Stocks spent most of today's session in the red but finished essentially unchanged as the Dow Jones Industrial Average closed down 11 points, or 0.07%, while the S&P 500 finished up 0.03%. On a day with no major economic releases, investors seemed to keep their eye on international affairs in Ukraine and China. The European Union prepared a framework for sanctions against Russia, and worries about China's economic slowdown resurfaced thanks to weak export figures released earlier this week and copper prices approaching a four-year low, a sign of declining global industrial activity.

Among stocks making news after hours today was Williams-Sonoma , whose shares jumped 7% on a strong earnings report. The home-products retailer said earnings per share improved from $1.34 to $1.38, better than estimates at $1.35 a share. Revenue improved 10% on an even calendar basis, on a 10.4% increase in comparable brand sales to $1.47 billion, ahead of the consensus at $1.43 billion. CEO Laura Alber said that the company "outperformed the retail industry this holiday season, gaining market share and demonstrating the structural advantage of our multi-brand, multi-channel platform." Also pleasing investors was the company's decision to lift its dividend 6% from $0.31 to $0.33, though EPS guidance for the current year of $3.05-$3.15 was short of the consensus of $3.20. Still with core brands like Pottery Barn and West Elm growing organically by double digits, the company's position looks strong going forward.

Meanwhile, shares of Krispy Kreme Doughnuts were hopping out of the fryer after hours today, gaining 10% after reporting earnings. The doughnut chain actually missed estimates on both the top and bottom lines, as its EPS of $0.12 was a penny short of estimates. Revenues increased 3.3% on an even calendar basis to $112.7 million with a same-store sales uptick of 1.6%, but that missed the consensus at $118.8 million. Still, investors cheered the company's decision to raise its share-repurchase authorization to $80 million from $50 million, and it lifted its current-year EPS guidance to a range of $0.73-$0.79, in line with estimates of $0.75.

Finally, shares of Vail Resorts were taking a spill, down 3.4%, as a lack of snow in the Lake Tahoe region put a dent in earnings during the all-important winter ski season. Earnings per share fell from $1.65 to $1.60, missing estimates of $1.88, while revenue increased 7% to $452.7 million, below the consensus at $471.2 million. Separately, Vail announced it was doubling its quarterly dividend to $0.415, giving investors a yield of 2.4%. Considering the unpredictable nature of the weather and therefore earnings for Vail, investors may want to overlook the bottom-line miss for now and take solace in the generous dividend hike.

Blue sharks have been identified as the culprits of 13 attacks on humans in the last 430 years, according to the International Shark Attack File. There are likely more attacks that have not been reported or successfully identified, but don't worry -- humans have returned the favor by killing up to 20 million blue sharks each year. Legal or illegal, the motivation is simple: Shark products represent a big economic opportunity. The shark's skin can be used for leather, its fins can be prepared in soups, and the remaining meat can be processed into fish meal. And if you get two or three shark livers you can make about 1 liter of the high-value emollient squalane, which sells for $30 per liter, or $114 per gallon.  

Can engineered yeast save deep-sea sharks? Source: Wikimedia Commons.

Good news for deep-sea sharks: Synthetic biology pioneer Amyris has engineered yeast to create the hydrocarbon farnesene, which can then be processed into large amounts of high-quality squalane. The emollient is naturally produced by your skin to prevent moisture loss; thus, it's an important ingredient for numerous global cosmetic brands offering skincare lotions, hair care creams, hand washes, lipsticks, and various other personal-care products. In fact, you may have used a product containing squalane today. Several Avon products, the St. Ives brand from Unilever , the Cover Girl and Olay brands from Procter & Gamble , the Nivea brand from Beiersdorf, the Dial brand from Henkel, the Aveeno and Johnsons brands from Johnson & Johnson, and many others list squalane as an ingredient.  

Despite its perceived prevalence, manufacturers have largely abandoned the emollient because of sourcing concerns (shark liver and ultra-refined olive oil) that have led to volatile supply and pricing. The squalane market has shrunk to just one-third of its size by volume in the last decade as a result. However, manufacturers and suppliers are rushing to Amyris' novel synthetic biology platform in hopes of returning the squalane market to its previous glory. Amyris has grander plans.

The case of the missing squalane
The squalane market has shriveled from 7,500 metric tons annually 10 years ago to just 2,500 MT today. Simply put, shark livers (irregular and perhaps illegal supply) and olive oil (crops decimated by drought in recent years) cannot serve as stable annual sources of the emollient. Who knew! Of course, given the lack of alternatives, the market is still dominated by shark- and olive-derived squalane. That's about to change.

Amyris ran into problems as it began to ramp production at its first commercial scale facility in Brotas, Brazil in 2012, but still exited the year supplying 10% of the global squalane market. The company continued to march to higher production volumes in 2013 and managed to end the year with an 18% hold on the market while supplying squalane to over 300 unique brands.

*Numbers are approximate. Sources: Amyris presentation, author calculations.

It's important to note that Amyris supplies squalane to distributors around the globe, which then sell the emollient to personal-care product owners such as Avon, Unilever, and Procter & Gamble. Such a model is more capital friendly and allows Amyris to leverage the existing infrastructure within the industry while focusing on producing its molecules as cheaply as possible. Two molecules of farnesene, the company's versatile building block molecule, are required to make one molecule of squalane. It appears to be close to a 1-to-1 ratio on a volumetric basis as well, so it likely costs Amyris about $7-$8 plus additional minimal processing costs to produce 1 liter of squalane. Not bad considering the current market price of $30 per liter, but expect production costs to fall even further in the future.

While the company will continue to replace rare traditional sources of squalane, CEO John Melo doesn't want to just capture market share. He wants to create it. The global annual squalane market stands at roughly 2,500 MT, or 3.1 million liters, today. Given current prices the market represents a $93 million opportunity today. That's a far-cry from the market's historical peak value of $180 million. It's even more distant from the $300 million market Melo envisions his company's platform enabling. Can Amyris really capture and create market share?

Get ready for a squalane renaissance
You can laugh at the fact that Amyris' 18% market share represented just 450 MT of squalane exiting 2013, but that volume will fetch $13 million-$15 million in revenue in 2014 -- nearly equivalent to total renewable product sales realized last year. What high-value specialty chemicals lack in volume they make up for in selling prices. Besides, the potential future value of Amyris' squalane supply is anything but laughable.

