4 Stocks Rising 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.

Huron Consulting Group

Huron Consulting Group (HURN) is a provider of operational and financial consulting services. This stock closed up 2.5% at $60.96 in Monday's trading session.

Monday's Volume: 344,000

Three-Month Average Volume: 120,486

Volume % Change: 148%

From a technical perspective, HURN spiked higher here and tagged a new 52-week high at $61.08 with above-average volume. This stock entered new 52-week high territory after it took out some near-term overhead resistance at $61.01. Market players should now look for a continuation move higher in the short-term if HURN can manage to clear Monday's high of $61.08 with strong volume.

Traders should now look for long-biased trades in HURN as long as it's trending above Monday's low of $59.30 or above more near-term support at $58 and then once it sustains a move or close above its new 52-week high at $61.08 with volume that hits near or above 120,486 shares. If we get that move soon, then HURN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $65 to $68.

TheEnsign Group

TheEnsign Group (ENSG) offers skilled nursing and rehabilitative care services. This stock closed up 2% at $47.76 in Monday's trading session.

Monday's Volume: 141,000

Three-Month Average Volume: 65,086

Volume % Change: 93%

From a technical perspective, ENSG jumped higher here and broke out above some near-term overhead resistance at $45.35 with above-average volume. This move also pushed shares of ENSG into new 52-week-high territory, since the stock closed above $45.35. Market players should now look for a continuation move higher in the short-term if ENSG manages to take out Monday's intraday high of $46.32 with high volume.

Traders should now look for long-biased trades in ENSG as long as it's trending above some near-term support levels at $45 or at $43, and then once it sustains a move or close above its new 52-week high at $46.32 with volume that's near or above 65,086 shares. If we get that move soon, then ENSG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $50 to $55.

SM Energy

SM Energy (SM) is an independent energy company engaged in the acquisition, exploration, development and production of oil, gas and NGLs in onshore North America. This stock closed up 1.1% at $89.12 in Monday's trading session.

Monday's Volume: 1.30 million

Three-Month Average Volume: 878,928

Volume % Change: 85%

From a technical perspective, SM spiked modestly higher here right above its 50-day moving average of $84.98 with above-average volume. This stock has been trending sideways and consolidating for the last month, with shares moving between $83.52 on the downside and $93.70 on the upside. Shares of SM are now starting to push within range of triggering a big breakout trade above the upper-end of its recent range. That trade will hit if SM manages to take out Monday's high of $89.63, and then once it clears more resistance at $92.57 to its 52-week high at $93.70 with high volume.

Traders should now look for long-biased trades in SM as long as it's trending above its 50-day at $84.98 and then once it sustains a move or close above those breakout levels with volume that's near or above 878,928 shares. If that breakout hits soon, then SM will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $100 to $105.

CVR Energy

CVR Energy (CVI) is engaged in petroleum refining and nitrogen fertilizer manufacturing industries through its holdings. This stock closed up 1.3% at $40.03 in Monday's trading session.

Monday's Volume: 1.11 million

Three-Month Average Volume: 553,164

Volume % Change: 125%

From a technical perspective, CVI trended modestly higher here with above-average volume. This move briefly pushed shares of CVI into breakout territory, since the stock flirted with some near-term overhead resistance at $41.19. Shares of CVI closed off its intraday high of $41.29 to $40.03. Market players should now look for a continuation move higher in the short-term if CVI can manage to take out Monday's high of $41.29 with high volume.

Traders should now look for long-biased trades in CVI as long as it's trending above Monday's low of $39.45 or above $38, and then once it sustains a move or close above $41.29 with volume that's near or above 553,164 shares. If we get that move soon, then CVI will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $44.44 to $45. Any high-volume move above those levels will then give CVI a chance to tag $47 to $48.

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.

RELATED LINKS:

>>5 Short-Squeeze Stocks Ready to Pop

>>Timing the Fed's Taper

>>5 Stocks With Big Insider Buying

Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

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

On the Job: Just say ‘No,’ tactfully, to avoid …

The holidays are right around and the corner, year-end reports are due, co-workers are asking you to cover for them on vacation and the boss wants everything done yesterday.

It's no wonder you may be feeling a bit stressed.

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But could the stress be generated not from outside forces but your own actions?

At a recent Families and Work Institute conference, President Ellen Galinsky says that many employers are noticing a growing problem of employees being always "on." They answer e-mails at night and on weekends and work outside of regular hours when they're supposed to be off.

Employers are worried about worker burnout, she says.

One of the biggest problems for many workers today is that they can't say "no," says says Preston Ni, a professor of communications studies at Foothill College in Los Altos Hills, Calif.; a career coach; and trainer.

"There's always the concern in the workplace of social rejection or career consequences for saying no," Ni says. "Maybe you don't want to hurt someone's feelings by saying no, or doing so makes you feel guilty."

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“There's always the concern in the workplace of social rejection or career consequences for saying no.”

— Preston Ni, Foothill College

The problem is that by not learning to say "no," you then become a victim and risk burnout, he says.

The most successful people learn how to manage their own time effectively and aren't buffeted with demands from various sources, Ni says. They are still busy, just not overwhelmed.

With all the year-end activities and deadlines many of us are facing, Ni has advice to let you say "no," take control of your life, and be happier and more successful:

• Set boundaries. If a colleague approaches you about covering for her while she's taki! ng some time off, you can say "no" diplomatically by saying something like, "Unfortunately, I have a lot on my plate as well."

Or "it is important to me that I finish this project, so I need to focus on these tasks." Another option: Say you're "uncomfortable" taking on the other tasks at this time.

• Learn to engage and disengage. Instead of turning down a colleague's request for help, you can offer to take a specific piece of the task, and then request someone else take the rest.

Or negotiate a trade-off by saying, "I would be willing to this for you if you can do this task for me before you leave."

Press that "no" button and don't feel guilty.(Photo: Getty Images)

• Lead the boss. Every boss has her own goals, and any of your needs must be aligned with those.

Once you understand what is most important to the boss, then you can approach her and say, "I know getting this project done and implementing the new software are your priorities, so which of these two tasks do you want me to tackle to help you the most?" Ni says the key is to always offer solutions to the boss and offer no more than three.

"They should be solutions that work for you," he says. "Never go to the boss with a problem, or she may find solutions you don't like or make the situation worse for you."

• Use the 80/20 rule. This is based on the Pareto Principle that 20% of your activities will account for 80% of your results.

For example, if you have a to-do list with 10 items, two of the items on the list will turn out to be worth as much or more than all the other eight items combined.

A thorough review of your activities may reveal that you're not focused on the 20%, which will lead to better time man! agement, ! Ni says.

• Keep a schedule. Holiday time often adds an extra load of stress to your life, but you can manage it better if you decide ahead of time what is important to you and schedule time accordingly.

Prioritize your activities as a) have to do; b) should do, but not now; and c) put away until after the holidays.

"Think about what is most important to you and then prioritize your activities so that you feel you're doing the things that really matter in your life," he says.

Anita Bruzzese is author of 45 Things You Do That Drive Your Boss Crazy ... and How to Avoid Them, www.45things.com. Twitter: @AnitaBruzzese.

Ten Serious Reasons Apple Stock Is Being Sold Rather Than Rallying

Apple Inc. (NASDAQ: AAPL) has not gotten the warm reception from Wall Street and investors that the fan boys may have hoped for after its quarterly earnings report. The long and short of the matter is that Apple’s maturity has crept up on it, and the days of Apple shares rising indefinitely are looking more and more like the are in the past.

24/7 Wall St. has compiled a list of reasons that the stock is not rallying after earnings. We would caution investors that the drop was only 0.7% in the late morning trading on Tuesday (see updated closing price below). This “negative reaction” is one more of caution rather than a call that things are about to go from less-good to atrocious.

Some issues are hurting Apple, others are merely perception. We would even argue that perhaps some issues may be overblown when you consider that Apple became the greatest growth story of this generation. Apple’s past decade may be the greatest growth story ever.

Some issues are earnings, cash use, margins, market share, industry trends and the like. These are the details of 10 serious overhanging issues that are hurting Apple’s post-earnings stock reaction. Outside of the earnings per share (EPS) issue, they are not ranked in any specific order.

1. Declining Earnings. We may not have an order on the rest of things, but a decline in earnings has to stand out as serious trouble. Sales are barely growing, yet Apple’s EPS was reported as $8.26, versus $8.67 a year ago. Even if the number was ahead of the $7.93 consensus EPS estimate, it is a disappointing trend when you consider that Apple is buying back stock as well.

