Toyota showed the NS4 Concept back in 2012. Does its styling hint at what Toyota has in mind for its revised Camry? Source: Toyota.

Toyota  is the world's largest-selling and most profitable automaker. It's a good situation to be in. But even Toyota has problems, and here's one: The Camry is losing market share.

The midsize Toyota Camry has been America's best-selling car for years. But over the last year, it has lost ground: The Camry is still a good car, but rivals have gotten a lot better, and they've been stealing sales from Toyota's mainstay. One of those key rivals is Ford's  Fusion, which has grabbed sales with its stylish good looks and long list of premium features.

Toyota has said that it will defend the Camry's top-dog status, but it hasn't yet said exactly what it has in mind. But we do know this: The company plans to show off a revised Camry at this week's New York International Auto Show.

Fool contributor John Rosevear will be there when it's unveiled. As he explains in this video, there are good reasons to think Toyota could be aiming its overhauled Camry straight at Ford's handsome Fusion. 

A transcript of the video is below.

John Rosevear: Hey Fools, it's John Rosevear, senior auto analyst for Fool.com. The New York International Auto Show starts this coming week, media days are Wednesday and Thursday, and we're expecting the automakers to unveil several interesting new models. I'll be there with my Foolish colleague Rex Moore, we'll bring you a video report of the show's highlights at the end of each day, and we'll have a bunch of more in-depth reports for you over the next week or so after that.

One of the vehicles we're expecting to be a highlight of the show -- in fact it's the very first press conference on the agenda -- is an overhauled version of the Toyota Camry.

Now, this isn't an all-new Camry, it's what is normally called in the industry a "mid-cycle refresh." For most automakers, with most models, that means maybe a grille and new taillights and maybe some tweaks to the interior or the suspension or something, changes intended to make the existing model a little fresher and keep its sales strong for a little longer, but not a whole new model.

But Toyota has been hinting that they have something much more dramatic in store for the Camry. They really seem to be feeling the need to do something significant, because the Camry has been under a lot of pressure over the last year or so. The Camry has been America's best-selling car for a long while, but lately, it has been losing market share, and that's not because the current Camry is bad, it's because the competition is a whole lot better than it used to be.

The Honda  Accord has always been a very polished product, it has always been the Camry's chief rival. That's all still true, but now there's the Nissan  Altima hitting the Camry hard on price from one side, and the Ford Fusion hitting it on the other side, as a more stylish and somewhat more premium alternative. Now, Toyota certainly has the muscle to win a price war if it really wants to do that, but it might be trying a different approach.

There has been some speculation that the Camry will get a more dramatic restyling than we usually expect with a mid-cycle refresh, I've included a couple of photos of a concept car that Toyota showed in Detroit in 2012 called the NS4, it's a plug-in hybrid sedan, and as you can see, it's got much more dramatic styling than the current Camry does. It's possible that Toyota will do something like this with the Camry to try to fend off the Fusion.

Or, it's possible that there's some other significant new feature coming, a new hybrid drivetrain or something. But clearly, from what Toyota has said, and from the fact that they grabbed the very first press conference slot at the show in order to say it, this is going to be a big deal. And since this is America's best-selling car, it should be big news, and we'll have it all for you when it happens. Thanks for watching.

Shares of Pier 1 Imports are up today after the company beat analyst expectations in its fourth-quarter earnings on both the top and bottom lines. Meanwhile, Bed Bath and Beyond shares fell today after guidance for the new fiscal year was weak, with one analyst saying that the company was "searching for meaning."

However, in this segment from Thursday's installment of Investor Beat, Motley Fool analyst David Hanson tells investors why he just can't get excited about either one of these stocks. He notes that only 4% of Pier 1's sales are online, which is shockingly low considering the retail trends that are rapidly shifting in that direction. In the video, David discusses the strategic missteps for both companies, and tells investors why he just isn't interested in either one.

There have been major developments in the past month in the race for liquefied natural gas (LNG) export profits. And those developments will mean big profits for the companies and investors who get there first.

Houston-based Cheniere Energy was the first to get Department of Energy LNG export facility approval, and now it has signed another major export customer, moving it into pole position.

According to the Cheniere website, Spain-based Endesa Generacion S.A. agreed to buy about 1.5 million tonnes per annum of LNG from Cheniere's Corpus Christi facility once it is operational. The agreement will extend for 20 years from the date of first delivery, with an option to extend. Deliveries are expected to begin as early as 2018. 

In December, Cheniere signed a 20-year agreement with the Indonesian state-owned company PT Pertamina. Not surprisingly, Cheniere stock continues to hit new highs. The stock has increased almost 28% in the last 12 weeks.

But in spite of Cheniere's achievements, the race is not yet won, or even over for the competitors.

The runner-up
Hot on the heels of Cheniere is Dominion Resources , the Maryland-based utility company.

On March 31 the company announced that its wholly owned subsidiary Dominion Midstream Partners has filed a Form S-1 with the U.S. Securities and Exchange Commission (SEC) for an initial public offering of common units in a master limited partnership (MLP). (The new MLP expects to apply for a listing on the New York Stock Exchange under the ticker symbol DM.)

The MLP will benefit from and include all the outstanding preferred equity interests in the Cove Point LNG import and regasification plant in Maryland, as well as a 136-mile pipeline that connects the Cove Point plant to onshore interstate pipelines.

Dominion Midstream should also anticipate a burst of environmental protest against the plan. Environmental groups energized by their success at delaying -- and possibly killing -- the Keystone XL pipeline have taken aim at the proposed liquefaction plant.

As is common with MLP spinoffs, Dominion will retain 100% ownership of the general partner of Dominion Midstream and 100% of the incentive distribution rights. Dominion will also retain a majority of the common units in the new MLP.

Dominion's fourth-quarter 2013 earnings beat the top line but missed on the bottom. Operating revenue beat estimates by 4.8%, and the company enjoyed higher sales. But fourth-quarter adjusted earnings per share were only $0.80, $0.08 below analyst estimates. The company affirmed its long-term earnings growth of 5%-6% per share.

