5 Stocks in Breakout Territory on Big Volume

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

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Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

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With that in mind, let's take a look at several stocks rising on unusual volume today.

NuStar Energy

NuStar Energy (NS) is engaged in the terminalling and storage of petroleum products, the transportation of petroleum products and anhydrous ammonia and asphalt and fuels marketing. This stock closed up 1.7% at $43.97 in Wednesday's trading session.

Wednesday's Volume: 1.13 million

Three-Month Average Volume: 425,063

Volume % Change: 195%

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From a technical perspective, NS spiked modestly higher here with above-average volume. This stock has been uptrending strong for the last month and change, with shares pushing higher from its low of $36.15 to its intraday high of $44.81. During that uptrend, shares of NS have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of NS within range of triggering a big breakout trade. That trade will hit if NS manages to take out its 200-day moving average at $45.32 to some past overhead resistance levels at $45.56 to $46.19 with high volume.

Traders should now look for long-biased trades in NS as long as it's trending above $42 and then once it sustains a move or close above those breakout levels with volume that's near or above 425,063 shares. If that breakout hits soon, then NS will set up to re-test or possibly take out its next major overhead resistance levels at $50 to $52.50.

Dr Pepper Snapple Group

Dr Pepper Snapple Group (DPS) is an integrated brand owner, manufacturer and distributor of non-alcoholic beverages in the U.S., Canada and Mexico, including 7 UP, A&W, Canada Dry, Clamato and Dr Pepper. This stock closed up 2.4% at $46.49 in Wednesday's trading session.

Wednesday's Volume: 2.68 million

Three-Month Average Volume: 1.31 million

Volume % Change: 135%

>>5 Stocks Poised for Breakouts

From a technical perspective, DPS spiked higher here right off its 200-day moving average of $45.34 with strong upside volume. This move also pushed shares of DPS into breakout territory, since the stock took out some near-term overhead resistance at $46.11. This move is quickly pushing shares of DPS within range of triggering another big breakout trade. That trade will hit if DPS manages to take out Wednesday's high of $46.82, and then once it clears some past overhead resistance at $47.24 to $47.90 with high volume.

Traders should now look for long-biased trades in DPS as long as it's trending above that first breakout level of $46.11 or above its 200-day at $45.35 and then once it sustains a move or close above those breakout levels volume that's near or above 1.31 million shares. If that breakout hits soon, then DPS will set up to re-test or possibly take out its 52-week high at $50.37. Shares of DPS could even tag $53 to $55 if it clears its 52-week high with volume.

Allegheny Technologies

Allegheny Technologies (ATI) is a specialty metal producer in the world. This stock closed up 1.9% at $33.42 in Wednesday's trading session.

Wednesday's Volume: 4.16 million

Three-Month Average Volume: 1.39 million

Volume % Change: 190%

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From a technical perspective, ATI trended modestly higher here right above some near-term support at $30.50 with above-average volume. This move is quickly pushing shares of ATI within range of triggering a big breakout trade. That trade will hit if ATI manage to take out its 52-week high at $34.18 to some past overhead resistance at $35.94 with high volume.

Traders should now look for long-biased trades in ATI as long as it's trending above $32 or $31, and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.39 million shares. If that breakout hits soon, then ATI will set up to re-test or possibly take out its next major overhead resistance levels $43 to $44.

Hexcel

Hexcel (HXL) develops, manufactures and markets composites, including carbon fibers, reinforcements, prepregs, honeycomb, adhesives and composite structures, for use in commercial aerospace, space, defense and industrial applications. This stock closed up 2.6% at $42.04 in Wednesday's trading session.

Wednesday's Volume: 1.43 million

Three-Month Average Volume: 473,743

Volume % Change: 220%

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From a technical perspective, HXL spiked higher here right above some near-term support at $40 with heavy upside volume. This stock has been uptrending strong for the last six months, with shares soaring higher from its low of $30 to its recent high of $43. During that uptrend, shares of HXL have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of HXL within range of triggering a near-term breakout trade. That trade will hit if HXL manages to take out Wednesday's high of $42.57 to its 52-week high at $43 with high volume.

Traders should now look for long-biased trades in HXL as long as it's trending above $41 or $40 and then once it sustains a move or close above those breakout levels with volume that's near or above 473,743 shares. If that breakout hits soon, then HXL will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $48 to $50.

BBCN Bancorp

BBCN Bancorp (BBCN), a bank holding company, offers commercial banking and, to a lesser extent, consumer financial services through its wholly owned subsidiary, BBCN Bank. This stock closed up 4.2% at $15.27 in Wednesday's trading session.

Wednesday's Volume: 1.27 million

Three-Month Average Volume: 415,740

Volume % Change: 231%

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From a technical perspective, BBCN spiked higher here with strong upside volume. This stock has been uptrending for the last two months, with shares moving higher from its low of $13.05 to its recent high of $15.50. During that move, shares of BBCN have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of BBCN within range of triggering a big breakout trade. That trade will hit if BBCN manages to take out some key overhead resistance levels at $15.50 to its 52-week high at $16 with high volume.

Traders should now look for long-biased trades in BBCN as long as it's trending above some near-term support at $14.50 or its 50-day at $14.04 and then once it sustains a move or close above those breakout levels with volume that hits near or above 415,740 shares. If that breakout hits soon, then BBCN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $19 to $20.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

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

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

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Deals Demonstrate Value of MLPs

The leaves have turned and sentiment for MLPs appears to be following suit, as dealmaking reveals strong market appetite for income with a growth kicker.

You wouldn’t necessarily know this from the performance of the benchmark Alerian MLP Index, which has corrected sideways from May highs and has significantly underperformed the broader energy sector as well as the S&P 500 over that span.

But note that the largest IPO of the year took place only last week and related to a master limited partnership, as insiders raised $2.7 billion from the sale of a minority stake in Plains GP Holdings (NYSE: PAGP), the incorporated repository of general-partner interests and incentive distribution rights in Plains All American Pipeline L.P. (NYSE: PAA), one of the largest MLPs.

According to Hinds Howard of MLP HINDSight, PAGP’s resulting indicative yield of 2.7 percent was the lowest ever for a GP offering. The lower the yield, of course, the stronger the investor demand and growth expectations. So even though the deal priced at the bottom of the forecast range, investors still paid top dollar based on comparable past transactions.

Of course, the past didn’t feature rates quite this low, nor comparable demand for midstream infrastructure from this great a variety of drilling basins.

Nor did the past feature quite such a big disparity between MLP valuations and those in the rest of the energy sector, sparking quite the same rush of MLP spinoffs by corporations.

Devon Energy (NYSE: DVN) recently joined the club by announcing plans to spin off some of its midstream assets into an MLP, as a way of capitalizing on the much stronger valuation MLPs enjoy. The money raised could be presumably deployed for investments elsewhere.

Instead, Devon announced today that it would instead combine its US midstream assets with those of Crosstex Energy (Nasdaq: XTXI) and those of the MLP i! t manages, Crosstex Energy L.P., (Nasdaq: XTEX) into a new MLP to be listed alongside its corporate general partner. Devon’s contributing to the MLP its gathering and processing assets in the Barnett Shale near Dallas as well as Oklahoma’s Cana and Arkoma Woodford shales, its interest in fractionation plants on the Texas coast as well as $100 million in cash, for a total investment of $4.8 billion.

Crosstex brings to the table its own overlapping assets in the Barnett, strategically important pipelines in Louisiana, ambitious expansion plans in the Ohio River Valley as well as the Texas shale basins, and an experienced management team that will run the combined operation, even as Devon retains a majority stake and ultimate control.

Far from extracting Devon from the midstream business, the deal gives the gas and oil producer a much bigger stake in midstream’s continued growth.

Investors will get an opportunity to buy a partnership less reliant on a single customer but with the long-term acreage and minimum volume commitments from its committed corporate parent. The MLP will have relatively low leverage, investment-grade credit, a largely fee-based business increasingly profiting from natural gas liquids and petroleum and fast-growing distributions that will improve on what Crosstex has been paying out while still revaluing Devon’s assets at a much higher earnings multiple.

The market paid heed to these advantages, rewarding Devon with a 3.3 percent share price rise. XTXI shares, meanwhile, soared 71 percent, while XTEX units appreciated 33 percent. Not a bad windfall for investors in the only MLP involved in a deal capitalizing on elevated MLP valuations.

The takeaway here is not that MLPs are overpriced but rather that the market continues to undervalue some of the midstream assets on producers’ books given the tax efficiency of MLPs as well as the strong demand for additional infrastructure.

