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Valuation Doesn't Equal Share Price (and That Goes Double for Biotech)

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Most investors realize that share price is meaningless when comparing companies. A company at $50 per share might actually be worth more than a company at $100 per share because a company's value is determined by the number of outstanding shares in addition to the share price.

But in biotech, you can't even compare the current price of a company's shares to the price a year (or less) ago. MannKind , for instance, ran up the day after its positive advisory committee meeting. While it didn't reach its 52-week high, investors are actually valuing the company more than it was at its previous high because MannKind has sold shares in the interim.

In the following video, Fool contributor Brian Orelli and health-care bureau chief Max Macaluso talk about why looking at a company's market cap is more important than its share price and discuss a few other examples -- Galena Biopharma , Sangamo BioSciences , and ANI Pharmaceuticals -- of companies with market caps that have grown much larger than their stock price because they've sold shares.


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The article Valuation Doesn't Equal Share Price (and That Goes Double for Biotech) originally appeared on Fool.com.

Brian OrelliMax Macaluso, and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Halcon Resources, Bebe Stores, and Akebia Therapeutics Jumped Today

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Investors came back from the weekend refreshed after last week's substantial losses, and the stock market bounced back to produce fairly strong gains Monday. Government data showed a sharp rise in retail sales in the U.S. last month, and that translated into gains of almost 1% for major-market benchmarks. For Halcon Resources , Bebe Stores , and Akebia Therapeutics , though, Monday was an even stronger day, with more sizable gains for the three companies.

Photo credit: Flickr/Paul Lowry

Halcon Resources jumped 9%, following in the footsteps of other big players in the Tuscaloosa Marine Shale area of Louisiana and Mississippi after Goodrich Petroleum announced extremely encouraging results from one of its wells in the area. With Goodrich showing strong production composed almost entirely of oil rather than natural gas, investors hope that Halcon Resources will see similar success in its own extensive holdings in the region. Given that Halcon's holdings are in the same general vicinity as where the well results were from, it's reasonable to expect the fortunes of both companies to remain tied together for at least the near future.

The 15% gain that Bebe Stores gave shareholders today came after an analyst firm upgraded the women's retail stock and boosted its price target by more than a third. The industry niche claimed another victim when Coldwater Creek declared bankruptcy last week, and Bebe Stores has had trouble with falling sales in a difficult competitive environment. Even though the analyst expects sales to start growing again, Bebe Stores could take a long time to become profitable again, and that could make any rise in the share price somewhat premature.


Akebia Therapeutics soared more than 25% on a topsy-turvy day that included wild swings for the small and newly public biotech stock. Several analysts joined forces to give positive assessments of the company, with one offering a grandiose price target of $90 per share -- more than quintuple its price last week. Yet it's important to note that all three analysts giving Akebia positive ratings were involved in its initial public offering, including the two joint book-running managers and a co-manager for the offering. That doesn't automatically mean that their opinion is biased, but Akebia only has a couple of pipeline prospects and no approved products. With mid-stage trials still ongoing, it could be years before Akebia can even seek FDA approval for its treatments for kidney disease, anemia, and cancer.

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The article Why Halcon Resources, Bebe Stores, and Akebia Therapeutics Jumped Today originally appeared on Fool.com.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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The Apple, Inc. CarPlay Story Just Got Better

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Apple's CarPlay, or a version of iOS built to access the iPhone through Siri- and touch-enabled controls for functions like navigation, music, and messages, was first teased last summer at Apple's Worldwide Developers Conference. While Apple has showed off full-version demos of CarPlay since then, it has remained a question as to whether Apple would make CarPlay available to older vehicles through an after-market solution. But the wondering is over: Alpine is officially bringing to market a stand-alone console that supports CarPlay this fall, reports Japanese newspaper Nikkei

An after-market option for CarPlay is important to Apple's success in this new, fast-growing market of vehicle smartphone software amid attempts from competitors to successfully enter the same space.


Image source: Apple website.

Alpine's after-market CarPlay solution
In early March, investors got a first look at the manufacturers Apple planned to rollout CarPlay to. Fortunately, the list was long. But now, with Alpine's after-market solution, Apple is making it possible for almost anyone to get access to CarPlay -- new vehicle or not.

While a slew of carmakers will soon start offering vehicles that come standard with a CarPlay interface built in, the Japanese company's device is to be the first aftermarket product compatible with the system. It will first be available in the U.S. and Europe and likely cost around $500 to $700.

Alpine's after-market CarPlay solution will connect to the iPhone 5, 5c, and 5s. The display will likely be seven inches and also use voice commands. The Alpine device will initially be available in the U.S. and Europe, according to Nikkei.

Why Apple needed an after-market solution
Though the battle for the car among software giants is fairly new, it's already heated. Google's   Android for vehicles, in particular, is bound to be a formidable competitor to CarPlay.

CarPlay requires an iPhone, and Apple hasn't yet expressed interest to relieve consumers of this requirement. Source: Apple website.

At the 2014 International Consumer Electronics show in Las Vegas, Google announced its Open Automobile Alliance with a plan to bring Android to vehicles. Unlike Apple, Google doesn't plan for the onboard Android operating system to always require a phone to work. Not piggy-backing off of a phone, iPhone and Android users alike could get full access to Google's software in vehicles with it built in; this could be a good selling point for both manufacturers and consumers, while also making CarPlay less enticing.

