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 thesis.

What: Shares of Facebook took off today, gaining as much as 17%, and closing up 14% after posting another blockbuster earnings report.

So what: The social networking giant blew Wall Street out of the water, as revenue soared 63%, to $2.59 billion, well ahead of the analyst consensus at $2.33 billion. Meanwhile, adjusted earnings jumped from $0.17 a share a year ago to $0.31, beating estimates at $0.27. Mobile growth was particularly robust for the year, as daily mobile active users increased 49%, and monthly mobile users grew 39%. In a brief statement, CEO Mark Zuckerberg simply said: "It was a great end to the year for Facebook. We're looking forward to our next decade and to helping connect the rest of the world."

Now what: Facebook's growth continues to seem unstoppable. The company that was widely maligned after its 2012 IPO has now seen shares more than triple from their bottom that summer, as the social network has mastered the mobile ad game and seen revenue growth pick up. The market seems to be particularly excited about the potential of Instagram and video ads, as well, which are promising untapped sources. Apple's falter earlier this week may also show that the future of tech is in the hands of information stewards like Google and Facebook, and not with those like the iPhone maker.

In this video from Thursday's edition of Investor Beat, host Chris Hill, and Motley Fool analysts Jason Moser and Matt Koppenheffer, sift through the market headlines to bring investors the top stories of the day.

Visa's  first quarter could hardly have gone better, with top and bottom lines both coming in higher than expected, though much of this was already baked into the share price, and the stock moved little as a result. Under Armour exploded today, up an astonishing 22%, after reporting a fantastic fourth quarter, its 15th straight quarter in which revenue increased by at least 20%. Electronics retailer Hhgregg fell hard today after lousy Q3 results and weak guidance going forward, with an 11% decline in same-store sales. And CARBO Ceramics delivered a strong fourth quarter with revenue and profits both coming in above expectations, and the stock is up big as a result. In this segment, the guys take a look at four stocks making moves on the market today.

In this video from Thursday's edition of Investor Beat, host Chris Hill, and Motley Fool analysts Jason Moser and Matt Koppenheffer, sift through the market headlines to bring investors the top stories of the day.

Shares of Facebook hit another new all-time high today after fourth-quarter profits came in higher than expected. Mobile ad revenue, which was virtually non-existent when Facebook went public, now makes up 53% of the company's total revenue. In the lead story on today's Investor Beat, the guys discuss Mark Zuckerberg's role in Facebook's amazing turnaround, what the company may do with the $11 billion in cash on its balance sheet, and the potential for the company and the stock in the future.

Then, the guys take a look at four stocks making moves on the market today. Visa's first quarter could hardly have gone better, with the top and bottom lines both coming in higher than expected, though much of this was already baked into the share price, and the stock moved little as a result. Under Armour exploded today, up an astonishing 22%, after reporting a fantastic fourth quarter, its 15th straight quarter in which revenue increased by at least 20%. Electronics retailer Hhgregg fell hard today after lousy Q3 results and weak guidance going forward, with an 11% decline in same-store sales. And CARBO Ceramics delivered a strong fourth quarter, with revenue and profits both coming in above expectations, and the stock is up big as a result.

And finally, Matt tells investors about mortgage REITs ahead of the earnings announcements of several major mREITs next week, and discusses why he'll have an eye on Annaly Capital, in particular, while Jason talks Chipotle, and says that while the rest of the market might be focusing on same-store sales, he's much more interested in the company's throughput, how quickly it can move the line, and get people their burritos.

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

Investors decided to see the bull-market glass as half full on Thursday, with the S&P 500 more than making up for its losses yesterday on positive earnings news from a number of high-profile companies. But several stocks completely missed out on today's gains, as J.C. Penney , Overstock.com , and ITT Educational Services all recorded substantial losses today.

J.C. Penney fell 8%, steepening its downward trajectory from earlier in the week, and hitting levels not seen in more than 20 years. Investors continue to doubt whether the retailer can survive in its current form, even as management has taken steps to deter would-be acquirers or activist investors from taking substantial stakes in the company's stock. The move has valid tax purposes in preserving tax losses from what the IRS would define a change of control; but for investors hoping to score quick turnaround gains, J.C. Penney's poison-pill plan takes away one possible exit strategy.

Overstock.com plunged 22% after reporting its fourth-quarter results. Revenue rose 16% on an eightfold increase in net income. Yet, nearly all of that income came from a one-time bump related to deferred tax assets, without which the online retailer would have just barely grown its overall net income from last year's levels. With the stock having doubled before the announcement, Overstock investors clearly wanted the company's key holiday quarter to be more successful from an operational standpoint.

ITT Educational plummeted 21%, as investors reacted negatively to the for-profit educator's nearly 13% drop in revenue and wider net loss for the fourth quarter. New student enrollment showed promising growth of 4.5%, but total enrollment continued to wane, falling 5.8% from year-ago levels. Given that various state governments expanded their investigations of for-profit educational institutions earlier this week, investors aren't certain about ITT's future prospects.

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 Textura Corp. jumped more than 10% during Thursday's intraday trading after the company posted better-than-expected fiscal first-quarter 2014 results.

So what: Quarterly revenue increased 77%, to $12 million, which translated to an adjusted net loss of $0.19 per share. Analysts were expecting a $0.19 per-share loss on revenue of $11.85 million. 

Keep this in mind: Textura's acquisition of LATISTA closed in early December -- without it, Textura would have turned in revenue of $11.8 million, and an adjusted net loss of $0.18 per share.

