On March 14, messaging app Weibo filed to raise $500 million via a U.S. initial public offering. Weibo, provided by Sina , is a microblogging service similar to Twitter , which boasts roughly 130 million monthly active users. 

The long-awaited offering will finally allow Sina, which has a 77% stake, to spin off Weibo as a new company. E-commerce giant Alibaba Group, which is likely to increase its stake in Weibo to 30%, is another winner. As one of the most popular social networks in the world's second-largest economy, Weibo generated $188 million in revenue in 2013, mostly through advertising. What's next for Weibo after its IPO?

Source: Weibo Corporation, F1.

A mix of Facebook and Twitter
Launched in 2009, Weibo is a mix of Facebook and Twitter. Like Twitter, users are able to post messages with 140 characters. However, because users usually post messages in Chinese, they are able to express more ideas, as 140 Chinese characters amount to approximately 70-80  English words. Like Facebook, Weibo has plenty of social features. The design looks like a social network, and the service supports rich media. Weibo's message stream actually looks a lot more like a Facebook timeline than a Twitter feed.

The business
The company generates most of its revenue from advertising. Marketers see Weibo as a microcosm of Chinese society because the service is popular among a wide range of users, from ordinary citizens to celebrities. Weibo offers a wide range of advertising solutions, including social display ads and native ads. The service also provides traffic to several partners, including media outlets and game developers. 

More than 400,000 businesses have opened Weibo enterprise accounts, which enable them to create personalized landing pages and use the platform to create brand awareness, launch new products, and manage customer relationships. Not surprisingly, one of the company's most important clients is Alibaba, which has helped Weibo launch a new payment platform called Weibo Payment.

The service has experienced rapid revenue growth. Top line increased from $65.9 million in 2012 to $188.3 million in 2013. Moreover, in the most recent quarter, Weibo became profitable.

The IPO
By going public this year, Weibo could benefit from a great IPO atmosphere in the U.S. Roughly 49 companies have filed for IPOs this year, and many other tech companies may also be considering going public.

With more than 600 million registered users and 129 million monthly active users, Weibo's IPO will likely be huge. Note that Weibo has roughly half the size of Twitter's monthly active user base, and it is targeting an $8 billion initial market valuation, well below Twitter's $30 billion current market capitalization.

Heavy dependence on advertising
Despite being one of the most popular social networks in China, Weibo's IPO is not risk-free. First, like Facebook, Weibo is heavily dependent on advertising. The company generated almost 80% of its total revenue from advertising and marketing services in 2013. Weibo has tried to diversify its business model by introducing game-related services and VIP membership in the past few quarters. However, it's too early to know if these new monetization strategies will succeed in generating significant revenue in the medium run.

Beware of hypercompetition
Note that the company is competing for traffic in a hypercompetitive market. There are hundreds of popular social networks in China, including WeChat, QQ Mobile, Kakao Talk, Douban, Yixin, and Renren. In particular, instant messaging app WeChat -- developed by Tencent Holdings -- is a strong competitor. The app reported 379% year-over-year growth in global users in 2013. Unlike Weibo, Tencent Holdings is targeting international markets for its WeChat app. According to Tencent's chief strategy officer, James Mitchell, the company spent up to $200 million last year on WeChat's overseas promotion.

Final Foolish takeaway
Weibo is going public at a good time for IPOs. The company, which just became profitable in the fourth quarter of 2013, has become one of the largest social networks in China, generating more than $180 million in revenue last year, mainly from advertising. With roughly half the size of Twitter's monthly active user base, Weibo is targeting an $8 billion initial market valuation. At first glance, the number looks high for a company that is barely profitable. However, $8 billion may not be too unrealistic, as Twitter's current market capitalization is roughly $30 billion. In this context, there's a high chance that Weibo's IPO will succeed, but risks related to hypercompetition and heavy dependence on advertising should not be ignored.

The Dow Jones Industrials finished Tuesday with a solid gain of 91 points, following an up-and-down roller-coaster path during the day following some conflicting data about the health of the U.S. economy. A fall in new-home sales of 3.3% prompted concerns about whether housing's contribution to the economic recovery might be waning, but rising consumer confidence figures won the day for the Dow. Leading the way higher were tech giants Cisco and IBM , even as athletic stalwart Nike and Wall Street titan Goldman Sachs posted substantial declines on the day.

Cisco's jump of 3.5% came on the heels of its latest efforts to try to bolster its flagging growth, this time by making a substantial investment into cloud computing. Yesterday's announcement to spend $1 billion in creating Cisco Cloud Services is a direct move against rivals that include both IBM and Amazon.com, with IBM having said just a couple months ago that it would also make a billion-dollar investment into cloud computing. With the potential to bundle a broader cloud-computing presence with value-added services like its online-collaboration business, Cisco certainly has potential in the cloud space. Yet as much as $1 billion might sound like, Cisco's commitment could prove woefully insufficient to stem its sliding revenue recently. IBM's similar 3.5% jump followed its own cloud-computing collaboration to provide location-based services with Pitney Bowes.

Source: IBM.

Yet the longer-term question for both IBM and Cisco to answer is whether they'll be able to restore revenue growth to bolster their future prospects. Both companies are too large for any but the most ambitious initiatives to make a material difference to results, and both face huge competition both from each other as well as from numerous other big players in the industry. Valuations for the two stocks are modest, but only if you believe that they can continue to grow earnings, and that's a bold assessment given the challenges both IBM and Cisco face.

Meanwhile, on the losing side, both Nike and Goldman fell around 1.5%. Both companies have to face the rising difficulties outside the U.S. market, with Nike investors pointing to sluggish growth in China as well as the negative impact from falling currencies in the emerging markets. For Goldman, news of ex-director Rajat Gupta's loss of his appeal of his conspiracy and securities fraud conviction reawakened memories of more troubled times, but the Wall Street firm is also vulnerable to changing currents in emerging markets that could jeopardize one of its largest growth opportunities.

It's important for investors to remember that the Dow depends not only on U.S. economic growth but on the health of the global economy. Without strength from all quarters, the Dow's five-year-old bull market could be in jeopardy in the long run.

