In this video as part of The Motley Fool's "Ask a Fool" series, Fool health-care analyst David Williamson takes a question from a Fool reader, who writes, "What's your Foolish opinion on Organovo ? Buy, sell, or hold?"

David introduces investors to the company, which is working to develop the ability to use 3-D printing technology to create human livers, which would facilitate medical testing for liver toxicity without having to test on actual humans. David also warns that even though this is a potentially disruptive force, it's still so early in the development of its product that there's still a lot of risk for investors here, and he advises keeping this as no more than a tiny percentage of any investment portfolio.

Shares of Teva Pharmaceutical Industries were down about 1% after the company disclosed a federal investigation into its marketing practices. Both Teva's primary money-maker, Copaxone, which treats multiple sclerosis, and Azilect, used in the treatment of Parkinson's disease, will be the drugs in question during the investigation, which will track events dating back to 2006. If wrongdoing is found, there will probably be a settlement.

In this video, Motley Fool health-care analyst David Williamson notes that while he isn't concerned that this will dramatically affect Teva, such a settlement could come at a crucial time for the company. Paying out billions of dollars in a settlement could seriously affect Teva's flexibility, just as its big earner Copaxone begins facing generic competition. The company is currently trying to get aggressive in the face of this patent cliff, but having this legal issue on the horizon to settle may force the company to keep some of its powder dry at just the wrong time.

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.

On the back of their best week of 2014, U.S. stocks managed to finish ahead on Monday - modestly -- with the benchmark S&P 500 index and the narrower Dow Jones Industrial Average rising 0.16% and 0.05%. With the earnings season beginning to wind down, investors are beginning to return their focus to that other critical driver of stock prices. Not valuations, of course - who wants to focus on such fuddy-duddy fundamentals? I'm speaking instead of the Federal Reserve and expectations for monetary policy, of course.

On Tuesday, new Fed Chief Janet Yellen will face her first major test as she sits before Congress for her first of two days of testimony regarding monetary policy. However, before she has even uttered a single word, Yellen's Fed already has a communications problem.

In an article published on Monday by the Federal Reserve Bank of San Francisco (the same bank Yellen used to head), Jens Christensen, a senior economist at the bank, argues that in the months leading up to the Fed's December decision to begin tapering its bond purchase program, investors brought forward their anticipated date for the first interest-rate rise significantly -- even though "Fed policymakers made few changes in their projections of appropriate monetary policy." The author's analysis, which is based on the Treasury yield curve, suggests that the expected time until the first rate rise went from two years in September to 15 months by late December, putting the first rate rise around spring 2015.

If investors aren't listening to the Fed's projections for the first interest-rate increase, that's a genuine problem for the central bank as it winds down its asset purchases (a.k.a. "quantitative easing"), since the process of communicating its expectations for the federal funds rate, known as forward guidance, will become the main policy lever.

Of course, the fact that bond market participants' expectations for a rate rise weren't the same as Fed policymakers' doesn't mean that bond traders aren't listening to the Fed, as such; instead, it could indicate a difference of opinion regarding when the Fed will ultimately begin to raise rates. After all, the Fed's projections are just that -- policymakers themselves do not know with any certainty when they will decide to raise, as the decision depends on many dynamic factors (unemployment, economic growth, inflation, and so on). Nevertheless, any difference of opinion in this area will make it harder for the Fed to do its job.

Part of the problem may be that the Fed's current framework for forward guidance, which ties the first interest rate rise to the unemployment rate has become essentially irrelevant. The Fed had said it would consider raising rates once the jobless rate fell to 6.5%. Last Friday, the Labor Department's January employment report showed an unemployment rate at 6.6%. The Fed updated its guidance in December, saying it expected to maintain rates at zero "well past the time" the unemployment rate falls below 6.5%. Considering that we are almost at the threshold now, that's simply stating the obvious at this stage.

Professional investors -- in bonds and equities alike -- will be following Yellen's testimony carefully this week, looking for some guidance on the current state of the Fed's guidance. For long-term, value-oriented investors, however, it is enough to remember that while the Fed's slow withdrawal of its arsenal of unconventional monetary policy measures could produce bouts of substantial stock market volatility, its monetary acrobatics will have little impact on long-term stock market returns.

Because of the Constitution's Commerce Clause regulating interstate transactions, it certainly seems California will lose a legal challenge to its chicken regulations after Missouri sued the state and asked a federal judge to strike them down. But it will undoubtedly be the Show-Me State that winds up with egg on its face.

Source: SXC.hu.

Now, most people probably learned about the Commerce Clause when the Obama administration creatively expanded its definition by applying it to the Affordable Care Act to force individuals into buying health insurance. The Supreme Court, however, rightly rejected the president's argument, noting that the purpose of the clause was to regulate existing commerce between the states, not the creation of new commerce.

And that's why a California law regulating the sale of eggs produced beyond its borders will fail; it's exactly the kind of regulation the Commerce Clause prohibits. In the end, though, as animal rights activists get more companies to agree to humanely treat their animals, Missouri will still lose the war despite having won the battle. 

California enacted a regulation that mandated egg-laying chickens be housed in cages that allow them to spread their wings. Because its egg farmers complained they'd be subject to "unfair competition" from farmers in states without the same burdensome laws, California banned the sale of all eggs regardless of where they came from that weren't raised in the same conditions it demanded. Missouri charges in federal court the ban imposes new requirements on out-of-state farmers, which the Commerce Clause prohibits.

According to the lawsuit, Missouri farmers produce about 1.7 billion eggs annually, with about one-third of them, or some 540 million eggs, sold in California. While it says the state is the second largest egg producer behind Iowa, Cal-Maine Foods , a Mississippi-based producer with operations across the Southeast and the only publicly traded egg farmer, is the largest producer and marketer of shell eggs in the United States, selling more than 948 million dozen shell eggs in 2013.

According to SourceWatch, Cal-Maine contributed $500,000 to defeat the California measure in 2008, and it's come under scrutiny before for its practices. Last year it settled a lawsuit for $28 million over charges it raised prices by killing off its flocks and limiting the supply of eggs.