Textura also reaffirmed revenue guidance for the full fiscal year 2014 for sales in the range of $57.5 to $60.5 million, or an increase of 62% to 70% over fiscal 2013. In addition, Textura introduced 2014 earnings guidance, projecting an adjusted loss per share in the range of $0.62 to $0.55.

The midpoint of both ranges actually falls short of analysts' numbers, which call for a 2014 net loss of $0.52 per share on sales of $59.4 million. However, the discrepancy again lies with the LATISTA acquisition, which will only add around $1.5 to $2 million in 2014 revenue, while increasing Textura's 2014 losses by $0.23 to $0.24 per share.

Now what: As long as Textura is still bleeding money with no end in sight, I have to admit it's hard for me to get excited about the stock. What's more, Textura is also facing allegations of fraud from Citron Research, which most notably called into question the credibility of Textura's management, given a troubling lack of disclosure leading up to its 2013 IPO.

But regardless of whether Citron's allegations are correct, I'd still prefer to see more tangible progress from Textura toward achieving sustained long-term profitability. Until then, I think investors would be wise to keep it on their watchlists.

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 thesis.

What: Shares of ITT Educational Services were flunking out today, falling as much as 23%, and finishing down 21% after an underwhelming fourth-quarter earnings report.

So what: The for-profit educator has been particularly volatile during the past year, and that pattern continued as revenue fell 12.6%, to $262.9 million, though that actually beat estimates of $260.9 million. Meanwhile, the company saw its per-share loss grow from -$0.41 to -$0.49, as overall enrollment dropped 5.8%, to 57,542. As a silver lining, new student enrollment ticked up 4.5%, to 13,995, but continuing students fell 8.6%, a sign that dropouts are increasing, and that students are perhaps not finding the school worth their investment.

Now what: The for-profit education industry tends to track as a whole, and the group of stocks has begun to battle back recently after two years of sharp declines. The fourth quarter is generally a weak one for ITT, so the loss should not be so surprising. In its earnings call, management forecast EPS for 2014 of $3.00-$3.65 compared to the analyst average at just $3.11. That range would be better than its 2013 total of $2.52, meaning now could be a good time to invest. Still, I'd like to see student enrollment and revenue numbers moving in the right direction first.

All those who lamented Google's decision in 2012 to drop $12.4 billion on Motorola Mobility, easily its largest acquisition to date, as misguided and much too expensive are probably gloating today. After announcing it sold Motorola, not counting the 20,000 mobile patents, to Lenovo for $2.9 billion, Google and CEO Larry Page were likely expecting a tidal wave of negativity. And, at first glance, the various headlines referring to the Lenovo deal as "Google's Misstep" seem warranted.

But before you judge the deal too quickly -- in other words, take the original $12.4 billion price tag Google spent for Motorola in 2012, subtract the $2.9 billion it just sold the unit for, and determine Google is eating $9.5 billion -- there's a bit more to the story. Does the sale of Motorola equate to an admission of defeat for Google? To some extent, yes, certainly as a hardware manufacturer, but nothing close to a $9.5 billion setback.

The rest of the story
Determining how big a hit Google is taking by selling Motorola to Lenovo requires reviewing its original deal to secure the business in 2012. Of the $12.4 billion Google spent to acquire the device manufacturer, $2.9 billion was cash and equivalents sitting on Motorola's balance sheet. That drops the cost of Motorola's actual assets at the time to $9.5 billion.

Since taking over Motorola, Google has also unloaded non-core assets, including last year's deal to sell the cable box unit to Arris Group for $2.05 billion in cash along with $300 million in stock. So, if we take another $2.3 billion from the $9.5 billion Google sunk into Motorola's assets, the search giant's on the hook for about $7.2 billion.

When Google made the original Motorola deal, it estimated the value of Motorola's patent portfolio at a whopping $5.5 billion. Even then, it was clear the patents were far and away the most valuable asset Motorola owned. Some investors may question Google's patent valuation, but let's assume its patent estimates are close; that leaves Google with Motorola assets of $1.7 billion ($7.2 billion less $5.5 billion), based on its original acquisition price. Does that mean Google actually made money on the Lenovo deal? Not quite.

There's one last factor to consider in calculating just how much Google lost, or gained, from the sale of Motorola. The $2.9 billion deal with Lenovo for the hardware business includes $1.4 billion in cash, about half the amount Google received in its original Motorola transaction, meaning Lenovo is actually spending $1.5 billion for Motorola's hardware assets.

After taking into account the cash included in both the 2012 and 2014 Motorola deals, asset sales in the interim, and Google's patent portfolio, the sale of Motorola leaves Google with approximately $200 million of egg on its face ($1.7 billion less $1.5 billion). Nothing to brag about, but hardly as bad as the headlines would have some believe. 

From here
Though China-based Lenovo's $2.3 billion deal to acquire the low-end server business of IBM last week was well received, the same can't be said for the Motorola acquisition. Lenovo was down more than 4% at the open after getting pounded by investors in after-hours trading.

As for Google, the decision to exit the hardware business and concentrate on its Android OS dominance, self-driving cars, and bizarre Internet balloons, among other innovative technologies, seems to have struck a chord with investors, and Google's share price jumped about 2% out of the gate this morning.

