Apple  is widely expected to launch its iWatch this year, which should include a wide range of health and fitness features. One analyst is offering up estimates for how the rumored product might fare during its first year. Morgan Stanley analyst Katy Huberty thinks that the iWatch could generate upwards of $17.5 billion in revenue over the first year, unless supply constraints hold back Apple's ability to meet demand. Huberty also expects Apple to price the device at $300.

Samsung  didn't fare so well with its own $300 Galaxy Gear, although the company is likely preparing to launch a new version in coming months. Even though Apple may pursue a similar strategy of making the iWatch more of an accessory than a stand-alone device, Apple enjoys a much stronger "halo" around its products than Samsung. 

In this segment of Tech Teardown, Erin Kennedy discusses Apple's iWatch opportunity with Evan Niu, CFA, our tech and telecom bureau chief.

It's never easy to play turnaround stories, and although Broadcom  isn't in need of a turnaround, its cellular modem/mobile apps processor efforts have been less than inspiring over the last year. Indeed, the company has been through a number of rough patches, including a writedown on its NetLogic purchase and increasing fears of Qualcomm and Marvell gaining connectivity share. Did the most recent quarter do anything to assuage these fears?

The not-as-bad-as-expected syndrome
While Broadcom actually beat expectations in the most recent quarter, its guidance of $1.9 billion-$2 billion for Q1 wasn't exactly inspiring against a sell-side consensus of $1.97 billion. What's interesting is that peer Qualcomm actually performed similarly, yet its shares saw a nice rally on the back of the report.

Naturally, Broadcom's shares rallied as a result and actually managed to top the $30-per-share mark for a brief period before moving back down into the $28-$30 range. Truth be told, stocks really only move out of fairly well-defined trading ranges on meaningful catalysts, so what will it take to get Broadcom moving again?

Fears of connectivity share loss haven't gone away
On Qualcomm's most recent call, management stated in no uncertain terms that it had won over 200 designs for its 802.11ac (the latest and greatest Wi-Fi standard) connectivity solutions. When Broadcom was questioned about this, management was careful to point out that it really only targeted the high end of the market, and that its share position would still be in good shape. However, this does not preclude the notion of share loss in a growing market.

More troubling, when pressed about whether its connectivity business would actually grow in 2014, CEO Scott McGregor was quick to point out that connectivity combo chip sales would be loaded toward the second half of the year, and seemed to suggest that growth would be driven by a mix-shift upward (i.e., Apple's next-generation iPhone 6 using 802.11ac, rather than 802.11n, as it did in the iPhone 5s).

The key will be to watch tear downs of other flagship devices throughout the year to see if Qualcomm took any big ticket share, or if its wins are simply the result of 802.11ac being pushed into mid-range (and perhaps even lower-end) phones. The difference, while subtle, is an important one.

The cellular story gets interesting
While the connectivity story is getting tenser, the good news is that Broadcom is finally making some progress with its LTE solutions. Even with a fairly modest dual-core ARM Cortex A9 and an integrated category 4 LTE modem, the company does expect "nine digits" of LTE revenue this year. Broadcom's CEO was also quick to point out that its LTE design wins were across multiple customers and included multiple designs within each customer. This, while not yet game-changing, is highly encouraging, given the turbulence that Broadcom has faced to get here.

Foolish bottom line
While it's too early for Broadcom bulls to declare victory (especially because this story really needs to play out), the longer-term signs are encouraging, even in light of the numerous fears surrounding the company's connectivity business. That said, it's myopic to only focus on mobile and wireless, but given that both infrastructure and broadband are humming nicely, the focus really is on the more exciting (and volatile) mobile and wireless business.

The Department of Defense awarded General Dynamics Corporation a $520 million sole-source undefinitized contract action, or UCA, on Tuesday, funding the purchase of long lead-time materials that the defense contractor will require for use in constructing the Virginia-class nuclear fast attack submarines SSN 794, SSN 795, SSN 796, and SSN 797.

The DoD issues UCAs to authorize defense contractors like General Dynamics to begin work on a project, and to provide them with funds to accomplish this work, even before final agreement has been reached between the parties on all terms of a contract.

In the instant case, General Dynamics will use these UCA funds to purchase steam and electric plant components, and to pay for work on the submarines' main propulsion units and turbine generators, plus purchases of steel, and miscellaneous hull, mechanical, and electrical system components.

Work under this UCA is expected to be complete by January 2015.

Virginia-class nuclear fast attack submarine USS Hawaii (SSN 776). Source: Wikimedia Commons.

In this video from Tuesday's edition of Investor Beat, host Chris Hill and Motley Fool analysts Mike Olsen and Morgan Housel dig into the biggest business stories from Tuesday's market facing Foolish investors today.

J.C. Penney hit a fresh 52-week low today, after same-store sales for the fourth quarter rose by only 2%. Shares of Michael Kors were up big today, after third-quarter profit rose by 77%, with same-store sales in North America up by 24%. On Monday, RadioShack got a lot of praise for its Super Bowl commercial, but today The Wall Street Journal is reporting that the company plans to close about 500 of its 4,500 stores. And happy birthday to Facebook ! The social network turned 10 today and got a boost to its share price as a birthday present. In this segment, the guys discuss four stocks making moves on the market today.