With such a notable disadvantage to Google's customized version of Android for Vehicles in gaining mass adoption, Apple's willingness to let manufacturers build after-market solutions is welcoming news for Apple investors. Though I'd still like to see Apple eventually hand over enough control to vehicle manufacturers to let the cars themselves power CarPlay without requiring an iPhone, Apple's move to allow other brands to debut after-market solutions provides me with a little more confidence the tech giant will be willing to fight with some vigor in this important market.

Putting the icing on the cake, estimates from Yano Research Institute suggest that the after-market smartphone vehicle entertainment system market is growing fast. "Shipments of in-car entertainment systems that link to smartphones ... will leap roughly fivefold [between 2013 and 2018] to reach 14.75 million," Nikkei asserted, citing Yano Research Institute's projections. Given this expected growth, Apple's presence in the space is basically a necessity for the company to become a formidable player in vehicles.

Automotive peripheral company Clarion has also said that it plans to support CarPlay in after-market devices at some point in the future, according to MacRumors.

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The article The Apple, Inc. CarPlay Story Just Got Better originally appeared on Fool.com.

Daniel Sparks owns shares of Apple. The Motley Fool recommends Apple, Ford, General Motors, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Ford, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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How NVIDIA Is Helping Adobe Power Our Creative Future

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NVIDIA's Quadro and Tesla GPUs are the driving forces behind Adobe Creative Cloud. Source: NVIDIA.

At the 2014 NAB Show in Vegas earlier this month, Adobe showcased some thrilling enhancements to the video apps in its Adobe Creative Cloud solution.

Some of the useful functionality includes new masking and tracking abilities for newsrooms to automatically follow subjects to blur faces and logos, autosave to Creative Cloud for automated backup of projects, and a slick "Master Clip" feature in Premier Pro and SpeedGrade to enable effects applied to original clips to ripple down through all instances.

But perhaps the most intriguing updates were applied to Adobe Anywhere, which allows users of video solutions like Adobe Premier Pro CC and Adobe After Effects CC to work together on centralized media through disparate networks.


Translation? If you've got people in disparate locations who all need to work simultaneously on the same massive video files, Adobe Anywhere allows them each do so in real time without conflicts -- just as though the video files were stored locally on their machines. No more slow FTP uploads. No more sacrificing the quality of your video to save time. No more shipping hard drives to remote offices.

The driving force behind Adobe Creative Cloud
If you're wondering exactly how Adobe achieved this monumental feat, look no further than its close collaboration with longtime partner and graphics specialist NVIDIA . As Steve Parker, NVIDIA's CTO, Pro Visualization and Design, recently elaborated:

NVIDIA and Adobe have a very fluid relationship. It starts at the engineer-to-engineer level, where engineers from NVIDIA and engineers from Adobe are in regular contact. Whether it's regular engineering meetings, or face-to-face discussions, brainstorming sessions -- it's almost like another engineering team within NVIDIA. We collaborate with them that closely.

Sure enough, only a few days after Adobe unveiled its enhancements, NVIDIA announced its GPUs are powering all of the upcoming releases and new GPU-accelerated features of Adobe Creative Cloud. That includes everything from GPU-accelerated ray tracing in After Effects, to the remote streaming capabilities and Mercury Playback Engine in Adobe Anywhere and Premiere Pro CC.

The multimillion-dollar question
Of course, this raises the question: Should investors expect this to move NVIDIA's revenue needle going forward?

Probably not. Well, at least not directly over the near term, anyway. What this does provide, however, is yet another piece of validation for NVIDIA's world-class, cloud-based graphics technology. What's more, this also shows just how pervasive NVIDIA continues to become, especially considering we already know NVIDIA -- long thought of as a hard-core gaming specialist -- wants its GPUs to power everything from your smartphone to your camera and your car.

In the end, whether it succeeds on all fronts remains to be seen. But over the long term, these are exactly the kinds of lofty aspirations I love to see as an investor.

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The article How NVIDIA Is Helping Adobe Power Our Creative Future originally appeared on Fool.com.

Steve Symington owns shares of NVIDIA. The Motley Fool recommends Adobe Systems and NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Will Intel's China Push Pay Off?

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In a declining PC market, Intel needs to increase its tablet processor market share, and it's looking at China to make it happen. That's why the company hosted its Developer Forum in Shenzhen, China, this year, and is spending $100 million on an innovation fund in the country.

But despite Intel's efforts to do business with Chinese tablet vendors, it is facing fierce competition from both small chipmakers in China that use ARM Holdings' chip designs.  

Why court Chinese vendors?
The company is trying to strategically position itself in the low-end tablet market as the PC market declines and cheap tablets continue to grow.


Worldwide PC shipments, the bread and butter of Intel's chip businesses for decades, declined by 4.4% in the first quarter, year over year. While other quarters have seen double-digit declines, the PC market is still expected to shrink as tablets grow. IHS estimates that tablet processors shipments will increase by 23% from last year, hitting about 300 million shipments worldwide this year. And by 2016, that number is expected to be more than 400 million units.

IHS estimates that entry-level tablets will make up about one-third of tablet shipments this year, which Intel wants to further tap.

To do that, it'll have to increase its relationships with Chinese vendors and expand the number of models Intel chips run. According to PCWorld, Intel had 13 original tablet chip designs in 30 models in 2013, and by the end of this year, it aims to have 20 designs in 80 models.

That's why Intel announced earlier this month that it would establish a Smart Innovation Center in Shenzhen to "to accelerate the delivery of Intel technology-based devices to the China market and beyond." The company also announced it would spend $100 million developing everything from tablets to wearables with Chinese vendors.

