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 Compugen , a clinical-stage biopharmaceutical company developing therapeutic proteins and monoclonal antibodies to treat immunologic and oncologic disease, jumped as much as 12% on the day after reporting positive results for investigational immune checkpoint candidate CGEN-15052.

So what: According to Compugen's early morning press release, CGEN-15052, "demonstrated robust inhibition of T cell activation, both as a membrane protein and as an Fc fusion protein." Compugen's initial tests in human cancer tissues demonstrated CGEN-15052 expression in "multiple epithelial cancers," with Compugen noting a high expression in lung cancer samples.

In addition, Compugen also disclosed the discovery of two new B7-like immune checkpoint candidates, bumping up its number of discoveries to 11 in what it classifies as high medical areas of interest.

Now what: First, we have even more proof that the company's methodology and research platform works with nearly one dozen therapeutic product candidates discovered since its inception. As I've discussed previously, the more pitches a clinical-stage company has to swing at, the better chance it has of hitting a home run. Being able to generate new immune checkpoint compounds may give Compugen a greater chance at success. Additionally, initial results from CGEN-15052 are encouraging, and provide further evidence that Compugen's research is moving in the right direction. Still, as a wholly clinical company with much of its research still very early stage I find placing a somewhat accurate valuation on Compugen difficult. With plenty of clinical testing to come over the next few years investors' safest bet may be to remain on the sidelines until we have something tangible to base our investing decision on.

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 OncoMed Pharmaceuticals , a clinical-stage biopharmaceutical company focused on developing monoclonal antibodies to target cancer stem cells, gained as much as 12% after announcing a double-dose of mixed news late Friday and over the weekend.

So what: First, OncoMed announced that the Food and Drug Administration had placed investigational Wnt pathway drug vantictumab on partial clinical hold until it receives revised trial protocols that it agrees with. The move shouldn't come as a surprise given that OncoMed shares tumbled on Friday after announcing its voluntary clinical hold following instances of bone-related adverse events in eight of 63 patients in its study involving vantictumab.

Secondly, over the weekend OncoMed announced that it was presenting data for its notch 1 diagnostic assay at the European Hematology Association's annual meeting in Italy. Notch 1 mutations are often linked to refractory lymphoid malignancies, such as chronic lymphocytic leukemia and mantle cell lymphoma, but identification of the gene isn't easy. The idea is that notch 1 may prove a valuable biomarker which, when targeted early, could lead to more favorable patient outcomes.

Now what: OncoMed has now gained back all of Friday's tumble following the very early stage halt of vantictumab and Fzd8-Fc due to bone-related adverse events. Investors seem at ease with the understanding that partial clinical holds usually end up being lifted by the FDA once revised trial conditions are met, and that this is merely a temporary hurdle that OncoMed will have to overcome. In addition, investors may also be realizing that it's not worth getting all bent out of shape over two early phase studies when OncoMed has numerous other trials ongoing and a number of collaborative partners, complete with billions of dollars in possible milestone revenue.

I, for one, happen to be extremely intrigued by OncoMed's approach to targeting cancer stem cells as opposed to focusing on proliferating cancer cells like most other oncology-focused biotechs. I believe this could give the company an edge and is a reason why so many big pharma names have partnered with OncoMed. It's for that reason I'd suggest adding OncoMed to your watchlist and, for biotech-savvy investors, digging a bit deeper because you might like what you find.

Source: OpenTable.

Online travel leader Priceline announced on Friday the acquisition of online restaurant reservation platform OpenTable in a $2.6 billion cash deal. Although the price represents a considerable premium versus recent market prices for OpenTable, it looks like Priceline is making a smart move and positioning itself to capitalize on substantial growth opportunities in the years ahead.

Buying a place at the table
Priceline will be paying $103 per share for OpenTable, a premium of nearly 46% versus the closing price of around $70 per share for OpenTable on Thursday. Understandably, this could create some concern among investors, who may feel that Priceline is paying too much -- however, it's also worth noting that OpenTable still offers enormous room for growth.

According to Priceline President and CEO Darren Huston: "OpenTable is a great match for The Priceline Group. They provide us with a natural extension into restaurant marketing services and a wonderful and highly valued booking experience for our global customers. We look forward to helping the OpenTable team accelerate their global expansion, increase the value offered to their restaurant partners, and enhance the end-to-end experience for our collective customers across desktop and mobile devices."  

OpenTable covers a network of more than 31,500 restaurants, and the company makes more than 15 million reservations per month. Profit margins are under pressure as the company is actively investing for growth, but OpenTable is generating impressive sales growth.

Revenues during the quarter ending on March 31 increased 18% versus the same period in the prior year to $53.8 million, while seated diners totaled 46.7 million, a 25% increase versus the same quarter in 2013.

Valuation is always a matter of debate, especially when it comes to a highly dynamic growth company such as OpenTable. However, the acquisition makes a lot of sense from a strategic point of view.

Stronger together
OpenTable is still in its initial stages when it comes to international expansion. The company produced approximately $7.8 million in revenues from global markets during the last quarter, representing less than 15% of total sales.

As of the end of the first quarter, OpenTable has international presence in the U.K. with 4,097 restaurants, Germany with 2,057 locations, and Japan with 1,567 restaurants. This means a total of 7,721 international restaurants, less than 25% of the total restaurant base of 31,583 locations.

One key area where Priceline has excelled over time is international expansion. The company is the undisputed market leader in hotel reservations in Europe via its widely popular Bookings.com platform, which covers a network of 455,000 hotels and other accommodations in 200 countries.

Priceline is performing remarkably well on the international front: International bookings increased by 37% during the first quarter of 2014. According to management, this was due to "increased penetration of core Western European and North American markets, but also very attractive growth in newer markets, including Eastern Europe, the Middle East, South America, and the Asia-Pacific region."