Final Foolish thoughts
The Motorola announcement is an ideal example of why investors need to go beyond the headlines before making decisions. If your research stopped at the news that Google spent $12.4 billion for Motorola and then sold it less than two years later for $2.9 billion, you'd wonder if Page and his team had lost their collective minds. Turns out, what seemed to have been a colossal failure at first glance really wasn't that bad a deal for Google.

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

The Dow Jones Industrials bounced back from yesterday's declines, rising almost 110 points. But more interesting than the Dow's gains themselves was where they came from, with consumer stocks Nike and Disney leading the way, joined by industrial giant Caterpillar .

Nike rose more than 3%, which was all the more surprising because rival Under Armour posted amazing results that lifted the stock by 23% today. Ordinarily, you'd think that the success of one athletic-apparel maker would necessarily mean failure for others. But Nike's gains reflect the ongoing increases in popularity of sports and, at least for now, there's more than enough money chasing after various sports opportunities to give Under Armour, Nike, and several other major players in the industry room to grow well into the future.

Along the same theme, Disney climbed 2.7%, perhaps reflecting the importance of its ESPN cable network to its overall operations. The rise of ESPN has mirrored the rise in sports generally and, despite steadily increasing costs to acquire sports content, ESPN has commanded unparalleled bargaining power among cable providers and other content-delivery companies to ensure a constant flow of sports programming. Combined with Disney's other extensive ventures, the stock's gains appear justified, especially in light of recent declines during the Dow's stutter-step downward.

Meanwhile, outside the consumer space, Caterpillar gained 2.9%. The heavy-equipment maker's move came after the company quickly completed its existing stock-buyback program with an accelerated repurchase amounting to $1.7 billion. With a new $10 billion program about to take effect, Caterpillar pointed to its ability to use its extensive cash flow to complete the previous buyback program, even though that program still had two years left to run. Caterpillar is betting hard on its share-price declines being cyclical and, if it's right, shareholders who hang onto their stock could earn big rewards.

Image source: Google.

In reaction to a roughly in-line fourth-quarter report, Google shares traded more than 4% higher after the closing bell. The stock set new 52-week and all-time highs in the process.

The online search and advertising giant reported fourth-quarter revenue of $16.9 billion, a 17% year-over-year jump, and just above analyst expectations. Non-GAAP earnings surged 13% higher, landing at $12.01 per share. Analysts were looking for $12.26. The company is not in the habit of providing forward guidance of any kind.

The Motorola Mobile segment saw revenues falling 18% year over year. Operating losses in this division more than doubled, to $384 million, or roughly $1.13 per share on an EBIT basis. Motorola's handset operations are being sold to Chinese hardware specialist Lenovo for $2.9 billion, relieving Google of these operating losses in future reporting periods. The company did not elect to classify Motorola Mobility as discontinued operations in this fourth-quarter report.

Revenue collected from Google-owned sites jumped 22% year over year and accounted for two-thirds of total revenues. The volume of paid clicks increased 31% from the year-ago period, moderated by 11% lower cost per click.

In other news, Google's board of directors approved the plan to issue a third class of Google shares to existing Class A and Class B shareholders. One new Class C share will be issued for each Class A or B stub on April 2, to shareholders of record as of March 27. The new shares will adopt the old GOOG ticker, while Class A shares move to a new GOOGL ticker. The super-voting Class B shares will remain unlisted, as before.

Image source: Google.

In reaction to a roughly in-line fourth-quarter report, Google shares traded more than 4% higher after the closing bell. The stock set new 52-week and all-time highs in the process.

The online search and advertising giant reported fourth-quarter revenue of $16.9 billion, a 17% year-over-year jump, and just above analyst expectations. Non-GAAP earnings surged 13% higher, landing at $12.01 per share. Analysts were looking for $12.26. The company is not in the habit of providing forward guidance of any kind.

The Motorola Mobile segment saw revenues falling 18% year over year. Operating losses in this division more than doubled, to $384 million, or roughly $1.13 per share on an EBIT basis. Motorola's handset operations are being sold to Chinese hardware specialist Lenovo for $2.9 billion, relieving Google of these operating losses in future reporting periods. The company did not elect to classify Motorola Mobility as discontinued operations in this fourth-quarter report.

Revenue collected from Google-owned sites jumped 22% year over year and accounted for two-thirds of total revenues. The volume of paid clicks increased 31% from the year-ago period, moderated by 11% lower cost per click.

In other news, Google's board of directors approved the plan to issue a third class of Google shares to existing Class A and Class B shareholders. One new Class C share will be issued for each Class A or B stub on April 2, to shareholders of record as of March 27. The new shares will adopt the old GOOG ticker, while Class A shares move to a new GOOGL ticker. The super-voting Class B shares will remain unlisted, as before.

The Department of Defense awarded 12 defense contracts Thursday, worth $346.9 million in total. Two of these -- including the day's largest contract -- dealt with the new V-22 Osprey tiltrotor aircraft built jointly by Bell Helicopter Textron and Boeing , and in use by the U.S. Air Force, Navy, and Marine Corps.

Specifically:

• Britain's Rolls-Royce Corp. was awarded a $90.2 million option exercise instructing it to supply the U.S. Marine Corps with, and install, 40 AE1107C engines to power USMC MV-22 Osprey helicopters. Delivery of these engines is due in November 2015.
• Additionally, the Bell-Boeing Joint Project Office was awarded a $10.3 million contract modification paying for additional "Joint Performance Based Logistics" work supporting USMC MV-22 Ospreys, and Air Force and Special Operations Command CV-22 Ospreys, as well. Work on this contract should now be completed in February 2014.