In this video from Tuesday's edition of Investor Beat, host Chris Hill and Motley Fool analysts Mike Olsen and Morgan Housel dig into the biggest business stories from Tuesday's market facing Foolish investors today.

In this segment, Mike tells investors about the virtuous cycle that allows Progressive to grow and pass savings along to consumers, while Morgan discusses MasterCard , and the opportunity ahead of the company now that the economy is recovering and its lagging credit card business has a chance to catch up as consumers have more of an ability to pay off their debts.

In this video from Tuesday's edition of Investor Beat, host Chris Hill and Motley Fool analysts Mike Olsen and Morgan Housel dig into the biggest business stories from Tuesday's market facing Foolish investors today.

Microsoft has now appointed its new CEO, 22-year Microsoft veteran Satya Nadella, who replaces outgoing Steve Ballmer to be only the third CEO in the company's nearly 40-year history. Meanwhile, Bill Gates will exit his position as chairman of the board and move to a new role as technology advisor. In the lead story on today's Investor Beat, the guys discuss what initiatives they're hoping to see from Nadella, and why he may have been too conservative a choice for the company to have gone with.

Then the guys discuss four stocks making moves on the market today. J.C. Penney hit a fresh 52-week low today, after same-store sales for the fourth quarter rose by only 2%. Shares of Michael Kors were up big today, after third-quarter profit rose by 77%, with same-store sales in North America up by 24%. On Monday, RadioShack got a lot of praise for its Super Bowl commercial, but today The Wall Street Journal is reporting that the company plans to close about 500 of its 4,500 stores. And happy birthday to Facebook! The social network turned 10 today and got a boost to its share price as a birthday present.

Finally, Mike tells investors about the virtuous cycle that allows Progressive to grow and pass savings along to consumers, while Morgan discusses MasterCard, and the opportunity ahead of the company now that the economy is recovering and its lagging credit card business has a chance to catch up as consumers have more of an ability to pay off their debts.

Anadarko Petroleum's recent adverse environmental cleanup news eclipses its liquefied natural gas, or LNG, developments in East Africa. Japan's Prime Minister Abe recently visited Mozambique, approved an over $600 million economic development loan, and noted Anadarko's sale of 20% of its stake to Mitsui.

Anadarko and Mitsui intend to ship LNG by 2018 from Mozambique Rovuma Offshore Area 1. The gas field promises over 150 trillion cubic feet, or Tcf, one of the largest finds in East Africa. This reserve by itself would be able to supply Japan for over 30 years.

With over 250 Tcf reserves, Mozambique could well be the fourth largest exporter of gas in the world. East Africa is the new Middle East. Anadarko is on the ground floor in Mozambique. This strategy will act as a foil for low natural gas prices in the U.S.

Global refocus
Anadarko got in Mozambique early and is developing wells nearer to shore than other finds. The company is now monetizing its development investment with a stake sold to India's ONGC for $2.64 billion. This will allow Anadarko to refocus its efforts on new shale plays in the Permian-Delaware Basin in West Texas and in other plays in Colorado, the Gulf of Mexico, and Alaska. This cash can also help defray the multi-billion dollar cost of the LNG port facility it is building with Italy's Eni onshore.

Thailand's PTT plc, the state-owned petroleum company, just signed a preliminary deal for Anadarko to supply 2.6 million tons of LNG from Mozambique. This is part of PTT's expanded investment plan to replace aging natural gas reserves with East African and Myanmar supplies. Along with the $5.5 billion investment plan for 2014 will be an increased focus on the Mozambique stake and less focus on its Canadian oil sands play.

Japan continues to float LNG prices
Anadarko investors should closely watch the ebb and flow of global LNG prices as the company begins to monetize its East African developments. These plays are supplying sub-continent and East Asian regional customers. Long-term prices are beginning to approach spot market pricing in recent deals.

Japan is the largest importer of LNG globally. Japan's demand for low sulphur fuel oil will continue to drop over the next five years by about 1.9% per year to cut costs. LNG and coal are being used for fuel oil with more LNG fired plants to come on line through 2020. Japan has to compete with global second largest importer, South Korea, as well as India, the Philippines, Thailand, and Malaysia for new LNG supplies.

Landed prices in China, South Korea, and Japan are over $15 per million British thermal units, or mmBtu, on the spot market. This is compared with over $4 per mmBTU at Lake Charles, Louisiana, and Cove Point, Nova Scotia. Several $8 to $10 per mmBtu long-term contracts are being renegotiated to align more closely with spot markets. LNG is still linked to oil so that a 15% LNG deal means that a $100 per barrel oil price will translate into a $15 per mmBtu LNG price.

Foolish final thoughts
Anadarko is building more LNG trains in East Africa, even as it is refocusing on shale in West Texas and Colorado. A liquids and gas glut in the U.S. might not be as profitable as feeding an LNG-starved India, Thailand, and Japan.

Anadarko has built the second largest LNG liquefaction facility and port in the world, after Qatar, on the Indian Ocean with Italy's Eni. This port promises to be a major pricing hub for LNG shipments not only to Asia, but also around the horn to Latin America and Europe.

