Bull of the Day: Pilgrim's Pride (PPC) - Bull of the Day

Pilgrim's Pride (PPC) has seen some big action on recent Friday's, carries a great valuation and will be reporting earnings soon. It is a Zacks Rank #1 (Strong Buy). It is the Bull of the Day.I Feel Like Chicken TonightIf the title line of this section is lost on you then I am showing my age a bit. That was a popular tag line from a commercial in the 80's but it's clear that the sentiment still rings true.With a 19% share of the domestic market, Pilgrim's Pride has a firm grip on second place behind Tyson's 22%. The 36 million bird weekly capacity also tells you that plenty of people are eating chicken.Company DescriptionPilgrim's Pride produces, processes and markets fresh, frozen, and value-added chicken products in the United States, Mexico, and Puerto Rico. The company was founded in 1945 and is headquartered in Greeley, Colorado. As of December 28, 2009, Pilgrim's Pride Corporation operates as a subsidiary of JBS USA Holdings, Inc. Earnings HistoryLooking to the earnings history, I see a stock that has beaten the number in two of the three most recent reports. The most recent quarter was a miss of $0.02, which translated into a negative earnings surprise of 8.7%. The two previous quarters had the analyst guessing where the number was going to come in and they were pretty light. The September 2012 quarter was s beat of $0.11 or 183%, and that was followed up by an even more impressive $0.17 beat for the December 2012 quarter. That translated to a beat of 212%, which isn't exactly chicken feed.Not a Small ChickenPPC has approximately 37,500 employees and 30 hatcheries. They also have 3,900 growers and 26 feed mills with production facilities throughout the Southeast of the United States, Mexico and Puerto Rico. The company sells to a wide range of food service companies like US Foodservice, Yum Brands, Wendy's, Burger King and ConAgra Foods. on the retail side, PCC sells to grocers like Walmart, Publix, Kroger and SuperValu among others.Earnings Estimates Tic! k HigherEstimates for FY2013 have been moving higher and higher. The 2013 calendar year started out with the Zacks Consensus sitting at $0.86, but that number jumped to $1.31 in April, and then again to $1.49 in May and now sits at $1.65. That is some excellent growth of nearly 100% in just six months.The picture for 2014 is a little less clear, but still shows some growth. The Zacks Consensus for next year started the year at $1.18 and ticked higher to $1.22 in April. A big move up to $1.41 the following month and a subsequent move to $1.47 at the current level. ValuationThe valuation picture for PPC is a good one. With a trailing PE of 20.8x the stock trades at a very small premium to the industry average of 19.5x. Not that great, but not that bad either. The impressive valuation metric is the forward PE of 9.3x compared to the 18x industry average. That is a significant discount for such a large player in the industry. The price to book of 4.1x carries a small premium to the 3.6x metric for the industry. Price to sales of 0.5x is only a fraction of the 2.4x industry average, so lots of room to expand there.The Chart The year to date price chart of PPC stock shows a few recent big up days. Both were more than 10% moves and both came on Friday's in June. Last Friday, 7/5 saw a surge of buying at the close, but nothing like the recent big moves. Is it at all a coincidence that PPC is the Bull of the Day on this second Friday in July? Well, I am not a believer in Easter Bunny or coincidences, just merely the appearance of said bunny and coincidences. How else to do explain all those egg hunts, chocolates and foam bunny treats? As for the stock, I like it here and beyond the August 1, 2013 earnings release. Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of the Zacks Home Run Investor service, a Buy and Hold service where he recomm! ends the ! stocks in the portfolio.Brian is also the editor of Breakout Growth Trader a trading service that focuses on small cap stocks and also carries a risk limiting strategy. Subscribers get daily emails along with buy, and sell alerts.Follow Brian Bolan on twitter at @BBolan1Like Brian Bolan on Facebook

ELS Stock: Live Large With This REIT

Popular Posts: 3 High-Yield Stocks on the Road Less TraveledAMZN Stock: What Do Amazon Earnings Have in Store?Why Retirement Investors Should Always Hold Energy Stocks Recent Posts: Rent-to-Own Stocks Look Compelling ELS Stock: Live Large With This REIT Why Retirement Investors Should Always Hold Energy Stocks View All Posts

Just imagine nice houses with resort-style amenities, situated in a nice community, probably with a pool — and maybe even a golf course nearby.

I'm talking about manufactured home communities. In the case of Equity LifeStyle Properties (ELS), 70% are communities for those 55 years of age or older. It's a great niche, and this REIT has grown into 370 communities and resorts in 32 states and British Columbia, which contain 140,000 actual sites. The properties certainly look nice on the company's home page, and community living for seniors has taken on increased popularity over the past twenty years.

This is the kind of operation that I like, because once someone moves into a community like this, they are very likely to remain for quite some time. Not that someone who chooses to move out won't get replaced by another buyer (the average home cost is only $75,000), but the company reduces its market price risk by effectively capturing long-term homeowners.

And because ELS stock must pay out 90% of income as a dividend anyway, it's particularly reassuring to know that such income should be relatively consistent.

ELS stock just reported results for Q1. Funds from operations increased $6.4 million to $71.4 million (78 cents per share), compared to $65.0 million, year-over-year. Net income increased $3.1 million to $38.1 million, or 46 cents per share. That's a solid gain of 10% across the board.

These increases came on rather modest revenue gains in the 6% range. ELS stock reports "property operating revenues," which increased $10.5 million to $186.4 million. Income from property operations increased $6.7 million to $111.0 million.

A big concern for most REITs is mortgage debt. Equity LifeStyle's debt structure is prudent, and the company is always trying to pay off more expensive debt and/or replace it with lower-cost debt. In fact, ELS stock paid off $20.7 million in mortgages in Q1, which carried a 5.63% weighted average interest rate. That was done in conjunction with a year-long refinance, which netted the company $430 million in proceeds at a mere 4.54% weighted average.

The best part is that the debt doesn't mature until 2034 at the earliest. That's the beauty of mortgage debt: It costs very little, so if a company can generate more than enough revenue to pay that debt and make money to boot, it's a real business.

And the company is indeed able to cover those interest payments — almost four times over. ELS also has a cash backstop of $56 million and continues to expand via acquisition. It completed two purchases in the quarter for $61 million. The advantage of this niche market is that an entire community can be scooped up for eight figures, from which multiples can be earned over the life of the property.

Top 5 Income Stocks To Watch Right Now

With a 3.2% dividend yield and a solid business model, ELS stock is a good choice for core and retirement portfolios alike.

Lawrence Meyers does not own any security mentioned.

Top 10 Airline Stocks To Buy For 2014

Top 10 Airline Stocks To Buy For 2014: Deutsche Lufthansa AG (LHA)

Deutsche Lufthansa AG is a Germany-based aviation company with global operations and a total of more than 400 subsidiaries and associated companies. The Company is engaged in passenger transport, airfreight and airline services. The Lufthansa Group operates in five major business segments: scheduled passenger air traffic (Passenger Airline Group) consists of Deutsche Lufthansa AG, Lufthansa CityLine GmbH, Swiss International Air Lines AG, Austrian Airlines AG, Air Dolomiti S.p.A., Eurowings Luftverkehrs AG and Germanwings GmbH; scheduled airfreight services (Logistics) consists of the Lufthansa Cargo group; maintenance, repair and overhaul (MRO) consists of the Lufthansa Technik group; information technology (IT Services) consists of the Lufthansa Systems group, and catering (Catering) consists of the LSG Lufthansa Sky Chefs group. On April 20, 2012, the Company announced the divestiture of British Midland Ltd. (bmi) to International Consolidated Airlines Group SA. Advisors' Opinion:

• [By Jonathan Morgan]

  Deutsche Lufthansa AG (LHA), Europe's largest airline by sales, advanced 3.1 percent to 15.52 euros as a gauge of travel and leisure companies posted the biggest gain of the 19 industry groups in the Stoxx Europe 600 Index. EasyJet Plc rallied after saying its fiscal third-quarter revenue climbed.

• [By Jonathan Morgan]

  German stocks were little changed, as declines in utilities and banks offset gains in Deutsche Lufthansa AG (LHA) and Deutsche Boerse AG.

  RWE AG (RWE), Germany's second-largest utility, slipped 2.4 percent after RBC Capital Markets cut its recommendation on the stock. Lufthansa followed its European peers higher, recovering some of its Aug. 2 selloff. Xing AG (O1BC), the business social network, jumped the most since October as Deutsche Bank AG (DBK) upgraded its rat! ing on the shares.

• [By Tom Stoukas]

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

source from Top Stocks Blog:http://www.topstocksblog.com/top-10-airline-stocks-to-buy-for-2014.html

Aussie Inflation Eases

Well, maybe it was too good to last. After the raft of better-than-expected economic data over the past couple of months, the Australian economy finally posted a key figure that fell short of the consensus forecast.

The country's Consumer Price Index (CPI), one of the main measures of inflation, rose 0.6 percent sequentially during the first quarter, following a rise of 0.8 percent in the fourth quarter of 2013.

The latest result was two-tenths of a percentage point below economists' expectations. On a year-over-year basis, the CPI increased by 2.9 percent, which was three-tenths of a percentage point below the consensus forecast.

Best Dow Dividend Stocks To Watch Right Now

The most significant price rises this quarter were for tobacco, up 6.7 percent, automotive fuel, which rose 4.1 percent, medical and hospital services, which climbed 1.9 percent, and pharmaceutical products, which increased by 6.1 percent.

Tobacco and medical expenses rose due to changes in government policy, including an increase in a federal excise tax for the former and a reduction in subsidies for the latter.

At the same time, furniture prices fell 4.3 percent, maintenance and repair of motor vehicles dropped 3.3 percent, and international holiday travel and accommodation decreased by 2.4 percent.

While consumers typically dread the prospect of inflation, when an economy is emerging from a period of weakness a rise in prices can actually signal a further rebound. And central banks have the ability to choke off inflation before it gets out of control, except during periods of stagflation, when weak growth is accompanied by rising prices.

By contrast, disinflation, or even outright deflation, can quickly spiral out of control. When that happens, even an extraordinarily accommodative monetary policy can do! little to offset fearful human psychology, such as what occurred during the Global Financial Crisis.

In fact, inflation targeting is the primary mandate of the Reserve Bank of Australia (RBA). The goal of the central bank's monetary policy is to achieve an inflation rate of 2 percent to 3 percent, on average, over the course of a cycle.

The RBA defines the inflation target as a medium-term average, rather than as a rate (or band of rates) that must be held at all times. This allows for flexibility in policymaking as the bank waits for the effect of a change in interest rates to flow through to the economy, which for some sectors can take as long as two years.

The central bank has been on a rate-cutting cycle since late 2011, with the last decrease in the benchmark cash rate this past August bringing short-term rates to an all-time low of 2.5 percent. Prior to the latest data on the CPI, traders had been betting the RBA would be forced to hike rates later this year, particularly after the surprise jump in the CPI for the fourth quarter.

But with the slackening in inflation more recently, most central bank watchers now believe interest rates will be stable for the duration of 2014. Indeed, financial markets are pricing in a 56 percent chance of a rate hike over the next year, down from 92 percent prior to the CPI release, according to data aggregated by Credit Suisse.

That's good news at this stage of the cycle because policymakers are keen for non-resource sectors to lead the economy now that mining investment is on the wane.

And a rate hike at this juncture would not only threaten the strength of rate-sensitive sectors such as real estate, it would also boost the exchange rate and undercut exports.

In response, the Australian dollar, which had been in rally mode in the three months since hitting a three-year low of USD0.868 in late January, continued its long-awaited correction. The aussie currently trades near USD0.929, down about 1.4 percent from its year! -to-date ! high.

Equity investors also appreciated the fact that the RBA now has additional breathing room to hold rates steady. The S&P/ASX 200 hit a post-Global Financial Crisis high of 5517.8, with a total return of 118.9 percent since its bottom in March 2009.