Using current market prices, a $300 million market would be supported by roughly 8,100 MT, or 10 million liters, of the emollient. If the company can successfully expand the squalane market and account for the bulk of the added volume (where the heck else would it come from?) then sales of squalane could represent a megaopportunity for Amyris without taking up much production capacity. Here are a few step-wise scenarios to consider on the way to building a $300 million squalane market.

*Expressed on a farnesene basis, although other molecules are produced. Source: Amyris for approximate market price, Author calculations.

Although deep-sea shark liver and ultra-refined olive oil currently represent approximately 2,050 MT of the annual global supply of squalane, they're quickly being replaced by Amyris. It's difficult to say if they will be completely squeezed out of the market, or if other sources of farnesene will arrive to take small minority stakes in the market, but the company remains in a unique position. Consider that producing 5,600 MT of squalane each year, or the entire expanded volume of the market, would give Amyris a 69% market share. Wouldn't an expansion of the market result in lower average selling prices? Perhaps, but if Amyris can grab a stranglehold on the market and provide a consistent, sustainable supply of squalane it would have a pretty big role in determining the market price. I don't think Avon, Unilever, or Procter & Gamble would mind, either.

Foolish bottom line
The ability to engineer yeast to create a global supply of a constrained, highly coveted molecule at significantly reduced costs compared to traditional sources highlights a small sliver of the awesome potential of synthetic biology. Amyris could accomplish amazing things, while returning out-sized gains to investors, with more than just the squalane, however. The company plans to launch its second flavor and fragrance molecule in the next year or so and capture 40% of the market within the second year of production. It will represent a smaller volume than even the squalane market, but will sell for much higher prices to make up for it.

Now, Amyris isn't a perfect short-term investment. Some analysts and industry watchers weren't thrilled with the planned slow pace of ramp-up at Brotas in 2014, and the conversion of debt issued from past mistakes will result in share dilution in the future. However, I see an amazing long term opportunity, especially at a lowly current market cap of roughly $320 million. That seems like a steal for a company that will be able to produce over $1 billion in annual revenue at 60%-70% margin, expand production capacity by at least 400%, keep your skin moisturized better than lower-quality emollients currently used in personal care products, and save millions of sharks by the end of the decade. Sounds pretty Foolish to me.

Diamond Foods has an extremely high debt load and has recently been accused of accounting fraud. This may not be an investment for the faint of heart, but if you believe in second chances then this company could reward you handsomely.

Jumping right into it
In November 2011 Diamond was accused in several lawsuits (which have since been consolidated into one) of misleading investors and making false statements regarding financial results and operations, specifically in reference to payments made to walnut growers .

The results of this accounting scandal have been ugly; Diamond is expected to pay $11 million in cash and issue 4.45 million shares of their stock into a recovery funds, as well as pay $5 million to the Securities and Exchange Commission .

In fiscal 2013, Diamond lost $163 million on sales of $864 million. The loss was built by $180 million worth of impairments due to the lawsuit and issues related to the lawsuit .

The first quarter of the current fiscal year offered more of the same, as Diamond piled up losses of $42 million on sales of $235 million. Again, losses were due to $45.5 million worth of impairments due to the lawsuit and related issues.

Indebtedness issues
Diamond's debt issues began in 2010, when the company increased its debt fivefold to acquire Kettle Foods . Then, in the midst of the accounting lawsuits, it agreed to take an investment from Oaktree Capital Management L.P. in order to restructure its balance sheet . This deal added $225 million worth of debt at a rate of 12%.

The interest expense of nearly $58 million for last fiscal year represented an interest rate on long term debt of nearly 10%, as well as 7% of total sales.

Where to go from here
Diamond appears to be heading in the right direction. In February, the company completed a debt restructuring. This included a new issuance of $230 million worth of 7% notes to replace the Oaktree loan and a replacement of the $415 million term loan . The debt restructuring should help improve margins as interest expense will be drastically lowered.

Along with the restructuring, time should help heal Diamond from its legal woes. Once Diamond completes settlements and related issues, there is plenty of promise left.

Diamond operates a snacks segment with brands including Kettle chips and Pop Secret popcorn, as well as a nuts section including Emerald and Diamond of California brands. The company had been averaging over 10.5% top line growth each year for the nine years prior to 2013, when revenues dropped 12% from 2012 .

The decrease in sales in 2013 was caused by decrease in net segment sales. This trend continued in the first quarter of 2014 as the snacks segment grew sales by 1.2% from the same period a year prior, and nut sales fell 17% from the same period a year prior . Decreases in nut sales were due to lack of supply of walnuts and the relaunching of the Emerald brand. The company hopes these issues are behind them, and their outlook was positive after the release of first quarter earnings.

Current valuation
Due to negative earnings, price to earnings ratio cannot be computed. Instead, we will take a look at Diamond's price to sales ratio, which stands at 0.8. This compares favorably to larger competitors General Mills and Kellogg , selling at 1.9 and 1.5 times sales, respectively.

General Mills and Kellogg both have a much larger and more diversified stable of brands which helps them have more consistency than their smaller counterpart, Diamond. They have both consistently had profit margins around 10% over the last ten years.

Continued turnaround
As the turnaround continues and operations get back to normal, Diamond will be able to acquire and diversify into more brands and grow margins to a regular rate for the industry. A turnaround such as this does not happen overnight or even over a year for that matter, and Diamond is still in the beginning stages of the process.

Investing now, ahead of second quarter earnings that will still be plagued by legal issues, could give you a favorable position as this company smoothens operations moving forward in the coming years.

Speculators betting against the growth of Apple  may soon find themselves in troubled waters. According to a recent report by Digitimes, Apple's recent deals with China Mobile and NTT DoCoMo -- with a collective base of 821 million subscribers -- will propel the global demand for iPhones. The research firm expects iPhone shipments to double in 2014. 

This, of course, presents a bullish outlook for Apple. But, iPhone's hardware and software suppliers, namely Micron , Jabil Circuit , and Electronic Arts , also stand to benefit here. Do these stocks deserve a place in your portfolio?

