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Intel Could Show Off 10-Nanometer Wafers This September

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While some seem to believe that Intel may lose its manufacturing technology lead to the likes of Taiwan Semiconductor and Samsung , reality is likely to be rather different. In fact, at an upcoming developer conference, Intel could show evidence that its lead is quite intact.

Intel launching first 14-nanometer products, demonstrating 10-nanometer?
According to Digitimes, Intel will be launching its first 14-nanometer Broadwell products under the Core M brand at the 2014 Intel Developer Forum in September. As a quick reminder, Core M is a family of products intended for fanless clamshells and detachable/convertible 2-in-1 designs. The rest of the designs -- aimed at higher power and performance notebooks -- will roll out over the course of 2015.

More interestingly, though, is that Digitimes reports that Intel will demonstrate 10-nanometer wafers at the same time. We've known that Intel's chip teams have been designing on 10-nanometer for quite some time, so it wouldn't be farfetched for Intel to demonstrate a wafer of test chips.


Why would Intel do this?
Right now, there's some concern that Taiwan Semiconductor and Samsung will be able to "accelerate" the development of their next generation manufacturing technologies to "overtake" Intel. While roadmaps and plans are fine and dandy, the reality of the situation is that the move to 20-nanometer, which still doesn't utilize the FinFET transistors that Intel utilized at 22-nanometer, has yet to really begin in earnest, so it's tough to believe some of the claims from the foundries.

In particular, the claim from TSMC is that 16 FinFET comes in 2015, and then 10 nanometer comes in 2016. Given that Intel -- which has had a manufacturing lead for years -- went through a lot of pain in moving to 14-nanometer, it's just really hard to believe that 16 FinFET and 10 nanometer will be cakewalks for either TSMC or Samsung.

At any rate, if Intel does demonstrate such a wafer, it would likely be to reassure investors that it does have a technology lead over the rest of the industry -- because seeing a wafer in real life is much more convincing than a roadmap that is subject to change.

Foolish bottom line
Though there are a lot of conflicting views here, I'm of the belief that Intel's manufacturing lead remains intact. Intel has traditionally invested more in semiconductor manufacturing technology than any other company, and it has a very strong track record of delivering high quality, economically viable processes into high-volume production well before its competitors do. That's not a track record I'd want to bet against in the long run.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

The article Intel Could Show Off 10-Nanometer Wafers This September originally appeared on Fool.com.

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

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

 

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3 Simple Steps For Building Financial Independence

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Every July 4, people celebrate our nation's independence by going camping, watching a fireworks display or grilling some burgers. Sounds like fun! Less fun, however, is living a life shackled to your debt. If you're interested in achieving financial independence, here are some tips to get you started.

1. Take a serious look at your spending
Before you can create a meaningful budget, you have to know where your money is going. How much are your monthly bills? When are they due? You may want to note which bills are optional (like cable or a gym membership) and which are not (like your mortgage or your student loanpayments).

In addition to gathering information about your bills, it's also important to track your discretionary spending. How often do you go out to eat? Have you been spending your weekends at the movie theater catching the latest summer blockbusters? While tracking your spending for a month should give you enough information to begin making changes, the longer you track, the easier it becomes to identify spending patterns.


2. Imagine the life you want and budget around it
Contrary to popular belief, budget is not a four-letter word. If you create a budget that reflects your priorities, it will actually enable you to live the life you want more easily. Let's say you notice that the majority of your spending goes toward eating out, and you're OK with that. Your goal isn't to deprive yourself of something that you truly enjoy. Your goal is to find a way to do the things you love while still meeting your financial responsibilities.

So start with your income and subtract your mandatory expenses, like housing and utilities. Then set some income aside for emergencies in a high-interest savings account, as well as some for your retirement fund. Now take a look at what's left over.

Is it enough to cover your desired discretionary expenses? If not, you have some choices to make. Maybe eating out is super important to you, but cable TV isn't. With many cable packages running $80 a month, cancelling means you can eat out two or three additional times! If you have consumer debt, a low-interest balance transfer card offer may also free up some funds as well, as help you make headway in escaping your debt once and for all.

3. Don't forget the long-term
While budgeting is important to make sure you're not digging yourself into debt, having a long-term perspective and goals is also an important aspect of financial freedom. Don't be so focused on the month-to-month that you neglect goals that will take months, years or even decades to achieve. Take retirement as a case in point -- what kind of life do you envision for yourself once your working days are behind you?

If you enjoy restaurant dining now, for example, you'll probably want to continue with that habit once you retire. But where will the money come from once you've no longer got paychecks coming in? Reducing your future expenses by paying off your mortgage, student loans and consumer debt will help improve your financial flexibility. So will increasing your future income by contributing to a retirement account now and letting compound interest work its magic over the years.

Freedom now, freedom later
If you've made some less-than-stellar financial decisions in the past, you may have to wait until you've paid off some debt before you can truly budget around your priorities. Remember, though, that earning more money is always an option too! By getting a handle on your day-to-day spending, you can make sure you have the means to participate in activities you enjoy.