On March 25, HTC released its next-generation HTC One. The phone is a pretty meaty upgrade from its predecessor, offering the following improvements:

• A larger, improved 5-inch display (up from 4.7 inches in the prior generation).
• A Snapdragon 801 processor (much more powerful than the Snapdragon 600 found in the previous version).
• More metal, lending a sleeker industrial design.
• Improved software and interface.

Source: HTC.

In short, it's a better version of last year's HTC One, which was already a very well received Android device. The question now is whether this new device should be enough to worry shareholders of the world's leading premium phone vendor, Apple .

It's more than just the hardware
Smart business decisions and economies of scale have kept Apple and Samsung in control of the majority of the profits in the smartphone business. A phone like the HTC One packs in a number of great features, but the gross margin profile isn't likely to be very good. A 5-inch 1080p display isn't cheap, nor are a top-end Qualcomm SoC, 2GB of DRAM, a large metal chassis, and so on.

That wouldn't be too big of a problem if HTC had the scale to source components at more favorable rates and to amortize the fixed design and manufacturing costs over a large shipment base. Unfortunately, since both Apple and Samsung are much more popular brands that already have the mind-share of a good chunk of the smartphone market, HTC is fighting an uphill battle trying to compete against the Apple iPhone and, probably more directly, the Samsung Galaxy S.

Does that mean Apple is safe?
When it comes to the smartphone wars, Apple has a number of critical advantages that -- if utilized properly -- help keep the likes of HTC at bay. For example:

• iOS is popular among developers and has a very loyal user base.
• Apple's customers tend to buy more apps than Android users do, which helps create a "stickiness" for users who are already on the iOS platform.
• Apple's brand is extremely powerful -- far more people are familiar with Apple than with HTC.
• Apple is a big buyer with its suppliers and as a result can strike much more favorable deals than a company like HTC can.

Of course, poor management decisions or a stroke of bad luck could always undermine Apple's advantages, but Tim Cook and company appear to understand the strengths Apple enjoys and continue to work hard to build on that successful base. Apple has fought high-spec competitor phones in the past and emerged victorious -- so there's nothing new here from Apple's point of view.

Foolish bottom line
No company -- especially one so dependent on the fickle whims of consumers -- is "safe," but Apple has built itself a wide moat around its hardware, software, and brand. While the HTC One is a gorgeous phone that should appeal to Android enthusiasts, it's unlikely to capture meaningful amounts of Apple users.

In fact, if anything, users looking for the Android equivalent of an iPhone may favor the Galaxy S5 over the new HTC One. And the original HTC One still had many of the same advantages over the Galaxy S4 that the new HTC One has over the Galaxy S5, so it's unclear whether HTC will even gain share against its nearest, cash-rich competitor in the Android space, let alone Apple.

With the reported talks between Apple  and Comcast  about a potential partnership, what does Comcast gain from the rumored deal? There may be some seeming similarities with Apple's initial iPhone partnership with AT&T years ago, but there are many notable differences. Cable service is not metered like cellular data, but cable is also seeing the cord-cutting trend continue. If Apple can mitigate cord-cutting with its brand strength and improved experience, Comcast could benefit from higher retention.

Additionally, Apple may sell its set-top boxes directly to consumers instead of the current model where customers lease set-top boxes from cable providers. Meanwhile, Apple may risk tarnishing its brand by association. Comcast has quite a poor reputation for customer service, which contrasts with Apple's strong reputation. There has also been a lot of debate around net neutrality, which could further complicate this deal.

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

After a difficult start to the week, U.S. stocks rebounded on Tuesday, with the benchmark S&P 500 ended Monday's gaining 0.4%. The narrower Dow Jones Industrial Average rose 0.6%. The animal spirits are out there: Witness Facebook's latest acquisition, a $2 billion deal for virtual reality specialist Oculus -- it's been little more than a month since Facebook announced it was acquiring messaging application WhatsApp for $19 billion.

What does Oculus do?
Billing itself as a "the leader in immersive virtual reality technology," Oculus has yet to release a consumer product -- its virtual reality headset is still at the prototype stage; however, it has already received 75,000 development kits for the headset to games developers. The technology is genuine; in fact, judging by some of the following user reactions, it's very realistic, indeed. (Warning: the video contains some profanity.)

Is Oculus profitable?

Probably not. Facebook Chief Financial Officer David Ebersman told investors and analysts on a conference call today that the acquisition wouldn't have a material impact on Facebook's revenues, as one might have expected.

Speaking of profitability, how much is Facebook paying exactly?
The total deal consideration is roughly $2 billion, but only $400 million of that sum is in cash, with the rest in virtual money, er ... Facebook shares (23.1 million of them, to be exact). Finally, the acquisition agreement also provides for an additional $300 million earn-out in cash and stock contingent on achieving certain performance milestones.

What is the significance of the deal?
According to Facebook CEO Mark Zuckerberg, Oculus has the potential to be "the most social platform ever," or as as game developer Daniel Ratcliffe quipped on Twitter:

I'm with Zuckerberg though; there's nothing more social than sitting in a chair with a device on your head that blocks out all sensory input

— Daniel Ratcliffe (@DanTwoHundred) March 25, 2014

Indeed, this acquisition is a bit of a head-scratcher, at first glance -- the synergies between Facebook's social mission and Oculus' virtual worlds are far from obvious. However, the key to understanding the deal -- or at least understanding Facebook's rationale for doing it -- appears to lie with the concept of platform. For the social network, mobile is currently the key platform, having overtaken the PC, but Zuckerberg is looking ahead, trying to determine what the next dominant platform will be. He thinks that platform is virtual reality, ergo Facebook must shape development in this area. Buy or build? In this case, Facebook felt Oculus had a sufficient lead that it made more sense to buy.