Stocks to Watch: AT&T, Boeing, Delta

Among the companies with shares expected to actively trade in Wednesday’s session are AT&T Inc.(T), Boeing Co.(BA) and Delta Air Lines Inc.(DAL)

Amgen Inc.(AMGN) said its first-quarter earnings fell 25% on higher costs that masked the biopharmaceutical company’s revenue growth. Shares dropped 2.6%to $116.15 premarket.

AT&T sales rose to start the year, as the carrier added more subscribers and increasingly sold mobile devices like the iPhone at full price. But profit declined due to higher taxes. Shares declined 2.5% to $35.38 premarket.

Boeing said its first-quarter earnings fell 13% as costs tied to changes to its retirement plans masked the continued strong demand for its jetliners. Shares edged up 2.3% to $130.50 premarket as the results beat expectations and the company raised its earnings guidance.

Cree Inc.(CREE) said its fiscal third-quarter earnings climbed 27% on higher sales of its lighting bulbs. Shares declined 7.4% to $53.75 premarket as the company’s outlook was mostly below views.

Delta said first-quarter earnings surged, with higher revenue and passenger demand. The big U.S. airline’s financial improvement came despite the fact it cancelled more than 17,000 flights due to severe weather in January and February. Earnings beat expectations, pushing shares up 5.6% to $36.89 premarket.

Dow Chemical Co.(DOW) said first-quarter earnings rose 65% on modest revenue growth and a boost from lower costs. Earnings beat expectations, and shares edged up 2% to $49.90 premarket.

Gilead Sciences Inc.(GILD) reported nearly $2.3 billion in first-quarter sales for its new hepatitis C treatment Sovaldi in what is believed to be the best-selling prescription drug launch in history. Shares climbed 3.6% to $75.45 premarket.

Illumina Inc.(ILMN) swung to a first-quarter profit, as the gene-sequencing company recorded a sharp increase in revenue. The company also raised its outlook for the year, pushing shares up 7.4% to $158.93 premarket.

Intuitive Surgical Inc.(ISRG) said its first-quarter earnings fell 77% on a steep decline in sales of its da Vinci robotic-surgery systems. Shares dropped 8.9% to $384.69 premarket.

Shares of Sanmina Corp.(SANM) jumped in after-hours trading Tuesday as the electronics manufacturer posted better-than-expected results for the fiscal second quarter. Sanmina also issued rosy outlook targets for the current quarter, pushing shares up 9.5% to $20 premarket.

Skechers USA Inc.'s(SKX) first-quarter profit soared as the footwear company reported broad sales growth in the U.S. and abroad, while also striking a bullish tone about demand later this year. The latest period’s results easily topped Wall Street’s expectations. Shares climbed 12% to $41.38 premarket.

Skyworks Solutions Inc.'s(SWKS) shares rose Tuesday after the wireless-chip supplier reported better-than-expected fiscal second-quarter profit and revenue growth. Shares climbed 8.8% to $41.30 premarket.

Shares of Super Micro Computer Inc.(SMCI) jumped 17% to $22.09 premarket after the servers maker reported better-than-expected profit and sales growth for the fiscal third-quarter. Super Micro also issued a rosy outlook for the fiscal fourth quarter.

Yum Brands Inc.'s(YUM) first-quarter profit rose 18%, as the parent company of KFC, Taco Bell and Pizza Hut recorded improved sales in China. Yum’s earnings topped Wall Street’s expectations, pushing shares up 2.9% to $79.72 premarket.

Small Cap Winnebago Industries (WGO): Time to Bet on Recovery With This RV Stock? DW, SKY & THO

The CEO of recreation vehicle (RV) stock Winnebago Industries, Inc (NYSE: WGO) recently appeared on CNBC to say that the economy is improving for RV makers, meaning its time to take a closer look at the stock plus take a look at the performance of other small cap RV stocks like Drew Industries, Inc (NYSE: DW), Skyline Corporation (NYSEMKT: SKY) and Thor Industries, Inc (NYSE: THO).

What is Winnebago Industries, Inc?

Incorporated under the laws of the state of Iowa on February 12, 1958, small cap Winnebago Industries is a manufacturer of RVs, which are used primarily in leisure travel and outdoor recreation activities. Specifically, the company builds motor homes, travel trailers and fifth wheel products under the Winnebago®, Itasca®, Winnebago Touring Coach™, SunnyBrook®, and Metro™ brand names and then markets these recreational vehicles on a wholesale basis to a diversified dealer organization located throughout the US and Canada. Other products manufactured by the company consists of original equipment manufacturing (OEM) parts, including extruded aluminum and other component products for other manufacturers and commercial vehicles.

As for potential small cap RV peers, Drew Industries is a leading supplier to the recreational vehicle and manufactured homes industries, through its wholly-owned subsidiaries, Lippert Components, Inc and Kinro, Inc; Skyline Corporation is a manufacturer of manufactured and modular housing along with travel trailers, ultra lite trailers and recreational vehicles; and Thor Industries which divested its bus business in 2013 to focus on its core RV business, is one of the world's largest manufacturers of recreational vehicles.

What You Need to Know or Be Warned About Winnebago Industries

During last Wednesday's CNBC interview, Winnebago Industries' CEO Randy Potts commented how the financial crisis and subsequent recession had been a train wreck for the RV industry – which went from record setting high sales to record setting low sales. Potts believes the RV industry is in a recovery phase now that will continue for four good reasons:

Energy prices plus energy availability are favorable. Interest rates are attractive. Housing market is healing. Demographics are favorable.

When asked about the practicality of powering RVs in the future with increasingly plentiful natural gas, Potts commented that it would require too much space on the vehicle due to the relative lack of a natural gas for vehicle infrastructure and that lack of infrastructure is also a problem because the RV lifestyle not about being tied down. He then noted how Winnebago is a premium iconic brand that sells at a higher price and that margins have grown quarter over quarter for the last year. Potts ended the interview by saying:

"Naturally during the recession it was -- again, it was very hard, but we survived that. We're one of some companies that didn't survive, and, you know, we're coming back with a vengeance and we're hitting it very hard and very successful with it."

In late March, Winnebago Industries reported earnings for the second quarter of Fiscal 2014 ended March 1, 2014 with revenues rising 29% to $228.8 million for a a better-than-expected 53% jump in net income to $9.6 million as the company sold more motorhomes to dealers in a quarter otherwise impacted by storm-related disruptions. CEO Potts commented:

"We achieved strong results for the quarter, notwithstanding challenges associated with the severe winter weather.  Although we scheduled four additional production days to satisfy motorized backlog, the severe weather conditions caused numerous work delays and closures at both our Iowa and Indiana facilities, which led to the loss of multiple production days, and contributed to increased expenses due to inefficiencies that limited margin expansion and earnings growth."

Top 10 Shipping Stocks To Invest In Right Now

Winnebago Industries had also recently announced a large incremental rental order from Apollo Motorhome Holidays, an RV rental company, to be delivered during the company's Fiscal 2014 third quarter.  The order is for approximately 500 units with Winnebago Industries having contractually agreed to repurchase up to two thirds of the units at specified prices after one season of rental use.  

Otherwise, it should be mentioned that Winnebago Industries has a trailing P/E of 18.35 and a forward P/E of 13.72.

Share Performance: Winnebago Industries vs DW, SKY & THO

On Monday, small cap Winnebago Industries fell 1.39% to $25.51 (WGO has a 52 week trading range of $16.72 to $32.41 a share) for a market cap of $694.87 million plus the stock is down 5.45% since the start of the year, up 43.7% over the past year and up 266.5% over the past five years. Here is a look at the performance of RV stock Winnebago Industries verses Drew Industries, Skyline Corporation and Thor Industries:

As you can see from the above performance chart, RV stocks Winnebago Industries, Drew Industries and Thor Industries have given investors roughly the same performance while Skyline Corporation has been a disappointment.

Finally, here is a look at the latest technical charts for all four RV stocks:

The Bottom Line. Small cap Winnebago Industries looks like its in solid shape but investors may also want to take a closer look at Drew Industries and Thor Industries given their similar performance to WGO.

Risk of Stock Pullback Continues

Investors breathed a sigh of relief last week as major stock indexes recovered almost all their recent losses. Talk of a major downdraft faded.

Many money managers warned clients, however, that the risk of a sharp pullback has been delayed, not eliminated. Stocks still are expensive after last year's huge gains, making it hard for them to keep rising as the Federal Reserve reduces its support. The S&P 500 stock index last year rose 32% including dividends, its biggest gain since 1997.

"We continue to think we are going to see more volatility than we have in the past," said Jim McDonald, chief investment strategist at Northern Trust, which manages $915 billion in Chicago.

Markets have been so strong in recent years that major indexes haven't dropped 10% or more since September 2011. That is twice as long as usual. "Investors need to be positioned for that to happen at some point this year," Mr. McDonald said.

He is telling clients to keep needed cash in short-term and medium-term bonds, rather than in stocks.

So far, indexes have escaped the declines many money managers expect. The Dow Jones Industrial Average fell 7% in January and early February and the S&P 500 dropped 6%, but both rebounded. Neither fell even 4% in the latest selling.

"I was a little surprised that we bounced back as quickly as we did" this month, said Jim Dunigan, chief investment officer at PNC Wealth Management, which oversees $130 billion.

"I still look at this year as a transition period, from a market that was supported by easy money, by highly accommodative monetary policy, back to one that is based on fundamentals," he said. "All transitions are challenging but this will be sloppy to get through."

Because the Fed and other central banks have been holding interest rates low and stocks have been rising for so long, investors have forgotten what a normal market looks like, Mr. Dunigan said. As the Fed slowly allows interest rates to rise to more-normal levels over the next few years, he and others said, markets are likely to see more-normal volatility.

In an average bull market, the S&P 500 falls by 10% or more about once every 16 months, according to Ned Davis Research. It has been 31 months since the last 10% pullback, in September 2011.

Hot High Dividend Companies To Buy Right Now

The strains are showing. The Dow closed at a record 52 times last year but hasn't hit any records in 2014. The S&P 500 has hit eight records this year, after 45 last year. At the end of last week, the Dow was down 1% for the year and the S&P was up 0.9%, far from last year's pace.

Last year, the S&P 500 fell as much as 2% on only two days; it already has done so three times this year, says Mr. McDonald of Northern Trust.

Stock prices are high by historical standards, although not off the charts.

The S&P 500 trades at 16 to 18 times its component companies' earnings, depending on how the earnings are measured. That is above long-term averages of 15 to 16. At this level, stocks sometimes but not always have suffered declines. But the current price/earnings ratio is nowhere near the 35 to 40 range reached at the height of the 2000 tech-stock bubble.

A much-followed P/E measure maintained by Nobel Prize-winning Yale economist Robert Shiller, based on 10-year average earnings, is now well above its average historical level. But it isn't quite as high as when markets peaked in 2007 and is far from its 2000 level.

While fears of a decline are widespread, few money managers expect it to be severe or long lasting. One big reason: The Fed is determined to avoid recession and to keep financial markets stable, and investors feel it is foolish to fight the Fed.

Money managers increasingly are adopting a view dubbed "Tina" by Jason Trennert, founder of Strategas Research Partners. Tina stands for "there is no alternative" (to U.S. stocks).

Low interest rates are keeping some people from buying bonds. Although U.S. stocks are more expensive than European ones, many consider the U.S. economy stronger and safer. And with developing economies like China, Brazil and Russia facing problems, many U.S. investors are wary of those stocks.

"Where are you going to put your money, in cash at zero interest? Emerging markets still are suffering from their malaise and U.S. equities are looking kind of like a safe haven," said Janna Sampson, co-chief investment officer at OakBrook Investments, which oversees $3.3 billion in Lisle, Ill.

Ned Davis Research has been warning for months that stocks could face a pullback in the middle of this year. It says the risks will heighten if stocks keep rising and investors become overly optimistic again. But its analysts, too, forecast that declines will be limited.

"Deeper bear markets generally are due to recessions," said the firm's global strategist, Will Geisdorf. Because the Fed is so supportive, "we see little threat of recession until 2016 or 2017."

