Raise your hand if you'd invest in a company that's growing like a weed, even if it's only growing the top line. Would you hold on even if that company had no easy path toward a long-term profit explosion?

Put your hands down, Amazon investors... you don't count.

Anyone else? Not too many people. That makes sense, doesn't it? We don't invest in nonprofits when we buy stocks. Without earnings, a company has nothing to return to shareholders, and nothing to reinvest in its business. Revenue growth is great, but margins matter. A company that makes a billion widgets, but can't turn a profit, will eventually lose out to the company that can figure out how to scale up widget-making profitably.

Investors are finally coming to understand that about 3-D printing stocks, which is why 2014 has been such a horrible year for Stratasys and 3D Systems . Both stocks have slipped significantly today after the latter warned that it would not manage to grow its earnings at all in 2014, a warning made worse by the fact that 3D Systems had to downgrade its own earnings guidance for 2013. This wasn't even the first such slip -- Stratasys also warned of weaker earnings in 2014 several weeks ago, precipitating another sectorwide drop.

Revenue is nice, but margins matter. Where are they in the 3-D printing industry? Right now, they're low, and going lower:

SSYS Revenue (TTM) data by YCharts

DDD Revenue (TTM) data by YCharts

Keep in mind that these are GAAP results and, as free cash flow has not been moving ahead of earnings per share, it's hard to argue that real profits are substantially better than the adjusted figures. Smaller 3-D printing companies tend to do worse on the bottom line. ExOne has yet to post an annual profit in its life as a public company, although it's getting closer. Tiny voxeljet has no profit to speak of, but its market cap is still 39 times its annual sales. Here's a quick look at how these companies are valued today, and what it might take for their valuations to look a little bit more sustainable:

Source: Yahoo! Finance.

Is your nose bleeding yet from these sky-high valuations? But some companies should be overpriced, because their growth rate is so monstrous that they'll soon blow us all away with huge earnings. Let's assume that the present market caps of these four companies stay the same, but revenue and earnings continue to grow. How much would it take for them to get to more sensible valuations -- which we'll define here as P/E ratios of 40, and P/S ratios of four, for a reasonable net margin of 10%?

Author's calculations assume same market cap with P/E ratio of 40 and P/S ratio of four.
* Revenue and earnings from most recent trailing-12-month data, via Morningstar.

Only 3D Systems has managed to post positive GAAP earnings over the past several years. In 2010, its adjusted profit margin was 14%, and its GAAP profit margin was 12.2%. In 2011, its adjusted profit margin was 17.8%, and its GAAP profit margin was 15.4%, which is still a record GAAP margin for the company. In 2012, its adjusted profit margin was 19.2%, but its GAAP profit margin was just 11.1%.

For 2013, 3D Systems anticipates an adjusted profit margin of roughly 17%, which is lower than last year's, and it expects an adjusted profit margin of just 11.6% for 2014. Given the company's increasingly divergent adjusted and GAAP earnings, the final results could look significantly worse. This is the best 3-D printing company you can buy today, the only one that's been consistently profitable during the past few years, and its margins are undeniably shrinking. If scale and market leadership can't give 3D Systems the pricing power it needs to maintain its margins, is there really any hope for the other 3-D printing companies?

This may just be the tip of the iceberg for 3-D printing profitability. The industry has been highly insulated from real competition for years thanks to a bevy of patents protecting its core technologies; but that protection is about to fall apart. The earliest patents that expired were those for fused deposition modeling, and we can see the outcome of those expirations in the wide range of low-cost consumer 3-D printers available today. By the middle of next year, a number of laser sintering and stereolithography patents will have expired.

These two 3-D printing methods are much more precise and more advanced than those now churning out little plastic gewgaws in thousands of cheap desktop machines around the world. History has shown that when competition is allowed to proliferate in hardware manufacturing, profit margins are quickly pushed to the floor. All it takes is the full investment of a major industrial concern, and 3D Systems, Stratasys, and their smaller compatriots may find it nigh-impossible to maintain even the illusion of profitability afforded by adjusted earnings.

Margins matter, and the 3-D printing industry is neither growing quickly enough, nor keeping costs contained enough, to justify even its post-drop nosebleed valuations. Competition is coming, and it won't be kind to your favorite 3-D printing stocks.

Plains All American Pipeline reported fourth-quarter and full-year earnings after the market close Wednesday. For the quarter, the partnership reported a 3% drop in net income and EBITDA. On the year, both metrics posted sizable gains, as net income climbed 24% over 2012's number, while EBITDA grew 11% on a year-over-year basis.

The decline in the fourth-quarter numbers was driven by the partnership's supply and logistics segment, where adjusted segment profit declined 22% in the fourth quarter. Despite the drop-off, the figure slightly exceeded management's midpoint guidance for the quarter. In other words, they knew this was likely, given the abnormal success of the segment in 2012.

On a positive note, the fourth-quarter adjusted segment profit for the transportation segment grew 8%, and 20% in the facilities segment.

Looking ahead, management expects aggregate adjusted segment profit for the transportation and facilities segments to increase 15% in 2014, while the supply and logistics segment returns to a baseline performance. The partnership also expects to deliver 10% growth for its distribution this year, while maintaining full coverage. Plains' fourth-quarter distribution was $0.6150 per unit, a 9.3% increase year over year.

Plains All American's fourth-quarter earnings call will take place at 11 a.m. ET on Thursday, Feb. 6. Interested investors can tune in here.