XTXI shareholders have been promised a ! 50 percen! t dividend boost next year  (for a prospective 2014 yield of3.2 percent at today’s premium price) as well as long-term dividend growth of 20 percent or more annually. XTEX shareholders can look forward to an 8 percent distribution boost next year and comparable increases longer-term.  As for Devon, its contributions have been valued at 11 times Ebitda, vs. the 6.5 times enterprise valuation for the entire company, and Devon has retained control as well as a lion’s share of the upside from continued growth.

This looks to be a win-win deal, especially for Devon, whose shares may not yet fully reflect the merger’s long-term benefits.

Speed Traders Meet Nightmare on Elm Street With Nanex

Nanex Chart of Equity Trading after Chicago PMI Data on Feb. 28, 2013.

The nemesis of Wall Street's high-frequency traders operates out of an apartment-sized office above the Bliss Salon -- manicure/pedicure $45 -- on Elm Street in the Chicago suburb of Winnetka.

Staring at four computer monitors,Eric Scott Hunsader, the founder of market-data provider Nanex LLC, looks for hints of illicit trading hidden in psychedelic images of triangles dancing with dots that represent quotes to buy and sell U.S. stocks broken down by the millisecond.

Charts of trading produced by Hunsader's eight-person firm have captivated everyone from regulators to art gallery owners. One stunt involved a computerized piano piece mimicking quotes for an exchange-traded fund. He infuriates some traders, who say Nanex draws unwarranted conclusions and spreads conspiracy theories.

To Hunsader, the images created from market feeds are evidence of high-frequency trading firms exploiting market rules to turn a profit in a lawless environment. Though others in the industry see his reports and charts as propaganda, Nanex's interpretations are helping to drive the public debate about the fundamental fairness of the modern stock market.

"You ever see 'Lord of the Flies' or read that book?" he said, using the William Golding novel about boys stranded on an uninhabited island as a metaphor for the stock market. "When you don't have a parent around, things fall apart."

'Ticker Plant'

As the 51-year-old Hunsader sees it, that's especially true for a market capable of spewing out quotes to buy and sell stocks at rates as fast as 2 million per second, compared with about 1,000 in the 1990s. The options market can produce quotes at a rate of more than 10 million per second, according to Nanex, whose business is to process the data and distribute it to users in what's known as a "ticker plant."

Hunsader's firm detected what it said was suspicious trading before the government's jobs report on Oct. 22. On Oct. 16, Nanex i! dentified a buy order worth more than $400 million shortly before the open of European exchanges. The orders for E-mini S&P 500 futures were canceled "just before selling began in earnest," Nanex said.

Nanex labeled the report "Panthers on the Loose?," arguing the trades resembled a case that caused the Commodity Futures Trading Commission to order Panther Energy Trading LLC to pay $2.8 million in fines and forfeited trading profits. The firm was accused of "spoofing," or using an algorithm to illegally place and quickly cancel bids and offers in futures contracts in order to create the false impression of demand.

David, Goliath

"It shouldn't take the regulator more than an hour to figure out who did it, and a day to find out the intent," Nanex wrote in the Oct. 16 report. "We'll wait."

Hunsader's firm portrays itself as David fighting industry Goliaths, the deep-pocketed HFT firms that dominate U.S. stock trading. That industry has started fighting back -- accusing Hunsader of drawing the wrong conclusions about what his charts show.

Making a joke about Nanex was the first thing Chris Concannon, a partner at proprietary trading firm Virtu Financial LLC in New York and former Securities and Exchange Commission attorney, did when he stepped to the microphone at an industry event last month.

"I'm required to announce our sponsor of this segment, which is Nanex," Concannon said to laughter at the Security Traders Association's Market Structure Conference in Washington. Nanex's tag-line, he said, is "making markets better with inaccurate information."

Advance Word

Virtu and Nanex had traded insults since Hunsader published a report on Sept. 20, two days after the Federal Reserve surprised markets by not reducing the $85 billion of monthly bond purchases it makes in its quantitative easing program.

Titled "Einstein and The Great Fed Robbery," the report cited market data that it said showed some trading ! firm or f! irms got advance word about the Fed's decision and then used the milliseconds-long head start to place bets totaling more than $1 billion. A millisecond is one-thousandth of a second, or three places to the right of the decimal point -- one farther out than how Olympic track and swim times are posted. Following the report, the central bank began a review and ultimately tightened the way it releases its statements.

Virtu's report said Nanex's study was "severely flawed" because of the type of data feed it relied on. Hunsader replied that Virtu needs to buy a "new calculator" and that if you read the report closely enough it corroborates his own theory that the information left Washington early.

Concannon didn't respond to five phone calls and e-mails seeking comment on Nanex's statements.

'Disprove Mine'

Hunsader, dressed in jeans, a white short-sleeved shirt and running shoes in the Winnetka office, points at the approximately 3,000 pieces of trading research he's released, claiming he has never stood down from a finding. How do you publish that many reports, he said, "and not ever have to retract them?"

"If you can't prove your point, then disprove mine," he said. "But don't go around saying we think you're making leaps without backing it up."

A high-frequency tweeter with more than 11,000 followers, Hunsader conducts his crusade on the Internet and with interviews with journalists, documentary film-makers and others looking for someone to explain today's computerized market.

Many of his more than 11,500 Twitter posts contain links to his charts highlighting unusual patterns in stock quotes and often blaming computer algorithms being used by HFT firms. "Obscene manipulation in $AAPL stock. Where's @SEC_News on this & 1000's of other examples?" he posted on Oct. 5, referencing the symbol for Apple Inc. and a Twitter feed run by the SEC.

Market Police

Regulation NMS, the set of rules that ope! ned stock! trading to greater competition six years ago, has helped fragment the almost $22 trillion U.S. market to the point where orders to buy and sell bounce between 13 exchanges and more than 40 alternative platforms. Bloomberg LP, parent of Bloomberg News, operates an equities venue called Tradebook and is a provider of market data and analytics.

In Hunsader's view, the computerized firms that benefit from the fragmentation by profiting off fleeting price discrepancies between markets are not being policed enough.

The results, according to Hunsader, included higher data-processing fees and unexplained lurches in the prices of individual stocks that cause investors anxiety. There is also the potential for more outright disasters, he said, like the May 2010 "flash crash" when the Dow Jones Industrial Average extended a drop to almost 1,000 points within minutes.

'Truthers'

Nanex regularly misunderstands what it sees in market data and is fueling misconceptions that damage investor confidence, according to Manoj Narang, founder and chief executive officer of HFT firm Tradeworx Inc. in Red Bank, New Jersey. He compared Nanex to the "truthers" who doubt the official explanation of the Sept. 11 terrorist attacks.

There are usually benign explanations for what look to Nanex like attempts to manipulate prices through what it calls "quote stuffing," he said. For example, he said, bursts of quotes could be trading algorithms reacting when the difference between the best bid to buy and the best offer to sell grows to more than a penny. The programs automatically cancel the orders after exchanges modify them to avoid markets where bids equal offers, according to Narang, resulting in "inadvertent repetitive behavior" by algorithms.

"The conclusions that they form generally have a paranoid or conspiracist sort of bent to them," said Narang. "Stirring the pot like that and dabbling in all of these conspiracy theories, and having those things get a seriou! s airing,! undermines investor confidence. And for no real reason."

Simplifying a market that is spread across so many trading venues is easier said than done, said Larry Tabb, chief executive officer of market-research firm Tabb Group LLC.

'Too Complex'

"The markets are certainly too complex," Tabb said in an e-mail. "The problem is how do you simplify it? Are there too many exchanges? Too many dark pools? Too many algorithms? To simplify the structure the SEC needs to make some very unpopular decisions that go against 15 years of market structure history, which actually benefits many investors. They are in a difficult spot."

The Nanex founder said one place for the SEC to start is to use its new Market Information Data Analytics System, known as Midas and built by Tradeworx, to explore what he considers one of the top issues with modern markets. Direct data streams from the exchanges, which HFT firms such as Virtu receive, are delivering more timely information than the consolidated feeds that are sent to the rest of the market and were meant to level the playing field, Hunsader said. Hunsader's firm uses the consolidated feeds.

Boutiques, Nanex

SEC spokesman John Nester declined to comment on Nanex's assertions. Also declining to comment were Eric Ryan, a New York Stock Exchange spokesman; Rob Madden of Nasdaq OMX Group Inc.; and Randy Williams of Bats Global Markets Inc., which is combining with Direct Edge Holdings LLC.

Nanex's office in a village of upscale cafes and boutiques consists of a room dominated by Hunsader's wall of monitors, another filled with stacks of servers, a common area with a mini-fridge stocked with soda -- and not much else.