At the least a continued investment in Mozambique gas will help Anadarko diversify its global oil and U.S. plays with both northern and southern hemisphere LNG markets. These decisions should continue to raise expectations of rising future earnings and cash flow. 

Anadarko's current trailing 12-month earnings multiple is over 23x, a discounted valuation compared with the 55x average for its industry and stronger than the 18x average for the S&P 500. Anadarko's earnings retention rate is 87%, which along with a return on average equity of 8.3%, implies a potential long-term book equity and earnings growth of 7.2%.

A quick thought experiment: The current price to book ratio, or p/b, is 1.87. With 7.2% book equity growth p/b would rise to 2x. If we were to apply this p/b to the 43.73 book equity per share, obtained by taking the current stock price of $81.79 and dividing by the p/b of 1.87, we get a potential stock price of over $87. Monetizing Mozambique assets is a step in the right direction.

Spectra Energy is a much different company than it was when the sun rose on January 1, 2013. According to energy analyst, Taylor Muckerman, that is a great thing. Between dropping down tremendous assets to Spectra Energy Partners , of which it is the general partner, and overseeing 50% of advantageously positioned DCP Midstream , distributions should keep rolling in at continuously increasing rates. Natural gas and natural gas liquids are the ticket for this company, and both areas couldn't be more well positioned for growth. Check out the following clip to see how it performed in 2013 and a few other reasons why Taylor likes this company.

Building an income portfolio takes more than 1 dividend stock, so here are 9 to consider

This segment is from Tuesday's edition of "Digging for Value," in which sector analysts Joel South and Taylor Muckerman discuss energy and materials news with host Alison Southwick. The twice-weekly show can be viewed on Tuesdays and Thursdays. It can also be found on Twitter, along with our extended coverage of the energy & materials sectors @TMFEnergy.

AES deploys smart-grid technologies alongside its regulated utility and power plant asset base. Its latest innovation automates grid scale battery storage at Dayton Power and Light in western Pennsylvania. This innovation is the latest in securing reliable electricity from a diversity of renewable and non-renewable sources.

With 150 Megawatts, or MW, online, AES Storage helps utilities free up expensive reserve capacity, better meet peak power demand, and make more effective use of intermittent generation from resources like wind and solar.

AES independently develops and operates electric power plants and infrastructure, now in 20 countries. It typically receives fixed revenue contracts for power off-take and services, much like a utility tariff. It also operates two U.S. utilities: Indiana Power and Dayton Power and Light. Battery profits from AES Storage can drive new market interest, operational efficiencies, and revenue growth. AES owns and operates over $100 million of storage assets globally.

An old and new, tried-and-true technology
Batteries have provided the equivalent of 160 MW of pumped hydro storage in Japan for over 20 years. Grid experiments seem to have determined the efficacy of batteries, pumped storage, and capacitor banks alongside them, for use with solar and other generation assets. In addition, non-toxic, no-lead, rechargeable battery technologies are being manufactured in West Harlem New York City and are just beginning to be deployed for industrial and grid-scale applications.

Storage has clearly been demonstrated as a critical method for making transmission and distribution of electricity more reliable and resilient to disruption. Typical battery storage grid services include frequency response, black start, voltage support, and rapid demand support. All very technical, but industrial rate payers will definitely notice something is wrong when power ebbs ever so slightly. The result for a generic drug manufacturer is that a tank full of biologics dies and halts a vaccine supply chain in its tracks. A recent study estimates that an industrial outage of eight hour duration could cost over $200,000 on average.

Grid reliability
The AES Storage 40 MW project at Dayton Power and Light's Tait generating station in Moraine, Ohio provides fast-response frequency regulation and grid stabilization services to the Pennsylvania-Jersey-Maryland, or PJM, Interconnection. DPL is one of two AES utlities. The other is Indiana Power and Light in Indianapolis.

The Tait storage project benefits financially from PJM's new tariff for fast-response regulation designed to comply with FERC Order 755. Enacted in 2011, Order 755 increased the tariff rate for "fast" responding sources like batteries or flywheels that are bidding into frequency regulation service markets. AES Storage has now installed 100 MW of storage in PJM.

California is next
The other investor story for AES Storage on the horizon is the California Public Utilities Commission, or CPUC, proposal asking the state's big three investor-owned utilities to procure 1.325 Gigawatts, or GW, of energy storage by 2020. Devoted to bulk transmission is the procurement of 700 MW of storage alone. The remainder assigned to distribution and customer applications. 200 MW are to be procured in 2014.

In this market, AES Storage would operate as a systems integrator and program manager of a complex set of storage projects. At one end it would engineer, procure, and construct battery-based and other storage option site projects. At the other end it would manage offtake capacity contracts, manage regulatory relationships, and arrange project financing.

AES, through its Silver Ridge Power joint venture with Riverstone Holdings, is teaming with Google to develop the 265 MW Mount Signal photovoltaic project in California. This project will deliver power to San Diego Gas and Electric under a long-term power contract. Grid stabilization using electric storage will be a significant component of integrating solar power on the California grid.