But getting those vendors on board with Intel chips won't be easy.

The obstacles
Intel faces a handful of hurdles in expanding its processors in cheaper Chinese tablets. The first is pricing. Intel's chips can be almost half the cost of some of the cheapest tablets. That's obviously not a sustainable strategy, so the company will either need to lower its prices to better compete with Chinese chipmakers, or try to expand more into the mid-range market. 

The second drawback is that the vast majority of tablets sold under $200 are run on chips designs licensed by ARM Holdings. Intel not only has to find a way to make its chips cheaper, but also has to convince Chinese vendors that they should move away from the ARM designs they use now. That won't be an easy sell considering that ARM's designs are found in about 95% of the world's smartphones and tablets . 

Foolish thoughts
While Intel has a significant amount of clout in the PC industry, its influence in the mobile market is much smaller. The company is essentially playing a game of catch-up to ARM's designs and Qualcomm chips. 

I think Intel's latest efforts to expand its relationship with Chinese vendors will pay off for its tablet business, but I don't think it's going to be a game changer for the company. ARM designs already dominate the market and I can't see Intel convincing enough companies to switch or dropping prices low enough to compete with the extremely low prices some tablet chipmakers have. The end result will be that Intel will have to find some other major source of revenue to replace what it makes form PC processors. That may be in wearables or the Internet of Things, but it's not going to come solely from tablet processors.

Intel and investors should look to wearable tech for growth
While Intel searches for a segment to replace declining PC processor shipments, investors should be looking for the next wave of tech innovation. Wearable technology may fit the bill, with ABI Research predicting 485 million wearable devices could be sold over the next decade. Click here to get the full story in this eye-opening new report.

The article Will Intel's China Push Pay Off? originally appeared on Fool.com.

Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Intel. It also owns shares of Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Fiat S.p.A. Needs the 2015 Jeep Renegade

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The new 2015 Jeep Renegade will make its U.S. debut in New York this week. Photo credit: Fiat Chrysler

Jeep has never built anything like the new Renegade. 


The brand's first-ever subcompact will be one of the smallest SUVs sold in the U.S. when it debuts later this year. And it's going to be built far from traditional Jeep territory, in Italy.

All that may sound strange to American Jeep fans, but Fiat Chrysler  has big plans for the new Renegade -- plans that stretch far beyond America's borders.

As Fool contributor John Rosevear explains in this video, the littlest Jeep will be a real Trail Rated Jeep -- but while it will be sold in the U.S., its real importance will be found overseas.

A transcript of the video is below.

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John Rosevear: Hey Fools, it's John Rosevear, senior auto analyst for Fool.com. The New York International Auto Show starts this 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'll be checking out closely is the all-new Jeep Renegade.

The Renegade is something new for Jeep, a subcompact SUV. It was originally unveiled at the Geneva auto show in Switzerland last month, but this will be its North American debut.

It's an interesting product for Jeep, and one of the things that's most interesting about it is that it's not really primarily intended for the U.S. market. It will be sold here, you will be able to buy one, but it's really going to be aimed at younger buyers in Europe and in developing markets, possibly China as well.

And it's not going to be made in the U.S., it's going to be made in Italy. Fiat and Chrysler are now one company, and CEO Sergio Marchionne is running them as one company with a global vision.

One part of that vision involves making Jeep a truly global brand, Jeep has offered a fairly wide range of models for years but most of its sales and profits and really most of its image come from the Wrangler and from the big Grand Cherokees.

Now in order to introduce Jeep to new audiences outside of the U.S., they've come up with this Renegade, which is going to go head to head with vehicles like the Opel Mokka, which is a European cousin of the Buick Encore, and with the Ford  EcoSport, which is another subcompact SUV, it's based on the Ford Fiesta's platform and it has been a big success for Ford in places like India, where small and rugged and cheap but still nice is a winning combination.

That's really where Jeep is aiming this Renegade, and they have what could turn out to be a trump card if they market it correctly, and that's that this little thing comes in a 4x4 Trail Rated version.

Chrysler says the Renegade Trailhawk, and I quote, "delivers best-in-class 4x4 Trail Rated capability with class-exclusive Jeep Active Drive Low, which includes 20:1 crawl ratio and Jeep Selec-Terrain system."

If they can deliver that for a price that is competitive with a Ford EcoSport, at least a loaded EcoSport, the Renegade could get quite a bit of attention and could do quite well.

But I don't know how it'll do here. Really in the U.S. its competition will be the Nissan  Juke and the Kia  Soul, and neither of those are positioned as something with serious off-road capability.

If it's a success, it makes me wonder if Ford will try to bring the EcoSport to the U.S., they certainly could do it without a massive investment, it could be built right on the line in the Mexican factory that builds the U.S. market Fiestas.

But we'll see how it plays out.This new Jeep is an interesting product, and I'm looking forward to getting up close with it in New York later this week, Rex and I will bring you a close look at it with a video report from the show floor. Thanks for watching.

The article Why Fiat S.p.A. Needs the 2015 Jeep Renegade originally appeared on Fool.com.

John Rosevear owns shares of Ford. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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2.5 Reasons to Hold On to Becton, Dickinson's Stock

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Becton, Dickinson is a selection for the real-money Inflation-Protected Income Growth portfolio. In this brief video, portfolio manager Chuck Saletta offers two-and-a-half reasons he's holding on to Becton, Dickinson's stock despite its 31% increase since he bought those shares in January 2013.