Answering the front door is Nate Rock, a 34-year-old software engineer with a bushy beard and a penchant for dropping references to Dungeons and Dragons into conversation. He became interested in Hunsader's work after trying to invest some spare money made at a previous job at Infinite Campus! Inc., wh! ich makes software for educators and students.

Barefoot 'Dogbert'

Barefoot, wearing camouflage shorts and a black T-shirt that says "meh," Rock uses the professional title "Dogbert" in reference to the canine sidekick in the "Dilbert" comic strip. He read about Hunsader's work on the blog Zero Hedge and got a job after exchanging e-mails with Nanex programmer Jeff Donovan during a vacation day spent drinking with a buddy and watching Facebook Inc.'s initial public offering in May 2012.

"My original schooling was in sciences and I saw the work that Eric was doing and I was like, he's a scientist," Rock said. "It's very detailed down to the millisecond. And I hadn't seen that anywhere."

Among those who have come here to pick Hunsader's brain is Jim Angel, a finance professor at Georgetown University who studies market-structure issues. He said Hunsader's research is a valuable service even if he doesn't always agree with the conclusions, since there's not enough information available to prove what is happening in the charts.

'Some Blemishes'

"I don't think his analysis is always correct," Angel said. "He doesn't know who's trading, who's putting in the various quotes. But there are imperfections in our market operations. And even though on average our markets are a whole lot better than they were 10 or 20 years ago, the reality is, hey, there's still some blemishes around the edges that can and should be addressed. And he draws attention to them."

Hunsader has delivered his critique of the markets to everyone from officials at the Federal Reserve Bank of Chicago to members of Britain's government at 10 Downing Street in London.

"He's kind of the mosquito in the room that people pay attention to," said Van Hutcherson, trader at JonesTrading Institutional Services LLC in Oak Brook, Illinois. "He shines a light on some pretty important situations that I think go unnoticed because the ma! jority of! folks, unless you're super sophisticated, don't have the technology."

YouTube

To illustrate computerized trading to the general public, Nanex has turned trading data into animated videos, with triangles and dots representing tens of thousands of orders dashing between exchanges. One video he posted on YouTube showed a 50-millisecond period in which quotes for Nokia Oyj dashed around the market at a rate of 22,000 per second. The video, published on Oct. 9, has been viewed more than 6,400 times.

He programmed a computer to play piano notes corresponding to different bids and offers for a popular exchange-traded fund, resulting in a manic staccato composition even when slowed down. It was meant to highlight what Hunsader says is the absurdity of modern computerized trading.

"Everybody who's gone this route has had to be a little bit theatrical and Wall Street doesn't like it," said Haim Bodek, founder of Decimus Capital Markets LLC, which develops computer programs to help institutions better trade with HFT firms and avoid "predatory" behavior.

'Deep Flaws'

"The irony here is that he really is addressing these deep flaws," said Bodek, who previously founded Trading Machines LLC, a high-frequency options firm, and headed electronic volatility trading at UBS AG.

One of Nanex's charts was featured in artist Trevor Paglen's book "The Last Pictures," an archival disc of which was launched into space aboard a satellite a year ago as part of a project to leave "artifacts of human civilization" that will continue to orbit Earth long after humans are gone, according to the project's website.

Hunsader started in the era of floppy disks, spending "my total life savings," he said, to buy a personal computer in 1984, a machine he still keeps under his desk. He stored each day's trading data from the Chicago Mercantile Exchange and sold the information on a computer bulletin board, the precursor of the Internet.

Cadill! ac, Compa! q

In 1987 he got a job offer from Tom Joseph, founder of Trading Techniques Inc., who developed technical-analysis charts to study movements of asset prices. While most traders were still shouting or making hand signals on exchange floors or hunched over early desktop PCs, Hunsader and Joseph were able to check stock charts as they rode around in Joseph's Cadillac with a Compaq computer hooked up to a car phone.

Trading Techniques was bought by CQG, a trading software maker, and Hunsader went to work for that firm. He read a book on Java code, then wrote an application that allowed users to get streaming intraday stock charts on the newly developing Internet. The founder of the website Quote.com was interested in the application and hired Hunsader.

"We put it up on their site and we went from zero to 10,000 paying subscribers in about 18 months," he recalls. "About $100 a month these guys are paying for this little thing on the net. They had to hire temps in on the weekends to freaking process all the credit cards."

Number Five

The Internet portal Lycos Inc. bought Quote.com in 1999 and Hunsader left. The next year he focused on writing the software for his own venture, into which he poured thousands of hours of development time.

The result was the ticker plant Nanex, which receives quotes from consolidated market feeds and distributes the data to users through software that allows them to analyze, chart it and write their own trading programs to complement its software.

The flash crash inspired Hunsader to look more closely at the data he was distributing. He set out to figure out what was going on with Donovan, a southern California surfer and ticker-plant programmer who also develops three-dimensional graphics software.

"We saw the SEC was kind of dragging," Hunsader recalls, "I said to him, 'you know what, we've got the data. We could do this. Let's see what we could do, let's just have fun.'"

As the pair drille! d through! the quotes, unexpected patterns emerged in charts for stock orders. They called them crop circles, a reference to the mysterious patterns sometimes reported in grain fields, and published them as research on the firm's website.

"That was a blessing and a curse," Hunsader said. "It was a blessing because it caught the eye of Main Street, and it got us into the Atlantic which got us into the New York Times. But the curse was that the Wall Street glitterati, or elites, used that to paint these as conspiracy."

Rails to Jeans: Screening Splits

Each month we add one stock to our model portfolio, chosen from those that have announced stock splits; there were two splits announced last month, and both scored quite favorably in our rankings, says Neil Macneale, editor of 2-for-1 Stock Split Newsletter.

Both Canadian National Railway (CNI) and VF Corporation (VFC) show very similar numbers in many of the critical categories in our screening process.

For our portfolio, I'm going with Canadian National Railway for two reasons. It is the more profitable of the two, and it is a business I understand. I'm not comfortable when it comes to fashion or fad businesses.

Canadian National Railway was privatized in 1995 and began trading on the NYSE in 1996. The company has thrived, growing both in Canada and the US, mostly through acquisitions of smaller lines. CNI serves all the major commodity industries including coal, oil, lumber grain, and chemicals.

Connecting the Atlantic, Pacific, and Gulf of Mexico, it is truly a North American railroad. CNI is a big, stable, profitable business, and the numbers reflect this.

A long-term 8% growth in earnings, a 1.5% dividend yield growing at 12% per year, and a strong balance sheet are all metrics to my liking.

The stock's volatility is about equal to that of the market. The best numbers are the five-year average 25% net profit margin and 20% return on equity. This is a great business!

Meanwhile, the other stock split announcement from October was VF Corporation, an apparel company based in North Carolina.

The company was founded in 1899 and went public in 1959. It has grown internally and through acquisitions, and now owns numerous brands such as Lee, Rustler, Majestic, Nautica, JanSport, Wrangler, Eagle Creek, Timberland, Vans, North Face, and many more.

Such wide diversification mitigates some of my anxiety regarding the fashion business, and most of its numbers are very similar and just as good as those of CNI. It's even a little less volatile and it pays a bigger dividend, but VFC is not quite as profitable.

This is a 4-to-1 split. Its Board of Directors must be very confident and I could hardly argue if you decided to buy it.

Subscribe to 2-for-1 Stock Split Newsletter here…

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BALTIMORE (Stockpickr) -- "The future is uncertain; it is always a difficult time to invest." It feels like Blue Ridge Capital founder John Griffin was channeling this exact month when he made that comment.

>>5 Rocket Stocks Ready for Blastoff

Between the announcement of Janet Yellen as the new Fed Chairman nominee, the ongoing debt crisis debate, the start of earnings season, and new highs in volatility for 2013, traders are scrambling to try to make sense of the markets this month. And despite the fact that stocks are certainly still in correction mode right now, October hasn't exactly been a bloodbath for stock investors: the S&P 500 is only down around 2% since the start of the month.

So while there's no question that we're in another difficult time to invest, it's not quite as one-directional right now as many folks feel it is. That's creating some attractive trading opportunities in the biggest names on Wall Street right now. We're taking a closer technical look at five of them today. If you're new to technical analysis, here's the executive summary. >>5 Stocks Hedge Funds Love This Fall Technicals are a study of the market itself. Since the market is ultimately the only mechanism that determines a stock's price, technical analysis is a valuable tool even in the roughest of trading conditions. Technical charts are used every day by proprietary trading floors, Wall Street's biggest financial firms, and individual investors to get an edge on the market. And research shows that skilled technical traders can bank gains as much as 90% of the time. Every week, I take an in-depth look at big names that are telling important technical stories. Here's this week's look at five high-volume stocks to trade this week.