Priceline's presence and experience in international markets could be enormously valuable for OpenTable, and there are clear opportunities for cross-promotion, as travel and restaurants are closely related industries.

Both Priceline and OpenTable benefit from the network effect, meaning that their services become more valuable as they become bigger. OpenTable's platform becomes more attractive to diners as it offers a wider network of restaurants to choose from, and restaurants naturally benefit from a growing audience of potential customers. Diners and restaurants attract each other to the platform.

The same is valid for Priceline. Travelers want to go to the platforms where they can find more and better options, and companies like hotel operators, airlines, and car rental businesses choose to partner with the online travel agencies that can bring in more clients.

A bigger business means not only more money for Priceline and OpenTable, but also a more valuable service and increased competitive strength.

Foolish takeaway
Priceline didn't pay a cheap price for OpenTable, but there is much more than money to consider in this transaction. Priceline is buying a leadership position in the online restaurant reservation business, and this means substantial opportunities for growth in the years ahead, especially considering Priceline's presence and successful track record in international markets. Both companies should complement each other quite well, and the merger will consolidate their competitive positions.

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 business advisory firm FTI Consulting, jumped as much as 11% today after increasing estimates.

So what: Management said that it now expects second quarter revenue to be between $445 million and $450 million, above its previous estimate of $430 million-$445 million. On the bottom line, it said adjusted earnings per share for the quarter should be $0.49-$0.55, higher than a previous $0.32-$0.42 estimate.  

Now what: The improvement has been sharp because the last estimate was given in May. Management also said that full-year results will be higher than expected, predicting $1.55-$1.70 per share in earnings, higher than Wall Street's current $1.54 estimate. I think that the company is in a great position long term and that 2016 results should provide no less than $2.50 per share in earnings. Given the pullback since the initial pop, shares still have good value for investors today.

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 Star Bulk Carriers Corp. jumped as much as 11% today after announcing an acquisition.

So what: Star Bulk is buying Oceanbulk Shipping LLC and Oceanbulk Carriers LLC for 54.1 million shares in an all-stock deal. This will create the largest U.S.-listed dry bulk shipper and will be paid for with new shares of Star Bulk.  

Now what: Oversupply in the dry bulk business has led to massive losses over the last few years and consolidation in the industry is understandable at this point. For Oaktree Capital Management, who owns a large stake in the Oceanbulk businesses, this presents an opportunity to exit from this investment, which may be a driver behind the deal. I don't think this means much about the health of the dry bulk market and wouldn't get bullish, but it's been good for Star Bulk's stock today.

Continued merger activity around the world didn't have much of an impact on markets today, and with 30 minutes left in trading the Dow Jones Industrial Average was down 0.07%.

Siemens and Mitsubishi teamed up to counter General Electric's $17 billion offer for Alstom, which is now a hot commodity among industrial conglomerates. Siemens offered to pay $5.3 billion for Alstom's gas turbine business and proposed joint ventures in rail and power systems. Mitsubishi would take a 10% stake in the French conglomerate and bring more than $4 billion with it. The saga continues, and I wouldn't be shocked to see this be a contested bid all summer.  

But the bigger deal here in the U.S. is Medtronic's proposed acquisition of Covidien , which would bring together two medical device giants.

Why Medtronic has its sights on Covidien
Medtronic's offer of $35.19 in cash and 0.956 shares of ordinary stock for each Covidien share gives the deal a value of $42.9 billion before Medtronic's shares dropped today. But the reason for the deal is even more surprising than the fact that there's another proposed merger in the medical industry.

Medtronic's headquarters in Minneapolis may be a little quieter in coming years. Source: Medtronic.

Medtronic's medical device sales don't necessarily fit well strategically with Covidien's surgical materials business. So many analysts are pointing to the tax benefits of the acquisition as the key.  

Covidien's headquarters are in Ireland, and Medtronic plans to move its own headquarters there once the deal is finalized. That will free up international profit to be returned to HQ in the new country, whereas many companies keep cash abroad so they can avoid repatriation taxes in the U.S. That tax benefit was also a planned benefit of Pfizer's recent attempts to acquire British pharmaceutical AstraZeneca

The Medtronic buy could also free up cash to spend on further acquisitions and research. But before we go assuming the best for this merger, keep in mind that larger mergers or acquisitions rarely add the kind of value management expects over the long term. For that reason, it's worth looking at skeptically from Medtronic's side.

There's also the possibility that U.S. tax law is put under so much pressure that rules are changed and make the tax benefits moot. It will take years to determine if the deal is a success, but it's worth noting that taxes are now a huge consideration of major U.S. corporations, which are even willing to move abroad to save money.

Ulta Salon, Cosmetics, & Fragrance is the largest specialty retailer of beauty products in North America, and it has recently announced first-quarter results to kick off fiscal 2014's earnings season. The company's stock has reacted by making a sharp move higher, so let's break down the results and its outlook going forward. We'll then check in on one of its largest competitors, Sally Beauty Holdings , to determine if we should be buying into this rally right now or if we should wait for a lower entry point.

Source: Ulta.

The quarterly results are in
The first-quarter report was released after the market closed on June 10. The results exceeded analysts' expectations on both the top and bottom lines; here's a breakdown:

Source: Benzinga.

Earnings per share increased 18.5% and revenue increased 22.5% year over year, driven by comparable-store sales rising 8.7% and e-commerce comparable sales growing an incredible 72.3%. This growth led to e-commerce making up 8.7% of total sales compared to just 6.8% in the year-ago period.

Source: Ulta.