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 Actuate Corporation fell nearly 19% Wednesday after the personalized analytics company released disappointing fourth-quarter earnings.

So what: Quarterly sales came in at $32.4 million, which translated to adjusted earnings of $0.09 per share. By contrast, analysts were modeling earnings of $0.10 per share on revenue of $35.19 million.

Going forward, management expects 2014 revenue to fall to $122 million -- a result led by 10% growth in its BIRT iHub business to $82 million, but offset by continued declines in its legacy business, which should achieve combined license and maintenance revenue of $40 million. Analysts, on average, were looking for total 2014 revenue of $146.25 million.

Separately, Actuate detailed the acquisition of German software company legodo, whose products should "significantly extend" Actuate's Customer Communication Management offerings. Specific financial terms for the deal weren't released.

Now what: Actuate may look relatively cheap trading around 14 times next year's estimated earnings, but keep in mind those estimates are likely to fall as analysts have time to fully digest today's miss. Additionally, given the added risk for Actuate in successfully implementing the acquisition, I prefer to keep Actuate on my watch list for now.

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 Gigamon plunged more than 10% early Wednesday, then recovered to close down just 1.3%, despite turning in better-than-expected fourth quarter results and solid forward guidance.

So what: Quarterly sales came in at $43.1 million, which translated to adjusted earnings of $0.18 per diluted share. By contrast, analysts were only looking for earnings of $0.12 per share on sales of $41.9 million.

For the current quarter, however, Gigamon expects a breakeven quarter on revenue of $34 million to $35 million. Analysts, for their part, were looking for looking for breakeven results on sales of $33.43 million.

Now what: Given industry peer F5 Networks' pop two weeks ago, investors were likely hoping for an even bigger beat and higher guidance from Gigamon.

But to be fair, Gigamon stock did jump more than 10% to end last week after a Goldman Sachs upgrade in anticipation of today's results. As it stands, investors should be pleased shares have actually risen slightly from Friday's close, even despite a broader market pullback.

The stock does look pricey today trading at 34 times next year's estimated earnings, but keep in mind that Gigamon should continue to benefit from improving U.S. enterprise spending going forward. While I'm not particularly compelled to buy today, at the very least I think investors would be wise to add Gigamon to their watchlists.

On Monday, most automakers in the U.S. -- including Ford Motor , General Motors , Toyota Motor , and Honda Motor -- reported year-over-year declines in vehicle sales for the first month of 2014. At first glance, this data might seem to suggest that the recent rebound of the U.S. auto sector is coming to an end. However, that couldn't be further from the truth.

There was one key factor that knocked U.S. auto sales off track in January: bad weather! Virtually every automaker acknowledged the effect of record cold weather and strong winter storms that hit much of the U.S. last month. As a result, there is every reason to expect a solid bounce in auto sales in the next month or two.

Sales skid
At Ford, January sales retreated 7%. Cars took the brunt of the decline while truck sales came in almost even with January of 2013. Ford executives noted that retail sales were up double-digits in the West, where there were no major weather issues. By contrast, sales dropped significantly in the East, Midwest, and Southeast, which experienced the most severe weather. 

Not surprisingly, few people want to go look at new cars on a dealer lot on a frigid day. However, retail sales weren't the only part of the industry to see a weather-related sales slump. Ford reported that some of its fleet deliveries were also delayed because of problems at its factories caused by the cold weather. 

Toyota Camry sales dropped significantly last month because of the bad weather. Source: Toyota.

Toyota's sales also dropped 7% year over year. The company's luxury Lexus division actually posted a solid 8.8% increase, largely because of a large sales gain for the recently redesigned Lexus IS. However, this was offset by big sales drops for some of Toyota's high-volume car models, including the Camry and Prius. 

General Motors saw an even steeper decline, with retail sales down 10% and fleet deliveries down 18% for a total drop of 12%. Sales of GM's new pickups remained slow because of the company's commitment to holding down incentive spending; Chevy Silverado sales dropped 18.4% and GMC Sierra sales fell 13.5%.

Bad weather aggravated GM's difficulty selling its new full-size pickups at full price. Source: GM.

On the other hand, Honda had a relatively good month, with sales down just 2%. The Acura luxury division was particularly strong, setting monthly sales records for the MDX and RDX SUVs. This was offset by a modest drop for the Honda nameplate.

Fundamentals remain good
Weather may have stymied dealer traffic last month, but this represents a very short-term problem for automakers. They should be able to recapture almost all of the lost demand in February and March.

Moreover, the fundamentals of the U.S. auto market still look good. The U.S. economy has been adding jobs slowly but surely over the last few years. Housing demand is improving, and this helps automakers because rising home prices makes homeowners more confident in their financial position, and because a rebound in new-home construction will drive pickup demand in the construction industry. 

Lastly, gasoline prices have remained moderate in recent months and are currently $0.25 per gallon below their level at this time last year. This provides some extra room in household budgets. Most importantly, as car buyers have become less concerned about fuel prices, sales of more profitable (but less fuel-efficient) SUVs and luxury cars have rebounded.

Foolish conclusion
The long-term outlook for automakers continues to look bright. Developed economies are recovering from the Great Recession, while developing countries provide huge long-term growth potential because of the expansion of the middle class in places like China. However, some investors appear to have panicked because of a few weak data points that have emerged in recent months, causing a broad pullback in auto stocks.