Xerox

Document solutions firm Xerox (XRX) has been quietly working its way higher since the start of 2013; year-to-date, the stock is up 50%. But the trend is far from over. Here's how to trade new highs in Xerox.

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Right now, Xerox is forming an ascending triangle pattern, a bullish price setup that's formed by horizontal resistance to the upside at $10.50 and uptrending support below shares. Basically, as XRX bonces in between those two technical levels, it's getting squeezed closer and closer to a breakout through that $10.50 level. When it happens, traders have a buy signal in shares. Momentum, measured by 14-day RSI, adds some extra confidence to more upside in Xerox. The momentum gauge has been in an uptrend itself since the pattern started forming. If you decide to be a buyer on the breakout above $10.50, I'd recommend keeping a protective stop underneath the 50-day moving average. It's been a great proxy for support all the way up.

Wal-Mart

The outlook is a little less glowing over at retail giant Wal-Mart (WMT). That's because this $237 billion name is currently showing traders a descending triangle, the bearish opposite of the pattern in Xerox. Support for Wal-Mart currently comes into play at $72.50; if shares can't catch a bid above that price, then it's time to sell (or short) this big stock.

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That doesn't mean a breakdown is a 100% foregone conclusion just yet. Shares slipped through $72.50 earlier this week, only to pop back into the pattern (the "bear trap" on the chart above). But a confirmed breakdown is certainly a sell signal. Whenever you're looking at any technical price pattern, it's critical to think in terms of those buyers and sellers. Triangles, and other pattern names are a good quick way to explain what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares. That support level at $72.50 is a price at which there has been an excess of demand of shares; in other words, it's a place where buyers are more eager to step in and buy shares at a lower price than sellers were to sell. That's what makes a breakdown below that price so significant -- the move would indicate that sellers are finally strong enough to absorb all of the excess demand at that price level. Wait for that indication before you sell.

Visa

You don't have to be an expert technical analyst to figure out what's going on in shares of Visa (V) right now. The preeminent payment network is currently bouncing higher in a well-defined uptrend that's propelled shares since the start of 2013. This week, with shares testing that trendline support level for an eighth time, we're coming up on an ideal time to be a buyer.

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But don't buy shares of Visa anticipating a move higher. Instead, wait for the bounce. Buying off a support bounce makes sense for two big reasons: it's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). And by actually waiting for the bounce to happen first, you're ensuring the Visa can actually still catch a bid along that line. Remember, trendlines do eventually fail, and when this one does, you don't want to be holding the bag. We could very well get our bounce today in Visa. If you decide to buy, keep a tight stop in place.

Google

2013 has been a pretty strong year for search giant Google (GOOG). Since the start of January, the firm has seen its shares rally more than 20%. But Google is starting to look "toppy" right now, after forming a bearish pattern since the start of the summer. Here's how to trade it.

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Google is currently forming a head and shoulders top, a bearish pattern that indicates exhaustion among buyers. The setup is formed by two swing highs that top out around the same level (the shoulders), separated by a higher high in between them (the head). The neckline, depicted on the chart above, is the trigger level to watch -- a slip below that neckline means that it's time to sell (or short) this tech giant. The neckline in Google is currently sloping. That means that as time progresses, the trigger price is dropping -- and so is the downside target if this trade does get kicked off. But we're perilously close to a breakdown this week, so I suspect we'll either see GOOG send out a sell signal or start to completely change its trend. Keep a close eye on this one.

PetroChina

Last up is PetroChina (PTR), the oil and gas giant based in the People's Republic. PTR is currently forming the bullish opposite of the setup in Google: an inverse head and shoulders pattern.

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As with Google, the neckline level is sloping in PTR, and shares are extremely close to that breakout level right now. At the moment, the neckline price is right around $114, a level that's getting tested in today's trading session. If PTR can hold a bid above that upper blue line, then it makes sense to jump into shares. If you think that the head and shoulders is too well known to be worth trading, the research suggests otherwise: a recent academic study conducted by the Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits [that] would have been both statistically and economically significant." That's good reason to keep an eye on both of these names in the next few sessions. To see this week's trades in action, check out this week's Must-See Charts portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore. RELATED LINKS: >>4 Stocks Spiking on Big Volume >>5 Hated Earnings Stocks You Should Love >>4 Stocks Under $10 in Breakout Territory Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned. Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation. Follow Jonas on Twitter @JonasElmerraji

Stamp prices to go up 1 cent in January

The cost of stamps will go up by at least one cent in January. Maybe more.

WASHINGTON (CNNMoney) Mailing a letter will cost one cent more, or 47 cents, starting in January, under a proposal approved by the U.S. Postal Service's regulator.

The Postal Regulatory Commission ruled Thursday that the agency can raise the price in keeping with the cost of inflation. Prices could go even higher as the commission is considering a postal service proposal to raise money.

The U.S. Postal Service had asked for a total price hike of another 3 three cents, which would ultimately make first-class mail stamps cost 49 cents.

The price of sending a postcard would remain the same, at 33 cents, although the postal service is seeking to hike rates to 34 cents as part of its broader rate hike request.

The one cent hike will kick in Jan. 26.

If the agency gets the green light for all its rate hikes, it will mean an extra $2 billion for the cash-strapped postal service.

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The agency said last week it lost $5 billion in the latest fiscal year ending Sept. 30, far less than in recent years. In 2012, it reported a $16 billion loss.

Much of its cash problems stem from a congressional mandate to make annual $5 billion payments for future retiree health care benefits.

The requirement has been a major drag on the agency, which has exhausted a $15 billion loan from taxpayers to make up for shortfalls.

Declining mail volume continues to plague the postal agency. Some 2 billion fewer pieces of mail were sent in 2013 compared to 2012, thanks to another drop in first-class mail, the kind most consumers use to pay bills and send letters to Grandma.

This would be the second year in a row when the price of a a first-class mail stamp is going up by by 1 cent in January.

Prefer UnitedHealth, Cigna and Aetna for Healthcare Reform Buffers, Morgan Stanley Says

Managed care companies could have a tough 2014, says Morgan Stanley, as they navigate the reforms hitting healthcare. Its advice: Look for diversification in stocks like Cigna (CI), UnitedHealth (UNH) and Aetna (AET).

Getty Images

That’s diversification of business, however, not stocks. Morgan Stanley’s Andrew Schenker and team write:

We favor MCOs with diversified earnings streams and exposure to segments less levered to reform uncertainties. While most MCOs should ultimately benefit under reform, we expect some to be winners and some to be challenged next year given the opportunities for enrollment growth, the potential for margin compression, and execution missteps due to reform. Our proprietary market/pricing model of the commercial, Medicaid, and Medicare spaces give us confidence that our Overweight rated stocks [Aetna, Cigna, and UnitedHealth] are best positioned to: 1) see EPS growth next year and 2) spread reform-related risks across their broader books.

Diversified plays like Aetna, UnitedHealth and Cigna also have the advantage of being cheaper than “Medicaid pure-plays,” trading at 11.6 times forward earnings, versus 20.9 times. “We expect multiples will converge between Medicaid and diversified stocks as the Medicaid pipeline is realized and long-term growth normalizes,” Schenker says. “Therefore, even with the recent outperformance, we think multiples of diversified companies can expand as investors gain comfort that such companies can navigate the Affordable Care Act (ACA) changes and produce earnings growth.”

Aetna has gained 1.3% to $66.79, UnitedHealth has risen 1.4% to $72.97 and Cigna is little changed.

Five Rules To Improve Your Financial Health

The term "personal finance" refers to how you manage your money and how you plan for your future. All of your financial decisions and activities have an effect on your financial health now and in the future. We are often guided by specific rules of thumb – such as "don't buy a house that costs more than 2.5 years' worth of income" or "you should always save at least 10% of your income towards retirement." While many of these adages are time tested and truly helpful, it's important to consider what we should be doing – in general – to help improve our financial habits and health. Here, we discuss five broad personal finance rules that can help get you on track to achieving specific financial goals.

Do the Math – Net Worth and Personal Budgets

Money comes in, money goes out. For many people, this is about as deep as their understanding gets when it comes to personal finances. Rather than ignoring your finances and leaving them to chance, a bit of number crunching can help you evaluate your current financial health and determine how to reach your short- and long-term financial goals.

As a starting point, it is important to calculate your net worth – the difference between what you own and what you owe. To calculate your net worth, start by making a list of your assets (what you own) and your liabilities (what you owe), and then subtract the liabilities from the assets to arrive at your net worth figure. Your net worth represents where you are financially at that moment, and it is normal for the figure to fluctuate over time. Calculating your net worth one time can be helpful, but the real value comes from making this calculation on a regular basis (at least yearly). Tracking your net worth over time allows you to evaluate your progress, highlight your successes and identify areas requiring improvement.