Gross profit increased 20.6% to $245.95 million and operating profit increased 19.5% to $80.88 million; in relation, the gross margin contracted 50 basis points to 34.5% and the operating margin contracted 30 basis points to 11.3%. The contraction of Ulta's margins can be attributed to a 23.5% increase in costs of goods sold and a 22.1% increase in selling, general, and administrative expenses.

In terms of expansion, 21 new stores were opened during the quarter, bringing Ulta's total store count to 696 in North America. This puts the company on pace to achieve its expansion goals for the year and puts it a little bit closer to reaching its long-term goal of 1,200 total stores.

In summary, it was a fantastic quarter for Ulta. The sentiment got even more bullish when the company reaffirmed its full-year outlook.

What will the remainder of the year hold?
In the report, Ulta also reaffirmed its growth expectations for the full year. Here's what it expects to accomplish:

• Earnings per share growth in the mid-teens percentage range
• Revenue growth in the mid-teens percentage range
• Comparable-stores sales growth of 4%-6%
• 100 net new stores
• Free cash flow generation of approximately $100 million

Source: Ulta.

This is a solid outlook, and Ulta added that it expects earnings per share in the range of $0.78-$0.83 and revenue in the range of $706 million-$717 million in the second quarter; this would result in year-over-year growth of 11.4%-18.6% and 17.5%-19.3%, respectively. This was also in line with analysts' expectations of $0.82 in earnings per share and $704 million in revenue.

Overall, it was a phenomenal quarter for Ulta and its stock reacted accordingly by spiking more than 14% higher in the next trading session. This is a huge one-day pop, and I think that it more than prices in the good news. Because of this, I would urge Foolish investors to wait for the stock to come down a few points before pursuing new positions.

Sally Beauty is not seeing the same growth
Sally Beauty Holdings, the international retailer and distributor of beauty products, is one of Ulta's largest competitors in North America. It recently released earnings results of its own. Sally Beauty has been struggling to grow over the last few quarters, and this trend continued in the second-quarter report released in May:

Source: Estimize.

Earnings per share remained unchanged, and revenue increased 2.4% year over year as comparable-store sales rose just 1%. All three of these statistics came in below analysts' expectations. 

Source: Sally Beauty.

Gross profit increased 2.7% to $456.4 million and operating profit declined 2.9% to $124.1 million, as the gross margin expanded 10 basis points to 49.6% and the operating margin contracted 70 basis points to 13.5%. These statistics were negatively affected by a 2% increase in Sally's costs of goods sold and a 4.5% increase in general and administrative expenses.

On a positive note, Sally Beauty repurchased about 2.1 million shares of its common stock for approximately $59.5 million during the quarter. There is about $331 million remaining on the company's $700 million repurchase authorization that was announced in March 2013.

In summary, it was a dismal quarter for Sally Beauty Holdings and its stock responded by plummeting 7.48% in the trading session that followed. The shares have continued lower in the weeks since, and I think there is more room to the downside; as such, I believe investors would be wise to avoid Sally Beauty indefinitely.

The Foolish bottom line
Ulta has just released strong first-quarter results, and its reaffirmed outlook calls for substantial growth going forward. The company's shares have reacted by rising more than 14% in the trading session following the release, but I do not believe this represents a rally that investors should buy into. Foolish investors should instead simply monitor the stock going forward and consider buying on any weakness.

The rapid growth of streaming video services led by Netflix has raised the possibility that Internet service providers will -- like most mobile phone carriers have -- move away from offering one-price, all-you-can-use data plans.

While most ISPs have yet to formally announce plans to cap or throttle heavy data users, Comcast  already has a plan in place. The cable and Internet provider, which is currently seeking federal regulatory approval to merge with Time Warner Cable  in a $45 billion deal, would provide Internet service to 40% of the country should the merger go through. 

If one company controls that much of the market decides to cap, throttle (slow down access during peak times), or otherwise put a price tag on data that goes over a certain level, it makes it easier for the rest of the industry to do the same. That is essentially how the mobile phone companies moved from offering truly unlimited plans to selling tiered data plans.

Of the four major mobile phone companies, none offers a truly unlimited data plan. AT&T , which only offers unlimited plans on a grandfathered basis, throttles speeds after 5GBs. Sprint  stills sells an unlimited plan that throttles data at certain times for its heaviest 5% of users. T-Mobile  throttles after a data cap is reached. Verizon  does not currently show an unlimited data plan on its website. 

Unlimited data was a logical offer for mobile phone companies back when people had flip phones or limited-function smartphones used for basic web browsing. Once watching video and streaming music on a phone became common, making these plans disappear became a priority for the mobile carriers.

Now that streaming video to your television or other connected devices on home Internet networks has flourished, the ISPs will likely attempt to do the same. If Comcast successfully merges with Time Warner Cable then you can assume it will extend data restriction policies to its new customers.

How is Comcast capping data? 
In 2008, Comcast announced an Internet data usage policy that allowed residential customers up to 250 GB of data usage per month. This, the company said in a press release, "was far above any normal (including very heavy) residential use of our high-speed data service, and in fact, that remains the case today." 

That policy was changed in May 2012 when the ISP replaced its static 250 GB usage threshold with what it described as "more flexible data usage management approaches that benefit consumers and support innovation." The company explained the new plan as follows.

The first new approach will offer multi-tier usage allowances that incrementally increase usage allotments for each tier of high-speed data service from the current threshold. Thus, we'd start with a 300 GB usage allotment for our Internet Essentials, Economy, and Performance Tiers, and then we would have increasing data allotments for each successive tier of high speed data service (e.g., Blast and Extreme). The very few customers who use more data at each tier can buy additional gigabytes in increments/blocks (e.g., $10 for 50 GB).