The Department of Defense awarded 12 defense contracts Thursday, worth $346.9 million in total. Among the publicly traded companies winning contracts:

• "Jacobs & HDR, a Joint Venture" between Jacobs Engineering and privately held HDR, won an indefinite-delivery/indefinite-quantity architect-engineering contract worth up to $60 million, paying the firms to perform unspecified "analysis" work on Navy and other Department of Defense (DoD) facilities infrastructure at various locations throughout the Naval Facilities Engineering Command's (NAVFAC) area of responsibility (AOR) worldwide. Work under this contract is expected to continue through January 2019.
• Northrop Grumman was awarded a $26.1 million contract modification funding work on Reliability and Maintainability Information Systems (REMIS) Sustainment and Development Services for the U.S. Air Force. This contract modification extends the period of the original contract through Jan. 31, 2017.
• General Dynamics won a new $26 million firm-fixed-price contract to develop, design, and supply to the U.S. Marine Corps 468 Seat Survivability Upgrade (SSU) Kits for installation in USMC Mine-Resistant, Ambush-Protected (MRAP) vehicles. Each SSU Kit includes energy absorbing seats, five-point seat belts, blast mats, and reconfigures the internal crew Automatic Fire Extinguisher System, and upgrades the driver/co-driver compartment. Delivery is expected by July 2015.
• Lockheed Martin was awarded an $8.5 million contract modification funding modernization work on AN/FPS-117 Long-Range Radars via the U.S. Air Force's Essential Parts Replacement Program. Thirteen Field Maintenance Equipment Kits will be supplied to USAF under this contract, with delivery due July 30, 2015.

Image source: Broadcom.

Broadcom posted a mild earnings surprise in the fourth quarter alongside a 9% dividend boost, triggering a positive uptick in share prices after Thursday's closing bell.

Analysts expected the fabless designer of communications microchips to report non-GAAP earnings of $0.57 per share on $2.0 billion in revenue. Broadcom delivered adjusted net income of $0.60 per share on $2.1 billion of net sales, besting the Street targets in both cases.

Management set first-quarter revenue guidance in line with analyst targets, near $2 billion again. Gross margins are expected to decline slightly, along typical seasonal patterns.

Looking further ahead, Broadcom CEO Scott McGregor has a couple of potential growth catalysts up his sleeve. "We are building momentum in LTE, setting the stage for Ultra HD and powering next generation service provider and data center networks," he said in the earnings release.

In layman's terms, that's a triple play on high-speed wireless networking, the next version of high-quality digital video signals, and faster wired networking equipment for the biggest data traffic handlers on the planet.

Broadcom shares jumped as much as 6% higher on the news before falling back to a more modest 0.5% gain at the closing of after-hours trading.

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

A day after the market slumped on the Fed's decision to take the second step in its stimulus taper, stocks rallied today on strong earnings and GDP numbers. The Dow Jones Industrial Average finished up 110 points, or 0.7%, while the S&P 500 and Nasdaq jumped 1.1% and 1.7%, respectively, as a huge beat by Facebook sent social media stocks soaring. The Commerce Dept. released its first of three estimates on fourth-quarter GDP today, saying the nation's economy grew at an annual rate of 3.2%, better than estimates of 3%. That figure was down from 4.1% in the fourth quarter, but still better than the 1.9% rate for the year. Personal consumption expenditures seemed to drive the strong figure. In other economic reports of the day, initial unemployment claims remained elevated at 348,000, and pending home sales fell 8.7% in December, well below expectations; but the market seemed to overlook those reports.

After hours, Chipotle Mexican Grill shares were heating up, jumping 13% as the burrito roller delivered another stellar quarterly report. Revenue at the fast-casual star increased 20.7%, to $844.1 million, better than estimates at $826.3 million, as same-store sales improved an impressive 9.3%, which came primarily from an increase in traffic. Earnings per share grew 30%, to $2.53, in line with estimates. Restaurant operating margin improved 100 basis points, and CEO Steve Ells said the quarter "demonstrated our ability to focus on and run great restaurants," saying the restaurant teams "continued to delight our customers." For 2014, the company expects nearly 200 restaurant opening and comparable sales in the low-to-mid single digits, excluding any price increases. Shares hit a record high near $560 on the news as Chipotle's 9.3% comp clip was especially impressive during a holiday season where consumers were thought to be pinching pennies. After a quarter like this, Chipotle looks to be poised for another solid performance in 2014.

Amazon.com , meanwhile, was headed in the opposite direction after hours, falling 4.6%, to counteract a 4.9% gain during the regular session. The online juggernaut saw sales increase 20%, to $25.6 billion, below the $26.06 billion analysts had expected. Earnings per share of $0.51 also missed the mark of $0.66, but that was still an improvement from $0.21 a year ago. The company's guidance was not any better as it said it expects sales growth of 13% to 24% for the current quarter, below the analyst consensus at 22.4%, and operating profit around breakeven. Wall Street had been eyeing an EPS of $0.54. Amazon is a unique company, and the mild sell-off indicates that investors seem unfazed by a report that would send many stocks down double digits. After all, this is a company that has proved time and again it's willing to sacrifice short-term profits for long-term market power. And while Amazon may never put up huge profit numbers, as long as sales continue to grow at a brisk pace, the stock is likely to move higher over time.