Don't rest on your laurels once your monthly spending is under control, however. With any luck, you're going to live for a long time, and you should have a plan in place that ensures your financial freedom not only now, but for years to come.

This article 3 Simple Steps for Building Financial Independence originally appeared on Money Blue Book.

Bank of America + Apple? This device makes it possible.
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its destined to change everything from banking to health care. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here

You may also enjoy these financial articles:

How to grow your savings with a zero-sum budget

2 financial goals you should revisit every year

5 tips for building an emergency fund

The article 3 Simple Steps For Building Financial Independence originally appeared on Fool.com.

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

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

 

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The iPhone's Greatest Asset is About to Get Even Better

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Apple's iPhone 5C. Source: Apple.

It's hard to believe, but when the iPhone launched in 2007 it didn't come with Apple's now famous App Store. The company quickly realized the need for one centralized location for the distribution of apps and launched the store a year later.

Even after six years, the App Store is still one of the iPhone's greatest assets and in iOS 8 it's about to get even better.


Time for an upgrade
With 1.2 million apps, Apple's store is busting at the seams. Overall, that's been good for developers and users, but now it's getting hard to find the best apps.

To solve this, iOS 8 will add the following features to the App Store:

App bundling: Let's say a developer makes several organizational apps, like calendar and to-do list applications. That developer can now bundle those apps together so users can easily see all of them in the same category. Aside from increasing exposure, this allows discounts for bundled prices which could translate into more sales for app creators.

Video preview: Apple doesn't get the credit for this one, Android has had video previews of apps for a while. Instead of the standard screenshot, users get a full-screen video of the app at work.

Family sharing: Up to six people can share App Store purchases with each other, as long as they all use the same credit card. This feature is actually extended into iTunes and iBooks purchases as well. Parents will be able to approve children's purchases via a notification on their device.

Trending apps: Instead of relying on old ways of categorizing top apps, Apple is trying to make it easier -- and more legitimate in some cases -- for developers to get their apps in front of users.

TestFlight: Exactly how it sounds, developers can test out versions of their apps in the developer center and also open them up to public beta testing.

So this all sounds pretty cool, but why does it matter?

The real reason Apple updates the App Store 
Apple has said that since it's App Store launched six years ago there have been 75 billion app downloads. Last year, iPhone and iPad users spent $10 billion in app purchases in the App Store. Of course Apple only takes 30% of that and the rest goes to the developers.

According to Forrester Research, app sales are expected to reach $100 billion by 2020, industry wide.

But the significance of the App Store isn't necessarily from app sales.

Apple receives more than half of its revenue from iPhone sales, so keeping consumers engaged with the device is extremely important to the company's bottom line. Apple does this well through branding and creating high-end devices with great specifications, but part of the iPhone's draw is also what the phone can do. That's why Apple continually tweaks the App Store, and why the updates for iOS 8 are so important.

Will the app store be used for wearables soon?
Apple is expected to launch a wearable device this coming fall, leaving the possibility wide open that its current App Store will soon host new applications tailor-made for the device. But while Apple is readying its wearable device, some investors are getting in on the tech trend now by investing in the technology inside wearables. One company is leading the pack right now, and you can found out which one it is in The Motley Fool's free report -- just click here now

 

The article The iPhone's Greatest Asset is About to Get Even Better originally appeared on Fool.com.

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

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

 

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Intel Corporation Earnings: Will the PC Really Save the Chipmaker?

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On Tuesday, Intel will release its quarterly report, and shareholders have to be excited about the strong performance in the chip giant's stock lately. Even as long-term investors have bemoaned Intel's strategic lapse in falling behind competitors Qualcomm and NVIDIA in tapping the full power of the mobile revolution, Intel appears to be getting support from an area that most investors had given hope on entirely: the PC realm.

Intel pioneered the semiconductor industry, with its microprocessors forming the foundation of the PC boom of the 1980s and 1990s. More recently, though, the rise of smartphones, tablets, and other mobile devices has forced Intel to make a major strategic shift, and its sluggishness in adapting to the new environment gave Qualcomm, NVIDIA, and other nimbler competitors the opening they needed to chip away at Intel's dominance. Despite a recent bump in PC demand, Intel still has to figure out how to move forward in a viable strategic direction for the long run. Let's take an early look at what's been happening with Intel over the past quarter and what we're likely to see in its report.


Source: Intel.


Stats on Intel

Analyst EPS Estimate

$0.52

Change From Year-Ago EPS

33%

Revenue Estimate

$13.69 billion

Change From Year-Ago Revenue

6.8%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Are Intel earnings exploding higher?
In recent months, investors have become much more enthusiastic about Intel earnings, boosting second-quarter estimates by $0.09 per share and full-year projections by almost double that amount. The stock has soared in response, gaining 17% just since early April.

Source: Intel.

Intel's first-quarter results showed the general trend the chipmaker had fallen into recently. Revenue fell 1.5% from year-ago levels, sending earnings per share down 5%. Pockets of strength helped Intel's overall results, including gains in its data-center group. But steady weakness in its PC business continued to weigh on Intel's overall results, with PC-Client revenue easing downward by 1%.