Dominion is still a great long-term utility investment, especially with recent developments in wind and solar energy. The stock has gained nearly 20% over the past year and continues to climb. The forthcoming MLP will definitely be one for energy investors to watch.

And the bronze goes to Canada!
In the back of the pack, but gaining momentum, is the newest contender in the LNG race: Canadian company Veresen  received Department of Energy approval on March 24 for the proposed Jordan Cove Energy Project in Coos Bay, Ore. It is the first approval for an Asia-focused export facility.

ExxonMobil , Chevron, and CNOOC are among companies that have proposed projects to export LNG to Asia, where gas prices are five times higher than in North America.

But the export approval may not be reason enough to invest with Veresen. The company is trading at 65 times trailing earnings, and has more than $1.2 billion worth of debt on the balance sheet.

The Jordan Cove facility joins other approved facilities, including the Freeport LNG Development in Freeport, Texas. ExxonMobil is in a partnership with Qatar Petroleum International to own and operate the Golden Pass facility, also in Texas. And Sempra Energy has received approval for the Cameron LNG terminal in Hackberry, La.

As of March 31, there are seven approved LNG export facilities. The companies with existing approvals already are lengths ahead in the LNG profits race, as are the investors who get in early.

In this segment from Thursday's edition of Investor Beat, Motley Fool analyst David Hanson tells investors why he's got his eye on Facebook stock ahead of its earnings release in two weeks. Facebook has made headlines a number of times recently with a lot of big-ticket flashy acquisitions, and some investors have started to express concern about the company's capital allocation strategies. David takes a moment in the video to remind investors of one key fact about CEO Mark Zuckerberg that gives him a lot of faith in the company's long-term prospects.

Jesse Redniss, chief strategy officer at Mass Relevance, co-hosted the "How to Monetize the 2nd Screen Evolution" panel at the South by Southwest Interactive conference in Austin, Texas. Walt Disney's  ESPN provides the most obvious use of the second screen, with apps that allow such things as enhanced stats and profiles on a mobile device while a game is being watched on another screen.

But what's coming down the road? Redniss spoke with Fool analyst Rex Moore in Austin, and in this video he explains how wearable technology will play a big role in the future of the second screen.

A full transcript follows the video.

Rex Moore: Final question: I think you said $8.9 billion industry for second screen in a few years. What do you envision in the future, that maybe we can't even hardly imagine right now, but you've certainly been thinking about?

Jesse Redniss: When you think about it -- and I just talked to another gentleman over here about the wearable technology space, and how that's going to come into the market.

In my talk, I was talking more about the unified screen experience in which segregating out mobile, tablet, laptop, desktop, television -- all of that's going to be converging, so it's all about the screen that's most useful to you and most convenient to you, whenever you are and wherever you are.

As your consumer journey goes across screens, the content that's there should be going across screens, too. Therefore, the revenue that's being generated across all those screens needs to be bucketed all together.

That's now going to move into the wearable space, too. It's going to move into the digital billboard space, too. It's going to be moving into the location-based mobile space. It's going to get massive, so figuring out how you actually create the consumer experience -- the journey as a consumer is going and seeing all these different screens and putting on these different wearables -- is going to be really important.

It's a big challenge that I think a lot of people are really excited about taking on, because everyone loves a challenge!

The fight between Carl Icahn and eBay about whether or not it would spin off its PayPal business is officially over. PayPal will remain a part of eBay, but the company has named the former CEO of AT&T, David Dorman, to its board of directors, a move which satisfied Icahn.

On Thursday's Investor Beat, host Chris Hill and Motley Fool analyst David Hanson talk eBay, PayPal, and Carl Icahn. David notes how unusual it is for Icahn to back down from a position like this, and thinks eBay and its shareholders should be happy with the fact that this feud will now be out of the headlines.

Then, shares of Pier 1 Imports are up today after the company beat analyst expectations in its fourth-quarter earnings on both the top and bottom lines. Meanwhile, Bed Bath and Beyond shares fell today after guidance for the new fiscal year was weak, with one analyst saying that the company was "searching for meaning." However, David says he just can't get excited about either one of these stocks. He notes that only 4% of Pier 1's sales are online, which is shockingly low considering the retail trends that are rapidly shifting in that direction. David discusses the strategic missteps for both companies, and tells investors why he just isn't interested in either one.

And finally, David tells investors why he's got his eye on Facebook stock ahead of its earnings release in two weeks. Facebook has made headlines a number of times recently with a lot of big-ticket flashy acquisitions, and some investors have started to express concern about the company's capital allocation strategies. David takes a moment in the video to remind investors of one key fact about CEO Mark Zuckerberg that gives him a lot of faith in the company's long-term prospects.

Did CEO Mary Barra's testimony before Congress expose a deeply flawed GM? Photo credit: General Motors Co.

Shareholders of General Motors have been watching the news around the company's recall scandal with some trepidation. 

On the one hand, the stock has been holding up fairly well, with most big investors taking the view that the events would pass in time without doing too much harm to GM's long-term prospects. Toyota's experience provides good reason to take that view. 

On the other hand, those of us who have spent many years watching General Motors have been wondering if there's another shoe waiting to drop.

That shoe might have dropped on Wednesday.

A leading GM bull changes his mind
Morgan Stanley auto analyst Adam Jonas is widely perceived as one of the sharper observers of the global auto business. His has been one of the stronger voices making the case for GM as an investment. But that abruptly changed on Wednesday, when Morgan Stanley downgraded GM"s stock to underweight and lowered its price target for GM shares from $49 to $33.

The Detroit News quoted Jonas as saying, "We think the market's got it right on GM valuation and no longer see significant risk-adjusted upside."

Ouch.

That's a sharp change of course for Jonas, who -- like many of his peers -- was quite bullish on GM's prospects as recently as January. 