Automaker Stock Performance, data by YCharts.

This is nothing to worry about. In fact, investors who missed out on auto stocks' strong 2013 performance now have an opportunity to put some money to work at more attractive prices. Over the next five years, there is far more upside than downside for investors in the auto sector.

To understand that the tobacco industry views the electronic cigarette market as its future, look no further than the latest acquisition by Altria  of Green Smoke for $110 million. The purchase by the tobacco giant's Nu Mark subsidiary shows the importance being placed on rolling up key independent producers as a means of strengthening one's position in the industry.

Source: GreenSmoke, USA.

Because Lorillard was the primary early mover in the e-cig market with its acquisition of blu eCig, it's been able to stake out a leadership position in the industry. Between blu and its more recent purchase of SkyCig, Lorillard now owns well more than a third of the market by units sold and has an almost 45% share by dollar. 

Yet it's still a wide-open field. At around $1.2 billion, e-cigs are still a tiny niche, representing about 1% of the $100 billion tobacco industry. Yet depending upon whose numbers you want to believe, that figure can soar to anywhere between $3 billion and $10 billion over the next five years -- and some believe it could even surpass regular cigarette sales within the next decade.

Make no mistake, attacks on tobacco will not relent, but as the industry titans establish bulkheads on the e-cig battleground, politicians, regulators, and activists will come after e-cigarettes as well. So-called "vaping bans" are being enacted with at least a partial rationale being that because e-cigs look like regular cigarettes, their proliferation will diminish the stigma anti-smoking crusaders have worked so hard to establish.

Yet smoking is inherently dangerous, contributing 80% of the lung cancer deaths in women and 90% in men, according to the American Lung Association. Since it's the tar created by burning tobacco that's the problem, e-cigs would be the safer alternative -- even if manufacturers can't market them that way -- because they contain 450 times lower levels of toxicants in their vapors than cigarettes have in their smoke. 

And since it is vapor, a mist, and not smoke, "secondhand smoke" concerns are lessened, though the FDA believes the matter of secondhand effects is not settled and can't be dismissed out of hand. Considering that a new study now suggests that "third-hand smoke" -- the residue that's allowed to settle into objects like tables, couches, or other surfaces -- is just as deadly as smoking the cigarette itself, it will create even more of a movement toward alternatives that don't produce smoke. 

Despite blu eCig's dominance, there are plenty of opportunities for new products to make their mark. Reynolds American recently introduced its Vuse brand into the Colorado market and almost instantaneously captured 62% of the market. Altria recognizes there's not only an opportunity in the U.S. but internationally as well, and it is partnering with Philip Morris International to market and distribute e-cigs and other smokeless tobacco products on a global basis.

In its fourth-quarter earnings report last week, Altria noted that its flagship Marlboro brand cigarette suffered a 5.7% volume decline while its other premium smokes were down more than 11%. Even its smokeless products, like chewing tobacco, were down more than 4%. A lot of its future will reside in e-cigs or, as Altria calls them, e-vapor products.

Altria was late to the game and allowed Lorillard, Reynolds, and independent manufacturers to take a large portion of the market already, so look for it to make more such acquisitions to build up its portfolio. Green Smoke generated $40 million in revenue last year, meaning Altria paid 2.8 times sales for the company (or 3.3 times if incentives kick in). When Lorillard paid $135 million for blu, it paid 4.5 times the e-cig maker's $30 million in revenue. Revenues for SkyCig weren't disclosed, but Lorillard was willing to pay upward of almost $50 million for it, with another $50 million due in 2016 if it can hit certain financial performance targets, so Altria got Green Smoke for a decent price.

The tobacco giant may be a Johnny-come-lately to e-cigs, but I wouldn't snuff out its potential to become the biggest player in the space. As it's looking at this as a global opportunity, Altria may yet smoke the competition.

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.

Even though the ADP private-sector jobs report came through with weaker numbers than expected today, the major indexes took it in stride. The Dow Jones Industrial Average ended the day down just 5 points, or 0.03%, while the S&P 500 fell 0.2% and the Nasdaq lost 0.5%.

Of the three jobs reports scheduled for release this week, the one from ADP doesn't get as much emphasis as the other two. The Labor Department will release its report on Friday, and the weekly jobless-claims report comes out every Thursday. That's part of the reason investors didn't react too strongly to the ADP news, which reported 175,000 new jobs, compared with the estimate of 185,000. ADP also revised its December figure from 238,000 down to 227,000.

As for the Dow, the majority of its components -- 17 of 30 -- actually finished the day in the black. But the Dow is a price-weighted index, so the 0.83%, 1.09%, and 1.18% drops at Goldman Sachs , United Technologies, and Chevron, respectively, outweighed the gains made by companies with lower share prices. Goldman's drop probably came in reaction to a pending investigation, as New York state's superintendent of financial services requested documents from Goldman and other financial institutions in relation to a possible act of collusion to fix key benchmarks used for currencies and interest rates around the world. If Goldman traders are found to have taken part, the company could end up on the hook for a big fine.  

Elsewhere in the market, two big technology names, Pandora and Twitter , are tanking in after-hours trading after reporting earnings.