Some investors are saying the market might escape a 10% decline this year. Instead it could suffer smaller pullbacks, as it already has been doing. Some term that a "sideways correction," meaning one where stocks don't fall heavily but fail to make significant gains for a long period.

One likelihood is that markets won't do what most analysts expect. Big pullbacks come when investors are overly optimistic and aren't expecting trouble. They stop hedging, move too heavily into stocks, get caught off guard by a decline and panic. Right now, it would take a sudden, unexpected shock to cause that kind of reaction.

Related: E.S. Browning has details on MoneyBeat.

Groupon trims 3Q loss, revenue lags estimates

CHICAGO (AP) — Groupon whittled its losses during the third quarter, but weak revenue growth underscored the challenges facing the online daily deal service as it tries to morph into a more comprehensive destination for Internet bargain hunters.

As part of its expansion efforts, Groupon announced Thursday that it is buying Korea-based Ticket Monster from its daily deal rival Living Social for $260 million in cash and stock. The deal provides Groupon with a springboard for selling more products and travel packages in Korea.

"We're pleased with our progress, but we still have work to do as we transform the business from our daily deal email roots to a full e-commerce marketplace," said Groupon CEO Eric Lefkofsky.

Top Promising Stocks To Own Right Now

The stock rose 5.3% to $10 in extended trading Thursday after being down sharply during the regular trading session and shortly after the earnings were released.

Lefkofsky is trying to train Groupon's 43.5 million customers to regularly check for deals on their mobile devices whenever they are about to buy something, rather than waiting for an offer to be emailed to them each day. That effort is beginning to bear fruit in North America, where more than half of all Groupon's third-quarter purchases were completed on smartphones and tablet computers.

The results announced Thursday came out shortly as the stock of another young Internet company, Twitter urged to a 73% gain to end its opening day of trading with a market value of $31 billion despite a history of uninterrupted losses.

Like Twitter, Groupon once was considered to be a hot commodity among investors looking for a piece of rapidly growing companies with large audiences.

Despite questions about the company's ability to make money, Groupon ended its first day of trading two years ago with a market value of $17 billion. The fears about Groupon's turned out to be justi! fied. As its growth stalled and losses mounted, Groupon replaced co-founder Andrew Mason as CEO earlier this year. Since Mason left in February, Groupon's stock has more than doubled, but remains well below its initial public offering price of $20. Groupon's market value Thursday: About $6 billion.

The Chicago company lost $2.6 million during the three months ending in September, compared with a loss of $3 million at the same time last year. On a per-share basis, that translated into break-even for both quarters.

If not for expenses for employee stock compensation and charges for past acquisitions, Groupon said it would have earned 2 cents per share. That figure was a penny above the average estimate among analysts surveyed by FactSet.

Revenue rose 5% to $595.1 million, short of analysts' projection by $20 million.

Groupon is counting on the holiday shopping season to boost its revenue during the current quarter ending in December, to $690 million to $740 million. Analysts predict $725 million. It expects adjusted earnings to range from break-even to 2 cents. Analysts predicted profit of 6 cents.

Is This the End of Lululemon as We Know It?

Occasionally, The Economist will post high-level positions in the back of its pages for CEOs, finance ministers, or the like -- anyone interested in running a massive yogawear company might consider picking up the next issue. Yesterday, after the markets closed, lululemon athletica (NASDAQ: LULU  ) announced that Christine Day would be stepping down from the CEO role after a five-and-a-half-year run. Today, the stock dropped 16% in midday trading.

The journey, according to Day
The stock's fall trimmed back a huge amount of the gain that Lululemon has seen over the last 12 months, and the news puts up a huge warning sign for the future of the company. Day spent the first part of her career at Starbucks, moving to Lululemon in 2008. Since then, the company has grown from a $275 million in annual revenue  minnow into a $1.4 billion leviathan.

Along with Day's resignation, Lululemon also announced analyst-beating estimates yesterday, in a scene that's become familiar to anyone watching the company's growth. The fact that the stock still fell highlights the value that Day was seen as adding to the company. In her statement, Day said that the company was ready for new leadership as "[plans] have been laid for the next five years and a vision set for the next 10." That confidence in the ability of the Lululemon machine to continue beyond her reign may be misplaced.

The cost of leadership
While Day may have the hearts of investors, she has recently been a lightning rod for complaints from Lululemon fans. Since the sheer-pants scandal earlier in the year, customers have called on Day to resign, citing her failure to live up to the brand ideals of Lululemon while expanding the company at all costs.

That allegation certainly has some backing. The product issues of earlier in the year did have a meaningful impact on sales. The company had originally forecast a comparable-sales increase of 11%  but only managed an increase of 7% . The product issues may well have stemmed from the company's -- and Day's -- single-minded focus on expansion. When Day joined the company, Lululemon operated 81 stores -- today it runs 218.

What comes next
With Day's resignation, Lululemon is in an interesting position. The company could probably find an internal candidate fairly easily, but since Day's appointment in 2008, the competitive landscape has changed dramatically. Now, Lululemon is facing competition from Gap's (NYSE: GPS  ) Athleta brand, as well as from Under Armour (NYSE: UA  ) and other traditional sporting goods companies.

Gap and Under Armour both make similar products at slightly lower price points, and both have made it clear that yogawear is going to make an impact on their future bottom line. Now Lululemon is in a position where it can conceivably pull an important manager from one of those competitors.

At Gap, Art Peck is managing the portfolio of brands that Athleta falls into. The role is new to him, but he's been with the company since 2005. His experience as president at Gap North America would be an extremely valuable tool for Lululemon, if it chose to pursue him.

At Under Armour, both Charlie Maurath and Henry Stafford would be welcome additions to Lululemon's team. Murath is the president of Under Armour's international business, while Stafford is senior vice president of apparel. Both executives have experience that would help Lululemon as it pushes for more international exposure.

In general, I think Lululemon still has a lot of room left to run. While Day is impressive and important to the company, she isn't irreplaceable. I'd love to see Lululemon take this opportunity to add a rival to its team, which would give it a strong competitive advantage. If I were on the fence about Lululemon, I'd see this downturn as a real opportunity.

Even with the loss of Day, Lululemon has the potential to grow its sales by 10 times if it can penetrate its other markets like it has in Canada, but the competitive landscape is starting to increase. Can Lululemon fight off larger retailers and ultimately deliver huge profits for savvy investors? The Motley Fool answers these questions and more in its most in-depth Lululemon research available. Thousands have already claimed their own premium ticker coverage; gain instant access to your own by clicking here now.

.

Preventing and Fixing Broken 401(k) Plans: 12 Common Compliance Errors

ED Note: This article is an excerpt from a section in “The Advisor’s Guide to 401(k) Plans” called, “Preventing and Fixing Broken 401(k) Plans.” For the full guide on this and other topics please check out our bookstore.

Introduction 

As we have noted in prior chapters, a qualified 401(k) plan is a defined contribution retirement plan that by its nature will likely run decades. It might be expected to continue beyond current management and maybe even current ownership in the case of family-owned, closely-held companies.

And, as we have discussed, in order to obtain and maintain the desired tax and other qualified plan benefits of a 401(k) plan for the participants (primarily income tax deferral and tax-free growth of earnings) and for the sponsoring company (business expense deduction for employee and employer contributions to the 401(k)), the plan must be properly documented and then operate according to the plan-documented 401(k) design and required legal terms for the life of the plan. That compliance period extends until the plan is officially terminated under the Internal Revenue Code and ERISA requirements.

In summary, the plan must always be in both (1) form and (2) operational compliance, including demographic eligibility compliance, with the terms of the plan document for the life of the 401(k) plan in order to claim the benefits granted to a qualified plan.

Why Comply

As noted, there is the possibility of the 401(k) plan losing its qualified plan status, resulting in immediate taxation of all plan participants as well as the loss of the employer’s business expense deduction for all contributions made to the 401(k) plan. These negative tax consequences are bad enough in themselves for the employer sponsor and the plan participants. However, even worse consequences can occur. As we have already discussed, the sponsor and its designated officials in charge of the plan take on certain personal fiduciary duties and other legal responsibilities with regard to the plan and, with this duty, assume certain legal liabilities if they do not assure proper qualified 401(k) plan compliance.

For example, the DOL has instituted a special program to track down and recover from the fiduciaries on certain plans the employee salary reduction contributions that should have been made to a 401(k) by the employer and were not. The liability for these missed employee contributions (or misdirected and misused contributions due the plan) is not avoided by either corporate or personal bankruptcies. In effect they are like income tax obligations owed; they may not be avoided. Moreover, if there is evidence of intentionality in the actions, even criminal charges may be applied, and have been.

Who Is an ERISA Fiduciary?

According to ERISA, “every employee benefit plan shall be established and maintained pursuant to a written instrument (plan document). Such instrument shall provide for one or more named fiduciaries (emphasis added) who jointly or severally shall have authority to control and manage the operation and administration of the plan.”

***

[T]he IRS and the DOL have both stepped up audit programs to increase and assure compliance. The IRS is currently—as of the date of this publication—conducting audits based upon the 401(k) questionnaire it has been sending out to plan sponsors and fiduciaries. A nonresponse to the questionnaire will cause an automatic IRS audit on the nonresponder. Otherwise, the IRS is zeroing in on common problems identified by the responses as the focus of its selected compliance program audits. For instance, recently it has been targeting those companies with safe harbor plans that are failing to provide the required annual safe harbor plan notice to participants, as apparently identified from the questionnaire.

And, while many errors offer the opportunity for self-correction under the IRS and DOL correction programs, higher penalties will normally apply if the IRS identifies the problem and takes action on the violation before the plan sponsor. With the advent of the electronic filing of Form 5500, the IRS is likely to discover noncompliance and violations in a plan more quickly than in the past. In this regard, it is valuable to understand the errors and mistakes most commonly made by plan sponsors and fiduciaries with regard to 401(k) plans so that preventative process and procedure measures might be installed from the outset to avoid or reduce the incidence of errors and violations.

Finally, it is unreasonable to assume that such a complex retirement plan with substantial initial and ongoing compliance requirements will never experience an error in its documentation or violation in its operation. In fact, realistic practitioners will say that some errors in connection with qualified 401(k) plans are 100 percent certain to happen given enough time. Fortunately, even the IRS and the DOL have recognized this reality. Therefore, both agencies have adopted extensive programs for the correction of nonegregious qualified plan errors; that is, those made accidentally and without intent to avoid compliance. They have recently even updated and expanded them in Revenue Procedure 2013-12 to make it easier for plan sponsors and their designated officials on the plans to make the necessary corrections.

Common 401(k) Plan Compliance Errors

According to the IRS, the most common errors in connection with qualified plans, and specifically a 401(k) defined contribution plan, are as follows:

Conclusion

401(k) plans offer substantial tax benefits to both the plan participants and the plan sponsor that are worth protecting. Both the IRS and the DOL have provided corrective programs to cure violations in both documentation and operation of a 401(k) plan. The best approach is to establish a set of internal controls and plan documentation files that support correct documentation and operation from inception to termination of the plan in the distant future. Plan sponsors and plan fiduciaries should acquaint themselves with the most common violations that may occur with their 401(k) plan and establish internal plan controls and procedures to help prevent these violations in the first instance. They may also help surface and identify operational and fiduciary prohibited transaction violations early if they should occur despite the controls and procedures. Use of a knowledgeable and experienced qualified plan administrator can assist in this important process of compliance.

However, with the aid of its legal advisors, the plan sponsor should move quickly to ascertain the best available IRS or DOL program to cure the violation once a documentation or operational violation has been identified. It should then move forward to make the necessary correction under the selected program at the earliest date in order to protect the plan’s income tax benefits for all concerned. And, this action to correct a form or operational error may also protect the fiduciaries and plan sponsor from penalties for any fiduciary failures in connection with the 401(k) plan.

Franklin Street Properties Named Top Dividend Stock (FSP)

In this series, we look through the most recent Dividend Channel ”DividendRank” report, and then we cherry pick only those companies that have experienced insider buying within the past six months.