So, what has changed?

I think that's the problem is that it's starting to look like not enough has changed.

Meet the new GM... a lot like the old GM?
It's no secret that GM was a very broken company before its 2009 bankruptcy. Too much bureaucracy, hilariously inadequate financial controls, broken product-development processes, too-high fixed costs... the list of problems was a very long one.

GM did have some things going for it, even then: Its factories and production processes were modern and well-run, it had a surprising amount of first-rate talent within its engineering ranks, and it had -- somehow -- a steady, if slowly dwindling, group of loyal customers.

The bankruptcy fixed some of that in one fell swoop. Freed of a slew of underutilized factories and heavy debts, GM's cost base was suddenly far more competitive. 

But plenty of problems remained, starting with the still-broken GM bureaucratic culture and its long-misplaced priorities that threatened to sabotage any revival. 

That culture, more than anything else, is what former CEO Dan Akerson set out to fix when he took charge in the fall of 2010. Akerson didn't know the car business when he took over -- but he knew business, and he could see a lot of what GM needed. 

And he had a very good model just a few miles away: Ford's old problems weren't exactly the same as those that GM was facing, but the Blue Oval's thoroughly convincing turnaround provided a rough road map for addressing GM's lingering issues.

Akerson did a lot of good work. Some things really have changed. GM already has much better internal reporting and financial controls, and it's implementing thoroughly up-to-date systems to improve them still further.  GM's product-development process has been completely overhauled and the results are far better cars and trucks -- and lower costs. 

Strong new GM products like the excellent Chevy Impala sedan have helped convince investors that GM's turnaround is for real. Photo credit: General Motors Co.

But when CEO Mary Barra went before Congress making promises of transparency -- but couldn't answer a lot of questions about the circumstances around the recall -- it gave the impression that GM still has too many layers of dysfunctional bureaucracy. That GM management still doesn't know what's going on in the far-flung reaches of the company. 

That led a lot of people, including your humble Fool, to wonder if GM had really come as far as we'd thought. 

The case for owning GM stock boils down to the belief that GM is finally getting its act together, that it really is following the path blazed by Ford. There have been a lot of reasons to believe that that's true, that a genuine transformation is well under way. If so, it's easy to argue that GM stock remains a good buy, recall woes notwithstanding. 

But what if GM really hasn't changed all that much?

Apparently, Jonas and his team at Morgan Stanley have been asking themselves the same questions.

It's not too late for Barra to change this, but it's getting late
Barra has spent a lot of time in the last few weeks telling us -- GM customers, Congress, the media, the American public -- how much GM has changed.

Barra has been employed by GM since 1980. I have no doubt she feels GM has changed tremendously over the last few years and that her statements are sincere and heartfelt.

The problem is, she hasn't yet been able to show us that GM has changed and we have decades' worth of reasons to be skeptical. 

We need actions, not words, and we need to see them soon. Without the actions, the words don't mean much. 

It's not too late. Some strong moves from Barra could still change minds.

But when you've got even top-drawer Wall Street analysts hinting that it's the Same Old GM after all, it's getting very late.

Time Warner may be getting closer to offering stand-alone HBO on-demand service, Fool contributor Tim Beyers says in the following video.  

How can we know? HBO is conducting more experiments with digital distribution, including placing the entire first episode of Silicon Valley, its new comedy series, on YouTube. More than 300,000 have tuned in as of this writing.

The experiment comes on the heels of another. Barely a month after an Internet simulcast of True Detective brought HBO Go to its knees, the Game of Thrones Season 4 premiere did the same. In each case, password sharing appears to have crashed HBO's servers. Hardly surprising when you consider that Game of Thrones is already the most pirated show in television.

Looks like there's trouble in the realm. Apologies for the inconvenience. We'll be providing updates, so please stay tuned. #GameofThrones

— HBO GO (@HBOGO) April 6, 2014

For his part, HBO chief Richard Plepler has made it clear that he wants to find a way to offer individual HBO Go subscriptions, but only when the math makes sense. Little experiments -- like the one with Silicon Valley -- may help clarify the profit potential of stand-alone HBO on-demand service, Tim says.

Now it's your turn to weigh in. How much would you pay for a stand-alone HBO on-demand subscription? Please watch the video to get the full story, and then leave a comment to let us know your take, including whether you would buy, sell, or short Time Warner stock at current prices.

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 Gogo Inc rose more than 10% early Thursday, then settled to close up around 1% after the in-flight connectivity specialist announced a technical services agreement with Boeing.

So what: The news follows a nearly 7% pop yesterday, which occurred after Gogo announced a partnership with Air Canada to bring Wi-Fi to its North American fleet in May. The Air Canada deal also included future type-testing beginning in 2015 of Gogo's satellite solutions for Wi-Fi on international flights.

However, today's Boeing agreement is different in that Boeing hasn't officially approved a wide-scale partnership just yet. Rather, it's a solid first step as Boeing evaluates Gogo's suite of technology solutions for new aircraft orders. Gogo, for its part, says it's targeting having line-fit evaluations completed for its new "ATG-4" technology by 2015, and satellite solutions by 2016.

Now what: That said, Gogo does already have an agreement in place for line-fit provisions for ATG-4 on Boeing's 737NG aircraft, and it seems likely its tech will eventually make its way into the rest of Boeing's fleet. With shares still down around 20% during the last month, I wouldn't be surprised if the stock has some upside left for patient long-term investors.