Pandora finished the day with a 0.08% gain but has fallen more than 9.4% after-hours. Revenue hit $200.4 million on a GAAP basis, a 52% increase from a year ago. while earnings on a GAAP basis hit $0.04 per share, up from $0.01. Sounds great, but the company is also spending more money to get listeners as the competition in the streaming video arena has heated up. Spotify and Apple's iTunesRadio are two notable services that have moved into Pandora's market, and they obviously don't care that Pandora was there first and is the current market leader. Costs will probably only continue to rise in the future, and that's not something investors want to see.  

As for Twitter, the stock closed the day down 0.53%, but has plummeted by more than 17% in the extended trading period. In its first earnings statement as a public company, revenue jumped from $112 million to $243 million, but the company also lost $1.41 per share during the quarter, compared with a loss of $0.07 a year ago. On an adjusted basis, the company posted earnings of $0.02 per share, while analysts were expecting a loss of $0.02, but user growth during the quarter came in lower than expected. Finally, Wall Street wanted to see a total of 244 million users, while Twitter reported 241 million. That's a 30% increase from the same quarter last year, but it also indicates that user growth is slowing. While the company certainly has a great future ahead of itself, investors will have to be patient, as today's decline proves that expectations for the company were set way too high.

It's only February, but 2014 has already been a huge year for Facebook . Once the company that Wall Street loved to hate, the social media titan released its annual report on January 31, and the positive results immediately sent Facebook's stock price to new highs. All of this excitement is happening just as Facebook celebrates its tenth birthday, no less. Here's a closer look at exactly what is causing this company's solid performance.

10-K, good buddy
Facebook shakily meandered through the first half of last year, still not having quite recovered from its terrible 2012 IPO performance. Then in July 2013, the company's quarterly report finally proved Facebook's ability to monetize its operations within the mobile realm. After that, the business's price per share took off like a shot, capped off by the release of its 10-K for 2013, after which Facebook stock reached a new all-time high of over $60.

Such a sudden spike might have looked dramatic, but in Facebook's case, it might have been well-founded. By the end of the year, the amount of Facebook's daily active users (DAUs) had jumped 22% compared to the same time last year, reaching 757 million. That's more than twice the entire population of the United States, logging on at least once a day to check their mini-feeds.

Regarding mobile -- a segment Facebook investors have been watching like hawks -- the company increased its DAUs to 556 million by the end of the year, up 49% from the same time in 2012. Mobile advertising also accounted for 45% of the company's overall $6.9 billion in advertising sales, which makes up 88% of Facebook's overall revenue. This is a huge spike compared to 11% one year prior.

Advances in adverts
While mobile has been a hot topic for Facebook, what really caused the company's revenue growth to surge last year were tweaks to the way ads appear on its News Feed, for both mobile devices and PCs. Advertisements on the Feed reap higher engagement and financial results than any of the company's additional placements, and last year, Facebook did whatever it could to take advantage of that fact. The company boosted the number of ads it displayed on users' News Feeds by 20%, and the boost in that overall total helped the average price per ad go up by 36%.

Facebook also continued working to diversify its revenue streams last year. Sales from its "Payments and other fees" segment -- i.e., fees paid by developers to create apps, as well as users paying for gifts and games -- rose 9.3% compared to last year, coming in at $886 million. Developers might see additional incentive to hop on board the Facebook bandwagon within the next year as well; the company paid out over $2.1 billion to its developers in 2013, up from $1.96 billion in 2012. 

Finally gaining solid footing
After a year and three quarters as a public entity, the once-beleaguered Facebook now appears capable of putting its money where its mouth is. Wall Street seems more than eager to celebrate accordingly, but that doesn't necessarily mean Facebook's days of volatility as a stock are gone for good. It could take several quarters of positive earnings before the market completely gets past Facebook's IPO iniquities, but by upping the frequency of the company's ads, attracting developers with higher payments, and getting a solid foothold on mobile, the social media company certainly seems to be building enough momentum to accomplish that kind of continued success.

In this video from Wednesday's Investor Beat, host Chris Hill and Motley Fool analysts Jim Gillies and Bill Barker dig into the biggest business stories of the day for Foolish investors.

CVS has announced that as of Oct. 1, it will no longer sell cigarettes or related tobacco products. The second-largest pharmacy chain in the U.S. does about $2 billion per year in tobacco revenue. While the media is applauding the move, the stock fell slightly today. In the lead story on today's Investor Beat, the guys discuss how big a deal it is that the company is leaving that $2 billion a year on the table from here on, and why they like the move in the long run.

In this video from Wednesday's Investor Beat, host Chris Hill and Motley Fool analysts Jim Gillies and Bill Barker dig into the biggest business stories of the day for Foolish investors.

3D Systems fell hard today after the company issued a profit warning for the fourth quarter and the full year. The company is slated to announce earnings on Feb. 28. Retail franchiser Winmark popped today on the news that it will pay out a special dividend of $5 per share. And same-store sales for Buffalo Wild Wings rose more than 5% at its company-owned locations, but fourth-quarter revenue came in a bit light, and shares were down on the news. In this segment, the guys look at three stocks making moves on the market today.

In this video from Wednesday's Investor Beat, host Chris Hill and Motley Fool analysts Jim Gillies and Bill Barker dig into the biggest business stories of the day for Foolish investors.

In this segment, Jim discusses Ascena Retail Group , parent company for Dress Barn among other retail chains, and why he'll be watching this multi-decade success story, while Bill looks at Advance Auto Parts , and why the rough winter weather this year is great news for an auto-parts store.

