Why it makes sense to start investing early in your career!

Investing for your retirement may not be the most important thing on your mind when you start your career. For most people, investing may not even be on the priority list when they start their career. When you start your career, your saving capacity may not be much in absolute terms, as your salary itself may not be much. But this should not deter you from making investments. This is because the first few years of your earning life has a huge impact on your future finances.

As with anything else in life, investing also benefits with an early start. The earlier you do your retirement planning, the greater will be your return on investment. There are more reasons than one for you to start investing early in your career. Let's look at the various benefits of early investing.

The effect of compounding:
The most important reason for you to start investing early in your career is to get the benefit of compounding. Compound interest works magic for any investor. As you know, compound interest means the interest earned on interest. If you continuously reinvest your earnings, your return on investment will increase exponentially.

When you regularly invest from the start of your career, you are increasing the return you receive on your returns. A monthly investment of as low as Rs.1,000 or Rs.2,000 will have a large impact on your financial position. Let's understand the effect with a few examples:

Example 1: X is 25 years old and has 35 years left for retirement. He starts to invest Rs. 1000 per month for 35 years at a return of 12% per annum. The corpus left with X at the end of 35 years will be Rs. 64 lakhs.

Y is 30 years old and has only 30 years left for retirement. He also starts to invest Rs. 1000 per month. But as he has started investing late in his career, he can invest this amount only for the next 30 years at 12% per annum. The corpus left with Y at the end of 30 years will be Rs. 35 lakhs. This is the difference 5 years of investment has made to the final corpus value. If Y needs the same Rs. 64 lakhs for his retirement, he will need to shell out Rs.1830 per month instead of Rs. 1000.

To understand the wonder of compounding, let's look at another example:
Example 2: Both X and Y are 30 years of age and have 30 years left for retirement. Now, X invests Rs. 2000 every month for the first 15 years at a return of 12% per annum. He totally invests Rs. 3.6 lakhs. At the end of 15 years of his investment, he does not invest further and also does not withdraw the money. His total corpus at the end of 30 years will be close to Rs. 55 lakhs.

Now Y invests only Rs. 1000 per month at a return of 12% per annum. But he invests for 30 years. Y's total investment is also Rs. 3.6 lakhs - same as X's total investment. But his corpus after 30 years is only Rs. 35 lakhs. Thus for the same total investment, X's corpus is much higher than Y's corpus. This is because X had invested more in the initial years and had allowed this money to get compounded for the total period.

Thus, the most important advantage of beginning to invest early in your career is to realise the full benefits of compounding. There are other reasons why it makes sense to start investing early in your career -

Improvement in spending habits: As you begin to save early in your career to start investing, you have lesser disposable cash with you. This helps you in being more prudent and brings about a discipline in your spending habits.
Ability to take risk: Not all of us get our investment options correct the first time. When you begin exploring investment avenues early in your life, you have a greater ability to take risk and experiment, compared to someone who starts investing later. This is because, at a later stage in life, if you realise you do not have sufficient savings; you will be more cautious in your choice of investments.

Money available during emergencies: When you begin to invest early, you would have a comfortable cushion backing you up. Thus, you can be rest assured that your savings will be of use to you in times of need.

Better choices in life: As seen in the examples above, the corpus built by investing early in life is much bigger than the corpus built by someone who starts a little later. As a result of the savings back-up, you can afford a better lifestyle and an improved quality of life, helping to fulfil your financial goals.
Thus, beginning to invest early in your career can help you in building a secure future.

 

 

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Is Dunkin’ Brands a Sweet Investment?

With shares of Dunkin' Brands Group (NASDAQ:DNKN) trading at around $40.06, is DNKN an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

There are many important points to cover for Dunkin', but let's first take a look at what Dunkin' Donuts has to offer in regards to food and beverage. This has the potential to serve two purposes, which are to inform investors of what they might be investing in, and to inform all readers what they might be eating or drinking in the near future.

Even if you frequent Dunkin' Donuts, it's not likely that you know the entire menu. Most people walk into Dunkin' Donuts knowing exactly what they want. This has a lot to do with either a slight caffeine addiction (don't worry, that's perfectly normal) or a craving for a donut or ice cream. Okay, so let's get to it.

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Breakfast Sandwiches

Bacon Egg & Cheese

Big N' Toasted

Egg White Flatbreads

Egg & Cheese

Glazed Donut Breakfast Sandwich

Ham Egg & Cheese

Sausage Egg & Cheese

Turkey Sausage Breakfast Sandwich

Wake-Up Wrap

 

Bakery Sandwiches

Chicken Salad Sandwich

Chicken Sandwiches

Ham & Cheese

Texas Toast Grilled Cheese

Tuna Salad & Chicken Salad Wraps

Tuna Salas Sandwiches

Turkey, Cheddar & Bacon

 

Bakery

Bagels and Bagel Twists

Cookies

Danishes

Donuts

Hash Browns

Muffins

Munchkins (so underrated)

 

Hot Beverages

Beverage Flavors

Box O' Joe

Cappuccino

Dunkaccino

Espresso

Hot Chocolate

Hot Coffee

Hot Tea

Latte

Mint Hot Chocolate

Vanilla Chai

 

Iced Beverages

Beverage Flavors

Iced Coffee

Iced Latte

Iced Sweet Tea

Iced Tea

 

Frozen Beverages

Berry Blast Coolatta

Blue Raspberry Coolatta

Frozen Caramel Coffee Coolatta

Frozen Coffee Coolatta

Frozen Mocha Coffee Coolatta

Hot Chocolate Coolatta

Minute Maid Orange Coolatta

Raspberry Lime Coolatta

Strawberry Coolatta

Vanilla Bean Coolatta

 

At Home Brewing

K-Cup Packs

Packaged Coffee

Packaged Tea

 

There has to be something on that list that you will enjoy! That, in turn, is the point. Dunkin' is very good at attracting new customers that then become loyal to the brand. Dunkin' is also looking to penetrate west of the Mississippi River. If successful, it could lead to substantial growth opportunities. Management is also aiming to add between 300 and 600 units in the United States this year alone. Companies that are opening stores/restaurants are often highly confident in their future prospects. It should also be noted that this is in an environment where most companies are closing stores/restaurants, or at least cutting costs in a massive way. All that said, this growth comes at a cost. Dunkin' does have some substantial debt concerns. On the other hand, management has been making strategic moves to better manage the debt.

Best Safest Stocks To Buy Right Now

The ultimate concern here is that Dunkin' suddenly finds itself in a weaker economic environment where the stock market suffers a steep correction and interest rates increase. However, this has been a concern for a long time, and while the concern is justifiable, it never becomes a reality. It's possible that savvy investors are simply mistiming the market and underestimating the power of the current upward momentum in the market.

The chart below shows some basic fundamentals for Dunkin' Brands, Starbucks Corporation (NASDAQ:SBUX), and McDonald's Corp. (NYSE:MCD). Some readers might wonder why Krispy Kreme Doughnuts (NYSE:KKD) isn't on the list, but as Krispy Kreme CEO James Morgan admits, Dunkin' Brands and Starbucks are largely beverage companies whereas Krispy Kreme is more focused on doughnuts.

	DNKN	SBUX	MCD
Trailing P/E	42.75	32.25	18.17
Forward P/E	22.13	24.13	15.70
Profit Margin	15.90%	10.80%	19.79%
ROE	19.24%	28.97%	36.59%
Operating Cash Flow	139.86M	2.55B	7.02B
Dividend Yield	1.90%	1.30%	3.20%
Short Position	7.80%	1.30%	1.00%

Let's take a look at some more important numbers prior to forming an opinion on this stock.
T = Technicals Are Mixed

Dunkin’ has performed well over the past year as well as year-to-date, but momentum has slowed. Does this present a buying opportunity, or should it act as a warning sign?

	1 Month	Year-To-Date	1 Year	3 Year
DNKN	-0.11%	21.87%	30.56%	1.11%
SBUX	5.42%	19.14%	23.51%	150.0%
MCD	-3.28%	12.81%	16.71%	58.54%

At $40.06, Dunkin’ is trading above its averages.

50-Day SMA	39.85
200-Day SMA	36.24

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E = Equity to Debt Ratio Is Weak

The debt-to-equity ratio for Dunkin’ is much weaker than the industry average of 0.90. In the current economic environment, it’s possible to get away with using a lot of leverage to fuel growth. However, there will eventually be a price to pay.

	Debt-To-Equity	Cash	Long-Term Debt
DNKN	5.32	179.19M	1.84B
SBUX	0.10	1.70B	549.60M
MCD	0.84	1.87B	12.80B

E = Earnings Have Been Steady

Earnings and revenue have consistently improved on an annual basis.