The second new approach will increase our data usage thresholds for all tiers to 300 GB per month and also offer additional gigabytes in increments/blocks (e.g., $10 per 50 GB).

In both approaches, we'll be increasing the initial data usage threshold for our customers from today's 250 GB per month to at least 300 GB per month.

However you phrase it, Comcast did not foresee the rise of services like Netflix and the increased data usage that would bring. The company was willing to give its users 250 GB of data back when few would use it; now that more and more customers are likely to go over, though, Comcast sees a way to increase revenues.

This type of tiered pricing and charging for data overages also gives the ISPs that are also cable companies a hedge against cord cutting. If a customer drops his cable subscription, he will still need Internet access to use streaming video services. Those people are the most likely to top the allotted data. While the companies will lose a cable subscriber, they should make up some revenue on the ISP side.

How much data is being used?
While it's easy to paint the ISPs as villains, one of the key reasons that data caps and throttling are on the table is that people use a lot more data. Forecasts show that this number will grow in the future.

According to Cisco's Visual Networking Index, consumer Internet traffic will grow by 260% through 2018 to an estimated total of 83,298 petabytes or 83 million terabytes per month. The growth in IP traffic will mainly be driven by an increase in online video consumption, which is expected to account for 76% of all consumer Internet traffic in 2018, up from 60% in 2013. Here is a look at the the projected growth:

The numbers are big, and they're getting bigger. It's reasonable to think that the ISPs would want to cap usage or charge more after a certain point. The question is whether they can do it in a way that keeps customers from looking at alternate means of getting Internet access.

Right now, choice in most markets is limited to cable companies and phone companies -- that's sort of like picking between a root canal and a colonoscopy. With Internet giants including Google exploring alternate ways of bringing people Internet access, however, the lack of choices may not be a forever thing. If the ISPs handle the move from unlimited to capped or throttled access as clumsily as the phone companies did, the hunger for an alternative will grow stronger.

What can ISPs do? 
Comcast -- which usually has the grace of a drunken fratboy -- has actually handled the concept of data caps reasonably well. The challenge is phasing in caps that impact very few people while maximizing revenue from the users who consume the most data. Since the vast majority of customers don't reach the cap, few know it exists. That creates problems going forward as streaming services integrated into TVs and other devices become even more common and make it easier for more people to go over the limit.

Before that starts to happen, Comcast and the other ISPs should offers apps and on-screen tools to track data usage that clearly show the cost of going over. If consumers can see their usage then they will be able to watch it grow as they increase their streaming behavior. That will allow them to limit data use or at least not be surprised when increased consumption puts them in a situation where they need to pay more.

People are not unwilling to pay when they see that they are getting more for their money. They tend to react poorly when something that was once seemingly free now costs extra, however. Unfortunately, it's hard to imagine that the ISPs will be deft enough to handle this transition from an unlimited to a capped data world without angering some customers and opening up the door for competitors.

This article was written by Oilprice.com -- the leading provider of energy news in the world. Also c heck out this recent article:

•  Why Greenbacks Aren't Going Toward Green Energy

This article was written by Oilprice.com -- the leading provider of energy news in the world. Also c heck out this recent article:

•  Mosul Falls to Insurgents, Threatening Iraqi Oil Sector

Today, news broke that Nuance Communications and Samsung have held acquisition talks. The news eventually led to Nuance being halted due to volatility, but the end result should have sent a chill through Cupertino, as an Samsung/Nuance merger could have huge ramifications on Apple's iPhone.

Wasn't this supposed to be Apple?
As it's been widely reported, Apple's Siri is powered by Nuance. A couple of years ago, Apple co-founder Steve Wozniak had the Internet on fire when he mentioned in passing that Apple had acquired the voice recognition company. Of course, those rumors later proved untrue but the rumor mill burned slowly for this deal. It briefly reignited when Carl Icahn disclosed his state in Apple; the investing community is well-aware of his stake in Nuance and his son's appointment to the board of directors.

A Siri-less Apple?
The big risk to Apple is losing Siri. Apple has been lukewarm about admitting it, but it is widely reported "digital assistant" is powered by Nuance. When Siri was first introduced, it was considered a massive step forward in the phone's evolution. The company planned a huge ad blitz centered around the function and Apple went on to sell 1 million iPhone 4s units its first week - much more than the 600 thousand iPhone 4 units.

Moving forward to today, Apple is coming out of the doldrums on the back of a successful iPhone 5s launch, a great earnings report, and a recently completed stock split.

AAPL data by YCharts
If this rumor ends up being true, and Siri is lost from the iPhone, this will be a huge blow to the iPhone line and a risk to Apple's fantastic year

Foolish final thoughts
It is important to understand that while this is a fast moving story, we shouldn't get too far ahead of ourselves with speculation. The risk to Apple is there, but don't put it past Cupertino's finest to secure Siri's functionality going forward - either by a deal with the acquirers or making an in-house solution. In the meantime, it will be interesting to see what happens to Nuance - and to watch Samsung's strategy going forward.

Wholesale warehouse club-driven businesses have been doing well. Executives in the consumer products industry expect this store format to deliver the highest growth during the next two years, according to new research from Deloitte. The slow-growing economy is pushing affluent customers to this channel, benefiting the likes of Costco .

Costco boasts of a terrific track record, and its third-quarter results highlight its strong position in the industry. However, it faces competition from Wal-Mart's Sam's Club and other discount retailers like Dollar General . Let's take a closer look at Costco and see how it stacks up against the competition.

Inconsistent, but strong
Fiscal 2014 has been a bit patchy for Costco, as it missed consensus estimates in the second quarter, and the trend continued in the third quarter. Its earnings have been under pressure due to an increase in selling, general, and administration expenses, and volatile gas prices.