The Department of Defense awarded 15 defense contracts Thursday, worth $521.9 million altogether. Among the publicly traded companies winning work:

• Jacobs Engineering was awarded a $67 million option exercise to perform additional diverse engineering, technical and acquisition support services for the U.S. Air Force. This work will include a small amount of foreign military sales for the governments of Australia, Bahrain, Belgium, Canada, Chile, the Czech Republic, Denmark, Finland, Germany, Greece, Hungary, Israel, Italy, Japan, Jordon, Kuwait, Malaysia, Morocco, Norway, Oman, Pakistan, Poland, Portugal, the Republic of Korea, Saudi Arabia, Singapore, Sweden, Switzerland, Taiwan, Turkey, the United Arab Emirates, and the United Kingdom. This work is expected to be complete by Oct. 18, 2014.
• Northrop Grumman was awarded a $25.2 million option exercise to perform Army Knowledge Online Enterprise Services web-based enterprise information services for the U.S. Army through April 12, 2015.
• Huntington Ingalls was awarded a $7.7 million option exercise to perform engineering and technical-design services in support of research and development on advanced submarine technologies for the U.S. Navy through January 2015.
• Boeing was awarded a $6.6 million contract modification to supply the U.S. Navy with eight Reconfigurable Transportable Consolidated Automated Support System-Depot (RTCASS-D) conversion kits, with delivery due August 2015.
• Elbit Systems won a new contract worth up to $12.2 million to supply improved signal data converter to the U.S. Army for use in its helicopters. Delivery is due April 9, 2016.

link

Bridgepoint Edcuation is one of the three losing positions -- of the 19 currently held -- in my Messed-Up Expectations portfolio, the real money portfolio I run on behalf of The Motley Fool. I purchased it twice in mid-2011 at around $22 per share, and then suffered through the massive drop in price to below $10 about a year later. By late 2013, it had clawed back up to near my purchase price, but its recent earnings release for 2013's fourth quarter has put paid to that. At least in the short term.

The company was hurt in 2012, thanks to accreditation issues, especially at Ashford University, one of Bridgepoint's two brands. Those were resolved in 2013 and the agency, Western Association of Schools and Colleges, granted accreditation to the university last summer.

Unlike the price drop in 2012, the recent share price drop was for a more prosaic reason: The company missed earnings estimates. Well, that and the fact that total student enrollment had declined by 22% year over year. Plus, you could probably add management's less-than-stunning guidance for 2014, and here we are with shares down about 25% from their February high.

It's actually not as bad as the surface numbers make it appear. It reported a loss of $0.12 per share when analysts were expecting a break-even level. Most of that loss, $0.10 of it, was due to a one-time legal accrual charge, so that much should be ignored (as long as it doesn't become a regular thing); but the company still ended with a loss. On the other hand, new student enrollment was up for the quarter, by 10%.

The company's not about to go bankrupt anytime soon, however, despite the disappointing Q4 results. For one thing, over half of its market cap is sitting in cash and investments, and it has no debt. For another, it's continuing to improve its marketing, targeting potential students who are more likely to graduate and find jobs, something the administration is concerned about. Rebranding Ashford University's business school as the Forbes School of Business  at Ashford University doesn't hurt these efforts, either.

I'm satisfied that the company is on the right track and will turn the situation around, possibly sooner than a pessimistic market is willing to believe. Thus, I'm going to take advantage of the 25% drop to lower my cost basis on what I believe is a winning company, and add shares as soon as Fool trading rules allow.

Do you think timberland and real estate will preserve value or appreciate over the next 10 years?

If so, Plum Creek Timber is a solid stock worth considering for your long-term investment portfolio. Plum Creek controls one of the largest, most geographically diverse land banks in the world.

Conscious capitalists
Rather than being a slumlord of the forest, Plum Creek's team of foresters are great custodians of the wilderness. They strive to make every acre of land the best that it can be for all stakeholders: community, environment, employees, and shareholders. Outside of buying acreage directly to build your chalet or pitch a tent, Plum Creek could be the next best option. It offers liquidity, and a yield north of 4%.

How does 4.2% sound?
Plum Creek's latest 10-K filing said the company has 177,094,071 shares outstanding. Dividing shares outstanding by 6.8 million, the number of acres it owns, we get 26. The means owning 26 shares of Plum Creek's stock is equivalent to owning one acre of land, excluding other asset and debt considerations. At recent prices, that would be an investment of $1,094.

Average pricing for an acre of timberland peaked in 2007 at about $1,800 -- prices during the low points of the 1990s and 2000s were around $600 per acre.

Symptoms of cyclicality
In addition to selling land, timber REITs such as Weyerhaeuser , Potlatch , and Plum Creek generate a healthy percentage of revenue from wood products. Therefore, when the housing market is sick and new construction starts slow, these stocks could catch a cold. Knowing that, keep the Echinacea and Vitamin C on hand just in case.

Going once ... going twice ... $1,114 per acre
Potlatch is the fourth-largest timber REIT and has 40,536,879 shares outstanding, according to its latest 10-K filing. Dividing that by the number of acres owned, 1.4 million, we get 29. Excluding debt outstanding and manufacturing assets, Potlatch is selling for the equity equivalent of $1,114 per acre (multiply 29 by $38.43 per share). For that price, it will even throw in a quarterly dividend of $0.35 per share, which calculates out to a 3.6% yield.

Eighty-five percent of its acreage holdings are located in Idaho and Arkansas. The location-location-location portion features 3,000 miles of waterfront property.

The circle of life
Not unlike Plum Creek and Potlatch, Weyerhaeuser's wood products are used in the building and remodeling of homes. In addition, Weyerhaeuser also sells a load of paper products and cellulose fibers. Seedlings grow up to become trees, eventually finding their way into everyday items such as diapers, newspaper, and milk cartons.

Buy Weyerhaeuser now and get a free gift!
Weyerhaeuser announced in November it would merge its homebuilding division, WRECO, with a subsidiary of Tri Pointe Homes , a builder specializing in new home and community development. The deal is anticipated to close in the second quarter of 2014. Weyerhaeuser shareholders will receive an 80% ownership interest in the combined entity, which is expected to have a market valuation of $2.5 billion. It will be among the 10 largest public homebuilders, with approximately 30,000 lots across California and Colorado.

