Source:  Elizabeth Arden.

Shareholders in cosmetics giant Elizabeth Arden have been waiting for any sliver of good news to send the company's share price higher, after it has underperformed both the broader market averages and industry players like Ulta Salon, Cosmetics & Fragrance and Sally Beauty over the past 12 months.  Elizabeth Arden's share price has been hurt lately by relatively weak results, as evidenced by sales and operating profit declines in fiscal 2014.

Fortunately, good news may have arrived in late April, after South Korea's LG Household indicated that it might be looking to swallow up the cosmetics giant as part of a plan to grow in foreign markets like the U.S. So, does Elizabeth Arden have some upside for investors?

What's the value?
Elizabeth Arden is certainly not the biggest fish in the global cosmetics pond, but it has built a solid niche in the celebrity fragrance arena through the licensing of brands from popular entertainers, like Taylor Swift and Justin Bieber.  While getting in bed, business-wise, with entertainers is fraught with risk, the growth in the company's base of licensee partners was primarily responsible for a upward trajectory in Elizabeth Arden's total sales and operating profit over the past few years. At the same time, management has been reducing risk by diversifying its distribution network beyond the traditional upscale department store channel, highlighted by its co-development of the Red Door Spa franchise.

In fiscal 2014, though, Elizabeth Arden's overall business has taken a step back, due to significant weakness in its North American geography, the source of nearly two-thirds of its overall sales. Digging a little deeper, the company was hurt by sales declines in its licensed products business, a trend that management attributed to the overload of product and brand choices available in the current marketplace, especially at mass merchandisers. The net result for Elizabeth Arden was a decline in its adjusted operating profitability, down 10.3%, a data point that has led management to target its finite resources on key retailer partners that are capable of driving sales momentum for the company going forward.

Looking for growth
While Elizabeth Arden could ostensibly catch a bid from one of its larger competitors, like LG Household, investors looking for growth-powered share price gains are probably going to be waiting for a while, assuming the remainder of the year follows the script of the first two fiscal quarters. Management certainly is on the case, as evidenced by the recent introduction of the Elizabeth Arden Rx line of skin care products. But the category's minimal weighting in the company's overall business mix will probably not lead to a big gain on its profit statement.

As such, investors should probably turn their attention to players in the industry that are growing in the current environment, such as Ulta. The company has been one of the runaway success stories in the cosmetics business, more than doubling its sales over the past five fiscal years, thanks to its growing base of convenient neighborhood stores that offer a broad assortment of cosmetics and personal care products at mostly value prices. Ulta has also successfully captured a portion of the upscale crowd -- the target demographic of the department stores' cosmetic operations -- by opening high-touch, in-store boutiques through partnerships with prestige manufacturers.

Similarly, Sally Beauty has powered a solid five-year run for its top line by offering a wide assortment of products from leading manufacturers, including L'Oreal and Clairol, and putting its growing base of namesake stores within a convenient distance of the vast majority of the populace. Like Ulta, Sally Beauty has taken advantage of a wildly successful loyalty program -- as evidenced by its more than 7 million Beauty Card Club members -- in order to lower its marketing expenditures and produce consistent annual improvement in its operating profitability. The net result for the company has been a solid annual uptick in its operating cash flow, thereby funding its global store-expansion plans.

The bottom line
Shareholders in Elizabeth Arden received a gift with the news of a potential merger, given its recent top-line weakness and an above-market P/E multiple that tips the scale at around 34. Unless you are a speculator, it is probably time to take a look for the exit sign.

Microsoft recently made two bold moves addressing two common complaints about the Xbox One -- its high price tag and the Xbox Live Gold requirement to access popular apps like Netflix and ESPN.

Source: Microsoft

Desperate times call for desperate measures
Microsoft has lowered the price of the Xbox One from $499 to $399, matching the price of its primary competitor, Sony's PlayStation 4. Microsoft accomplished this by unbundling the Kinect motion sensor, which costs an extra $75 to manufacture, from the console.

The Xbox costs $396 to manufacture without the Kinect, according to a teardown report from IHS. IHS also claimed that the PS4, which retails for $399, costs $381 to manufacture. Meanwhile, CNN reported that Nintendo's Wii U Basic Set, which sells for $299.99, has a production cost of $228.

However, all three teardowns don't fully account for past research and development expenses and packaging costs, meaning that Microsoft, Sony, and Nintendo could still be selling their consoles at slight losses. Yet investors should remember their intention was never to make a profit through hardware sales, but rather to sell enough consoles to claim a slice of software sales.

Microsoft's removal of the Xbox Live Gold ($60 per year) requirement to watch Netflix and other services is clearly a response to Amazon, which mocked Microsoft's "double billing" strategy during the launch of its Amazon Fire TV set top box in April. Amazon's Fire TV, Sony's PS4, and other popular streaming devices like Roku and Google Chromecast don't require additional paid memberships to access Netflix content.

Netflix on Xbox One. Source: Xbox.com

Both moves indicate that Microsoft is willing to do whatever it takes to get Xbox One sales back on track. The Xbox One is currently in last place in the eighth generation console race, shipping approximately 5 million units, compared to 7.5 million PS4s and 6.1 million Wii Us. In terms of sales growth, however, Microsoft is still faring better than Nintendo, which launched the Wii U a full year before the Xbox One or PS4 hit the market last November.

Microsoft's new tradition of backtracking
Microsoft has backtracked a few times already regarding the Xbox One.