However, Costco exceeded expectations on net sales by clocking $25.2 billion, representing year-over-year growth of 7.1%. The growth in the top line was fueled by a robust comps growth of 5% year over year in the U.S., and a 3% jump at international locations. Most importantly, its membership revenue, which contributes a major chunk to its profit, grew 5.6% versus the year-ago quarter, to $561 million. Despite the pressure on the margins, the robust top-line growth and a marginal decline in effective tax rates helped it deliver earnings growth, though not as much as analysts would have liked.

The road ahead
Despite weaker-than-expected earnings, Costco is working on initiatives to keep its long-term growth story intact. Expanding its footprint is one such initiative. In the third quarter, it opened four new locations, including two in the U.S., and one each in Japan and Korea. It is moving into Spain for the first time, and is also adding locations in Australia, Korea, and Japan, taking the total Costco store count to 657. By the end of fiscal 2014, it plans to add six more locations, taking the total to 663.

In the last year-and-a-half, the company has focused on e-commerce visibility, and has added mobile apps. It's bolstering the e-commerce channel -- Costco Online -- to woo Millennials by combining e-commerce merchandising with in-store buying efforts. It has added a few categories, like apparel, certain limited apparel items, and some limited health and beauty items. In addition, it has started shipping out of more than one depot to reduce delivery times.

Outside of the e-commerce channel, it has tested Google Shopping Express to offer same-day deliveries of Costco wares in New York, Los Angeles, and San Francisco. Its efforts to sell club memberships via social media initiatives, including LivingSocial and Zulily, are showing early, yet positive, results in wooing new members. Costco has a very healthy balance sheet, and it can easily afford to spend on these long-term growth initiatives, and position itself to counter threats from Dollar General and Wal-Mart.

Competitive threats
Dollar General, the largest of the dollar stores, is not a warehouse club like Costco. Still, it offers a credible threat to Costco on the back of its competitively low pricing. According to a Kantar Retail price survey last year, Dollar General's total shopping basket was the cheapest among the retailers surveyed, coming in ahead of Wal-Mart.

Dollar General is expanding at a very brisk pace, opening about 600 to 700 stores per year. Its increased visibility could be a thorn in the flesh for Costco. However, since Dollar General's performance is also dependent on government assistance, as its customers depend on food stamps, Costco has an upper hand. Costco's target customers are from the affluent section of society, enabling it to sustain its performance, even in troubled economic times.

Wal-Mart's Sam's Club, on the other hand, is a direct competitor of Costco. However, Costco has pioneered the concept of warehouse club retail model, and led Sam's Club in terms of revenue generated per club. Last year, Sam's Club generated $80 million per club versus $162 million  for Costco. Sam's Club announced a new credit card this month in order to woo online shoppers. This will make it the first major American retailer to switch to a more secure payment card technology. The Sam's Club MasterCard, issued by GE Capital Retail Bank, will be available on June 23.

Sam's Club has been trailing Costco by quite a distance. It had a tough quarter last time, with lower-than-expected sales. According to Faye Landes, a senior research analyst at the Cowen Group, a financial services company, "The divergence from Costco is striking, because they're basically in the same business -- but apparently they're not in the same business." The reason behind this anomaly is because Sam's Club is targeting customers who rely on government assistance, unlike Costco.

The bottom line
Despite putting in a weak earnings performance in the previous quarter, Costco is looking solid. The company enjoys an advantage over its peers. A robust business model means that its performance can improve going forward, driven by international expansion and social media initiatives. All in all, Costco looks like a solid long-term bet.

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 Covidien plc surged 20% today after medical device giant Medtronic agreed to acquire its rival for $42.9 billion.

So what: The cash-and-stock deal --$35.19 in cash and 0.956 of a Medtronic share -- values Covidien at $93.22 per share and represents a premium of 29% to its closing price on Friday. Medtronic is making the move to increase its global reach and significantly boost scale but, judging by its own stock's 2% decline today, Mr. Market isn't too thrilled with the price that management is paying to do it.

Now what: The transaction is expected to be accretive to Medtronic's cash earnings and GAAP earnings in FY 2016 and FY 2018, respectively. "This acquisition will allow Medtronic to reach more patients, in more ways and in more places," said Medtronic Chairman and CEO Omar Ishrak. "Our expertise and portfolio of services will allow us to serve our customers more efficiently and better address the demands of the current health care marketplace. We also look forward to welcoming the Covidien team to Medtronic and working together to improve health care outcomes globally." So while Covidien is likely all popped out at this point, Medtronic's newly bolstered top and bottom line growth prospects might be worth looking into. 

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 Nuance Communications rose more than 11% early Monday following news the voice and language software specialist recently held talks with potential buyers to sell the company.

So what: Citing "people familiar with the matter," The Wall Street Journal reported (may require subscription) that Nuance has held talks with both Samsung and several private equity firms to explore a sale. Closing a deal with the former suitor would be particularly interesting considering Nuance's technology powers Apple's Siri virtual assistant. Still, it wouldn't be entirely surprising as Nuance's solutions are also used in Samsung's various electronic devices.

Now what: However, I certainly wouldn't be willing to base my entire investment thesis for Nuance Communications on an acquisition as a sure thing. And despite the fact that Nuance isn't profitable on a trailing-12-month basis, this would require some relatively deep pockets given Nuance's roughly $6 billion market capitalization. Still, picking up Nuance at the right price could make plenty of sense for the right buyer, and shares do look reasonably valued trading around 15 times next year's expected earnings. One way or another, I think Nuance could very well be set to reward patient investors going forward.

In today's edition of "is this iPhone 6 leak real?" let's look at the key points from a video alleging to show the specifications of Apple's next-generation iPhone 6 models.