The officers and directors of a company tend to have a unique insider’s view of the business, and presumably the only reason an insider would choose to take their hard-earned cash and use it to buy stock in the open market, is that they expect to make money — maybe they find the stock very undervalued, or maybe they see exciting progress within the company, or maybe both.

So when stocks turn up that see insider buying, and are also top ranked, investors are wise to take notice. One such company is Franklin Street Properties (FSP), which saw buying by Director John N. Burke.

START SLIDESHOW:
The Top DividendRank‘ed Stocks With Insider Buying »

Back on March 5, Burke invested $103,046.68 into 8,135 shares of FSP, for a cost per share of $12.67. In trading on Monday, bargain hunters could buy shares of Franklin Street Properties Corp and achieve a cost basis 3.8% cheaper than Burke, with shares changing hands as low as $12.18 per share. Franklin Street Properties shares are currently trading +0.63% on the day. The chart below shows the one year performance of FSP shares, versus its 200 day moving average:

Looking at the chart above, FSP’s low point in its 52 week range is $11.55 per share, with $15.27 as the 52 week high point — that compares with a last trade of $12.24. By comparison, below is a table showing the prices at which insider buying was recorded over the last six months:

Purchased Insider Title Shares Price/Share Value

02/21/2014	John G. Demeritt	Chief Financial Officer	1,000	$12.10	$12,100.00
02/26/2014	Jeffrey B. Carter	Chief Investment Officer	2,900	$12.24	$35,493.00
02/28/2014	Georgia Murray	Director	4,000	$12.51	$50,035.80
03/05/2014	John N. Burke	Director	8,135	$12.67	$103,046.68

Top Services Companies To Invest In Right Now

The DividendRank report noted that among the coverage universe, FSP shares displayed both attractive valuation metrics and strong profitability metrics.

For example, the recent FSP share price of $12.16 represents a price-to-book ratio of 1.2 and an annual dividend yield of 6.25% — by comparison, the average company in Dividend Channel’s coverage universe yields 3.9% and trades at a price-to-book ratio of 2.0. The report also cited the strong quarterly dividend history at Franklin Street Properties , and favorable long-term multi-year growth rates in key fundamental data points.

The report stated, ”Dividend investors approaching investing from a value standpoint are generally most interested in researching the strongest most profitable companies, that also happen to be trading at an attractive valuation. That’s what we aim to find using our proprietary DividendRank formula, which ranks the coverage universe based upon our various criteria for both profitability and valuation, to generate a list of the top most ‘interesting’ stocks, meant for investors as a source of ideas that merit further research.”

The annualized dividend paid by Franklin Street Properties  is 76 cents per share, currently paid in quarterly installments, and its most recent dividend ex-date was on 04/23/2014. Below is a long-term dividend history chart for FSP, which the report stressed as being of key importance.

Indeed, studying a company’s past dividend history can be of good help in judging whether the most recent dividend is likely to continue.

Staples, Inc. (SPLS): Insider Buying – CEO Pulls a 180

Last week's NASDAQ meltdown may have spooked boardroom investors as the number of companies with records of insider buying dipped below 100.  iStock doesn't know if dwindling buying is a leading or lagging indicator. Either way, sentiment for both is weak at the moment.

But never fear, iStock has an insider buying idea here.

One of our favorite angles is when an insider has a change of heart. Staples, Inc. (NASDAQ:SPLS) Chairman of The Board, Chief Executive Officer and Chairman of Executive. Committee, Ronald L. Sargent indirectly bought (trust, spouse account…) 8,500 shares at $11.82 per share for a total investment of $100,470.

[Related -Sector Detector: Fast and Furious Selloff Provides Critical Market Cleansing]

Sargent is the king fish at Staples, which operates office products superstores. It operates in three segments: North American Stores & Online, North American Commercial, and International Operations. As of March 7, 2014, it operated approximately 2,200 stores worldwide. The company also operated 116 distribution and fulfillment centers in 30 states in the United States; 7 provinces in Canada; and in Austria, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Poland, Portugal, Spain, Sweden, the United Kingdom, China, Argentina, Brazil, and Australia.

The April 3rd buy stands out like SHAQ in a Wizard of Oz Munchkin reunion. For the past two years, the CEO did nothing but sell, acquire free stock, and exercise options. To see him purchasing stock near its 52-week low of $11.04 gives investors a sense of what Sargent might believe is Staples intrinsic value i.e. the sum of the parts.

[Related -Staples, Inc. (SPLS): How Q3 Earnings Will Fare?]

Maybe, business isn't going to slip as much as analysts expect in 2014. So far, at least, search volume intensity for the keyword "Staples" is flat for the first three months of 2014 versus the same time last year. Additionally, both Alexa.com and quantcast.com show a rise in web visitors to Staples.com year-over-year to start 2014, as well.

Meanwhile, analysts believe sales will drop 2.7% to $22.49 billion this year from $23.11 billion last years. Earnings per share (EPS) are also forecasted to decline to $1.08 from $1.16 (6.9% lower).

While actual revenue and profit results might prove to be slimly better than the current consensus outlooks, current valuations are below the half-decade averages.

During the last five-years, SPLS traded with an average price-to-sales (P/S) ratio of 0.50, and the typical price-to-earnings (P/E) ratio was 16.27. Today, shares of the office supply retailer trade at 0.35 times sales and 12.96 times earnings.

Based on Wall Street's 2014 consensus sales and EPS estimates, if SPLS trades at the average P/S and P/E ratios sometime during the year ahead, then the stock would price out at $17.28 and $17.57, respectively.

Overall: Staples, Inc. (NASDAQ:SPLS) tends to hug Wall Street's estimates for sales and earnings. If SVI and web traffic trends are somewhat reliable indicators, then SPLS's top and bottom lines might be a little bigger than expected, which should help drive Staples' P/S and P/S ratios a little closer to normal.  

How Warren Buffett lost $1 billion

With the first quarter of 2014 officially closed, one stock in the portfolio of Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B) sunk the value by $1 billion. And which one it is will surprise you.

The one tough start to 2014

Coca-Cola (KO) watched its stock price dip 6.4% through the first three months of 2014, and when you consider Buffett has a 400 million shares which were worth $16.5 billion at the beginning of the year, that drop means the position is now worth a staggering $1.1 billion less.

The sales volume at the beloved drink firm fell below analyst expectations when it announced earnings in the middle of February. With the questions swirling surrounding the future success of soft-drinks as Americans and individuals everywhere become more health conscious, many have begun to question the lasting value of Coca-Cola.

What the market is missing

Buffett once said he has "to stick with what I really think I can understand," and troublingly, it seems as though many people have lost sight of the true reality of Coke.

Many people forget Coca-Cola is willing to expand within its circle of competence, beverages, but outside of its own core products. It acquired Vitaminwater for $4.2 billion in 2007, and in February it announced it has taken a 10% stake in the popular Green Mountain Coffee, for $1.25 billion which sent Green Mountain stock soaring up 25%. All of this is to say nothing of its smaller -- but likely pivotal -- brands like Simply and Honest Tea.

In addition, few people realize the willingness of Coca-Cola to return its earnings to its shareholders. In 2013, it reported a net income of $8.6 billion, and it sent $8.5 billion back to its shareholders through dividends and share repurchases.

This is part of the reason why its adjusted earnings per share -- excluding currency and other impacts -- was up 8% even despite its net income falling by 5%.

Buffett himself noted as a result of its buybacks, the total ownership of Coca-Cola by Berkshi! re Hathaway rose from 8.9% to 9.1%. While that may not sound significant, he highlighted "if you think tenths of a percent aren't important, ponder this math: For the four companies [Wells Fargo, American Express, Coca-Cola, and IBM] in aggregate, each increase of one-tenth of a percent in our share of their equity raises Berkshire's share of their annual earnings by $50 million."

All of this is to say, Buffett isn't deterred by the ability of Coke to generate remarkable returns to those who own it, even despite growth that "misses expectations."

Buffett is undeterred

As mentioned earlier, the position's value shrunk and is now worth over $15 billion. But Berkshire Hathaway only paid $1.3 billion for these shares -- meaning Buffett and team are still well in the green when it comes to Coca-Cola.

And when you consider a year ago Buffett remarked "We've never sold a share of Coca-Cola stock, and I wouldn't think of selling a share," the reality is, his billion dollar "loss," is simply one that'll be logged on paper only.

The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

<SCRIPT language='JavaScript1.1'SRC="http://ad.doubleclick.net/adj/N4538.USAToday/B2304017.8;abr=!ie;sz=550x300;ord=[timestamp]?"></SCRIPT><NOSCRIPT><AHREF="http://ad.doubleclick.net/jump/N4538.USAToday/B2304017.8;abr=!ie4;abr=!ie5;sz=550x300;ord=[timestamp]?"><IMGSRC="http://ad.doubleclick.net/ad/N4538.USAToday/B2304017.8;abr=!ie4;abr=!ie5;sz=550x300;ord=[timestamp]?" BORDER=0 WIDTH=550 HEIGHT=300ALT="Advertisement"></A></NOSCRIPT>

Morning Movers: JPMorgan Drops on Earnings; the Gap Falls on Declining Sales

Yesterday’s pain erased two days of gain. Can the market make any back today?

Agence France-Presse/Getty Images

Doesn’t look that way. S&P 500 futures have dropped 0.4%, while Dow Jones Industrial Average futures have fallen 0.4% and Nasdaq Composite futures have declined 0.6%.

Shares of the Gap (GPS) have dropped 5% to $37.30 in pre-open trading after the retailer said same-store sales fell 6%.

 JPMorgan Chase (JPM) has fallen 4.3% to $37.62 3.2% to $55.55 after the banking giant missed earnings forecasts as trading volume declined.

Wells Fargo (WFC) has gained 0.3% to $47.85 after the bank beat earnings forecasts thanks to lower expenses.

Ford (F) has gained 0.6% to $15.72 after the automaker was upgraded to Buy from Hold at Deutsche Bank.

H&R Block (HRB) has gained 5.7% to $30.03 after it reached an agreement to sell its bank unit.

Icahn Settles With EBay Board

NEW YORK (The Deal) -- Carl Icahn on Thursday backed away from his proxy battle with eBay (EBAY), dropping his proposal that the company split off its PayPal unit and withdrawing two nominees from the company's board.

The two sides in a statement said that eBay has agreed to Icahn's suggestion to appoint one-time AT&T  (T) CEO David Dorman to its board. Dorman, a founding partner of Centerview Capital Technology and chairman of CVS Caremark Corp  (CVS), worked with Icahn as lead independent director at Motorola Solutions (MSI).

EBay CEO John Donahoe, a target of stinging criticisms from Icahn in recent months, in a statement said, "we are very pleased to have reached this agreement" and return focus to running the company.

"As a result of our conversations, it became clear that Carl and I strongly agree on the potential of PayPal and our company," Donahoe said. "I respect Carl's willingness to work together to drive sustainable shareholder value today and into the future. His record shows that he has done this with many other companies in the past." Icahn, owner of about 2% of the company's shares, in January called for eBay to split off PayPal, and in a series of letters accused eBay directors Marc L. Andreessen and Scott Cook of conflicts. The activist said that corporate governance at eBay was among the worst he had seen and that Donahoe was not up to the task of being CEO of the company. EBay and its directors responded by pointing out examples of potential Icahn conflicts, and arguing that eBay is better served by keeping PayPal in-house. Icahn seemingly has had a difficult time gaining traction with shareholders, in March calling on eBay to sell 20% of PayPal to the public instead of doing a full spinoff. The activist, who as part of the deal announced Thursday signed a confidentiality agreement covering any nonpublic information eBay officials share with him, said he has been engaged in conversations with Donahoe in recent weeks and plans to continue talks about eBay's future. "We both strongly believe in the great potential of eBay and PayPal, and I have found a number of his ideas to be extremely compelling," Icahn said. "However, I continue to believe that eBay would benefit from the separation of PayPal at some point in the near future and intend to continue to press my case through confidential discussions with the company."