Prior to its launch, Microsoft dropped a controversial requirement for Xbox One owners to constantly maintain an Internet connection to play games. It also decided to allow used games to be played, reversing an earlier plan to completely drop support for used titles. Both plans were intended to prevent gamers from sharing titles and buying used games, since they don't generate any revenue for major publishers like Activision and Electronic Arts.

However, Microsoft's new tradition of caving in to demands extends beyond the Xbox One. After finally dropping support for Windows XP on April 8, the company backtracked and threw stubborn XP diehards a lifeline after a dangerous exploit hit all versions of Internet Explorer earlier this month. Microsoft did the same with the Windows 8.1 update, extending its original upgrade deadline from May 13 to June 10.

These examples illustrate how far Microsoft has fallen since the days of Bill Gates, when the tech giant was stubborn, unapologetic, and willing to battle antitrust regulators across the globe to dominate the PC market. Today, Microsoft readily bows to consumer demands and inadvertently encourages users to never take its policies seriously.

A look back at Microsoft's Xbox One blunders
Microsoft clearly should have made smarter decisions to begin with, so it wouldn't have needed to backtrack and reverse unpopular decisions.

Microsoft simply didn't think things through with the Xbox One. The Xbox One's predecessor, the Xbox 360, originally launched for $399 -- $100 less than Sony's PS3. However, the pricier PS3 still eventually outsold the Xbox 360 (82.8 million units versus 81.3 million units). Considering that Sony outsold Microsoft with a more expensive console during the seventh generation, it's impossible to understand why Microsoft decided to sell the Xbox One for $100 more than Sony's PS4.

Meanwhile, Microsoft became obsessed with the idea that the Xbox One would take over the living room with Kinect, Skype, and Internet Explorer. Therefore, Microsoft decided that making the Kinect a required part of the Xbox experience was worth the extra cost. It turned out that people simply wanted an affordable, powerful console to play games -- and the PS4 fit the bill perfectly.

EA's Titanfall, a rare bright spot for the Xbox One. Source: Microsoft

The unpopular Xbox Live Gold requirement for Netflix could easily have been avoided with simple market research. Microsoft obviously wanted to reclaim the living room from streaming devices like Roku and Chromecast. However, it got greedy and decided to charge customers for services that had long been offered for free on multiple platforms. Sony noticed that wasn't a line to be crossed, and assured customers last June that a PlayStation Plus account wouldn't be required to access Netflix, Hulu, or other popular services.

Much of this disorganization should be blamed on Xbox head Don Mattrick's abrupt departure last July. Microsoft then left the Xbox division without a single official leader for nearly nine months, before CEO Satya Nadella finally promoted Phil Spencer, the chief of Microsoft Studios, to lead the division in March.

The moral of Microsoft's story
There are valuable business lessons to be learned from Microsoft's blunders and backtracking.

First and foremost, properly assessing the market environment matters. Microsoft thoughtlessly launched a console that was $100 more expensive than a formidable competitor, then made the package even more unattractive with extra fees. Simply making the right choices to start with -- as Sony clearly did with the PS4 -- can save a company from embarrassing backtracking.

Last but not least, leaders matter -- Microsoft might have avoided all this grief if by simply appointing a dedicated leader to the Xbox division before the console launched last November.

This article was written by Oilprice.com -- the leading provider of energy news in the world. 

Freeport-McMoRan Copper & Gold's ambitious goal to reduce its debt from the current $19.8 billion to $12 billion in 2016 needs robust action. Falling copper prices and continued difficulties in Indonesia put Freeport-McMoRan's plans under question despite the fact that the company stated that it could get to $14 billion debt in 2016, even with $3 copper.

Now, the first step toward debt reduction has been made. Freeport-McMoRan announced the sale of its Eagle Ford shale assets for $3.1 billion to Encana . Freeport-McMoRan estimates that the after-tax proceeds of this transaction will be approximately $2.5 billion. Soon after this announcement, Apache revealed that it will sell its Lucius and Heidelberg Gulf of Mexico development projects to Freeport-McMoRan for $1.4 billion.

Logical move
Freeport-McMoRan made no secret of its desire to concentrate the oil and gas part of its business on the Gulf of Mexico. Hence, selling Eagle Ford assets looks very logical. The Gulf of Mexico assets contributed 46% of the oil and gas cash operating margin in the first quarter, while Eagle Ford assets brought 32% of the cash operating margin.

Freeport-McMoRan stated that it will use proceeds from the Eagle Ford asset sale to repay outstanding indebtedness and to invest in additional assets in the Gulf of Mexico. Taking into account Freeport-McMoRan's estimate for the Eagle Ford sale after-tax proceeds, the company will dedicate $1.1 billion to debt reduction. This will lower Freeport-McMoRan's debt to $18.7 billion.

What else can Freeport-McMoRan sell in order to lower its indebtedness? The company possesses oil assets in California, both onshore and offshore. Freeport-McMoRan also possesses assets in the gas-rich Haynesville. However, it is unlikely that the company will be pushing to find a buyer for Haynesville assets, as natural gas prices remain relatively low.

News doesn't affect the company's valuation
Although the recent developments are significant for Freeport-McMoRan, they don't change the whole outlook for the company. Freeport-McMoRan's desire to sell some of its assets in order to reduce its debt and grow its Gulf of Mexico business was known before. The company just continued executing its strategy.