Fiscal Year	2009	2010	2011	2012
Revenue ($) in millions	538	577	628	658
Diluted EPS ($)	NA	0.28	0.32	0.93

Looking at the last quarter on a year-over-year basis, revenue and earnings improved. Both revenue and earnings have been consistent without being overly impressive on a sequential basis.

Quarter	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012	Mar. 31, 2013
Revenue ($) in millions	152.37	172.39	171.72	161.70	161.86
Diluted EPS ($)	0.21	0.15	0.26	0.32	0.22

Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Support the Industry                         

The cost of coffee has decreased 24 percent over the past year, which has helped the industry a great deal. Coffee prices are off their lows, but they're not expected to shoot higher unless there is a major weather event that significantly impacts commodity prices.

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Conclusion

Dunkin’ has a strong brand, and it's likely to become stronger in the coming years. Annual revenue and EPS growth have been steady, and margins are impressive. On the other hand, Dunkin' is currently trading at 43 times earnings. Therefore, there isn't much margin for error. Furthermore, stock performance has been subpar over the past month and debt management is still a concern.

Microsoft's First Move Down Flops

The Acer Iconia W3 isn't long for this world. The device is the first eight-inch tablet running Microsoft (NASDAQ: MSFT  ) Windows 8, an important strategic move for the software giant as it looks to enter the small-sized tablet segment. Microsoft has been making aggressive concessions with OEMs to encourage them to target smaller form factors, including discounting Windows license fees and bundling in Office for smaller devices.

Sadly, the Iconia W3 looks like a flop. The tablet is heavy, bulky, and has a low-quality display that The Verge simply calls "disgusting." It's significantly heavier than the top competing devices. CNET concludes that "a handful of flaws drag down what would otherwise be a great budget pick." Gizmodo doesn't think it can measure up, either.

The good news for Microsoft is that Acer has taken these criticisms to heart, and is hard at work on an upgraded version. Once existing stock at retailers is cleared out, Acer won't be refilling those shelves with the current model. Instead, the OEM is working to release a successor that's thinner and lighter. The company may upgrade from the current low-quality TN panel to a high-end IPS panel, which is what most rivals, like Google's Nexus 7 and Apple's iPad Mini, sport.

Tablets like the Iconia W3 are exactly why Microsoft decided to get in the tablet game in the first place with Surface. The company was being held back by third-party OEMs that cut costs because of slim margins. Integrating hardware is a better way to deliver a consistent experience. While Surface hasn't exactly made a huge dent in the market place, the competitive threat directly from Microsoft should catalyze a shift toward higher quality.

If the Acers of the world don't launch a compelling tablet to target the seven-inch to eight-inch market, Microsoft will just have to take matters into its own hands.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Forget Search and Video -- Check Out This Stock's Gaming Profits

Sohu (NASDAQ: SOHU  ) finds itself in a tight space -- it competes in many areas, but it's not the best in any of them. Fortunately, Sohu does have one business that's raking in the dough: online gaming.

Two surprising facts from Sohu's annual report 
When analyzing Sohu's business, you may quickly get this picture: Sohu lags behind Baidu in search, Youku Tudou in video, and Tencent and SINA in online portals.

The company does have a $1 billion war chest to tackle its competitors. But, it's doubtful that $1 billion will go far. Sohu is competing in extremely competitive industries, and will probably burn all of its cash to battle these top dogs. Luckily, Sohu can choose to forgo any confrontation in search, video, and online portals.

Instead, Sohu can choose to tackle online gaming.

Now, before you laugh, consider this: Last year, Sohu raked in 60% of its revenues from its gaming division. That means that Sohu generates more of its money from online gaming than it does from search, video, and portal advertising combined! If you don't believe me, just check out the income statement in their annual report.

To be fair, these revenues come from their stake in game company Changyou (NASDAQ: CYOU  ) . Because Sohu owns a majority stake in Changyou, Sohu must consolidate all financials into its statements -- even as Changyou is independently listed on stock exchanges. Whatever the case, Sohu actually created Changyou -- it started as a business unit in 2003, then was spun out in 2007. In any case, Sohu should do some serious soul-searching.

Just look at its fat profit margins from online gaming. In 2012, Sohu's advertising gross profit margin was 44%. Not bad, but Sohu's gaming gross profit margin was about DOUBLE that. Surprisingly, compared to the gross profit margin from the gaming industry, Sohu is among the best.

Top Stocks To Own For 2014

Company

Gross Margin

Giant Interactive (NYSE: GA  )	87%
Sohu	86%
Perfect World	84%
Netease (NASDAQ: NTES  )	68%

Source: 10-Ks

However, it's understandable that you may worry about Sohu's gaming business. If it focuses solely on this industry, Sohu will have to go toe-to-toe with industry giants.

One company Sohu will have trouble with is Giant Interactive. Like Sohu, Giant Interactive creates games specifically for the Chinese market. But, unlike Sohu, Giant Interactive has done so for longer -- it started in 2001 -- and with more focus than Sohu. So, Sohu has its work cut out for it. Luckily, Giant Interactive has taken a hit since insiders cashed out this month – giving Sohu an opening if it can react quickly enough.

Another company Sohu would also have to compete and catch-up with is Netease. Not only does the company continue to push out new domestic titles -- its last three helped Netease increase revenues 14% QoQ -- but it is also building foreign partnerships. Netease already has a licensing agreement with Activision Blizzard to bring World of Warcraft to China. Luckily, World of Warcraft is censored, and it remains to be seen if the game mechanics will profit Netease.

Should you buy Sohu for its games?
While there are big competitors to fight, Sohu seems like it has a better chance battling gaming competitors than online portal, search, and video giants. Additionally, as China's online gaming market has grown 56-fold over the past decade, there may still be room for even greater gaming profits going forward.

All you need to look for is where Sohu invests its $1 billion war chest. If it tackles gaming, then Sohu may be a great buy.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Why OSI Systems Shares Got Crushed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of OSI Systems (NASDAQ: OSIS  ) got crushed today, down by 17% at the low after the company provided an update on its TSA Show Cause Letter.

So what: Reports surfaced last November that the company was manipulating test results for its Rapiscan security units, while analysts defended the company at the time. OSI Systems will begin formal proceedings that will allow the company to provide information and communicate directly with Department of Homeland Security officials.

Now what: CEO Deepak Chopra reiterated confidence that OSI Systems will be able to clear its name as a responsible TSA vendor. OSI will now be able to prove its compliance with its obligations, but acknowledges some possible risks. There are three possible outcomes, the worst of which would be OSI Systems being debarred. The company also said there are restrictions on its ability to seek and/or accept additional government contracts.

Interested in more info on OSI Systems? Add it to your watchlist by clicking here.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Finish Line Inc Q3 Earnings Beat Estimates; Raises Outlook (FINL)

Shares of Finish Line Inc (FINL) were up nearly 6% on Friday morning after the company reported better than expected third quarter results and raised its FY2014 outlook.

FINL’s Earnings in Brief

-FINL reported Q3 earnings of $2.32 million, compared to a a loss of $0.11 million a year ago. On a per share basis, earnings were 5 cents per share.

-On a Non-GAAP basis, EPS came in at 6 cents, 5 cents above analysts’ estimate of 1 cent.

-Revenue for the quarter rose to $364.5 million, up from $296.62 million last year. Analysts expected to see revenue of $354.57 million.

-Comparable store sales increased 7.1% during the quarter.

-Looking ahead, FINL has raised its outlook for FY2014 and now sees earnings between $1.60 and $1.65 per share. Analysts expect to see earnings of $1.59 per share.

CEO Commentary
Chairman and CEO, Glenn Lyon commented: “We are very pleased with the top and bottom line performance we delivered in the third quarter. Our commitment to developing a premier omni-channel platform is strengthening both our customer relationships and our brand partnerships while also reinforcing our market leadership position. We are continually adapting and refining our strategies in this rapidly evolving retail landscape to ensure we meet the needs of today’s empowered consumer. Finish Line is on the right strategic course and is well-positioned to deliver on our near and longer term goals.”

FINL’s Dividend
FINL made no mention of when its next quarterly dividend will be, as the company just paid a 7 cent dividend on December 16. However, it is likely that FINL will announce a 1 cent dividend increase in January.

Stock Performance
Finish Line shares were up $1.54, or 5.89%, during pre-market trading Friday. The stock is up 38% YTD.

IIHS names 22 cars as Top Safety Pick Plus

Just when it looked like every new car on the road would earn the Insurance Institute for Highway Safety's Top Safety Pick Plus designation, the rules get changed and the winners are winnowed down considerably.

Only 22 models now earn the IIHS' top award, coveted enough that it shows up endlessly in car advertising. To have won it, cars not only had to ace front, side, head restraint and roof crash tests, but the "small overlap crash test," which simulates crashing into a pole on the driver's side of the car.