Memory guy
Every computing device requires DRAM memory, and Apple devices are no different. The iPhone 5c and 5s are equipped with LPDDR2 and LPDDR3, or Low-Power-DDR3 memory modules, respectively, which are manufactured and supplied mainly by Elpida Memory -- owned by Micron Technology.

Preparing for the next iteration of iPhones, Micron has developed its latest LPDDR4 memory. Compared to LPDDR3 modules, these next-gen modules are reportedly about 60% faster and consume 40% less power. 

The pure-play memory manufacturer has sent its LPDDR4 modules for sampling and testing purposes, after which these modules can be deployed in upcoming high-performance mobile devices like iPhone 6 and iPad Air 2. 

Trefis estimates that Apple uses about 80% of Elpida's mobile DRAM manufacturing capacity, and according to Wilson Wang, sales to Apple represent about 13% of Micron's net sales. In light of this product roadmap and close corporate proximity, Micron seems well-positioned to benefit from surging iPhone sales.  

Electrical guy
Jabil Circuit is another prominent supplier. In addition to providing manufacturing services and product management solutions to a wide range of industries, the company manufactures electronic components and casings for iPhone units.  

Investors should note that Apple single-handedly commands the growth of Jabil Circuit. Apple is Jabil's largest client, with sales to the former representing 19% of the latter's overall sales. This reliance was corroborated last year; dismal sales outlook of iPhone 5c caused a sell-off in shares of Jabil Circuit. 

But, now that iPhone shipments are expected to grow at a blazing pace, Jabil Circuit should, in theory, benefit greatly.

Software guy
Electronic Arts, on the other hand, takes care of the user engagement. The software and game publisher creates and distributes content for a wide range of platforms including gaming consoles, handheld devices, personal computers, tablets, and smartphones.

Last year, however, management reported that its revenue from Apple's App store exceeded any of its other retail distribution channels'. The game publisher currently derives about 51% of its revenue from digital sales. But, in spite of these numbers, investors shouldn't get too carried away. 

This figure includes software purchases made on OS X and iOS devices. Excluding OS X sales, EA's digital revenue from smartphones and tablets stood at $110 million -- about 21.2% of the company's overall revenue. This figure, in turn, is comprised of sales on Android, iOS, Windows 8, and BB10 platforms. 

While this diversified revenue stream adds stability to EA's top line, it also reduces EA's exposure to iOS devices. This, in turn, suggests that the game publisher's gains from surging iPhone sales will be fairly limited.

Foolish final thoughts
With the impending iPhone boom, the most obvious choice would be to invest in Apple. Investing in its manufacturers, however, would be a great way to hedge the risks and spread the rewards.

On Thursday, the stock market finally succumbed to some of the nagging problems that have plagued it over the past couple of weeks, as investors pointed to the situation between Ukraine and Russia as well as nervousness about China's economy as their justification for a broad-based sell-off. Major stock market benchmarks posted losses of roughly 1% to 1.5%, but World Acceptance , Carriage Services , and Gogo suffered much more dramatic declines today due to company-specific issues.

World Acceptance dropped almost 20% after the provider of small consumer loans said that the Consumer Financial Protection Bureau was investigating the company's business practices. World Acceptance received a civil subpoena from the newly created regulatory agency requesting documents related to the company's loans and other business. Payday lender Cash America International also fell on the news, with that company already having paid a $19 million settlement last year in what appears to be a similar investigation to what's going on with World Acceptance now. The move shows that the CFPB intends to move aggressively to curb what many see as questionable business models among consumer lenders.

Carriage Services fell 9% as the death-services provider announced that it would raise $120 million in capital through a private offering of convertible subordinated notes. The company said it would use the proceeds to repurchase or redeem existing convertible debt, but investors are clearly worried that the issuance of new debt could only compound the potential for long-term dilution. With the notes not maturing until 2021 and with holders allowed to convert to shares until late 2020, the debt could put a ceiling over Carriage Services' upside potential for years to come.

Gogo declined about 8% despite releasing a quarterly report that included higher revenue and a narrower loss than expected. The provider of in-flight Internet services initially climbed after the report, but investors might have had second thoughts about Gogo's revenue guidance for the 2014 fiscal year. Given Gogo's potential as a leader in a high-growth industry, investors have high expectations for the stock, and even solid results won't necessarily be enough to keep Gogo's share price from falling in the future.

After reporting some horrible numbers over the past year, heavy-equipment manufacturer Caterpillar looked like it finally bulldozed its way out the deep hole it dug. Shares have climbed nearly 25% above their 52-week low, helped along by higher sales of power systems even while dealer retail sales of heavy equipment continue their global decline. But now comes the part where the other shoe falls.

Actually, shoes have been falling all over the place, but now is when they will leave the deepest scar on Caterpillar. With the U.S. coal industry under assault, China's economic "miracle" is coming unglued, sending prices for both copper and iron ore tumbling and imperiling the entire mining sector.

Trade data released this past weekend showed Chinese exports collapsed more than 18% in February from the year-ago period; this is compared to analyst expectations of a 7.5% increase and down from the double-digit growth export achieved in January. The world's second-largest economy is entering a much worse tailspin than many previously believed possible.

In response, copper prices plunged to a seven-month low yesterday as inventories surged higher, raising concerns that not only is copper mining in trouble, but that China's financial markets are about to unravel -- the red metal is used as collateral to make loans to companies and investors. The falling price could create a domino effect that causes a call for covering the debt to be issued, leading to dumping copper stocks and further pressuring the price.

Similarly, iron-ore pricing recently dropped to its lowest level since last June leading to a similar ripple effect throughout the mining industry. Shares of BHP Billiton fell 2.7% yesterday and are down almost 9% from the recent high hit just weeks ago, while Rio Tinto declined 2% on Monday and is down more than 12% since hitting a 52-week high in late February. Sure, there was some exaggeration in the trade data due to Chinese New Year holidays, but the numbers still suggest a substantial weakening of the world's second-biggest economy that carries global ramifications.

And nothing good for Caterpillar, either. BHP and Vale have both been reining in their capital expenditures. BHP recently sold its position in its Australian Jimblebar iron-ore mine and Vale, the world's biggest iron-ore miner, has cut its capital expenditure program for the third year in a row. Rio Tinto has also slashed its budget by $3 billion to $11 billion for 2014.