Going back to its roots
By chopping off WRECO, Weyerhaeuser will be a forestry-focused entity. Excluding any considerations for manufacturing assets and debt, I'm forecasting that Weyerhaeuser's per-acre price will be approximately $2,164. It will be priced at a premium relative to Potlatch and Plum Creek, and rightly so, because of its larger and more diversified wood products businesses. As a stand-alone, the cellulosic fibers segment had $1.9 billion in net sales during 2013.

Also explaining the premium, 2.6 million of Weyerhaeuser's nearly 7 million acres are located in the Pacific Northwest (Oregon and Washington state). Land and timber values there are worth more than acreage in the South, where Potlatch and Plum Creek are overweighted.

Why invest in timberland?
The reasons are many, but I will mention a few. Prices will never drop to zero. Land cannot be printed (not even with a 3-D printer), and we're not making any more of it. Population growth will drive demand for wood products worldwide.

I can tell you that Canada's share of the U.S. lumber market will drop due to the Pine Beetle epidemic. Peak lumber by 2016? U.S. producers will have to pick up the slack. Collect dividends while you wait.

 

Photo credit: ConocoPhillips 

The Eagle Ford Shale just keeps getting bigger. ConocoPhillips was the latest company to point out that its oil position in the play is much bigger than previously thought. In fact, the company now estimates that its position in Texas' Eagle Ford Shale is actually 40% larger than earlier estimates. Because of the company's vast technical knowledge of the play it now estimates that its acreage position now holds 2.5 billion barrels of oil.

Why the Eagle Ford Shale continues to grow
As Eagle Ford Shale focused drillers have developed the play, we've continued to see upward revisions to previous resource estimates. EOG Resources , for example, noted that its resource potential in the Eagle Ford Shale is now 45% than its previous estimate. EOG Resources now sees its oil recovery in the play being 3.2 billion barrels of oil equivalent, which is 250% higher than its original estimate. A combination of better data on wells, improved completion techniques and downspacing of wells are all providing a noticeable boost.

We might not have seen the last boost in resource potential from either company. As the following slide shows, ConocoPhillips is still evaluating further upside opportunities within its Eagle Ford Shale acreage.

Source: ConocoPhillips Investor Presentation (Link opens a PDF) 

The company is working on tighter spacing of its wells in addition to testing the Upper Eagle Ford Shale. Beyond that there could be potential for the Austin Chalk on its acreage position. The fact that EOG Resources has already demonstrated success with tighter 40 acre well spacing bodes well for ConocoPhillips suggesting it likely will add even more recoverable oil in the future.

In addition to these tests energy companies continue to improve well designs in order to get more oil out. EOG Resources recently demonstrated that it can produce enormous quantities of oil from its wells as its getting better at finding the right mix to get more oil out of each section. The company recently reported stunning well results to the Texas Railroad Commission as five of its newest wells produced 13,000 barrels of crude oil per day. With shale wells producing over a thousand barrels per day considered exceptional, these wells which averaged between 2,314 to 3,071 barrels of oil per day were truly remarkable. Finding the right keys to unlocking the oil trapped in the rocks not only improves returns but it improves the ultimate recovery of oil from the play. ConocoPhillips is finding that changes it made to well designs has resulted in it doubling its cumulative production. 

Then there is the Upper Eagle Ford Shale and the Austin Chalk that hold upside promise to extend growth for Eagle Ford leaseholders. While ConocoPhillips has a handful of wells planned this year to explore the Upper Eagle Ford Penn Virginia Corporation  is already one step ahead of it. As a slide from a recent investor conference showcases, Penn Virginia has already seen solid results from that formation.

Sources: Penn Virginia Corporation Investor Presentation (Link opens a PDF)

While its still early, the results experienced by the industry so far is compelling enough to entice producers to explore that section. As producers delineate the Upper Eagle Ford and Austin Chalk there is the possibility that the play will continue to keep getting bigger.

What this means for investors
ConocoPhillips sees its Eagle Ford Shale position producing 250,000 barrels of oil equivalent per day, or BOE/d by 2017. That's growth of more than 100,000 BOE/d from the 141,000 BOE/d the company was producing out of the Eagle Ford just last quarter. Given the upside it's seeing within the play, there is likely more production growth to come beyond 2017 as the company continues to optimize the development of this play. That should yield even better long-term returns for its investors. 

Activist investment firms Starboard Value and Barington Capital are up in arms over Darden Restaurants' plan to spin off Red Lobster. While the activist investors feel that Darden should be broken up, they also content that throwing Red Lobster out to sea, so to speak, isn't the answer. These investors own a combined 7.5% stake in the company and are demanding that their voices be heard at a special meeting before the spin off takes place. Darden Restaurants management, however, stands behind its proposal to spin off Red Lobster.

The question for this Fool becomes, who is right and what's a Fool to do?

A history of underperformance
The most frustrating thing for Darden shareholders has been the stock's performance since 2010. For more than four years, shares have been stuck in a $30 to $55 range, mostly in the low $40s. Investors have been left owning a company with a stagnant share price. The only saving grace has been the company's high dividend yield; shares of Darden currently yield of 4.3%. But since the company is already paying out 86% of its earnings, I don't expect the dividend to go much higher.

Starboard's history
Starboard Value is certainly taking a proactive approach. It recently released a detailed presentation opposing the Red Lobster spinoff. This follows the firm's history of investing in underperforming companies and looking for ways to increase shareholder value. Starboard has been an active investor for more than 12 years. During that time, it has added or replaced 115 corporate directors on about 40 companies.

Starboard's argument
Starboard says now is the worst time to spin off Red Lobster. This is mainly due to Red Lobster's poor performance. Restaurant traffic, same-store sales, and margins have all deteriorated. Starboard has a point. If Red Lobster were spun off, investors would not actually be lining up to buy shares in a struggling restaurant chain.

Starboard feels that Red Lobster should be turned around first. The firm is also unhappy with management's plan to turn the chain around. Its argument is that Red Lobster does not need to be a separate company for change to occur. Matter of fact, changes need to be happening now.