That last test has been bedeviling automakers since it was introduced. Cars that had been on recommended lists for years suddenly found themselves failing. Automakers scrambled and make sure they could pass. Hence, Consumer Reports magazine today restores Toyota Corolla to its recommended list now that it passes the IIHS tests.

"We've made it more difficult for manufacturers this year," says IIHS President Adrian Lund in a statement. "Following a gradual

phase-in, the small overlap crash is now part of our basic battery of tests, and good or acceptable performance should

be part of every vehicle's safety credentials."

Those passing all the test include:

Honda Civic hybridMazda3 built after October 2013Toyota Prius built after November 2013Ford FusionChrysler 200Honda Accord 2-doorHonda Accord 4-doorMazda6Subaru LegacySubaru OutbackInfiniti Q50Lincoln MKZVolvo S60Volvo S80Mazda CX-5 built after October 2013Mitsubishi OutlanderSubaru ForesterToyota HighlanderAcura MDXMercedes-Benz M-Class built after August 2013Volvo XC60Honda Odyssey

Take Your Profits Now: 5 Energy Stocks To Trim in 2014

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Wall Street is full old-timey investment sayings. One of the best adages goes "Bulls make money, Bears make money, but Pigs get slaughtered."

There's some evidence of truth to that statement. Being too greedy when it comes to investing can have major portfolio implications and the concept of mean reversion is very real. No one ever lost money taking some profits on a stock. While it can be hard to do, selling and trimming back some of winners is an important piece of portfolio rebalancing.

After a year of torrid growth, plenty of energy stocks have surged to new highs. Gains in hydraulic fracturing, production and prices for the underlying commodities have lit a fire under a variety of stocks in the oil and gas industry — with the broad based Energy Select Sector SPDR (XLE) up about 20% this year.

With that said, it could time to trim back positions in some winning energy stocks. And with the new year quickly approaching, today could be a prime opportunity. Here are five of the best candidates to trim after a 2013 surge.

Hess

Shareholder activism can be a wonderful thing when it's done right. Known for its iconic green-and-white trucks, Hess (HES) had been stuck in neutral as its peers dove head-first into shale production and "sexier" unconventional resource plays. HES stock languished and was passed by in many portfolios.

Enter activist hedge fund Elliot Management. After calling management at HES inept, Elliott pressured the firm to focus on its core business of E&P operations and reduce its exposure to refining, marketing and other ventures. After a bitter proxy battle, the two came to an agreement and Hess began divesting assets and shifting focus.

Well, those efforts seem to have delighted investors, as HES stock has surged more than 48% year to date.

Given those huge gains, investors may want to trim back their position in HES shares — especially given Hess's recent weak earnings guidance. For the fourth quarter, HES estimates that it will realize a $6 per barrel decrease in its average selling price for crude, in addition to pumping out less oil than expected. All in all, HES will earn than it did in the third quarter.

For investors, the time to sell some HES stock is now if they want to capture those hefty gains.

Dril-Quip

It takes an awful lot of muscle and technological know-how to frack and drill unconventional wells. So the oil service industry is poised to continue churning out hefty profits in years to come. That fact has benefited mid-cap maker of drill-bits, pipes and other rig equipment Dril-Quip (DRQ).

Being a potential buy-out candidate hasn't hurt either.

Some analysts have proposed that DRQ could be one of the next targets for industrial titan GE (GE) as it expands into the oil and gas space by buying up smaller energy stocks. That speculation, along with stronger revenues and earnings, have propelled DRQ stock upwards — to the tune of 48% year to date.

That's a big gain for such a small firm, and while there isn't anything particularly wrong with DRQ or its prospects, it has gotten ahead of itself in terms of the "buy-out" potential. DRQ shares now trade for a P/E of near 30 and forward P/E of around 21. That's about double the oil service sector’s average and about 5% higher than its normal P/E range.

Given the gains, investors may want sell a bit of DRQ stock.

EOG Resources

There's no denying that EOG Resources (EOG) is the reigning kingpin in the Eagle Ford shale. The firm has some of the largest acreage in the region and continues to churn out hefty oil and natural gas liquids production in Texas.

That fact hasn't been lost on investors, who continue to bid up shares.

Overall, EOG stock is up 30% this year, on top of the 23% it gained in 2012. Which means early investors are sitting on some pretty hefty capital gains, and EOG could represent one of the "piggiest" stocks in the oil and gas sector. Trimming back some your EOG stock makes a whole lot of sense after such a huge win.

Besides, EOG is getting expensive. Shares are currently going for a P/E of nearly 40 and forward price-to-earnings metrics are still an industry high at 18.

EOG isn't a bad firm — it's just so darn pricey.

Continental Resources

Like EOG, Continental Resources (CLR) is a beast in its core production area, North Dakota's Bakken shale. And like EOD, CLR has seen its production surge as it continues to frack the formation with gusto.

And like EOG, CLR stock is up huge in 2013 — racking up an impressive 43% gain for shareholders. Which means it may be time to sell some and move on to more undervalued pastures. That position trimming could even be more prudent because rising production for CLR is a bit of a Catch-22.

That's because there' still a huge glut of Bakken crude that can't leave the region. Crude-by-rail is growing, but there's still insufficient pipeline infrastructure to carry CLR's production down to refiners on the Gulf. Overall, lower WTI crude prices because of the glut hinders CLR's earnings and rising production.

And with investors in CLR shares up big, the time could be right to sell some of those gains and move on.

Cheniere Energy

With so much natural gas coming from our shale fields, the promise of exporting that bounty is quickly becoming a reality for the U.S. As one of the first firms to win export approvals for its Sabine Pass facility, Cheniere Energy (LNG) shares have surged nearly 120% year to date.

5 Best Bank Stocks To Own For 2014

With the Sabine Pass scheduled to begin liquefied natural gas (LNG) shipments in 2015 and construction starting on a second LNG facility in Corpus Christi, the long-term promise is certainly there for LNG stock.

However, the glaring problem is that LNG doesn't actually make any money right now. Contract royalties from when it was an importer still trickle in, but as an exporter, LNG hasn't yet produced a profit.

On the flipside, competing energy stocks — Dominion (D) and Spectra (SE) — have a breath of assets that continue rack up earnings and pay dividends. Investors are being paid to wait while their LNG facilities take shape.

LNG has no such cushion, and with the stock up so huge in 2013, investors may have already priced in much of the export growth into the stock. It'll be better in the longer term, but as we go into the new year, trimming Cheniere is prudent.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.

Is GlaxoSmithKline An Attractive Investment?

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With shares of GlaxoSmithKline (NYSE:GSK) trading around $51, is GSK an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

GlaxoSmithKline is global healthcare group engaged in the discovery, development, manufacturing, and marketing of pharmaceutical products. These products are vaccines, over-the-counter medicines, and health-related consumer products. GlaxoSmithKline's principal pharmaceutical products are medicines in these areas: respiratory, antivirals, central nervous system, cardiovascular and urogenital, metabolic, antibacterials, oncology and emesis, dermatology, rare diseases, immuno-inflammation, vaccines, and HIV.

GlaxoSmithKline is investing early in India's booming pharmaceutical market. The company announced that it is initiating a $1 billion voluntary open offer for a higher stake in its Indian drug unit, GlaxoSmithKline Pharmaceuticals Ltd. GlaxoSmithKline PLC, the British unit of the company, sees a huge surge in the demand for pharmaceuticals in the Indian market, one that PricewaterhouseCoopers estimates as being worth $12 billion, all told. The move would increase the British unit's ownership of its Indian subsidiary to nearly 75 percent, up from 50.1 percent previously, according to a Glaxo press release.

T = Technicals on the Stock Chart Are Strong 

GlaxoSmithKline stock has trended higher in the past several years. The stock is currently trading near highs for the year and looks set to continue this path. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, GlaxoSmithKline is trading between its rising key averages, which signal neutral price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
GlaxoSmithKline options	15.50%	36%	33%

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

	Put IV Skew	Call IV Skew
January Options	Average	Average
February Options	Average	Average

As of today, there is an average demand from call and put buyers or sellers, all neutral over the next two months. To summarize, investors are buying a minimal amount of call and put option contracts and are leaning neutral over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Decreasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on GlaxoSmithKline’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for GlaxoSmithKline look like and more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	-12.65%	-66.67%	-28.21%	-26.92%
Revenue Growth (Y-O-Y)	-1.86%	-34.80%	-7.20%	-1.91%
Earnings Reaction	-0.11%	0.38%	0.01%	0.73%

GlaxoSmithKline has seen decreasing earnings and revenue figures over the last four quarters. From these numbers, the markets have been optimistic about GlaxoSmithKline’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has GlaxoSmithKline stock done relative to its peers, Pfizer (NYSE:PFE), Merck (NYSE:MRK), Novartis (NYSE:NVS), and sector?