Summary:

  • No. 1: Solid balance sheet with a debt-to-equity ratio around 0.8, which suggests the company should have little trouble rolling over its debt in the near future.
  • No. 2: Healthy, well-covered dividend with recent growth and room to continue growing as the company does.
  • And the half-reason: It's market capitalization isn't too far ahead of the iPIG portfolio's fair-value estimate.

Top dividend stocks for the next decade
Becton, Dickinson made the cut for the iPIG portfolio in large part because of its dividend. The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily while allowing you to sleep like a baby.

Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, simply click here.

The article 2.5 Reasons to Hold On to Becton, Dickinson's Stock originally appeared on Fool.com.

Chuck Saletta owns shares of Becton Dickinson. The Motley Fool recommends Becton Dickinson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Aspen Insurance Holdings Limited Shares Rocketed Higher

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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 Aspen Insurance Holdings , a global insurance and reinsurance company specializing in commercial and environment liability, as well as casualty insurance, jumped by as much as 19% after receiving an unsolicited takeover offer from Endurance Specialty Holdings .

So what: Under the terms of the offer, Endurance was willing to acquire Aspen for $47.50 per share in a mixed 60% stock and 40% cash deal valuing the company at $3.2 billion (a 21% premium to its close on Friday). Endurance believed acquiring Aspen would be immediately accretive to EPS and contribute to $100 million in annual cost savings. However, Aspen's board of directors rejected Endurance's proposal with Glyn Jones, chairman of the board, noting that the deal was "not in the best interests or Aspen or its shareholders. Endurance's ill-conceived proposal undervalues our company, represents a strategic mismatch, carries significant execution risk, and would result in substantial dis-synergies."


Now what: Tell us how you really feel, Glyn! It's pretty evident that there isn't a price that Endurance can put on Aspen Insurance that's going to sway the board toward accepting a buyout. But that may not stop another suitor from stepping up to the plate or for Endurance to attempt a hostile takeover of Aspen and take its offer directly to shareholders. This is a situation that investors would be wise to keep their eyes on. However, it's rarely prudent to chase a stock higher solely on the premise of buyout rumors. With that being said, I'm going to watch the festivities play out from the sidelines.

Shares of Aspen Insurance Holdings may be soaring today, but they'll likely be hard-pressed to keep pace with this top stock in 2014
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The article Why Aspen Insurance Holdings Limited Shares Rocketed Higher originally appeared on Fool.com.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name  TMFUltraLong , track every pick he makes under the screen name  TrackUltraLong , and check him out on Twitter, where he goes by the handle  @TMFUltraLong . The Motley Fool recommends Endurance Specialty. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why BofI Holding Inc. Shares Popped Today

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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 bank-holding company BofI Holding  popped 10% today after agreeing to acquire the banking unit of tax preparer H&R Block .

So what: BofI shares had pulled back sharply in recent weeks on concerns over slowing growth, but today's deal is quickly easing some of those worries. While financial terms weren't disclosed, BofI said that its expects ongoing annual revenue from H&R Block Bank of roughly $26 million to $28 million starting in fiscal 2015, giving analysts plenty of good vibes over its top-line trajectory.


Now what: The agreement remains subject to regulatory approvals and other customary closing conditions, but BofI seems confident that it'll get done. "We believe our nationwide low-cost branchless Bank is well aligned with H&R Block's desire to provide their clients with affordable banking products and services," said BofI President and CEO Greg Garrabrants. "Once approved and consummated, these H&R Block agreements should add to the strength and diversity of our deposit, lending and fee income businesses." More important, with BofI shares still off about 25% from its 52-week highs and trading at a reasonable price-to-book 3.5, there's plenty of room left to buy into that improvement. 

Big banking's little $20.8 trillion secret
There's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banks. That's bad for them, but great for investors. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. To learn about about this company, click here to access our new special free report.

The article Why BofI Holding Inc. Shares Popped Today originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends and owns shares of BofI Holding. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Western Digital Looks Like a Solid Long-Term Investment

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Data storage company Western Digital's shares were up by double-digits this year before being hit by the recent sell-off in tech stocks. However, the company has consistently performed well in the past few quarters, beating rival Seagate Technology  this year, and its prospects look strong due to the expected growth in its business going forward.

Investors should consider taking a close look at Western Digital for their portfolio since the company could be a long-term winner. Let's see why.

Pulling ahead
Western Digital is seeing strong momentum across its product portfolio. The company has a 45% share of the storage market, pulling ahead of Seagate's 40% market share. In the fourth quarter of last year, the total addressable market, or TAM, for hard drives grew by 6 million units year over year to 142 million.


That exceeded Western Digital's expectations for the quarter, in which it shipped roughly 63 million units. A robust performance from the gaming segment and a seasonal pickup in sales of branded products were tailwinds for Western Digital. Looking ahead, the company expects this momentum to continue with an increase in total exabytes shipped.

Western Digital took good advantage of this TAM growth, reporting almost 4% growth in quarterly revenue and a 29% boost in earnings, year over year. On the other hand, Seagate's market-share loss led to a 4% drop in revenue, while earnings were down 13% year over year. 

New products and a strong market
Western Digital also sees good opportunities in fast-changing information technology infrastructure as cloud computing gains steam. The company aims to add more value to its products and offer more customization levels to customers to tap the growth of this market.

In addition, Western Digital's focus on new products is also bearing fruit. Its WD My Cloud, a comprehensive cloud solution, and HelioSeal, a six-terabyte helium-based sealed drive, are attracting many customers.