More intriguing is the solution to the company's Indonesian problems, where it suffers from a copper concentrate ban. Among recent news, Newmont Mining announced that it will ramp down production at its Batu Hijau copper and gold mine in June if it doesn't secure an export permit. The reason for this is that Batu Hijau's copper concentrate storage facilities will reach capacity in late May. This will inevitably lead to a reduction of workforce on the mine. In turn, this could force the government to speed up the export-permit process, which is favorable for Freeport-McMoRan.

Bottom line
Copper price levels, as well as the Indonesian export ban, continue to weigh on Freeport-McMoRan's shares. On the other hand, the company's shares are supported by solid operational performance, exposure to stable oil prices, and a 3.7% dividend yield. All in all, Freeport-McMoRan looks fairly valued at the moment with a chance for upside in the case of positive news from Indonesia.

Despite the growth of the electronic cigarette market, the tobacco industry must still deal with the immediacy of declining sales of traditional combustibles. That's leading to greater speculation that M&A may be the route the smoking giants take. The latest focus of such rumors is British American Tobacco , the London-based owner of brands such as Lucky Strike, Kent, and Pall Mall, which is said to be eyeing a megamerger in the U.S. market.

According to the London Times, British American Tobacco hired Deutsche Bank to consult on pursuing and financing a deal across the pond. With the value of any deal rumored to be in the billions of dollars, it would likely be a company such as Reynolds American or Lorillard that would be the target, and it's more than just speculation to think it might be the former tobacco company as opposed to the latter.

A decade ago, BAT's Brown & Williamson subsidiary combined its assets with RJ Reynolds Tobacco to form the current Reynolds American, which gave the U.K. cigarette company a 42% stake in its American rival. In exchange for accepting the liabilities of B&W, British American Tobacco entered into a 10-year standstill agreement that prohibits it from acquiring any more of Reynolds' stock. As that agreement expires at the end of July, it explains why we're suddenly hearing more about possible M&A activity in the tobacco industry.

Back in March it was rumored Reynolds might be interested in acquiring Lorillard in a megadeal rumored to be valued in excess of $20 billion. Since BAT's voting bloc could nix any sort of deal it would make, we might not see anything happen until the standstill agreement expires. But at that point British American Tobacco could also make a play for Reynolds and afterward go after Lorillard.

Yet it's also possible BAT might not only allow Reynolds to acquire Lorillard first, it could even help finance the transaction, particularly if it sought a majority position in Reynolds beforehand. There seem to be endless combinations possible.

One can't ignore the e-cig market, either, in any of this. Lorillard's blu eCig is the biggest name in the business with a 45% share of the market, but in June both Reynolds and Altria plan to roll out nationally new e-cig brands. Following its successful debut in Colorado and Utah, Reynolds will be going national with its Vuse brand. Similarly, Altria will be taking its new MarkTen brand national then as well, but it also partnered with Philip Morris International to market e-cigs globally. British American Tobacco has its own electronic cigarette, Vype, but a partnership with Reynolds to market or distribute e-cigs is also a distinct possibility.

The real concern here is tobacco, though, as the M&A rumor-mongering is predicated on countering slowing growth. Industry cigarette shipment volumes fell 2.7% last quarter, though after adjusting for wholesale inventory changes, they were down 4.4%. Reynolds says they're down about 3.5% over the past several years. Whether British American Tobacco buys Reynolds, Reynolds buys Lorillard, or there's a three-way combination of the above, it's clear industry investors stand to profit handsomely from some major M&A activity about to be unleashed.

SodaStream reported its first-quarter earnings before the market opened today. For the three-month period ended March 31, SodaStream posted a profit of $0.08 per diluted share, which was down from earnings per share of $0.57 during the same period a year ago. Despite this significant year-over-year drop in earnings, its $0.08 in the latest quarter was better than the $0.01 profit analysts were expecting.

The company said "strong growth" outside the U.S. offset weakness in the U.S. from a "challenging holiday season."

Revenue came in at $118.2 million in the quarter, up from $117.6 million in the year-ago period. Wall Street was looking for revenue of $117.9 million. Unfortunately, beating analysts' estimates on both the top and bottom lines wasn't enough to save the stock from falling more than 3% in pre-market trading on Wednesday. However, as of 9:45 a.m., the stock was up a bit from yesterday's closing price.

Investors may have been eyeing SodaStream's 28% sales decline in the Americas. In this region, SodaStream generated $34.8 million during the first quarter of fiscal 2014, down from $48.3 million a year ago. Revenue in other regions notched double-digit percentage increases.

Nevertheless, SodaStream's chief executive, Daniel Birnbaum, is optimistic about the company's future, saying in the company press release that, "We are confident that our long history leading the evolution of home carbonation continues to provide us with strong competitive advantages and compelling growth opportunities across the globe."

BreitBurn Energy Partners is a master limited partnership, or MLP, engaged in producing oil and gas from mature, high-margin, and long-lived assets. In other words, BreitBurn is an 'upstream' MLP.

The upstream MLP industry is in a sort of 'bonanza' period. As many large oil companies are racing to develop shale resources, these same businesses are financing shale development by selling mature assets in the U.S. Taking these high-margin and long-lived but mature oilfields off the hands of larger companies, upstream MLPs have been a big, if indirect, factor in the financing of shale projects across the country. 

It's a buyer's market for the assets that upstream MLPs are typically interested in, and these partnerships can often get these parcels at reasonable prices. However, there is concern that some upstream MLPs have bitten off more than they can chew, so to speak.