	GlaxoSmithKline	Pfizer	Merck	Novartis	Sector
Year-to-Date Return	17.09%	20.39%	10.11%	21.44%	18.25%

GlaxoSmithKline has been an average relative performer, year-to-date.

Conclusion

GlaxoSmithKline is a healthcare group that engages in many aspects of the pharmaceutical business around the world. The company is investing early in India's booming pharmaceutical market. The stock has trended higher in recent years and is currently trading near highs for the year. Over the past four quarters, investors have been optimistic, as earnings and revenue figures have been declining. Relative to its peers and sector, GlaxoSmithKline has been an average year-to-date performer. WAIT AND SEE what GlaxoSmithKline does this coming quarter.

IBM to Fight Lawsuit Over NSA Spying

International Business Machines Corp. (NYSE: IBM) has said in a statement that it will vigorously fight the lawsuit filed in the U.S. District Court in Manhattan by shareholder Louisiana Sheriffs’ Pension and Relief Fund over its alleged failure to disclose its involvement in the U.S. National Security Agency’s (NSA) spy program and the subsequent loss of business in China.

In November, China appeared to stonewall IBM, Cisco Systems Inc. (NASDAQ: CSCO) and Microsoft Corp. (NASDAQ: MSFT) in response to media reports that they were aiding the NSA through a program known as Prism. The use of Prism and other disclosures were revealed to the press by former NSA contractor Edward Snowden.

The complaint claims that IBM’s lobbying of Congress to pass a law letting it share personal data of customers in China and elsewhere with the NSA threatened IBM hardware sales in China. IBM reported disappointing third-quarter results, including a 22% loss in revenue from China and a 40% decline in overall hardware sales. Total revenue came in well below analyst forecasts. IBM shares fell more than 6% on the news, wiping out more than $12 billion of the company’s market value.

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Chief Executive Virginia Rometty and Chief Financial Officer Mark Loughridge are named in the lawsuit as defendants. The complaint says they should be held liable for the company’s failure to reveal the risks of its lobbying and its NSA ties sooner.

Reported actions of the NSA that have caused controversy since he leaks by Snowden include spying on the German and Mexican presidents, installing surveillance equipment at foreign embassies, creating malware that infected many thousands of computers, breaking into the networks of Microsoft and Google Inc. (NASDAQ: GOOG) and even infiltrating online multiplayer games.

IBM shares were up fractionally in premarket trading Monday to $173.88, in a 52-week range of $172.57 to $215.90.

Top Madoff aide’s testimony may help both sides

NEW YORK — Former Bernard Madoff finance chief Frank DiPascali's testimony against five former co-workers charged with aiding the disgraced financier's Ponzi scheme could be a double-edged legal sword that helps both defense and prosecution.

DiPascali, who pleaded guilty to $17.3 billion fraud and hopes to reduce the 125-year maximum prison term he faces by cooperating with the government, has helped prosecutors give Manhattan federal court jurors a firsthand look into how the scheme operated. He has also provided details of alleged wrongdoing by the defendants.

They include Annette Bongiorno, Madoff's former administrative assistant; ex-operations manager Daniel Bonventre; JoAnn Crupi, who helped supervise a key Madoff bank account, and former computer programmers George Perez and Jerome O'Hara.

The former co-workers have maintained they were unaware of the scam and were among the thousands of ordinary investors, celebrities, charities and others hoodwinked by Madoff.

Although the disgraced financier's ex-lieutenant has testified he lied repeatedly to regulators, auditors — and even the defendants — DiPascali's overview of the fraud's many intricate details and players might not be easily replicated by other prosecution witnesses.

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"He's building his credibility with the jury by admitting he lied, and also telling them, 'Here's what happened,' " said William Shepherd, the former Florida statewide prosecutor who just ended his term as chairman of the American Bar Association's criminal justice section. He has no involvement in the case.

Yet during seven days on the the witness stand so far, DiPascali also has provided admissions and statements that could make prosecutors' job more difficult.

Answering questions from Assistant U.S. Attorney John Zach last week, DiPascali testified he had to give Bongio! rno Madoff's Dec. 2008 order for employees to close their investment accounts. But he couldn't tell her why — Madoff was running out of funds and planned to surrender to authorities, triggering the scam's implosion. The mastermind pleaded guilty without standing trial and is now serving a 150-year federal prison term.

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Instead, DiPascali testified he concocted a false cover story. "That was the only logical thing I could come up with so Annette wouldn't jump out the window," he said.

That testimony could be interpreted to mean the co-worker and former next-door neighbor who helped DiPascali land his Madoff job would be distraught at the specter of arrest and prosecution. But it could also offer the possibility Bongiorno didn't know Madoff was secretly running a fraud.

Similarly, DiPascali was asked by defense attorney Larry Krantz under cross-examination if he lied to Perez and O'Hara because he needed the programmers to help produce documents that were falsified. Krantz asked if he manipulated the pair "to participate in what you knew to be a massive fraud without them knowing it."

After pausing, DiPascali replied, "Yes."

Krantz followed by asking if DiPascali, as the programmers' boss and a friend, "owed them better than that."

"Yes, sir," said DiPascali.

"He definitely helps the defense when he makes statements that these guys didn't know what they were doing because I was lying to them," said Shepherd, now in private practice at law firm Holland & Knight in West Palm Beach.

But testifying to defense-friendly details could also boost DiPascali's overall credibility, aiding the government, said Neil Barofsky, a former federal prosecutor and special inspector general who's now a partner at Jenner & Block in New York.

Defense lawyers have suggested Madoff strategically hired employees who lacked secur! ities ind! ustry experience or were just out of high school and didn't know that some of the work they were told do was illegal. Even if that's true, Shepherd suggested the defense team faces a seemingly insurmountable task.

"When you're helping create false statements, you don't have to be a Wall Street veteran to know that a lie is a lie," he said.

Florida congressman Grayson a victim of $18 million stock scam

Rep. Alan Grayson, D-Fla. Bloomberg News

One of the wealthiest members of Congress was the most prominent victim of a stock fraud that blew up, sending its perpetrator to jail.

Rep. Alan Grayson, D-Fla., lost $18 million in a scheme conducted by William Dean Chapman of Sterling, Va., who offered loans to customers who used their stocks as collateral. Mr. Chapman, who was sentenced to 12 years in prison last week, defrauded his clients of $35 million in an operation that totaled $270 million.

The fact that Mr. Grayson was ripped off shows that it isn't just retirees and mom-and-pop investors who get cleaned out by fraudsters, according to a spokesman for state regulators.

“If Alan Grayson can fall victim to a scheme, anyone can,” said Bob Webster, director of communications at the North American Securities Administrators Association. “Wealth does not protect you against financial fraud.”

Mr. Grayson first invested money with Mr. Chapman in 2003, before he was elected to Congress.

Mr. Chapman was supposed to hold onto Mr. Grayson's stock and return it, along with any gains, when the congressman's loan matured.

But Mr. Chapman sold Mr. Grayson's stock without the congressman's permission, and he wasn't able to repay him, according to Lauren Doney, the congressman's spokeswoman.

Mr. Chapman's attorney Pleasant Sanford Brodnax III of the Law Office of Pleasant Brodnax III didn't return a phone call seeking comment. His loss was first reported by the Associated Press.

Prosecutors accused Mr. Chapman, the owner of Alexander Capital Markets, of selling 122 clients' stock collateral rather than engaging in legitimate hedging.

Over time, the fund was unable to return stocks or cash when loans came due, and the company became insolvent in April 2008. Nonetheless, Mr. Chapman continued to make loans, using the proceeds to pay other borrowers and operating costs. In addition, he used some of the money for personal purchases, such as a $3 million home in the Virginia suburbs of Washington, condominiums in Florida and the Caribbean, and Lamborghini and Ferrari sports cars.

The downfall of Mr. Chapman's fund started when Mr. Grayson's stock achieved remarkable performance, according to court documents.

Mr. Chapman contributed $3.8 million to the fund, but it wasn't enough to keep up with Mr. Grayson, whose return on equity for his securities in 2007 was 1,372%, according to a court document.

“The monies owed to one spectacularly successful investor, A.G., ACM's inability to obtain further capital beyond Chapman's $3.8 million, and, most importantly, Mr. Chapman's lack of complete transparency with borrowers after 2008 provide conte! xt to the fraud committed by Mr. Chapman,” a court document states.

In other documents, court officials identified “A.G.” as Mr. Grayson.

Mr.Chapman initially sought to do business with Mr. Grayson because he brought big assets to the table.