With miners sharply pulling back, a move that may not be enough in light of current events, we could see further cuts imposed. Joy Global, which is more exposed to coal's curtailment than Caterpillar (two-thirds of its sales coming from coal miners), reported last week that first-quarter revenue plunged another 27%, with original equipment sales cut in half. Bookings, which were down 19% in the fourth quarter, dropped another 16% in the first.

China accounts for about 28% of Caterpillar's Asia-Pacific region sales, or 6% of total revenue, about double what it did the year before. The heavy-equipment maker placed more emphasis on the country to bolster sagging sales elsewhere; now that the underpinnings of the Chinese economy are buckling the risk to Caterpillar grows exponentially, especially because so much of the rest of the global economy relies upon China. 

Caterpillar's stock may have bounced higher because it was so undervalued, but I think the cycle has run its course and a potential collapse in China may cause the next falling shoe to squash its shares once more.

In a rare bit of truly good news for a brick-and-mortar retailer, fourth-quarter profits for Williams-Sonoma came in higher than expected, with the company also increasing its dividend by 6%, sending shares upward. But with so many other retailers facing a serious threat from Amazon.com , what is Williams-Sonoma's secret to staying strong in today's difficult retail environment?

In this segment from Thursday's Investor Beat, host Chris Hill and Motley Fool analyst David Hanson discuss Williams-Sonoma's proactive efforts at becoming successful selling directly to consumers online, while other retailers sit back and let Amazon eat their lunch. They also touch on the other channels the company is tapping to remain a strong retailer today.

Apple's had a decent year with gains of 25%, but it still remains more than 20% off its all-time highs. But the company's deal with China Mobile , new product launches, and new services to contend with the likes of Pandora and Sirius XM  could indicate now is the time to buy Apple shares.

It's time for growth in China
In 2014, Apple is expected to sell nearly 180 million iPhones, which gives it a 14.9% global market share. While Apple's presence in the U.S. is high, the company has failed on many levels to monetize China, a massive market where Apple needs to succeed. In fact, Apple sold just 22 million iPhones in China during 2013.

Last year, China shipped 360 million mobile devices, and this year that number is expected to grow to 450 million. Apple's relatively small 7% market share in China has taken a backseat to the likes of Samsung, Lenovo, and also China-based companies like Yulong. There are two things all these leaders have in common: partnerships with China Mobile and large screen devices.

For the first part of the equation, Apple finally signed a deal with China Mobile last year after being absent from its 710 million subscriber network during all of its success. This deal clearly works to the benefit of Apple but also for China Mobile.

China Mobile is selling the iPhone 5C in China for $733, which means it's not subject to the same subsidized pricing offered by U.S. telecom giants like AT&T and Verizon. Essentially, China Mobile makes a profit from the device when it's sold rather than having to wait over the life of a two-year contract to generate a profit. As a result, China Mobile can attract new subscribers who may want to purchase an iPhone and won't suffer immediate margin pressure thanks to the deal.

With that said, there is still the problem of Apple's market share, which might naturally be boosted thanks to the China Mobile deal. But as previously mentioned, there is a link between screens greater than 5 inches -- iPhone's screen size is 4 inches -- and leaders in the space. Thus, back in February a leak from China on Macrumors.com showed pictures of an early stage iPhone 6, showcasing screen sizes between 4.7 and 5.7 inches.

U.S. consumers have been begging for a larger iPhone for the last two years, which Apple has yet to provide. But to capitalize on the China market, it finally looks as though Apple has an incentive. As a result, its China Mobile deal combined with larger iPhones provide reasons to be optimistic for Apple investors.

iTunes Radio makes itself heard
Apple is entering the music space with authority, offering a mobile service that's been compared to Pandora and now penetrating the in-car arena with a service that some believe will cripple Sirius XM.

First, in less than six months, iTunes Radio has already become the third most popular U.S. music streaming service, controlling 8% of the market with 20 million users. Clearly, this competes with Pandora, which owns a 31% share.

Earlier this month shares of Pandora fell from all-time highs after it reported slower listener-hour growth relative to prior months. The 11% monthly growth was impressive, but the company's decision to stop reporting monthly listener growth is what alarmed investors. Given iTunes Radio's growth, perhaps it's already starting to affect Pandora and, if so, it has a lot of share to gain.

CarPlay: Coming to a driveway near you!
Then, there's CarPlay, an infotainment system that incorporates Apple's operating system, Siri, iTunes, etc., to send messages, listen to music, make calls, and for navigation. The first version of CarPlay will be found in luxury auto makers Ferrari, Mercedes, and Volvo. But Apple already has deals with other manufacturers like GM, BMW, Nissan, and Honda that will roll out in the near future.

With the service not yet launched, we don't know exactly how Apple will be compensated from auto manufacturers, or if it will lead to increased iTunes purchases. Still, Sirius XM has built a near $4 billion a year business by operating exclusively in this space. Since November, shares of Sirius have fallen 12%, and with CarPlay customers not paying for service and able to listen to artists and songs of their choice, it is likely that Sirius XM's decade old technology will feel the heat of new-age competition. Regardless, CarPlay and Apple's long line of manufactures bodes well for investors.

Final thoughts
Out of all these developments, market share in China is the only noted event that could drive substantial year-over-year fundamental growth. In regard to CarPlay and iTunes radio, both combined might only create $1 billion in revenue this year. But if successful, it's the innovation involved with these two services that might spark optimism, which consequently leads to gains.

As for Apple boosting its presence in China, gaining China Mobile and offering iPhone 6 models in different sizes can't hurt its chances to grow. With that said, even a 3% market share gain through the addition of China Mobile and new launches could add an extra 13.5 million units. If Apple exceeds expectations by this number, its stock is most certainly to rise.

Combined, these catalysts over the next year make Apple an attractive stock to watch, buy, and hold. Furthermore, at 13 times earnings, with a dividend of 2.3%, and the company buying-back stock, there is small downside risk. Thus, Apple looks like a golden opportunity.

Fourth-quarter profits for Krispy Kreme more than tripled year over year, with the company now having approximately 800 locations worldwide. Just how much bigger can this doughnut maker get?