Equally important is developing a personal budget or spending plan. Created on a monthly or annual basis, a personal budget is an important financial t! ool, because it can help you:

Plan for expenses Reduce or even eliminate expenses Save for future goals Spend wisely Plan for emergencies Prioritize spending and saving There are numerous approaches to creating a personal budget, but all involve making projections for income and expenses. The income and expense categories you include in your budget will depend on your situation and can change over time. Common income categories include:

Alimony Bonuses Child support Disability benefits Interest and dividends Rents and royalties Retirement income Salaries Social security Tips Wages General expense categories include:

Debt payments – car loan, student loan, credit card Education – tuition, daycare, books, supplies Entertainment and recreation – sports, hobbies, movies, DVDs, concerts, Netflix Food – groceries, dining out Giving – birthdays, holidays, charitable contributions Housing – mortgage or rent, maintenance Insurance – health, home/renters, auto, life Medical/Healthcare – doctors, dentist, prescription medications, other known expenses Personal – clothing, hair care, gym, professional dues Savings – retirement, education, emergency fund, specific goals (i.e. vacation) Special occasions – weddings, anniversaries, graduation, bar/bat Mitzvah Transportation – gas, taxis, subway, tolls, parking Utilities – phone, electric, water, gas, cell, cable, Internet Once you've made the appropriate projections, subtract your expenses from your income. If you have money left over, you have a surplus and you can decide how to spend, save or invest the money. If your expenses exceed your income, however, you will have to adjust your budget by increasing your income (adding more hours at work or picking up a second job) or by reducing your expenses.

To really understand where you are financially, and to figure out how to get where you want to be, do the math: calculate both your net worth and a personal budget on a regular basis. This may seem abundantly obvious to some, but people's failure to layout and stick to a detailed budget is the root cause of excessive spending and overwhelming debt.

Recognize and Manage Lifestyle Inflation

Most people will spend more money if they have more money to spend. As people advance in their careers and earn higher salaries, there tends to be a corresponding increase in spending … a phenomenon known as lifestyle inflation. Even though you might be able to pay your bills, lifestyle inflation can be damaging in the long run, because it limits your ability to build wealth: Every extra dollar you spend now means less money later and during retirement.

One of the main reasons people allow lifestyle inflation to sabotage their finances is their desire to keep up with the Joneses. It's not uncommon for people to feel the need to match their friends' and coworkers' spending habits. If your peers drive BMWs, vacation at exclusive resorts and dine at expensive restaurants, you might feel pressured to do the same. What is easy to overlook is that in many cases the Joneses are actually servicing a lot of debt – over a period of decades – to maintain their wealthy appearance. Despite their wealthy "glow" – the boat, the fancy cars, the expensive vacations, the private schools for the kids – the Joneses might be living paycheck to paycheck and not saving a dime for retirement.

As your profe! ssional and personal situation evolves over time, some increases in spending are natural. You might need to upgrade your wardrobe to dress appropriately for a new position, or, with the addition of a baby, you might need a house with one more bedroom. And with more responsibilities at work, you might find that it makes sense to hire someone to mow the lawn or clean the house, freeing up valuable time to spend with family and friends and improving your quality of life.

Recognize Needs Vs. Wants – and Spend Mindfully

Unless you have an unlimited amount of money, it's in your best interest to be mindful of the difference between needs and wants so you can make better spending choices. "Needs" are things you have to have in order to survive: food, shelter, clothing, healthcare and transportation (many people include savings as a need, whether that's a set 10% of their income or whatever they can afford to set aside each month). Conversely, "wants" are things you would like to have, but that you don't need for survival.

It can be challenging to accurately label expenses as either needs or wants, and for many, the line gets blurred between the two. When this happens, it can be easy to rationalize away an unnecessary or extravagant purchase by calling it a need. A car is a good example. You need a car to get to work and take the kids to school. You want the luxury edition SUV that costs twice as much as a more practical car (and costs you more in gas). You could try and call the SUV a "need" because you do, in fact, need a car, but it's still a want. Any difference in price between a more economical car and the luxury SUV is money that you didn't have to spend.

Your needs should get top priority in your personal budget. Only after your needs have been met should you allocate any discretionary income toward wants. And again, if you do have money left over each week or each month after paying for the things you really need, you don't have to spend it all.

Start Saving Early

It's often said that it's never too late to start saving for retirement. That may be true (technically), but the sooner you start, the better off you'll likely be during your retirement years. This is because of the power of compounding – what Albert Einstein called the "eighth wonder of the world."

Compounding involves the reinvestment of earnings, and it is most successful over time: the longer earnings are reinvested, the gre! ater the value of the investment, and the larger the earnings will (hypothetically) be.

To illustrate the importance of starting early, assume you want to save $1,000,000 by the time you turn 60 years old. If you start saving when you are 20 years old, you would have to contribute $655.30 a month – a total of $314,544 over 40 years – to be a millionaire by the time you hit 60. If you waited until you were 40, your monthly contribution would bump up to $2,432.89 – a total of $583,894 over 20 years. Wait until 50 and you'd have to come up with $6,439.88 each month – equal to $772,786 over the 10 years. (These figures are based on an investment rate of 5% and no initial investment. Please keep in mind, they are for illustrative purposes only and do not take into consideration actual returns, taxes or other factors). The sooner you start, the easier it is to reach your long-term financial goals. You will need to save less each month, and contribute less overall, to reach the same goal in the future.

Build and Maintain an Emergency Fund

An emergency fund is just what the name implies: money that has been set aside for emergency purposes. The fund is intended to help you pay for things that wouldn't normally be included in your personal budget: unexpected expenses such as car repairs or an emergency trip to the dentist. It can also help you pay your regular expenses if your income is interrupted; for example, if an illness or injury prevents you from working or if you lose your job.

Although the traditional guideline is to save three to six months' worth of living expenses in an emergency fund, the unfortunate reality is that this amount would fall short of what many people would need to cover a big expense or weather a loss in income. In today's uncertain economic environment, most people should aim for saving at least three to six months' worth of living expenses, and more if possible. Putting this as a regular expense item in your personal budget is the best! way to e! nsure that you are saving for emergencies and not spending that money frivolously. Keep in mind that building an emergency fund is an ongoing mission: Odds are, as soon as it is funded you will need it for something. Instead of being dejected about this, be glad that you were financially prepared, and start the process of building the fund again.

The Bottom Line

Personal finance rules-of-thumb can be excellent tools for achieving financial success. But, It's important to consider the big picture and build habits that help you make better financial choices, leading to better financial health. Without good overall habits, it will be difficult to obey detailed adages like "never withdraw more than 4% a year to make sure your retirement lasts" or "save 20 times your gross income for a comfortable retirement."

Seat belts on commercial buses delayed 45 years

WASHINGTON — After a drunken driver on a California highway slammed into a bus carrying passengers to Las Vegas, killing 19, investigators said a lack of seat belts contributed to the high death toll. But 45 years later, safety advocates are still waiting for the government to act on seat belts and other measures to protect bus passengers.

Over the years, the National Transportation Safety Board has repeated its call for seat belts or some other means to keep passengers in their seats during crashes involving the large buses used for tours, charters and intercity passenger service. About half of all such motorcoach fatalities are the result of rollovers, and about 70% of those killed in rollover accidents were ejected from the bus.

The board has also repeatedly recommended stronger windows that don't pop out from the force of a collision and help keep passengers from being ejected, and roofs that withstand crushing. Those recommendations are nearly as old as the seat belt recommendation. No requirements have been put in place, even though all have long been standard safety features in cars.

Hundreds of motorcoach passengers have died and even more have been injured, many severely, since the board made its initial recommendations. Victims have included college baseball players in Atlanta, Vietnamese churchgoers in Texas, skiers in Utah, gamblers returning to New York's Chinatown, and members of a high school girls' soccer team en route to a playoff match.

"In 1998, my father was launched like a missile (out) a bus window and landed on his head on pavement. He is now permanently brain damaged and cannot even take care of himself," one woman wrote regulators, urging them to act. "This issue has been around for decades and it needs to change, NOW, before more people die or are severely injured like my father."

In 2009, the safety board said government inaction was partly responsible for the severity of injuries in a rollover crash near Mexican Hat, Utah, which killed 9 skiers ! and injured 43. Then-Transportation Secretary Ray LaHood promised the department would act to improve motorcoach safety, including requiring seat belts. Last year, when that still hadn't happened, Congress wrapped bus safety improvements into a larger transportation bill, which was signed into law. Regulations requiring seat belts on new buses were due in September, but are still under review by the White House Office of Management and Budget.