Yet regardless of whether the current lawsuit is successful, it won't be California, Missouri, or Cal-Maine that determines how the chickens are housed. As we're seeing all across the food processing industry, the distribution chain is having the final say. As pressure is brought to bear on them by animal rights organizations, they're lobbying for change from their suppliers.

Tyson Foods recently became one of the latest meat processors to announce it was phasing out the use of gestation cages for hogs, the confining cages that prohibit breeding pigs from doing anything but standing still for the duration of their four-month pregnancy. Then after the sow gives birth, it's reimpregnated and returned to the gestation cage again.

Source: SXC.hu.

But it was pressure from fast-food restaurants, grocery stores, and food-service giants like Sysco that demanded their suppliers end the use of the cages that finally forced their hand. Now Tyson, Smithfield Foods, and Wendy's  have also demanded gestation cage-free pork from its suppliers, and Wendy's just said it will also demand greater transparency from them, requiring they undergo annual audits that examines their housing, transportation, holding facilities, and processing procedures.

Similarly, Tyson's cattlemen and chicken farmers will also need to ensure their herds and flocks are treated better, as it contends it's a three-protein company and it's taking a holistic approach to animal welfare.

While egg farmers in Iowa, Missouri, Mississippi, Arkansas, and elsewhere may escape California's strictures this time, it will eventually come down to whether the marketplace sees the requirements as reasonable, making it unnecessary for states to dictate rules or creatively write laws to have them put in place.

Investors in Gilead Sciences had something to shout about last week as the company beat Wall Street estimates when it reported its fourth-quarter results.

While the results showed that earnings per share were the same as in the fourth quarter of 2012 at $0.47, they beat Wall Street estimates. Furthermore, revenue also beat Wall Street estimates of $2.85 billion, rising by 20% to hit $3.12 billion.

The EPS figure is slightly misleading, as quarterly profit increased by 4% to $791 million but, on a per-share basis, it stayed the same simply because of an increase in the number of shares in issue. So both the top line and bottom line grew when compared with the fourth quarter of 2012, giving investors something to cheer about.

A key reason behind the growth in sales and profits for Gilead was sales of its hepatitis C drug, Sovaldi, which amounted to $140 million following approval of the drug in December. This is highly encouraging news for investors in Gilead, and with the drug's having been approved in Canada (also in December) as well as the European Union (in January), Sovaldi could prove to be a blockbuster drug for Gilead in 2014.

Sovaldi appears to be an improvement on current treatments for hepatitis C, with incumbent Incivek (sold by Johnson & Johnson and Vertex Pharmaceuticals ) taking longer to treat the illness and having a lower success rate. Interestingly, Vertex recently sold the overseas rights of Incivek to Johnson & Johnson for $152 million as domestic sales of the drug fell by 91% in the fourth quarter of 2013 -- highlighting the strength of Sovaldi sales in December.

While Sovaldi cured around 90% of patients with hepatitis C after 12 weeks of treatment in clinical trials, Incivek cures around 75% of patients over the course of a year. Furthermore, patients treated with Sovaldi don't need to take interferon, an injectable drug that can cause diarrhea, so long as Sovaldi is taken alongside ribavirin. This, coupled with the relatively high success rate of the drug and its relatively short treatment time, means that it could become a blockbuster for Gilead in 2014.

Of course, Johnson & Johnson had a new drug for the treatment of hepatitis C approved in late 2013, too. However, it seems as though Sovaldi could win the race, as Gilead seeks out additional combination drugs to be used alongside Sovaldi.

Meanwhile, Gilead also saw strength in sales of its antiviral and cardiovascular products, with the former increasing sales by 22% and the latter by 25% when compared with the fourth quarter of 2013. Of particular note were Complera and Eviplera, where sales more than doubled to $260 million, while Stribild saw sales increase from $40 million to more than $200 million.

Guidance for 2014 seems encouraging, although Gilead has excluded sales of Sovaldi from its forecasts. However, with an impressive level of uptake since approval on Dec. 6 and the anticipation that it could be a blockbuster drug, Sovaldi could be a game-changer for Gilead in 2014.

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.

Stocks finished essentially flat today on a day with no major economic reports, as investors continued to react to earnings reports coming in. The Dow Jones Industrial Average finished up 8 points, or 0.05%. Meanwhile, the S&P 500 and Nasdaq made slightly larger gains as investors looked ahead to Janet Yellen's first remarks as the new chairwoman of the Federal Reserve tomorrow. The Fed's bond-buying taper has taken center stage in investors' minds, and the market is anxious to see whether Yellen will continue the taper as expected, in declining increments of $10 billion, or whether she will slow it down. Yellen will meet with lawmakers tomorrow to discuss the future of the country's monetary policy.

In stocks making news today, Barnes & Noble shares spiked 9% on reports that it will lay off staff in its Nook e-reader division. The struggling bookseller said reports in Business Insider that claimed it had fired its entire Nook engineering department were incorrect, but it did allow that it had let go of some employees. A spokeswoman said the company was "rationalizing" the division, which has gone from being viewed as a potential savior for the retailer to now an albatross in need of a turnaround or harvesting. Nook sales fell 60.5% during the holiday season, and the department is just one of many problems facing Barnes & Noble as readers turn to the Internet to get their books. Long-term investors would be better off ignoring today's gains, and waiting for a real sign of a turnaround, if it ever comes.

Elsewhere, McDonald's continued to struggle as shares finished down 1.1%, after the fast-food chain reported January comps. Overall same-store sales were actually better than expected, improving 1.2% globally on flat guidance, but fell domestically by 3.3%. McDonald's recent troubles at home seem to have been magnified amid problems revamping its dollar menu and rolling out other menu items, and management cited bad weather and other broad-based challenges for the poor results at home.

After hours, shares of another food-maker were falling as well, as Annie's was down 9% after an underwhelming third-quarter earnings report. The maker of organic food products including mac-and-cheese said sales improved 21.7% to $46.2 million, ahead of estimates at $45.9 million, while adjusted EPS grew just 8% to $0.17, a penny short of expectations. Annie's also scaled back EPS guidance for the full year from $0.93 to $0.92 on increasing cost pressure, below analyst estimates at $0.97. CEO John Foraker noted positive signs in accelerating consumption, but the high-priced stock will need to show stronger bottom-line growth to live up to investors' hopes.