In this video from Wednesday's Investor Beat, host Chris Hill and Motley Fool analysts Jim Gillies and Bill Barker dig into the biggest business stories of the day for Foolish investors.

CVS has announced that as of Oct. 1, it will no longer sell cigarettes or related tobacco products. The second largest pharmacy chain in the U.S. does about $2 billion per year in tobacco revenue. While the media is applauding the move, the stock fell slightly today. In the lead story on today's Investor Beat, the guys discuss how big a deal it is that the company is leaving that $2 billion a year on the table from here on, and why they like the move in the long run.

Then, Bill and Jim look at three stocks making moves on the market today. 3D Systems fell hard today after the company issued a profit warning for the fourth quarter and the full year. The company is slated to announce earnings on Feb. 28. Retail franchiser Winmark popped today on the news that it will pay out a special dividend of $5 per share. And same-store sales for Buffalo Wild Wings rose more than 5% at its company-owned locations, but fourth-quarter revenue came in a bit light, and shares were down on the news.

And finally, Jim discusses Ascena Retail Group, parent company for Dress Barn among other retail chains, and why he'll be watching this multi-decade success story, while Bill looks at Advance Auto Parts, and why the rough winter weather this year is great news for an auto-parts store.

Source: www.planetofsuccess.com.

I have to tip my hat to Prospect Capital -- it always has some unique, out-of-the-ordinary way to make a buck.

Recently it's been apartments. Now, it's a plan to get into the peer-to-peer lending space to earn as much as 23% per year.

Loans by individuals, for individuals
Peer-to-peer lending companies launched as a way for consumers to skip the bank. You can go online to one of many peer-to-peer sites (the biggest being Prosper and Lending Club) and ask for a loan. Then, investors, most of whom are individual investors, look at your loan request and decide whether they want to make you a deal.

From start to finish, hundreds of investors may make up just one loan. Once the loan is fully funded, Prosper and LendingClub send the cash to the borrower and process all the back-end stuff like making sure you pay on time and that the investors get their portion of the payments when each amortizing payment comes in.

The potential
Returns from LendingClub and Prosper vary greatly by credit quality. On the conference call, Grier Elisak said Prospect is getting a weighted average yield of roughly 13%. After expected losses, which Prospect believes will come in at 5% of the loan portfolio, the net return is 8%.

Obviously, for a double-digit yielder like Prospect Capital, an 8% return is much too low. Prospect Capital thinks it can leverage this portfolio up to 3-to-1 with secured funding.

We can run the numbers on what this portfolio might return based on its own projections. We can estimate that Prospect Capital would fund this with a line of credit with a rate consistent with its funding for its corporate line of credit as well as its funding for First Tower, another consumer loan company. Prospect can currently borrow at LIBOR plus 2.75%.

That puts Prospect Capital's funding costs at roughly 2.90% per year. That's cheap. Levered at 3-to-1, Prospect would earn 8% on assets and pay total funding costs equal to 2.175% of assets, for a total return on equity of 23.3% per year.

That's good for 18.2% annually after accounting for management fees.

That's the expectation. What about reality?
Everything in the conference call is consistent with data from one P2P lending site, Prosper.com. Prospect said it was looking at borrowers with FICOs of 700 or better scores and expected 13% returns with losses in the 5% range.

I did my digging. Prosper.com has a page outlining returns for various loans by credit quality. The B-range borrowers have a 700-plus credit score, tend to yield about 14% per year, and have losses at around 5% per year.

There is one important caveat: This is looking at Prosper's historical returns since the middle of 2009. As we know, that's when the economy started improving.

Prosper has changed its pricing model and leadership team since the pre-crisis era, but the company discloses that loans between November 2005 and June 2009 produced a negative-5.29% return. LendingClub reveals that loans issued in 2007 and 2008 to B-credit borrowers returned roughly 3.2% per year.

The Foolish bottom line
Prospect Capital's P2P lending is interesting, but it's not exactly compelling. Prospect Capital earns huge returns in its other consumer lending businesses because it adds value by finding the customers. That's the hard part of consumer lending. The easy part is providing the capital to do it. P2P lending sites take out the component that adds value (finding borrowers), and the investors provide the commodity -- money.

If Prospect Capital proves to be profitable in P2P loans, other financiers, who have much lower-cost capital, can do exactly the same thing. Investors should probably look at this as a niche, and potentially temporary, place for Prospect to earn a return.

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 Tableau Software popped 15% after the data analytics company turned in better-than-expected fourth quarter results and solid forward guidance.

So what: Quarterly sales rose 95% year over year to $81.5 million, which translated to adjusted earnings of $0.20 per diluted share. Analysts were only expecting a breakeven quarter on sales of $67 million.

Keeping in mind Q1 is typically Tableau's lightest, management expects current-quarter revenue to be in the range of $61 million to $63 million, or above expectations for sales of $60.25 million. For the full year 2014, Tableau expects revenue of $320 million to $325 million, versus estimates which called for $308.18 million. 

Now what: Tableau is also expecting non-GAAP operating losses between $15 million and $20 million this year as it invests to aggressively boost its industry position. But the company should have no problems weathering those losses considering it has no debt and almost $253 million in cash on its balance sheet.

It Tableau can continue delivering this kind of top-line growth en route to sustained long-term profitability, the stock could still prove a bargain for patient investors.

Spectra Energy and master limited partnership Spectra Energy Partners announced today plans to expand two existing pipeline systems in the Northeast United States to connect natural gas supplies with demanding markets in the region.