By the way, Zuckerberg is clearly looking beyond gaming for applications of virtual reality technology, "including communications, media and entertainment, education, and other areas." All well and good, but this is a highly speculative acquisition, at least in terms of Facebook's "moon shot" ambitions. No-one knows what direction virtual reality will take or what sort of acceptance it will ultimately achieve, but Facebook/Zuckerberg are willing to place billion-dollar bets with long odds because they appear to have a something of a paranoia about missing the next big thing (in Facebook's business, that sort of paranoia can be useful).

As such, I think this acquisition ought to be allocated to Facebook's "experimental" budget and is comparable to that of robot maker Boston Dynamics by Google. In short, who knows whether it will ever pay off, but the technology is pretty cool and it could end up being huge -- do you really need a better reason to spend $2 billion?

After yesterday's sell-off, stocks swung back into positive territory today as investors cheered on a strong consumer confidence report. By the end of the day, the Dow Jones Industrial Average  had gained 91 points or 0.6%, and the S&P 500 finished up 0.4%.

The Conference Board said its reading of consumer sentiment jumped from 78.3 in February to 82.3, its highest mark since January 2008. According to the survey, consumers were more optimistic about job prospects and the economy as a whole, not only indicating their confidence in the economy's continued recovery but also supporting the notion that severe weather cooled off spending this winter. In other news, February new home sales were down slightly, falling from an annual rate of 455,000 to 440,000, below estimates of 445,000. Separately, two other reports showed home prices rising in January, indicating the housing market still seems to be moving in the right direction. 

Just weeks after absorbing WhatsApp for $19 billion, Facebook  made waves again today, snatching up virtual reality company Oculus for $2 billion. Oculus has no products currently available, but has a virtual reality headset that's soon to hit the market, the Oculus Rift, which has already received more than 75,000 orders from video game developers. While the addition of Oculus may not be of immediate value to Facebook's bottom line, its virtual reality expertise seems to fit in with the social network's mission to make the world more open and connected. Commenting on the deal, Facebook CEO Mark Zuckerberg said, "Oculus has the chance to create the most social platform ever, and change the way we work, play, and communicate."  Facebook shares were trading down 1% on the news as investors didn't seem to share his opinion.

Source: Wikipedia.

Elsewhere, Walgreen  gained 3.3% after reporting earnings this morning. The drugstore chain actually came up short on the bottom line with a profit of $0.91 against estimates of $0.93. Still, same-store sales improved 4.3% on an overall revenue increase of 5.1%, and the company said its integration with its new strategic partner, the British chain Alliance Boots, is proceeding rapidly. Walgreen said the combined synergies with Alliance Boots totaled $236 million in the first half of the fiscal year, and it lifted its savings estimates for the second year of the agreement by $25 million. Gross margin fell 130 basis points to 28.8%, which management said was due to "slower generic drug introductions and severe weather." Finally, Walgreen also said it planned to close 76 stores in the second half of the fiscal year as a part of its store optimization plan, though it still expects a net increase of 55-75 stores for the fiscal year. Despite the dip in profits, Walgreen's long-term plans seem to be on track as it sees $130 billion in 2016 revenue, including the contribution from Alliance.

As a deal that centering around two of the world's largest tech companies with operations spanning several continents and would require the blessing of regulators the world over, suffice to say Microsoft's deal last year to buy Nokia's handset business involves its fair share of complexity.

However, with a sticker price of roughly $7.2 billion and few, if any, material antitrust issues to overcome, it seemed both Microsoft and Nokia would have plenty of skin in the game to get the deal done as quickly as possible.

When the deal was first announced last September, Microsoft and Nokia said they hoped to complete the transaction no later than the first quarter of 2014. However, things haven't necessarily gone as planned, and recently, Microsoft and Nokia actually amended their targeted closing date for this multi-billion dollar deal to next month at the earliest .

So what went wrong, and what does this mean for investors in either Microsoft or Nokia? Let's have a look.

Hurry up and wait
Let's start with the good news, namely that everyone and their mom still expects the Nokia handset sale to Microsoft to eventually close. There's no looming threat of this deal somehow breaking up. This is essentially a done deal. It's just now a question of when, not if, this deal will be sign, sealed, and delivered.

And in that vein, many of the most important hurdles have been cleared as Microsoft and Nokia have received approval for the deal in 15 different markets over 5 continents, including critical regulatory approval from the U.S and the European Union.

The key roadblocks have been two-fold. For staters, Nokia is still awaiting approval from China's key regulators, which reports depict as likely to be granted in an acceptable timetable. Secondly, and perhaps more importantly, Nokia is also working to overcome issues with India's tax authorities. It's unclear to what extent this dispute will have over the deal's eventual closing, this appears to be the more critical of the two factors holding Nokia back at present. These tax issues to relate to a key Nokia handset plant in Chennai that will be transferred to Microsoft at the closing of the deal. Again, these are both issues that Nokia and Microsoft should be able to overcome eventually, but this delay does come with its costs.

What this means for Microsoft and Nokia investors
In all reality, the delay should do little to impact Microsoft shareholders. Nokia is already the largest maker of Windows Phone products with its Lumia line of smartphones, and it appears shifting timing on the deal would do little to alter the product launch schedules Microsoft has in development.

This deal is slightly more problematic for Nokia shareholders who are set to see roughly 50%  of the company's past revenue base removed at the closing of this deal. For reporting purposes, this has actually already occurred.  Moving forward, the question as to how Nokia plans to grow its business going forward remains still largely unclear.

What is clear though is that Nokia will have around $20 billion in gross cash and short-term investments  at its disposal. This fact, as you can probably imagine, has lead to all kinds of wild speculation as to what exactly Nokia plans to do with its post-handset future. Many have seen this huge cash balance as an opportunity for Nokia to acquire its way into a position of greater strength in the highly competitive communication and networking equipment markets where economies of scale reign supreme. Other communications equipment names like Alcatel-Lucent for example have surfaced as possible acquisition targets.

However, it seems that Nokia will be confined to holding pattern of sorts until it can finally close this game-changing deal. And while it's a virtual lock that this deal will still go through, the sooner it can move on with its future the better for both Nokia and Microsoft.