Stock quotes in this article: EBAY, T, CVS, MSI 

3 Stocks That Blew the Market Away

Don't settle for ordinary quarterly reports.

Every week, I take a look at three companies that beat market expectations, since I believe that it's the biggest factor in a stock beating the market. Leaving Wall Street's pros with stunned expressions can be a good thing. It usually means that the companies have more in the tank than analysts figured. Capital appreciation typically follows.

Let's take a look at a few companies that humbled the pros over the past few trading days.

We can start with Dangdang (NYSE: DANG  ) . Shares of the Chinese online retailer soared 24% last week after posting a narrower quarterly deficit than Wall Street was expecting. Dangdang's loss of $0.15 a share was less than the $0.19 a share in red ink that analysts were forecasting.

This is the third consecutive quarter in which Dangdang has posted a smaller loss than the pros were projecting.

InterOil (NYSE: IOC  ) was another gusher. The energy explorer's profit of $0.08 a share during the first quarter may not seem like much. Net income actually clocked in 58% lower than it did a year earlier. However, Wall Street was actually bracing for a quarterly deficit. InterOil stock moved 18% higher on the week.

Finally, we have Brocade Communications (NASDAQ: BRCD  ) landing ahead of the prognosticators.

The networking storage specialist came through with a profit of $0.17 a share. Analysts figured that Brocade's earnings would be flat with the $0.15 a share it reported a year earlier. Brocade's beat came despite revenue coming in slightly below Wall Street estimates, translating into an even bigger positive surprise in terms of net margins.

It wasn't necessarily pretty for Brocade. Unlike Dangdang and InterOil, which rewarded investors with double-digit percentage gains last week, investors weren't swayed by Brocade's performance. A big reason for the letdown -- beyond coming up short on the top line -- is that the company's guidance for the current quarter is well below where analysts are presently perched.

Beating profit targets is just one ingredient in the recipe for superior market returns.

Moving in the right direction
It's important to keep watching the companies that surpass expectations. Over time, it will be a lucrative experience for investors as the market rewards the overachievers. That's the kind of surprise that we look for in the Rule Breakers newsletter service. Want in? Check out a 30-day trial subscription.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

APL: Taxes and the Toll-Road Business

Top 5 Tech Companies To Own For 2014

Master Limited Partnerships are a part of the oil and gas and energy industry that has been exploding in recent years, says Matthew Skelly, Head of Investor Relations at Atlas Pipeline Partners, who explains what they are and how they relate to federal and state taxes.

Master Limited Partnerships (MLPs) came around in the early 1980s. The government created this form of company to foster energy infrastructure build-out in this country. Master Limed Partnerships were created as a way to not charge any of these companies corporate income tax, which, in turn, allowed the companies to take their cash flow and pay investors, and reinvest, and build pipelines, plants, as well as to produce oil and gas.

That's kind of how this whole asset class came about. Master Limited Partnerships don't pay corporate income tax. That way, these MLPs essentially pass the savings through to the distribution, or dividend; that's how MLPs are able to pay such high yields on their units (stocks).

There were 21 new MLPs created in 2013 alone. There are probably between 80 and 90 different MLPs currently that are publically traded. So the choices for MLP investors keep getting wider and wider as a direct result of the energy resurgence in this country.

Companies in the pipeline portion of the energy sector are the types of businesses you traditionally think of, when you think of MLPs. These MLPs follow a "toll-road business model." Much like with a toll on a highway, the more cars that pay the fee, the more cash is raised. Pipelines are very much the same way, volumes of natural gas and liquids flow through pipe, and the Pipeline MLP just collects a fee from the drilling customers.

And that's what you want in an MLP. You want steady, predictable cash flow, because the MLP is on the hook to pay a distribution to their investors every quarter. People invested in MLPs are invested because of the distribution, because of the yield (not to mention a potential rising stock price!). It is great income, so you want to make sure that cash flow is as predictable as possible, because of that distribution that is expected every quarter.

However, when it comes to investing in MLPs, there are some state and federal tax considerations that come into play. MLPs are considered partnerships, not corporations, so an investor will get a K-1 tax form at the end of the year. It's just one extra form that the investor files with his federal taxes, basically saying that he's part of a partnership. It will show how much an investor has gotten in distributions, and that is usually considered a return of capital against his purchase price, provided the cost basis has not gone to zero (cost basis is reduced by the distribution). Every time an investor gets a dividend, or distribution, his cost basis decreases from what he paid in. Basically, it's tax-deferred and an investor doesn't really have a tax obligation until his basis gets to zero, which could be for quite some time.

In regards to state taxes, the MLP investor is getting cash flow from various states in the form of a distribution, or dividend, and therefore, he/she has to file state taxes in the states in which the MLP operates. This can be cumbersome if invested in a large MLP that operates in multiple states.

However, our midstream MLP only operates in just three states. Atlas Pipeline Partners (APL) only operates in Oklahoma, Kansas, and Texas. And Texas has no state taxes. So, an Atlas Pipeline investor may only have to file, potentially, in Oklahoma and Kansas.

Please note neither Atlas Pipeline Partners nor Matthew Skelly gives tax advice and this article should not be taken as such. It is for informational purposes only. Please contact a tax advisor as MLPs may not be suitable for all investors.

Click here to learn more about Atlas Pipeline Partners...

Top 10 Defense Companies To Buy Right Now

After bulling through March with strong spending despite the sequester, Pentagon contract awards fell off a cliff in early April. And what little money there was to spread around was often showered upon�non-traditional�recipients such as Madison Avenue advertising firm�Interpublic Group (NYSE: IPG  ) .

So what's really going on over there in Washington today? Is defense spending stalled, or will it rise again? And what does this mean for ultra-low-P/E-bearing stocks like Boeing (NYSE: BA  ) , Lockheed Martin� (NYSE: LMT  ) , Northrop Grumman� (NYSE: NOC  ) , and General Dynamics� (NYSE: GD  ) .

Motley Fool contributor Rich Smith let's you know the score...

Boeing operates as a major player in a multi-billion-dollar defense market in which the opportunities and responsibilities are absolutely massive. However, emerging competitors and the company's execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. In our premium research report on the company, two of The Motley Fool's best minds on industrials have collaborated to provide investors with the key, must-know issues surrounding Boeing. They'll be updating the report as key news hits, so don't miss out -- simply click here now to claim your copy today.

Top 10 Defense Companies To Buy Right Now: Embraer SA (EMBR3)

Embraer SA is a Brazil-based holding company primarily engaged in the manufacture of aircrafts. The Company�� business activities are divided into three business segments: Commercial Aviation; Defense and Security Business, and Executive Aviation. The Commercial Aviation segment is involved in the development, production and sale of commercial jets, as well as in the provision of support services, with emphasis on the regional aviation industry and aircraft leasing. The Defense and Security Business segment mainly includes the research, development, production and modification of defense aircrafts as well systems and software design. Through the Executive Aviation segment, the Company is active in the development, production and sale of business jets, provision of support services related to this sector of the market and aircraft leasing. The Company has subsidiaries, affiliated companies and representative offices in Brazil, the United States, France, Holland and China, among others. Advisors' Opinion:

• [By Lyubov Pronina]

  Most emerging-market stocks fell as Samsung Electronics Co.�� earnings missed estimates and planemaker Embraer SA (EMBR3) posted a surprise loss. Turkish stocks capped the biggest weekly loss since June after policy makers raised borrowing costs.

• [By Ney Hayashi]

  The Ibovespa dropped for a third day as planemaker Embraer SA (EMBR3) led losses among exporters on speculation that a strengthening local currency will erode revenue from outside Brazil.

Top 10 Defense Companies To Buy Right Now: Rolls-Royce Holdings PLC (RYCEY)

Rolls-Royce Holdings plc, formerly Rolls-Royce Group plc is a provider of power systems and services for use on land, at sea and in the air. The Company operates in four segments: civil aerospace, defense aerospace, marine and energy. The civil aerospace is engaged in development, manufacture, marketing and sales of commercial aero engines and aftermarket services. The defense aerospace is engaged in development, manufacture, marketing and sales of military aero engines and aftermarket services. The marine segment is engaged in development, manufacture, marketing and sales of marine propulsion systems and aftermarket services. The energy segment is engaged in development, manufacture, marketing and sales of power systems for the offshore oil and gas industry and electrical power generation and aftermarket services. In January 2013, the Company bought PKMJ Technical Services. In January 2013, Alstom SA acquired Tidal Generation Limited from the Company.

During the year ended December 31, 2010, it acquired ODIM ASA. In June 2011, Daimler AG and Rolls-Royce Holdings PLC had secured around 94% interest in Tognum AG-DJ. In September 2011, the Company acquired R Brooks Associates.

Civil aerospace

The Company�� civil aerospace business provides the powers for 30 different types of commercial aircraft in a range of markets, such as widebody, narrowbody, corporate and regional aircraft. As of December 31, 2010, it had over 13,000 engines in service with 650 airlines, freight operators and lessors and 4,000 corporate operators. Its civil aerospace products include large aircraft engines, small aircraft engines and helicopter engines. The Company�� Trent 700 is an engine on the Airbus A330. The Trent 1000 is powering the Boeing 787 on the aircraft�� flight test schedule. It provides a range of services, such as TotalCare, CorporateCare, helicopters services, financial services, training and technical publications.

Defence Aerospace

The Compan! y is a provider of defence aero-engine products and services, with 18,000 engines in service for 160 customers in 103 countries. It is also the supplier of engines for transport aircraft globally, powering fleets, such as the C-130, C-130J, Spartan C-27 and Osprey V-22. It is also involved in research projects, such as Adoptive Versatile Engine Technology (ADVENT), which is designed to reduce fuel consumption. Its engines power aircraft in all sectors, such as transport, combat, reconnaissance, training, helicopters and unmanned aerial vehicles. The defense aerospace segment of the Company provides engines power aircraft in all sectors, such as transport, combat, reconnaissance, training, helicopters and unmanned aerial vehicles. Its products include combat jets, helicopters, transporters, trainers, tactical aircraft, unmanned aerial vehicles and distributed generation systems. It provides a range of services, such as training, technical publications and service locations.

Marine

The Company focuses on power, propulsion and motion control solutions and serves over 2,500 customers and has equipment installed on 30,000 vessels operating worldwide. As of December 31, 2010, the Company had 650 designed and equipped vessels operating in the offshore oil and gas sector. As of December 31, 2010, it had more than 2,500 marine customers and has equipment installed on over 30,000 vessels worldwide, including those of 70 navies. The energy business supplies gas turbines, compressors and diesel power units. Its products include automation and control, bearings and seals, deck machinery, electrical power systems, engines, gears, propulsors, ship design, shiplifts and submarine equipment. It provides a range of services, such as global support network, spares and tools, field shop services, technical support, training, tailored solutions and upgrading.

Energy

The Company is a provider of gas turbines for onshore and offshore applications. The Company�� energy busi! ness is e! ngaged in two activities: supply power to the oil and gas sector, and the provision of power generation products and services. Its products include gas engines, gas turbine engines, gas compression, diesel engines, fuel cells, and automation and control systems. Its services consist of long term service agreements, component supply and technical support, distributed generation systems and training. During the year ended December 31, 2010, it conducted a range of a tidal power turbine, anchored on the sea bed off the coast of Scotland. During 2010, this had generated 500 kilo-watt at full power and has been successfully linked into the national grid.

Advisors' Opinion:

• [By Rich Smith]

  According to the DSCA, Lockheed Martin (NYSE: LMT  ) will be the prime contractor on this sale, which is valued at $588 million. It would involve not only the sale of the planes per se, but also eight Rolls Royce (NASDAQOTH: RYCEY  ) AE 2100D3 engines for the four-engine planes, and two spare engines, plus modifications to be made on the planes, radio equipment and other accessories, technical documentation, three years of training, and related logistics services.