The alleged specs
According to the video, here are some of the most important specifications for the iPhone 6:

• 4.7-inch and 5.5-inch models
• Display resolution of 1704x960.
• Measurements of 5.4 x 2.6 x 0.27 inches (compared to the 4.8 x 2.3 x 0.29-inch iPhone 5s).
• 121 grams (a bit thicker than the iPhone 5s, which weighs in at 112 grams).
• Touch ID.
• Apple A8 processor.
• 2-megapixel front camera, 10-megapixel rear camera (up from 1.2 megapixel and 8 megapixel in the iPhone 5s, respectively).

In addition to the specifications, the leak suggests that the base model will sport 32 gigabytes of flash (up from 16 gigabytes) at the traditional $199 carrier-subsidized price, with increments to 64 gigabytes and 128 gigabytes at the $299 and $399 subsidized prices, respectively.

There's not much new here (and that pricing info seems fishy)
The only fresh information here are alleged dimensions (and even those could have been estimated from images of the mockups that have leaked so far) and the camera sensor resolutions. It is not inconceivable that someone who has been following most of the prior leaks simply stitched together a "website" based on these leaked specifications using the current iPhone 5s tech specs page as a template.

Furthermore, the pricing info -- suggesting that Apple is going to equip the baseline model with 32 gigabytes of flash storage -- seems suspicious at best. Apple has likely driven nontrivial amounts of "easy" incremental gross-margin dollars through the upsell from 16-gigabyte models to 32 and 64 gigabyte models. Why would it suddenly abandon that strategy, particularly as the new phone will likely have more expensive components across the board (meaning Apple will want to try to capture every last gross-margin dollar that it can)?

Something else fishy -- no improvements to the camera performance?
Here's another thing that is bothersome about the video. Look at the following image:

Source: YouTube.

The video recording segment still only cites "1080p HD video recording" at "30fps." Given that this would not represent an improvement from the iPhone 5s, and that it would make the iPhone 6 relatively dated relative to something like the Galaxy S5 which supports recording of 3840x2160 video at 30 frames per second, this also seems unlikely. 

Foolish takeaway
As the iPhone 6 nears launch, the signal-to-noise ratio with respect to these leaks will improve, but right now it's hard to believe much of the stuff that gets out. Based on the analysis above, I'm not buying this latest "leak."

Source: Wish-Bone.

Not surprisingly, Hillshire Brands is withdrawing its $4.3 billion bid to purchase Pinnacle Foods . Originally hailed as a perfect blend of meat and vegetables, sandwiches and pickles, the acquisition attempt quickly went off the rails following competing bids from Pilgrim's Pride and Tyson Foods to take over packaged-meats maker Hillshire.

The only caveat to either offer was that Hillshire drop its acquisition of Pinnacle, maker of Vlasic pickles, Wish-Bone salad dressing, and a host of other food brands. With Tyson coming out on top with an offer of $63 per share, or $7.7 billion, Hillshire found the price simply too rich to reject. And this morning the owner of Jimmy Dean sausages made it official that it was withdrawing its offer. As a consolation prize, Pinnacle Foods will receive a $163 million termination fee.

Tyson investors, however, must now be concerned that their company is overpaying for the privilege of buying Hillshire. At a time when the economy seems to be going sideways, consumer spending is soft, and protein prices are hitting new records due to drought and disease, Tyson will issue new debt and maybe even new stock to complete the deal.  

Although it's getting kicked to the curb, Pinnacle may still be a tasty morsel for someone, though not likely any of the losing players in the Hillshire bidding war.

Pilgrim's was looking to acquire Hillshire because its parent, Brazilian meat processor JBS, wanted to diversify away from the low-margin business of selling meat to supermarkets and believed Hillshire would give it a portfolio of brand-name products that could boost its bottom line. While Pinnacle has brand-name power of its own, it would be more an example of Peter Lynch "diworsification" -- buying beyond your core competency. But to a company such as ConAgra or Kraft Foods, it might be a more natural fit.

Pinnacle itself has been willing to play the M&A game, having bought the Wish-Bone salad dressings business from Unilever for $580 million last summer. But with grocery store frozen-food sales stalling as consumers search out fresher, more wholesome options, the premium it would have garnered from Hillshire's offer may not be in the offing again.

Fresh produce is the fastest-growing department in grocery stores, according to the market analysts at Nielsen. Counted as a bundle with meat and deli items, produce grew 7% last year to reach $100 billion in sales. Sales of frozen foods, on the other hand, were flat at $50 billion in sales in 2013.

Hillshire Brands rightly urged its investors to back the board of directors' decision against the still-pending buyout offer for Pinnacle Foods. Now that it is a free agent again, and now that its rivals know it is in the market, expect Pinnacle to be on top of someone's shopping list real soon.

In the spirit of World Cup competition, we're holding our own tournament in search of the Better Stock Today. We're pitting 32 companies against each other, and you, the reader, will determine the winner.

Visa takes on Pfizer for this first round-robin matchup in our search for the better stock today.

Financials analyst David Hanson thinks Visa  should advance to the next round because of the business's importance to the global economy. During the recent economic sanction battle between the U.S. and Russia, the potential loss of Visa's network caused the Kremlin to work out a deal with the payment processor. In addition to its crucial function, the company sports some of the most impressive margins across any business. With a management team committed to returning capital to shareholders, investors would hard-pressed to find a better long-term buy than Visa. 

David Williamson, Motley Fool health-care analyst, thinks Pfizer should advance to the next round because of one big reason -- it isn't afraid to think big. Pfizer has gone through a radical transformation -- gone are nutrition and animal health, and off-patent drugs may be next. Pfizer was unable to pull off a merger with AstraZeneca to dramatically lower its tax rate, but that doesn't mean the company's financial engineering is done. Expect Pfizer to spend the money on shareholder-friendly actions like increasing its dividend and ramping up share buybacks.