Western Digital's enterprise-class solid state drives, or SSD, are also selling well. According to management, in the last quarter, Western Digital's enterprise revenue grew at a faster rate than the overall SSD enterprise market. The company has made some good moves in this department that are driving results, such as the 2013 acquisitions of Virident and sTec.

The sTec acquisition enabled Western Digital to gain hold of more than a 100 SSD-related patents, while Virident helped it strengthen its position in flash storage hardware and software. Furthermore, as Western Digital continues integrating these new acquisitions into its business, it should attract more customers to its product offerings.

In a strong position
Western Digital anticipates improvement in the global economy, while stabilization of the PC market should also help its prospects. With investments to be made across the product portfolio, Western Digital looks set to perform well going forward.

In addition, Western Digital's strong balance sheet gives it more opportunities to make acquisitions and invest in research and development. Western Digital has $4.7 billion in cash and debt of $2.3 billion. Its debt-to-equity ratio is 27. By comparison, Seagate carries debt of $3.6 billion and a weak cash position of $2.3 billion. Seagate's debt-to-equity ratio is also a sky-high 143. 

Foolish takeaway
Western Digital's superiority over Seagate places it in a strong position to benefit from growth in the storage market. The company has made smart acquisitions and is focusing on product innovation and improving its standing. Investors should use the recent tech sell-off as a buying opportunity in Western Digital.

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The article Western Digital Looks Like a Solid Long-Term Investment originally appeared on Fool.com.

Mukesh Baghel has no position in any stocks mentioned. The Motley Fool owns shares of Western Digital.. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Why Shares of Goodrich Petroleum Corporation Popped Today

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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 Goodrich Petroleum Corporation jumped as much as 39.5% today after the company announced drilling results.

So what: Goodrich's Blades 33H-1 well in Tangipahoa Parish, La., achieved a 24-hour average production rate of 1,270 barrels of oil equivalent, including 1,250 barrels of oil. The company owns a 66.7% working interest in the well and is part of a large bet on the Tuscaloosa Marine Shale play.


Now what: One of the drivers of the stock today is a short squeeze, which happens when lots of investors who have bet against the stock suddenly rush to buy and close their positions. At the end of March, 59.5% of the float was sold short, so when good news like this comes out, investors rush to the exit. While the news is great, I'd be careful betting too big one way or the other because the buying was driven by short-sellers today, and that may stop later this week, which can make for a volatile stock.

Three stock picks to ride America's energy bonanza
Goodrich's pop is just one data point in a huge explosion of oil production in the United States. For investors who can find the right plays while historic amounts of capital expenditures flooding the industry the opportunity is enormous. For this reason, the Motley Fool is offering a look at three energy companies using a small IRS "loophole" to help line investor pockets. Learn this strategy, and the energy companies taking advantage, in our special report "The IRS Is Daring You to Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

The article Why Shares of Goodrich Petroleum Corporation Popped Today originally appeared on Fool.com.

Travis Hoium and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Organovo Holdings, Gogo, and National Bank of Greece Tumbled Today

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For those investors who feared further losses after last week's declines, Monday provided some relief, with major-market indexes rising almost 1% on the day. Positive news on the economic front helped to bolster investor confidence, but it did little to help the shares of Organovo Holdings , Gogo , and National Bank of Greece , all of which fell sharply on the day.

Source: Organovo Holdings.

Organovo Holdings declined 14% on a tough day for many 3-D printing stocks generally. Increasingly, momentum-driven investors have been skeptical about Organovo's long-term promise, especially after last week's comments from CEO Keith Murphy that threw cold water in the face of those who expected the company to print entire organs from scratch. But from a medical perspective, the idea that printing a relatively small amount of organic material but tailoring it to work with the patient's own cells and body to develop more compatible organs makes plenty of sense. Even with today's bounce in the stock market, many speculative stocks still face the challenge of convincing their shareholders that they can survive for the long haul, and that's a contributing factor to Organovo Holdings' decline today.

Gogo fell almost 8% as investors apparently reined in their enthusiasm about recent deals that the in-flight Internet service provider made with key partners. Last week's news included a new partnership deal with Canada's biggest airline and a technical services agreement with aircraft manufacturer Boeing to evaluate adding in-flight Internet technology at the production stage rather than waiting for retrofitting already-manufactured aircraft. Yet ever since offering disappointing guidance for the coming year in its earnings release early last month, Gogo shares have struggled to keep altitude. Despite the prudent strategy of investing growing revenue into expanding its offerings, Gogo might decline further even if it keeps delivering good long-term prospects for its business.


National Bank of Greece dropped almost 15% after the Greek bank decided to do a secondary offering of shares in order to improve its capital position. In order to comply with the terms of the Greek bailout, National Bank of Greece will have to raise more than 2 billion euros in capital. The disappointment among shareholders comes from the fact that it had said earlier that it would not issue new shares to meet its capital shortfall, and with the offering, the specter of dilution will weigh heavily on National Bank of Greece's shares. The news highlights the fact that even though prospects for the Greek economy have improved -- the nation was able to sell five-year sovereign debt at less than 5% interest recently -- Greece's fortunes won't necessarily lift those of National Bank of Greece, or the rest of the country's banking sector.

Say goodbye to "made in China"
For the first time since the early days of this country, we're in a position to dominate the global manufacturing landscape thanks to a single, revolutionary technology: 3-D printing. Although this sounds like something out of a science fiction novel, the success of 3-D printing is already a foregone conclusion to many manufacturers around the world. The trick now is to identify the companies -- and thereby the stocks -- that will prevail in the battle for market share. To see the three companies that are currently positioned to do so, simply download our invaluable free report on the topic by clicking here now.