Returns for investors?
AES Corporation's business exposure to 20 countries around the globe helps to mitigate any region-specific risk like poor water levels for hydro-power in Brazil, or nationalization risk in Cameroon.

Earnings are tied to long-term fixed power purchase contracts through a base in power plants. These arrangements are designed to pay down project debt and provide standards of service to local utilities. They do not allow for any near-term growth.

The company is investing in over 2,000 MW of capacity expansion in the power-hungry Latin American and Asian markets. AES has exited eight countries and received $286 million on associated asset sales this past year. Along with this the company is growing new capacity markets with AES Storage and new generation markets through Silver Ridge Power.

AES's current trailing 12-month earnings multiple is over 22x, a discounted valuation compared with the 71x average for its industry and stronger than the 18x average for the S&P 500. AES's earnings retention rate is 75%, which along with a return on average equity of 22% implies a potential long-term book equity and earnings growth of 16%.

A quick thought experiment: The current price to book ratio, or p/b, is 2.19. With 16% book equity growth p/b would rise to 2.54. If we were to apply this p/b to the 6.48 book equity per share, obtained by taking the current stock price of $14.19 and dividing by the p/b of 2.19, we get a potential stock price of over $16.40. Management has its work cut out for it this year.

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.

Following Monday's collapse, stocks rebounded today as the market's focus returned to earnings season after fears about a sharp drop in new orders sparked a sell-off yesterday. Today, the Dow Jones Industrial Average finished 72 points, or 0.5% higher, as drugmakers Merck and Pfizer led the way, each gaining 2.8%, after Pfizer got an upgrade from Jeffries. The research firm said the company's reorganization and promising cancer treatment should help drive long-term growth. Like many drugmakers, Pfizer has struggled with the so-called "patent cliff" as a number of its blockbuster drugs, including Lipitor, have recently lost their patent. The main focus of the company's restructuring is to divide operations into groups, with one focusing on newer drugs and the other examining products approaching the cliff.

Elsewhere, Michael Kors finishing up 11% after the fashion label once again delivered blowout quarter, and coming against an otherwise dismal holiday season, the performance looked especially impressive. Kors delivered earnings of $1.11 per share, well ahead of the analyst mark at $0.86, while sales shot up 59% on a whopping 28% same-store sales growth. The comparable sales figure shows that growth came both organically and through as the clothing-maker appears to be firing on cylinders. Shares are up over 60% over the past year, but based on today's report they have a lot more room to run.

J.C. Penney wasn't faring as well, falling 11% after releasing comparable sales numbers for its fourth quarter. The struggling retailers said same-store sales grew 2%, but that seemed to disappoint the market, which was hoping for a better performance as Penney desperately needs to mend its bottom line. Analysts had estimated growth in the category at 4.2%. Also disconcerting to investors was Penney's lack of information on gross margin, indicating that those increased sales may have come from steep discounting, meaning its net loss may have actually gotten worse in the quarter.

Apple  is reportedly interesting in building its own content delivery network, or CDN. Currently, companies such as Akamai  and Level 3 deliver iTunes content, apps, and software updates for the Mac maker. Investors know how much Apple loves vertical integration, and the company supposedly is not pleased with iCloud performance. That could motivate it to develop some first-party network infrastructure to bolster its ability to deliver content to its user base.

Apple might not have any experience with CDN infrastructure, but it has been hiring talent in this department. Akamai got hurt last quarter after guidance implied that Apple was renegotiating its pricing. If at all, Apple likely wouldn't transition all of its CDN needs away from Akamai even if it built its own network. These types of networks take upwards of 18 months to deploy, which should give Akamai some warning if Apple were interested in cutting it out of the loop.

In this segment of Tech Teardown, Erin Kennedy discusses Apple's possible CDN ambitions with Evan Niu, CFA, our tech and telecom bureau chief.

The U.S. Defense Security Cooperation Agency notified Congress Tuesday of plans to sell the government of Iraq a set of Air Traffic Control and Landing Systems plus associated equipment, parts, logistical support, and training worth a total estimated cost of $700 million. Specifically, FAA Air Traffic Control, or ATC, Equipment Suites and Airfield Navigational Aids Suites will be sold to Iraq and set up at four air bases, in Tikrit, Al Basra, Al Kut, and Taji.

Each ATC Equipment Suite includes four ASR-11 Airport Surveillance Radars, 10 ATC Automation systems with 10 controller consoles, four AutoTrac II Airfield Support and Navigation Suites, two Primary Search Radars, and two Mono-pulse secondary surveillance radars. Each Airfield Navigational Aids Suite includes a pair of Very High Frequency Omni-directional Range systems and three Instrument Landing Systems with Distance Measuring Equipment, two Airfield Lighting Systems with Flush Mounted Lights for runways and taxiways, and one Air Traffic Control Tower Equipment Suite. 

Although at least one defense contractor -- Raytheon is known to produce much of this equipment -- the AutoTrac II suite and the ASR-11 Airport Surveillance Radar for example, DSCA notes that it has not yet picked a principal contractor for this contract. However, a principal contractor "will be determined through a competitive process."