Graphics specialist NVIDIA is due to report earnings on Wednesday, and in this video from Monday's edition of Tech Teardown, Motley Fool tech and telecom analyst discusses with host Erin Kennedy what investors should be looking for from the report.

He points to two things. First, he'll be watching how the company did over the holiday shopping quarter, noting that there is a significant gamer population interested in high-end graphics processing units, or GPUs, as stocking-stuffers. However, Evan says that the bulk of his interest with the company is in its Tegra mobile chip business. The Tegra business has long operated at a loss as the company continues to invest in its progress, and with the new Tegra K1 chips featuring custom cores that will require significantly more R&D, Evan is going to have a close eye on whether the operating loss for NVIDIA's Tegra business widens as a result.

Well-known billionaire and activist investor Carl Icahn has been loudly calling for Apple to release some of its cash hoard to the benefit of shareholders by instituting very aggressive stock buyback programs. However, Institutional Shareholder Services has come out in support of Apple's position to reject Icahn's massive proposed buyback program, saying instead that while Apple has been a bit "sluggish" with buybacks, they have really ramped up recently. Apple CEO Tim Cook announced last week that the company has bought back $14 billion worth of shares over the past two weeks.

In this video from Monday's edition of Tech Teardown, Motley Fool tech and telecom bureau chief Evan Niu talks with host Erin Kennedy about the ISS's stance on the issue, and Apple's current share buyback plan. Evan looks back to last year when David Einhorn went on a similar crusade to push Apple into enacting a dramatic share repurchase plan, and he also says that while these very aggressive plans might not be appropriate, the company is now on track to buy back $32 billion worth of shares this year, which Evan sees as a better use of its cash than the unnecessary amount of stockpiling it had been doing before this point.

When your company is mentioned fairly consistently with a "lost decade" of returns, you know that drastic changes may be needed to sway investors. Microsoft has a new strategy and wants to become a devices and services company. The good news is, that is exactly what's happening, the bad news is, these changes are not all positive. In fact, if Microsoft can't answer three important questions, we might be in the middle of another lost decade for the stock.

Which is worse? The devil you know?
It's no secret that Microsoft is suffering when it comes to licensing its popular Windows operating system. In the company's current quarter, Device & Consumer Licensing revenue fell by nearly 6%. To make things worse, the overall PC market witnessed the steepest decline in sales in history with a 10% decline last year. Somehow Microsoft needs to find a way to solve this problem and fast.

The causes are known and aren't going away anytime soon. Google is taking a piece of Microsoft's pie by offering Chromebooks, a computer that just connects to the Internet. Between streaming video, music, and multiple photo services offering huge online storage, saving your own files just isn't as important as it used to be.

On Chromebooks and Android devices, services like YouTube, Google Docs, Google Music and more are making customers question why they need a PC.

In addition, Apple is shipping millions of iPads and Macs and Microsoft makes nothing off of these sales. Whether it's Chromebooks, Macs, iPads, or Android tablets, Microsoft is finding out what happens when customers have multiple choices that can do what their computer used to do.

Or the devil you don't?
Many investors expect that the future of Microsoft is its push into devices and services. This sounds great, but devices aren't nearly as profitable as software licensing.

Google learned this lesson and decided to jettison the money-losing Motorola Mobile business by selling it to Lenovo. Motorola carried roughly 20% gross margins versus better than 60% gross margins at Google's search and sites business. It appears that the company didn't want to continue dragging its other business down with continued investment in Motorola.

A good picture of what a devices and services company looks like is Apple. However, Apple's gross margin has been under pressure and in the current quarter the company's gross margin came in just under 38%.

The challenge for Microsoft is the company's push toward devices is going very well, but at the expense of margins. In the current quarter, Microsoft witnessed a 68% increase in its Devices and Consumer Hardware business. This would seem to be great news, but with a gross margin of just 8.7%, investors need to hold their applause.

In fact, gross margin pressure from this business is probably just getting started. The company's highly successful device sales (Surface and Xbox) over the holiday season are at least partially to blame for Microsoft's overall gross margin, compressing from over 70% last quarter to just over 66% in the current quarter.

With lower margins it will be harder for Microsoft to generate significant earnings growth even with better sales. If you want proof, consider that current quarter revenue jumped 14% but EPS increased less than 3%.

An investing thesis is dying right before our eyes
One reason many investors own Microsoft is the company's huge cash-generating capabilities. However, the company's thinner margins are hurting the company's cash flow as well.

In the last six months, Microsoft's net cash and investments was essentially unchanged. By comparison, Google grew its net cash and investments by 25% year-over-year, and Apple generated better than 9% net cash growth in just the last three months.

The bottom line is, if Microsoft is going to continue on its current path, investors need to realize this new company won't be like the old Microsoft. While the company's devices may sell very well, the company's huge margins are at risk. This quarter was likely a preview of what is in Microsoft's future. Better revenue growth, but anemic earnings growth because of lower and lower margins. This sounds like a recipe for another lost decade.

Techy kiosk firm Outerwall has been a polarizing stock for some time, but it appears the bulls are winning these days, as the company recently touched its 52-week high. The company, which owns Redbox and Coinstar, among others, is proving doubters wrong, at least for now. Some analysts and investors question the long-term viability of Redbox, given the ongoing shift to streaming media from physical -- and it's a valid concern. Outerwall continues to tack on new locations in front of grocery stores and 7-Elevens, but what happens if demand shifts? Still, it's hard to deny the company's current success. Coupled with a Dutch auction $350 million buyback, Outerwall may be one of the most shareholder-friendly tech businesses out there.

Full rent
On an adjusted basis, the bottom line climbed high in the fiscal fourth quarter -- from $1.01 in 2012's quarter to $1.68 in this one -- well above analyst estimates of $1.25 per share. Revenue grew 5% and also outpaced the Street's expectations.