The article Why Organovo Holdings, Gogo, and National Bank of Greece Tumbled Today originally appeared on Fool.com.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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You're Hating JPMorgan for the Wrong Reasons

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Shares of JPMorgan Chase fell sharply on Friday after the company missed analysts' earnings estimates. But is that miss the whole story?

In this video from Monday's Where the Money Is, Motley Fool financial analyst Matt Koppenheffer sifts through the earnings conference call for some of the key pieces of rationale behind leadership's decision-making process this quarter. A key philosophical theme he highlights is JPMorgan's unwillingness to aggressively chase growth at the expense of discipline.

Matt highlights some of the accolades CEO Jamie Dimon received for his conservative approach going into the credit crisis, which led JPMorgan to weather the storm better than some of the other large banks. Matt further points out that this philosophy applies to the bank and its strategies today in the highly competitive commercial and industrial loan atmosphere.


Big banking's little $20.8 trillion secret
There's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banks. That's bad for them, but great for investors. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. To learn about about this company, click here to access our new special free report.

The article You're Hating JPMorgan for the Wrong Reasons originally appeared on Fool.com.

Matt Koppenheffer owns shares of JPMorgan Chase. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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How General Motors Company Will Boost the 2015 Chevy Cruze

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Hoping to keep sales strong for another few years, General Motors is unveiling a refreshed version of the Chevrolet Cruze in New York this week. Photo credit: General Motors Co.

General Motors  may be mired in a recall scandal, but life for GM's product teams goes on. 


GM will have several new or refreshed products at this week's New York International Auto Show. Among them: A lightly overhauled version of the best-selling Chevy in the world, the compact Cruze.

GM didn't make radical changes to the 2015 Cruze -- but the detail changes make for a more premium-looking car. Photo credit: General Motors Co.

As the recent recalls have reminded us, GM's small cars weren't exactly top-tier products in the past. But when it debuted in 2011, the Cruze changed that: It's a compact Chevy that really can hang with the import-brand mainstays, and sales have been strong.

The Motley Fool's John Rosevear will be in New York when GM takes the wraps off of the updated Cruze this week. In this video, he outlines what he expects to see -- and why the Cruze is so important to General Motors.

A transcript of the video is below.

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John Rosevear: Hey Fools, it's John Rosevear, senior auto analyst for Fool.com. The New York International Auto Show starts this week. Media days are Wednesday and Thursday, and we're expecting to see a bunch of 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, Wednesday and Thursday, and we'll have a bunch of more in-depth reports for you over the next week or so after that.

As of right now General Motors doesn't have any media events on the official auto show schedule, but they are bringing a couple of interesting things to New York, and one of those things is a refreshed version of the Chevrolet Cruze compact.

The Cruze has been a strong product for them, after years of really not very good compact cars the Cruze was released here in the U.S. for the 2011 model year and it has been very competitive with cars like the Toyota Corolla and Ford Focus, they've sold a lot of them in the U.S. and in China and other parts of the world, more than 2.5 million since 2010.

It is is in fact the best-selling Chevy model around the world, and now it's getting what we call a mid cycle refresh. This comes about six weeks after Ford revealed a refreshed version of the Focus, so it's timely.

The Cruze gets a new grill that looks like the one on the current Chevy Malibu, some exterior trim changes, and some revisions in the interior. They've moved some control switches around to make the design more "intuitive", their word.

They've also added what they describe as "enhanced connectivity and convenience features", built around their touchscreen infotainment system. There's a text message alert system that works with your phone and reads your incoming texts to you, and if you have an iPhone there's an integrated version of Apple's Siri personal assistant, you can trigger it with buttons on the steering wheel, you don't need to take your eyes off the road.

There's also a new 4G LTE connectivity option, we've been talking about this for a while, GM is starting to roll out 4G as an option in pretty much all of their U.S. models, you activate it through OnStar and you can have a rolling wifi hotspot in the car, you have to pay for it of course. 

They're even going to have an app store, the Chevrolet AppShop, which will offer apps that will, as they put it, "connect drivers to vehicle data, music, news, weather, travel information and more." 

Engines aren't changing, at least not yet, but they're still offering the diesel version of the Cruze, sales of the diesel have apparently been quite strong, they like to point out that it's ten percent more efficient than the Volkswagen Jetta diesel and has more horsepower and torque.

So we'll be bringing you a close look at the overhauled Cruze at the show and we'll give you our impressions after we've had a look. Thanks for watching.

The article How General Motors Company Will Boost the 2015 Chevy Cruze originally appeared on Fool.com.

John Rosevear owns shares of General Motors. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Stocks to Watch Now: Amazon.com and Berkshire Hathaway

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In this segment from Tuesday's Investor Beat, Motley Fool analysts Morgan Housel and Mike Olsen each discuss one stock popping up on their radar this week. Mike looks at the curiosity that is Amazon.com , the behemoth that defies all prediction of how big it can one day get. Meanwhile, Morgan points out that at just around 1.3 times book value, Berkshire Hathaway is one of the last places investors can go for value on the market today.

The greatest thing Warren Buffett ever said
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The article Stocks to Watch Now: Amazon.com and Berkshire Hathaway originally appeared on Fool.com.