DSCA describes the purpose of selling this equipment to Iraq as aiding in "Iraq's continuing reconstruction effort and directly improv[ing] Iraq's ability to control its own airspace." 

According to DSCA, "there will be no adverse impact on U.S. defense readiness as a result of this proposed sale." Nor will the sale "alter the basic military balance in the region." 

Novartis looks to be the next big pharma to face a breakup. In this video, Motley Fool health-care analyst David Williamson looks at a potential repositioning of assets with Novartis, as reports still linger that the company is negotiating with Merck over an exchange of NVS's animal health business for Merck's over-the-counter business. Now however, there is a rumor that Eli Lilly could be interested in growing its own animal health business and may bid on the division.

David looks here at the three companies, why Novartis is reorganizing after a very tough quarter, and what he'll be looking for as more details of the deal become known.

Pfizer announced today a successful phase 2 trial of its breast cancer drug Palbociclib, which had shares up 2.5% on the news. "We are delighted with the final data, which suggests the potential for Palbociclib to transform the standard of care," Pfizer announced. The company could file for accelerated approval in March, which would potentially mean approval this year.

In this video, Motley Fool health-care analyst David Williamson looks at the competition in this space, the potential market for Pfizer's new drug, and one secret winner that stands to benefit here.

Cloud content management company Box is one of the most anticipated tech initial public offerings of this year. The company raised $100 million in a Series E funding on Dec. 2013, obtaining a valuation close to $2 billion. This late-stage capital is rumored to be led by a group of strategic Japanese investors who are willing to help the company expand its customer base in Asia.

According to Quartz, the cloud storage company may already have secretly filed paperwork for an initial public offering  in an attempt to start trading before its main competitor Dropbox, which may have reached a $10 billion valuation according to The Wall Street Journal. Does Box have sufficient economic moat to continue growing in a fierce environment, where even giant competitors such as Amazon.com  and Google are struggling to capture market share? 

Source: Box Website

Understanding Box's economic moat
Despite competing in a fierce market, Box has a real chance to become a huge company in the mid run thanks to its unique focus on the enterprise market. Unlike Dropbox, Box started to switch its focus from massive cloud storage solutions to the rich enterprise market as early as in the summer of 2007.

Simply put, a clear focus on the enterprise market allows Box to develop specific competitive advantages. Since 2009, the company has been mainly hiring engineers and executives who understand the enterprise market. As a result, Box has made all its main business and technological decisions with a clear enterprise focus in mind.

For example, apart from providing simple and secure file transferring, it has developed a platform that gets salesmen working with the most up-to-date and effective sales collateral, pricing information, and product specs. Salesmen using this system get email notifications when the marketing team adds new information regarding a particular product.

Thanks to its focus on enterprise, more than 200,000 businesses already use Box to a certain extent; these include everything from start-ups to big corporations. Procter & Gamble uses it to enable 18,000 global users to share content immediately. Fujifilm is using Box in Australia to replace insecure mail attachments. Columbia University's Neuroscience department relies on Box to produce the field's most widely used textbook, an effort involving 80 contributors from 50 universities.

Competitors
Box isn't the only company interested in the rich enterprise segment. Amazon offers both personal cloud storage solutions --Amazon Cloud Drive, which comes with free 5GB-- and enterprise solutions: Amazon Web Services (AWS), a complete set of web services. Amazon Web Services is among the cheapest options in the industry when it comes to industrial cloud storage. According to IDC research, it represented a 70% savings as compared to on-premises solutions.

Like AWS, Google's Cloud Platform is a set of modular services that allow companies to create anything on the cloud, from storing sales documents to developing complex websites. The service allows start-ups to run their apps on Google's robust infrastructure, which serves over six billion hours of YouTube video per month without any major technical trouble. The service is also said to have more regional data center coverage in Europe than AWS.

Microsoft  is also in the game. On Oct. 2013, the company announced a new wave of enterprise products to complement Office 365 and other cloud services. The company's public cloud platform, Windows Azure, is available in 109 countries, including China, and supports more than 15 currencies and 10 languages.

Although Box appears to lack scale advantages against Amazon, Google and Microsoft, the company is trying to emphasize its mobile advantage to win market share, as evidenced by its recent ads. While most competitors have the option for working on your phone or tablet, Box's mobile platform is among the best when it comes to user experience. More importantly, since the company doesn't sell or support a particular operating system, Box is available on every possible mobile device: you can use it on the Ipad and iPhone, Android, and even the Windows Phone or BlackBerry operating systems.

Final Foolish takeaway
In a fierce market, Box is trying to differentiate its service by focusing on the enterprise segment where customers are looking for something more than just cloud storage. This is why Box focused on adding innovative features around raw storage --sharing, collaboration, multi-platform, integration with Salesforce products, sales features-- to make sure that a file hosted on Box had more value than a file saved on Dropbox, Amazon Web Services, or Windows Azure.

This has allowed the company to remain highly competitive, despite lacking scale advantages against tech giants. In this way, Box --which is hoping to go public as early as April, according to a Forbes' source-- may have a good chance to become a huge company in the mid run.