In this segment of Thursday's Investor Beat, host Chris Hill and Motley Fool analyst David Hanson discuss Krispy Kreme's growth plans. Despite the company's ambitious goals, David sees a lot of potential headwinds that the company may be facing. With healthy eating trends gaining more and more traction in the U.S., and the company's efforts to grow in so many very different markets, he doesn't get particularly excited about this business, despite enjoying its product.

In this segment from Thursday's Investor Beat, Motley Fool analyst David Hanson discusses why Discover should stand in its own right as a strong performing investment, rather than continuing to hold the stigma among investors as "the poor man's American Express ." David also talks about why this company should stand apart in investors' minds from the two big players in credit cards, Visa and MasterCard , and why Discover should almost be viewed more as a bank than a credit card company.

Amazon.com has now made it official: the company has raised the price of its Amazon Prime membership service from $79 a year to $99 a year. Amazon had initially suggested that such a possible price increase could be anywhere from $20-$40, but on Thursday's Investor Beat, host Chris Hill and Motley Fool analyst David Hanson discuss why it wasn't the fact that the increase came in at the low end of this range that caused the stock to rise a bit on the news.

David points more to the idea that this just simply means more cash flowing into the business. While some have compared this to the Netflix debacle, where it raised rates and consumers fled, Amazon's incredibly robust moat means it has more-than-enough brand strength to raise rates without losing Prime members. However, while David notes that this will be an incremental boost to the company's bottom line, he won't be buying just on this news alone.

Then, in a rare bit of truly good news for a brick-and-mortar retailer, fourth-quarter profits for Williams-Sonoma came in higher than expected, with the company also increasing its dividend by 6%, sending shares upward. But with so many other retailers facing a serious threat from Amazon.com, what is Williams-Sonoma's secret to staying strong in today's difficult retail environment? Chris and David discuss Williams-Sonoma's proactive efforts at becoming successful selling directly to consumers online, while other retailers sit back and let Amazon eat their lunch, and they also touch on the other channels the company is tapping to remain a strong retailer today.

Also, fourth-quarter profits for Krispy Kreme more than tripled year over year, with the company now having approximately 800 locations worldwide. Just how much bigger can this doughnut maker get? The guys discuss Krispy Kreme's growth plans. Despite the company's ambitious goals, David sees a lot of potential headwinds that the company may be facing. With healthy eating trends gaining more and more traction in the U.S., and the company's efforts to grow in so many very different markets, he doesn't get particularly excited about this business, despite enjoying its product.

And finally, David discusses why Discover should stand in its own right as a strong performing investment, rather than continuing to hold the stigma among investors as "the poor man's American Express." David also talks about why this company should stand apart in investors' minds from the two big players in credit cards, Visa and MasterCard, and why Discover should almost be viewed more as a bank than a credit card company.

Thursday's decline of 231 points for the Dow Jones Industrials came as a shock to some investors today, given the market's past resilience even in the face of escalating tensions in Ukraine, and signs of economic deterioration in China. But before you start making wholesale changes to your long-term investment strategy, there are several reasons why, even if the Dow and the broader stock market fall further from here, making emotionally driven decisions now could cause a whole lot of regret later. Let's look at three of them.

1. Trying to time the market when declines are orderly is almost impossible.
The temptation when a stock market decline begins is to sell immediately in the hopes of minimizing your losses. Unfortunately, you'll only know whether a long-term decline actually did begin in hindsight.

For instance, turn the clock back to February 3, when the Dow lost more than 325 points. At that point, many people expected further declines and, therefore, sold their stocks. Yet, in doing so, they missed out on a 1,000-point move upward in the ensuing month. Selling in the hopes of buying back later at a lower price can leave you trapped with cash on the sidelines and missed profit opportunities.

2. Basing stock selections on risk tolerance is still working.
When the market falls, investors often turn to defensively oriented stocks for shelter. That strategy worked today; even though all 30 stocks in the Dow fell, Procter & Gamble and AT&T -- two stocks known more for their stability than for their growth prospects -- posted only small losses. On the other hand, high-growth powerhouse and Dow giant Visa was among the biggest losers on the day, as investors reined in lofty expectations for the card-giant's future.

There's no guarantee that these relationships will hold up in an extended decline. During the 2008 financial crisis, many stocks that investors had previously seen as bear-proof posted huge drops, hurting investors who had counted on their defensive characteristics. But at least for now, the fact that defensive strategies are still working should help you keep from panicking.

3. You can look forward to picking up some bargains.
Most investors love it when stocks rise, and hate it when stocks fall. But for long-term investors who still expect to invest substantial amounts of money in the future, the opposite should be true: You should root for stocks to fall so that you can get as many shares as possible with your money. Declines like today's are only painful if you focus on the money you already have invested and, as you get closer to retirement, you become more dependent on stocks staying healthy. But if you have a decade or more to go before you retire, and plan to put a lot more money into the market during your remaining years of work, then a 231-point drop in the Dow should whet your appetite to get a shopping list ready in the hopes of even bigger declines ahead.

Be smart with your money
Bull markets don't last forever, and it's smart to be prudent about the potential for stock market losses. But don't let single-day declines drive your investing. Take a longer-term view instead, and you'll end up being much happier with the results.

When it comes to Apple , the Street is getting impatient. Hoping the iPhone 5c would be a low-cost smartphone to compete with an onslaught of cheap Android-powered devices in important markets like China, the market was largely disappointed when Apple announced the pricing of its 5c at just $100 less than its flagship 5s. Apple's winning strategy at the high end, which helps Apple consistently capture the lion's share of global mobile phone profits, apparently isn't enough for the Street.

But no matter what the Street says, there is no incentive for Apple to pursue the low-end market -- especially in China. In just three charts based on just-released data from Umeng (via Benedict Evans), an app analytics firm that has its code in a large portion of active Chinese apps, it's clear that the best strategic pricing move for Apple in China would be to continue to pursue the premium market, where there is still meaningful opportunity.

A packed Apple store in China.

Growth is still robust
Why compete on price when the entire China market is growing so robustly and Apple has already proven it can successfully market to the high end? Doing so could mean missing out on lucrative growth at the high end.

In the first quarter of 2013, there were just 380 million active smartphones and tablets. By the end of the year, there were 700 million.

Data for chart retrieved from Umeng's 2013 report on smartphones and tablets in China.