Alison Southwick and Morgan Housel have no position in any stocks mentioned. Michael Olsen, CFA, owns shares of Berkshire Hathaway.The Motley Fool recommends and owns shares of Amazon.com and Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Investor Beat: The Market Correction Everyone's Been Fearing?

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As the Nasdaq Composite continues to trend downward, more and more Wall Street analysts have the word "correction" on their lips. The index has been pulled down largely by social media and biotech stocks, but companies across technology have been feeling the burn.

On Tuesday's edition of Investor Beat, host Alison Southwick and Motley Fool analysts Morgan Housel and Mike Olsen discuss this major pullback. Morgan gives his thoughts on market corrections in general and how often investors can expect to see this kind of downward fall, while Mike looks at the actual value of the market today.

Then the guys look at four stocks making moves on the market today. Google has just acquired Titan Aerospace, a maker of solar-powered drones. The search giant has said it could use the technology both for collecting high-resolution images, and for offering Internet access in remote areas. Coca-Cola stock was up today, after the company beat analysts' expectations for first-quarter earnings. However, revenue was still down 4% for the quarter, amid declining consumer demand for soft drinks. Motorola has now sold off its enterprise business, which makes hardware such as computers, tablets, and barcode scanners, to a barcode printer maker called Zebra Technologies. And Citigroup saw shares rise after beating the rather low expectations for its first quarter.


And finally, Mike and Morgan each discuss one stock popping up on their radar this week. Mike looks at the curiosity that is Amazon.com, the behemoth that defies all prediction of how big it can one day get. Meanwhile, Morgan points out that at just around 1.3 times book value, Berkshire Hathaway is one of the last places investors can go for value on the market today.

The greatest thing Warren Buffett ever said
Warren Buffett has made billions through his investing and he wants you to be able to invest like him. Through the years, Buffett has offered up investing tips to shareholders of Berkshire Hathaway. Now you can tap into the best of Warren Buffett's wisdom in a new special report from The Motley Fool. Click here now for a free copy of this invaluable report.

The article Investor Beat: The Market Correction Everyone's Been Fearing? originally appeared on Fool.com.

Alison Southwick and Morgan Housel have no position in any stocks mentioned. Michael Olsen, CFA, owns shares of Berkshire Hathaway. The Motley Fool recommends Amazon.com, Berkshire Hathaway, Coca-Cola, and Google (A and C shares); owns shares of Amazon.com, Berkshire Hathaway, Citigroup, Coca-Cola, Google (A and C shares); and has options on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Linear Technology Corporation Sinks on Soft Sales

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Image source: Linear Technology.

Shares of Linear Technology Corporation fell nearly 2% in after-hours trading, following the release of the analog chip maker's third-quarter results.

Revenues increased 11% year over year to $348 million. GAAP earnings grew 4.3% to $0.48 per share.

The results missed the Street's revenue view by $2 million and matched the earnings consensus.


Linear Technologies enjoyed a 21% tax rate this quarter compared with 25% in the second quarter, thanks to tax liability reserves that were released as their auditable periods expired. Similar audit expirations plus a federal R&D tax credit led to a minuscule 12.75% tax rate in the third quarter of 2013.

CEO Lothar Maier noted that order bookings exceeded billed deliveries this quarter, which points to growing revenues in future quarters. "Bookings increased sequentially in all of our major markets, with the automotive, industrial and communications markets showing the most gains," Maier said in a prepared statement.

Driven by the growing order bookings, Linear Technologies expects revenues to increase between 2% and 6% in the next quarter. Analysts are currently hoping for $365 million in fourth-quarter revenues, which works out to 5% sequential growth.

The stock set brand new multi-year highs earlier this month. Including the weak after-hours price action, Linear Technologies is still trading 26% higher over the last 52 weeks.

The article Linear Technology Corporation Sinks on Soft Sales originally appeared on Fool.com.

Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends Linear Technology. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why PetSmart, Inc., Wynn Resorts Ltd., and First Solar, Inc. Are Today's 3 Worst Stocks

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Around lunchtime today, the stock market was dropping like a rock, threatening to resume a sell-off that left investors fearing a 2000-like, tech-driven market plunge. Just a few hours later, nine in 10 sectors were showing gains and things were peachy again. Although the housing market didn't perk up as expected in March, inflation rose modestly, which was a bullish enough indicator for Wall Street. Apparently PetSmart , Wynn Resorts Ltd. , and First Solar didn't get the memo: Each stock tumbled on Tuesday, even as the S&P 500 Index added 12 points, or 0.7%, to end at 1,842. 

PetSmart's 4% losses secured its finish as the day's worst S&P performer. Bank of America/Merrill Lynch hit PetSmart with a dreaded downgrade Tuesday, citing the company's ebbing market share resulting from rising competition. It's a dog-eat-dog world after all, with businesses constantly at each other's throats competing for business. PetSmart should know this well by now. After signing a multiyear deal to buy Martha Stewart-branded pet foods from Age Group, Martha Stewart Living then tried desperately to sell its products to PetSmart directly, circumventing the agreement it had with Age Group, the third-party seller. This is according to a lawsuit brought by Age Group in New York courts, in which PetSmart is not named as a defendant. 

Analyst sentiments quite frequently act as short-term catalysts, either propelling shares skyward or sending them on their merry way to the ground. Such sentiments were not only behind PetSmart's decline today, but also Wynn Resorts, which tumbled 3.6% on Tuesday. The slump came after tightening lending conditions in China saw credit decline nearly 20% in March from the same month last year, a dip that portends lower gaming revenue in Macau, according to Wells Fargo analysts. While China's effort to curb growth represents a legitimate concern for the Macau-reliant casino industry, make sure to take upgrades, downgrades, and sidegrades with a grain of salt: analysts don't often share incentives with the common investor. 