For example, Linn Energy , with its acquisition of Berry Petroleum, had to increase its offer from 1.25 shares to 1.69 shares in exchange for each share of Berry. In doing so, the deal was no longer immediately accretive to that company's distributable cash flow. Another example would be Vanguard Natural Resources' most recent acquisition, which represented a deviation in strategy from a cash flow focus to a drilling and growth focus for that partnership. Although only one quarter old, Vanguard experienced significant drilling delays from its operating partners and posted cash flow numbers well below expectations as a result. 

BreitBurn, however, boasts a history of careful and measured acquisitions as well as smooth transitions. Its most recent acquisition of a CO2-injection aided oilfield in the Oklahoma panhandle, developed by world-class independent Whiting Petroleum, has thus far been accretive to distributable cash flow. Not only that, this deal, dubbed the 'Postle acquisition,' will provide production growth for the next 10 years. 

Like many other upstream MLPs, BreitBurn is eager to acquire mineral rights in California's mature oil basins. That's because oil produced in the Golden State fetches Brent Crude pricing, which sits at a premium to West Texas Intermediate. While BreitBurn has more than 3,000 net acres, mostly in the mature and highly profitable Midway-Sunset and Wilmington fields, management has expressly stated that it would like to acquire more. Unfortunately for BreitBurn, barriers to entry in California have been very high, particularly because oil production in the state is so concentrated into the hands of only three producers.

This situation might soon be changing. Occidental Petroleum , one of those three big producers, is splitting up and moving its headquarters from Los Angeles to Houston. As a result, the California oil picture will change, and BreitBurn will be better able to compete for mineral rights when the opportunities arise. 

Upstream MLPs are usually valued by their respective distributable cash flow, nearly all of which is distributed to shareholders. As we can see above, at 9.8%, BreitBurn's distribution yield is second among the biggest and best upstream MLP names. While the partnership does not provide forward distributable cash flow guidance, and its hedging policy is admittedly a bit weaker than that of Vanguard and Linn, its acquisition track record is so far the cleanest, so to speak. I believe that BreitBurn is worth a shot right here. 

Bottom line
For a partnership with, I would argue, the best acquisition track record so far, BreitBurn has quite a high yield for an upstream MLP. Despite the fact that this partnership does not give forward guidance, I would argue that its distribution, at this time, is among the most secure in this industry. With growing production from the Postle field and an increasingly good chance that it will have an opportunity to expand in the Midway-Sunset or Wilmington, BreitBurn is likely to maintain and modestly grow its distribution for the next few years.

Millions of Americans use Social Security for retirement income. But it isn't the only such program out there. Railroad Retirement is another system that provides income to former workers.

In the following video from our Social Security Q&A series, Dan Caplinger, The Motley Fool's director of investment planning, answers a question from Fool reader Kathleen, who asks whether she can collect both the spousal pension she is receiving from Railroad Retirement and Social Security based on her own work history. Dan notes that the programs aren't identical, but they largely serve the same purposes. He also points out that taking benefits from both programs at the same time can be counterproductive and lead to benefit reductions, while waiting until a later time to collect Social Security benefits can be the smarter choice. Dan concludes that it's smart to talk with both Social Security and with Railroad Retirement to confirm what effect each will have on the other when it comes to benefits.

Have general questions about Social Security? Email them to SocialSecurity@fool.com, and they might be the subject of a future video!

Boeing released its latest report on airplane orders received -- and canceled -- through mid-May 2014 on Thursday. There were no new orders or cancellations noted since last week.

To date this year, the aerospace giant has booked:

• 339 "gross" orders for various flavors of its 737 regional airliner
• four orders for the 777 airliner
• one 747 order
• one 787 order

No new orders have been booked since Boeing last updated its order book a week ago. Nor have there been any new cancellations reported in the past seven days.

Since our look at Boeing's progress at the end of April, however, there have been some changes. Specifically, the company has added three new 737 orders from Turkmenistan Airlines, and one or more unidentified customer(s) appears to have switched out orders for seven 737 Next Generation aircraft, substituting requests for seven more modern (and more expensive, at least at list price) 737 MAX models instead.

Boeing's order book is not entirely clear on such order substitutions, and actually reflects only seven 737 orders canceled, with seven more orders placed. But as Boeing has explained, "if there are an equal number of orders and cancellations, it is almost always an NG to MAX conversion."

Net result: Boeing still has 345 gross plane orders booked to date. Subtracting 54 cancellations from that total, it's left with a net gain of 291 new plane orders so far this year -- which is still twice as many net orders as Airbus has booked.

Boeing announced Tuesday that it had lined up a deal to sell 50 737 aircraft, including Next-Generation 737s and 737 MAXs, to a subsidiary of China's Juneyao Airlines. The company said the orders would be posted to the orders and deliveries page "once all contingencies are cleared."

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 ExOne Co are trading 15% lower today after the 3-D printing upstart reported rather miserable results for its first quarter.

So what: ExOne's revenue, which was already tiny, declined 8% year over year to $7.29 million, which was well below the somewhat modest $9.24 million top line Wall Street analysts had expected. ExOne's bottom line also blew up in rather spectacular fashion, with a $0.38 loss per share not even in the same ballpark as analysts' expectations of a $0.12 loss per share. Even without one-time items, ExOne's adjusted loss per share was $0.37. The company's gross margins were shredded by "significant development costs" -- that margin was 22.2% in the first quarter, down from 35.8% a year ago.