Plenty of value in the real estate
Starboard Value considers the real estate that Darden is sitting on highly valuable. It values the real estate at as much as $4 billion. Starboard thinks the real estate should be spun off. Doing so would create a restaurant operating company and a REIT.

If Darden goes ahead and spins off Red Lobster, a good portion of that real estate value would disappear too. This is because a good portion of Darden's real estate value comes from Red Lobster. Starboard's opinion is that Red Lobster's poor operational performance would lower the value of the real estate if Red Lobster were to be spun off.

How is the competition doing?
Some of Darden's competitors have fared much better over the past few years. Two companies with multiple concepts in their portfolios include Brinker International and Bloomin Brands . Both companies have seen their shares rise more than 30% in the past year.

In Brinker International's latest quarter, its Chili's brand saw comparable sales increase 0.3% in the U.S. and 1.4% internationally. Brinker's Maggiano's Little Italy, which competes with Olive Garden, saw comparable sales rise 0.9%.

Bloomin Brands' latest quarter saw comparable sales for company-owned restaurants in the U.S. rise 1.4%. Total revenue increased 5.2% to $1.1 billion. The company continues to expand; it opened 15 new restaurants and renovated 36 locations in the period.

How do shares compare? 

Source: Yahoo! Finance

Foolish assessment

I have to agree with many of the points made by Starboard Value. Now does not look like the time to spin off Red Lobster. However, there is something to be said that if a spin-off were to occur, then management at Red Lobster would not be dealing with other aspects of Darden's organization. Management would be focused solely on turning around Red Lobster.

Overall, I see great value that can be unlocked for shareholders in Darden's brands and real estate. Hopefully, Darden management and Starboard Value can come to an agreement that increases shareholder value and benefits the company and its shareholders.

Recently, the Fool sat down with Zillow CEO Spencer Rascoff to get an update on the company's current strategy and learn more about how Rascoff sees Zillow's future opportunity. Joining Zillow as one of the founding employees in 2005 and at the helm since 2010, Rascoff brought Zillow through its IPO and has overseen the strategy that has led its stock to more than triple over the past 17 months.

In this video segment, Rascoff explains that mobile usage migration also drives monetization migration, due to the nature of the real estate market. He also explains the role of online and offline advertising in Zillow's bid to grow its lead over the competition.

Brendan Byrnes: Let's talk about mobile; 65% of your traffic is coming from mobile. For a lot of media companies, that would scare them because advertising is so difficult on mobile. But I don't think that's the case for you guys. Could you talk about the different dynamics there, and how you guys monetize mobile?

Spencer Rascoff: Real estate is the perfect use case for mobile. It's when you're driving around looking at a home, or walking around looking at a neighborhood, that you want access to real estate information -- when you're untethered. Real estate is just perfectly suited for mobile information consumption.

We have been the beneficiary, though, not just of usage migration to mobile, but also monetization. When you're looking at a real estate listing on a smartphone on Zillow, you're three times more likely to contact an agent as when you're looking at the same listing on the desktop.

We benefit from the usage migration but also the monetization migration because ultimately that's how we get paid, is when we connect a consumer with a real estate agent.

Byrnes: Let's talk about some advertising you guys are doing -- $65 million this year, versus about $40 million last year -- a lot of that going to TV. Could you talk about the overall strategy there, and TV in particular? I'm sure a lot of people have seen those ads.

Rascoff: Yes. TV, but just generally advertising for us, has been very effective. In 2013, we spent around $35 or $40 million, and we tripled the size of our lead over the competition. We really ran away with the category in terms of audience growth last year, and based on the results we saw last year, we're nearly doubling our investment in 2014.

As I mentioned, it's because advertisers follow audience. We see this in every category, whether it's in search marketing -- Google has query dominance. They have 65% query share in the U.S., but they have almost all of the search advertising budget in the U.S. YouTube has the bulk of video consumption, and therefore they get the bulk of video advertising.

Advertisers follow audience. We need the audience leadership, and advertising for us helps amplify our audience leadership.

Byrnes: What's the rough breakdown in advertising? I don't know if you're willing to share that or not.

Rascoff: Between online and offline?

Byrnes: Right.

Rascoff: It really changes. We go into the year with a budget, but then during the course of the year, based on what we're seeing, we adjust. We may dial up online search engine marketing and dial down mobile acquisition, or dial up TV and dial down other forms of marketing, through the course of the year as we see the market dynamics changing.

Byrnes: When it comes to marketing for a company like Zillow, that's very data-based, is it more difficult as far as television goes? You're not necessarily looking exactly; you can't pinpoint the leads, and you can't pinpoint exactly the kind of revenue that you're bringing in from that.

Rascoff: That's a great question. Television is harder to quantify than online media, for sure. For us, though, our brand is still so new and we're still in the brand-building stage, that we're comfortable with the inherent ambiguity in television advertising.

You can measure it, but it is harder to measure than direct response advertising online, for example, where you buy a click from Google and you know exactly what happens to that user, downstream. TV's a little bit more amorphous, but I'm comfortable operating in that environment.

Source: Las Vegas Sands 2013 10K presentation.

executives have pointed to five trends that will lead to continued growth in Macau over the next five years. Diving into the second trend on the list, the growing number of Chinese citizens that now have the ability to travel outside of the Chinese mainland is driving growth in Macau and driving profits for gaming companies like Las Vegas Sands, MGM International , Wynn Resorts , and Melco Crown . While only 83 million Chinese traveled outside of the mainland in 2012, the number could nearly double in the six years from 2012 to 2018, according to estimates.

Betting on more Chinese leaving the Mainland for Macau
This growing number of Chinese leaving the mainland for travel and leisure is a bullish sign for gaming investors, because Macau has become a destination for not only the VIP gamblers of China's elite, but increasingly the middle class as well. As more and more Chinese have the means for leisure travel, many of these travelers will begin bringing families to Macau for the entertainment, site-seeing, and, of course, gambling for the parents.