2. A Cash Bubble Peak. Apple’s cash balance added up to $147 billion at the end of the quarter, but this was barely higher than last quarter because of buybacks and dividend payments. Investors will worry that the “peak cash” has been seen. Even with $9.9 billion in cash flow from operations, the cash balance hardly grew.

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3. Gross Margin. Apple’s gross margin remains under pressure. This was shown to be 37% in the most recent quarter, versus 36.9% in the prior quarter, which was at the high end of the prior guidance. As Apple keeps shifting to overseas and lower-priced products, it keeps having to sacrifice on margin. Gross margin a year ago was almost 43%.

4. International Pain vs. Gain. Apple is becoming more international each and every quarter. You could almost argue that the company has a drug company aspect, because higher product prices in the United States just are not as common overseas. As mentioned above, this helps to drive down margins. This past quarter appears to be a high, with 60% of revenue being from international sales.

5. The Buyback Dud. Apple may have spent $7.8 billion buying back stock in the past quarter, but activist Carl Icahn is calling for more. Icahn wants a $150 billion accelerated share buyback, but Tim Cook pushed out a decision on a buyback increase (capital allocation plan) until the first quarter of 2014.

6. A Tim Cook Discount. This is going to sound unfair, and we admit that it is, but the reality is that Cook is just not anywhere close to Steve Jobs when it comes to a CEO premium. He does not bring the same excitement, does not convey the same confidence, and seems to have less urgency than Jobs. Before you knock Cook down too much, consider this: no one else is Steve Jobs either. Cook is probably a stellar CEO by another measurement than comparing him to Jobs.

7. Share Price Alone. Apple shares are basically flat on the year’s stock performance, despite a gain of well over 20% for the S&P 500 Index. The stock is down from the 2012 peak of $705, but it has recovered handily since the 2013 lows. April 17, 2013, was the first day of the sub-$400 stock price, and the stock rose 32% from that point going into earnings, and they were up almost 37% from the 52-week low. Some investors simply are locking in great profits, which means selling pressure.

8. Analyst Lethargy. R.W. Baird was the sole analyst upgrade we have seen, to Outperform from Neutral. The rest of the analyst calls felt merely like a slow telegraph of a slightly more positive bias. Some price target hikes might even be considered a huge disappointment to the true Apple fan boys. Were there some yawns in there from those Wall Street analysts?

9. Declining iPhone Market Share. Apple just recently was shown by Strategy Analytics to have a declining market share in its iPhones. This market share was down to 13.4% from 15.6% a year ago as newer and cheaper competing phones grab interest globally. With the new iPhones, this has to be an ongoing concern.

10. Macs Are Now Just PCs. Apple may have done something to itself that is sad to see. By creating the explosive iPad and tablet market, Apple may have turned the Mac merely into a PC as well. These are high-margin unit sales, but the most recent quarter’s Mac sales were 4.6 million, versus 4.9 million in the year-ago quarter. This is called cannibalization, something we worried about from the start of this effort. Great iPads can be bought for $600 (or less) while great Macs will sell for multiples of that.

The reality is that you can go on and on about how and why Apple shares are selling off. Apple is a maturing story, even if it will continue to launch great new products ahead. You can argue either way that shares will rise or that shares will fall in the weeks and months ahead. That is what makes a ball game.

UPDATE FOR CLOSE: Apple shares closed down 2.5% for a loss of $13.20 to close at $516.88 on Tuesday.

Microsoft Corporation (MSFT) Dividend Stock Analysis

Linked here is a detailed quantitative analysis of Microsoft Corporation (MSFT). Below are some highlights from the above linked analysis:

Company Description: Microsoft, the world's largest software company, develops PC software, including the Windows operating system and the Office application suite.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value (see page 2 of the linked PDF for a detailed description):

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

MSFT is trading at a discount to 1.) and 2.) above. The stock is trading at a 24.0% discount to its calculated fair value of $44.92. MSFT earned a Star in this section since it is trading at a fair value.

Dividend Analytical Data: In this section there are three possible Stars and three key metrics (see page 2 of the linked PDF for a detailed description):

1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%

MSFT earned three Stars in this section for 1.), 2.) and 3.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. MSFT earned a Star for having an acceptable score in at least two of the four Key Metrics measured. The company has paid a cash dividend to shareholders every year since 2003 and has increased its dividend payments for 12 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the link! ed PDF for a detailed description:

1. NPV MMA Diff.
2. Years to > MMA

MSFT earned a Star in this section for its NPV MMA Diff. of the $23,985. This amount is in excess of the $2,300 target I look for in a stock that has increased dividends as long as MSFT has. If MSFT grows its dividend at 17.5% per year, it will take ine year to equal an MMA yielding an estimated 20-year average rate of 3.41%. MSFT earned a check for the Key Metric 'Years to >MMA' since its one year is less than the five-year target.

Memberships and Peers: MSFT is a member of the S&P 500. The company's peer group includes: Apple Inc. (AAPL) with a 2.5% yield, Oracle Corp. (ORCL) with a 1.5% yield and Google Inc. (GOOG) with a 0.0% yield.

Conclusion: MSFT earned one Star in the Fair Value section, earned three Stars in the Dividend Analytical Data section and earned one Star in the Dividend Income vs. MMA section for a total of five Stars. This quantitatively ranks MSFT as a 5-Star Very Strong stock.

Using my D4L-PreScreen.xls model, I determined the share price would need to increase to $78.12 before MSFT's NPV MMA Differential decreased to the $2,300 minimum that I look for in a stock with 12 years of consecutive dividend increases. At that price the stock would yield 1.4%.

Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the target $2,300 NPV MMA Differential, the calculated rate is 10.1%. This dividend growth rate is lower than the 17.5% used in this analysis, thus providing a margin of safety. MSFT has a risk rating of 2.00 which classifies it as a Low risk stock.

PC sales have been under pressure for a number of quarters. In addition, MSFT faces a slow recovery in enterprise IT spending. The pending purchase of Nokia's hand set business and the recently announced restructuring, with a new focus on devices and services, should help the company focus and better compete in a challenging marketplace. The company's shift to a mobile strategy ! and their! persistence should eventually lead to long-term success.

With strong free cash flow and very low debt, MSFT in an enviably financial position. Not to be overlooked, the company ended fiscal 2012 with 9 times its dividend in cash and short-term investments sitting on its balance sheet. With its most recent dividend increase, MSFT is a buy below its calculated fair value price of $44.92. I will continue to add to my position in the stock as market conditions and my allocation allows.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I was long in MSFT (3.3% of my Dividend Growth Portfolio). See a list of all my dividend growth holdings here.

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Investing Lessons - Petroplus Holdings (PPHN.SW)

To become a better investor, one has to keep learning from the ideas that went wrong. Sometimes, an investor may put off his better judgement and invest in a stock for some quick bucks because he "knows" the way the stock price behaves. He might think that the company is not going bankrupt and will recover from the slump that the general market is in. I will describe one such company which has made me grapple with myself quite a bit. I am happy to report that even though some serious profits could have been made by investing in this particular stock for the short term, I did not invest in it because of some reservations I had about the business and its liquidity. Last December, I even removed this company from my watch list because I would look at the price and think, "Oh! If only I had bought some at $6 I would have doubled my money in a month!"

If my memory serves me right, I first saw Petroplus Holding (yahoo quote PPHN.SW) in February 2010, when it had dropped from CHF23 in Jan 2010 to CHF16 in Feb 2010. A 30% drop and in comparison, the Swiss Leader Index had only dropped 7%. I did a quick check of the company, what it does and how its balance sheet looks.

The Company

Petroplus Holding is Europe's largest independent oil refiner by capacity. It has refineries in UK, Belgium, France, Germany and Switzerland, with sales of nearly $21 billion. In 2006, it had made earnings of $9.71 per share and traded in the CHF 67-80 range. The operating profit in 2010 was $155.4 million. The key numbers from the annual report are given below.

If you look at the numbers, it does not seem like Petroplus will go bankrupt. The current ratio is above 1, and the debt-to-equity ratio is less than 1 and is improving. Furthermore, at CHF24 a share it was greater than $2 billion company and hence a safer bet than small caps. With its improving EPS it seemed like the company is turning around a corner and could be a very good turnaround play. The refining margins were better and the oil d! emand was recovering.

[ Enlarge Image ]

Let us quickly run through the investment thesis here.