• [By Alan Oscroft]

  Rolls-Royce (LSE: RR  ) (NASDAQOTH: RYCEY  )
  Having reached 1,148 pence this morning to set a new 52-week high, Rolls-Royce Holdings shares are now up 40% since this time last year. That was partly due to a strong 2012, which saw a 22% rise in earnings per share and an 11% rise in the dividend -- albeit with a modest yield of 2.2% on the year-end price.

Top 10 Energy Companies To Watch In Right Now: Raytheon Company(RTN)

Raytheon Company, together with its subsidiaries, provides electronics, mission systems integration, and other capabilities in the areas of sensing, effects, and command, control, communications, and intelligence systems, as well as mission support services in the United States and internationally. It operates in six segments: Integrated Defense Systems, Intelligence and Information Systems, Missile Systems, Network Centric Systems, Space and Airborne Systems, and Technical Services. The Integrated Defense Systems segment provides integrated naval, air, and missile defense and civil security response solutions. The Intelligence and Information Systems segment offers intelligence, surveillance and reconnaissance, advanced cyber solutions, weather and environmental solutions, and information-based solutions for law enforcement and homeland security. The Missile Systems segment develops and produces weapon systems, including missiles, smart munitions, close-in weapon systems, projectiles, kinetic kill vehicles, and directed energy effectors for the armed forces of the U.S. and other allied nations. The Network Centric Systems segment provides net-centric mission solutions, including integrated communications systems, command and control systems, combat systems, and operations and precision components for the U.S. federal, state, and local government customers, as well as civil customers. The Space and Airborne Systems segment designs and develops integrated systems and solutions for missions, including intelligence, surveillance, and reconnaissance; precision engagement; unmanned aerial operations; and space. The Technical Services segment provides training, logistics, engineering, product support, and operational support services for the mission support, homeland security, space, civil aviation, counterproliferation, and counterterrorism markets. Raytheon Company was founded in 1922 and is based in Waltham, Massachusetts.

Advisors' Opinion:

• [By Rich Smith]

  The U.S. Department of Defense awarded Raytheon (NYSE: RTN  ) a pair of contracts Wednesday -- one big, one small.

  The big one -- in fact, the biggest contract the Pentagon awarded to anyone Wednesday -- is worth $83.8 million to Raytheon. A sole-source, cost-plus-incentive-fee, and cost-plus-fixed-fee foreign military sales contract modification, it hires Raytheon to perform software updates, radar repairs, logistics, and other work on AN/TPY-2 radars being provided to the government of the United Arab Emirates for use as part of Lockheed Martin's (NYSE: LMT  ) new Terminal High Altitude Area Defense, or THAAD, system.�

• [By Dividend Growth Investor]

  The company�� last dividend increase was in September 2013 when the Board of Directors approved a 15.60 % increase in the quarterly dividend to $1.33� per share. The company�� peer group includes Raytheon (RTN), General Dynamics (GD), Northtrop Grumman (NOC) and Boeing (BA).

Top 10 Defense Companies To Buy Right Now: Implant Sciences Corp (IMSC)

Implant Sciences Corporation (Implant Sciences), incorporated in August 31,1984, develops, manufactures and sells sensors and systems for the security, safety and defense (SS&D) industries. Its technologies are used worldwide in security and inspection applications. Implant Sciences has developed technologies used in explosives trace detection (ETD), and and narcotics trace detection (NTD) applications and market and sell handheld ETD and benchtop ETD and NTD systems that use its technologies. The systems are used by private companies and Government agencies to screen baggage, cargo, vehicles, other objects and people for the detection of trace amounts of explosives. Implant Sciences have developed explosives detection systems designed for use in aviation and transportation security, high threat facilities and infrastructure, military installations, customs and border protection, and mail and cargo screening. The systems use the Quantum Sniffer technologies, including photon-based, non-radioactive ion source in combination with ion mobility spectrometry, a detection tool sensitive to the speeds with which ions of various substances move through the air to electronically detect minute quantities of explosives vapor and particles.

Quantum Sniffer QS-H150 Portable Explosives Detector

The Quantum Sniffer QS-H150 Portable Explosives Detector employs a vortex collector for the simultaneous detection of explosives particulates and vapors with or without physical contact and in real-time. The QS-HS150 can detect vapors and nanogram quantities of explosives particulates for explosives substances considered to be threats. The substances include military and commercial explosives, improvised and homemade explosives, and propellants and taggants.

The QS-H150 has automatic and continuous self-calibration. It monitors its environment, senses changes that would affect its accuracy, and re-calibrates accordingly. The system requires no user intervention and no calibration cons! umables. The detection process begins with the collection of a sample with its vortex collector. After collection, the sample is ionized photonically and analyzed using ion mobility spectrometer (IMS) technology. The presence of a threat substance is indicated by a visible and audible alarms. The threat substance is then identified and displayed on the integrated liquid crystal display (LCD) screen. When detecting a threat substance, the QS-H150 rapidly alarms. This real-time detection limits equipment contamination and allows for fast clear-down.

Quantum Sniffer QS-B220 Benchtop Explosives and Narcotics Detector

QS-B220 Benchtop Explosives and Narcotics Detector uses dual IMS with non-radioactive ionization for the detection and identification of a range of military, commercial, and improvised explosives as well as narcotics. The QS-B220 uses a sample trap which is wiped on the surface to be interrogated for explosives or narcotics particles.

The QS-B220 has automatic and continuous self-calibration. It monitors its environment, senses changes that would affect its accuracy, and re-calibrates accordingly.

Quantum Sniffer TM QS-Hx Portable Explosives Detector

The Company is focusing in developing a next-generation handheld detector that will use dual IMS non-radioactive ionization for the detection and identification of a range of military, commercial and improvised explosives, as well as narcotics. The QS-Hx will have automatic and continuous self-calibration, multi-level password-protected data security and will include a data management interface with data export to a network for recordkeeping, providing a link with the central command centers and logistics systems used by carriers.

Miniature Mass Spectrometer

The Company�� acquisition of Ion Metrics enabled it to obtain miniaturized quadrupole mass spectrometry (QMS) detector technology. The QMS detector is roughly the size of an AA battery and has low manufactur! ing costs! . When used in conjunction with an IMS, the QMS detector senses the molecular weight of the chemical species resulting in an orthogonal detection method in which a more fundamental characteristic of a substance is measured. It is developing interfaces for integrating the QMS detector into its future products.

Hyphenated Detectors

Depending on the application and the number of interfering background chemicals, it may be necessary to incorporate additional orthogonal detection methods. The combination of multiple sensors in series is known as employing hyphenated methods. By measuring different properties of the same species, interferents are separated from target species for a deterministic detection and identification and have minimum rates of false alarms. It is developing hyphenated systems employing conventional ion mobility, differential mobility and quadrupole mass spectrometry. As of June 30, 2012, it has one patent issued in real-time trace detection by IMS and QMS and two hyphenated system patents pending.

The Company competes with Morpho Detection, Inc., NucTech Company Limited and Smiths Detection, Inc.

Advisors' Opinion:

• [By James E. Brumley]

  It's not an uncompetitive market. Names like Implant Sciences Corporation (OTCMKTS:IMSC) and NXT-ID (OTCBB:NXTD) are battling in the security and facility-defense arena as well; IMSC makes explosives-detection and drug-detection hardware, while NXTD designs 3D image-rendering software that caters to the unique needs of prison security personnel, though the same technology has been proven in more traditional functions like building-security systems that keep certain people out rather than in. Neither Implant Sciences nor NXT-ID compete directly head-to-head with View Systems, however ... fortunately for them. See, VSYM is considered by some to be the best in the industry.

Top 10 Defense Companies To Buy Right Now: Rockwell Collins Inc (COL)

Rockwell Collins, Inc. (Rockwell Collins), incorporated on March 1, 2001, is engaged in design, production and support of communications and aviation electronics for commercial and military customers worldwide. The Company�� products and systems are primarily focused on aviation applications, The integrated system solutions and products it provide to its served markets include communications, navigation, automated flight control, displays/surveillance, simulation and training, integrated electronics and information management systems. The Company also provides a range of services and support to its customers through a network of service centers, including equipment repair and overhaul, service parts, field service engineering, training, technical information services and aftermarket used equipment sales. The Company operates in two segments: Government Systems and Commercial Systems.

Government Systems

The Company�� Government Systems business provides a range of electronic products, systems and services to customers, including the United States Department of Defense, other ministries of defense, other government agencies and defense contractors around the world. These products, systems and services support airborne, precision weapon, ground and maritime applications and are used in line-fit applications on new equipment, as well as in retrofit and upgrade applications designed. The Company�� defense-related systems, products and services include communications systems and products designed to enable the transmission of information across the communications spectrum, including satellite communications; navigation products and systems, including radio navigation products, global positioning system (GPS) equipment, handheld navigation devices and multi-mode receivers; avionics sub-systems for aircraft flight decks that combine flight operations with navigation and guidance functions that can include flight controls and displays, information/data processing and communicat! ions, navigation, safety and surveillance systems; cockpit display products, including multipurpose flat panel head-down displays, wide field of view head-up and helmet-mounted displays; simulation and training systems, including visual system products, training systems and services, and maintenance, repair, parts and after-sales support services.

Avionics consists of electronic solutions for a range of airborne platforms, including fixed and rotary wing aircraft, unmanned aerial vehicles (UAVs) and the associated aircrew and maintenance training devices and services. The Company provides complete avionics solutions (including cockpit avionics, mission system applications and system integration) and also provides individual avionics products to platform integrators. The Company serves various roles within these markets, including system and subsystems integrator, as well as provider of various electronic products. Communication products include spectrum voice and data connectivity for government and military use in the air, on the ground and at sea. Surface solutions include electronic systems applied to a variety of non-airborne market segments.

Commercial Systems

The Company�� Commercial Systems business supplies aviation electronics systems, products and services to customers located throughout the world. The customer base is consists of original equipment manufacturers (OEMs) of commercial air transport, business and regional aircraft, commercial airlines and business aircraft operators. The Company�� systems and products are used in both OEM applications, as well as in retrofit and upgrade applications designed.

The Company�� commercial aviation electronics systems, products and services include integrated avionics systems, such as Pro Line Fusion. Capabilities include synthetic and enhanced vision enabled flight displays, advanced flight and performance management systems, fly-by-wire integrated flight controls and information management! solution! s to improve operational efficiency; integrated cabin electronics systems, including cabin management systems, passenger connectivity and entertainment solutions, business support systems to improve passenger productivity and passenger flight information systems; communications systems and products, such as data link, high frequency, very high frequency and satellite communications systems; navigation systems and products, including landing sensors to enable automatic landings, radio navigation and geophysical sensors, as well as flight management systems; situational awareness and surveillance systems and products, such as synthetic and enhanced vision systems, surface surveillance and guidance solutions, head-up guidance systems, weather radar and collision avoidance systems; integrated information management solutions to improve the overall efficiency of flight, maintenance and cabin operations. These include on-board information management systems and connectivity solutions, airborne and ground applications and services, and ground infrastructure and services; electro-mechanical systems, including integrated pilot control solutions and primary and secondary actuation systems; simulation and training systems, including full-flight simulators for crew training, visual system products, training systems and engineering services, and maintenance, repair, parts, after-sales support services and aftermarket used equipment.

Air transport aviation electronics include avionics, cabin systems and flight control systems for commercial transport aircraft platforms. Business and regional aviation electronics include integrated avionics, cabin management and flight control systems for application on regional and business aircraft platforms. The Company develops integrated avionics, cabin and flight control solutions for business and regional aircraft OEMs and support them with the integration into other aircraft systems. Products offered for OEM applications in the business and regional aircraft cate! gory are ! marketed directly to the aircraft OEMs.

The Company competes with Honeywell International, Inc., Thales S.A., Panasonic, Raytheon Co., Harris Corp., BAE Systems Aerospace, Inc., General Dynamics Corporation, L3 Communications, Inc., The Boeing Company, Northrop Grumman Corp., CAE Inc., General Electric Co. and Garmin International Inc.

Advisors' Opinion:

• [By Lauren Pollock]

  Rockwell Collins Inc.(COL) said its fiscal first-quarter earnings slid� as charges related to a major acquisition offset a slight boost in the defense contractor’s sales. Rockwell also raised its full-year outlook.