It seems like not a day goes by that we don't hear about the NSA spying, Russian teen hackers, or new details about the Target security breach. Our bank, email, and social network accounts are ripe for the taking. Consumers will never fully trust retailers with financial or private information again. It's another "new normal" thrust upon us, and it's here to stay.

Hackers, phrackers, and crackers continuously find loopholes, gaps, and other open doors into our data. No matter how complex the information security or how strong the firewall, threats will persist -- and sometimes circumvent even the best-designed security technologies. The general public's new realization of just how serious cyber threats are has put cybersecurity firms in the spotlight. Barracuda Networks , F5 Networks , and Check Point Software Technologies are three cybersecurity firms to watch in 2014.

One mean fish
Barracuda Networks is poised for growth. The company specializes in easy-to-install cloud and security solutions. With the recent Target banking breach, Barracuda Networks products and services will be in high demand. The firm adds value by offering products in three key areas: storage, application delivery, and content security. The Barracuda Web Security Service, Barracuda Email Security Service, and Barracuda Web Application Firewall should be flying off the virtual shelves.

Barracuda Networks also has products and services that cover cloud-enabled appliances. Citibank, IBM, FedEx, Harvard, and Coca-Cola are just some of the 180,000 organizations that use Barracuda Networks products and services. The company has focused on providing clients with a cost-friendly solution. Barracuda has strong recurring revenue because of a robust subscription model. The company is a trusted vendor in the mid-market IT space. Customers like the responsive deployment -- often within 24 hours -- and Barracuda's knowledgeable sales and technical teams. These teams work with customers to close the sale and implement the technology.

Check Point gnarly
Check Point Software Technologies is Internet security. The company has deep roots in web security. Founded in 1993, it's been the go-to company for businesses and governments looking to stop cyber attacks. With solutions for network, data, and mobile security, Check Point Software will be a winner as more companies look to secure not just their data, but their customers' data. Check Point Software has been innovative in its software development, and savvy and innovative thinking has led to key mergers and acquisitions over the past decade that have deftly shielded the company against upstarts like Barracuda Networks. Check Point Software had a strong 2013. Total revenue was $331.7 million, up 3% year over year. The tech company placed in the "Leaders Quadrant" of Gartner's recent Magic Quadrant for Mobile Data Protection. This was Check Point's seventh time selected as a leader by Gartner. This is the equivalent to getting an Emmy in the IT security industry. Being named a leader means your products become industry standards and are shortlisted on most RFPs.

I have Five on it
F5 Networks is all about solutions. Solve it, believe it, build it, and support it -- F5's unofficial tag line says it all. The Seattle technology company has been on a tear. Like the F5 tornado for which it was named, it's been ripping through the IT security sector. The company's BIG-IP product line has been a solid performer for years. F5 has also been a go-to company for those wanting industrial security. Maintaining market leadership with competitors like Cisco Systems, Barracuda Networks and A10 Networks has not been easy, but F5 has done it -- and thrived in the process. F5 has even worked with companies like Amazon, offering secure billing systems that work on Amazon Web Services and link with F5's BIG-IP products.

Networking pays off
Barracuda Networks shares are somewhat of a mixed bag right now. At $35.68 per share, the stock is modestly priced, but the return on investment and operating margin are both negative. The -6.25 operating margin is not a deal breaker, but this and a -9.34 ROI point to F5 possibly needing to burn through cash reserves instead of growing the business. With Barracuda Networks' subscriptions and overall business growth, these negative numbers are a concern.

Thankfully, the negative numbers are in the low single digits. But why are these numbers negative, given Barracuda Networks' industry prowess? Mixed numbers aside, Barracuda Networks is a good growth tech stock to watch -- and possibly buy -- in 2014.

F5's stock has been active and is up 6.62% year to date. The shares are attractively priced at $97.48. This stock will certainly eclipse the century mark during this quarter. The company's earning report was good. Its reported first-quarter EPS was $0.03 better than the consensus estimate of $1.19. F5 saw revenue for the quarter increase to $406.5 million, while estimates called for only $396.27 million. Like most tech companies, the stock's P/E is high at 27.79, but this stock should be part of any value-driven technology portfolio.

The Foolish takeaway
As more companies and customers demand that their data be private, secure, and accessible, look for the profiles of Barracuda Networks, F5 Networks and Check Point Software to rise. These three companies have proven solutions and services to thwart growing threats.

Chipotle Mexican Grill turned in a stellar performance in Q4, recovering from a weak start to 2013. Total revenue increased more than 20% for the quarter and 17.7% for the full year. Meanwhile, comparable restaurant sales rose 9.3% last quarter and 5.6% for all of 2013.

2013 was another good year for Chipotle.

I love Chipotle. The food is tasty, and I also appreciate the company's commitment to sourcing ingredients responsibly and giving its best employees plenty of opportunities to move up the management ranks.

However, I don't like Chipotle stock very much; it's even pricier than the food! While the company has plenty of growth left, there are other investment opportunities with similar growth potential at much more attractive prices.

Chipotle remains popular
Chipotle's Q4 comparable restaurant sales growth was the company's strongest result since Q1 of 2012. In some ways it was even better, because menu price increases contributed to Chipotle's sales growth in late 2011 and early 2012, whereas last quarter's gain was driven by higher traffic at its restaurants.

