchronous transfer mode/frame relay services, and mobile data and voice services, as well as installation, managed network, remote access, and disaster recovery services. It also provides wholesale services comprising broadband transport services, including private line, Ethernet private line, and wavelength services; local communications and local dial tone communications services; live and automated operator, and directory assistance services; and dedicated Internet access services and direct connectivity. In addition, this segment leases server space and provides Web hosting services that enable customers to build and maintain an online presence, including domain names, storage, mailboxes, software tools to build Web sites, e-commerce applications, and 24/7 customer support. This segment offers its services through direct sales, and independent dealers and sales agents. The company was founded in 1994 and is headquartered in Atlanta, Georgia.

Advisors' Opinion:

Vatalyst 2011-10-22

Shares are trading at $6.50 at the time of writing, as against their 52-week trading range of $6.04 to $9.29. Earnings per share for the last year were $0.45, and it paid a dividend of $0.20, yielding 3.10%.

Earthlink has shown tremendous growth in its internet and telephonic connectivity markets lately. But is this growth soon to blow out? In a market that is dominated by the larger companies, At&T (T), Verizon (VZ), and even AOL (AOL), it is hard to see that these three will allow too much trampling on their markets by the far smaller Earthlink. Gross margins at At&T, Verizon, and Earthlink are similar at around 58%, and there is not much difference in the resultant operating margins, either (15.5%, 17.5%, and 18.5%, respectively). Dividends are twice covered by earnings at AT& T and Earthlink, and marginally covered by earnings at Verizon. If the sector develops into a price war, AT&T’s dividend of yield of 6%, and undemanding price to earnings ratio of 8.39 will be more attractive to investors, and easier to achieve. Switch from Earthlink into AT&T.

Top Stocks To Buy For January 2012: Medtronic Inc. (MDT)

Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. The company?s Cardiac Rhythm Disease Management segment offers products for the diagnosis, treatment, and management of heart rhythm disorders and heart failure, including implantable cardioverter-defibrillators, cardiac resynchronization therapy devices, and cardiac pacemakers; AF products; diagnostics and monitoring devices; and patient management tools. Its Spinal segment provides medical devices and implants used in the treatment of the spine and the musculoskeletal system, such as thoracolumbar, cervical, and biologics products; and minimal access spinal technologies platform that facilitates spinal surgeries. Medtronic?s CardioVascular segment offers percutaneous coronary and peripheral vascular interventions; endovascular stent grafts; arrested heart surgery and beating heart surgery equipment; surgical ablations; and surgical heart and transcatheter heart valves. The company?s Neuromodulation segment provides neurostimulators for chronic pain; implantable drug delivery and deep brain stimulation systems; and urology and gastroenterology devices. Its Diabetes segment offers integrated diabetes management solutions; professional CGM; carelink therapy management software; and blood glucose meters. The company?s Surgical Technologies segment develops, manufactures, and markets products and therapies to treat diseases and conditions of the ear, nose, and throat, as well as certain neurological disorders; and image-guided surgery and intra-operative imaging systems that facilitate surgical planning during surgeries. Its Physio-Control segment offers external defibrillators, including manual defibrillator/monitors used by hospitals and emergency response personnel; and automated external defibrillators used in commercial and public settings for the treatment of sudden cardiac arrest. Medtronic, Inc. was founded in 1949 and is headquartered in Minneapolis, Minnesota.

Top Stocks To Buy For January 2012: Cinemark Holdings Inc (CNK)

Cinemark Holdings, Inc. and its subsidiaries engage in the motion picture exhibition business. As of June 30, 2011, it operated 436 theatres with 4,983 screens in 39 states of the United States, as well as in Brazil, Mexico, and 11 other Latin American countries. The company is headquartered in Plano, Texas.

Advisors' Opinion:

Jeff Reeves 2011-10-21

Cinemark Holdings Inc. (NYSE: CNK) owns movies theaters across the United States and Latin America, with a total of about 5,000 screens in America alone.

Current Yield: 4% (84 cents a share annually)

Dividend History: In June 2010, Cinemark paid a quarterly dividend of 18 cents a share. This July, it will pay 21 cents, for a nearly 17% increase.

Dividend Outlook: According to Bloomberg, the three-year expected dividend growth rate of CNK is 2.5%.

Recent Performance: Cinemark has surged over 20% so far in 2011, more than doubling the market. It is approaching a new 52-week high as of this publication.

Strong Outlook for Shares: Cinemark has seen improving revenue each year since 2007, connecting with movie-goers despite the recession. That’s in part because of growth and acquisitions — most recently it plans to buy a 12-screen cinema in South Carolina. The movie industry may not be booming right now, but CNK could cash in big time when box office receipts improve thanks to its growth over the last few years.

Shares have quadrupled in less than three years

Jonas — 2011-12-13 22:44:31

Is it too late for investors to hop aboard the fast-moving Intuitive Surgical (NASDAQ:ISRG) express?

By all indications, there’s still time to join the party.

And what a celebration it’s been up to now. Since late March 2009, the Sunnyvale-Calif.-based maker of surgical systems has seen its shares more than quadruple to nearly $440. And the company shows no signs of slowing down. It recently reported a blowout third quarter, with net income climbing 41% on a revenue gain of 30%.

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Intuitive also raised its revenue projections for the year, estimating sales of more than $1.7 billion, up 22%-23% from 2010. Liking what he saw, William Blair analyst Ben Andrew maintained his outperform rating on the stock.

Particularly impressive is that Intuitive achieved these blockbuster results in what is supposed to be a rough market for medical equipment companies. This led Seeking Alpha to call Intuitive “a stock that seems immune to what constitutes typical or appropriate valuation on a growing med-tech name.”

Intuitive is being rewarded for leading the transformation to robotic surgery, a technology that should continue to gain favor as more hospital administrators recognize its patient and economic benefits.

The company calls its offering the da Vinci surgery system, a technology that looks to be a big step up from typical “open” surgery or the newer minimally invasive surgery. With da Vinci, the surgeon sits at a console and controls the movement of instruments that have been inserted into the patient through small incisions.

The company says da Vinci provides the surgeon with intuitive control, range of motion, fine tissue manipulation capability and high definition 3-D vision, while simultaneously allowing him to work through the small openings, according to the company’s 2010 annual report.

Today, robot-assisted surgery has become almost commonplace for removing the prostate gland and for hysterectomies. But Intuitive is already expanding its technology into new areas such as colorectal surgery and for removing tumors in the throat and voice box. And in the not-too-distant future, look for da Vinci to be used in thoracic and cardiovascular surgery.

As the dominant player in the industry, Intuitive doesn’t appear to have any obstacles standing in the way of its continued growth. The company doesn’t have any major direct competitors and the barriers to market entry are high. Any competitive system would have to be considerably superior because switching to a new technology would force hospitals and care centers to spend a lot of time and money to retrain their staffs.

Those investors who want to break into the robotic surgery game but find Intuitive’s share price and 37 price-to-earnings ratio too rich for their blood might want to consider Mako Surgical (NASDAQ:MAKO), which focuses on joint repairs. The company boosted its applications in September with a hip-replacement product to go along with its system for knees.