Other regulations on windows and roofs are due by Sept. 30, 2014, but safety advocates said they doubt the government will meet that deadline since it is less than a year away and regulations haven't even been proposed, let alone made final.

A spokeswoman for the National Highway Traffic Safety Administration didn't reply to an Associated Press request for an explanation of the holdup.

"Consumers have come to expect seatbelts in all motor vehicles; the regulator needs to get with the program and establish requirements that are long overdue. This is a simple issue: restraints save lives," NTSB Chairman Deborah Hersman told The Associated Press.

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The delays are "unacceptable," said Sen. Sherrod Brown, D-Ohio, co-author of the bus safety provisions. He noted "safety measures like seatbelts are neither exotic nor complicated, and they are not new."

Motorcoaches typically cost between $350,000 and $500,000, according to the American Bus Association. Seat belts would add about $13,000 to the price of a new bus.

Safety advocates compare the buses to commercial airlines, which have even fewer deaths and injuries but still require passengers to buckle up. The nation's fleet of 29,000 commercial buses transports over 700 million passengers a year, roughly equivalent to the U.S. airline industry.

"These motorcoaches carry over 50 people. This is the over-the-road regional airline for some people," ! said Jack! ie Gillan, president of the Advocates for Highway and Auto Safety.

So far this year, 23 people have been killed and 329 injured in crashes, according to the organization's unofficial tally.

Seat belts have been required on motorcoaches in Europe and Australia since the 1990s.

Commercial bus operators fought seat belts for decades, but opposition began to weaken after a high-profile accident in 2007 in which a bus carrying Ohio's Bluffton University baseball team plummeted off a highway overpass near Atlanta. Five players, the bus driver and his wife were killed. Twenty-eight others were injured, including some students who are still trying to put their lives back together seven years later, said John Betts of Bryan, Ohio, whose son, David, was among those killed.

Bus manufacturers have recently begun including seat belts on most new buses anyway, said Dan Ronan, a spokesman for the American Bus Association.

But buses are typically on the road for about 20 to 25 years. Even if the government were to issue regulations tomorrow, it would likely be years before all have safety enhancements.

The industry opposes requiring that existing buses be retrofitted with seat belts. Seats not designed for them may not be strong enough to withstand the repeated pulling of straps, it says. Retrofitting is also more expensive than adding belts to new buses.

Generations of buses have come and gone without seat belts since the 1968 accident on a Mojave Desert highway near Baker, Calif., that prompted NTSB's first recommendation. In that collision, autopsies later showed most of the passengers survived the crash, but were badly injured and unable to escape the fire. If the bus had seat belts, it is likely that more passengers would have escaped because their injuries would have been less severe and they would have been less disoriented, the safety board said.

"We have worked too hard for too long for such a common-sense thing to be held up by people that don't see it as signif! icant," s! aid Betts, who lobbied to get the legislation passed. "If their son or daughter or wife or husband were killed in a motorcoach accident, perhaps that would get it off their desk."

Post Office Says It Lost $5 Billion in the Last Year

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Andrew Harrer/Bloomberg via Getty Images The U.S. Postal Service says it lost $5 billion over the past 12 months. It's the seventh straight year the agency has reported a net loss. Postal officials say the loss increases the urgency for Congress to let them end Saturday mail delivery and reduce payments for retiree health benefits. The Postal Service has struggled for years with declining mail volume and required payments of $5.6 billion annually in health care costs for future retirees. It has defaulted on three of those payments. Revenue from package delivery continued to grow, rising 8 percent last year. But that's not enough to offset losses in first class mail, which has been the post office's most profitable service.

Gamestop Corp. (GME): Upcoming Console Cycle Bodes Well For Gamestop's Fundamentals

GameStop Corp. (NYSE:GME) is incrementally bullish on the upcoming console cycle compared to their views 3 to 6 months ago. The company is expanding into higher-margin revenue streams apart from recording more favorable revenue mix, and that is helping margins.

GameStop is the world's largest multi-channel video game retailer. GameStop's retail network and family of brands include 6,505 company-operated stores in 15 countries worldwide and online at www.GameStop.com.

The company's network also includes www.Kongregate.com, a leading browser-based game site; Game Informer magazine, the leading multi-platform video game publication; and Spawn Labs, a streaming technology company.

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Previously, management's model assumed the video game industry would shrink 15 percent or so in the next-gen compared to the last cycle.

"With additional information on hardware, software and consumer demand, we think management is beginning to see the potential for industry sales to be at least flat cycle over cycle," Sterne Agee analyst Arvind Bhatia said in a client note.

The company's used business next year could be stronger than most people currently believe. Given the high margins, any upside in this segment could clearly be meaningful to earnings.

Used video game product revenues for the second quarter were down 6.0 percent to $529 million. New software sales were down 9.3 percent to $430 million, compared with a 19.4 percent decrease in the US market as the company continues to gain market share.

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New hardware sales also dropped 19.4 percent to $148 million, reflecting a consumer pull-back for current legacy consoles ahead of the upcoming launches of Sony's PS4 and Microsoft's Xbox One – both of which are expected this November.

Consumers reserve their interactive entertainment software dollars for the new console launches later this year. Sony anno! unced the PlayStation 4 will launch in North America on Nov. 15 and Europe/Latin America on Nov. 29. The timing is in line with Street expectations – arriving in North America two weeks before Black Friday. Sony also indicated pre-orders of the PS4 have surpassed one million units, suggesting that demand for its new console appears strong.

Microsoft's Xbox One is expected to go on sale on Nov.22, and would launch in 13 markets around the world, followed by eight additional countries in 2014. Xbox One has 50 announced titles of which 23 titles are slated to be available at launch.

Meanwhile, GameStop management is bullish on the Simply Mac opportunity and its potential to offset some of the cyclical nature of their core video games business.

"We think there is likely to be one more meaningful long-term opportunity that GME will reveal over time. Also, our sense is management is unlikely stray too far from its core business and core competencies," Bhatia said.

In addition, PowerUp Rewards loyalty program remains a key advantage for the company. The program has reached 25 million members in the US and 31 million members worldwide.

Separately, the upside surprise in GTA V (as reported by Take Two) and the strong launches of Battlefield 4 and Assassin's Creed IV: Black Flag bode well for the company's third quarter and the high anticipation for the launch of next-gen consoles in November bodes well for its fourth quarter.

The company recently sent emails to customers indicating that pre-orders for Xbox One are reopened for a limited time, suggesting GameStop has received an additional allocation for that console.

Model S Owner Speaks Up: My Tesla Saved My Life

Model S fire in Tennessee. Source: Tesla Motors official blog.

After another Model S fire this week -- and three in less than six weeks -- many investors were waiting for Tesla Motors (NASDAQ: TSLA  ) to speak up. This time, however, it wasn't Tesla that spoke up to defend the safety of the company's Model S -- it was the owner of the third Model S that caught fire.

Speaking up
Following the first Model S fire -- which started after the car struck a metal object on the road -- Tesla was quick to respond to the negative headlines. In a company blog post, Elon Musk wrote a personal letter on the safety of the Model S and shared an email from the owner of the burned vehicle in which the owner showed enthusiasm for the Model S -- despite the fire.

Musk had quite a bit to say in his letter. 

Had a conventional gasoline car encountered the same object on the highway, the result could have been far worse. A typical gasoline car only has a thin metal sheet protecting the underbody, leaving it vulnerable to destruction of the fuel supply lines or fuel tank, which causes a pool of gasoline to form and often burn the entire car to the ground.

... the combustion energy of our battery pack is only about 10% of the energy contained in a gasoline tank and is divided into 16 modules with firewalls in between. As a consequence, the effective combustion potential is only about 1% that of the fuel in a comparable gasoline sedan.

For consumers concerned about fire risk, there should be absolutely zero doubt that it is safer to power a car with a battery than a large tank of highly flammable liquid.

Following the second fire, Tesla didn't post a story on the company's blog. It did, however, have a statement prepared for probing publishers. The statement again emphasized that the fire was a result of an accident, and not spontaneous. As cited by Business Insider, it read:

This was a significant accident where the car was traveling at such a high speed that it smashed through a concrete wall and then hit a large tree, yet the driver walked away from the car with no permanent injury. He is appreciative of the safety and performance of the car and has asked if we can expedite delivery of his next Model S.

After a third fire, however, Tesla responded with more than a statement. This time the owner of the third vehicle took it upon himself to passionately defend the Model S on the company's blog.