Lululemon Athletica  is the ultimate enigma to investors. On one hand, this is a company that has delivered consistent growth on its top and bottom lines while creating an extremely loyal following. On the other hand, it's a company that has had to endure one embarrassment after another, from too-sheer yoga pants to a phony job ad to a former employee's tell-all experience about the oddities of Lululemon management.

Source: Lululemon

Just when you think Lululemon has reestablished its growth path and headwinds have passed, something comes up. And just when you think the company is buried too deep in negative PR for a comeback, it indeed comes back.

And so the cycle continues. In this case, it's on the positive side ... potentially.

The key concept here is that Lululemon is offering attire that can be worn in any atmosphere, from the gym to the boardroom to the bar. Doubters will say that wearing the same clothing throughout the day -- after sweating in that clothing -- is disgusting. This is a valid point. However, not everyone will choose to sweat in this attire. 

Ready, set, &Go
Based on Lululemon's history, there are certainly going to be many doubters about its newest initiative, which goes by the name '&Go.' This new brand targets women who wake up early, go to work, exercise at some point during the day, and then go out at night. Of course, that's very specific, and it's likely that any loyal Lululemon customer will consider &Go for their wardrobe regardless of their daily schedule.

The &Go brand has 12 products thus far, and half of them sold out within hours. That's a good sign. The only negative is that Lululemon didn't anticipate the correct demand and didn't maximize its potential. But Foolish investors don't care about opening-day results, instead focusing on the long term.

What's most important here is that Lululemon was the leader, not the follower. At least it would seem that way.

Quiet Athleta
Gap launched its Athleta brand partially because it saw how well Lululemon was doing with its yoga attire and wanted a piece of the pie. Gap has generated $1.7 billion in operational cash flow over the past year. This gives it much more potential (marketing, innovation, consumer insights) than Lululemon, which generated just $261.7 million in operational cash flow over the past year. 

Like Lululemon, Athleta sells women's dresses, skorts, and skirts. Despite Athleta's quality being very similar to Lululemon, and more affordable, Athleta hasn't gotten the word out nearly as well. For instance, were you aware of the fact that Athleta sells these items? Better yet, did you know that Athleta exists?  

Picking fights
Lululemon is also selling men's workout attire, which pits it against Under Armour . When it comes to this competition, Under Armour has a clear advantage, simply because it primarily targets a male audience. Lululemon is seen primarily as a female brand, and it will take a lot of marketing and time for that perception to change. 

Over the past year, Lululemon has grown its top line approximately 8.8%. Not bad, but Under Armour has grown its top line by 16.2% over the same time frame. In addition to that, while Lululemon has grown its bottom line about 3%, Under Armour has seen 22.2% bottom-line growth over the past year.

The one selling point for Lululemon over Under Armour is that it's trading at just 26 times earnings, whereas Under Armour is trading at 81 times earnings.

There's one other important factor to consider here. Earlier this quarter, Lululemon CFO John Currie stated: "We were on track to deliver on our sales and earnings guidance through the month of December; however, since the beginning of January, we have seen traffic and sales trends decelerate meaningfully."

Therefore, while &Go might offer long-term potential, it's not likely to benefit this quarter much.

The Foolish takeaway
Lululemon has a habit of surprising investors in positive and negative ways. Fortunately, its branding has been strong, which has helped lead to a loyal following despite premium prices over Athleta. Adding the &Go brand should provide another long-term revenue stream. On the other hand, this quarter's results might disappoint. Investors might want to see what happens on March 27 prior to making any investment decisions. But please do your own research prior to making any of those investment decisions.

MarketSnacks Fact of the Day: ESPN is the most valuable TV channel in the U.S. and accounts for 40% of parent company Disney's operating income.

Drug companies are staples in dividend investors' portfolios thanks to their predictable demand and solid cash flow. However, many drug companies, including AbbVie and Pfizer , have seen dividend yields fall as markets have pushed shares to new highs.

Although it may be tempting to simply buy the company with the higher dividend yield, patent expiration is likely to take a big bite out of profit at these two companies over the next three years. That suggests investors should consider patent exclusivity, payout ratios, and pipelines before committing to buy shares.

PFE data by YCharts

Comparing patent portfolios
Pfizer lost a big chunk of revenue when Lipitor, its top selling cholesterol fighting drug, lost its patent protection in 2011. Lipitor was a massively successful drug for Pfizer, generating peak sales near $13 billion a year in 2006. Since losing exclusivity, sales of Lipitor have sunk to just $2 billion in 2013.But that's yesterday's news. Instead, investors should be worrying about Celebrex's patent protection. Celebrex, its $3 billion-a-year drug for osteoarthritis and rheumatoid arthritis, will lose exclusivity at the end of 2015.

While Celebrex's expiration puts a sizable stake of Pfizer's sales up for grabs in 2016, AbbVie may face an even bigger threat when Humira, its best selling drug, goes off-patent in the U.S. at the end of 2016.

Humira accounted for nearly 60% of AbbVie's revenue in 2013, and competitors like Novartis' Sandoz generic unit are already working on potential Humira biosimilars. Sandoz advanced its Humira copycat into phase 3 trials in December.

Those patent expiration risks are important, given that falling revenue could affect the amount of dividends these companies pay in the future. The good news is that both companies appear to be generating plenty of cash to maintain their current payout rates -- at least for now. The cash dividend payout ratio, which divides dividend payments by operating cash minus capex and preferred dividends, is 40% at Pfizer and 44% at AbbVie. Those numbers are OK, but if they surge investors should worry.

PFE Cash Dividend Payout Ratio (TTM) data by YCharts

Debating products and pipelines
Pfizer's Lyrica is making up some of the ground lost when Lipitor went off-patent. Lyrica, its treatment for diabetic neuropathy and fibromyalgia, posted sales of $4.5 billion last year, up 11% from 2012. Pfizer's two recently launched cancer drugs, Xalkori and Inlyta, are also seeing sales grow. Those two drugs produced $200 million in revenue during the fourth quarter. Pfizer also hopes sales will pickup for its rheumatoid arthritis drug Xeljanz, a JAK-inhibiting oral therapy. If so, Xeljanz can protect some of the sales Celebrex will lose when it goes off-patent. Despite those bright spots, Pfizer's sales still fell 6% to $51 billion last year.