For the fourth quarter of 2013, IBM  saw its systems and technology division revenue decline by 25%. It was not that big of a surprise, then, when the company announced last week that it was selling its low-end server unit. While this sale is not a retreat from the hardware business, it is in keeping with IBM's long-term move toward emphasizing software and services.

The deal will help improve margins and streamline the company's hardware business, but the true test of success will be where IBM puts in resources going forward. One area that could prove successful is the hybrid cloud.

Hardware decline
IBM is selling its x86 server business to Lenovo for $2.3 billion. The cash is not a huge positive for the company, given that it reported free cash flow of over $8 billion for the fourth quarter. But, IBM is getting rid of a low-margin segment.  

The low-end server business is the second-largest component of IBM's systems and technology group. That group saw fourth-quarter gross margin of 38% and a PTI margin of 4.7%. Compared to the 90.5% gross margin and 47% PTI margin of the software group, it's clear that IBM's margins will get a boost.

Higher margins can help software and services pricing
Higher margins will help IBM be more competitive in pricing its software and services. This will give IBM a competitive advantage over rival Hewlett-Packard .  

Hewlett-Packard continues to struggle with low margins, and these low margins put further pressure on its enterprise and services divisions. Without selling off some of its low-margin hardware business, Hewlett-Packard will likely continue to struggle, allowing IBM to take a larger lead.

IBM's future in the cloud
While there are several areas that IBM expects to take off in the near future, one of particular interest is the hybrid cloud. This past summer, IBM announced its latest cloud acquisition, SoftLayer, making the company's commitment to the hybrid cloud clear. 

The strategy behind the SoftLayer purchase was to build-out public cloud infrastructure. Combined with IBM's existing private cloud infrastructure, the company becomes one of the leaders in hybrid cloud services. This allows customers more freedom and flexibility in choosing between high-performance data access and secure private storage.

The hybrid cloud market is growing, and some analysts predict that, by 2016, it will become the largest sector in the IT market. There are several competitors to IBM in this area.

Microsoft , arguably, leads the way in hybrid cloud development. While still being somewhat behind in the cloud market, Microsoft made a commitment to the hybrid cloud roughly two years ago and has built out a massive public and private infrastructure. For this reason, the company's Azure offerings will capture a good share of the growth going forward, particularly if, and when, clients move toward more private offerings. 

Compared with Microsoft, Amazon.com's  Web Services has long been a leader in cloud computing. But, the company has resisted the private cloud and, thus, hybrid services, believing that most enterprises will most likely stick to public offerings. This puts Amazon in disagreement with what many analysts are predicting.

If Amazon is correct, it will continue to be a dominant player in the cloud market. If the company is wrong, a large opportunity exists for competitors like IBM and Microsoft to find enormous growth.

Conclusion
IBM has improved its position by selling off its x86 server unit. As a result, the company will see rising margins and will be in better position to compete on price in its software and services divisions.   

But, the future of the company depends on its focus going forward, which currently appears to be the hybrid cloud. There is potential for good growth in the future if mid-size and enterprise customers move toward private cloud offerings and adopt the hybrid cloud. But, if customers remain with public offerings, IBM will further cede ground to Amazon in the cloud arena. Investors should watch this area very closely.

Follow @mthalman5513

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

In the past, I have written about big single-day stock moves and noted that they are great examples of how the stock market is not quite yet truly efficient. I have, in many cases, even called some of those big moves irrational price movements. Today, I'd like to highlight two stock moves that are not only irrational, but also examples of why the market may not be completely efficient yet. I'll also point out why day trading can be a very dangerous game to play. So, let's dig in.

Shares of Zynga closed the regular trading day up 4.09%. That move came after the company announced it would be laying off 15% of its employees -- or 314 people -- in an attempt to cut costs. Additionally, Zynga announced that it would be buying gaming developer NaturalMotion for $527 million. The company has made games such as CSR Racing and Clumsy Ninja, and is known for its focus on mobile games as opposed to Zynga's historically focused PC-based titles. With this purchase, management is acknowledging that it needs to focus more on mobile, as the number of casual PC gamers has been declining during the past few years.

Then, in the after-hours session, shares increased by another 17.98% after the company reported earnings. Zynga posted revenue of $176.4 million for the quarter, a decline from $311.16 million during the same time period last year, but higher than the $141.1 million analysts were expecting. On the earnings side, the company lost $0.03 per share, compared to analyst estimates of a $0.04 loss for the same quarter in 2012, when Zynga posted a $0.01 gain. Furthermore, management believes the company will post revenue within a range from $155 million to $165 million for the first quarter of 2014, while analysts have been looking for revenue of $170 million. On the earnings side, analysts have been predicting a loss of $0.02 for the current quarter; but Zynga believes it will post a loss of just $0.01. 

The better-than-expected results and positive forward-looking statements by management have investors really hopeful for the future. The problem is that Zynga's previous business model -- making games for casual PC gamers -- seems to be disappearing in front of the company, and it doesn't appear to have a solid solution for this problem. Furthermore, as we have seen with Zynga and some of its most popular games, users don't last very long -- a few months at best -- and then they move on to the next game. This model of consistently creating new hit after new hit is not easy, and while NaturalMotion has produced a few big winners for mobile, there is no guarantee those hits will keep coming. The reason I mention that is because Zynga is a game developer, so to spend big bucks at a time when it's struggling -- to gamble with buying a company that essentially does the same thing -- doesn't seem to make a lot of sense. The mobile games NaturalMotion has today will likely not be worth a lot in a few months; so if it was the talent Zynga was looking for, why not just make certain employees offers they couldn't refuse?