Redbox sales rose just 2%, while Coinstar posted 8% growth. The company's latest venture, ecoATM (an electronic recycling kiosk), along with other new ventures, posted the greatest numbers. The segment topped $16 million in sales, up from $293,000 in the year ago quarter.

Outerwall's asset-light, cash-flow-centric business is one that even the most tech-averse investor could love. Even better, its sub-12-times forward earnings multiple makes it look much more like a retailer than a high-growth Silicon Valley play.

Listening in
Last year, Outerwall attracted activist investor interest because of capital allocation practices. Essentially, the investor wanted cash flow to breathe a bit more with fewer capital expenditures. The company appears to have taken heed, as it has a slower growth plan for ecoATMs and fewer dollars dedicated to the New Ventures segment in general. This leaves us with a company that could foreseeably generate  $200 million or more in cash flow in the current year. With a market cap of less than $2 billion, this raises yet another encouraging valuation signal for the company.

Then, there is the question of Redbox. Will Netflix and the bevy of streaming options eventually wipe out the DVD rental business? If so, what happens to the thousands of kiosks around the country and the bulk of Outerwall's revenue?

Over the very long run, this certainly has validity, but it won't affect Outerwall substantially in the foreseeable future. For one thing, as the shift continues to streaming and fewer people buy movies at retailers, Redbox's cost-friendly kiosks will actually benefit from a market share gain. In the long run, the segment will provide enough cash flow to the company (and investors) to mitigate any current risk.

Still looking good
Even at a 52-week high, Outerwall has an appealing valuation and prospect for capital appreciation. The $350 million buyback (conducted in a shareholder-friendly method) could take up to one fifth of the shares off the table by year's end.

The company trades at 11.78 times forward earnings and has an EV/EBITDA of just 4.88. While comparisons are difficult given the line of business, Outerwall's numbers look cheap across any sector—especially technology. Based on cash flow prospects and a shareholder-friendly management team, Outerwall should deliver even better times ahead.

If at first you don't succeed try, try ... and try and try again. That's what private equity firm Vintage Capital Management is doing, pursuing rent-to-own leader Aaron's for the fourth time in three years, offering $30.50 per share, or $2.3 billion, a 12.8% premium Thursday closing price.

Source: Wikimedia Commons.

Investors initially responded by bidding up the stock to over $32 on Friday, indicating they thought a better deal might eventually come, but it closed just above $28 a stub today. In its letter to Aaron's board of directors, Vintage said it was "summarily ignored" with its previous buyout attempts, but it's ready to work once more with management. To ensure it couldn't be so easily rebuffed again, Vintage, which owns the similar rent-to-own business Buddy's Home Furnishings, also filed with the SEC notice that it's acquired just under 10% of the company's stock, with the intention of being an activist investor.

According to the Association of Progressive Rental Organizations, the rent-to-own industry has grown to $8.5 billion by 2012, serving 4.8 million customers through approximately 10,400 stores in all 50 states, Mexico, and Canada. As the economy grinds down, furniture store sales fell and fewer retailers are left that focus on credit installment sales to lower- and middle-income consumers, though federal policies that tightened consumer credit still create a market opportunity for the industry.

Source: U.S. Census Bureau data.

Yet that's been outweighed by rising costs, persistent unemployment, a decades-low labor participation rate, which is making it difficult for consumers to keep pace. Aaron's forecasts revenues for the first quarter will rise less than 1% from 2013. 

Aaron's also reported fourth-quarter earnings on Friday that saw sales revenues fall 2% for the quarter and turn up only 1% for the full year. Quarterly earnings were also down, but by a much larger 37% from the year-ago period as its lower and middle-class customers continued to feel pressure. While industry peer Rent-a-Center reported a 2% increase in revenues for the quarter, profits plunged 72% year on year.

Despite the market potential, however, the industry has often been viewed as predatory. Sears Holdings came in for a lot of criticism when its Kmart division also launched a rent-to-own business last year in time for the Christmas shopping season. 

In the same vein as payday lenders, pawn shops, and check cashing services, the rent-to-own business does meet the real financial needs of its target customer -- those with poor or bad credit, the unbanked, or individuals with limited financial resources. Although they provide a service that many traditional institutions ignore, it's not in the consumer's best interest to use them. As Sears itself noted, "I'm not here to convince you lease-to-own is not more expensive than a credit program." 

Yet Vintage, as an industry practitioner already with Buddy's, might be able to offer Aaron's an opportunity to turn its business around out of the public eye. The P/E firm and its principals have had an 18-year relationship with Aaron's, including several years as its second largest franchisee. With the business flagging and the economy not conducive to growth, investors might just find the offer an intriguing financial solution even if management doesn't. 

The third time might not have been the charm for Vintage Capital, but the fourth time to the well with Aaron's may at last pay off.

A few months back, I touched on regional grocery chain Ingles Markets . The stores don't have nearly the name recognition of many industry players, but they're growing in number and generating plenty of profit for the corporation. Shareholders aren't doing too badly, either, as the stock is still up more than 15% in 12 months after a recent double-digit selloff. Ingles is coming off a difficult quarter, as costs were high and management chose not to pass on the price increases to customers, but that should only improve investors' view of the company. At less than 11 times earnings and with a long growth runway ahead of it, Ingles remains a top industry pick.

Tough quarter
Top-line sales grew just past the 1% mark for Ingles' fiscal 2014 first quarter, while net income slid down from $11.6 million to $9.5 million. Same-store sales contracted slightly -- down 0.8%. Investors should note that weekly customer store visits actually increased, while transaction amount was down.

In terms of spending, the company made pricing investments (in an effort to keep prices low during the holiday season) that management believes will come back. On a bigger scale, Ingles is putting the pedal down on new store construction. Since 2009, the company has only netted three new stores. Though specific numbers aren't available, recent management comments and the last 10-K note that the company should tack on material square footage in 2014, as compared with prior years.

One thing that has concerned some in the grocery industry is a reduction in Supplemental Nutrition Assistance benefits. For Ingles, at least, the transition hasn't shown up at the registers. Either those using SNAP have switched to cash payments, or they were yet to be affected by the change.