Financial risk

The company's debt and the maturity profile is not out of order either. As you see, until 2013 the company does not need to make major payments to its creditors and hence is quite safe till then.

[ Enlarge Image ][ Enlarge Image ]

Insider Holdings

The chairman of the board, Thomas D. O'Malley, owns 3.97% of the shares outstanding as of 2010.

Management Compensation

This is a group of 14 people and they were compensated $18.6 million in the fiscal year 2010. The management was not treating the company like their wallets.

My decision

I decided not to invest in the company. There were three reasons for this. One, I did not understand the refining business. I mean, I know what the business is but I don't have a good idea about how the margins work. I tried to educate myself but it seemed like a bad business with very low gross margins. Two, I did not like the business. There was no defensible moat. No one cares where the oil comes from, the cheaper the better. Three, the total equity was $2 billion and the total liability was $4.7 billion. I had randomly decided that I would not invest in a stock with total liability/equity was greater than 2, however attractive it may look (I have broken this rule a few times in "expert" recommendations and it has turned out well so far).

Let's look at the sh! are price! graph during February-April 2010.

[ Enlarge Image ]

And in April I thought that I missed a good opportunity to capitalize on the "value" of this investment. In any case, then came the sovereign debt crisis in Greece and then the Macondo Well oil leak. Down the market went and Petroplus with it. I was again considering pulling the trigger.

[ Enlarge Image ]

At around CHF10 I was asking myself if the stock had gone too far down and at some point the risk of balance sheet will be worth taking from a pure value point of view. I mean, how low can it go ? The price/sales ratio at this point was 0.07 which means that even with a paper thing 0.7% net margin the company will have a P/E of 10! In February 2011 the company quickly doubled from a low of CHF9. And then it went down slowly as the 2010 results were also a loss, but better then the results of 2009.

The company improved the balance sheet (not by much, as you can see from the details in the key figures). And then came the debt ceiling debate with the usual Greek problems and at CHF4.12, I fought with the idea that I should buy some. This decision was also due to the fact that in October 2011 several of the insider buy transactions were reported. You can see in the table below that the insiders bought almost CHF700,000 worth of shares at an average price of more than CHF5.5. This was a good buy signal that the insiders thought that the company had gone too far down and was quite cheap.

[ Enla! rge Image! ]

Date	Price/Share (CHF)	Shares	Amount
08.08.2011	6.38	12,574	80,222
08.08.2011	5.97	15,000	89,550
10.08.2011	5.994	5,000	29,972
18.08.2011	5.8	66,000	383,103
22.08.2011	5.4	10,000	54,000
22.08.2011	5.7	20,000	114,500

At this point though, I had several less risky investment options because the market was down and several good quality companies were trading at discount. In particular, I bought Swiss Re (up 25%), Zurich Financials (up 25%), Transocean (up 8%) and ABB (up 10%). Also, at this point I had decided not to buy bad companies (bad businesses I mean) and so I stayed away from Petroplus and even removed it from my watch list. This was the end of my actively following the company.

I have a RSS feed for BBC business news and I saw the article on Jan. 24, 2012' about Petroplus' insolvency filing. And I was happy that I stayed away from this company. The stock at the moment trades at CHF0.4 and had traded as low as CHF0.18.

Head and Shoulder Patterns Near Breakout Levels

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The Head and Shoulders pattern (H&S) is a classic topping pattern, where the stock makes two successive new highs, but then fails to make a new high on the third attempt. This often indicates that the stock is headed for a decline, but only if the pattern actually "breaks." These four stocks are near H&S breaking points, which is the entry for the trade. Since the H&S is a topping pattern these are all potential short trades, but with major indexes at all times highs, including the SPDRs S&P 500 (ARCA:SPY), taking on short positions does warrant some caution.

PulteGroup (NYSE:PHM) broke below its H&S pattern on July 25 when the stock gapped lower. A price objective is obtained by taking the height of the pattern and subtracting it from it from the breakout price. With the breakout occurring very near $18, and a pattern height of $6 (rounded down), the price target for the decline is $12. I'd place a stop loss near $20.75, which is just above the latter high of the right shoulder. An alternative entry is to wait and see if the price rallies to test the breakout point near $18, and then enter a short in that vicinity. This option provide a better risk/reward, but if the stock doesn't test the breakout point then the trade is missed.

Autodesk (Nasdaq:ADSK) actually broke out of its H&S pattern back in May, but the rally in July has brought the price back back above the breakout. This "second chance" trade is fairly common with H&S patterns, and one benefit is that the risk is slightly less because the price is above the breakout point (and original entry price). Before entering short though I'd like to see the stock drop below minor support at $35.95. If that occurs the price target is $31. There are multiple stop levels I believe are good choices, although $38.50 is the one I prefer.



Taiwan Semiconductor (NYSE:TSM) is in a similar to position to Autodesk, in that it broke out earlier, but has rallied back to near the breakout point. If the price drops back below $16.68 I like the short trade, with a target of $13.50. Placing a stop at $19 is ideal, but just above $18.30 is likely also fine as it is just above a gap which occurred during the right shoulder.



Martin Marietta Material (NYSE:MLM) broke below the H&S breakout point on July 30, and closed nearly right on it after a wide-ranging sell-off day. Before taking a short position I think the prudent choice is to wait for the price to drop below the July 30 low at $95.64; this will provide some confirm that there is still selling pressure. The orginal breakout/entry price is just below $98, and is still valid. though. The target for the downside move is $79 with a stop-loss just above $107.



The Bottom Line
The head and shoulders pattern is a classic topping pattern, often indicating that the price will continue to slide once the pattern completes. Of course that doesn't mean the stock will always drop. That's why a stop loss order is used to control risk. The profit target is an estimate of where momentum could take the price, it is not meant to pinpoint an exact low or reversal point. Also, since H&S patterns can take months to form, reaching the profit target may also take as long.

At the time of writing, Cory Mitchell did not own shares in any of the funds mentioned in this article.

Charts courtesy of StockCharts.com.

Starbucks Expands Into French Luxury Department Stores

Who knew? The French like Starbucks (NASDAQ: SBUX  ) .

On Monday, Starbucks and French luxury department-store company Galeries Lafayette struck a partnership to open two stores by the end of the summer in Paris. Both stores will be located in Paris' 9th District, with the first one to open at Galeries' flagship Haussmann department store. In designing the stores, Starbucks says it will work to meet Galeries Lafayette's high-end atmosphere and architecture.

The Galeries Lafayette partnership reflects Starbucks' strategy for Europe. In the company's press release, Starbucks EMEA Senior Vice President Doug Satzman said, "We are developing partnerships with leading retailers across Europe, of which Galeries Lafayette is a prime example."

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So far, Starbucks has 83 stores across France. As the company further expands across France and the rest of Europe, Starbucks will continue to focus on "significant" licensed partnerships.

If all goes well, then Starbucks and Galeries Lafayette have agreed that there will be more stores to come over the next few years.

Galeries Lafayette operates 60 department stores, with international locations in New York City, Dubai, and Jakarta. 

A Day of Firsts: Home Depot, Private Spaceflight, and More

On this day in economic and business history...

The first two Home Depot (NYSE: HD  ) warehouse stores opened to the public on June 21, 1979. That day, the Atlanta area got its first glimpse of a truly colossal retail future: Each store was stocked with more than 250,000 different products and was so large that a local radio personality quipped, "If these stores were any bigger, they'd be paying Alabama sales tax." Home Depot's own corporate blog recounts the extreme eagerness of co-founders Arthur Blank and Bernie Marcus to get people in and shopping:

Bernie and Arthur handed their kids 700 $1 bills and sent them into the parking lots of the stores. Yup, they were paying people to go in and spend money. After a slow day, the kids still had $1 bills in their hands. ...

In addition to filling an important need in the marketplace, the company took a "whatever it takes" approach to customer service from the very beginning. "We had so few customers that if I saw someone leaving a store empty-handed, I took it personally," Bernie Marcus wrote in Built from Scratch, the book that chronicles the company.

He'd follow the would-be customer out into the parking lot, asking what they were looking for that we didn't carry, then offer to hand-deliver the item himself. (After ordering the item for future stock, he would head to a competitor or wholesaler to pick it up, taking care to scrape off the stickers.)

The co-founders' persistence paid off. Five years later, Home Depot began trading on the Big Board, and it was already a billion-dollar company with 19 stores and roughly $250 million in annual sales. There were 100 Home Depots by 1990 and 1,000 stores by 2000.