Mr. Grayson is the 21st wealthiest member of Congress and has a net worth of $16.69 million, according to a survey by the publication Roll Call.

“Chapman saw the relationship as an amazing opportunity because the deals with A.G. were so large,” a court document states.

Although Mr. Grayson knows how to pick stocks, he chose poorly in selecting the person with whom to do business.

“Here's someone who has financial acumen, knows what he's doing and still stumbled into a scheme,” Mr. Webster said. “You never know when you're going to run up against someone who's out to do harm.”

5 Tools to Supercharge Retirement Planning

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Alamy Retirement planning and saving can be intimidating. From selecting an asset allocation to rebalancing and fund selection, saving for our golden years is not for the faint of heart. Fortunately, there are some free and paid tools that make our job a lot easier, and dare I say, even fun. These five tools address various pain points when it comes to retirement planning. Just be careful, because the visual charts and graphs can become addictive. 1. Personal Capital. The free tool from Personal Capital is the easiest and most thorough way to track an investment portfolio. The online tool enables users to connect investment accounts, including 401(k), IRA and taxable accounts from a multitude of brokers and mutual fund companies. Once connected, Personal Capital slices and dices the portfolio to show users their asset allocation, investment performance and even investment fees. The tool provides visually stunning graphs and charts to help understand a portfolio. With Personal Capital's 401(k) fee analyzer, users can see what percentage of their returns are being lost to fees. And its investment checkup allows users to evaluate their asset allocation and see alternative investments with lower fees. 2. Jemstep. There are two nettlesome aspects of retirement investing: asset allocation and rebalancing. As retirement accounts multiply from a single 401(k) to multiple IRAs and taxable accounts, keeping the right asset mix can be a real challenge. Jemstep is a paid tool that aims to solve this problem. Once a user's investment accounts are added to the tool, Jemstep evaluates the asset allocation of the portfolio. It then compares an investor's asset allocation with Jemstep's recommendation. The recommendation is based on the investor's age and risk tolerance. It's the next step that sets Jemstep apart from other tools. Jemstep provides detailed buy and sell instructions to enable an investor to implement its proposed allocation. These instructions consider the tax ramifications of selling an investment, and it also considers asset location in its buy recommendations. If an investor doesn't like a recommended investment, Jemstep provides alternatives that can be easily selected. 3. Betterment. Betterment is an online tool that makes investing fun and easy. Once a Betterment account is opened and funded, the only decision to make is the percentage to be invested in stocks and bonds. Once that decision is made, Betterment handles the rest. It invests the funds in a select number of low-cost Vanguard and iShare ETFs. Betterment offers IRA accounts for those saving for retirement. In addition to its ease of use, Betterment also offers a visual tool to help users select their asset allocation. Using a point-and-click slider, users can see the projected effect of asset allocations ranging from 100 percent bonds to 100 percent stocks. With the click of a mouse, the asset allocation can be selected and the invested funds are automatically moved to the right stock and bond ETFs. 4. AARP Social Security Calculator. Determining when to take Social Security benefits is complicated. To help retirees make this decision, a number of online tools have been developed. While there are some excellent paid tools available, including maximizemysocialsecurity.com and socialsecuritysolutions.com, AARP offers a free Social Security Calculator. The AARP tool helps you determine how to achieve the highest monthly benefit. 5. FutureAdvisor. FutureAdvisor, like Jemstep, attempts to take the pain out of choosing an asset allocation and rebalancing a portfolio. It makes connecting investment accounts easy, recommends an asset allocation and provides projections of portfolio performance based on its recommendations. For a premium membership, FutureAdvisor takes its tool one step further. It will actually make the trades automatically that are necessary to rebalance a portfolio to its recommended asset allocation. It will also invest new cash and even harvest tax losses at the end of each calendar year.

Hedge Funds Hate These 5 Big Stocks -- but Should You?

BALTIMORE (Stockpickr) -- Hedge fund managers are agitated right now. With the S&P 500 up more than 26% since the first trading day in January, hedge funds are being compared against a pretty high barrier.

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And with only two weeks and change left in December, there isn't a lot of time left to play catch-up before the books close for year-end. That makes the stocks that hedge funds love right now pretty interesting -- and it makes the ones they hate even more interesting.

In my view, the performance gap means that a lot of the names fund managers are throwing away are quality stocks that they know won't close the gap on the market. But with hundreds of billions of dollars coming out of quality to chase higher-risk stocks this month, it could mean that there are some bargains in the names the pros hate.

Luckily for us, we can get a glimpse at exactly which stocks top hedge funds' hate lists by looking at 13F statements. Institutional investors with more than $100 million in assets are required to file a 13F, a form that breaks down their stock positions for public consumption.

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From hedge funds to mutual funds to insurance companies, any professional investors who manage more than that $100 million watermark are required to file a 13F. All told, 874 hedge funds filed the form for the most recent quarter, so by comparing one period's filing to another, we can get a sneak peek at how early filers are moving their portfolios around.

Without further ado, here's a look at five stocks fund managers hate.

Google

By far, the most unloaded name in the last quarter was search engine behemoth Google (GOOG). Hedge funds sold off more than 2.74 million shares of the $362 billion technology stock, cutting their stakes in GOOG by close to 20%.

Already it's proven to be a pretty poor trade. While the S&P 500 has climbed 7.2% since the quarter's end, Google has rallied more than 23.8% over the same timeframe.

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Google already operates the world's most popular Internet search engine, and it has made serious efforts to expand its reach into the "next big thing." The firm's Android operating system is the dominant platform for new mobile devices, and the acquisition of Motorola's Mobility arm last year makes Google a major electronics manufacturer too.

Despite some high-profile tech products, though, Google's bread and butter remains paid search. Search advertising still adds up to more than 80% of Google's revenues, but since the majority of GOOG's side projects (from Google Drive to YouTube to Android) really support ad traffic, that isn't as big of a disconnect as it may first appear.

Those efforts at attracting eyes are paying off; Google's products currently take in around 60% of the world's web search traffic. And since paid ads are designed to connect potential customers with the vendors they're looking for, Google's ads are actually accretive to users' experience (more than can be said for some other online ad sellers today).

While Google's valuation looks a bit rich at the moment, momentum remains strong. Hedge funds unquestionably made a mistake unloading shares when they did.

Visa

$126 billion payment network Visa (V) is another name that's delivered market-beating performance in 2013 -- and another position that hedge funds unloaded en masse in the most recent quarter. All told, funds sold off 7.53 million Visa shares, reducing their position in the payment stock by a hefty 20%.

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Visa is the biggest payment network in the world; its logo is printed on more than 60% of the world's credit and debt cards, giving it a deep economic moat. payment card acceptance is a positive feedback loop: consumers see Visa's network accepted everywhere they shop, so they're more likely to get a Visa-braded card, and merchants see more customers whip out a Visa than any other brand, so they're more willing to keep accepting Visa. That makes the firm's network extremely hard to replicate for new networks unless they're willing to take a huge haircut on the fees they charge.

Since Visa is the payment network, not the card issuer, it doesn't carry the balance sheet risks that a conventional banking stock would. Instead, the firm's revenues are spend-centric, not lend-centric. Globally, the shift from cash to electronic payments looks likely to fuel growth for the foreseeable future in Visa, especially in emerging markets where penetration is much lower.

Visa's massive scale just means that it'll get to benefit more than peers.

Intuitive Surgical

2013 has been a less impressive year for shares of $15 billion surgical device maker Intuitive Surgical (ISRG); shares of the firm have slopped more than 22% since the calendar flipped over to January. So while hedge funds only sold off 983,000 shares of ISRG last quarter, it actually amounted to almost a third of their collective stake in the stock. That's a conviction sell for sure.

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Intuitive Surgical makes robotic surgical systems for hospitals that want to be able to perform less-invasive surgeries than would be possible if done by a surgeon's hand. The firm's da Vinci system is currently deployed in more than 2,500 hospitals around the globe -- and that huge installed base comes with some big benefits. There's no question that the da Vinci system has stellar growth prospects, but shares spent the last year sporting a dramatically overinflated valuation. With much of the premium now deflated from ISRG's current share price, this stock is starting to look buyable again.

As Intuitive's installed base grows, so too does the firm's ability to generate recurring revenues. While new da Vinci systems are pricey (and sales are more hard-fought), ISRG also earns revenues by selling surgical systems and the instruments they use, more machines and more surgeries mean more high-margin consumable sales.

From a technical standpoint, this stock starts to look attractive again on a move through the $400 level.

J.C. Penney

Hedge fund managers may have been more on the money in their sale of J.C. Penney (JCP) last quarter. Funds sold off 11.62 million shares of the department store retailer in the period, but price action ended up being the more painful hit for Penney shareholders, considering that the stock has halved year-to-date. Hedge funds still retain an 89 million share position in JCP at last count.