All in all, the whole move seems irrational, and seems like Zynga is simply putting an expensive Band-Aid on a big bleeding wound.

Next, shares of Amazon.com rose 4.9% during the regular trading period today. The move was highly unwarranted, as no major news was released this morning or during the regular trading session. That, to me, is a sign that the move was caused by traders hoping to jump in on the stock before a big pop. The company was scheduled to release earnings today, and this was the likely cause for the move higher. In December, Amazon reported that the 2013 holiday shopping season was the best that it ever had, which is likely the kind of information that investors were basing their trading strategies on.

Shortly after the closing bell rang, Amazon reported earnings, and quickly following the release, shares were down as much as 9%. Revenue for the quarter came in at $25.59 billion, and earnings per share hit $0.51. Analysts were looking for revenue of $26.05 billion and earnings of $0.71 per share, after the company posted revenue of $21.27 billion in sales, and $0.21 EPS during the same quarter last year. 

When the after-hours session ended at 8 p.m. EST, shares were only down 4.59%, indicating that it was rather flat for the day. But this was an example of how day traders who panic-sold after the initial results were releasing lost money on the trade, and that it's unlikely anyone who bought shares of the company today made any money. During earnings season, stock prices fluctuate more than normal and, thus, those investors looking to make a quick buck come out in full force. While there isn't anything wrong with buying during earnings season, it's best to hold on individual stocks a few days prior and after they report results -- and always buy to own forever.

A deeper Foolish perspective

American Capital Agency will release its quarterly report on Monday, and investors have already sent shares of the mortgage REIT tumbling during the past several months, as fears about the Federal Reserve's tapering of its quantitative easing program have spread across the mortgage-backed securities market. Yet, even as it and peers Annaly Capital and Two Harbors have cut their dividends in recent quarters, American Capital Agency earnings could eventually stabilize, and even grow again if short-term rates stay flat, or rise less rapidly than long-term rates during the next couple of years.

American Capital Agency has been one of the favorite investments for dividend lovers in recent years, with its double-digit dividend payouts enticing income-hungry investors to seek to profit from the highly leveraged play on mortgage-backed securities. Yet, American Capital Agency has seen its share price suffer from losses in its securities portfolio, with falling prices for bonds having a definite impact on American Capital Agency's book value. Let's take an early look at what's been happening with American Capital Agency during the past quarter, and what we're likely to see in its report.

Will the Federal Reserve hurt American Capital Agency's earnings in 2014? Image source: Motley Fool.

Stats on American Capital Agency

Source: S&P Capital IQ.

How much will American Capital Agency earnings fall this quarter?
In recent months, analysts have gotten a lot less enthusiastic about American Capital Agency earnings, cutting their fourth-quarter estimates by about a third. The stock has also delivered poor performance, falling 14% since late October.

The vast bulk of American Capital Agency's share-price decline came after its third-quarter report, in which the mortgage REIT reported several troubling results. Net interest spreads dropped from 1.49 percentage points to 1.20 percentage points, and returns on equity from interest income fell again to just 10.31%.

In order to try to protect itself from rising rates, American Capital Agency moved aggressively from 30-year fixed mortgages to 15-year fixed mortgages in the third quarter. Yet, given that 15-year mortgages earn almost a full percentage point less than 30-year mortgages, the move could further pressure American Capital Agency's interest income if the mortgage REIT didn't reverse course in the fourth quarter. That's what's largely responsible for the company choosing to cut its dividend again last month, making its quarterly payout $0.65 per share.

Yet a big question mark for American Capital Agency is what the Fed decides to do in 2014. So far, tapering has taken away $20 billion in monthly bond purchases, including $10 billion in mortgage-backed securities. Since the taper began, however, interest rates haven't risen. That has taken away much of the pressure that sank book values at American Capital Agency, Annaly, and ARMOUR Residential by double-digit percentages during the second quarter of 2013, when tapering first made it onto the table.

Still, many argue that American Capital Agency's share-price declines already reflect the impact of the taper. Indeed, the mortgage REIT itself has said that it has bought back about 7% of its outstanding shares in the past quarter, spending $586 million during the fourth quarter, and paying an average share price of $20.82 -- just a bit higher than its closing price on Thursday.

In the American Capital Agency earnings report, watch for a couple of key figures: what the mortgage REIT has done to the alignment of its portfolio, and how it has changed its leverage ratio. With potential opportunities to pick up cheaper mortgage-backed securities as the Fed tapers, while perhaps being able to maintain low borrowing costs if short-term rates stay low, American Capital Agency could be setting itself up for a big rebound later in 2014.

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Recent breaches in debit card security at several retail stores highlight the need to beef up the protection of customer information. In Europe, most cards use imbedded microchips instead of relying on the infamous magnetic strip on the back to transfer data to point-of-sale machines. Will that catch on in the United States as well?

It might, though over the long term another innovation may be the best way to handle debit transactions. It also might benefit the world's No. 1 tech company and its investors, too.

The iPhone as a cash register 
If the rumors that Apple is in discussions with retail industry executives are true, at some point in the future your iPhone (or possibly a wearable device like the long-rumored "iWatch") could be used when you go to the store to make a purchase. Just point and click. The company has filed a patent for a secure two-part in-store communication system. 