The year before it crossed the four-digit store mark, Home Depot joined the Dow Jones Industrial Average (DJINDICES: ^DJI  ) as only the second retail-store enterprise out of 30 components. In the 13 years that followed, Home Depot became the best-performing addition out of a rather ill-timed group, more than doubling the gains of both the next-best addition and the Dow itself. Today, Home Depot is widely considered one of the housing industry's most important bellwethers, and its earliest shareholders have enjoyed one of the greatest rides of all time: In the first 20 years of Home Depot's life as a public company, a single share (with dividends reinvested) gained more than 123,000%.

Desalting the seas
The first desalination plant in the world began operating on June 21, 1961 after a ceremonial button-press from the desk of President John F. Kennedy gave suitable pomp to the historic moment. The term for this new technology hadn't been settled yet -- The Washington Post called it a "water factory," and The New York Times used the popular phrase "desalting plant" in its headline -- but its importance was nevertheless notable enough to draw participation from the highest levels of American government. Kennedy himself called it:

An important stride toward the achievement of one of the oldest dreams of man -- extracting fresh water from the seas. ... The American people are ready and willing to share the fruits of our research -- and the knowledge of our technicians -- with those nations and peoples who wish to work side by side with us to enlarge the supplies of water available to mankind.

The plant, built and operated by Dow Chemical (NYSE: DOW  ) , was to purify a million gallons of seawater each day at a cost ranging from $1 to $1.25 per thousand gallons. The government had agreed to subsidize the plant's operation at a modest loss, expending between $0.70 and $0.95 per thousand gallons to distribute the water to the city of Freeport and to Dow's operations. At its costliest, the plant would cost the government about $350,000 per year.

Today, there are roughly 15,000 desalination plants at work around the world, and by 2016 there may be enough processing capacity for 107 million cubic meters of water per day -- equal to approximately 28.3 billion gallons of fresh water. However, an innovation in graphene-sheet production developed by Lockheed Martin (NYSE: LMT  ) could significantly improve both the efficiency and the capacity of the world's desalination plants within the next few years. Click here to read more about this promising breakthrough.

Catch a cab to the cosmos 
On June 21, 2004, SpaceShipOne became the first privately financed spacecraft to exit the Earth's atmosphere. Wired recounts the historic event:

With self-taught civilian test pilot Mike Melvill at the controls, SpaceShipOne was released by its carrier craft and fired its hybrid rocket motors at an altitude of 47,000 feet over California's Mojave Desert. As Melvill steered the ship outside the atmosphere, he spent about three minutes in weightlessness.

To help dramatize the moment, Melvill opened a bag of M&M's and watched the candy float around the cockpit. "It was amazing," he said later.

SpaceShipOne reached an altitude of 62 miles, putting it into suborbital space.

Financed by Microsoft co-founder Paul Allen to the tune of $25 million and designed by pioneering aerospace engineer Burt Rutan, SpaceShipOne was built in part to claim victory in the $10 million Ansari X Prize competition. It won this prize several months later and was retired from active service.

Today, a growing range of ambitious private companies compete for the prestige (and potential profit) of sending things and people into outer space. Elon Musk's SpaceX is perhaps the most well-known, but Rutan's Scaled Composites is also working with Virgin's Richard Branson to develop and promote private space-tourism ventures. Bigelow Aerospace is another major player, and it may have the most ambitious (though still realistic for the next few years) goal of all: a privately developed commercial space station.

Reaping the rewards of innovation
The name Cyrus McCormick is indelibly linked to the mechanical reaper, which -- along with the cotton gin -- is widely considered one of the most important technological advances in farming during the early Industrial Revolution. McCormick was not the first to develop a reaper, but his tireless tinkering and relentless promotion of the machine finally brought a viable product to market -- several years after he gained his first patent for the reaper on June 21, 1834.

McCormick's father Robert had worked to develop a reaper for more than two decades, but it fell to Cyrus to develop the first one that could handle the varying field conditions of a typical farm. The McCormick reaper was one of the first to combine several steps of harvesting into one machine, and its horse-drawn design was more efficient than others of its generation that were pushed, rather than pulled behind the team. After demonstrating an early version in 1831, McCormick raced against other inventors to patent his device, as a rival announced the construction of a similar reaper in 1833.

The shortcomings of McCormick's first patented reaper and the Panic of 1837 proved major setbacks, but the McCormick family forged ahead, finally beginning to sell machines in 1840. Cyrus' continuous improvements to the 1834 design resulted in another patent in 1845, and two years later McCormick and his brother Leander moved their manufacturing operations to Chicago, which was an ideal distribution point to the vast grain fields of the American Midwest. From then on, McCormick's business grew rapidly, owing in no small part to his innovative business practices, as recounted by PBS' American Experience website:

Sales improved as [McCormick] guaranteed performance ("15 acres a day" or your money back), allowed farmers to buy on credit and pay over time, educated his customer base with demonstrations, and advertised with satisfied customer testimonials. He set a fixed price of $120 ("take it or leave it!") and removed the hassle of dickering over more money. He developed interchangeable replacement parts and had them readily available. He trained men on the mechanics of his machine and on his business and then sent them out as the first traveling salesmen. McCormick's motto was "One Price to All and Satisfaction Guaranteed."

By 1860, McCormick's company was selling more than 4,000 reapers a year despite a major patent-suit loss in 1855, which saw future President Abraham Lincoln join the defense against McCormick's suit (Lincoln was not a factor in the case).

This highly successful company became one of financier J. P. Morgan's major consolidation successes in 1902, when it was merged with several other agricultural equipment firms to form International Harvester. It became a member of the Dow in 1925 and remained until 1991, a few years after changing its name to Navistar (NYSE: NAV  ) . The current descendant of McCormick's reaping innovations bears little resemblance to the company he founded: International Harvester's agricultural-machinery division was sold off in 1984, and Navistar is now known primarily for producing trucks and buses.

Investors and pundits alike are skeptical about future growth in the American markets. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!

Chrysler to recall 1.2 million Ram trucks

DETROIT (AP) — Chrysler is recalling about 1.2 million Ram trucks to fix front-end problems that could lead to steering troubles.

The company announced three recalls on Friday. It wants to inspect the trucks and says only 453,000 will likely need repairs.

Chrysler said Friday in a statement that it knows of six crashes and two injuries involving the 2008 to 2012 Ram 2500 and 3500 trucks that are being recalled, and one crash with no injuries from the other recalled models.

The trucks are being recalled because tie-rod ends in the steering system may have been installed improperly, which Chrysler says stemmed from technicians misinterpreting instructions. Those tie-rods could be out of alignment, which Chrysler says can lead to steering failures.

The company has since updated the instructions and the parts involved.

The first case covers 842,400 Ram 2500 and 3500 trucks from 2003 through 2008. Chrysler says 116,000 were repaired with tie-rods in the steering system that could be out of alignment.

The other two involve trucks with tie-rod assemblies that were replaced in previous recalls. They cover 294,000 Ram 2500 and 3500 trucks from the 2008 through 2012 model years, and 2008 Ram 1500 four-by-four mega cabs. Also included are 43,000 Ram 4500 and 5500 four-by-four chassis cabs from 2008 through 2012.

Customers will be notified by letter in December, and work could begin in January, the company said. Owners of Ram 4500 and 5500 models can take their trucks to dealers for interim repairs because parts may not be available until late next year, the statement said. The interim service would involve realignment of the front ends.

Chrysler said about 968,000 of the affected trucks are in the U.S., with another 157,000 in Canada, 37,100 in Mexico and 18,000 from other countries.

Owners with questions can call (800) 853-1403.

1 Potential Roadblock for the Merck Stock Run-up

If you own Merck (NYSE: MRK  ) stock, you likely enjoyed the past couple of months. Shares were on a downward trajectory in late 2012 and into early 2013, but the past couple of months are looking much better.

MRK data by YCharts.

Since February, Merck stock has jumped nearly 14%. Will this nice stock run continue -- or is a roadblock right around the corner?

Potential obstacles
It won't be hard to identify potential obstacles. One that especially stands out is declining revenue from several high-dollar drugs.

Singulair stands at the top of this list. Merck lost U.S. patent protection for the asthma drug in August. Sales for Singulair fell by 67% in the fourth quarter. Merck lost European patent protection for the drug in February, so these numbers will undoubtedly worsen.

Migraine drug Maxalt went off patent in the U.S. in December and loses European market exclusivity in August of this year. Male pattern hair loss drug Propecia also faces generic rivals in 2013. These two drugs combined for more than $1 billion in 2012 sales.