Vote here to determine the winner of this match and sound off in the comments. Check back to Fool.com to see who advances in the tournament.

It's been a rough few months for McDonald's and its CEO Don Thompson. No matter what the company tries, it cannot reverse its declining U.S. sales numbers. For the month of May, McDonald's saw its U.S. same-store sales drop 1%. This marked the seventh consecutive month of disappointing same-store results.

Source: McDonald's, Bloomberg

While I give Thompson credit for trying to stem the losses, his predecessors deserve the blame for McDonald's current problems. Right now, McDonald's biggest problem is that it's losing sales to its competitors, most notably Chipotle Mexican Grill and Starbucks . No matter how hard the company tries, it cannot bring back those customers it lost to Chipotle and Starbucks. If we could go back in time, things would be much different for McDonald's today.

Source: McDonald's

What was McDonald's thinking?
Chipotle owes a good chunk of its success to McDonald's. After all, it was McDonald's that provided the capital to expand Chipotle from only 14 restaurants.

Back in 1998, McDonald's invested in Chipotle Mexican Grill with the hope of identifying new ways to reach customers and possibly providing its restaurant operators with a new franchising opportunity. McDonald's, at one point, owned 90% of Chipotle after investing about $360 million to expand the chain nationwide.

Source: Chipotle Mexican Grill

By 2005, Chipotle had expanded to 460 restaurants and was adding 100 restaurants a year. However, McDonald's decided to cash in on its investment and walk away with $1.5 billion to instead focus on its core business. I guess the growth was just too much for McDonald's executives to handle at the time.

While $1.5 billion is a lot of money to us, for McDonald's it's a drop in the bucket. Consider that the company plans to return $18 billion to $20 billion to its shareholders over the next three years in the form of dividends and share repurchases. This is more than 10 times what the company got from selling Chipotle.

If McDonald's would have held onto its 90% stake in Chipotle, it would have a stake valued at more than $15 billion, or about 15% of McDonald's current market value.

Source: Wikimedia Commons

Getting rid of Chipotle when McDonald's did was no doubt one of its biggest corporate blunders of all time. I'm sure Thompson wishes he had Chipotle now. It would certainly take the focus away from McDonald's weak U.S. same-store sales numbers. Chipotle's same-store sales rose by more than 13% in its first quarter.

McDonald's was late to the party
Starbucks CEO Howard Schultz purchased control of Starbucks back in 1987 with a group of investors when it was just a small Seattle coffee roaster and retailer. By the time the company went public in 1992, Schultz had grown the company from $1.3 million in sales to $73.5 million in sales and 140 stores.

Source: Forbes

The rest is, as they say, history. Starbucks now has more than 20,000 stores globally. Its current market cap is $55 billion compared to McDonald's market cap of $100 billion. Starbucks saw its U.S. same-store sales rise an impressive 6% and earnings per share increase 17% in its most recent quarter. This year, Starbucks plans to open 1,500 new stores across the globe.

Source: Starbucks

However, McDonald's didn't think coffee was a great business to be in until 2008. This is when the company decided to roll out its McCafes in a direct challenge to Starbucks. Over the years, McDonald's has added free Wi-Fi and lounge seating, similar to Starbucks.

How have Chipotle and Starbucks affected McDonald's?
McDonald's has felt the biggest impact from Starbucks in its morning breakfast business. Starbucks has been steadily increasing the number of food items on its menu to boost its sales.There are now eight premiere breakfast sandwiches available at Starbucks. Starbucks has also been adding menu items from La Boulange, which it purchased in 2012 for $100 million. The result is that Starbucks continues to blow away its competition in the quick-serve restaurant category.

Source: Adage

In terms of Chipotle, it has had a real impact on McDonald's lunch and dinner business. Its healthier fare appeals to many customers, and Chipotle has created a loyal following because of it. In fairness to McDonald's, though, even Chipotle founder Steve Ells did not foresee the impact his company would have on McDonald's. In 1998, he told the Chicago Tribune:

They are separate concepts, and we don't feel like we compete at all with McDonald's. We're a relatively small company but have a very strong operations system and a very loyal customer base. We have a great recipe for success.

Foolish final thoughts
McDonald's recent sales slump has been building for years. The market has changed dramatically over the past 20 years. Burgers and fries are no longer delivering the type of growth McDonald's experienced in the past. Growth is now found at Starbucks and Chipotle, which both have winning formulas and deliver products that customers can eat every day in a healthy manner.

McDonald's reliance on burgers and fries has cost the company and its shareholders dearly. For shareholders of McDonald's, growth is unlikely, and the focus in owning McDonald's is on its steady dividend and share buybacks. In a zero interest rate environment, McDonald's 3.2% dividend yield is still a solid play for investors.

In the highly competitive retail landscape, innovative companies like VF lead the industry due to their ability to constantly change and adapt to the needs of consumers. However, this ability demands a leadership team that is constantly in tune with current trends.

In the company's latest 10-K filing, VF management highlighted the importance of being able to assess and react quickly to the ever-changing needs of consumers in an effort to maintain brand strength. While VF's management team has performed well in this regard so far, the company's dependence on powerful brand images is one of the largest risk factors for investors to consider going forward.

Timberland logo. Source: Company Facebook 

Brand strength is in short supply
In the general retail landscape, there are not too many brand names that stand out, which makes the handful of those that resonate well with consumers all the more valuable.

VF owns several popular brands, but the company's two biggest names are The North Face and Timberland, both of which figure prominently in VF's signature Outdoor & Action Sports product category.