The story
After Juris Shibayama drove over a "rusty three-pronged trailer hitch that was sticking up with the ball up in the air," going 70 miles per hour, Tesla's Model S began communicating to the driver:

30-45 seconds after the driver felt the "thud" that seemed to lift the car up in the air, the Model S displayed a warning on the dashboard: "Car needs service. Car may not restart." Continuing to drive, and hoping to get home, there was a new message about one minute later: "Please pull over safely. Car is shutting down."

After pulling over, Shibayama said he was able to retrieve all of his belongings from the car and walk about 100 yards away from the vehicle, where he waited about two minutes before he began to see flames coming from the front of the car.

He vigorously defended the car's performance in the situation:

I am thankful to God that I was totally uninjured in any way from this impact. Had I not been in a Tesla, that object could have punched through the floor and caused me serious harm. From the time of impact of the object until the time the car caught fire was about five minutes. During this time, the car warned me that it was damaged and instructed me to pull over. I never felt as though I was in any imminent danger. While driving after I hit the object until I pulled over, the car performed perfectly, and it was a totally controlled situation. There was never a point at which I was anywhere even close to any flames.

The firemen arrived promptly and applied water to the flames. They were about to pry open the doors, so I pressed my key button and the handles presented and everything worked even though the front of the car was on fire. No flames ever reached the cabin, and nothing inside was damaged. I was even able to get my papers and pens out of the glove compartment.

This experience does not in any way make me think that the Tesla Model S is an unsafe car. I would buy another one in a heartbeat.

Shibayama wasn't the only owner to show enthusiasm for the car after the accident -- all three owners did.

Should investors be concerned?
For now, the statistics are still in Tesla's favor. Vehicle fires occur more frequently in traditional vehicles -- 152,000 vehicles fires per year and about 17 per hour. Comparatively, fires in Teslas happen about once in every 50 million miles driven, compared with about one in every 20 million miles driven for conventional gasoline cars.

Model S. Source: Tesla Motors Facebook page.

If these fires were spontaneous or happened in low-impact collisions, there might be reason for alarm. But all three of these were the result of high-speed accidents. Sure, investors should keep an eye on the development. But for now, there's no indication that the safest car ever tested by the National Highway Traffic Safety Administration has any defect.

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10 Best Undervalued Stocks To Invest In 2014

Introduction

In late January 2013, I wrote an article about Surge Energy (ZPTAF.PK), an oil-weighted intermediate producer with operations in Canada and US. It was when the price dropped below $4. Actually, I recommended Surge Energy back then at $3.7, for the reasons mentioned here.

I know that I am the only contributor of SA who writes articles about Surge Energy, but I do not really care. I always enjoy unearthing overlooked and grossly undervalued companies. This is how I discovered C&C Energia (CZE.TO) from the main Toronto board, recommending it at $5.7 in August 2012. My article is here.

C&C Energia was acquired by Pacific Rubiales (PEGFF.PK) for $9.5 (including the shares for Platino Energy), three months later. Nobody else had ever written an online article about C&C Energia.

Same thing happened with Rock Energy (RENFF.PK), when I recommended it at $1 about three months ago. My article is here.

Rock Energy is at $1.3 today, and its annual report confirmed my bullish call. I have been alone in that bullish call once again.

10 Best Undervalued Stocks To Invest In 2014: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:

• [By Dan Moskowitz]

  The shiniest dollar
  Many investors and analysts like to debate which dollar store offers the best investment opportunity. The truth is that Dollar General, Dollar Tree Stores (NASDAQ: DLTR  ) , and Family Dollar Stores (NYSE: FDO  ) are all likely to be quality long-term investments.

• [By Lawrence Meyers]

  The finance sector, as mentioned, can make money in many ways. The second-highest growth sector is expected to be consumer discretionary, with a 6.2% increase. When you look at earnings from luxury brands like Tiffany & Co. (TIF), and that the hotel sector continues to do very well, it suggests that those people who are in good financial shape are spending their money. Meanwhile, dollar players like Dollar Tree (DLTR) continue to perform very well, suggesting that folks with less money are spending it on cheaper items.

• [By Rich Duprey]

  Deep discounter Dollar Tree (NASDAQ: DLTR  ) announced today that its current chief operating officer, Gary Philbin, will now also carry the title of president, a position previously held by company CEO Bob Sasser.

• [By Terri Stridsberg]

  Dollar Tree (DLTR), has had a banner 2013, gaining 45.3% year-to-date, and tagging a new record high of $59.68. Nevertheless, short interest skyrocketed by close to 398% over the most recent reporting period, and now accounts for a healthy 6.7% of the equity's available float.

10 Best Undervalued Stocks To Invest In 2014: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:

• [By Tyler Crowe and Aimee Duffy]

  About 1% of all drilling operations are powered by natural gas. By shifting all drilling operations over to natural gas, the industry could save as much as $1.6 billion a year. The idea has such appeal that both Haliburton (NYSE: HAL  ) and Schlumberger (NYSE: SLB  ) have said that they would be willing to test sites with Apache for free. In this video, Fool.com contributor Tyler Crowe talks about how the industry could convert to natural-gas-powered operations, and highlights companies to look out for that could benefit from this movement.

• [By Isac Simon]

  Is the stock looking cheap?
  To me, Halliburton currently looks cheaper that its bigger cousin Schlumberger (NYSE: SLB  ) . While Halliburton is trading at 21 times its earnings, and Schlumberger's trading at only 18 times earnings, the reason I'm not too interested in the P/E multiple is that Halliburton's bottom line doesn't reveal its actual profits. Since April 2010, the company has been making provisions for its part in the Macondo oil spill disaster. This has distorted Halliburton's actual earnings considerably.

• [By Isac Simon]

  4. Ambitious plans for subsea systems
  Last November, Cameron and Schlumberger (NYSE: SLB  ) floated a joint venture to manufacture and develop products, systems and services for the subsea oil and gas market. While Cameron retains a 60% ownership, Schlumberger will contribute with its flow assurance, power and control systems. Clearly, these companies anticipated a solid growth in subsea systems market that is currently National Oilwell Varco's fiefdom.

• [By Dan Caplinger]

  Another issue that Varco has to face is the specter of increasing competition. Cameron International (NYSE: CAM  ) has arisen as a big player in the drilling and production systems space, with a particular emphasis on subsea applications like blowout preventers. With Cameron sporting a recent partnership with Schlumberger (NYSE: SLB  ) , the combination will have both the expertise and the financial resources to challenge Varco in that niche. More broadly, up-and-coming Forum Energy (NYSE: FET  ) has sought to emulate Varco's broad-based services menu, offering remotely operated vehicles for deepwater inspection and construction as well as pipe and cementing materials and a range of subsea systems and equipment. Forum has posted solid results in its brief history, taking steps to continue its fast growth trajectory.

Hot Oil Stocks To Own For 2014: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:

• [By David Sterman]

  It's mining giant Caterpillar (NYSE: CAT).

  Gates started building a position in Caterpillar before the financial crisis, but he became a very aggressive buyer once the crisis hit and shares had fallen by half. Yet remarkably, Gates has kept on buying, even as shares steadily rebounded to previous peaks.

• [By John Divine]

  But Caterpillar (NYSE: CAT  ) shares ended as the Dow's worst performers, losing 3.3% today. Caterpillar is always deeply affected by shifts in global industrial trends, especially from China. Revenues from outside the U.S. accounted for about 70% of total consolidated sales for the company last year. With quarterly earnings set to come in next Monday, shareholders will be watching closely to see what impact Asia's recent weakness will have on results.�

10 Best Undervalued Stocks To Invest In 2014: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:

• [By Eric Volkman]

  Tupperware Brands (NYSE: TUP  ) is reaching into its corporate bowl for a fresh payout to shareholders. The company has declared a quarterly dividend of $0.62 per share. This will be paid on July 8 to stockholders of record as of June 19. That amount matches the firm's previous distribution, which was paid in early April. Prior to that, Tupperware Brands was rather less generous, handing out $0.36 per share.

European Stocks Drop From Five-Year High as BMW, RSA Fall

European stocks fell from a five-year high as the European Commission cut its growth forecast for the euro area and Bayerische Motoren Werke AG retreated after reporting results.

BMW, the world's largest maker of luxury vehicles, slid the most in two months as profit declined. RSA Insurance Group Plc sank 6.3 percent as the U.K.'s biggest non-life insurer by market value said it will miss its profitability target after last week's storms. Beiersdorf AG rose the most in a year after the maker of Nivea hand cream increased its sales forecast.

The Stoxx Europe 600 Index fell 0.2 percent to 321.89 at the close of trading. The benchmark gauge has still soared 15 percent in 2013 as the Federal Reserve maintained stimulus measures and the European Central Bank cut interest rates to a record low. The ECB will make its next announcement on monetary policy on Nov. 7.