According to research by Nielsen Group, the number of mainland tourists traveling to Macau grew 12% in 2013 over the previous year. The research also shows that, while the bulk of tourists to Macau historically made trips to Hong Kong and added Macau as a side stop, more consumers are now going straight to Macau without visiting Hong Kong, showing Macau's growing allure as a travel destination all its own. During this year's Chinese new year celebration from January 31 to February 6, 770,000 mainland Chinese visited Macau, more than the island's 600,000 total permanent residents and 23% more than visited Macau during the same holiday season last year. During the entire month of January, 1.6 million visitors came from mainland China to the gambling island, by far more than any other country or area including Hong Kong.

Data: Macau Hub

How investors can gain on more mainland families playing in Macau
Las Vegas Sands, MGM International and Wynn Resorts are all hoping that their new casinos, which will be completed in 2015 and 2016, can woo families with their mixture of entertainment, dining, shopping, and gambling. For instance, Wynn's new floral themed resort, its first property on the Cotai strip, will be similar to the company's Las Vegas property, the Bellagio. The resort will include a massive lake, a light-and-fire show, a gondola to ferry passengers across the lake, and an assortment of giant animal and floral attractions. MGM plans to have its new Cotai-centered casino completed in mid-2016 as well, for only $2.4 billion, compared to Wynn's, built for a price tag of $4 billion. This lower price may help the company to realize profits sooner from the property, though the resort is not expected to be as grand as that of Wynn or Sands.

Las Vegas Sands has already been dominating the Cotai strip with impressive resorts. The two casinos on the strip owned by Sands, The Venetian Macao and the Sands Cotai Central, have already posted solid growth and revenue. Sands Cotai Central, for example, reported a 61% jump in revenue and a more than 250% surge in operating income for 2013. The company's new megaresort on the strip will be opened a full year earlier than these two, which have target completion dates in summer 2015. The Parisian promises to be even more spectacular than its two predecessors. This $2.7 billion Integrated Resort will include over 3,000 hotel rooms and suites, around 450 table games, 2,500 slots, a retail mall, and a replica of the Eiffel Tower at 50% scale. While Sands is a great bet on the continuing trend toward more leisure travelers to Macau, it may not be the best bet for growth and return to investors following this trend of leisure travelers.

This potentially undiscovered company might be the best growth bet for this trend
One company stands out in family entertainment. Within their very bullish report on the global gaming market in 2014, Hong Kong-based Citigroup analysts pointed to this one company to out-perform in the coming years. That company is local Melco Crown. The analysts believe the investor community has not realized the importance of the company in Macau, nor its international opportunities in other Asian markets, such as Japan and the Philippines. Additionally, Studio City, Melco Crown's coming Cotai property, is said by the Citi analysts to be the best-located casino on the Cotai strip.

House of Dancing Water, performed at Melco Crown's City of Dreams resort. Photo: HouseofDancingWater.com

The City of Dreams resort in Macau brings entertainment to a new level. World-renowned live acrobatic and dance shows housed in the Macau casino, such as the beautiful House of Dancing Water, have made this property a destination for vacationers, even those who are not gambling. As this trend of leisure travel brings more and more travelers seeking entertainment along with their gambling, Melco Crown is in a great position to continue capitalizing on this gain.

Foolish takeaway
The vastly growing number of Chinese coming from the mainland to Macau is reason to be bullish on more revenue flowing to the gaming companies in Macau. While the next couple of years will be very exciting, with each company opening up new resorts on the Cotai strip, the company that I'm bullish on for a win on this trend is Melco Crown, with its mix of industry-leading entertainment, well positioned property for its newest casino, and potentially undervalued stock.

 

On the heels of yesterday's market rout, U.S. stocks opened lower on Thursday morning, with the benchmark S&P 500 and the narrower Dow Jones Industrial Average  both down 0.6 % at 10:15 a.m. EDT.

Whether the losses will persist through the day is a guessing game, but investors need to keep in mind that the stock market could certainly fall further if we use valuation as a reference. As of yesterday's close, the cyclically adjusted price-to-earnings, or CAPE, multiple championed by Nobel laureate Robert Shiller suggests the S&P 500 is overvalued by 49% -- an unusually high "margin of vulnerability" by historical standards. While I think that overestimates the gap with fair value, the CAPE has proven to be a reliable indicator of long-term value at its extremes (but note that it is worthless as a timing tool). Furthermore, it appears that the S&P 500 will get no help from bank shares today, with JPMorgan Chase reporting disappointing first-quarter results this morning and Citigroup in the headlines yet again for a supervisory lapse.

On the headline numbers, JPMorgan missed Wall Street's consensus estimates for both earnings per share and revenue, with EPS coming in at $1.28, 9% lower than the $1.41 forecast. Both revenue and EPS were also down from year-ago figures.

The culprit appears to be the corporate and investment bank unit, in particular fixed income markets, which suffered a 21% year-on-year drop in revenue. This activity produces volatile earnings, although there is some question whether part of the decline is tied to regulatory changes, including stricter capital requirements, which constrain profitability.

In a market that looks a bit richly valued, I continue to think that the major banks are a pocket of value; among them, JPMorgan looks particularly attractive. At 9.8 times next 12 months' EPS estimate, the shares are cheaper than those of its top five competitors: Goldman Sachs (10.3), Morgan Stanley (12.2), Bank of America (13.9), Citigroup (9.8), and Wells Fargo (11.8).

This is the world upside down: With significant commercial banking activity, JPMorgan's business model is less risky and its earnings less volatile than those of pure-play investment banks Goldman and Morgan Stanley, and, despite the spectacularly bad knock to its image from the "London Whale" trading scandal, it remains a higher-quality franchise than either BofA or Citi.