Merck also continues to see lower sales from Remicade and Simponi, which brought in a combined $2.4 billion in 2012. The company reached an agreement with Johnson & Johnson (NYSE: JNJ  ) in 2011 to relinquish rights to market the anti-inflammatory drugs in several regions. Under the deal, J&J gained distribution for Remicade and Simponi in Canada, Latin America, the Middle East, Africa, and Asia Pacific. These territories represent about 30% of Merck's 2010 revenue for the drugs.

The good news for Merck is that diabetes drugs Januvia and Janumet continue to show strong growth. Potential rivals really haven't mounted a significant threat so far. Lilly's (NYSE: LLY  ) diabetes drug Tradjenta was approved in 2011 with some thinking that it could rapidly gain market share However, the launch for the drug got off to a relatively sluggish start. Boehringer Ingelheim, Lilly's partner for Tradjenta, cited an "economic headwind" in Europe and the U.S. that affected sales in 2012.

Most likely to succeed?
While there are several potential roadblocks for sustained stock success, probably the most likely to make a difference in the coming months is a failure in Merck's pipeline. Another experience like Merck had with Tredaptive could easily stop the stock's upward trajectory.

In January, the company pulled the plug on the cholesterol drug after Tredaptive failed to reduce heart problems and safety concerns arose in a large-scale clinical study. While the drug was not yet approved in the U.S., it had received approval in around 70 other countries. Merck subsequently pulled Tredaptive from those markets.

It seems unlikely that history would repeat itself with another drug in Merck's pipeline so soon after this failure, but anything is possible. The company has three drugs under review by the Food and Drug Administration and one under review by European regulators. Any negative news could send Merck stock downward.

I suspect that the drugs being reviewed by the FDA are more likely than not to receive approval. Merck and partner Endocyte (NASDAQ: ECYT  ) are seeking European approval for ovarian cancer drug vintafolide based on early stage and mid-stage clinical trials only. While the drug shows considerable promise, there is always a risk that authorization could be denied.

Perhaps the larger risk stems from the 16 drugs in phase 3 clinical studies. While a small number of failures in these studies probably wouldn't materially impact Merck over the long run, any bad news could take a toll on the stock in the short term.

When, not if
Overall, Merck is doing well despite declining revenue from Singulair and other drugs. I like the company's pipeline potential, especially for insomnia drug suvorexant.

The reality, though, is that the Merck stock run as of late will end at some point. It's a matter of when it will do so -- not if it will. I still like this big pharma over the long run -- the run that counts the most.

Can Merck beat the patent cliff?
This titan of the pharmaceutical industry stumbled into 2013 and continues to battle patent expirations and pipeline problems. Is Merck still a solid dividend play, or should investors be looking elsewhere? In a new premium research report on Merck, The Fool tackles all of the company's moving parts, its major market opportunities, and reasons to both buy and sell. To find out more click here to claim your copy today.

Is Coach the Best Way to Profit from China's Growth?

South Korea may its own, new handbag museum -- but if you want to see those women's accessories in action in an Asian market, look to China.

Luxury goods companies such as Ralph Lauren (NYSE: RL), Michael Kors (NASDAQ: KORS) and Mercedes Benz (OTC: DDAIF) count on China for increasing sales. And among the most desired items by Chinese consumers are handbags and other accessories from Coach Inc (NYSE: COH).

10 Best Performing Stocks To Own For 2014

A luxury leather designer and maker, Coach has more than 300 locations in Asia. But in the Asian market China is, by far, the most important for the growth plans of Coach. For the most recent quarter, Coach registered 40 percent growth in annual sales in China. For North America, it was only 1 percent annual growth. As a result, Coach is moving to greatly increase both its store and e-commerce presence in China.

That fits in well with the evolving economy in China.

As detailed in a previous article in Benzinga, the Chinese economy is changing to respond more to consumer demand. Urbanization in China will also increase the consumer class -- meaning there should be many more customers for Coach products.

The shareholders have certainly been patiently waiting.

In a double-digit bull market, Coach is up just two percent for 2013. What is bullish about Coach are many of its financials. The profit margin is over 20 percent. The return-on-equity is more than 45 percent. The balance sheet is clean with no debt, which is always appealing.

What is also attractive about Coach is its dividend.

The average dividend yield for a member of the Standard & Poor's 500 Index is around 1.9 percent. Coach has a dividend yield of almost 2.50  percent. The company also has a history of increasing its dividend.

Coach shareholders can collect an increasing dividend while waiting for growth in China to take the share price higher.

Posted-In: accessories China Chinese consumers Consumers handbags Luxury goods luxury items women's accessoriesLong Ideas Emerging Markets Dividends Economics Markets Trading Ideas Best of Benzinga

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Pandora Media Inc (NYSE:P): Improved Mobile Monetization Should Boost Profits

Pandora Media Inc (NYSE:P) should generate more profitability due to the ongoing improvement in mobile monetization that is leading to lower content acquisition costs (as a percent of revenue).

Pandora continues to post strong listener usage metrics in the face of increased competition and benefit from stronger and growing RPMs (revenue per 1000 hours) from its mobile listening hours.

Overall, Pandora's share of terrestrial radio grew to 8.44 percent in November 2013 from 7.09 percent a year ago and up from 8.06 percent in October 2013. Active users grew 23 percent to 72.7 million, and listener hours grew 12 percent to 3.98 billion.

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BMO Capital Markets analyst Edward Williams believes Pandora can continue to leverage its proprietary technology to drive stronger engagement and grow listener hours further. The company generates approximately 80 percent of its listener hours from mobile platforms.

Meanwhile, Pandora appears to have rebounded and fully recovered from the temporary weakness in listener metrics following Apple's (NASDAQ:AAPL) launch of iTunes Radio in September. Key metrics, including share, listener hours and active users are all at or near all time highs for the company, and it can grow further with the ongoing adoption of smartphones and tablets.

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In addition, RPMs for the recent quarter rose to $57.68 from $55.51 a year ago, an increase of 3.9 percent while mobile RPMs rose 58 percent to $39.32. The ongoing adoption of mobile devices, principally smartphones and tablets, will drive near-term growth for Pandora.

Williams noted that mobile RPMs should continue to rise as the company better monetizes its advertising inventory by leveraging its growing local sales force as well as its position as the leading radio station in most major markets in the US.

On the competition front, the landscape remains dynamic ! with new entrants (Apple) and long-standing alternatives (Spotify) all competing for listener hours. However, thus far Pandora has successfully grown share in the face of competition and it is now the leading radio station in most major markets in the US. Even when competing with well capitalized competitors – and/or well known brands – Pandora has been able to grow its listener share.

Pandora has driven revenue growth in part through stronger monetization of its mobile advertising inventory. In the September quarter, the company generated $35.30 of advertising per 1,000 streamed hours on mobile platforms versus $23.50 a year ago.

Williams expects content acquisition costs to drop to the company's long-term target levels as the company approaches a blended level of $50 per 1,000 hours streamed. He believes monetization should continue to improve as the company's investments in its sales team results in increased pricing-power.

As a percent of revenue, Pandora's content acquisition costs have been declining, and the third quarter 2013 represented 48.8 percent of revenue versus 58.2 percent in the same quarter of 2012. The key driver for this is the rate of growth of mobile monetization, which is now growing at a faster rate than mobile listening hours, allowing the company to generate some leverage. Further gains in mobile monetization should lead to lower content acquisition costs.

Meanwhile, international markets remain an almost entirely untapped section for Pandora. Though the company does operate in Australia and New Zealand, and recently surpassed the 1 million active users mark, there is still room for growth.

In addition, with 47 percent of radio listening in cars, full blown integration in the auto market remains a long term-driver for growth for Pandora. Williams noted that the company has dramatically increased the number of autos it's in and that the longer cycle adoption of Pandora in automobiles creates a potentially significant longer-term catalyst.

! Last but ! not the least, Pandora should also continue to benefit from the "internet of things" – especially as connected TVs and devices like Sonos systems continue to proliferate.

Sonoco Products Misses on the Top and Bottom Lines

Sonoco Products (NYSE: SON  ) reported earnings on April 18. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Sonoco Products missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly. Non-GAAP earnings per share dropped. GAAP earnings per share grew.

Gross margins shrank, operating margins dropped, net margins increased.