With growth like this, it would be silly for Apple to launch an assault at the low end. If Apple attracts just a sliver of first-time smartphone and tablet buyers in China in this massive, fast-growing market in the coming years, Apple could benefit.

Existing smartphone owners are upgrading in droves
If there's any consumer in China that may be able to afford an iPhone, it's someone who already has a smartphone. And apparently frequent smartphone upgrades are not just a Western phenomenon.

Data for chart retrieved from Umeng's 2013 report.

Smartphone upgrades in China are becoming increasingly commonplace, according to Umeng.

High-end smartphones are popular in China
After the segment with smartphones prices between $1 and $149 -- a category that would be suicide for Apple to enter -- the $500 plus category is the largest segment of active smartphones in China. And 80% of these are iPhones, according to Umeng.

Data for chart retrieved from Umeng's 2013 report.

That's a fast-growing smart device market, a massive replacement market for smartphones, and more than a quarter of smartphone owners choosing high-end smartphones (where Apple irrefutably dominates). These three ingredients sound like a recommendation for Apple not to pursue the low-end market in China and, in doing so, risk giving up pricing power.

The opportunity at the high end looks enticing -- maybe not enticing enough for investors looking to get in and out of Apple stock in the next year, but enticing enough for investors with a Foolishly long-term time horizon.

As both an NVIDIA and Intel shareholder, one merger that has seemed extremely appealing over the last year has been the purchase of NVIDIA by Intel. The synergies here are mind-numbingly obvious, and such an acquisition would lead to the creation of, frankly, an unstoppable force in the semiconductor business and would rather dramatically change the semiconductor market to favor both NVIDIA shareholders and Intel shareholders.

NVIDIA's GPU architectures are far superior
Even as an Intel bull, it's important to call a spade a spade. Intel's GPU architectures to date have been downright embarrassing. The Gen 7-derived GPU in the company's Bay Trail-T system-on-chip is lower performing than the Adreno 330 found inside of the Qualcomm Snapdragon 800 as well as the GeForce ULP found in the Tegra 4. In fact, Intel's Gen. 7 GPU is so poor on a performance/watt and performance/area compare that the company uses GPU blocks from Imagination Technologies for its smartphone-oriented chips.

But it's not just ultra-mobile computing that's the problem -- it's the PC. While Intel has been improving its GPU architectures found in its PC-oriented chips, and while these GPUs benefit from Intel's industry-leading manufacturing technology, NVIDIA is still able to offer discrete GPU solutions that outrun the integrated parts as far as performance/watt goes. Now, the discrete GPUs have dedicated memory, wide memory busses, and a fairly large die size budgets, but this argument breaks down when we see Intel's Iris Pro (which has a large area budget, a fat custom-designed eDRAM, and low latency access to the CPU) perform meaningfully worse than a discrete solution in a lower thermal envelope (although do keep in mind that the number of CPU cores doubles in the Iris Pro measurement and the game may not be particularly CPU limited). 

Source: NVIDIA.

But Intel should have two new GPU architectures out in 2014 and 2015...
The argument that somebody could very reasonably make is that Intel's Gen 7.5 GPU found inside of Haswell (which, as rumor has it, was a last-minute effort as its Larrabee GPU was insufficient to meet Haswell's needs) is an old architecture and that Intel is planning a significant revamp with its Gen. 8 GPU. Indeed, all of the signs suggest that is the case. Further, Intel appears to be planning yet another significant revision with its Gen. 9 GPU, which will be found in the Skylake PC processor as well as the Broxton system-on-chip intended for tablets and smartphones, both scheduled for mid-2015 launches. If Intel can really punch it and deliver a set of world-class GPU architectures, then the case for Intel picking up NVIDIA suddenly becomes a whole lot less compelling.

What would be in it for both parties financially?
For Intel, the strategic benefits are pretty clear:

• Obtain the world's best GPU team and IP war chest;
• Add an instant $4 billion to the top line and at least $400 million in net income (this could actually grow significantly if Intel were to reduce the work done on SoCs, with an offset being potential interest payments made due to borrowing to make the deal or dilution if Intel did the deal in stock);
• Remove the only other merchant player besides Qualcomm in the mobile space that has both a strong in-house CPU team and GPU team; and
• Increase utilization (longer term, not immediately) as Intel would build discrete GPUs for gaming and for workstations today, and this business is non-trivial.

Now, the tricky question is: What does NVIDIA get out of this?

NVIDIA's stock has had a very nice run from the $12's seen in late 2012, and it now trades much closer to fair value today than it did then, but many will argue that the company has quite a bit of room left to run as a stand-alone entity. As soon as the thesis that the discrete GPU is going away is discredited (and it seems to have been), NVIDIA's future looks a lot brighter and something like Tegra looks to be a great incremental growth opportunity. Not to mention, of course, the room there is across NVIDIA's various growth initiatives (Tesla, Quadro, GeForce, GRID, and so on).

In short, NVIDIA may simply not be interested in prices south of $30.

Foolish bottom line
At the end of the day, Intel needs to fix its internal GPU architectures either by building a great one organically or by acquisition. If Intel can deliver on world-class GPUs with Gen. 8 and Gen. 9, then an NVIDIA acquisition -- while still strategically interesting -- loses a lot of its allure. If Gen. 8 and 9, even with Intel's massive R&D dollars funding the development, still turn out to underperform, then picking up NVIDIA may be an interesting option. 

The Department of Defense awarded 13 separate defense contracts Thursday, worth $453.2 million in total. Among the publicly traded companies winning contracts:

• Exelis was awarded a $91.7 million option exercise for the manufacture and delivery of 42 AN/ALQ-214(V)4 on-board jammer (OBJ) systems, to be installed aboard U.S. Navy F/A-18C -D, -E, and -F fighter-bombers. Part of an F/A-18's electronic countermeasures suite, this OBJ jams radio waves to protect the plane from guided surface-to-air and air-to-air missiles. Delivery of the systems is due in November 2016.
• A joint venture between Australia's Cardno Limited and Leidos Holdings won a firm-fixed-price, indefinite-delivery/indefinite-quantity architect-engineering contract worth up to $50 million. The JV will be asked to perform works aimed at preserving U.S. Navy, Marine Corps, "and other government facilities" training ranges and other assets, pursuant to National Environmental Policy Act and Executive Order 12114 on Environmental Effects Abroad of Major Federal Actions. Most of the work under this contract will be done at training ranges within the Atlantic Fleet area of responsibility (AOR), but ranges and installations around the world may also be involved. Lasting up to 60 months' duration, this contract is expected to wrap up by March 2019.
• Honeywell was awarded $13.1 million time-and-material task order instructing it to support the U.S. Marine Corps's Afghanistan Retrograde and Redeployment Operations / Maintenance / Preservation Packaging and Packing Support efforts in Afghanistan. Work on this contract should continue through March 2015.