This could mean a return to higher growth for the company and big returns for Apple investors. The maker of the iPhone already has several hundred million credit cards on file in its iTunes and App store database. It could develop an app that interfaces wirelessly back and forth between the database and the store computer system. Apple would take a small cut of each transaction, and that could probably add several billion a year to its top line. The margins are bound to be very high for something like this.

A leg up
Although the industry is in its infancy, Apple probably has a leg up on its competition because it controls all the parts needed for a payment system --- hardware, secure transaction technology such as the fingerprint sensor used in the new iPhone, software (it gets to approve all apps), and stored financial information.  

Amazon.com might have a big advantage in retail experience, and probably has much of the needed software for accessing lots of customer credit and debit account information. It currently lacks the hardware and technology to do the whole job, however. The company would need to develop some type of payment device or acquire a company to do it, and this would probably require the company to divert funds away from its successful e-commerce and cloud computing businesses. Apple, with its huge cash pile and head start, doesn't have those worries. 

Google has bits and pieces of the whole pie in place but lacks the penetration of Apple worldwide. It has Google Wallet, but it only works on certain smartphones purchased domestically and at merchants that use PayPass and PayWave .The Motorola division produces mobile devices, but it commands only a small portion of the market right now.

There are over 300 million iPhones in service currently, and most could be easily converted to a mobile payments device. Any new device would of course have the needed technology and apps already in place. Google has some catching up to do. The company might want to stay put and focus on its cash cow search business. 

Consumers can currently pay for in-store purchases using their PayPal accounts too.  PayPal is one of the two most important segments (the other is the online marketplace) of eBay  and currently handles over $180 billion in transactions annually. The company is planning on more growth from this business and additional revenue from the retail side, as it expands, would help. However, like Amazon, eBay doesn't offer a physical payment device yet and would probably lag behind Apple and Google in the business, at least initially, because of this. 

Foolish conclusion
A somewhat overlooked result of the recent theft of debit card information at several retail outlets is the opportunity to profit from a revamped mobile payments industry. One tech giant, Apple, appears to have all the pieces in place to benefit from the trend if it materializes. Some pretenders to the throne such as Amazon, Google, and eBay have some of the puzzle pieces, but are lacking in one or more areas and would have to spend some serious cash to overcome that.

Apple    had a reasonably good quarter with its earnings beating estimates, but the company's earnings report led to a big sell-off. In terms of revenue,  Apple had its biggest quarter ever, but the company's weak revenue forecast for the first quarter of calendar year, 2014 coupled with lower iPhone unit sales, sparked the sell-off.

The market reaction is a little overblown primarily because Apple sold record iPhone units and generated record revenues from the iPhone franchise. And Apple's quarterly earnings per share hit an all-time high as well. Apple's EPS increased 5% to $14.50, partially driven by share repurchases by the company. Apple's revenues from China Mobile  will surprise to the upside because of conservative guidance by Apple's management. And the pullback in Apple shares represents a great buying opportunity. 

iPhone prices on the rise
In the holiday quarter, the average selling prices (ASPs) of the iPhone surged sequentially to $637 from $577 in the previous quarter. The increase in selling prices of the iPhone is likely due to the higher mix of iPhone 5s unit sales relative to the iPhone 5c. And this strength in iPhone 5s unit sales has enabled the company to preserve its gross margin at 37.9%, ahead of the company's guidance.

With 56% of total Apple revenues coming from the iPhone franchise, the segment is crucial for the company's growth. Apple's iPhone unit sales did reach record levels to the tune of 51 million iPhones in the holiday quarter. However, this fell short of expectations that were pegged at roughly 56 million units. Total iPhone revenues grew 6% year over year to $32.5 billion. In 2013, Apple's market share of the worldwide smartphone market stood at 15.3% and Samsung stood at 31.3%, according to IDC. 

Apple's performance in North America was disappointing with sales portraying a slight decline, and management pointed toward supply constraints for the iPhone 5s and a lack of demand for the iPhone 5c. The lack of growth in North America is leading many investors to question the company's ability to grow its handset business in the region. However, in the U.S. smartphone market iPhone holds roughly 41% of smartphone subscribers at the end of November and iPhone users have a loyalty rate of 90%, according to data from comScore and Kantar.

And Apple's revenues did grow 11% year over year to $4.9 billion in Japan driven by the company's deal with NTT Docomo. And according to Kantar, the iPhone holds 69% share of the smartphone market in Japan.

The major pessimism surrounding the company's sell-off after the earnings report was that the company guided toward revenues which are essentially flat from the prior year, even though the company's marquee deal with China Mobile will start showing up in the company's financials in the current quarter.

Investors and analysts alike expect the China Mobile deal will provide tailwinds for Apple's March quarter, because of China Mobile's subscriber list of more than 760 million. However, it is worth worth noting Apple will initially sell iPhones in only 16 cities where China Mobile offers 4G. In the future, China Mobile will be rolling out 4G stations in more than 340 cities across China, and these cities will eventually become new addressable markets for Apple.

Robust iPad sales
Apple's iPad unit sales also hit a record in the holiday quarter with more than 26 million units. And iPad ASPs stayed relatively stable from last quarter to $440. The strong growth in iPad unit sales was aided by stellar unit sales in China, where sales doubled.  

Consumers are relishing the newly introduced iPad Air and iPad Mini with the Retina Display. The iPad has a strong position in the U.S. commercial tablet market with 78% share, according to IDC. Apple sold 4.8 million Macs in the last quarter and ASPs stood at $1322 in the last quarter.