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J.C. Penney is a 111-year-old department store retailer that operates just over 1,100 stores in 49 states and Puerto Rico. That huge store footprint means that Penny is pretty highly leveraged, so while great execution can drive some impressive income statement performance, a series of execution misses have disproportionately hammered losses into this stock in recent years.

The unceremonious departure of Ron Johnson back in April should have left a bad taste in investors' mouths. Johnson's changes hadn't had time to fully play out, yet he was ousted in favor of former CEO Mike Ullman. The decision to destroy shareholder value by changing horses in midstream hasn't been adequately addressed by management.

Management has at least stocked JCP's shelves with a more-appealing, higher-margin merchandise mix. And the bandages on JCP's business should at least stop the cash hemorrhaging that's been stomping this stock's price in 2013.

Even though Penney looks cheap right now, the technicals suggest that it could be headed cheaper. I'd follow hedge funds' lead in December.

Broadcom

The last name on our hedge funds' sell list is Broadcom (BRCM), the $16 billion chipmaker. Even if you're not directly familiar with Broadcom's products, there's a good chance you use them; BRCM's wifi, Bluetooth and GPS chips are used in a wide array of devices.

Broadcom's expertise in building communications chips makes it a perfect match for original equipment manufacturers looking to add communications capabilities to their products; the firm was one of the first to perfect combining hardware for different technologies on a single chip. One of the most attractive (and unique) attributes about Broadcom's model is the fact that the company doesn't own its own production facilities. Instead, it outsources those tasks to third parties. While that means that BRCM leaves some profit on the table with its manufacturers, it also means that the firm is spared from the high capital costs that make semiconductors so cyclical.

Huge production volumes for mobile devices should continue to spur growth at Broadcom. As consumers shorten their upgrade cycles between subsidized phones and tablets, BRCM is able to sell more chips than ever before. So even though hedge funds sold off 18.26 million shares of this chip stock last quarter (around a third of their total stake), BRCM looks like it has upside ahead of it.

To see these stocks in action, check out the at Stocks Fund Managers Hate portfolio on Stockpickr.



-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:

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Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in the 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

What if Mexico's Energy Bill Goes Through?

If a huge energy bill and change in the constitution passes in Mexico, writes MoneyShow's Jim Jubak, also of Jubak's Picks, the companies that stand to gain the most, may be the ones with all the equipment.

Certainly it's too early to say that a historic energy bill—and constitutional amendment—will pass Mexico's legislature. Mexican senators have just begun to debate a bill that would amend the constitution and create a system that permits foreign oil companies to invest in Mexico's oil industry for the first time since the sector was nationalized in 1938. The current bill would allow private companies to own part of the production—or part of the profit—from Mexican oil wells, while keeping ownership of Mexican oil reserves in the hands of the government owned national oil company Petroleos Mexicanos, or Pemex. Foreign oil companies would not be allowed to book state-owned reserves for accounting purposes—but would be able to put cash flow from production on their balance sheets. A system like this would give Mexico, which has seen production fall by 25% since 2004, the capital it needs to drill in deeper parts of the Gulf of Mexico, to modernize oil recovery methods used in its existing fields, and to begin to exploit the country's own oil and gas shale geologies. (The effort is crucial to Mexico's economy, which has seen a manufacturing recovery, hobbled by energy costs far higher than those just across the border, and by electricity rates, 25% higher than in the United States.)

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The bill is contentious. Mexico's ownership of its own oil is, for many Mexicans, a foundation of the country's economic independence from the United States. Street protests are likely to be a continuing fact of life in Mexico City, while the legislature debates the bill. The government of President Enrique Pena Nieto has set the goal of passing a bill before Christmas.

Despite the protests, and the deep ambivalence many Mexicans feel about letting the big international oil companies—that dominated the country's oil industry—back in the door, I think the current legislation has a very good chance of passing. It has been crafted to avoid those points most likely to invoke that history—and the need is very pressing. Mexico gets a third of its budget from Pemex and, therefore, the downward trend in oil production isn't just an issue for the economy as a whole, but also goes right to the ability of the government to fund its operations.

If the bill does pass, as I expect, what might an investor want to own? All the big international oil producers will move to invest in Mexico's fields. For most of these, though, even big increases in Mexican production isn't going to make a huge impact on their balance sheets. Exxon Mobil (XOM), for example, is just too big to get much leverage out of Mexico. (The two international oil producers that are likely to get the biggest leverage out of investing in Mexico are Chevron (CVX) and Anadarko (APC)—because their current finds in the Gulf of Mexico fit together, in my opinion, so well with reserves, and potential reserves, owned by Pemex.

But I think the biggest beneficiaries of a change in Mexico's constitution, that allows foreign investment in Mexico's oil industry, will be companies that sell equipment to the oil industry.

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Class of 2012 graduated with $29,400 average debt

The average student debt load continues to rise as new data show the Class of 2012 graduated college with an average debt of close to $30,000.

The $29,400 last year's graduates hold in student loans is up from an average debt load of $26,600 held by 2011 graduates, according to an annual report from the Project on Student Debt at The Institute for College Access and Success.

While colleges are raising tuition, families' incomes are still suffering from the effects of the recession and remain flat — both factors are increasing students' need to borrow to attend school, says Debbie Cochrane, research director at The Institute for College Access and Success.

"Rising tuition and high tuition are certainly a contributor to increasing student debt, but it's far from the full picture," she says. "Family incomes and families' own ability to contribute to college costs has just been stagnant."

Sallie Mae's "How America Pays for College" study out earlier this year found parents' income and savings are covering 27% of college costs, compared with 37% in 2010.

"The post-recession reality is (parents) don't have the income and savings," Sarah Ducich, senior vice president of public policy at Sallie Mae, told USA TODAY in July. "It's not that they're not willing to stretch. It's that they don't think they have the money to do that."

Plus, many graduates are still having difficulty finding jobs that pay enough to cover student loan payments, Cochrane says.

"The down economy has really been a double-edged sword in many ways because (students) and their parents have fewer resources to pay for college costs, which may lead them to take on more debt," she says. "And then they're entering a down economy where it's hard to find a good job that allows them to repay the debt."

This year's Project on Student Debt numbers include data from the National Postsecondary Student Aid Study, which comes out every four years. It gives a more comprehensive picture of student debt, becau! se it includes debt loads for students who went to for-profit colleges, where more students often graduate with debt and graduate with higher debt, Cochrane says.

To provide individual state and college data, The Project on Student Debt also collects data from colleges that volunteer the information, and few for-profit colleges participate, Cochrane says.

Students from Delaware graduated with the most debt — an average of $33,649 — while students in South Dakota were the most likely to graduate with debt, at 78% of graduates, the data show. South Dakota's average debt is $25,121.

While most students take out federal loans, a fifth hold private loans, the data show. Private loans have been known to be more difficult for borrowers to manage and have less flexible repayment plans. The Consumer Financial Protection Bureau's annual student loan ombudsman report out in October reported that students with private student loans in particular have difficulty enrolling in alternative repayment plans; private loan servicers also often allocate payments to maximize late fees and pay off low-interest loans first rather than costlier high-interest loans.

'Mad Money' Lightning Round: I Believe in Red Hat

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

NEW YORK (TheStreet) -- Here's what Jim Cramer had to say about some of the stocks callers offered up during the "Mad Money Lightning Round" Friday evening:

Red Hat (RHT): "The cloud stocks are still under a cloud but I'm a believer."

DepoMed Inc (DEPO): "Drug delivery systems are hot and anyone that gets it right will make a lot of money." CVR Energy (CVI): "I think the refiners are good and that's a good one." Chesapeake Energy (CHK): "I think this one is fine. I think it's worth a lot more long term." United Community Banks (UCBI): "That's a good community bank and I think you're in good shape with that one." iShares Silver Trust (SLV): "No. I'm not a buyer of silver here. I like Randgold Resources (GOLD)." Westport Innovations (WPRT): "Here's the problem. It's a speculative stock that's partnered with Cummins (CMI). If you want to play natural gas engines, buy Cummins." DryShips (DRYS): "I would buy some DryShips. I have no problem with that." To read a full recap of "Mad Money" on CNBC, click here. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here. -- Written by Scott Rutt in Washington, D.C. To email Scott about this article, click here: Scott Rutt Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

Fidelity Institutional lowers fees for financial advisers trading on its platform

Fidelity Institutional Wealth Services is lowering fees for advisers who trade on its platform — for the most part.