In light of the stronger-than-expected results, Chipotle's management raised their forecast for 2014 comparable restaurant sales growth. The company now projects a low- to mid-single-digit gain, excluding the effect of any menu price increase.

Additionally, Chipotle CFO Jack Hartung stated on the company's recent conference call that Chipotle is likely to raise menu prices during the third quarter. This will allow Chipotle to recoup the impact of commodity cost increases, which drove a slight decline in its restaurant-level operating margin last year. In other words, not only will a menu price increase boost sales growth further, but it will also push Chipotle's profit margin higher.

The price is the problem
Given that Chipotle has strong traffic and sales momentum entering 2014 and the company's margins could get a lift later this year from a menu price increase, what's not to like?

The answer is valuation. At this time last year, Chipotle stock traded for around $300, which seemed fairly attractive. By contrast, the stock has jumped to more than $540 and touched an all-time record high of $568.90 last week!

Chipotle 5 Year Stock Chart, data by YCharts

At that price, investors are paying more than 50 times Chipotle's 2013 earnings. That's about 3 times the market average. To justify that price, Chipotle will need to deliver a stunning level of long-term earnings growth.

How fast can Chipotle grow?
Chipotle's recent results demonstrate that the company is far from saturating the market. However, it's hard to avoid the fact that growth is gradually tailing off. Chipotle added 180 net new restaurants in 2012 and 185 in 2013, and it is projecting 180 to 195 new restaurant openings in 2014. While the absolute number of store openings is similar, the growth rate in Chipotle's store count has slipped from around 15% in 2012 to a projected 11%-12% in 2014.

Chipotle may have trouble pushing its growth beyond the recent pace of just under 200 new restaurants annually. Unlike many of its competitors, Chipotle does not franchise. This allows it to offer a more consistent, high-quality experience, but it also creates organizational barriers to faster growth. (Think about it this way: if there are 250 working days in a year, Chipotle's development team is choosing a new restaurant site almost every day!)

Within each restaurant, opportunities for future sales growth are limited as well. Chipotle frequently has long lines at peak lunch and dinner times. This has led to a focus on "throughput" -- speeding up service times -- in recent years. The company has made good progress in this regard, setting a new record last quarter.

Still, there are physical limits to how quickly Chipotle can serve customers! Better practices may allow the company to increase peak-hour transactions by 10% or 20% over time, but these initiatives aren't going to double sales. Chipotle is now looking into mobile payment systems, which may speed up checkout times, but this isn't likely to be a panacea, either.

Foolish conclusion
I am confident in Chipotle's long-term prospects, and I think the company could easily grow sales at a 15% annual pace through the end of the decade. However, even that level of growth isn't enough to justify Chipotle's current valuation.

For example, Spirit Airlines has been growing even faster than Chipotle in recent years and has equally good long-term growth prospects. Yet it is trading for less than 20 times 2013 earnings! Some of that difference is warranted by the riskiness of the airline industry, but the risk/reward trade-off for Spirit still seems much more enticing.

Long-term investors in Chipotle who buy today and hold for 10-20 years are unlikely to lose money, due to the company's consistent growth and large opportunity. That said, Chipotle's total return is still likely to trail that of the broader market due to its pricey valuation today.

Walt Disney will release its quarterly report on Wednesday, and investors still have high expectations that the multimedia empire can sustain its impressive growth rates well into the future. With its smart acquisitions of content-production powerhouses Lucasfilm, Marvel, and Pixar and with an ironclad grip over the sports-programming world with its leading ESPN network, Disney has held competitors at bay and has become a must-have source of content both for cable providers and for streaming-video giants Netflix and Amazon.com , and shareholders expect earnings growth to continue well into the future.

When it comes to vertical integration in entertainment, Disney has mastered the industry. With so many cross-promotional opportunities, Disney builds its customer base from the earliest of ages and holds onto them throughout their lives. Yet the stock rose at more than double the pace of the Dow Jones Industrials last year, raising questions about whether even such a promising company might be overvalued. Let's take an early look at what's been happening with Walt Disney over the past quarter and what we're likely to see in its report.

Source: Wikimedia Commons.

Stats on Walt Disney

Source: Yahoo! Finance.

Will Disney earnings keep moving higher and higher?
Analysts have had mixed views on Disney earnings in recent months, boosting their December-quarter and full-year fiscal 2014 estimates by $0.02 per share each, but cutting their out-year fiscal 2015 projections by a nickel per share. The stock has continued its advance, rising 5% since late October.

Disney's September-quarter earnings report provided a good picture of just how broad-based and strong the company's empire remains. Sales rose 7%, pulling net income up by 12%, and the company's parks and resorts segment led the way with above-average gains in revenue and earnings. Theme-park ticket-price increases and merchandise and hotel room revenue helped offset an 8% drop in operating income from Disney's media-networks segment. Disney also said it would delay the release of the next installment of the Star Wars series from mid-2015 to late 2015, but that didn't creating any lasting drag on the stock.