The project is based on an agreement between Spectra Energy and Unitil, a natural gas distribution company in Massachusetts, New Hampshire, and Maine. However, the release notes that Spectra's commitment to the project creates ample room for other customers to add on their natural gas demand capacities to the expansion.

"Spectra Energy's pipeline systems are strategically positioned to answer New England's need for additional domestic, clean-burning natural gas," said Bill Yardley, Spectra Energy's president of U.S. Transmission and Storage. "We are able to expand our existing facilities, mostly within their current footprint, and be operational by 2017. The additional supply will keep prices lower overall, while also dampening future gas and electricity price volatility, generating savings for homeowners, manufacturers and businesses."

Spectra Energy has set an in-service target date for what's been dubbed the "Atlantic Bridge project" of November 2017, by which time it hopes to have filed up slots for the 100,000 dekatherms per day addition to its current system. Depending on shipper requests, it may consider more commitments for 2018.

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.

Despite a slow morning, stocks battled back to finish the day nearly unchanged, as the Dow Jones Industrial Average closed down 5 points or 0.03%, coming back from a 100-point deficit earlier in the day. The S&P 500 and Nasdaq, meanwhile, lost 0.2% and 0.5%, respectively. The day's economic reports were mostly in line with expectations, as an ISM Services report rated last month's growth in the category at 54.0, indicating a modest expansion, while the ADP's employment report said 175,000 jobs were added in January, even with expectations for the official report due out on Friday. Atlanta Federal Reserve President Dennis Lockhart also said earlier in the day that he expects the stimulus taper to continue in increments of $10 billion as it's begun and that it should be completed by the fourth quarter. The comments may have shaken investors, as the Dow has already fallen 6% this year, and investors may have been expecting the Fed to make adjustments according to market behavior.

Elsewhere on the stock front, some major news rocked the beverage industry after hours today, as Green Mountain Coffee Roasters said that it had entered into a long-term global strategic partnership with Coca-Cola , the world's largest beverage company. The news shocked the market, sending Green Mountain shares up as much as 55% and Coke shares up 2%. According to the agreement, Coca-Cola will make its brand portfolio available for the forthcoming Keurig Cold brewing system, and will put its marketing muscle behind the new soda-making machine, in whose success Coke now has its own vested interest. As part of the deal, Coke also took a 10% stake in Green Mountain for the cost of $1.25 billion, or $74.98 a share. The deal opens up a world of possibilities for the two companies, but it may be an odd move for a traditional competitor like Coke, considering that the Keurig Cold is not yet on the market and won't be available until 2015. Left out in the cold was rival SodaStream International , maker of the leading at-home soda machine, whose shares fell 7% on the news. The development could, however, prompt PepsiCo or another soda-maker to partner with SodaStream in order to fight the Green Mountain/Coke alliance. In its earnings report, Green Mountain said per-share earnings came in at $0.96, beating estimates of $0.90, though revenue grew just 4% to $1.39 billion, falling short of expectations.

Also making news after hours was Twitter , which has been a market darling since its November IPO but fell sharply in its first report as a public company, with shares trading down 18% at the time of writing. Investors seemed concerned by sluggish user growth and flagging timeline views. Twitter said it averaged 241 million users in the quarter, just a 4% sequential bump, and timeline views actually fell sequentially for the first time, going from 159 billion to 148 billion. Those page views are what Twitter needs to sell ads. Those developments were enough to send the stock tumbling even though revenue jumped 116% to $242.7 million, well ahead of estimates at $217.8 million, and adjusted earnings came in at $0.02 a share, better than the $0.02-loss expected. With a sky-high valuation, the Twitter thesis is all about the future, and if page views aren't growing, the microblogging site could be in trouble. 

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 Nanometrics Incorporated  popped more than 10% during Wednesday's intraday trading, then settled to close up 7% after the company turned in better-than-expected fourth quarter earnings. 

So what: Quarterly revenue rose 18% year over year to in at $46.2 million, which translated to adjusted earnings of $0.04 per diluted share. Analysts, on average, were looking for a loss of $0.01 per share on sales of just $44.88 million.

For the current quarter, Nanometrics expects revenue to be in the range of $48 million to $54 million, which should result in non-GAAP earnings of $0.01 to $0.13 per share. Analysts were modeling Q1 earnings of $0.08 per share on sales of $50.6 million.

Now what: The midpoint of their earnings guidance came in slightly below expectations, but management explained that the miss was primarily due to a shift in timing of R&D program spending from Q4 into Q1.

That's fair enough, but while shares don't look particularly expensive trading at 14.6 times next year's estimated earnings, I'm still not quite compelled enough by Nanometrics' growth to want to buy shares now. At the very least, I think investors would do well to add this one to their watch lists to keep tabs on the company's progress.

J.C. Penney fell below $5 per share on Tuesday after the company's latest financial update disappointed investors. The stock hasn't been at these levels since 1982, so contrarian investors may feel tempted to consider a long position in the company at discounted prices. However, things could easily continue getting worse before they become any better for J.C. Penney.

Too little, too late
The company announced a 3.1% increase in comparable sales during the nine weeks covering the key months of November and December. Comparable sales during the complete quarter grew by 2% versus the prior year, and this was the first time since the second quarter of 2011 that J.C. Penney reported rising comparable sales.