The Department of Defense awarded 13 separate defense contracts Thursday, worth $453.2 million in total. Defense contractor L-3 Communications won two of them:

• The larger of the two awards, a $38 million contract modification to an existing firm-fixed-price contract, calls for L-3 to supply non-long-lead critical spare parts needed for Royal Australian Air Force's fleet of 10 C-27J transport planes, currently on order. Delivery of these parts is due by March 2015.
• The smaller, but perhaps more interesting award is a $16.4 million cost-plus-fixed-fee contract with the U.S. Defense Advanced Research Projects Agency -- DARPA. L-3 will be supporting Phases 2 and, if the appropriate contract option is exercised, also Phase 3 of the DARPA mobile hotspots program.

As DARPA explains on its website, this project aims to provide "high-bandwidth communications for troops in remote forward operating locations" lacking access to traditional wired Internet. If successful, this experimental program will use air, mobile, and fixed assets to create a "gigabit-per-second tactical millimeter-wave backbone network" extending from military commanders all the way down to the lowest-echelon warfighters. The UAV pods will be an integral part of this project.

In Phase 2, L-3 will be expected to deliver a "solution" consisting of radio and router pods that can be mounted aboard Shadow unmanned aerial vehicles (UAVs) manufactured by Textron . These pods will be used to create UAV-borne mobile hotspots in the vicinity of the UAVs. Completion of Phase 2 is expected to be achieved by March 12, 2015.

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 Williams-Sonoma  were dazzling investors today, gaining as much as 12% after a strong fourth-quarter earnings report.

So what: The maker of specialty home products said that even-calendar sales increased 10%, to $1.47 billion, beating estimates of $1.43 billion, on a 10.4% spike in comparable brand sales. Earnings, meanwhile, improved to $1.38, topping the consensus at $1.36. CEO Laura Alber said the company "outperformed the retail industry over the holiday season, gaining market share, and demonstrating the structural advantage" of Williams-Sonoma's model.  

Now what: Sales at Pottery Barn and West Elm were particularly strong, growing by 14.6% to 18.3%, respectively. Revenue guidance for the current year was also impressive as the company sees full-year sales of $4.63-$4.71 billion against the consensus of $4.64 billion. Separately, the company raised its dividend 6% to $0.33, giving the stock a dividend yield of 2%. While comparable-brand sales are expected to moderate to 5%-7% this year, Williams-Sonoma's brand strength should ensure solid shareholder returns and continued outperformance.

Toyota Motor , the world's largest automaker, has been doing very well. The company expects record earnings this fiscal year on the back of a weaker yen, low costs of production, and the roll-out of new models. However, the automaker's decisions to recall many vehicles in 2013, and then to start 2014 with another spate of recalls, could hurt Toyota's brand image in the U.S. and abroad. In addition, the recalls of the company's high-profile models, such as the Lexus and the Prius, could lead to market share losses in both the luxury and eco-friendly car segments.

Solid expectations
Toyota is upbeat about its prospects in the U.S. market. Despite poor sales in the last month, the Japanese automaker expects a mild recovery this year. It expects vehicle sales in the U.S. to increase to 16 million in 2014, a slight increase from 15.58 million last year. As such, Toyota expects sales of the Prius, which came in at 234,228 units last year for 17th place among vehicles sold by volume in the U.S. according to Autodata, to perform well once again. 

Moreover, Toyota is focusing on various segments worldwide to improve its profitability. Its expectation of an increase in operating profit suggests that it will continue to perform well. However, the fact that Toyota took a hit to its reputation in the recent past because it recalled millions of vehicles due to the serious problem of unintended acceleration cannot be ignored. 

The recalls might hurt
Last month, Toyota recalled 295,000 Lexus and Toyota brand vehicles worldwide due to faults in various safety systems, such as stability control and anti-lock brakes. Most of these recalls are in the U.S. Since Lexus is a premium Toyota brand, the company runs the risk of losing customers to the competition. Both General Motors and Tesla Motors are aggressively pushing their premium models, respectively the Cadillac lineup and the Model S.

Last year, GM received permission from Chinese authorities to build a $1.3 billion plant to manufacture Cadillac vehicles in China. General Motors looks to benefit from the growing luxury-car market in China while Lexus is still off balance in the world's most populous country. Toyota isn't pushing the Lexus brand as aggressively in China as it probably should when considering the efforts of other players, such as General Motors. As a result, Toyota could end up lagging behind in the luxury-vehicle market in China.

Also, the recall of Toyota's Prius could hurt the company's prospects in the hybrid market. Toyota is recalling 1.9 million Prius vehicles due to faulty software in the car's hybrid-control system. It won't be surprising if Toyota loses some share in the electric-vehicle market to Tesla's Model S. Tesla is seeing rapid growth in sales and has moved up to third place in the important California market.

Moreover, Prius sales have been falling in the past couple of years. In 2012, the Prius was among the 10 top-selling cars in the U.S. However, Prius dropped to 17th last year, which means that the model has gradually lost its charm in the market, while Tesla's Model S has only gained steam. Also, a recent report by the Los Angeles Times says that 15.5% of Toyota owners buy a Model S, and the Prius is probably to be the biggest loser of that statistic. In addition, one out of four owners of a Toyota premium vehicle, such as a Lexus, are reported to have switched over to Tesla. 

So, Tesla's premium positioning and eco-friendly nature are helping the brand take away share from both Toyota's high-end Lexus models and its Prius models.