Over the years, The North Face and Timberland have become increasingly popular among consumers. However, they are only valuable as long as consumers continue to identify with each brand. Any disruption in VF's ability to market each brand correctly could mean serious growth hurdles.

The company's 10-K filing reads:  

VF's success to date has been due in large part to the growth of its brands' images and VF's customers' connection to its brands. If we are unable to timely and appropriately respond to changing consumer demand, the names and images of our brands may be impaired. Even if we react appropriately to changes in consumer preferences, consumers may consider our brands' images to be outdated or associate our brands with styles that are no longer popular.

Such is the nature of any retail business; it is entirely dependent upon the notoriously fickle temperament of the consumer.

(The North Face is one of VF's most prestigious brands.
Source: Company Facebook)

VF is one of the best
The problem that VF faces is one that all other retailers face. Some companies are simply better at staying atop consumer trends than others. An example of a retailer that has failed to keep in touch with its target audience is lululemon athletica .

The popular yoga-apparel manufacturer has witnessed a severe drop in brand strength over the last year or so. The decline was due to a number of issues, most notably a defective product recall and numerous public relations blunders. The company's problems multiplied to the point where even loyal consumers began questioning their support for the Lululemon brand.

However, for Lululemon and its shareholders, the results were one and the same: slowing growth and a plunging share price.

Fortunately, the management team at VF has done a great job at identifying major trends and capitalizing on them. For example, the company has made numerous acquisitions in the rapidly growing outdoor-lifestyle segment. As a result, the overall company is now weighted heavily toward a product segment that is popular and which resonates extremely well with consumers.

Additionally, both The North Face and Timberland are supported by robust advertising campaigns that encourage consumer engagement. Whether it is through print ads or social media, VF continually fosters the idea of its two signature brands as being made for the adventurous.

A recent example is The North Face's 'Never Stop Exploring' campaign, which uses a combination of impressive aerial photography and the voices of iconic explorers to great effect.

Bottom line
The very nature of the retail business means there is no sure thing for investors. Since consumer trends are constantly changing, a successful company must be able to do so as well.

Some companies are more successful than others at maintaining a lasting and powerful brand image. VF is one of a select few companies to have found success for many years, which makes it one of the safest investments in the retail space.

ConAgra Foods  enjoys the benefit of a reliable business model. Since food is a basic requirement, ConAgra's products are in demand even when the economy goes south. ConAgra's portfolio of brands, including Hunt's, Chef Boyardee, Orville Redenbacher's, and Healthy Choice, provided buoyant sales even during the last recession.

Source: Company website

Stability is fairly common throughout the packaged-foods space. This is true not only for ConAgra but Kraft Foods as well. At least a few of Kraft's products, such as Oscar Mayer, Maxwell House, Miracle Whip, and Planters, along with ConAgra's, can be found in nearly every household in America.

But despite the slow-and-steady nature of food companies like ConAgra and Kraft Foods, there's still no such thing as a risk-free stock. There is always the threat of competition even within the food industry. And, in ConAgra's case, it made a significant acquisition last year for this very reason.

If you're interested in buying ConAgra today, here are a couple of risks you should know about.

ConAgra: Stable but not risk-free
ConAgra breaks out several risk factors in its annual filings with the Securities and Exchange Commission. Investors should be aware of these factors before jumping into the stock. One of them is the challenge the company faces from a shift in consumer preferences.

Even though ConAgra is a very large company with several different brands, management warns investors about the risk of consumers scaling back their spending toward cheaper, generic brands. While it's true that ConAgra has brands that are lower on the pricing ladder, those products are lower-margin as well and negatively impact profitability.

ConAgra holds a stable of brands that have generated strong profits for many years through the ups and downs of the broader economy. To that end, its sales grew 5% compounded annually since 2009.

The same is true of Kraft Foods, thanks to its own stable of well-known brands. Its sales are up about 1.5% compounded annually since 2009. That's not overly impressive, but Kraft maintains highly effective cost controls that have resulted in earnings per share from continuing operations growing at nearly 9% annually over the same time period.

As a result, it's clear that ConAgra looks to be highly recession-proof. But that dynamic may not always exist. ConAgra could lose market share to generic competitors should consumer tastes shift. In fact, ConAgra is showing some weakness in its flagship consumer-foods category, which is expected to post a 3%-4% decline in volume over the back half of the year due to weakness in a few unspecified key brands.

To combat this, ConAgra bought Ralcorp last year for $5 billion. This has greatly enhanced ConAgra's presence in private-label brands. ConAgra is now more diversified across price points and is better prepared for future fluctuations in consumer preferences.

However, the acquisition itself was not without its own risks. Management acknowledged that it was a very large takeover that would take time to be fully integrated. ConAgra is hoping to realize significant synergies from the deal. In fact, the company estimates it will generate $300 million in synergies by year-end 2017. This, along with other cost controls, is the foundation for management forecasting 7%-9% long-term annual earnings growth.

Even here, there are risks involved. ConAgra stated in its 10-K filing that it may not generate the cost savings or realize the growth opportunities it anticipates. The company may not eliminate duplicating costs, which fuel its synergy estimates. This is already showing up somewhat, which is why ConAgra recently lowered its full-year earnings estimates.

Some final Foolish thoughts
The bottom line is that while ConAgra performed admirably throughout the recession and is a large company with a portfolio of brands, it's not without its fair share of risks. ConAgra's business is exposed to changes in consumer preferences. This risk is mitigated somewhat by the acquisition of Ralcorp, which will boost the company's private-label business. But the acquisition itself was a risky endeavor. Management admits a buyout this large may not go as smoothly as planned.

At the end of the day, ConAgra has a certain amount of risks like any other company. For Foolish investors interested in buying the stock, it's worthwhile to know the risks before jumping in.