The tablet market grew 28% in the last quarter, and Apple now holds 33.8% market share across the globe, according to IDC. Apple's market leading position in the tablet market should lead to more revenues as the company turns to more emerging markets for additional revenue growth.

Enterprise market could be big
According to IDC, the iPhone now holds 59% market share of the commercial smartphone market in the U.S. And this should rise in the future as the company's iOS 7 platform received a security clearance from the U.S. federal govt. Apple continues to invest heavily in R&D, both in existing product categories as well as in new product development, and this should aid in better serving enterprise customers.

Corporations are increasingly leaning toward Apple products. Tim Cook disclosed in the earnings call that the iPhone is being used at 97% of the Fortune 500, and the iPad is being used at 98% of the Fortune 500. So, increasingly, Apple is addressing the enterprise market.

Going forward
Apple's revenue guidance has been weak, but there is a probability that the company's guidance was overly conservative. The company's China Mobile deal should provide more upside in the current quarter. Apple's revenues from the iTunes ecosystem have grown 19% in the last quarter and now have an annualized run-rate of $17.6 billion.

Consumers can buy content on Apple's platform using the Touch ID on the iPhone 5s, and this should aid in growing services revenue as well. Apple's share repurchase plan should fuel more EPS growth in the near future. The dip in Apple shares represents a great buying opportunity before the China Mobile upside comes to full fruition.

After a rough third fiscal quarter, ASML , the world's largest supplier of photolithography systems for the semiconductor industry, posted record quarterly earnings and a strong 2013 fiscal year that was largely driven by increased demand for the latest smartphones and tablets. Even so, the real star of its quarterly and yearly results is a new promising outlook in an often delayed technology that can yield strong long-term results.

The results
For the fourth quarter ending Dec. 31, 2013, ASML reported EPS of $1.46, beating the forecast $1.26 by 15.87%. Net income rose by 62% year over year to a record $657 million, up from $406 million a year earlier. Revenue rose 81% to $2.53 billion, up from $1.39 billion. Gross margins were strong at 43.6%, well within line of the company's standard. 

For fiscal 2013, ASML reported a record-breaking $7.19 billion in revenue, up 11% year over year, but it saw a decrease of 13% in net income, with a reported $1.38 billion. Gross margin remained strong at 41.5%. 

Why you should pay attention
Outside of continued success with its current photolithography machines -- of which the company sold 157 last year -- ASML has been continuing its research in the often-delayed EUV technology, a key component in allowing chipmakers to produce smaller, faster, less power-hungry chips with greater yields per wafer. Intel , Samsung  and Taiwan Semiconductor Manufacturing  have invested more than $6.42 billion in ASML in hopes of accelerating the company's research. 

With Intel desperately wanting a larger presence in the tablet and smartphone markets, the company has invested the most heavily out of the three, with a $4.1 billion investment in ASML. Intel's big break in the mobile market could possibly come in the mid-to-late part of 2015, when the company will be shipping its first 14nm processor chip, code-named Broxton. With Intel having the best FinFET processes, which routinely puts the company years ahead of the competition, the industry could be caught off-guard with no answer to Intel's product line come 2015.

Luckily, Intel's two investment partners, Samsung and TSMC, have recently signed a contract where TSMC will be building 60%-70% of Apple's 14nm A9 chipsets using a 16nm FinFET process, with the remaining 30-40% being handled by Samsung using a 14nm FinFET process. This will prove to be a challenge for both companies, seeing as TSMC has already struggled meeting Apple's demand and that only Intel currently has the capabilities of using the FinFET process in producing chips in commercial quantities. Apple's iPhone 7 is rumored to be released during the second half of 2015.

Where ASML fits in
While EUV isn't necessary in the production of 14nm transistors, it is becoming more costly for chipmakers to manufacture smaller chips. In order to shrink chips without the use of EUVs, chipmakers can use current lithography machines with stronger light sources and triple patterning, but this process will heavily cut into both margins and yields. As chipsets become smaller, using EUVs will inevitably become essential.

A highlight in ASML's fourth-quarter results is that after having sold its first EUV system in the previous quarter, the company has sold an additional three more. It also has an additional 14 in backlog, eight of which are expected to ship this year. While the semiconductor industry likes to closely guard its dealings, it's safe to assume that these shipments are arriving at the doorsteps of Intel, Samsung and TSMC.

While this is good news, customers that are currently ordering EUV machines are dealing with a lot of risks. They are expected to upgrade to models that offer more stability and higher productivity once they are released. According to a Bloomberg report, ASML isn't expected to reach the required stability levels in its EUV systems until the second half of 2016 or in 2017. Nonetheless, Chief Executive Officer Peter Wennink assures that "current EUV systems are at a level that is good enough for initial production for our customers".

The Foolish bottom line
ASML is projecting a strong 2014 first quarter, forecasting net sales at around €1.4 billion  -- $1.9 billion -- and a gross margin of around 42%. For the first half, the company is expecting revenue of €3 billion  -- around $4.1 billion -- excluding additional sales of EUV systems. With the semiconductor industry making significant investments in accelerating ASML research in EUV technology, and with the first four EUV machines having shipped and 14 more already in the backlog, ASML looks to remain strong through 2017.

While the company may be busy shrinking chips, you might want to consider growing your portfolio with ASML.