If Pfizer is going to return to top-line growth, it will need a few wins from its pipeline. Palboiclib and RN316 are among the closest to commercialization. Palbociclib's success in late stage trials as a treatment for ER+ and HER2 breast cancer patients has investors hoping for a quick path to approval. And RN316 is one of three late stage PCSK9 cholesterol fighting drugs in development -- the other two are being developed by Regeneron and Amgen -- that could enter a market eager for new therapies to lower bad cholesterol.

AbbVie's sales held up a bit better than Pfizer's in 2013. Revenue grew roughly 2% from 2012 to $18.8 billion; however, that masks a 2% year-over-year decline in sales to $5.1 billion in the fourth quarter -- a quarter in which Humira's sales climbed more than 13% worldwide. Outside of Humira, AbbVie boasts only one other blockbuster treatment: AndroGel, and its sales fell 10% last year to $1 billion.

That puts pressure on AbbVie to usher new products through its pipeline, including its promising hepatitis C cocktail. That three drug combination therapy showed solid cure rates in late-stage trials, prompting analysts to estimate it could someday carve out blockbuster status. AbbVie is also working with multiple sclerosis powerhouse Biogen on daclizumab for multiple sclerosis and with Bristol-Myers on elotuzamab for multiple myeloma. Biogen reported solid phase 2b data last spring for daclizumab, and AbbVie and Bristol-Myers reported solid mid stage results for elotuzumab in previously treated myeloma patients last summer.

Fool-worthy final thoughts
The ability to increase sales for current therapies and produce new winning treatments will go a long way to determining whether Pfizer and AbbVie can boost their dividends in the future. Currently, dividend yields for both Pfizer and AbbVie are nearly identical at 3.23% and 3.26%, respectively. Operating margin, which reflects the ability of the companies to deliver investor friendly profit, are similarly matched at roughly 30% for both companies.

Pfizer already faced its biggest patent threat when Lipitor lost exclusivity. Celebrex, while an important drug, represents just 6% of Pfizer's annual revenue, so it's unlikely the dividend is in jeopardy anytime soon. The issue is foggier at AbbVie given Humira represents more than half of the company's sales.

Since Humira's patent runs through 2016, investors have time to see whether compounds making their way to market can offset threats to AbbVie's sales. But that means AbbVie investors should keep a close eye on its pipeline over the next two years.

Although the Dow Jones Industrial Average began the day up more than 100 points, the blue-chip index closed the session down 98 points. The big swing came as investors grew more nervous about tensions with Russia, as economic data points to a slowing U.S. economy and high-valuation stocks lose some of their luster.

While the ongoing issue in Ukraine probably won't lead to much more than political talks, the Census Bureau's durable-goods report this morning again indicated that that although the U.S. economy is growing, it is doing so at a snail's pace. The expected orders growth rate of 0.3% last month came in at an just 0.2%. As for the usual highfliers, Facebook, Twitter, TripAdvisor, and Tesla all got hammered during the regular trading sessions today.

But there were a few shining stars on this down day. Shares of both DirecTV and DISH Network rose 5.7% and 6.28%, respectively, on rumors that DISH Chairman Charlie Ergen contacted DirecTV CEO Mike White to discuss a merger. Both companies declined to comment, but this isn't the first time the topic has arisen. More than a decade ago the two attempted to merge, but the FCC nixed the deal, saying it would eliminate competition. That may no longer be a concern. A lot has changed within the industry since then, and satellite-radio leaders Sirius and XM Radio were allowed to merge in more recent years.  

Another stock bouncing higher during regular trading hours was GameStop . Shares rose 2.94% as investors awaited the company's earnings report, scheduled for tomorrow before the opening bell. But in the after-hours session, the stock is down nearly the same amount. Analysts expect revenue to come in at $3.79 billion and earnings per share to hit $1.92. While the company may have performed well this past quarter, most investors probably care more about what management has to say about the future, especially now that Wal-Mart, as of today, is back in the used-video-game industry.

Another stock reversing course in the after-hours session is Paychex . Shares fell 1.3% during the regular trading hours but have climbed higher by 3.3% since the closing bell, following the company's earnings release. The payroll processing firm reported revenue of $636.5 million and earnings per share of $0.44, beating Wall Street expectations of $629 million and $0.42. Moving forward, management expects revenue to rise by 5% to 6%, while net income is forecasted to increase by 9% to 10%, up from previous expectations of 8% to 9% growth. Revenue guidance is in line with Wall Street's expectations, while most analysts were expecting EPS to increase by only 8% in 2014.  

In this edition of The Motley Fool's "Ask a Fool" series, Motley Fool One analyst Jason Moser and Motley Fool Stock Advisor analyst Brendan Mathews take a question from a reader who asks: "I've read your advice advocating owning at least 15 stocks. Right now I have six. I plan on investing a few hundred dollars a month. Am I better off putting that money into new stocks or the six I already have?"

Brendan suggests that if you find new stock ideas that you like, then it would probably make sense to add new stocks to the portfolio. Owning at least 15 stocks ensures at least a minimum degree of diversification, though owning perhaps 20 to 25 stocks would increase the benefits of diversification. Jason points out that it's also worth making an effort to keep costs down -- i.e., below 2% of the portfolio.

See more in the following video.

Avago Technologies looked like a promising investment at the end of last year, and the company has lived up to its billing so far in 2014. With almost a quarter of the year in the rearview mirror, the chipmaker has handsomely outperformed the NASDAQ Composite with gains of more than 20%. But this stellar performance has made Avago shares expensive at 29 times trailing earnings, while the dividend yield has come down to 1.70%.

Moreover, the stock is trading close to its 52-week high, and Avago investors might be wondering if the stock is worth holding on to anymore. Well, I think it is. Avago's key customers -- Apple and Samsung -- are going to take the smartphone war to the next level this year. Since Avago plays from both sides, there's a high probability that it will see solid revenue and earnings growth this fiscal year as well.