As a result of this big miss, ExOne reduced its margin guidance for the full year from an earlier range of 43%-46% to a new range of 40%-43%. Its revenue projection is now in the range of $55 million to $60 million for the full year, which does come in a hair ahead of Wall Street's $57 million consensus estimate. Since capital expenditures are now estimated to range from $31 million to $34 million for the year, ExOne will report a loss -- its gross profit will max out at $25.8 million, according to this guidance. The only question is, how bad will the loss actually be?

Now what: ExOne still has enough cash on hand to work through a period of losses, as it still boasts cash and equivalents of $77.6 million, down from $98.5 million a year ago. But this report is unmistakably lousy, and there's really no way to put a positive spin on it. ExOne was a super-hot stock out of the IPO gate a year ago, as shares nearly tripled in a few months before the growth-stock bloodbath began. Since then, it appears that investors have realized that paying 10 times sales (or more) for a tiny company running behind market leaders that are also experiencing weakening fundamentals might not be the best investment strategy.

ExOne will still be valued at over six times forward sales if it reaches the high point of its revenue projection, and that's the optimistic case here. I'd stay on the sidelines until ExOne -- and 3-D printing companies in general -- prove that they can shore up their margins in the face of the inevitable onslaught of lower-cost competition.

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Plug Power  climbed 4% today after Cowen upgraded the fuel-cell provider from perform to outperform.

So what: Along with the upgrade, analyst Robert Stone lowered his price target to $6 (from $7.50) on higher expenses and new shares, representing about 60% worth of upside to yesterday's close. So while momentum traders might be turned off by Plug Power's sharp pullback in recent weeks, Stone's call could reflect a sense on Wall Street that the company's growth prospects are becoming too cheap to pass up.

Now what: According to Cowen, Plug Power's risk/reward trade-off is rather attractive at this point. "YTD bookings of $80MM (2x vs. 2013) point to a steep ramp from Q2 and profitability in Q4," said Stone. "Our factory visit yesterday (5/14/14) confirmed a high level of activity. A strong cash position should support expansion into hydrogen generation, Asia, and new product segments." When you couple today's rally with the infrastructure risk still surrounding Plug Power's shipments, however, I'd hold out for a wider margin of safety before buying into those prospects.

Southern Company announced today that it is spreading solar energy to the U.S. armed forces bases. The utility announced plans today to build, own, and operate three solar farms on Georgia army bases.

According to the company, each plant will be capable of generating approximately 30 MW of solar energy, making them the largest solar farms on any U.S. base. They will be located at Fort Stewart near Savannah, Fort Benning near Columbus, and Fort Gordon near Augusta.

"Through constructive regulation and thoughtful energy policy planning, Georgia is leading the way in developing cost-effective solar generation for customers," said Norrie McKenzie, vice president of renewable development for Southern Company subsidiary Georgia Power, in the press release. "The agreement with the U.S. Army not only marks another step for Georgia Power's solar initiatives, but further enhances the state's position as a solar leader and will strengthen both the bases and the surrounding communities."

Georgia regulators have already approved the plants, and Southern Company estimates the farms to be fully operational by 2017.

The projects are all expected to be completed at an equal or lesser cost than generating the same electricity from other fuel sources. Georgia Power is investing heavily in solar, and expects its solar capacity to clock in at nearly 900 MW by 2016, the "largest voluntary solar portfolio" in the U.S. according to the press release. Voluntary means the utility is not building the plants simply to meet a mandated energy standard.

I don't know if you noticed, but the markets look terrible today. The Dow Jones Industrial Average  was down 1.1% at 2:10 p.m. EDT, while the S&P 500 and Nasdaq indices were doing about as bad. Only two of the Dow's 30 member stocks were trading in the green.

Cisco Systems  up 7.2%, doing more than its share to stabilize the Dow. Cisco pulled over 10 Dow points out of thin air today, all by itself. That's not small potatoes, though even Cisco's heroic efforts are a long way from stemming a nearly 200-point Dow point hemorrhage.

Cisco's secret sauce is the rock-solid fiscal third-quarter report it posted last night.

The networking giant edged out analyst targets on both the top and bottom lines, and painted a picture of strong prospects going forward.

For the fourth quarter, Cisco expects sales to decline something like 2% year over year. If that sounds bad, consider that analysts currently project a 4% revenue drop. Cisco's adjusted earnings guidance points to about $0.52 per share, just ahead of the consensus analyst target.

Cisco CEO John Chambers. Source: Cisco Systems.

More to the point, Cisco CEO John Chambers waxed downright poetic about the improving business landscape in front of him.

"We continue to be optimistic about the future opportunity," Chambers said in the earnings call with analysts. "As our customers embrace cloud, mobility, social, analytics and the Internet of Everything, they're seeing Cisco as uniquely positioned to help them build and run the highly secure environments they require."

Chambers has been talking about the Internet of Everything (also known as the Internet of Things or Industrial Internet) as a $14 trillion market for several years now. This time, he upped the ante: "We are making measurable progress connecting the $19 trillion value, we've identified in the Internet of Everything to specific business opportunities and pipelines."

But it's not all about unlocking the long-term value of nascent megamarkets. At long last, Chambers also sees signs of a global economic recovery -- starting with the developed world.

"Our U.S. enterprise and commercial segments are usually a very good indicator of GDP slowly increasing or GDP decreasing," the Cisco CEO explained. "From a geographic perspective, total U.S. product orders grew 7% with U.S. commercial and U.S. enterprise both up by over 10%. The momentum in U.S. enterprise and commercial remains very strong."