Tesla is now planning to take the Model S to China, a move that could compound Toyota's troubles in the region. The Chinese government will provide larger than expected subsidies to electric-car buyers, which could be a tailwind for Tesla in the long run if the company decides to set up production facilities there. Moreover, Tesla's Model S has received the best-ever score from Consumer Reports, and the car has a solid reputation of saving its occupant when in trouble. So, if Toyota doesn't pick up its game it could lose some share to Tesla, both in the U.S. and China.

The takeaway
So, despite a positive forecast, Toyota could be a risky investment. The numerous recalls of Toyota's vehicles due to technical issues, and the aggressive moves of Tesla and GM could eventually hurt the company in the long run.

Source: Stericycle

Industrial stocks are typically perceived as vulnerable in a recession, as their business operations are cyclical. However, this isn't the right way to assess a company's resilience. Companies in the industrials sector that provide products or services that reduce customers' downside risks remain relevant and profitable throughout different economic cycles.

When economic conditions are poor, companies will typically terminate the services of vendors providing discretionary services such as M&A advisory, management consulting, or public relations -- but retain suppliers that address the pain points that are critical to staying in business. Companies like these operating in the industrials space include Stericycle , Ecolab , and Middleby .    

Risk of potential liabilities
Stericycle helps its customers dispose of medical waste, including items such as gloves, syringes, and needles. Its customers; such as hospitals, pharmaceuticals, and blood banks face serious repercussions like legal liabilities and regulatory penalties, if their waste isn't handled properly.

Even if the economy deteriorates, Stericycle's customers are unlikely to switch to a cheaper and unproven vendor because of the huge risks involved. In addition, the highly regulated nature of the industry and the need for a network of collection and processing facilities to serve customers efficiently deter new entrants and protect Stericycle's industry leadership -- it owns a 15% market share.

Stericycle also boasts an impressive financial track record, having increased both its revenue and earnings per share in every single year since 1998. Its unique business model and favorable contractual terms play a key role in this consistency. More than 95% of Stericycle's sales are governed by multi-year long-term contracts, which allow for price increases.

Furthermore, Stericycle has shifted its emphasis to smaller customers (over larger ones) over the past decade. In 1996, small account customers represented one-third of Stericycle's revenue, while they now make up 64% of its sales. During this period, Stericycle more than doubled its gross margin from 21% to 45%, an indication of its stronger bargaining power and the potential for upselling other ancillary services -- such as patient communication and returns management.

Risk of food poisoning and customer dissatisfaction
Ecolab provides sanitation solutions for restaurants, which ensures a minimum level of cleanliness and food safety. These solutions include staff hygiene training, bacteria resistant touch-free dispensers, no-rinse produce wash, and dish washing machine detergents.

Clean tableware doesn't just ensure food safety; it even has a positive effect on customer retention. Ecolab combined the results of a Technomic survey on restaurant consumers and another Bellwether Food study of restaurant same-store sales, and found that restaurants with higher tableware cleanliness satisfaction scores also delivered higher average same-store-sales growth. More importantly, most of the restaurants that rated highly on tableware cleanliness satisfaction use advanced machines and advanced rinse additives from Ecolab.

Ecolab's financial results speak for themselves. It has grown its revenue in every year for the past 10 years, except for 2009 where Ecolab's top line declined by only 4%. Moreover, Ecolab has remained profitable and free cash flow positive during this period.  

Risk of high operating leverage
Restaurants are economically sensitive businesses bearing the brunt of high fixed costs during periods of weak consumer sentiment. Middleby helps food service operators reduce operating leverage with their cooking, warming, and preparation equipment, by cutting labor and utility costs.

source: Middleby

For example, its TurboChef Waterless Steamer combines steaming and cooking functions in one oven without the need for water. According to Middleby, one of its seafood chain customers saved in excess of 400 million gallons of water a year with the use of its TurboChef Waterless Steamer. Other cooking equipment provided by Middleby reduce cooking time, helping to cut down on the number of waitstaff needed.

Middleby's importance to its restaurant customers is further validated by its market leadership and financial track record. Middleby is the top kitchen equipment supplier to casual dining chains, pizza chains, deli's, and steakhouses. Furthermore, it is estimated that one in three restaurants are Middleby's customers.

Similar to Ecolab, Middleby emerged relatively unscathed from the global financial crisis, with its revenue falling by less than 1% in 2009.

Foolish final thoughts
The financial track records of the three companies are the best evidence of their recession-proof characteristics, given that their top lines were relatively unaffected by the 2008-2009 global financial crisis. The key lies in the fact that Stericycle, Ecolab, and Middleby remain relevant to their respective customers because they minimize the risks that will drive customers away from businesses. Of the three, Middleby is particularly attractive, as it helps restaurants survive and even thrive by enhancing their profit margins through improved cost efficiencies.  

The Department of Defense awarded 13 separate defense contracts Thursday, worth $453.2 million in total. Defense contractor Lockheed Martin was the big winner of the day, landing three of the contracts on offer -- and a piece of a fourth -- including:

• An $8 million contract modification to provide the U.S. Missile Defense Agency with test support at the Aegis Ashore Missile Defense Test Complex at the Pacific Missile Range Facility in Kekaha, Hawaii. This contract modification lifts the value of Lockheed's contract to just shy of $310 million. Completion is now scheduled to occur on Dec. 31, 2015.
• A $22.2 million contract modification exercising options on a preexisting contract to have Lockheed conduct "class service efforts and special studies, analyses and reviews" related to the U.S. Navy's Littoral Combat Ship (LCS) program. Lockheed Martin will provide engineering and design services as well as conduct affordability efforts with the aim of reducing the acquisition and lifecycle costs for Littoral Combat Ships through March 2015.
• A $24 million indefinite-delivery/indefinite-quantity contract to train the Iraqi Air Force and handle technology transfers in accordance with security assistance agreements and/or security cooperation programs relevant to maintaining and operating C-130J transport aircraft that have been acquired by the Iraqi Air Force. This work will continue through Jan. 31, 2017.

Additionally, the Longbow LLC joint venture between Lockheed Martin and Northrop Grumman was awarded a $25.5 million modification on a foreign military sales contract to supply the Royal Saudi Land Forces Aviation Command with Apache attack helicopter initial spare parts, production line spare parts, and "peculiar ground support equipment," and also to perform integrated logistics support and management services. This contract will run through June 30, 2016.