In the long run
Last year, Ingles posted sales growth around 2%. Management expects that number to pick up as the company adds new stores and renovates existing ones. The company's net income grew more than 17% in 2013. It's not growing like a weed, but Ingles is slowly and steadily building its half-century-old business in a conservative, and ultimately beneficial, manner. The company owns 75% of its total real estate, including a 1.6 million-square-foot warehouse in Asheville, N.C.

Compared with other grocers, the company looks appealingly valued. Kroger trades at a fair 11.6 times forward earnings, while Safeway is expensive at 18.3 times earnings. On a sales basis, Ingles is again the lowest at 0.14 times sales, while Safeway sits at 0.17 times and Kroger at 0.19 times.

Ingles has plenty of credit to use if it wants to speed up its growth process. The current $175 million line has only $14 million borrowed.

In all, Ingles remains a compelling long-term investment. It's 2.4% dividend is a modest but a nice addition to the potential for long-term, steady capital appreciation.

Apple is putting its abundant financial resources to use lately. The company has repurchased a whopping $14 billion of its own stock in only two weeks, with a positive reaction among many investors. Opportunistic buybacks are the smart thing to do in terms of capital allocation, but the real game-changer for the company would be successful product innovation.

Show me the money!
Renowned activist investor Carl Icahn announced on Monday his decision to back away from his nonbinding proposal that Apple increase its stock buybacks to $50 billion. The news comes after CEO Tim Cook said last week that the company repurchased nearly $14 billion in the two weeks following its latest earnings report, bringing the total buyback amount to more than $40 billion over the past year, so the company is aggressively putting its money to work.

Returning capital to shareholders is the right thing to do, considering that Apple has more than enough money to reinvest in the business and the stock looks materially undervalued at current levels.

With nearly $159 billion in cash and equivalents on its balance sheet, and generating over $22.6 billion in operating cash flow during the last quarter alone, there is no reason Apple should let all that money accumulate in the bank, generating lackluster returns, when it could be allocated much more efficiently by being distributed to shareholders.

The stock is also trading at a P/E ratio near 13 times earnings, a material discount to the average valuation of around 18 for companies in the S&P 500 index. Considering that Apple owns one of the most valuable brands in the world, a rock-solid balance sheet, and an extraordinarily profitable business, this entry price could easily be considered a buying opportunity for long-term investors.

When a company is repurchasing its own shares at a convenient price, it's not only reducing the share count and increasing earnings per share, but it's also putting the company's cash to work in a profitable investment. This is a double benefit for investors, so Cook is being a smart capital allocator by accelerating buybacks while the stock is attractively valued.

Show me the products!
Icahn recently compared via Twitter the valuation multiples the market currently assigns to Apple and Google , and he reached the conclusion that Apple could trade near $1,245 per share if it carried the same valuation multiple as Google in terms of operating profit.

Google is growing considerably faster than Apple. Tthe search giant announced a sales increase of 17% for the December quarter, while Apple's revenues grew by 6.3% during the same period. Google arguably deserves a valuation premium over Apple, but the numbers still show that Apple has plenty of upside potential from current levels if the company can reinvigorate growth. 

To put things in perspective, Apple is trading at a similar valuation to Microsoft , which carries a P/E ratio of 13.6. However, Apple is a leading player in the mobile revolution thanks to the popularity of its iPhone and iPad products, while Microsoft has missed many of the most relevant trends in the tech industry in recent years, and the company is now trying to turn things around under the leadership its new CEO, Satya Nadella.

The market seems to be excessively pessimistic when it comes to Apple, and that's probably related to concerns regarding the company's ability to innovate without Steve Jobs. Cook has repeatedly said that the company will be entering new product categories in 2014, and this could be a real game-changer for the company during the current year.

Apple needs to prove that it can still create new and innovative products, not only because of short-term financial considerations, but, more importantly, because that would show that the company still has the talent and vision to think outside the box and operate like a disruptive growth player.

Bottom line
Apple is doing the right thing by accelerating its stock buyback at opportunistic price levels, and downside risk seems limited considering the stock's undemanding valuation. However, for Apple to move substantially higher, the company needs to prove it can continue innovating and disrupting. Buying stock back is a smart move, but innovation and disruption are what have made Apple one of the best companies in the world. 

It's time for Broadcom to show the mobile world what it can do in the LTE market. The company just announced its M320 and M340 systems-on-a-chip (SoC) with integrated LTE -- a first for the company.

The news comes on the heels of Broadcom's acquisition of Renesas Electronics for $164 million back in September. Broadcom purchased Renesas for the sole purpose of entering the LTE market and had expected to bring its LTE SoC to the mobile market quickly.

Broadcom President and CEO Scott McGregor said at the time, "Today's transaction firmly establishes Broadcom's presence in the rapidly growing LTE market with a production-ready, carrier-validated SoC."

Though the new chips don't have earth-shattering specs, they're a good start for Broadcom's dive into LTE.

Chip specs
The new M320 LTE SoC is a dual-core production ready chip, while the M340 has a quad-core and will be available for sampling in the first half of this year. That means the more powerful M340 won't see production until the second half of this year at the earliest.

The chips will be pin-to-pin compatible, so original equipment manufactures can design devices with either chip in mind. The LTE connectivity can reach speeds up to 150Mbps on both FDD-LTE and TD-LTE and works on 3G HSPA+ and 2G networks. The chips also work on more than 40 networks in 20 countries and are pre-integrated with Android KitKat.

Why Broadcom needs this
Up until now, Broadcom hasn't had any integrated LTE systems-on-a-chip, an area that the mobile market is already headed. Qualcomm is the undisputed leader in integrated LTE chips right now, and holds about 95% of LTE revenue share. Intel is also fighting hard in the LTE market, and began shipping its own integrated LTE chip, the XMM 7160, back in August. ABI Research said Intel is expected to become a "significant challenger" to Qualcomm over the next few years, which means Broadcom's competition is getting even tougher.

The LTE market is growing quickly and by 2018 shipments of LTE chips in handsests are expected to hit 850 million. That's a huge opportunity for any chipmaker in the industry, Broadcom included.