Revenue details
Sonoco Products logged revenue of $1.18 billion. The 11 analysts polled by S&P Capital IQ expected revenue of $1.21 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.50. The 13 earnings estimates compiled by S&P Capital IQ forecast $0.53 per share. Non-GAAP EPS of $0.50 for Q1 were 3.8% lower than the prior-year quarter's $0.52 per share. GAAP EPS of $0.47 for Q1 were 12% higher than the prior-year quarter's $0.42 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 17.4%, 50 basis points worse than the prior-year quarter. Operating margin was 7.3%, 50 basis points worse than the prior-year quarter. Net margin was 4.1%, 50 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.22 billion. On the bottom line, the average EPS estimate is $0.58.

Next year's average estimate for revenue is $4.86 billion. The average EPS estimate is $2.29.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 121 members out of 131 rating the stock outperform, and 10 members rating it underperform. Among 45 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 44 give Sonoco Products a green thumbs-up, and one give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sonoco Products is hold, with an average price target of $33.09.

Looking for alternatives to Sonoco Products? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

Add Sonoco Products to My Watchlist.

Realtors forecast flat sales, rising prices

SAN FRANCISCO — Home sales will hold steady next year, but prices will continue to rise due to a low supply of homes for sale, the National Association of Realtors predicts.

Flattening home sales will mark a sharp reversal from the past two years in which existing home sales increased from the year before.

But the lack of income growth, higher home prices and rising interest rates will weigh on sales, says Lawrence Yun, the trade group's chief economist, speaking at the NAR annual conference here Friday.

Median home prices, currently about $200,000 for the U.S., will rise 6% next year after an 11% gain this year, Yun says.

The existing home inventory is now near a 13-year low.

"The inventory shortage will not go away," Yun says, noting that new home construction is still far from historic levels.

While rising home prices will entice more people to sell homes, many of those people will also buy homes, Yun says. New home construction is what's needed to expand inventories.

Markets with stronger job growth will do better next year that those without. Some of the best-performing housing markets next year will likely include Salt Lake City, Houston, Denver, Seattle, Tampa and Atlanta, Yun says.

Coastal California markets are likely to continue to experience inventory shortages given good job growth in many of those markets and little new home building.

Home sales could get a boost next year if lenders loosen home loan-lending standards. That would expand the pool of potential home buyers.

Lenders may do that given a dropoff in refinance demand. Refinance volume will fall next year to a 15-year low, Yun says. That's largely because interest rates have been below 6% for five years and there are not many people with mortgages left to refinance.

By the end of 2014, NAR forecasts the average 30-year fixed mortgage rate will hit 5.4%. Rates will rise as the Federal Reserve pulls back on the stimulus measures it has used since 2008 to keep rates low! and stimulate the economy.

Zillow's panel of 108 economists and real estate experts also predicts slowing home price appreciation ahead.

They predict that home values will end 2013 up 6.7% over last year and rise 4.3% next year, eventually falling to 3.4% by 2018.

At that pace, home values could exceed their May 2007 peak by the first quarter of 2018, Zillow's data show.

As home prices rise, more home sellers typically appear. In this housing market, there's been a "big disconnect," from that trend, says John Krainer, economic researcher at the Federal Reserve Bank of San Francisco.

While home prices have risen rapidly the past year, inventories haven't followed suit. Many homeowners, who may still owe more on their mortgages than their homes are worth, are likely waiting to be rescued by further appreciation in home prices, Krainer says.

Mortgage Rates Unexpectedly Fall, Latest Survey Shows

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David Ryder/Bloomberg via Getty Images WASHINGTON -- Average U.S. rates for fixed mortgages eased slightly this week, remaining near historically low levels. Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan declined to 4.42 percent from 4.46 percent last week. The average on the 15-year fixed loan fell to 3.43 percent from 3.47 percent. Mortgage rates peaked at 4.6 percent in August and have stabilized since September, when the Federal Reserve surprised markets by taking no action on starting to reduce its bond purchases. The Fed meets next week and could slow the bond purchases if the economy shows further improvement. The bond purchases are designed to keep long-term rates such as mortgage rates low. A Commerce Department report issued Thursday signaled growing consumer confidence in the economy at the start of the holiday shopping season, as November retail sales rose at the fastest pace in five months.

Your Year-End Financial To-Do List

Hot Cheap Stocks To Invest In 2014

Alamy Here are 10 ways to take advantage of tax breaks, financial strategies and opportunities to boost your savings by year-end. 1. Add more money to your 401(k). You can contribute up to $17,500 to your 401(k) for 2013 ($23,000 if you're 50 or older or will be by the end of the year), and you have until Dec. 31 to reach that limit. You can't just add extra money into the account yourself; the pre-tax contributions must be made through payroll deduction. Ask your employer's payroll department what steps you need to take to increase your contributions starting with your next December payday. Some employers also let you contribute a lump sum directly from a year-end bonus, before the money is paid and taxed. See How to Increase 401(k) Contributions for more information about giving your retirement plan a boost at the end of the year.

A China Trio

We haven't yet entered into the "irrational exuberance" we saw back in the 1990s; for now, we fully expect the Santa Claus Rally and January Effect to push the markets higher, forecasts Richard Schmidt, editor of Stellar Stock Alert.

During the market in the late 1990s, we saw companies with little revenue, but lots of promise, making huge inroads on the market. Today, it's just the opposite.

The companies getting rewarded are the companies that are producing. Companies that don't produce don't get rewarded by today's market. That's very bullish.

Meanwhile, the overall rally in Chinese stocks is paying off, with more room to grow. iShares FTSE/Xinhua China (FXI), which corresponds to the FTSE China 25 index, showed great strength mid-month, with a 10% jump in a matter of days.

The move indicates our push toward Chinese stocks is paying off, as this sector continues to improve. The overall rally in Chinese stocks is paying off, with more room to grow. FXI is a buy.

China Automotive Systems (CAAS), which makes auto systems and components, reported record-high net sales for the third quarter. The report excited investors, who bid the stock up about 30% for the month.

We're still down substantially from our recommended price, but we like the direction the company is moving. We expect the stock to make back our losses and bring us into profitability in the next year to 18 months. CAAS is a buy.

Hot Small Cap Stocks To Watch Right Now

e-House Holdings Limited (EJ), a Chinese real estate services company, continued its move back up in November. With strong third-quarter earnings, the stock jumped up over 30%.

But the jump up was more of a dead-cat bounce, as the stock pulled back. Still, the stock finished the month with a strong 12% gain. We liked the earnings report.

Now we'd like to see it hold onto the gains it makes from these reports. Too many investors are still trying to sell on these bounces. Continued earnings improvements will bring more investors in and keep them in. EJ remains a buy.

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Best Insurance Stocks To Buy Right Now

Amid the parade of drab and not-so-heartening economic news these days, one bright beacon stands out: America's oil-and-gas industry is rapidly pushing us toward (gasp!) energy independence.

According to Bank of America Merrill Lynch, domestic shale-oil production is expected to quadruple by 2014 from its level only four years previously. A recent Wall Street Journal analysis predicted that the United States will overtake Russia in 2013 as the world's largest producer of oil and natural gas.

If we were earlier in the market cycle, I would advise you to buy shares of some domestically focused oil companies. With the S&P 500 up more than 150% since the March 2009 low, however, I'm wary. Rather than hope for capital gains down the road, I want to collect as much of my return as possible up front—in the form of cold, hard cash.

Master limited partnerships fit the bill perfectly. In particular, I favor MLPs that operate "toll taker" businesses with repetitive, annuity-like income streams: pipelines, storage terminals, natural-gas processing plants, etc. These partnerships not only dish out an ample cash yield but also possess the financial ruggedness to ride through all sorts of economic ups and downs— even crises like that of 2008.

A Nifty Tax Break, Too

 Better yet, toll-taker MLPs let you shelter much (sometimes all) of your quarterly cash distributions from current income tax. How? By passing through to you their hefty depreciation write-offs. Uncle Sam "recaptures" this untaxed income when you sell your partnership units, but that event may be many years from now.

The chief drawback to MLPs is that they create extra paperwork at tax time. If you prepare your own taxes, I encourage you to use a software package like TurboTax or Tax Cut to guide you through the thicket, although even these programs occasionally leave details unclear.

In addition, be aware of these tax wrinkles:

Most MLP's don't generate their year-end K-1 forms (the equivalent of a 1099 form for corporations) until late February or early March. Eager beavers who like to file their taxes early will be frustrated. Don't place MLP's inside your retirement accounts. They can generate Unrelated BusinessTaxable Income. If you earn more than $1,000 of UBTI per year, the government will tax it. Since it's difficult to determine in advance how much UBTI a partnership may earn in a given year, I recommend avoiding the problem altogether. Hold your units in a taxable account.