That's particularly true in the big-ticket market where Cisco's largest customers buy some of its most expensive products. "In the U.S. enterprise, total deals over $1 million are up over 25% from Q3 start to Q4 start, and deals over $5 million are up more than 50%," Chambers said.

Source: Cisco Systems.

Similar trends are emerging across the Atlantic, where European customers are coming back to place large orders once again. "I think they are out of this downturn, slowly improving," Chambers said. "When I talked with our customers and the top financial people in New York which I did just a week ago, most everybody else is beginning to see very similar trends. In fact, it almost was scary because when you describe the world just like I did earlier including emerging markets and the challenges in Russia and Brazil, we could finish each other's sentences regardless of industry."

It's not 100% wine and roses, of course. All of these positive signs are counterbalanced by hard times in traditional high-growth markets. "We feel good about the U.S., good about Europe, don't feel very good about emerging markets. They are still very challenged, especially the BRICs," Chambers said.

So Cisco's big quarter actually comes across as a hint of fresh air for the global economy as a whole. It almost feels wrong to get these tidings on a day when the markets are slumping. Call me a blue-eyed optimist if you like, but I don't believe Chambers would get this rosy-cheeked unless he saw a real trend happening. Plus, Cisco is not the only bearer of good economic news right now.

Whether or not you like Cisco as an investment, this report is telling you to have some confidence in the economy -- at a time when investors just aren't feeling it.

This could be the perfect time to go dumpster-diving for some high-quality stocks that are on sale right now for all the wrong reasons.

The UN predicts that global population will increase by 2.6 billion by 2050. Royal Dutch Shell estimates that this population increase, coupled with strong economic growth in developing nations, will double the demand for oil (from its already record high of 91 million barrels/day).

A recent study by Morgan Stanley and Rystad Energy estimates that by 2035 the price of oil will most likely average between $125/barrel-$150/barrel (current price is $109/barrel). 

With long-term oil prices likely to remain at historic highs the stage is set for the world's energy companies to invest hundreds of billions of dollars into new production infrastructure. In fact, a recent study by the Interstate National Gas Association of America predicts that $272 billion will be spent to build out America's oil infrastructure by 2035. Total energy infrastructure spending (including natural gas and natural gas liquids) is projected to be $641 billion. This represents only domestic investment. Worldwide the amount is certain to be much higher.

A great way for patient, long-term investors to profit from this coming bonanza is by investing in quality oil services companies (the "pick and shovel" providers of the black gold rush).

This article outlines three companies that are set to profit strongly from this oil production megatrend: National Oilwell Varco , Halliburton Company and Schlumberger Limited .

Enormous market potential

Source: Schlumberger

As seen above, investment by oil companies has been growing by about 15% CAGR over the last 11 years. As the world's existing oil fields become depleted, keeping production at current levels becomes harder and more expensive. Growing production requires even more investment. Thus, despite short-term oil company decreases in their capital expenditure (capex) budgets in 2014-2017,the long-term outlook for oil services companies remains bright. Any short-term weakness should be viewed as a chance to add more shares (which are already historically undervalued).

Data from Fastgraphs

Data from Morningstar

The investment thesis for these companies consists of three parts. 

First, all three are undervalued -- both on an industry average and historical basis. For example, the 21-year average P/E multiples for Halliburton, Schlumberger, and National Oilwell Varco are 25.4, 31.1, and 18.8, respectively. Therefore, the current valuation represents a historic discount of 30%, 37%, and 19% respectively. 

The undervaluation is caused by concerns over short-term profit weakness due to oil majors such as ExxonMobil, Total, and Royal Dutch Shell announcing cost-cutting measures.

The second reason to invest in these companies is the potential for strong dividend increases (backed by the growth thesis). As seen from the above tables, the five-year dividend growth has been strong and the payout ratios are low. In addition, all three companies can easily service their debt with available cash flows. However, there is one note of caution that investors should consider when it comes to oil service company dividends -- the growth is cyclical.

Schlumberger for example, between 1997 and 2004, didn't raise its dividend at all (the same for 2009 and 2010). Halliburton was even stingier, with a static dividend 1995-2005 and 2009-2012. Meanwhile, National Oilwell Varco only initiated its dividend in 2009 but has raised it every year and by very healthy amounts. Dividend growth investors might want to stick with National Oilwell Varco (since annual dividend growth is the primary goal). 

The final pillar of the investment thesis for these companies is the immense growth opportunity presented by the oil production megatrend. Primarily this will be fueled by new technology, and each company is investing heavily to stay on the cutting edge (one of reasons dividend growth has been so sporadic). 

For example, Schlumberger has greatly increased its patent filings over the last six years. This has been fueled by large scale acquisitions (such as Smith International) as well as smaller companies (Nova Drill). The benefit to the company has been the acquisition of new technology such as the Stinger drill bit (a revolutionary new diamond cutter drill bit that can increase oil well penetration by 15%-30%).

Further Schlumberger innovations include the Microscope (allows advanced imaging of geological formation while drilling) and PowerDrive ( improved steering of rotary drills benefiting horizontal drilling capabilities).

All three companies have their own patented technologies to help energy companies image, stabilize, and maximize productive life out of oil and gas wells. 

Foolish takaway
Global oil production is likely to be one of the strongest economic megatrends of the next few decades. The three companies above represent excellent long-term investments to take advantage of the coming infrastructure boom. They each have the expertise, financial resources, and innovative technology to remain leaders in their industry. Investors can expect solid (if sporadic) dividend growth and robust capital gains in the decades to come. 