Foolish thoughts
Just two months ago, Qualcomm introduced its Snapdragon 410 integrated LTE 64-bit chip, aimed at devices $150 or less. There are two things that should worry Broadcom investors about this:

The first is that Qualcomm's processor is 64-bit capable, and Broadcom's is not. While 64-bit mobile processing is still in its infancy and there aren't a lot of direct applications for it right now, it still shows Qualcomm's technological superiority over the competition. As developers and OEMs release new ways to tap 64-bit technology, Qualcomm's chip will be ready to handle them and the competition will again be further behind.

The second significant difference is that the Snapdragon 410 is, again, made for devices priced at $150 or less, while the M320 and M340 are for devices priced $300 and less. So not only is the Snapdragon more powerful, but it can also theoretically be placed in devices that cost less than ones running Broadcom's new chips. This, again, is to Qualcomm's advantage. It doesn't mean that OEMs won't choose the M320 over a Snapdragon alternative, but right now it appears Qualcomm is giving OEMs every incentive to choose its chips over others.

Broadcom investors should be pleased to see the company enter the LTE market but should keep expectations in check. There's no doubt the M320 and M340 will gain some design wins, but it's going to be a long and difficult road in gaining traction against the current chip leaders.

BlackBerry is rumored to have a powerful new phone in the works, boasting among other strong specs an octa-core 64-bit chip, which is reportedly a Qualcomm Snapdragon chip. However, Motley Fool tech and telecom bureau chief Evan Niu senses something not quite right about the rumors.

In this video from Monday's Tech Teardown, Evan talks BlackBerry with host Erin Kennedy, and discusses why the chip story seems amiss. Qualcomm has been vocally opposed to chips with eight cores, saying that increasing the quality of the cores is far more important than increasing the quantity. With most apps currently only using two cores, chips boasting eight can be seen as more of a marketing technique than a useful incremental improvement, which Evan compares to the recent megapixel race in digital cameras and smartphone cameras.

More importantly, he discusses the broader issue of whether the ailing BlackBerry should be throwing in the towel on its fight to continue bringing hardware to the consumer market, and whether this new phone would be a useful part of the company's desperate turnaround efforts.

Shorting stocks often gets a bad rap in the media, but for investors, it's one of the few ways to make money off a declining market. It also plays an important role in keeping stock values in check.

There are a number of things to look for when looking for a short sale opportunity, like quality of the business, industry trends, and valuation. I've highlighted three of my top short candidates and why I think they're worth betting against right now.

Wal-Mart
The history of retailers going from the top of the industry to the bottom is long and distinguished. Not long ago, Sears, Kmart, and J.C. Penney were big names in retail, and now they're struggling just to survive. Wal-Mart is far from that kind of disaster, but it's definitely losing the cachet it once had, and as a result, same-store sales are down in the past year, which is the first sign of trouble for any retailer.

Wal-Mart has seen fewer items go through checkout lanes like this one in the U.S.

The reason this is a good short sale is that Wal-Mart is still valued as if nothing is wrong. The stock trades at 14 times trailing earnings, and with same-store sales falling in the U.S. and 50 stores being closed in Brazil and China, Wal-Mart will probably see profits fall in 2014. When a company cites food stamp cuts as one of the reasons it won't hit expectations, you know it's not the kind of stock you want to own as the economy improves.  

Tesla
Shorting on valuation alone is tough, and that's what makes Tesla Motors my highest-risk short pick. But I think the market has given way too much credit to a company that still makes a single model.

Consider that 22,450 Model S vehicles were delivered in 2013 and Tesla has a $22.9 billion market cap. That means Tesla is worth $1 million for every car it delivered during the year. Meanwhile, Ford is worth $23,678 per vehicle sold last year and General Motors is worth $18,003 per vehicle sold.  

Competition has also just barely started to pay attention to the electric-vehicle space Tesla dominates. BMW is introducing its i-series to compete directly with the Model S, and Ford, Nissan, GM, and others are increasing EV development.

The EV space is something Tesla owns right now, but that's only because it's not a big enough market for the big automakers to put the attention necessary into competing in. Once they do, Tesla's margins and sales will come under pressure, and it will be very difficult to justify its $23 billion valuation. Remember that Ford and GM are worth just over twice that, and they made 2.5 million and 2.8 million vehicles, respectively, last year. That's over 100 times more than Tesla, a huge disadvantage in a business where scale matters.

Facebook is getting the thumbs down from teens lately, which challenges its long-term growth prospects.

Facebook
The market is in love with Facebook once again, pushing its stock to an all-time high on Friday and giving it a market cap of $164 billion. Investors were excited that Facebook is learning now to send ads to mobile devices. But the problem I have with Facebook today is the "cool" factor, or, more specifically, how "un-cool" it is with teens today.

iStrategyLabs recently published a report that suggested a 25.3% decline in the 13- to 17-year-old age range and a 7.5% decline in those 18-24 between January 2011 and January 2014. Meanwhile, users 35-54 grew 41.4% and those 55 and over grew 80.4% over the same timeframe. Facebook is less cool with the kids, and as Grandma and Grandpa sign up, the younger generation will lose even more interest, moving on to the next social-media fad.

The numbers iStrategyLabs used aren't as exact as what Facebook has available and studied only the U.S., but it shows general trends Facebook itself has acknowledged. Since Facebook started in a Harvard dorm room a decade ago, it was teens and young adults who drove its growth, but now they're leaving in droves, and that's a troublesome sign.

At the very least, the downside risk is much higher than the upside potential. We saw how fast a social-media network can go bust when MySpace lost its crown to Facebook and new networks such as Twitter are already stealing users.

Investors can fall out of love with Facebook as fast as they "liked" its earnings in the fourth quarter, and at 57 times forward earnings estimates, investors who short the stock are getting a head start with such a high valuation.

Shorting stocks can diversify your portfolio
These are three great short opportunities for investors with a long timeframe to ride out the day-to-day waves of the market. A few short positions can also add diversity to your portfolio and give you a way to make money if the market goes down.

Tell us what your favorite short picks are in the comments section below.