For additional background on the tax aspects of MLPs, visit the website of the National Association of Publicly Traded Partnerships (www.naptp.org). The tab marked PTP 101 will walk you through the .mechanics of partnership investing.

Still Some Great Yields

Like the broader stock market, MLPs have performed strongly in 2013, with the benchmark Alerian index rolling up a 21.8% total return during the first nine months of the year. Over the past 10 years, the average MLP has produced three times as much wealth as the S&P 500 index.

Remarkably, though, many MLPs are still throwing off handsome cash yields. Factor in the prospect of distribution increases in the years ahead, and you've got a vehicle that will hedge you against inflation as well as any likely rise in interest rates.

Here are two of my favorite buys right now:

Buckeye Partners

After a disappointing 2012, Buckeye Partners (BPL) seems to be regaining its stride. On October 9, Buckeye announced it had signed a pact to buy 20 petroleum storage terminals, mostly on the East Coast, from Hess Corp. for $850 million. I expect this deal to give a noticeable lift to BPL's cash flow in 2014, enabling the partnership to pick up the pace of its quarterly distributions. Current yield: 6.4%. Look for the cash payout to grow 4%–5% a year over the long run, slightly below the industry average (because Buckeye's pipelines mainly transport refined products like gasoline and jet fuel, as opposed to crude oil direct from the fields). Nearly all of BPL's debt carries a fixed rate—a helpful "insurance policy" if interest rates go up.

Plains All-American Pipeline

At first glance, a 4.7% yield from Plains All-American Pipeline (PAA) may not pop your eye out. However, this organization boasts extraordinary growth prospects. Plains owns pipelines and storage facilities serving just about all the major regions of North America that produce oil and natural-gas liquids. Over and above its 18,000- mile pipeline network, PAA boasts 5,400 railcars transporting oil and gas, 1,505 trailers, 800 trucksand 100 barges. Quite an inventory!

In early October, PAA jacked up its distribution for the 17th quarter in a row (a fat 10.6% increase from the year-ago period). What's more, management predicted that the payout will climb another 10% in the next 12 months. Counting reinvested dividends and price gains, I figure you'll double your money by 2018 or sooner.

 

Bullish News from the Black Skies over Shanghai

Believe it or not, the news that hundreds of commercial flights over Shanghai were recently delayed due to excessive pollution is very bullish for China, and the global economy.

A long list of economic reforms were issued from the most recent meeting of the ruling Communist Party. The overall objective was to transform the economy of the People's Republic of China from being a manufacturing behemoth focused on exports to a service economy, responding to the needs of the domestic market.

As China has the world's largest economy in terms of purchasing power, that is very bullish for Coach (NYSE: COH), Coca-Cola (NYSE: KO) and Wal-Mart (NYSE: WMT), among others.

Many of the economic reforms for the world's most populous country are focused on protecting the environment. The news from Shanghai more than makes the point about that urgent need. Propitiating the growth of the service sector will do much to better the local surroundings, especially the skies (think black smoke billowing from the smoke stacks of steel mills powered by coal). About 70 percent of the American economy is focused on consumer demand. For China, it is the opposite.

Related: Time to Chow Down on this High-Dividend, Low-Debt Takeover Candidate?

The transformation to the service sector guided by market forces will be huge for companies emphasizing the consumer demand in China such as Coach, Coca-Cola and Wal-Mart.

Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics, reported in a study that China has the world's largest economy in terms of purchasing power. In addition to that, China is the biggest buyer of luxury goods, such as items from Coach. As a result, Coach, the maker of luxury handbags and other high-end items, has major expansion plans for China.

So do Wal-Mart and Coca-Cola.

All are moving to profit from the evolving Chinese economy. Wal-Mart is changing its strategy to build up its network in smaller urban areas in China. Coca-Cola is spending billions to increase its presence, with an acquisition campaign, to adapt to local tastes.

A Reuters story about the flights grounded due to darkening pollution reported that, "The incident is especially embarrassing at a time when China seeks to build Shanghai into a global business hub on par with the likes of London, New York and Hong Kong by 2020." For investors, it is useful as it will engender far greater efforts by Beijing to evolve into a service economy that does not pollute nearly as much as one dominated by manufacturing.

From that, there will be much greater demand for products from Coach, Coca-Cola, Wal-Mart and others from around the globe. That will do much to reduce the trade imbalance China has in trading with other nations. In addition to improving the environment, it will also increase economic growth in many other countries due to the burgeoning demand from about one-fifth of the world's people.

Posted-In: Arvind Subramanian People's Republic of China ReutersLong Ideas News Emerging Markets Commodities Events Global Economics Markets Media Trading Ideas Best of Benzinga

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Around the Web, We're Loving... Lightspeed Trading Presents: Thunder and Tubleweeds: Trading Techniques for the New Market Enviroment Pope Francis Rips 'Trickle-Down' Economics Come See How the Pro's Trade in this Exclusive Webinar Wynn, MGM, Other Casino Giants Vying For U.S. Turf What Should You Know About AMZN? Most Popular Luxury Real Estate Foreclosures Up 61 Percent #PreMarket Primer: Thursday, December 5: Apple & China Mobile Ink Deal 3 Reasons Every Family Office Should Own Petrobras Brasileiro Market Wrap For November 4: Economy Is Steady, Tapering Could Be Around The Corner Five Star Stock Watch: Sirius XM Holdings UPDATE: Morgan Stanley Reiterates on InterOil as More Clarity is Needed Related Articles (COH + KO) Bullish News from the Black Skies over Shanghai BofA Sees Promise In Green Mountain's Upcoming 'Keurig Cold' Product; GMCR Up 3% #PreMarket Primer: Wednesday, December 4: Taper Talk Back On The Table Who Would You Rather… Coke or Pepsi?

Career and Job-Search Advice From Around the Web

If you've been looking for a job, don't use the holidays as an excuse to take a break. This is actually a great time to step up your search, career experts say, because many companies are trying to fill openings that have already been budgeted for before year's end. Also, there's less competition since many job seekers assume employers aren't hiring over the holidays and put their efforts on hold. See How to Beef Up Your Job Search During the Holidays and the advice below from some of our favorite personal finance bloggers for tips to improve your chances of finding employment.

SEE ALSO: 7 Tips for Finding a Seasonal Job

Plus, I've also rounded up advice for employees as they head into performance reviews. And if you manage to get a bonus this year, there are tips for managing those extra funds wisely.

How to Network on a Budget [ReadyForZero]
"You don't need to shell out a lot of money to make new connections and develop professional contacts in your field."

How to Negotiate Higher Pay at Your Next New Job [Wise Bread]
"To earn an amount that is fair to both you and the employer, research market rates, determine and explain why you are an outstanding candidate, make a reasonable counter-offer, and keep proving and improving your value after you've been hired."

How to Get a Great Performance Review [Thousandaire]
"These performance reviews can have a big impact on whether or not you get a raise, a year-end bonus, and even if you get a promotion in the future."

7 Things to Do When You Get a Raise at Work [Money Crashers]
"If you've received an increase in pay, celebrate modestly, let it sink in, and when you're ready, begin planning what to do with the extra funds."

Why You Lose Money Trading & The Answer

How to turn your trading into a simple automated trading strategy: you know the difference among a winning and losing trade – we have all experienced both and know the excitement and the frustration associated with it.

The brutal honest truth is a tough pill to swallow. The fact that most of the time it's not the strategy that has failed; it's you (the trader) which is why you need a simple trading strategy drawn out on paper with detailed rules for you to follow.

In today's report I am going to talk about how you can stop losing money and become a successful trader. We all know that before you even enter a position, you must know where you place your stop-loss order. If you don't know where you stops are to be placed then you are trading with a major disadvantage.

Your position entry is not complete without having a stop price figured out. It blows my mind why so few investors use stop-losses. If you are guilty of not using stops, you need this information. It might be the difference between retiring on time with a big nest egg or retiring later and still just churning your account.

If you plan and place stops you are planning to win, but prepare to take losses because you will get stopped out and you will have to get back up, brush yourself off and trade another day. So with that said we need to look at the psychology around taking losses because it's not easy to manage, and is the main reason individuals do not use stops. Being proved you were wrong flat out SUCKS!

Successful traders understand they must know where they are going to be stopped out before they enter a position. They have to know ahead of time what a wrong trade looks like so they can exit it quickly. This is a rudimentary fundamental that EVERY trader knows the answer for.