Consider, for example, that JPMorgan recently reduced its goal for return on tangible common equity from 16% to a range 15% to 16% (it was 13% in the first quarter); compare that to Citigroup, which recently told investors its 10% goal for the same metric in 2015 is now in jeopardy. Wells Fargo, which sticks to its lending knitting and is superbly well run, is the only one of the five that arguably deserves its premium over JPMorgan.

Today Wells Fargo reported its net income stood at $5.9 billion in the first quarter of 2014 and its earnings per share rose to $1.05, each increasing 14% over the first quarter of 2013.

In total Wells Fargo saw its revenue decline 3% in the first quarter from $21.2 billion in 2013 to $20.6 billion in 2014. This was the result of a 46% decrease in its mortgage banking revenue, which fell from $2.8 billion to $1.5 billion. However this decline was partially offset by a nearly $750 million increase in its gains on equity investments.

Offsetting the declining revenue was a significant decline in provision for credit losses -- what Wells Fargo expects to lose on its loans -- which fell from $1.2 billion to $325 million, a decrease of nearly 75%. In addition, it decreased operating expenses and taxes, which fell from $12.4 billion to $12.0 billion, and $2.4 billion to $2.3 billion. These represented declines of 4% and 6%, respectively.

 "We are very pleased with Wells Fargo's performance in the first quarter, particularly in some of the fundamental drivers of long term growth: loans, deposits, investments, capital and credit quality," noted the chief financial officer of Wells Fargo, Tim Sloan, in the press release. "Revenue remained relatively stable despite the impact of fewer days in the quarter, reflecting contributions from our diversified sources of fee revenue."

Wells Fargo also continued to improved profitability metrics as its return on average assets rose from 1.49% to 1.57%, and its return on equity jumped from 13.6% to 14.4%. The bank also reported its efficiency ratio -- which measures the cost of each dollar of revenue -- improved to 57.9%, ahead of 58.3% in the first quarter of last year.

"Our solid first quarter results again demonstrated the ability of our diversified business model to perform for shareholders," added the CEO and chairman of Wells Fargo, John Stumpf ,in the press release. Stumpf concluded by saying, "As we move forward in 2014, I am optimistic about the opportunities ahead and believe that we are well positioned for growth." 

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U.S. natural gas production continues to boom. The problem is that U.S. natural gas consumption growth lags production growth. Instead of betting directly on natural gas prices and waiting for the supply/demand equation to slowly balance out, there is a second option. You can invest in natural gas infrastructure, allowing you to profit from natural gas' growth without worrying too much about prices.

US Natural Gas Marketed Production data by YCharts

Look south
U.S. natural gas consumption is rising, but the chart shows how production is still high when compared to the supply/demand situation before 2006. One of the easiest ways to rectify the supply/demand imbalance is to increase exports.

Liquefied natural gas exports are challenging because of the big costs to cool natural gas. By building pipelines to Mexico and LNG export facilities, midstream companies are able to increase U.S. natural gas exports and remain diversified. Energy Transfer Partners  is pursuing this path. The Federal Energy Regulatory Commission recently gave it permission to build a pipeline from Texas to Mexico with a capacity of 140 million cubic feet per day (mmcfpd).

This company's assets are focused on the Gulf Coast, making it a natural candidate to provide the pipeline hookups for LNG export facilities. Energy Transfer Partners' Lake Charles, La. LNG liquefaction project is already under development, with FERC construction approval expected by mid-2015.

Energy Transfer Partners is not the only company working with Mexico. Kinder Morgan Energy Partners LP has been working on its Sierrita Lateral project for some time. The $200 million pipeline has a capacity of 200 mmcfpd and is expected to come online toward the end of 2014. A FERC permit is still needed; but given FERC's history of approving natural gas export pipelines, Kinder Morgan has little to worry about.

Kinder Morgan Energy Partners or its LLC version, Kinder Morgan Management , are solid ways to profit indirectly from the natural gas boom. In 2014 natural gas pipelines are expected to provide 43% of their cash flow. With an existing network of product pipelines and natural gas pipelines along the U.S.-Mexico border and the Gulf Coast, Kinder Morgan is perfectly situated to support the U.S. energy export boom.

Don't forget natural gas liquids
Thanks to the fracking boom, natural gas liquids production has also grown very quickly. Enterprise Products Partners has a big network of NGL pipelines with established export connections. Its Rio Grande pipeline transports mixed NGLs to Mexico.

Enterprise Products Partners' Aegis pipeline is another good growth play. Its first stage is expected to be in service by the third quarter of 2014, transporting up to 425,000 barrels per day (mbpd) of ethane. By bringing ethane to the Gulf Coast, Enterprise Products Partners is helping to produce more U.S. petrochemical exports.

The financial perspective
All of these midstream plays are in a good position to profit from the booming natural gas market, but they are not equal. Enterprise Products Partners' 2013 distribution coverage ratio of 1.55 is higher than Kinder Morgan's ratio of 1.09 or Energy Transfer Partners' ratio of 1.05. 

Energy Transfer Partners has a significant retail arm that is a drag on growth. Among all segments retail had one of the company's biggest year-over-year falls in 2013 adjusted earnings before interest, taxes, depreciation, and amortization. Kinder Morgan and Enterprise Products Partners are purer midstream plays without significant retail exposure.

Given the low growth possibilities in the retail world, it should be no surprise that Energy Transfer Partners' current year-over-year distribution growth rate of 2.9% is below Kinder Morgan's comparable growth rate of 5.4% and Enterprise Products Partners' growth rate of approximately 6.1%.

Bottom line
There are many ways to invest in natural gas. By investing in midstream companies with healthy pipeline networks close to the Mexican border and the Gulf Coast, you can get a great piece of growing American industry. Kinder Morgan's FERC approval for the Sierrita Lateral should come soon, and Enterprise Products Partners is already exporting NGLs south of the border.

Energy Transfer Partners comes in second place. Its retail operations compress growth, and it already has the lowest distribution coverage ratio and growth rate of these three companies.