For most homeowners in cool, northern climes, a rich green lawn of Kentucky bluegrass, manicured to golf course-like specifications, is the standard against which success or failure is measured. Whole industries have spread like kudzu in catering to that often unattainable goal, from grass seed, fertilizer, pesticides, and herbicides to weekly lawn care and maintenance.

Source: The Scotts Company.

Towering over the industry like a mighty oak is Scotts Miracle-Gro , spreading over virtually every aspect of a lawn and plant's lifecycle, producing both chemical and organic solutions to meet the needs of homeowners. And now it's ready to introduce genetically modified organisms into its product mix that may make it every bit as controversial as Monsanto .

Although it's had GMO grass seed under development for years, sales of grass seed fell in 2013 and were down another 1% in the last quarter. It needs something to revitalize sales, so the news that Scotts will be testing in the wild a variety of Kentucky bluegrass resistant to Monsanto's Roundup herbicide is setting off alarm bells, as it threatens to accelerate the spread of superweeds and even enter the food chain.

At the company's annual shareholder meeting last week, Scotts announced that employees will be testing a Roundup Ready grass seed at their homes with an eye toward commercial production next year and introduction into the consumer market by 2016. Like farmers who grow Roundup Ready food crops, homeowners will be able to plant GMO Kentucky bluegrass, spray their lawns with the herbicide, and not worry about harming the grass.

However, the introduction of a GMO strain into lawns across the country would be even more insidious than the crop variants, because the Agriculture Department is leaving this seed unregulated. It exempted the strain in 2011 because its creation avoided the use of plant pathogens, so Scotts will be left to self-regulate its proliferation.

As a libertarian-minded person, I prefer a laissez-faire approach to regulation, but only when there are consequences for actions taken. By abdicating responsibility and permitting consequence-free outcomes, the potential for harm grows exponentially. Monsanto has a long record of suing farmers who've found their non-GMO crops cross-contaminated by its GMO seeds, and organic farmers had their lawsuit tossed last year after the chemicals giant pinky-swore it wouldn't sue more farmers if its seeds only contaminated their crops a little.

We're already seeing the proliferation of superweeds caused by the overapplication of Roundup herbicide, and the USDA's response to that was to approve a new herbicide-resistant seed by Dow Chemical to combat the problem, ensuring that down the road a new resistance will develop. A GMO Kentucky bluegrass strain will likely multiply that effect as it spreads around the country.

Source: Wikimedia Commons.

Not many people are aware that in many parts of the country, Kentucky bluegrass is considered a problem plant that competes with and crowds out native grassland species. The nation's prairies are particularly under siege as the grass blankets the ground and smothers almost every other plant beneath it. The USDA even acknowledges that the GM version of Kentucky bluegrass (and the non-altered version, too) is such a seriously invasive plant that it could be considered a noxious weed, a designation given only to a handful of harmful plants. However, it decided not to regulate it because not enough harm was found to have been caused by the non-GMO type.

With a GMO variety released into the wild, as Scotts is proposing, the potential for having it escape -- not only onto neighbors' lawns but into grasslands where cattle and other animals can graze on it -- is substantial. Organic dairy farmers and beef cattle ranchers face the threat of losing their organic status after their animals chew through a field full of GM bluegrass.

USDA Secretary Tom Vilsack told Scotts that concern over cross-contamination with non-GMO varieties was such that it "strongly encourages" the chemicals company to do all in its power to minimize the occurrence. It's worth noting that Scotts actually tried to get a GMO version of golf-course turf introduced, but the USDA rejected it after the U.S. Forest Service and Bureau of Land Management feared that its spread to some two dozen bentgrasses would wreak havoc on the environment. There are some 500 species of the bluegrass genus.

With Scotts Miracle-Gro mowing down worries about the release of genetically modified organisms into the wild, those who seek a more organic solution will be left feeling blue.

The year is only a handful of weeks old, and already there has been a raft of takeover activity among major pharmaceutical stocks!

Most recent was the completion of a $2.9 billion purchase of Aptalis, a company that manufactures treatments for cystic fibrosis and gastrointestinal problems, by Forest Laboratories .

The move is said to generate an additional $700 million in revenue per year for Forest Laboratories, and, crucially, the market seems to have welcomed it. Shares of Forest Laboratories are up more than 17% since the deal was first announced despite a weak wider market. Year to date, Forest Laboratories has beaten the S&P 500 by just under 18% -- highlighting how popular the acquisition is on the Street.

The move forms part of a new strategy under Brenton Saunders, CEO, as he seeks to increase medium- to long-term growth prospects. As well as this major acquisition, Forest Laboratories is set to cut costs by around $500 million and commence a large-scale share buyback of $400 million in 2014, with the company also lining up further acquisitions in addition to the Aptalis deal and the purchase of U.S. marketing rights to Merck's schizophrenia drug, Saphris.

However, the purchase of Aptalis isn't the only major deal of 2014. Just last week, Bristol-Myers Squibb and AstraZeneca confirmed the latter's purchase of the former's stake in the diabetes alliance joint venture for an initial sum of $2.7 billion.

The deal seems to be a convenient move for both companies, as Bristol-Myers Squibb attempts to restructure away from being a drug manufacturer for the masses and instead seeks to focus on specialist, niche-product offerings.

Meanwhile, AstraZeneca spent much of 2013 on an acquisition spree as it seeks to overcome a patent cliff (resulting from generic competition) that has caused a severe demise in total sales and net profit. However, with diabetes remaining a high-growth area (where the number of sufferers is set to increase from more than 300 million to more than 500 million in the next 20 years), it could prove to be a good move for AstraZeneca.

In addition to those deals, the biggest of them all has seen Johnson & Johnson sell its blood-testing unit to private-equity outfit Carlyle Group for just over $4 billion. The move is part of a shift from what Johnson & Johnson deems to be lower-growth divisions, as it seeks to reinvigorate a top line that has struggled to post much growth in the last handful of years.

So, while interest rates remain low and health-care companies continue to benefit from having relatively low debt levels and the financial flexibility that such a situation brings, dealmaking could continue to feature during the rest of 2014.