Do You Have A Trading Strategy That You Can Trade Like a Robot? Can You Answer The Following Questions?

1. How do you know when to sit tight or cut your losses?

2. Do you have rules to tell you when to sell a losing position?

3. Do you have rules of when to move your stop to breakeven?

If you cannot answer these questions properly, you are not alone. And what it means is that you need to establish some rules for yourself. All the trading rules in the world are meaningless if you do not use them. That is why I am telling about what's really going on with you when you refuse to manage your risk in a proactive and professional way.

Most traders refuse to take a loss for two basic reasons:

1. They cannot admit they are wrong.

For most traders, this is just too painful to admit. It's interpreted as failure or feeds a persistent, negative self-image which none of us enjoy feeling.

Humans by nature prefer to remain in denial instead of acknowledging their losses are causing them pain. This type of trader often has to lose it all before he begins to change (or gives up trading). I know this very well. I lost it all twice when learning to trade. It was not until the second time that I hit rock bottom (financially and emotionally) that I embraced trading rules and hired a mentor to help keep me inline with my trades.

2. The loss is too big relative to their overall portfolio size so they can't afford take the loss.

Know this, there's no such thing as just a paper loss. The investment (stocks, etf, options or futures contract) is worth what it's quoted whether you realize it or not by closing the position.

Both of these examples are a form of self-delusion that millions of investors, both large and small, suffer from.

If what I am saying here is making you uncomfortable or bringing up feelings of anger or powerlessness, then that is a good sign. It means you have enough common sense and self-awareness to change what you are doing.

Example of How You Can Make Your Trading Strategy To Be More Automated:

A successful trader uses a different strategy from that of a losing trader (you) by looking at the pain from the loss in an impersonal way. They know the loss as a sign that something went wrong with their approach, or their execution, but NOT that something is wrong with them.

Winning traders separate who they are from what they do. They learn and know, that their trading losses lie in their approach to trading the market and not a reflection of whom they are as a person. The pain they feel is quickly transmuted into motivation, which fuels their desire and determination to become a better trader through refining their trading strategies to better navigate the financial market place.

Both are learned responses and within your control. The opportunity for growth from the pain of our losses are the same. It's what we do with this emotional pain of a loss that matters, not the loss itself.

Stick with my proven Simple Automated Trading System
Make winning a habit.

Chris Vermeulen – Get 12 Months for the Price of Only 6 Months – Black Friday Special

Sprint Corporation (S): Sprinting To $10?

Nomura Securities says Sprint Corporation (S) is a $10 stock. Analyst Adam Ilkowitz upgraded the wireless communications company to a "Buy" from a "Neutral" rating.

In his research note, Ilkowitz wrote, "The heart of our call is that Sprint will likely double Adj. EBITDA owing to modest revenue growth and significant cost reductions. We believe operating cost reductions should be seen in two buckets: lower project spending (iDEN, Network Vision, roaming) and flat ongoing expenses. Our estimates are ahead of consensus, though they are more conservative than Sprint's publicly-disclosed forecasts in the proxy filings. We do not believe another round of Wireless M&A is likely given the already concentrated nature of the industry, and our forecasts and target price do not include further consolidation."

[Related -Apple Inc. (NASDAQ:AAPL): What Does A Potential China Mobile Deal Means For Apple?]

Sprint provides wireless and wireline communications services to consumers, businesses, and government users in the United States, Puerto Rico, and the U.S. Virgin Islands. Sprint is an independent publicly traded company in the U.S.; however, Japan's SoftBank controls 78% of its shares.

SoftBank's CEO Masayoshi Son promises to make S a viable competitor to AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ).

[Related -Why I Remain Bullish On Ezchip Semiconductor]

Now, trying to get to $10 per share using earnings-per-share is an impossible task considering Sprint has a history of losing money and is expected to do so in the year ahead. In fact, Nomura believes Sprint will lose $0.40 per share in 2014.

So, we'll turn to price-to-sales (P/S) to see if $10 is possible based on Sprint's past P/S ratio. Plus, we compare Sprint to VZ and T.

Wall Street expects Sprint to generate revenue of $35.45 billion in 2014. Since being listed in August, Sprint's P/S ratio range is 0.47 to 0.78 with an average of 0.59. To trade at $10 will require S to trade at 1.1! times 2014's consensus revenue estimate.

Ten bucks could be a difficult task considering VZ's average P/S ratio in the last half-decade was 0.95 and maxed out at 1.32. AT&T is rewarded with a higher multiple with a five-year average P/S of 1.40 and a peak of 1.76.

It's probably going to take a catalyst to help spur growth for $10 or more to become reality. The company expects to unveil the industry's "fastest wireless network speeds to approximately 100 of America's largest cities" covering "100 million Americans" by the end of 2014.

If the 1 Gigabit per second (Gbps) over-the-air network moves the sales needle, then iStock can see Sprint's multiples expanding and a potential return to profitability exciting investors.

Overall: SoftBank's commitment to Sprint Corporation (S) should begin to payoff sometime in 2014, probably around the time S rolls out its new network. While $10 is a possibility, investors are likely to wait for sales acceleration before valuing Sprint on par with AT&T or Verizon. 

3 Stocks Building Toward a Big Short Squeeze

Popular Posts: 3 Stocks Primed for a Short Squeeze Recent Posts: 3 Stocks Building Toward a Big Short Squeeze 3 Stocks Primed for a Short Squeeze Buy These 3 Stocks, Then Let the Short Squeeze Do the Rest View All Posts

Hot Biotech Companies To Watch For 2014

Short sellers are starting to get aggressive as we enter the final month of the year. For the last two-week reporting period, short interest on S&P 500 companies rose by 2.8% — its highest levels in more than a year. We view that as a perfect opportunity to pick up a few short squeeze candidates.

Click to Enlarge The addition of shorts shouldn't be a surprise. Analysts, pundits … everyone has been increasingly nervous of a potential snap to the market's breakneck rise.

While it shouldn’t be a surprise to see some weakness during the short-term, the increase in short interest suggests that any market decline — such as the current one — is likely to be a short and fast corrective move. After all, traders are already factoring a decline into stocks, via the short sales activity.

This means traders and investors looking for an opportunity to grab up some bargains on a decline need to prepare their short squeeze buying lists right now. That’s because any correction likely will be met with buying soon thereafter, as sidelined traders try to squeeze a lot of cash into a short-lived window of opportunity.

The above table shows a number of short squeeze opportunities that are likely to lead the market higher. Here’s a closer look at three:

Short Squeeze Candidate #1: Cerner (CERN)

Click to Enlarge Healthcare has been in the air lately with the implementation of the Affordable Care Act. The uncertainty surrounding the changes in legislation has traders betting against a number of companies, including Cerner (CERN).

Despite trading near all-time highs, short sellers have been hammering this healthcare information systems company. Current short interest for CERN stock stands at 22 times its average daily volume, setting up a nice short squeeze possibility.

Expect to see the shorts' resolve start to break as CERN stock cracks the $60 level, sparking a short squeeze.

Short Squeeze Candidate #2: Perrigo (PRGO)

Click to Enlarge Another classic setup for a short squeeze is the activity that we're seeing in Perrigo (PRGO).

PRGO stock is trading more than 50% higher for the year, which has the shorts screaming for a top. Perrigo has spent some time consolidating at the $155 level, which caused the shorts to take notice and add even more bearish bets. The 17% increase in short interest is a great indication that a short squeeze is pending, which will help PRGO stock break out of its recent consolidation.

In addition, Perrigo has some potential support building below as the 20-day moving average is sneaking up to the $155 level. The potential for support from the technicals and a break above $160 will likely be enough to get the shorts to scramble and turn into buyers to cover their positions, helping a new rally in PRGO stock.

Short Squeeze Candidate #3: Teradyne (TER)

Click to Enlarge Technology shares have been seeing some shorts lately as traders are betting on a fade in the trend of technology leadership. Among the names on our short list for squeezes is Teradyne (TER).

This semiconductor equipment provider is benefiting from stronger demand for chips in a myriad of electronic devices — the same fundamentals that have Intel (INTC) on our short list of technology names to buy.

TER stock recently consolidated at the $17 as three technical trendlines — the 20-, 50- and 200-day moving averages — are all settling in around $17. Teradyne is likely to benefit from the confluence of support from the technicals and use $17 as a launching pad for another rally. That would trigger a short squeeze and add to the buying power for TER.

As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.