Management highlighted the fact that the company is delivering improvements even in spite of the challenges affecting the industry over the past few months:

While 2013 brought a lot of change and challenges to J.C. Penney, the steady improvements in our business show that the company's turnaround is on track. In spite of the significant headwinds facing all retailers this season, including unprecedented harsh weather conditions in many parts of the country, we delivered on our promise to generate positive comparable store sales growth in the fourth quarter.

The company also announced that it now has more than $2 billion in excess liquidity, which is a positive sign when it comes to financial sustainability in the middle term.

On the other hand, Wall Street analysts think the company´s sales improvement is too small and comes too late: J.C. Penney received negative comments from Goldman Sachs, Deutsche Bank, and Sterne Agee on Tuesday, and the stock fell by almost 17% after the announcement.

The company has been facing stagnant sales and negative margins over the past few years. Management has implemented aggressive promotions to reinvigorate revenues lately, so profit margins most likely remained under heavy pressure during the holiday period. The company doesn't have much to show in terms of sales improvement, either, so things aren't looking good for J.C. Penney.

A dreaded competitive environment
Department stores are facing enormous challenges. Consumers are keeping their wallets closed, online retailers are rapidly gaining market share against bricks-and-mortar stores, and big discounts are becoming a necessity for those that want to protect their share of the pie under such conditions.

Sears Holdings' Sears stores have faced declining sales and falling profit margins in recent years, so the company´s problems can't be entirely blamed on industry conditions. However, Sears reported dismal sales performance during the holiday quarter, with comparable-store sales declining by a worrisome 7.4% versus the prior year.

Sears has turned to cost-cutting and inventory reductions to protect cash flows, but this seems to be hurting the shopping experience even more and aggravating problems on the sales front.

Kohl's hasn't provided specific information regarding performance during the holiday period. However, the company reported a 1.6% decline in comparable-store sales for the quarter ended on Nov. 2. Management is expecting comparable sales for the current quarter to be between flat and a 2% decline, so Kohl's isn't offering many reasons for optimism regarding the possibility of improving conditions for department stores.

Macy's is a different story, though: The company announced a better-than-expected performance during the holiday period, with comparable sales rising by 4.3% during November and December combined.

Management still made references to the questionable "macroeconomic environment with challenging weather in multiple states" affecting the sector, but the company seems to be sailing through the storm in a remarkably good shape. Macy's is most likely the exception that proves the rule, since most companies in the retail sector seem to be facing some truly heavy economic headwinds.

Turnarounds are always tough, and when the economic context isn't helping, they can become a challenge of enormous proportions. In that light, an investment in J.C. Penney is a materially risky proposition, considering the company's situation and competitive landscape.

Bottom line
A falling stock price doesn't necessarily mean an undervalued company, as the price needs to be compared against the company's fundamentals and business prospects to make sound investment decisions. J.C. Penney isn't showing signs of a sustainable turnaround at this stage, so an investment in the company seems to me like too much risk and uncertainty.

Blockbuster status -- the gold medal term awarded to therapies racking up sales of more than $1 billion per year -- is still a major goal for drug developers. Arguably, it's the chance to discover blockbusters that fuel R&D spending and offsets the loss of billions spent working on drugs that never make it to the market.

However, knowing which drugs will become blockbusters isn't easy. Industry watchers often predict big bucks for compounds in development that fail to live up to expectations. So, instead of guessing which clinical drugs might end up becoming the next big winner, in this article series I look at recently approved drugs already ramping up sales that could be on their way to blockbuster levels in 2014.

In a previous article, I covered Gilead's hepatitis C drug Sovaldi, a highly anticipated drug that won approval in December. This time we take at a look at Celgene's Abraxane, a cancer compound already approved as a treatment for breast, lung, and pancreatic cancers. Thanks to Abraxane's label expansion and international launches, Celgene shares hit new highs this past year. However, shares have slid recently on worries payers could balk at Abraxane's $6,000 to $8,000 per month price tag.

CELG data by YCharts

Taking on cancer
Celgene spent nearly $3 billion dollars acquiring Abraxis in 2010 to add Abraxane, a new formulation of paclitaxel, to its portfolio. That appears money well spent following Abraxane's approval as a first line treatment for pancreatic cancer last fall.

That approval marked the first significant new pancreatic cancer treatment in almost eight years, offering new hope to the 45,000 patients diagnosed annually with pancreatic cancer in the United States, and kicking off a burst of sales growth in the fourth quarter.

The use of Abraxane alongside gemcitabine, sold as Gemzar by Lilly prior to patent expiration, improved overall survival to 8.5 months, versus 6.7 months on gemcitabine alone. Overall response was better in the Abraxane plus gemcitabine arm too, reading out at 23% versus 7% for gemcitabine. Since gemcitabine remains the go-to standard of care, Abraxane is quickly capturing share as doctors embrace the dual-treatment approach.

Sales of Abraxane surged 90% in the past year to $202 million in the fourth quarter, up handsomely from the $170 million in sales registered in Q3 prior to the label expansion. The drug's growth was spread pretty evenly between the U.S. and international markets, where Abraxane has more recently been launching.

However, it may not be all clear skies ahead.  A recent letter published in the New England Journal of Medicine by doctors at the highly regarded Memorial Sloan-Kettering Cancer Center appears to question Abraxane's cost relative to its efficacy.