Source: First Solar website.


Finally, First Solar shares shed 2.8% today, even as (gasp!) there wasn't a prestigious analyst poo-pooing the stock. Forgetting Wall Street's opinion for a moment, my colleague Sean Williams identified First Solar as one of 3 stocks near 52-week highs worth selling last week. He worries that, while First Solar's business is sound, investors have been too giddy with optimism, overlooking the fact that U.S. solar power is subsidized by tax incentives that could disappear in the coming years. At the same time, China has pledged to continue its financial support of its own solar industry, raising questions about how competitive First Solar can be on a global scale.

Say goodbye to "Made in China"
China may be subsidizing the solar industry, but innovation isn't merely a function of how much money you throw at something. For the first time since the early days of this country, we're in a position to dominate the global manufacturing landscape thanks to a single, revolutionary technology: 3-D printing. Although this sounds like something out of a science fiction novel, the success of 3-D printing is already a foregone conclusion to many manufacturers around the world. The trick now is to identify the companies -- and thereby the stocks -- that will prevail in the battle for market share. To see the three companies that are currently positioned to do so, simply download our invaluable free report on the topic by clicking here now.

The article Why PetSmart, Inc., Wynn Resorts Ltd., and First Solar, Inc. Are Today's 3 Worst Stocks originally appeared on Fool.com.

John Divine has no position in any stocks mentioned.  You can follow him on Twitter, @divinebizkid , and on Motley Fool CAPS, @TMFDivine . The Motley Fool recommends PetSmart and Wells Fargo and owns shares of Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Pep Boys, Brink's, and Safeway Tumbled Today

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Tuesday was a day of wild swings for the stock market, with triple-digit moves in both directions finally settling out to sizable gains for the major market benchmarks. Even as investors continued to hope for better economic conditions around the world to improve prospects for global companies, several stocks failed to follow the general trend of the market higher. Among them were Pep Boys , Brink's , and Safeway , whose share prices fell dramatically today -- although with Safeway, there's a catch that investors need to be aware of before drawing the wrong conclusion.

Pep Boys plunged 15% after the auto merchandise and repair chain announced disappointing quarterly results this morning, including a surprise loss when investors had expected a modest profit. Same-store merchandise sales fell 3%, largely offsetting gains in service-related revenue and reflecting lower retail prices for tires. The bigger question for Pep Boys, though, is whether its hybrid parts-and-service model will prove to be more effective than the pure-play parts strategy that many of its rivals use. Given the age of cars on the road today, there's little doubt that many auto owners need Pep Boys and its peers, but whether they'll actually take advantage of parts and service retailers is another question entirely.

Security specialist Brink's dropped 11% after the company said that it would have to write down the value of its Venezuelan operations using the devalued exchange rate for the Venezuelan bolivar. U.S. investors might not be aware of the international nature of Brink's security services, but Brink's got almost 45% of its revenue last year from Latin America, almost doubling its North American revenue. Moreover, with Latin America giving Brink's more of its operating profits than any other, the hit from the Venezuelan asset writedown will be much more extensive than most investors in Brink's expect.


Safeway's share price fell by 10% today, but the drop merely reflected the grocery chain's spinoff of its Blackhawk Network Holdings shares, which was completely yesterday afternoon. Under the spinoff, Safeway shareholders received about 164 shares of Blackhawk for every 1,000 Safeway shares they held, worth roughly $4 per Safeway share and matching today's price drop in Safeway stock. Blackhawk's high-growth prepaid payment and product services businesses gave Safeway an interesting level of diversification, but the transaction will help Safeway focus more on maximizing the value of its grocery business as it works to complete its merger with Albertsons later this year.

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The article Why Pep Boys, Brink's, and Safeway Tumbled Today originally appeared on Fool.com.

Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Baidu Investors Should Love These 2 Moves

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Investing in Chinese Internet stocks certainly isn't for the faint of heart. However, certain larger companies like Baidu or Ctrip.com might prove appealing to investors, especially after the recent sell-off that's snakebitten tech stocks in general.

A perfect example of the short-term pain investors in these high-growth companies often encounter, Baidu's shares remain down around 10% since around just a month prior, even though my confidence in the firm remains as intact as ever. On the other hand, Ctrip.com stock has rallied nicely over the last few months, helping offset some stiff losses from earlier in the year.

Both Ctrip and Baidu are perfect examples of how quickly these kinds of Chinese Internet investments can pinball up and down. And another recent storyline between Ctrip.com and Baidu helps to highlight one of two reasons why investors should love Baidu these days.


Baidu and Ctrip.com linking up?
Word broke recently that Ctrip.com and Baidu are currently in discussions to combine Ctrip.com's core travel booking business with Baidu's majority-owned investment Qunar through some kind of merger, acquisition, or investment.

The deal makes perfect sense for Baidu, Ctrip.com, and Qunar as the companies could together become an even more powerful force to be reckoned with in the booming Chinese online booking space. And in the video below, tech and telecom explains why the Baidu/Ctrip.com/Qunar deal and another storyline are perfect examples of why investors should still be bullish on Baidu.

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The article Baidu Investors Should Love These 2 Moves originally appeared on Fool.com.

Andrew Tonner owns shares of Baidu. The Motley Fool recommends Ctrip.com International. It recommends and owns shares of Baidu. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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