• [By Rich Smith]

  The U.S. Department of Defense announced the award of 10 separate contracts Thursday, worth a bit over $340 million in aggregate value. Boeing and Raytheon claimed about one third of the money on offer, apiece. As for other companies participating in Pentagon funding, these included the following:

Top 10 Defense Companies To Buy Right Now: Airbus Group NV (EADSY)

Airbus Group NV, known as European Aeronautic Defence and Space Company EADS NV, is a Netherlands-based company active within the aerospace and defense sector. The Company manufactures aircrafts, helicopters, commercial space launch vehicles, missiles, satellites, defense systems and defense electronics, and offers services related to these activities. The Company oprates four divisions. The Airbus division comprises the Airbus Commercial and Airbus Military segments, which develop, manufacture, market and sell commercial jet aircrafts, military transport aircrafts and special mission aircrafts, among others. The Eurocopter division develops, markets and sells civil and military helicopters. The Astrium division develops, manufactures and sells satellites, orbital infrastructures and launchers, as well as provides space-related services. The Cassidian division develops, manufactures and sells missiles systems, military combat and training aircrafts, among others. Advisors' Opinion:

• [By Ben Levisohn]

  Shares of Boeing have dropped 8.9% this year, after gaining 84% in 2013. Airbus (EADSY), by comparison, has fallen 9.2% in 2014, after gaining 94% last year, while Embraer (ERJ) has gained 6.4% this year after rising 14% in 2013.

Top 10 Defense Companies To Buy Right Now: United Technologies Corporation(UTX)

United Technologies Corporation provides technology products and services to the building systems and aerospace industries worldwide. The company?s Otis segment designs, manufactures, sells, and installs passenger and freight elevators, escalators, and moving walkways, as well as provides maintenance and repair services. Its Carrier segment offers heating, ventilating, air conditioning, and refrigeration systems, controls, services, and energy-efficient products for residential, commercial, industrial, and transportation applications. The company?s UTC Fire and Security segment provides electronic security products comprising intruder alarms, and access control and video surveillance systems; fire safety products, such as specialty hazard detection and fixed suppression products, fire extinguishers, fire detection and life safety systems, and other firefighting equipment; systems integration, video surveillance, installation, maintenance, and inspection services; and mon itoring, response, and security personnel services. Its Pratt and Whitney segment supplies aircraft engines for the commercial, military, business jet, and general aviation markets; industrial gas turbines; geo thermal power systems; and space propulsion systems, as well as provides fleet management, maintenance, repair, and overhaul services. The company?s Hamilton Sundstrand segment supplies aerospace products, such as power generation, management and distribution, flight control, engine control, environmental control, auxiliary power units, and propeller systems; and industrial products, including air compressors, metering pumps, and fluid handling equipment under the Sullair, Sundyne, and Milton Roy names. Its Sikorsky segment manufactures military and commercial helicopters, as well as offers aftermarket helicopter and aircraft parts and services. United Technologies Corporation was founded in 1934 and is based in Hartford, Connecticut.

Advisors' Opinion:

• [By Rich Smith]

  The U.S. Department of Defense awarded multiple contractors shares in some 17 contracts Tuesday, valued at up to $1.3 billion in combined dollar value. Most of the funds awarded went to a series of 13 contractors working on a single cyber-defense project -- but there were a few other winners. Among them:

• [By WALLSTCHEATSHEET]

  United Technologies provides valuable aerospace technology and services to a multitude of companies participating in various industries worldwide. The stock has been a strong performer over the last several years and is now consolidating near all-time high prices. Earnings and revenue figures have been growing but investors have expected a little more from the company. Relative to its strong peers and sector, United Technologies has been an average year-to-date performer. Look for United Technologies to OUTPERFORM.

• [By Jim Pyke]

  Both VYM and VIG are also overweight in Consumer Staples, which makes sense, as well as Conglomerates. VIG's top three holdings based on March 30, 2013 share counts are Pepsico Inc. (PEP), Procter & Gamble Co. (PG), and Coca-Cola Co. (KO). In contrast, VYM has these three as well, but they are ranked, 16th, 6th and 11th respectively. VYM conglomerate exposure is through General Electric Co. (GE), United Technologies Corp. (UTX) and 3M Co. (MMM). VIG does not have GE, but does have the other two and three smaller firms as well. It is slightly surprising to see small VIG with fewer holdings have more in a specific sector than VYM.

• [By Chuck Saletta]

  Speaking of results ...
  Right now, quarterly earnings season is well under way, which provides a perfect opportunity for one of those "check in from time to time" moments. While the iPIG portfolio did nothing last week, several of its picks did report, and those quarterly confessionals can help determine whether the companies are still worth owning. To summarize key results:

  United Technologies (NYSE: UTX  ) reported decent numbers, with net earnings ahead of expectations but growth driven more by acquisitions than by organic improvements in its existing businesses. Given the company's conglomerate setup, growth by bolt-on acquisitions isn't surprising, but over the long haul, it'd be better to see its businesses growing internally as well as through acquisitions. The news at Mine Safety Appliances (NYSE: MSA  ) wasn't quite as good, with both revenues and net earnings falling from year ago levels on a tough environment for the mining businesses it supports. That's a risk well known to the company and its shareholders, though, and while the weaker results did knock the company's stock down, the business has ridden through tough cycles before. It looks capable of riding through this one, too. Hasbro (NASDAQ: HAS  ) , on the other hand, reported earnings that beat expectations on an operating basis, before restructuring charges knocked it down to a net loss. Given that the company is in the very seasonal toy business, that loss in an off-peak quarter is much less of a concern than it would have been in the make-or-break holiday quarter. UPS (NYSE: UPS  ) kept on trucking, with a better-than-expected January and strength from eCommerce helping the company turn in an 8% growth in net reported earnings per share. Overall, UPS is operating efficiently, though its future success is tied to its ability to continue delivering more packages. As long as its e-commerce business continues to grow, though, UPS is wel

Top 10 Defense Companies To Buy Right Now: Poly Shield Technologies Inc (SHPR)

Poly Shield Technologies Inc. (Poly Shield), incorporated on March 2, 2000, is a research, development and marketing company providing environmental, energy saving and durability solutions. The Company's are designed and manufactured under the advanced bio-scrubber technology and includes a line of protective fluoropolymer coatings. Poly Shield�� fluoropolymer products are manufactured at a production facility in Florida. Poly Shield�� manufactured fluoropolymer coatings are used in a number of different industries including marine, aerospace, oilfield, industrial, commercial, and residential applications. In addition, Poly Shield offers a line of antimicrobial coatings for use in hospital or food industries. In December 2013, Poly Shield Technologies Inc sold New World Technologies Group, Inc. to Viveros.

The Company's products include bio-scrubber, supershield, superiorshield and microshield. Its products are used in aerospace, cruise ship lines, marine, military, oil, and energy production industries. The Company's bio-scrubber is designed to remove alkali metals from fuel in an effort to protect gas turbines from high temperature corrosion. The technology has been installed on active ships within the cruise line industry.

SuperShield is a fluoropolymer coating that is formulated to work with a variety of residential, commercial, industrial and marine applications. It is a fluoroplymer resin that offers weathering ability and the choice of temperature curing. Its flagship product, SuperShield 100, containing fluoropolymer resins provides up to a 50 year service life on a steel and metal surfaces. Its SuperShield S is superhydrophobic and superoleophobic, with characteristic complex micro and nanoscopic surface, which minimizes adhesion. SuperShield S100 is also superhydrophobic and superoleophobic. SuperShield S100 is provides 50 year service life. The ultimate anti-fouling coating for ship hulls, oilfield rigs, heavy equipment, airplanes, bridges, etc.

! SuperiorShield is protective and energy saving roof coatings. Its superiorShield coating reduces heat transfer through infrared radiation, conduction and convection. SuperiorShield has the capability to reflect 90% of the suns ultraviolet (UV) rays.

MicroShield is a anti-microbial coating. MicroShield is an active antibacterial destroying the cell membrane and inducing oxidative deoxyribonucleic acid (DNA) and protein damage of microbes. It also acts as a bacteriostat, virostat and fungistat, inhibiting bacterial, viral and fungal growth.

Advisors' Opinion:

• [By Peter Graham]

  Small cap stocks Soul and Vibe Interactive Inc (OTCBB: SOUL), Globalstar, Inc (OTCMKTS: GSAT) and Poly Shield Technologies Inc (OTCBB: SHPR) have been getting some attention lately in various investment newsletters or investor alerts with at least two of these stocks being the subject of some sort of paid stock promotional or investor relations type of activities. With that in mind, just how hot are these three small cap stocks for investors or traders? Here is a quick reality check:

Top 10 Defense Companies To Buy Right Now: Spirit Aerosystems Holdings Inc.(SPR)

Spirit AeroSystems Holdings, Inc., through its subsidiaries, designs and manufactures commercial aerostructures worldwide. It operates in three segments: Fuselage Systems, Propulsion Systems, and Wing Systems. The Fuselage Systems segment develops, produces, and markets forward, mid, and rear fuselage sections and systems primarily to aircraft original equipment manufacturers (OEMs), as well as offers related spares, and maintenance, repair, and overhaul (MRO) services. This segment also offers rotorcraft comprising forward cockpit and cabin for military aircrafts. The Propulsion Systems segment engages in the development, production, and marketing of struts/pylons; nacelles, including thrust reversers; and related engine structural components primarily to aircraft or engine OEMs, as well as provides related spares and MRO services. The Wing Systems segment develops, produces, and markets wings and wing components comprising flight control surfaces and other miscellaneous structural parts primarily to aircraft OEMs, as well as offers related spares and MRO services. This segment is also involved in designing, engineering, and manufacturing structural components for military aircrafts, including low observables that are radar absorbent and translucent materials; and radome new builds and refurbishment. It also provides other military services, such as fabrication, bonding, assembly, testing, tooling, processing, engineering analysis, and training. Spirit AeroSystems Holdings, Inc. serves large commercial airplanes, business and regional jets, and military/helicopter sectors of the aerostructures industry. The company was formerly known as Mid-Western Aircraft Systems Holdings, Inc. Spirit AeroSystems Holdings, Inc. is headquartered in Wichita, Kansas.

Advisors' Opinion:

• [By Inyoung Hwang]

  Axel Springer AG (SPR) declined 1.5 percent to 43.43 euros. Goldman Sachs Group Inc. cut its rating on Europe�� biggest newspaper publisher to sell from neutral, saying its valuation is the highest of the publishers it covers. Shares trade at 18.6 times earnings compared with 16.3 times for the DAX.

• [By Michael Cintolo]

  Spirit AeroSystems (SPR) is a dominant supplier of aerostructures (fuselages, wing systems, etc.) to both Boeing and Airbus��n fact, it makes 70% of the airframe content for the Boeing 737, and is the largest aerostructure provider to Boeing's newer 787.

• [By Ben Levisohn]

  Shares of Textron have gained 1.2% to $36.63 at 1:09 p.m., while Embraer (ERJ) has risen 0.5% to $32.30, Triumph Group (TGI) has advanced 0.2% to $75.73 and Spirit AeroSystems (SPR) is off 0.8% at $33.90.

Top 10 Defense Companies To Buy Right Now: Northrop Grumman Corp (NOC)

Northrop Grumman Corporation (Northrop Grumman), incorporated on January 16, 2001, provides products, services, and integrated solutions in aerospace, electronics, information and services to its global customers. As of December 31, 2011, the Company operated in four segments: Aerospace Systems, Electronic Systems, Information Systems and Technical Services. The Company conducts most of its business with the United States Government, principally the Department of Defense (DoD) and intelligence community. It also conducts business with local, state, and foreign Governments and domestic and international commercial customers. Effective as of March 31, 2011, the company completed the spin-off of Huntington Ingalls Industries, Inc. (HII). HII operates the Company�� former shipbuilding business. In September 2012, it acquired M5 Network Security Pty Ltd.