That letter prompted a response from the author's of a prior NEJM article entitled "Increased Survival in Pancreatic Cancer with nab-Paclitaxel plus Gemcitabine," attempting to justify Abraxane in light of the absence of other new therapies.  If the big unmet need trumps payer push back, Abraxane's sales could march notably higher given Gemzar's annnual sales were around $1.7 billion back in 2008.

Abraxane is also succeeding against Lilly's Alimta in the lung cancer indication, for which Abraxane won approval in October 2012. Lilly previously failed to demonstrate an improvement in overall survival when Alimta was combined with Avastin, Roche's mega blockbuster drug that generated nearly $7 billion in sales last year, versus the earlier version of paclitaxel plus Avastin. That may have supported Abraxane's sales for the indication given Abraxane's sales grew from $106 million in the fourth quarter of 2012 to $155 million in Q2, 2013, up 60% year-over-year, following its non-small cell lung cancer approval.

Fool-worthy final thoughts
Abraxane's strong push into 2014 brought its full year sales to $649 million. That means sales would need to climb another 50% this year to reach blockbuster levels. However, the path isn't nearly that difficult given the pancreatic cancer indication lifted Abraxane's sales to over an $800 million annual run rate in Q4.

Abraxane may also see sales benefit as more doctors gain confidence in Abraxane, especially overseas where Abraxane's sales grew more than 90% to just $43 million last year. A filing for the pancreatic cancer indication in Europe, for example, is still pending, suggesting a nod from the European Commission could have a significant positive impact in 2014. Celgene is also awaiting the drug's approval as a treatment for metastatic gastric cancer in Japan. Looking further ahead, Celgene is studying Abraxane as a first line breast cancer treatment, and as a treatment for melanoma, both of which could support additional sales growth down the line.

Sony investors should not only have been disappointed, but also worried, after credit rating agency Moody's downgraded the company's credit rating to junk. The company has been downgraded by other agencies as well, which has strongly put forth the lack of sustainability in its core business segments. The electronics giant is facing a rough patch due to increasing obsolescence of televisions and fierce competition from the likes of Samsung and Apple  in the smartphone and tablet markets.

Can PlayStation turn around Sony's fortunes?
Last year, Sony reached the pinnacle of success with the launch of its much-awaited gaming console, PlayStation 4, which sold nearly 4.2 million units, ahead of its arch-rival Microsoft's Xbox One. Though sales figures remained short of management's expectation of 5 million units, they definitely set the ball rolling for the company to enhance the features on the gaming console and leverage initial sales.

There isn't a need to elaborate further on the glaring success of PS4, and as leading experts in the gaming industry have proclaimed, Sony's gaming console will conveniently beat Xbox One to become the gaming system of this generation . However, for Sony investors, it's important to understand the impact of PS4's success on the financial health of the company. Even though the giant has established dominance in the gaming arena, troubles in its televisions and smart devices segments are far from over.

Apple is a fierce competitor
In the smart devices sphere, Apple is proving to be a magnanimous challenge for Sony, as the company is badly struggling to maintain its market share. The successful launch of iPhone 5s and 5c put Apple back in the game and ended speculation related to a slow down in innovation. Additionally, the launches of the Retina iPad Mini and iPad Air are garnering good reception after some initial criticism.

The recently announced results for the first quarter clearly highlighted Apple's explosive quarter in terms of iPhone, iPad, and Mac sales. Revenue surged 6% to $57.6 billion in the quarter, with a commendable gross margin of 37.9% and diluted EPS of $14.50 per share. The focus of the earnings call was management's outlook on the big partnership with China Mobile because of the massive size of the Chinese markets.

It is prudent for investors to watch out for the development of Apple's share in China, especially after Google announced the sale of Motorola's mobility division to Lenovo . This deal can prove to be a major threat to Apple in the Chinese markets, as Lenovo has a better position there . Thus, the onus will be on Apple to maintain its innovation streak and develop a robust way to capture the Asian markets amid competition from low-priced devices from Lenovo and Samsung.

Lenovo's acquisition spree
Lenovo has a robust repute of growing inorganically, as testified by it's ascent to World's Largest PC maker after acquisition of IBM's PC unit in 2005. Though the move was claimed to be risky then, Lenovo turned the deal around and left many colossal enterprises behind. The company can now have access to North American markets that have been captured by Apple and Samsung with its acquisition of the distant third player, Motorola.

Bleak business prospects
If we were to simply view Sony's operations based on the industry analysis model designed by Michael Porter, it is clear that the consumer electronics favorite is now facing a threat of substitute products as well as competitive rivalry within the smart devices industry. While it is true that Sony is a clear winner in gaming consoles, and its latest innovation, PlayStation Now, should keep gamers connected to Sony for a longer time , the company's struggling earning potential is represented by its core electronic products.

Sony is poised to announce its quarterly earnings on Feb. 6, which will be of extreme significance for investors as the announcement comes after a series of downgrades by leading rating agencies. The company has tried to enter the smart devices markets, but has failed to capture the taste of consumers.

Final words
Recently, there have been reports regarding a potential alliance between Sony and Lenovo, with the latter taking over Sony's Vaio PC business overseas. Though nothing has been confirmed yet, it is a clear indication that Sony's management does not see considerable potential in the PC business and offloading it could prove better for the giant.

Sony is an age old company, but the revolutionary shift in consumer preferences and industry norms are taking a toll on its financial health. Hence, it is prudent to hold off putting money in this giant until there are some conclusive signs of momentum in its dying business segments.