Amazon is the unquestioned leader in cloud infrastructure, and aggressive marketing tactics, discounting, and new product offerings weren't helping its competitors gain ground. Yet, as investors grow accustomed to Amazon's dominance in this space, two companies are now gaining ground, Microsoft , and to a lesser degree, IBM .

The one dominant company in cloud
The cloud is a fast-growing segment of technology that dozens of companies are trying to penetrate. It is broken down into two segments, cloud infrastructure, or laaS, and app platforms, or PaaS. Combined, this market is growing at an annual rate of 50%, and at the end of the first quarter, it had created revenue of $12 billion during the last 12 months.

Currently, this market is highly fragmented, with dozens of technology companies having a presence of some sort. However, Amazon's Web Services, or AWS, is the one dominant company, owning a 30% market share and creating well more than $1 billion in revenue per quarter.

Despite Amazon's industry-leading market share, it's actually growing its share even larger, quarter after quarter. Specifically, in the fourth quarter of 2013 and first of 2014, the cloud market grew an average of 51%, but AWS grew by 65% and 67%, respectively, implying that its market share continues to grow.

Two companies rising fast
With AWS continuing to outperform the overall cloud industry, investors might assume that it's simply creating more separation from big tech companies that have made large investments in this space. While this assumption is in large part accurate, Microsoft and IBM are gaining ground on AWS.

Microsoft and IBM nearly doubled their revenues within this space during the fourth quarter. In the first quarter, Microsoft and IBM saw year-over-year growth of 154% and 80%, respectively. , This shows that both companies are gaining market share even faster than AWS, and that recent initiatives are paying off.

Microsoft, which owns less than a 9% market share, has rolled out countless new features on two different occasions in the last few months for Azure. Like other cloud services, Microsoft has also significantly cut its prices -- to the tune of 30% plus -- clearly showing that gaining share is most important to the company.

On the other hand, IBM has boosted its service offerings via a number of high-profile acquisitions over the last four years. The latest acquisition came in April with Silverpop, a developer of cloud-based marketing automation software. IBM is making smart buys in companies that are also growing organically.

What's all this mean to for stock prices?
Cloud services is an industry that's growing, one that could easily create tens of billions in annual revenue within the next few years. Becoming a leader is very important for these noted companies.

Right now, with a 30% market share, AWS is worth $50 billion, according to Evercore estimates. AWS accounts for only 6% of revenue, yet because of growth, it is worth 35% of the company. For IBM and Microsoft, cloud services are an even smaller piece of their business pie, but likely valuable.

IBM's segment that includes businesses aside from laaS and PaaS is growing 50% annually and is on a $2.3 billion revenue run rate. However, this accounts for only 3% of total revenue in a company that is seeing overall revenue declines.

We're discussing segments that are marginal in relation to the total businesses of these three companies, but carry large market valuations due to their growth. It's worth noting that Microsoft has added $25 billion to its market cap in 2014, while IBM has grown $7.5 billion despite fundamental losses. One could argue that these gains are due to accelerated growth in the cloud, which could remain if IBM and Microsoft can continue to steal market share.

Final thoughts
Microsoft and IBM have a long way to go before catching Amazon, but the important lesson for investors is that big investments are paying off for Microsoft and IBM. As a result, and with this industry's growth expected to last, it might not be long before the two companies' cloud businesses are worth $50 billion or more, which could create substantial shareholder value.

As for Amazon, it still remains the best pure investment on cloud growth. So while it's not growing at the same rate of Microsoft and IBM, it's still impressive. With the stock down 25% from its high, AWS is becoming a larger part of the investment story. It's an asset that will likely become even more valuable in the coming years.

Shares of retail titan Wal-Mart  are down today after the company announced first-quarter earnings. Wal-Mart missed analyst expectations of $1.15 in earnings per share by reporting $1.10, and it only made $114.7 billion this quarter versus expectations of $116.27 billion. Like many of its peers, the company blamed bad weather for the underperformance, but investors aren't pleased with that answer.

On top of all that, Wal-Mart released a statement that the company is OK with raising the minimum wage in the U.S. A higher minimum wage presents an interesting dilemma for Wal-Mart. On one hand, a large percentage of its customers are low-income consumers, meaning that they'll potentially spend more there once they're making more. But on the other hand, Wal-Mart pays a large percentage of its employees minimum wage, which means that an increase in the minimum wage will boost the company's expenses. 

So should investors dive into Wal-Mart now? On today's Stock of the Day, Motley Fool analyst Jamal Carnette says it's better to wait and see. He wants to give Wal-Mart a chance to live up to its own expectations while waiting for the company to begin delivering a dividend yield north of 3%. Until then, he'll be watching from the sidelines.

Celldex's shares jumped by more than a quarter following news that Bristol-Myers has paid Celldex $5 million up front and will pay half of development costs for a new study that teams Bristol's PD-1 drug nivolumab up with Celldex's promising varlilumab against solid tumor cancer.

The news appears to have surprised investors despite Celldex's deep ties to Medarex, a company bought by Bristol-Myers for more than $2 billion in 2009.

Bristol's up-front payment was small relative to upfront payments made by big pharma and big biotechs in the past year, but the real benefit to Celldex is in the renegotiation of its license with Medarex and the potential to cozy up more closely with Bristol's promising oncology business.

CLDX data. Source: YCharts.

Riding the roller coaster
Celldex was among last year's top performers, running more than 200% higher on enthusiasm for rindopepimut, a drug in phase 3 trials for a form of brain cancer that occurs in 30% of cases.