Certainly, there are a number of major pharmaceutical companies that are struggling to cope with the effects of generic competition and, as a result, are seeking to buy top- and bottom-line growth. As such, the pace of dealmaking year-to-date may not abate just yet.

Cisco Systems will release its quarterly report on Wednesday, and investors in the networking giant are starting to get some of their confidence back after a tough few months. Yet like competitors IBM and Hewlett-Packard , Cisco has had a tough time trying to maintain revenue growth and avoid sales contractions, and the company expects to see those headwinds not just this quarter but in future quarters as well.

Cisco continues to try to broaden its scope, fighting with IBM, HP, and other companies in order to take advantage of the hottest areas of the tech sector in today's market. With emphasis on cloud computing, enterprise information-technology consulting, and other high-margin areas, Cisco hopes to boost its profits while leveraging its historical expertise in the networking-equipment sector. Yet its competitors are making similar moves, forcing Cisco to defend its turf at the same time that it advances to capture new opportunities. Let's take an early look at what's been happening with Cisco Systems over the past quarter and what we're likely to see in its report.

Cisco CEO John Chambers. Source: Cisco.

Stats on Cisco Systems

Source: Yahoo! Finance.

How long will Cisco earnings decline?
In recent months, analysts have reined in their views on Cisco earnings, cutting $0.06 per share from their January-quarter estimates and double that from their full-year fiscal 2014 projections. The stock has stayed roughly flat since early November, bouncing back from big losses early on.

Most of those losses came after Cisco's previous quarterly earnings report, which sent the stock down 12% in a single day. Cisco managed to post better earnings than investors had expected, but the company missed revenue expectations for the second quarter in a row. Moreover, the company gave guidance that revenue would fall year-over-year, and in particular, weakness in emerging markets and the service-provider industry point to the possibility that Alcatel-Lucent or other rivals took away some business that Cisco might normally have won.

But the real damage was done in December, when Cisco made a change not just to single quarterly guidance but to long-term strategic growth goals. Specifically, CFO Frank Calderoni reduced his long-term sales growth expectations from a range of 5% to 7% to a lower range of 3% to 6%. At the same time, CEO John Chambers explained the difficulties of fighting Alcatel-Lucent, Huawei, and Juniper Networks in specific equipment-related areas.

Still, bullish investors have high hopes for Cisco. A Barron's article last month stressed the fact that threats like software-defined networking are still years away, giving Cisco time to adapt its offerings to require proprietary hardware while still offering cost savings for enterprise customers. Moreover, with valuations that make even relatively cheap competitors look expensive by comparison, Cisco has a big margin of safety even if things don't go as well as it hopes.

One huge strategic move for Cisco could come from its recent cross-licensing agreement with Samsung, which also includes by extension Google technology as well. The trio should be able to create unique combinations of technology offerings that include expertise in network security, mobile technology, and broad-based electronics research. As other major tech players also partner up, Cisco wants to have the right team in place to move forward aggressively.

In the Cisco earnings report, watch to see if the company can finally plot a course toward growing revenue once again at a more impressive pace. Without growth, investors will keep doubting Cisco's future.

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

Ford is enjoying an impressive streak of sales increases in China. Last year, the automaker had the top-selling car in China, with the Focus, and it's seeing incredible sales growth -- north of 30% annually. It's little wonder that Ford's recent annual reports have emphasized the company's emerging presence in China. Management is going to be devoting a lot of resources to the nation in the future, and the strong sales growth should continue.

Does that make Ford an attractive stock to add to your portfolio? Let's take a closer look.

Auto sales growth in China
A Jan. 31 CBS article quantifies the sales growth potential for automakers. Quite simply, there are a ton of people in China, and many of them don't own a vehicle -- yet.

With more than 1.35 billion people -- over 4 times the U.S. population -- China offers the largest single market in the world. Of course, that huge population wouldn't mean much for auto sales if the vast majority of Chinese couldn't afford to buy a car. But according to a 2012 CNNMoney report, China's middle class is growing quickly and stands at "more than 300 million" -- the same as the U.S. population. Furthermore, less than 10% of China's population has a car, compared with the U.S., where there are about 80 vehicles for every 100 Americans. It all translates to increasing auto sales for years to come. 

Pick your poison
But why are we focusing on Ford? Why not General Motors ? Or Volkswagen ? GM boasts higher annual sales than Ford, and Volkswagen is currently the top auto seller in China. What is it about Ford that makes its stock the one you should hold to capture these future growth opportunities?

First, I've recommended investors choose Ford over GM for a long time, mostly because of Ford's superior management. Alan Mulally is an exceptional CEO who has proved his ability to lead his company to profitability through the worst of times, all while innovating products and staying in touch with what customers want. Mary Barra, GM's new CEO, may prove to be as effective of a leader in time, but Mulally's track record of success is one worth betting on.

Aside from Ford's leadership advantage, its operations are also more efficient. Ford's profit margin is far greater than GM's, and this is one of my favorite metrics when comparing very similar manufacturers.

Now, what about Volkswagen? VW sold almost two and a half times as many vehicles in China last year as Ford did. But those high sales numbers are already built into Volkswagen's price. In other words, everyone knows that VW sells more than 2 million cars in China. Ford, meanwhile, has significant growth potential in the market, and that's going to be a major driver in the appreciation of Ford's stock over the next 10 years.

A good time to buy
At The Motley Fool, we don't mess around with short-term, high-turnover trading. We don't day trade or look for quick bets. Instead, we invest in good companies and focus on generating long-term wealth.

Yet no matter how long an investor holds a stock, the return earned is directly related to the price that investor paid for it. Therefore, we have to look at what the market is doing today, and plan around certain price behaviors. 

To that end, Ford is cheap right now. After sliding into "it's on sale!" territory about three weeks ago, the stock is trading at 11 times earnings. It's a good time to buy.

But I encourage you to be active in your own research on these stocks. The opportunity in China is open for any automaker to seize, and if you're in love with the stock of another automaker that has a chance to grow its market share there, then by all means, try to capture some of that wealth for yourself.

Just make sure you're picking a company with effective leaders, strong financials, and a strong brand. If that's what you're looking for, you certainly can't go wrong with Ford.