Smartphone goodness
Since Avago's wireless communications business accounts for half of its top line, the boost that it is supposed to receive from Apple and Samsung will play a big role in its financial performance. In fact, in the previous quarter, despite subdued production of Apple's iPhones, Avago managed to increase its wireless revenue, year over year. This was down to "sustained demand from a large OEM customer," which could be Samsung as it is ramping up production of the Galaxy S5.

Pre-orders for the Galaxy S5 have already started at AT&T, T-Mobile, and Sprint, and this new device should keep Avago's coffers full in the first half of the year. Apple is expected to come into play later this year when it launches bigger iPhones. Apple was a 10%-plus customer of Avago last fiscal year as the company gained content in the iPhone. 

Now, we could be looking at a bump in the addressable market for Apple this year as it introduces bigger-sized iPhones. Rumors going around on the web suggest that the next iPhone's screen will range from 4.7 inches upward, as the company tries to woo Android users into its ecosystem. Since Avago also supplies content for iPads, it could see more Apple goodness later this year with the new iPad cycle. 

Beyond Apple and Samsung
It is never a good idea to keep your eggs in one basket, so Avago decided to diversify and land a few design wins in China. The deployment of TD-LTE in China has created demand for LTE-enabled smartphones, and Avago management says that the company has won meaningful content in Chinese smartphones for the first time.

This is a significant opportunity for Avago, since 4G smartphone shipments in China are expected to rise to 72.6 million this year from 4.6 million units last year. By 2017, iSuppli expects that there will be 300 million 4G handsets in the Middle Kingdom. So, Avago has made a smart move by moving into this market.

Moreover, Avago is enjoying solid growth in its wired infrastructure business, which was up almost 60% in the last quarter. The long-term outlook for this business looks bright, since Cisco is another 10%-plus customer of Avago. The proliferation of connectivity around the globe with different applications in the Internet of Things and the Industrial Internet will lead to demand for data-center equipment and faster connectivity equipment going forward.

Avago is looking to make full use of this opportunity through its product development moves. It recently launched its latest solutions -- MicroPOD and MiniPOD -- in association with Corning that enable data centers and enterprise networks to switch from 10G to 100G Ethernet. This new suite of products also increases the link distance to 550 meters, thereby increasing the efficiency of data centers.

Final words
Avago has appreciated strongly this year and the stock isn't as cheap as it was in December last year. However, it is still cheap -- at less than 30 times earnings -- when compared to the industry average P/E of 43.As such, it is still a good idea to hold this stock, especially considering the catalysts that it has in store.

With recently appointed CEO Satya Nadella now at the helm, investors are re-evaluating their expectations for Microsoft's future. The revision to the underlying thesis for the company apparently is a positive one; shares are hitting 52-week highs that haven't been reached since the dot-com boom in 2000. Between the share performance and the potential major strategic changes around the corner, it's a great time to return to valuation.

But what is Microsoft stock really worth? Fool contributor Daniel Sparks recently set out to put a number to the fair value of the shares. Using a discounted cash flow valuation model with some conservative estimates for net income growth and a 10% discount rate, he thinks shares are worth $46. Check out the following video to find why.

Source: Starbucks.

Starbucks has been one of the most remarkable success stories in the consumer sector over the past several years, and the company has rewarded shareholders with substantial gains over time. However, market saturation could be a problem sooner or later, and competition is rapidly increasing on multiple fronts, be it from fast food giants such as McDonald's and Yum! Brands or traditional coffee players like Dunkin' Brands .

Does Starbucks still offer room for growth, or is the best part over for the company?

Steaming hot competition
Success generally attracts competition, and Starbucks is no exception, as competitive pressure is clearly rising lately.

McDonald's is looking for alternatives to reinvigorate its stagnant sales performance, and the company intends to gain market share in segments like coffee and breakfast. McDonald's is betting on its McCafe concept to expand sales and increase profit margins, while at the same time it's broadening its food offerings in the breakfast segment.

According to CEO Don Thompson: "We're enhancing the breakfast experience by creating more of a coffee culture through high-quality McCafe products. They pair very well with delicious foods, both existing and new."

Yum! Brands' Taco Bell will be launching its breakfast menu nationally on Thursday; the company will offer a waffle taco, a breakfast burrito, premium hot coffee, and Tropicana orange juice among other alternatives in its breakfast menu.

Fast-food companies are facing slowing demand in the U.S. lately, and breakfast seems to be the next battleground in the fast-food war. In addition, Starbucks faces growing competition from traditional coffee players like Dunkin' Brands.

Unlike fast-food chains, Dunkin' Donuts is benefiting from strong demand in the U.S., with comparable store sales rising by 3.4% in the country during 2013. Dunkin' Donuts introduced more than 40 new products during the year, and management is quite optimistic regarding customer response to these innovations and its implications for growth in the middle term.

A differentiated player
No company is completely immune to competition, but Starbucks has been able for a long time to deliver extraordinary financial performance while facing growing competitive pressure, and there is no reason to believe that's going to change anytime soon.

Starbucks benefits from tremendous brand power, a reputation for quality, and a differentiated customer experience. While McDonald's, Yum! Brands, and Dunkin' Brands compete aggressively in the low end of the pricing spectrum, Starbucks is uniquely positioned in the premium segment.

Starbucks reported a big 12% revenue increase during the quarter ended on Dec. 29 to a record $4.2 billion. Global same-store sales increased by 5% during the quarter, and the company opened 417 new stores for a total of 20,184 stores at the end of 2013.

Even in the Americas region, where market penetration is quite high, comparable-store sales increased by 5% on the back of a healthy increase of 4% in transactions and a 1% rise in the average ticket price during the last quarter. New store openings are not cannibalizing sales at existing locations, so Starbucks seems to be far away from reaching a saturation point.

In the China/Asia-Pacific region, where the company has a lot of room for store base expansion, Starbucks delivered a whopping annual increase of 25% in sales during the last quarter of 2013, so international expansion has a long way to go, judging by demand strength.