However, Celldex shares fell spectacularly in March, dropping nearly 40%, as investors shunned risk following dramatic gains across the industry. Those who jumped out of shares after the sell-off are likely wishing they'd taken a longer view.

In mid-stage trials, rindopepimut put up results that appear nothing short of impressive: 51% of patients receiving rindopepimut alongside the standard of care, Merck's Temodar, survived two years, significantly better than the 6% rate that is typical for the disease.

Temodar, which was approved as a treatment for brain cancer in 2005, lost patent exclusivity last year. Global sales totaled more than $700 million in 2013 and nearly $1 billion in 2012; however, new generic competitors reduced sales by 62% in the first quarter to $83 million.

Celldex hopes rindopepimut will prove as successful as Temodar, but that will only happen if rindopepimut puts up equally impressive results during its current phase 3 trials. Unfortunately, investors may have to wait a while to find out. The estimated primary completion date for that trial isn't until November 2016. In the meantime, investors should get data from Celldex's phase 2 trial of rindopepimut combined with Avastin in the second half of 2015.

In addition to rindopepimut, Celldex is also developing CDX-011, a treatment for triple negative breast cancer. Celldex used drug delivery technology from Seattle Genetics to develop CDX-011, and the drug is currently being evaluated in a phase 2 study that is slated for a primary completion date of September 2015.

Renegotiating a prior deal
Bristol's deal with Celldex expands its immense PD-1 nivolumab research program that includes more than 35 studies across more than 7,000 patients. Nivolumab and Merck's PD-1 drug MK-3475 have captured investors' attention as potential oncology blockbusters that could be used across a variety of cancer types.

Bristol hopes that combining nivolumab (originally developed by Medarex) with Celldex's varlilumab (a targeting antibody licensed to Celldex by Medarex) will improve efficacy in treating a range of solid tumors across non-small cell lung cancer, melanoma, ovarian, colorectal, and squamous cell head and neck cancer.

During preclinical studies, the two companies determined that varlilumab and nivolumab may be more effective when used as part of combination therapy than when used alone.

Whether that preclinical finding holds up in human trials is a big question, and investors won't know the answer for quite a while. Celldex doesn't expect to launch its phase 1/2 trial until the fourth quarter.

Foolworthy final thoughts
Bristol's deal with Celldex is atypical. Since Bristol owns Medarex and Medarex is due milestones and royalties from Celldex on varlilumab, Bristol renegotiated Celldex's contract instead of forking over big money. The new license cuts milestone payments and reduces royalty rates that Celldex would eventually owe Medarex if varlilumab makes its way to market.

The deal could also help pave the way to a closer combination between the two companies given that Celldex's C-Suite has substantial ties to Bristol's Medarex. After all, Celldex was first launched as a Medarex subsidiary back in 2004 and many of the company's top executives, including CEO Anthony Marucci, have previously served in senior roles at Medarex.

If Bristol's deal doesn't lead to a closer tie-up, Celldex still appears to have an intriguing future. Rindopepimut offers substantial new hope for brain cancer patients given survival rates in trials thus far appear to outpace rates typical under current standards of care. Since spending on brain cancer treatment is expected to climb from $4.4 billion in 2010 to as much as $8 billion in 2020, investors should pay close attention to Celldex. However, since Celldex doesn't have any products currently on the market, it still remains highly speculative and suitable for only the most aggressive investors.

Chipotle Mexican Grill investors have been spoiled in a climate that has been tricky for most of its competition, but it seems that even the halo of success has its limits. Shareholders gave their opinion on the burrito roller's executive pay proposal at today's annual meeting. Chipotle executives aren't going to like what they hear.

Just 23% of Chipotle's investors voiced approval for the new executive pay package. The vote itself is not binding, but it's hard to ignore that kind of investor mandate. If investors feel that salaries and stock option grants are too extreme, does Chipotle really want to go against their wishes? 

It's true that Chipotle does pay its executives handsomely. Co-CEOs Steve Ells and Monty Moran combined to make nearly $50 million last year. This happened despite a then-surprisingly high 27% of Chipotle shareholders voting against the say-on-pay measures last May after Ellis and Moran took home $38.8 million in combined compensation in the preceding year. If the message wasn't clear then, it's carnitas clear now.

One can argue that Chipotle did this to itself. Parading the "food with integrity" mantra as it paints itself as the good guys in fast-casual comes with more than just additional scrutiny. Investors drawn to Chipotle because it does the right thing in the kitchen will expect those same principles to apply to executive pay.

Bulls will argue that Ells and Moran earned their hefty paydays. That's a fair argument. Chipotle has been a market beater since going public eight years ago. It's been bucking the trend that has seen many formerly leading fast-food, fast-casual, and casual-dining operators post negative comparable-restaurant sales growth in recent quarters. Even McDonald's -- the world's largest burger chain and former Chipotle parent before spinning it off in a 2006 IPO -- has felt the pinch.

Comparable sales fell 1.7% at McDonald's during the first three months of this year. The company blamed the weather. Many chains have followed suit, making the recent winter a popular scapegoat to explain away the performance indigestion. However, Chipotle stunned the market when it revealed a 13.4% spike in comps during the same period.

This doesn't mean you hand executives at the 1,637-unit chain a blank check. Then again, history has proven that it's better to trust Ells and Moran than to bet -- and vote -- against them. Chipotle's response to the vote will go a long way in determining whether it's a good guy or villain here.