Starting Jan. 1, Fidelity will lower to $30, from $40, the standard pricing for a buy or sell transaction on its FundsNetwork platform, a 25% saving. But the custodian is also raising buy fees by 25% to $50 on five fund families, including the popular offerings from the Vanguard Group Inc., according to spokeswoman Erica Birke.

The fee shift signals the Fidelity custody division’s intent to heat up competition, especially with the larger Schwab Advisor Services and TD Ameritrade Institutional, in the aftermath of a corporate reorganization in July that saw the firm streamline its businesses for independent advisers, broker-dealers and other affiliates.

Fidelity is the third-largest independent adviser custodian by clients. Its platform provides access to more than 20,000 mutual funds.

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The fund families that will be hurt by the price increase, which was first reported by RIABiz, are Dimensional Fund Advisors, CGM Funds, Dodge & Cox Funds and Sequoia Funds. Sell fees on those funds, however will be decreased to $30.

“These specific fund families … are not compensating Fidelity for the shareholder services that we perform on their behalf,” Ms. Birke said.

Managers of the affected funds could not be immediately reached for comment. Like what you've read?

Fifth Third Settles SEC Accounting Charge

NEW YORK (TheStreet) -- The Securities and Exchange Commission on Wednesday announced that Fifth Third Bancorp (FITB) of Cincinnati and its former CFO Daniel Poston had settled charges of "improper accounting of commercial real estate loans in the midst of the financial crisis."

Fifth Third agreed to pay a $6.5 million fine, while Poston agreed to pay $100,000 and "be suspended from practicing as an accountant on behalf of any publicly traded company or other entity regulated by the SEC."

Poston had been demoted from the CFO position and named Fifth Third's "chief strategy and administrative officer in November, when Fifth Third announced its agreement to settle the charges.

The SEC accused the bank and Poston of failing to classify a pool of nonperforming commercial real estate loans as "held-for-sale" during the third quarter of 2008, even though the bank had already decided to sell the loans.  Recategorizing the loans during the third quarter of 2008 would have included a significant write down, which would have "increased Fifth Third's pretax loss for the quarter by 132 percent."

The SEC said Poston during the third quarter of 2008 was "familiar with the company's loan sale efforts, which included entering into agreements with brokers during the third quarter of 2008 to market and sell loans."  The regulatory added that "Despite understanding the relevant accounting rules, Poston failed to direct Fifth Third to classify and value the loans as required," and that the former CFO made inaccurate statements to auditors.  Poston also made inaccurate statements to Fifth Third's auditors about the company's loan classifications, and certified the company's inaccurate results for the third quarter of 2008.

Neither Fifth Third nor Poston admitted any wrongdoing.

Fifth Third's shares were down slightly during the final hour of trading Wednesday, to $19.93.

FITB data by YCharts
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Best Warren Buffett Stocks To Own For 2014

-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email. Follow @PhilipvanDoorn

Hot Growth Companies To Invest In Right Now

Margins matter. The more Immersion (Nasdaq: IMMR  ) keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new strategic plans, or (gasp!) distribute to shareholders. Healthy margins often separate pretenders from the best stocks in the market. That's why we check up on margins at least once a quarter in this series. I'm looking for the absolute numbers, so I can compare them to current and potential competitors, and any trend that may tell me how strong Immersion's competitive position could be.

Here's the current margin snapshot for Immersion over the trailing 12 months: Gross margin is 97.2%, while operating margin is -7.1% and net margin is -8.5%.

Unfortunately, a look at the most recent numbers doesn't tell us much about where Immersion has been, or where it's going. A company with rising gross and operating margins often fuels its growth by increasing demand for its products. If it sells more units while keeping costs in check, its profitability increases. Conversely, a company with gross margins that inch downward over time is often losing out to competition, and possibly engaging in a race to the bottom on prices. If it can't make up for this problem by cutting costs -- and most companies can't -- then both the business and its shares face a decidedly bleak outlook.

Hot Growth Companies To Invest In Right Now: Waste Management Inc.(WM)

Waste Management, Inc., through its subsidiaries, provides waste management services to residential, commercial, industrial, and municipal customers in North America. It offers collection, transfer, recycling, and disposal services. The company also owns, develops, and operates waste-to-energy and landfill gas-to-energy facilities in the United States. Its collection services involves in picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility, or disposal site; and recycling operations include collection and materials processing, plastics materials recycling, and commodities recycling. In addition, it provides recycling brokerage, which includes managing the marketing of recyclable materials for third parties; and electronic recycling services, such as collection, sorting, and disassembling of discarded computers, communications equipment, and other electronic equipment. Further, the company e ngages in renting and servicing portable restroom facilities to municipalities and commercial customers under the Port-o-Let name; and involves in landfill gas-to-energy operations comprising recovering and processing the methane gas produced naturally by landfills into a renewable energy source, as well as provides street and parking lot sweeping services. Additionally, it offers portable self-storage, fluorescent lamp recycling, and medical waste services for healthcare facilities, pharmacies, and individuals, as well as provides services on behalf of third parties to construct waste facilities. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was incorporated in 1987 and is based in Houston, Texas.

Advisors' Opinion:

• [By Wallace Witkowski]

  Some of the companies most dependent on government for revenue are Harris Corp. (HRS) �with 80% of revenue government-derived; Granite Construction Inc. (GVA) �with 58%; Flir Systems Inc. (FLIR) �with 54%; and Waste Management Inc. (WM) � and Republic Services Inc. (RSG) �both with 50%, according to Goldman Sachs.

• [By Sean Williams]

  Keep in mind that some companies�deserve�their current valuations. Take Waste Management (NYSE: WM  ) , for instance, which has rallied ever since reporting its first-quarter results last week. The company's internal revenue growth from yield for its collection and disposal operations came in at a two-year high, 1.4%, and the company modestly improved its adjusted year-over-year EPS. Trash disposal and recycling are necessity businesses and make Waste Management a solid long-term buy.

• [By Selena Maranjian]

  It can be good, though, with kids, to add a few individual company stocks to the mix, to keep things more interesting. A solid, dividend-paying blue chip such as Waste Management (NYSE: WM  ) can be a smart choice, in part because it's relatively easy to understand. It's reliable because garbage collection is likely to be in great demand for a long time, and the company has become a major recycler, too, even generating energy from some waste.

• [By John Persinos]

  One dominant company in the handling, treatment, and disposal of solid waste is Waste Management (WM). With this industry leader, investors are paying for market dominance, relative predictability, good dividends, and high cash flow.

Hot Growth Companies To Invest In Right Now: Eastern Insurance Holdings Inc.(EIHI)

Eastern Insurance Holdings, Inc., through its subsidiaries, provides workers compensation insurance and reinsurance products in the United States. The company?s Workers Compensation Insurance segment provides traditional workers compensation insurance coverage products, including guaranteed cost policies, policyholder dividend policies, retrospectively-rated policies, deductible policies, and alternative market products to employers. This segment distributes its workers? compensation products and services through its independent insurance agents primarily in Pennsylvania, Delaware, North Carolina, Maryland, Indiana, and Virginia. Its Segregated Portfolio Cell Reinsurance segment offers alternative market workers compensation solutions comprising program design, fronting, claims administration, risk management, segregated portfolio cell rental, asset management, and segregated portfolio management services to individual companies, groups, and associations. Eastern Insurance Holdings, Inc. is headquartered in Lancaster, Pennsylvania.

Advisors' Opinion:

• [By Lauren Pollock]

  ProAssurance Corp.(PRA) agreed to acquire Eastern Insurance Holdings Inc.(EIHI) for about $205 million, expanding the insurance company’s casualty insurance offerings. Eastern Insurance is a domestic casualty insurance group specializing in workers’ compensation products and services, among other things. ProAssurance plans to pay $24.50 in cash for each outstanding Eastern share, a 16% premium over Monday’s closing price.

Top 5 Energy Stocks To Invest In 2014: TrueBlue Inc.(TBI)

TrueBlue, Inc. provides temporary blue-collar staffing services in the United States. It supplies on demand general labor to various industries under the Labor Ready brand; skilled labor to manufacturing and logistics industries under the Spartan Staffing brand; and trades people for commercial, industrial, and residential construction, and building and plant maintenance industries under the CLP Resources brand. The company also provides mechanics and technicians to the aviation maintenance, repair and overhaul, aerospace manufacturing, and assembly industries, as well as to other transportation industries under the Plane Techs brand; and temporary drivers to the transportation and distribution industries under the Centerline brand. It primarily serves small and medium-size businesses. The company was formerly known as Labor Ready, Inc. and changed its name to TrueBlue, Inc. in December 2007. TrueBlue, Inc. was founded in 1985 and is headquartered in Tacoma, Washington.