"We have got some blurred economic signals here: not cold, not hot, but lukewarm," Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen, said by phone. "This together with a backdrop of strong performance in equities over the past two weeks and year is not enough to support the liquidity-on rally."

Bank of America Corp., UBS AG and Royal Bank of Scotland Group Plc forecast the ECB will cut its benchmark interest rate this week, according to a Bloomberg survey of 70 economists. The rest predict no change.

European Economy

The executive arm of the European Union trimmed its forecast for euro-area growth next year as the economy struggles to gain momentum with the debt crisis dragging into a fifth year and unemployment at a record. Gross domestic product in the 17-nation currency bloc will rise by 1.1 percent in 2014, less than the 1.2 percent forecast in May.

The commission forecast that France's budget deficit will be 3.7 percent of GDP in 2015, which would mean it misses a deadline to reduce the shortfall to 3 percent by then.

A U.S. government release on Thursday is forecast to show the world's largest economy grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent increase in the previous three months. Economists predict a report the next day will show U.S. payrolls climbed by 120,000 in October, according to a separate survey.

"The U.S. non-farm payrolls at the end of the week will bring economic matters back in focus, following interest-rate decisions from the Bank of England and ECB where no changes are expected," Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail.

Benchmark Indexes

National benchmark indexes fell in 14 of the 18 western European markets. The U.K.'s FTSE 100 (UKX) and Germany's DAX lost 0.3 percent, while France's CAC 40 retreated 0.8 percent.

BMW slid 2.9 percent to 81.20 euros, its biggest drop since Aug. 27. The automaker reported a 3.7 percent decline in third-quarter earnings before interest and taxes as spending on expansion offset stronger demand for the 3-Series sedan.

RSA plunged 6.3 percent to 121 pence, the largest slide in eight months, after saying wind damage in Europe and adverse weather in Canada will push return on equity below 10 percent for the year. That compares with a previous target range in August of 10 percent to 12 percent.

Orange SA (ORA), the phone company formerly known as France Telecom, retreated 3.9 percent to 9.75 euros as Bouygues SA unveiled a new Internet and calls package for 15.99 euros a month. The price is "particularly aggressive," Jacques de Greling, an analyst at Natixis SA, wrote in a report.

Bouygues declined 3 percent to 28.24 euros, the largest retreat in two months. Orange said it has no plans to change its pricing structure.

Beiersdorf Advances

Beiersdorf climbed 5.3 percent to 73.44 euros after saying sales will rise 6 percent to 7 percent this year. The Hamburg-based company had previously forecast revenue would increase 5 percent to 6 percent.

Marks & Spencer Group Plc (MKS), the U.K.'s largest clothing retailer, advanced 4.5 percent to 509 pence after reporting the smallest decline in general-merchandise sales in more than two years. Sales at stores open at least a year fell 1.3 percent in the quarter ended Sept. 28, M&S said. That beat the median estimate of 17 analysts for a 1.5 percent drop.

A gauge of mining companies rose the most among the 19 industry groups in the Stoxx 600. Anglo American Plc, owner of the world's biggest platinum mine, gained 2.8 percent to 1,536 pence and Glencore Xstrata Plc, the world's fourth-largest commodity producer, advanced 1.9 percent to 341.8 pence.

Best Buy and Staples at Historical Low P/S Ratios

The P/S ratio is a valuation tool that helps investors determine how much they are paying per sale the company makes. Companies with lower P/S ratios merit investors' attention as their stock price has not lifted with the amount of revenues they are taking in.

Two major retailers, Staples (SPLS) and Best Buy (BBY), recently they appeared on GuruFocus' historical low P/S ratios screener. Since the start of 2011, both of these retailers have moved up in step with the S&P, which has rallied up 7.4%, but both had fallen considerably over 2011. At the same time, their revenues have increased.

Best Buy (BBY)

Best Buy has the financials of a solid company yet is perceived by many as in decline or about to be in decline. The company has had 15.4% 10-year revenue per share growth, 13.9% 10-year EBITDA per share growth, and 11% 5-year free cash flow per share growth. It also grew revenue each year for the last decade, including through the recession, and reported a record $50 billion in 2011. Because revenues increased while the stock price declined, the company is trading near a historical low P/S ratio of 0.19. It is also at near-historical low P/E of 8.5 and a near-historical low P/S of 1.4.

BBY pe,ps,pb,Revenue Interactive Chart

In the three months ended Nov. 26, 2011, Best Buy's revenue increased 1.7% year over year to $12.1 billion. Domestic comparable store sales increased 0.9%, after declining 5% in the prior-year period. Sales from international comparable stores declined 1.7%, after increasing 2.3% in the prior-year period.

The improvement in domestic stores included the product areas of mobile computing (including tablets), appliances, eReaders, mobile phones and movies, partially offset by declines in imaging and gaming. Online domestic sales increased 20% from the prior year period. The international decline was led by lower sales in small box stores in Europe. Many investors worry about the effect of declining desktop PC sales on Best Buy's business.! Best Buy's "computing and mobile phones" segment, however, was up 8.8% in the quarter, and the entertainment category had the biggest decline, at 9%.

The company's gross margins have been declining, negatively affected by new measures geared toward boosting revenue and market share in-store and online.

Best Buy is also facing direct competition from Walmart (WMT) and online retailers such as Amazon (AMZN). At least one analyst so far has reported that the company gained market share in December, a critical month for retailers.

The CEO of Best Buy, Brian Dunn, in January issued a response to a lengthy Forbes piece detailing the company's problems, in which he explained why he does not believe his company is facing obsolescence: "First, some believe the internet has made physical retailing (i.e., stores) irrelevant. There's no doubt that the internet, and the mobile web in particular, have changed the way people shop, but there is strong evidence that consumers continue to value the experience of shopping in stores. A recent study by the NPD Group, a leading market research company, notes that nearly 80% of consumer electronics revenue still moves through physical stores. Additionally, approximately 40% of customer purchases made through Bestbuy.com are picked up in one of our stores. And the truth is, traffic in our physical stores increased in our third quarter and has been trending positively for most of the year.

Finally, there are those who question the validity of Best Buy's business model. This misguided perspective is especially troubling for me, because it blatantly and recklessly ignores overwhelming evidence to the contrary. Best Buy is a financially strong and profitable company that has generated more than $2.6 billion in cash flows from operating activities in the first three quarters of the fiscal year. We also delivered positive operating income in each of the first three quarters of fiscal 2012. We grew total market share in the third quarter accord! ing to th! e most recent public data available. We have closed down certain operations that were not profitable, which we expect to have a positive impact on our earnings going forward. And we are focusing the company on areas where we see the greatest opportunities for growth and profit: mobile devices and connection plans; enhanced digital and e-commerce strategies; growth in our services business; and expansion of our established business in China."

Nine GuruFocus gurus currently own Best Buy shares, with four adding to their holdings in the third quarter and one so far, John Hussman, adding in the fourth quarter.

Staples (SPLS)

Staples, founded in 1986, is the largest office products company in the world and engages in the office supplies, technology, furniture, copy & print, and cleaning and breakroom categories. It ranks second in the world for eCommerce sales and has stores in 26 countries.

Staples has increased its revenue per share at an annual rate of 10.3% over the last 10 years, its EBITDA by 12.2%, and free cash flow at 12.7%. Revenue has increased each year for the last decade, including through the recession. Last year, however, its stock price declined 33.5%, placing it near a historical low P/S ratio of 0.43. Staples' P/E, P/B and P/S ratios are all actually near historical lows:

SPLS pe,ps,pb Interactive Chart

Staples' North American Delivery sales, which increased 1.8% in the quarter, outpaced its North American Retail sales, which increased 0.5%, while comparable store sales decreased 1%. The comparable stores sales decline was due in large part to weaker sales in desktop computer, software and computer media, and partially offset by positive performance in laptops and tablets. Sales in its international operations decreased 1.9%, including the favorable impact of foreign exchange rates and a 12% decrease in store sales in Europe. The company's European business turned negative in August, coinciding with the intensifying of the eurozone's soverei! gn debt c! risis.

The company's primarily competitors are Office Depot (ODP), United Stationers (USTR) and Office Max (OMX). Staples has the best gross margins of its competitors, at greater than 26%, and the only one to increase its book value per share since 2001.

Staples is using its cash flow to invest in its current businesses and make acquisitions, as well as on dividends and share repurchases. In the fourth quarter of 2011, it planned to open 14 new stores.

See more companies at their historical low P/S ratios here. Since inception, GuruFocus' Low P/S Model Portfolio has gained 30.16, compared to 20.56% for the S&P.