Looking forward, one key deal involving Disney and Netflix could hold the key to yet another huge revenue stream for both companies. CEO Bob Iger said in November that the two companies would create a partnership to build several live-action series concepts based on Marvel characters. With so much potential content in the Marvel universe, Disney can afford to produce shows based on lesser-known characters without fear of cannibalizing demand from its feature film series on more popular characters. Moreover, with Netflix trying to hold Amazon at bay, Disney has leverage to get even more money for exclusive content deals and other value-added arrangements.

Disney doesn't have a wide-open field for industry domination, though. New pushes from NBC Universal and Fox to create rival sports networks of their own have caused some to worry about whether ESPN's command of the sports-broadcasting industry is a wide enough moat to last indefinitely. But with such a huge first-mover advantage, Disney has a head start that will make it difficult for its rivals to compete effectively unless they're able to build up their own critical mass of interest.

Moreover, Disney has some industries where it hasn't created a huge leadership advantage. In interactive gaming, for instance, Disney has seen repeated losses for years, and reports earlier today said that the company will lay off hundreds of employees at the division. Even so, interactive entertainment will remain an important piece of the industry, and Disney won't want to jettison its unit entirely if it can salvage profitable parts of it.

In the Disney earnings report, look beyond results of blockbuster films like Frozen to get a vision of the company's long-term growth strategy. With so many drivers to boost sales, Disney needs to be smart about choosing the path that will lead to the best possible prospects in the years and decades to come.

Click here to add Walt Disney to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

In the first part of this series, I noted five disadvantages average investors have in today's market. But before you stuff all your money under your mattress, you should know you have advantages of your own. It may surprise you, but there are some places where the big money lags behind.

1. Allocation flexibility
Many funds are managed with a stated goal in mind. It may be called "small cap," "aggressive growth," or "dividend-only." In many cases, this restricts what the portfolio can be invested in. Even if the manager of the dividend-only fund sees a non-dividend stock trading at an excellent valuation, he or she couldn't buy it because it would violate the structure of the fund. Many institutions also restrict purchases of stocks trading under $5 per share or under a certain market cap, keeping these traders from purchasing what are sometimes excellent values or growth prospects.

Even in cases where the company has noted its intention to pay a dividend in the future, dividend-only funds are usually restricted from buying. After noting the probability of a dividend months before each announcement, shares of Delta Air Lines and American International Group both posted strong gains on the days when the dividends were officially declared.

If you spend the time to search out the best investments, you have the flexibility to invest in pretty much anything you want. A blue-chip bond to go in your otherwise speculative growth portfolio? Why not? An emerging tech company to mix in with your dividend picks? Go ahead.

2. Control of cash flows
Many people question why fund managers sell so much stock at the bottom of the market only to be buying back in as it rises. But, to their credit, the decision is often beyond their control. Clients have their money in a fund, and when a recession hits, they need it back. When lots of clients need their money back, the fund needs to sell at the bottom -- a.k.a. the worst possible time.

While some average investors are unfortunately forced to also sell at the bottom to make ends meet after the loss of a job, those who remain on solid financial footing can choose to ride out the storm or even put more money in. And there certainly is potential here. Had you put your money into an index fund based on the S&P 500 during the bottom of the market, you would have more than doubled your investment in only a few years

3. Small money
If you remember, I noted in the last part of this series that Warren Buffett's name and billions of dollars get him better deals than the rest of us. But Buffett doesn't count out the small investor. In fact, he has some interesting thoughts about investing an amount smaller than he has now. As noted in Business Insider, Buffett says:

If I was running $1 million today, or $10 million for that matter, I'd be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I've ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It's a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.

While Buffett does put it best, I will attempt to paraphrase. Basically, Buffett argues that with a smaller amount of money, investors can achieve much higher percentage returns more easily.

And this makes sense, too. After all, a lot of small-growth companies would be completely missed by Berkshire Hathaway , since even their wildest success would only make a dent in Berkshire's bottom line. So for anyone with a sub-billion-dollar portfolio, you at least have a structural advantage over Buffett.

4. In the trenches
Financial analysts tend to see things from a financial perspective and miss many big growth stories as a result. Although market analysis may not be your trade, if you're involved in something like technology, design, or engineering, you could see the next big growth story before the financial types do.

Remember when Tesla Motors was the unprofitable niche company that made an electrified Lotus and was going to be bankrupt in a year? Today, close followers of Tesla who bought in at the IPO have seen their money multiply over eightfold. So just because you don't spend your day glued to the markets doesn't mean you can't find the next investment growth stories.

5. Fees and commissions
If you read the first part of this series, you probably remember I listed this as a disadvantage to average investors. But while fees and commissions do eat up a larger percentage of each trade, many investors who have larger amounts of money turn it over to an actively managed fund.

At first it seems like the smart thing to do. After all, how could someone getting paid so much to manage your money actually be worse than an index at it? Turns out, in most cases and when fees are taken into consideration, they are. So if you want a leg up on your rich uncle's investment in an actively managed equity fund, go grab a piece of an S&P 500 index fund.

The average investor can win
The stock market is not where average investors should expect to get rich quick but, through a combination of advantages and disadvantages, an average investor who follows the basic rules of investing so be able to generate meaningful returns. Part of investing is knowing where your advantages and disadvantages lie and average investors have plenty of both.