Advisors' Opinion:

• [By Jonathan Yates]

  Even though the stock market rallied on Federal Reserve Chairman Ben Bernanke's remarks with the Dow Jones Industrial Average (NYSE: DIA) and Standard & Poor's 500 Index (NYSE: SPY) surging, the long term winners will be stocks in the staffing industry such as Paychex(NASDAQ: PAYX), TrueBlue (NYSE: TBI), Robert Half (NYSE: RHI), and Labor SMART (OTCBB: LTNC).

• [By Jonathan Yates]

  For those looking to invest in real estate stocks, highly recommended is the Dr. Housing Bubble blog. In a recent posting, the "Dr." pointed out that there was a "Lost Generation" when it came to household income. That has not happened for those investing in staffing industry stocks such as Paychex (NASDAQ: PAYX), Robert Half International (NYSE: RHI), TrueBlue, Inc. (NYSE: TBI), and Labor SMART (OTCBB: LTNC).

• [By Jonathan Yates]

  When looking at small cap stocks, it is useful to compare the company with others that have expanded in both share price and size. For those considering investing in the $100 billion staffing industry, the growth of TrueBlue (NYSE: TBI) shows what could be the potential path for Labor SMART (OTCBB: LTNC), as both operate in the $29 billion demand labor sector. Other firms have done well in the staffing industry include Paychex (NASDAQ: PAYX) and ManPower Group (NYSE: MAN).

Hot Growth Companies To Invest In Right Now: Nordstrom Inc.(JWN)

Nordstrom, Inc., a fashion specialty retailer, offers apparel, shoes, cosmetics, and accessories for women, men, and children in the United States. It offers a selection of brand name and private label merchandise. The company sells its products through various channels, including Nordstrom full-line stores, off-price Nordstrom Rack stores, Jeffrey? boutiques, treasure & bond, and Last Chance clearance stores; and its online store, nordstrom.com, as well as through catalog. Nordstrom also provides a private label card, two Nordstrom VISA credit cards, and a debit card for Nordstrom purchases. The company?s credit and debit cards feature a shopping-based loyalty program. As of September 30, 2011, it operated 222 stores, including 117 full-line stores, 101 Nordstrom Racks, 2 Jeffrey boutiques, 1 treasure & bond store, and 1 clearance store in 30 states. The company was founded in 1901 and is based in Seattle, Washington.

Advisors' Opinion:

• [By Robert Martin]

  Deutsche Bank�(DB) analysts, for example, expect the department store space overall to struggle this holiday season in the face of declining mall traffic and overall spending that is lackluster. That means they expect stronger stores like�Macy’s�(M)�and�Nordstrom�(JWN) to post even lower earnings, and flailing JCPenney to post an even wider loss.

• [By Mani]

  [Related -Nordstrom, Inc. (JWN): Fundamental Stock Research Analysis]

  Nordstrom EPS results have managed to top the street's view twice in the preceding four quarters while missing in the remaining two periods. Analysts have become bearish on earnings prospects of Nordstrom as the consensus estimate dropped by 8 cents (11 percent) in the past three months. However, one analyst raised the profit estimate in the last month.

• [By Alex Planes]

  This graph represents the "purchase consideration" of Men's Wearhouse against some of its largest suit-selling competitors, listed as Jos. A. Bank (NASDAQ: JOSB  ) , Macy's (NYSE: M  ) , and Nordstrom (NYSE: JWN  ) , among others. The industry average has been pretty steady, but Men's Wearhouse appears to be wearing thin among millennials (and among male consumers on the bubble between the millennial generation and Generation X). If that's so, then why did Men's Wearhouse report a nice spike in profits in its latest report? Well, older consumers still like the way they look in a Zimmer-promoted suit:

• [By Ben Levisohn]

  Shares of J.C. Penney have dropped 4.4% to $8.65 today at 9:33 a.m., while Macy’s (M) has fallen 1.2% to $42.99, Kohl’s (KSS) has dipped 0.9% to $51.56, Nordstrom (JWN) is off 0.8% to $55.99 and Dillard’s (DDS) has dropped 0.8% to $78.50.

Hot Growth Companies To Invest In Right Now: MEDIFAST INC(MED)

Medifast, Inc., through its subsidiaries, engages in the production, distribution, and sale of weight management and disease management products, and other consumable health and diet products in the United States. The company?s product lines include weight and disease management, meal replacement, and vitamins. It also operates weight control centers that offer Medifast programs for weight loss and maintenance, customized patient counseling, and inbody composition analysis. The company markets its products under the Medifast and Essential brand names, including shakes, appetite suppression shakes, women?s health shakes, diabetics shakes, joint health shakes, coronary health shakes, calorie burn drinks, calorie burn flavor infusers, antioxidant shakes, antioxidant flavor infusers, bars, crunch bars, soups, chili, oatmeal, pudding, scrambled eggs, hot cocoa, cappuccino, chai latte, iced teas, fruit drinks, pretzels, puffs, brownie, pancakes, soy crisps, crackers, and omega 3 and digestive health products. Medifast Inc. sells its products through various channels of distribution comprising Web, call center, independent health advisors, medical professionals, weight loss clinics, and direct consumer marketing supported via the phone and the Web; Take Shape for Life, a physician led network of independent health coaches; and weight control centers. The company was founded in 1980 and is headquartered in Owings Mills, Maryland.

Advisors' Opinion:

• [By Jon C. Ogg]

  Medifast Inc. (NYSE: MED) saw its stock down 5% in evening trading on Tuesday after the weight loss player had soft sales and guided expectations lower. Shares were still indicated down about 5%, but volume has not yet started.

• [By Holly LaFon] ast produces, distributes and sells weight and health management products with the brand names Medifast, Take Shape for Life, Hi-Energy Weight Control Centers and Woman�� Wellbeing.

  Its return on assets in the third quarter of 2011 was 19.6%, which has been increasing in the past several years. The average return on assets for the specialty retail industry is 10.48% for the trailing 12 months.

  The company�� total assets amounted to $94 million in 2010, which increased from $62.8 million in 2009. Net income also increased to $19.6 million in 2010 from $12 million in 2009.

  Boston Beer Inc. (SAM)

  Boston Beer Inc. is the largest brewer of handcrafted beers in America. Boston Beer is a growing company that recently saw a large increase in its return on assets. It increased from 19.3% in 2010 to 29.7% in 2011, and was negative as recently as 2008. The average return on assets for the beverages industry in the trailing 12 months is 9.47%.

  In 2011, the company�� total assets increased to $272.5 million from $258.5 million in 2010. Net income increased to $66 million from $50 million.

  Alliances Resources Partners (ARLP)

  Alliance Resources Partners is a coal producer and marketer primarily in the eastern U.S. Its ROA has been increasing since 2008 and increased to 22.5% in 2011 from 21.4% in 2010. The average return on assets for the oil, gas & consumable fuels industry in the trailing 12 months is 24.47%.

  In 2011, its total assets increased to $1.7 billion from $1.1 billion in 2010. Its net income increased to $389 million from $321 million.

  Factset Research Systems Inc. (FDS)

  Factset researches global market trends and develops analytical tools for investors. Of all of GuruFocus��5-star predictable companies, it has the highest return on assets at 27%. ROA has been increasing over the past several years. The average return on assets for the software industry for the trailing 12 m

Hot Growth Companies To Invest In Right Now: Thoratec Corporation(THOR)

Thoratec Corporation engages in the development, manufacture, and marketing of proprietary medical devices used for circulatory support. The company?s primary product lines include ventricular assist devices, such as HeartMate II, an implantable left ventricular assist device consisting of a rotary blood pump to provide intermediate and long-term mechanical circulatory support (MCS); and HeartMate XVE, an implantable and pulsatile left ventricular assist device for intermediate and longer-term MCS. Its ventricular assist devices also comprise Paracorporeal Ventricular Assist Device, an external pulsatile ventricular assist device, which provides left, right, and biventricular MCS approved for bridge-to-transplantation (BTT), including home discharge, and post-cardiotomy myocardial recovery; and Implantable Ventricular Assist Device, an implantable and pulsatile ventricular assist device designed to provide left, right, and biventricular MCS approved for BTT comprising hom e discharge, and post-cardiotomy myocardial recovery. The company also provides CentriMag, an extracorporeal full-flow acute surgical support platform that offers support up to 30 days for cardiac and respiratory failure. In addition, it offers PediMag and PediVAS extracorporeal full-flow acute surgical support platforms designed to provide acute surgical support to pediatric patients. The company sells its products through direct sales force in the United States, as well as through a network of distributors internationally. Thoratec Corporation was founded in 1976 and is headquartered in Pleasanton, California.

Advisors' Opinion:

• [By Brian Pacampara]

  What: Shares of medical device company Thoratec (NASDAQ: THOR  ) sank 12% today after its quarterly results missed Wall Street expectations. �