Aerospace Systems

Aerospace Systems is engaged in the design, development, integration and production of manned and unmanned aircraft, spacecraft, high-energy laser systems, microelectronics and other systems and subsystems. Aerospace Systems��customers, primarily domestic government agencies, use these systems in a number of different mission areas, including intelligence, surveillance and reconnaissance; communications; battle management; strike operations; electronic warfare; missile defense; earth observation; space science; and space exploration. The segment consists of four business areas: Strike & Surveillance Systems; Space Systems; Battle Management & Engagement Systems; and Advanced Programs & Technology. Strike & Surveillance Systems designs, develops, manufactures and integrates tactical and long-range strike aircraft systems, unmanned systems, and missile systems. Key programs include the RQ-4 Global Hawk unmanned reconnaissance system, B-2 stealth bomber, F-35 Lightning II (F-35), F/A-18 Super Hornet strike fighter, Minuteman III Intercontinental Ballistic Missile (ICBM), MQ-8B Fire Scout unmanned aircraft syste! m, and Multi-Platform Radar Technology Insertion Program (MP-RTIP).

Space Systems designs, develops, manufactures, and integrates spacecraft systems, subsystems and electronic and communications payloads. Its main programs include the James Webb Space Telescope (JWST), Advanced Extremely High Frequency (AEHF) payload and many restricted programs. The Battle Management & Engagement Systems designs, develops, manufactures, and integrates airborne early warning, surveillance, battlefield management, and electronic warfare systems. Key programs include the E-2 Hawkeye, Joint Surveillance Target Attack Radar System (Joint STARS), Broad Area Maritime Surveillance (BAMS) unmanned aircraft system, EA-6B Prowler and its next generation platform, the EA-18G Growler, and Long Endurance Multi Intelligence Vehicle (LEMV). Advanced Programs & Technology creates advanced technologies and concepts. Its programs include the Navy Unmanned Combat Air System (N-UCAS), and other directed energy and advanced concepts programs.

Electronic Systems

Electronic Systems is engaged in the design, development, manufacture, and support of solutions for sensing, understanding, anticipating, and controlling the environment for its global military, civil, and commercial customers and their operations. Electronic Systems provides a variety of defense electronics and systems, airborne fire control radars, situational awareness systems, early warning systems, airspace management systems, navigation systems, communications systems, marine systems, space systems, and logistics services. The segment consists of five business areas: Intelligence, Surveillance, & Reconnaissance Systems; Land & Self Protection Systems; Naval & Marine Systems; Navigation Systems; and Targeting Systems. Intelligence, Surveillance & Reconnaissance (ISR) Systems delivers products and services for space satellite applications, airborne and ground-based surveillance, multi-sensor processing, analysis, and dissemination for com! bat units! and national agencies both domestically and internationally, providing battlespace awareness, missile defense, and command and control. Key products include the Space-Based Infrared System (SBIRS), Defense Meteorological Satellite Program (DMSP), Defense Support Program (DSP), ground processing, exploitation and dissemination systems, the TPS-78/703 family of ground based surveillance radars, and the Multi-role Electronically Scanned Array (MESA) radar.

Land & Self Protection Systems delivers products, systems, and services that support ground-based, helicopter and fixed wing platforms (manned and unmanned) with sensor and protection systems. These systems perform threat detection and countermeasures that defeat infrared and radio frequency (RF) guided missile and tracking systems. The division also provides integrated electronic warfare capability, communications, and intelligence systems; unattended ground sensors; automatic test equipment; and advanced threat simulators. Key programs include the U.S. Marine Corps Ground/Air Task Oriented Radar (G/ATOR) multi-mission radar; the Large Aircraft Infrared Countermeasures (LAIRCM) system for the U.S. Air Force, U.S. Navy, and strategic international and NATO allies; the AN/ALQ-131(V) electronic countermeasures pod; the LR-100 high-performance radar warning receiver (RWR)/electronic support measures (ESM)/electronic intelligence (ELINT) receiver system; the U.S. Army�� STARLite Synthetic Aperture Radar for Unmanned Aerial Vehicles (UAVs); the U.S. Army Vehicle Intercom Systems (VIC-3 and VIC-5); the U.S. Army Next Generation Automated Test System (NGATS); the U.S. Air Force Joint Threat Emitter (JTE) training range system; and the Vehicle and Dismount Exploitation Radar (VADER) system that enable airborne platforms to track individual persons or vehicles.

Naval & Marine Systems delivers products and services to defense, civil, and commercial customers supporting smart navigation, shipboard radar surveillance, ship control, mac! hinery co! ntrol, integrated combat management systems for naval surface ships, high-resolution undersea sensors (for mine hunting, situational awareness, and other applications), unmanned marine vehicles, shipboard missile and encapsulated payload launch systems, propulsion and power generation systems, and nuclear reactor instrumentation and control. Key products include Integrated Bridge and Navigation Systems, Voyage Management System, Integrated Platform Management Systems, Integrated Combat Management System, AN/WSN-7 Inertial Navigator, anti-ship missile defense and surveillance radars (Cobra Judy, AN/SPQ-9B, AN/SPS-74), propulsion equipment, missile launch, and sonar systems for the Virginia-class submarine, and launch system support for the Ohio-class submarine.

Navigation Systems delivers products and services to defense, civil, and commercial customers supporting situational awareness, inertial navigation in all domains (air, land, sea, and space), embedded Global Positioning Systems, Identification Friend or Foe (IFF) systems, acoustic sensors, cockpit video monitors, mission computing, and integrated avionics and electronics systems. Key products include the Integrated Avionics System, the AN/TYQ-23 Aircraft Command and Control System, Fiber Optic Acoustic Sensors, and a robust portfolio of inertial sensors and navigation systems. Targeting Systems delivers products and services supporting airborne combat avionics (fire control radars, multi-function apertures and pods), airborne electro-optical/infrared targeting systems, and laser/electro-optical systems including hand-held, tripod-mounted, and ground or air vehicle mounted systems. Key products include fire control radars for the B-1B, F-16 (worldwide), F-22 U.S. Air Force, and F-35; AN/APN-241 navigation/weather radar; the AN/AAQ-28(V) LITENING family of targeting pods; Distributed Aperture EO/IR systems; and the Lightweight Laser Designator Rangefinder (LLDR). In addition, the Electronic Systems segment also includes the Advanced Co! ncepts & ! Technologies Division (AC&TD), which develops next-generation systems and architectures.

Information Systems

Information Systems is a provider of advanced solutions for the DoD, national intelligence, federal civilian, state and local agencies, and commercial and international customers. Products and services focus on the fields of command, control, communications, computers (C4) and intelligence; airborne reconnaissance; intelligence processing; air and missile defense; decision support systems; cybersecurity; information technology; and systems engineering and integration. The segment consists of three business areas: Defense Systems; Intelligence Systems, and Civil Systems. Defense Systems is a provider of net-enabled Battle Management, C4 Intelligence, Surveillance, and Reconnaissance (C4ISR) systems, decision superiority, and mission-enabling solutions and services in support of the national defense and security of our nation and its allies. Defense Systems is a developer and integrator of many of the DoD�� programs-of-record, particularly for command and control (C2) and communications for the U.S. Air Force, U.S. Army, U.S. Navy, and Joint Forces. Major products and services include C4ISR Integration, Mission Systems Integration, Military Communications and Networks, Battle Management C2 and Decision Support Systems, Tactical and Operational C2, Ground and Maritime Combat Systems, Air and Missile Defense, Combat Support Solutions and Services, Enterprise Infrastructure and Applications, Defense Logistics Systems, Identity Management and Biometric Solutions, Cloud Computing, Maritime Mission Systems and Force and Critical Infrastructure Protection. Systems are installed in operational and command centers worldwide and across all DoD services and joint commands.

Intelligence Systems is focused on the delivery of intelligence-related systems and services to the United States Government and the international security community. Intelligence Systems focuses ! on missio! n areas, including Airborne Intelligence, Signals Intelligence (SIGINT) Systems, Cybersecurity, Geospatial Intelligence, Pervasive Intelligence, Surveillance and Reconnaissance (ISR), Ground Systems, Multi-Source Intelligence Data Fusion, and Dynamic Cyber Defense. Its offerings include intelligence sensing, processing, exploitation and dissemination systems, extremely Large-Scale Data Information Management, Intelligence and Prime Systems Integration, Knowledge Discovery Processes, ISR/Communications Quick Reaction Capability Solutions, Sensor Systems, Support to Special Operations, Cyber-SIGINT Mission Management/Multi-Intelligence, Language Services/Intelligence Analysis, Cyber Exploitation, Satellite Ground Stations, Weather Services, Geospatial Systems, Product Generation and Dissemination, Counter Narco-Terrorism, Drug Enforcement Operations, Geo-Intelligence Tradecraft Training, Enterprise Information Technology, Ground-Based Sensing, Studies and Analysis, Sustainment, Operations and Maintenance. Civil Systems provides specialized information systems and services in support of critical civilian government missions, such as homeland security, health, cybersecurity, civil financial, law enforcement and public safety. Primary customers are federal civilian agencies with some state and local and international customers. Civil Systems develops and implements solutions that combine a deep understanding of civil government domains with core expertise in prime systems integration, enterprise applications development, and high value information technology service, including cybersecurity, advanced networking and cloud computing.

Technical Services

Technical Services is a provider of logistics, infrastructure, and sustainment support, while also providing an array of modernization, high technology, and training and simulation services. The segment consists of three business areas: Defense and Government Services; Training Solutions; and Integrated Logistics and Modernization. De! fense and! Government Services provides maintenance, repair, and overhaul (MRO) of combat vehicles, engineering and high technology services for nuclear security and space missions, civil engineering work, military range work, launch services, and range-sensor-instrumentation operations. The division�� customer base includes the United States Army, Department of Energy, the DoD, NASA, and the intelligence community. Training Solutions provides training to senior military leaders, international and peacekeeping forces. The division designs and develops future conflict training scenarios, and provides warfighters and allies with live, virtual, and constructive training programs. The division offers training applications ranging from battle command to professional military education. Primary customers include the DoD, Department of State, and Department of Homeland Security. Integrated Logistics and Modernization provides life cycle product and weapon system sustainment and modernization. The division is focused on providing direct support to warfighters and delivering aircraft MRO; subsystem MRO and modernization; supply chain management services, warehousing and inventory transportation, field services and mobilization, sustaining engineering, maintenance, repair and overhaul supplies, and on-going weapons maintenance and technical assistance. The division specializes in quick reaction capability and deployed operations in support of customers. Primary customers include the DoD, as well as international military and commercial customers.

The Company competes with Lockheed Martin Corporation, The Boeing Company, Raytheon Company, General Dynamics Corporation, L-3 Communications Corporation, SAIC, BAE Systems Inc., EADS and Finmeccanica SpA.

Advisors' Opinion:

• [By Rich Smith]

  Following media reports that bungled relations with German regulators cost it a $1.3 billion defense contract, Northrop Grumman (NYSE: NOC  ) fired back at its critics over the holiday weekend.

• [By Katie Spence]

  When aggressive bidding bites back
  Bidding for the U.S. Air Force tanker contract was fierce, to say the least, and defense heavyweights such as Northrop Grumman (NYSE: NOC  ) , and European Aeronautical Defense and Space (NASDAQOTH: EADSY  ) , submitted bids. In fact, when Boeing's initial win was rescinded because of shenanigans -- people even went to jail -- a bid from Northrop/EADS won the second go-around. However, Boeing wasn't willing to give up that easily and lobbied to have the award overturned. It worked, and Boeing won the third and final round.�

• [By Katie Spence]

  A reputation for failure, but still limping along
  Historically, Lockheed's F-35 program has faced setbacks, groundings, massive cost overruns, and not a whole lot of good news. This is likely disconcerting for F-35 subcontractors Northrop Grumman (NYSE: NOC  ) and United Technologies (NYSE: UTX  ) , which through their Pratt & Whitney subsidiary builds the engine for the F-35.