In addition, broadening the portfolio of products is a smart strategy to generate sales in a cost-efficient way, and the company is firing on all cylinders in that area. Acquisitions like Teavana, Evolution Fresh, and La Boulange provide a deep pipeline for product innovation in the coming years.

The company has recently announced it will start selling beer and wine in thousands of stores, adding more sophisticated food offerings such as bacon-wrapped dates with balsamic glaze and chocolate fondue to its new evening menu in those locations.

Alcoholic drinks are typically high-margin products, and the company's latest menu innovation could provide a lot of leverage by increasing sales during the evenings, a typically a slow time of the day for Starbucks. There could be considerable risks and complications involved in this move, but if it works out as expected, it could do wonders for Starbucks in terms of growth and profitability.

Bottom line
Growth tends to slow down as companies become bigger, and Starbucks is facing rising competitive pressure. However, Starbucks is a high-quality company with a differentiated brand and solid competitive strengths. Demand remains remarkably strong judging by financial figures, and the company has plenty of room for store expansion and product innovation in the coming years. This caffeinated growth story is far from over.

Since buying its massive Jansen potash deposit in Saskatchewan in 2011, BHP Billiton has sunk more than $1 billion into the project, committed to spending another $2.6 billion over the next few years just to gain access to the site, and it's sinking big mine shafts and building associated infrastructure that are expected to be completed by 2016 with surface facilities coming online in 2017.

But it's about to have company up north, as Rio Tinto has quietly revealed that it's sitting atop another massive potash deposit close to Jansen that could launch it into a top-tier position in potash.

Rio's KP405 potash lease in Saskatchewan's Elk Point Basin has already been characterized as a Tier 1 deposit, meaning it's one of the biggest in the world, containing some 329 million tons of potash. Its Russian partner in the project, Acron, calls it massive and says Rio has the capability of operating the deposit for decades at low cost. The world's largest potash mine is Mosaic's  Esterhazy project in Saskatchewan, with an annual capacity of 5.3 million tonnes. Potash production is limited to just 12 countries, with Canada controlling more than half of the world's reserves.

For its part BHP calls potash the "fifth pillar" of its plan to meet the diverse needs of a developed and developing world, BHP is developing the potash project in preparation for the anticipated food boom and the resulting surge in demand for fertilizer to grow it. Although the industry was thrown into confusion last year when the Belarusian cartel split apart, causing potash prices to crater, China has since stabilized the market to a large degree by setting a floor of $305 per tonne. The situation in Ukraine has the potential to destabilize it again -- though perhaps to the high side this time -- but there seems little doubt the need for potash will continue to grow unabated. 

In addition to the currently fractured Belarusian cartel, which controls 40% of world potash supplies, another 30% is controlled by Canpotex, an exporter jointly owned by producers Mosaic, Agrium, and PotashCorp. The balance is made up of companies like Chemical & Mining Co. of Chile, Europe's K+S , and smaller operators including U.S.-based Intrepid Potash.

As big as Rio's discovery is, though, there are several caveats that should serve to dampen rampant enthusiasm even if it's still an exciting development. First, KP405 is of a lower grade than BHP's, with an average grade of 31% KCl compared with 40.7% based on Jansen's 25.7% K2O, a measure of potassium oxide.

Second, The Australian says KP405 is much smaller than Jansen, being about a third its size, but because it also runs almost twice as deep, it means Rio will likely have to use different mining methods than its rival will, which would likely make it more expensive to exploit.

While this is still an early stage development, the industry has to contend with a glut of the fertilizer even before these projects come online so we may see more cost-containment initiatives being employed. K+S, for example, recently slashed its dividend 82%, reducing the payout ratio to just 11% of adjusted after-tax earnings. While PotashCorp has called its own payout "sacrosanct," others might not have such a devout belief, but it could still determine how large a role Rio Tinto and BHP Billiton ultimately play in the industry.

While it will still be years before Bank of America is completely clear of legal liability related to the financial crisis, it's now officially in the homestretch.

The Charlotte-based bank announced on Wednesday that it will pay the Federal Housing Finance Agency $9.5 billion to resolve all of the latter's outstanding securities fraud claims. The settlement is split between $6.3 billion in cash and $3.2 billion for the repurchase of mortgage-backed securities.

Coupled with a large settlement from last April, Bank of America estimates it has "now resolved approximately 88% of the unpaid principal balance of all RMBS as to which RMBS securities litigation has been filed or threatened for all Bank of America-related entities."

It's for this reason the press release announcing the deal proclaims it concludes "one of the most significant remaining pieces of RMBS securities litigation facing the company."

To be clear, this is not an exaggeration. Over the past few years, Bank of America has had to deal with three separate buckets of legal liability.

The first involved so-called representation and warranties claims. The essence of these was that Bank of America -- or, more accurately, Countrywide Financial -- defrauded institutional investors and bond insurers by placing defectively originated home loans into mortgage-backed securities.

Through a series of settlements with private investors, custodial banks, monoline insurance companies, and Fannie Mae and Freddie Mac, these actions had largely been resolved by the end of last year.

The second bucket contained liability related to the servicing of mortgages. These were the so-called robo-signing cases in which Bank of America was accused of submitting fraudulent documents in foreclose proceedings. Their resolution came at the beginning of 2012 via the aptly named National Mortgage Settlement with multiple state and federal agencies.

Finally, the third bucket held securities fraud actions like the ones at issue here. While a large portion of these were dealt with in the middle of last year, via a settlement with institutional investors, two groupings remained. The largest included the FHFA's claims which are now resolved. The other is principally composed of claims between the insurance giant AIG and Bank of America.

My point in all of this was not to bore you. It's rather to demonstrate that Bank of America is indeed nearing the finish line when it comes to legal liability dating back to the financial crisis.

Does this mean that it's completely done with this unfortunate chapter? Absolutely not, as there will continue to be smaller settlements trickle in here and there. But what it does mean is that, with Wednesday's announcement, the bank has cleared the final major hurdle.

In short, Bank of America's investors can now rest easy knowing the end is in sight.

The Department of Defense awarded 14 separate defense contracts Wednesday, worth $2.25 billion in total. Two of the largest awards handed out concerned the supply of medical equipment for the Defense Logistics Agency's Troop Support division.

In the larger of the two awards, Siemens' Medical Solutions Inc subsidiary was awarded an option year (the fifth of seven possible) worth up to $1.79 billion to supply radiology systems, subsystems, accessories, and parts, plus servicing and repairs for same, to the U.S. Army, Navy, Air Force, Marine Corps, and federal civilian agencies through March 30, 2015.

 In the smaller, Hitachi's Medical Systems America Inc subsidiary was awarded a similar, but smaller contract modification -- again, the fifth of seven possible one-year exercisable options for supplying equipment to the U.S. Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Similar to Siemens' award, the contract states that it is for the supply of radiology systems, and also "components, upgrades, accessories, and installation" services. This award has a maximum potential value of $90.2 million and runs through March 29, 2015.

Shares of Apple  have been range-bound for a while, as investors have been skeptical about the company's future growth prospects after weak guidance for the current quarter. Apple's deal with China Mobile  will start showing up in the company's financials, which should surprise to the upside. 

Long-term benefits
Apple's revenue guidance of $42 billion-$44 billion implies flat year-over-year revenue. Investors weren't overly happy about the lack of growth in Apple's top line. The company did see a 6% increase in iPhone revenue in the last quarter, and its all-important gross margin stood at 37.9%. Going forward, the company's relationship with China Mobile should aid in driving big unit sales.

China Mobile sold 1 million iPhones in the month of February, after it commenced iPhone sales in January. And this momentum should continue as China Mobile grows its 4G network across the country. China Mobile was selling initially in only 16 cities, but over time is expected to launch iPhones in 340 cities. Apple's China deal should lead to revenue growth for the iPhone maker for years to come.

Moving forward, other Apple products, including the iPad and Mac computers, should get a boost in sales, too, as Apple grows its retail presence in China. In fact, Apple's management disclosed that in the last quarter, iPad sales in Mainland China doubled. That is a very positive sign for the company and should aid in growing its software and services business as well. 

Betting on Apple
Apple ended the December quarter with $32 billion yet to be executed in its stock-repurchase program. But after the company's notable drop in stock price after last quarterly earnings, Tim Cook stated that Apple was opportunistic and aggressively bought back $14 billion worth of stock in the two weeks after earnings. The company bought $2 billion in the open market, and $14 billion through an accelerated share-repurchase program, which might take a while to be fully executed. In the last 12 months, Apple bought back more than $40 billion worth of stock, which is a record, according to The Wall Street Journal.

It is evident that the company is wagering big time on its long-term future. Apple's CEO believes that the company is still in growth mode, and he made the aggressive share repurchases because he believes that the company's future products will drive value. 

The buybacks will aid earnings-per-share growth. In the last quarter, Apple's EPS grew 5% and there is room for higher EPS growth, which in turn, should drive higher upside for the stock.

What's on the way?
Investors want to see newer products from Apple, and not just heavy share repurchases alone. The company is being tight-lipped about its future product pipeline, and speculations about future Apple products have been all over the place -- from wearable devices to a mobile payment platform to a television set, and more. Recently, UBS stated that it expects Apple to launch an iPhone 6 in the latter part of the year. Based on the supply chain checks conducted by the analyst Steve Milunovich, they are anticipating a larger screen iPhone. New product launches should pave the way for a higher stock price for Apple.

The bottom line
Apple merits a greater valuation premium than it now commands. Investors' increasing confidence in management's ability to drive innovation in its future products should help on that front. The company buying back large amounts of stock demonstrates management's confidence in its business. And more carrier deals like China Mobile will lead to multi-year revenue and earnings streams for Apple.

Stocks got off to a strong start today thanks to a solid durable goods report, but they faded over the course of the session as another tech sell-off and worries over Russia combined to turn markets downward. The Dow Jones Industrial Average  finished the day down 99 points, or 0.6%, while the S&P 500 dropped 0.7%, and the Nasdaq lost a full 1.4%.

At a meeting in Brussels today, President Obama and European officials discussed stepping up sanctions against Russia, including on its energy sector. Russia is a major exporter of oil and natural gas, especially to Europe, so any decision to avoid doing business with Russia could affect energy prices. Obama specifically promised "more consequences for the Russian economy" if it continued on its current course. Earlier in the morning, the Department of Commerce said that durable goods orders jumped 2.2% in February, better than estimates of 1%, on strong growth in orders for aircraft. Excluding the volatile transportation sector, orders increased just 0.2%.

A A screenshot from Candy Crush. Source: Flickr.

The maker of Candy Crush Saga, King Digital Entertainment  fell 15.6% in its IPO today, the worst debut performance by a stock this year. The stock's slide today seems to reflect investor skepticism about the mobile gaming industry in general especially after Zynga, the maker of Farmville, became one of the bigger flops on the market in recent years. King has made over 180 games, but essentially all of its sales come from Candy Crush, and investors are concerned as sales seem to have peaked falling sequentially in its last two quarters from $620 million to $602 million.

After hours, shares of Citigroup  were tumbling, down 5.7%, after it was the only major American bank to have its capital distribution plan rejected by the Federal Reserve. It was the second time in three years that Citi's plan was rejected as it requested permission to buy back $6.4 billion in shares and raise its dividend. The central bank said there were concerns about the bank's plans for crisis situations, acting on authority given to it by the Dodd-Frank act to ensure that banks are adequately capitalized for a potential recession. CEO Michael Corbat called the decision "deeply disappointing."  The bank pays a quarterly dividend of just a penny per share now, good for a yield of 0.1%.

Finally, Facebook  shares fell 6.9% as investors registered their distaste for its $2 billion purchase last night of Oculus, a maker of virtual reality gaming headsets. Oculus' product has not yet hit the market and it has no sales, but its technology seems to fit with the social network's desire to make the world more open and connected. Still, investors seem to be suffering from sticker shock, especially after Facebook spent $19 billion on messaging service WhatsApp.