The big positive surprise for Intel shareholders came in June, when Intel announced it was raising its revenue guidance for the second quarter and for the full year. In the release, Intel cited strong growth in PC systems for enterprise customers, and that was enough for it to expect 5% higher sales for the second quarter and to call for at least some growth for the full year compared to original guidance for roughly unchanged sales. Many believe that the removal of customer support for the older Windows XP operating system might have spurred business customers to replace aging PCs with newer models, leading to the short-term bump in the division.

But many worry that the PC recovery could be short-lived, and when it comes to the area with the most promising long-term prospects for its growth, Intel has continued to struggle in the mobile arena. During the first quarter, Intel suffered operating losses of more than $925 million in its mobile and communications division, with net revenue plunging more than 60% from the year-ago quarter's levels. Despite Intel's predictions that the company would rebound sharply in the mobile space in 2013, many now expect that Intel won't see marked progress in mobile until next year at the earliest, as the first-mover advantages that Qualcomm has continue to hamper Intel's efforts to establish stronger market share.

In the long run, Intel will rely on new chip offerings in order to move forward. Its new Cherry Trail architecture has the potential to move well past older offerings, with applications both for low-power PCs and tablets. That could help its graphics performance be more comparable to offerings from NVIDIA and Qualcomm, finally closing a competitive gap that has held back Intel.

In the Intel earnings report, watch to see how large the bump in PC demand has been and what the company foresees as its long-term impact. Without ongoing progress in its mobile efforts, Intel's earnings outlook won't necessarily stay rosy for long.

Leaked: Apple's next smart device (warning -- it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee that its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming that its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts that 485 million of these devices will be sold per year. But one small company makes this gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and to see Apple's newest smart gizmo, just click here!

Click here to add Intel to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

The article Intel Corporation Earnings: Will the PC Really Save the Chipmaker? originally appeared on Fool.com.

Dan Caplinger owns shares of Apple. The Motley Fool recommends Apple, Intel, and NVIDIA and owns shares of Intel, Apple, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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

 

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4 Key Takeaways From Alcoa Inc's Earnings Report

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Alcoa's second-quarter report was praised by the market, and the company's shares continued their impressive rally. While most of the positives have been attributed to the company's aerospace and auto businesses, the primary aluminum segment showed strength as well. Besides successful cost-cutting and continuing idling of underperforming facilities, the primary aluminum segment also benefited from industrywide trends. These developments will benefit other primary aluminum producers, such as Century Aluminum and Rio Tinto .

Aluminum demand continues to grow
Alcoa continues to project that global aluminum demand will grow by 7% this year, fueled by continuing growth in China. The Chinese story is not that important for Century Aluminum, which derives 85% of its revenue from four customers, the biggest being Glencore Xstrata. However, it is important for Rio Tinto, for which China is a big customer.

Production curtailments create deficit
Alcoa expects a substantial deficit in the aluminum market this year. Alcoa itself has closed three smelters in 2013 and two smelters this year, while making production curtailments on many other facilities. In turn, Century Aluminum is also operating below its capacity. While the company's total annual production capacity stands just above one million tons per year, Century Aluminum produced 777,000 tons in 2013. Just like Alcoa, Century Aluminum expects to see a deficit in the aluminum market for the foreseeable future.


Aluminum inventories continue to decline
Alcoa stated that global inventories declined by 37 days from the peak reached in 2009. What's more, inventories declined by five days in the second quarter and remain at 71 days of consumption. Interestingly, when inventories were higher, aluminum prices at the London Metal Exchange (LME) were higher too. Possibly, the lower level of inventories was a source of the recent rebound in aluminum prices, although prices remain at low levels.

Better pricing would have certainly helped aluminum producers, especially for Century Aluminum, which had recently had a series of quarterly losses. However, the company is expected to return to profitability in the second quarter and is also expected to finish this year with a profit. Century Aluminum managed to grow its revenue by 31% in just one year, and this fact bodes well for the company's shares, which are up more than 60% year to date.

Premiums hit highs
Buyers who want physical delivery of aluminum pay a premium over the LME price. Back in 2013, those premiums were mostly between $250 and $300 per ton. At the end of the second quarter, premiums reached $425 per ton in Europe, $403 per ton in Japan, and $430 in the Midwest US. This fact signals improving physical demand in different parts of the world and should boost cash flows for aluminum producers.

Bottom line
The aluminum story is not only about value-add products right now. Producers can make money on primary aluminum as well, if they are positioned on the left side of the cost curve. For example, Alcoa plans to improve its aluminum cost curve position from the 43rd percentile to 38th percentile by 2016. Producers with solid costs will take advantage of the recent developments, and weaker players will be forced to leave the market.

Top dividend stocks for the next decade
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The article 4 Key Takeaways From Alcoa Inc's Earnings Report originally appeared on Fool.com.

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

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

 

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What Will Ford's New CEO Do With Lincoln?

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Ford's efforts to revive its old Lincoln brand have so far been a mixed bag. Is that about to change under its new CEO? Shown is a 2015 Lincoln MKC. Source: Ford Motor Co.

Ford  has a new CEO: Mark Fields took over for the retiring Alan Mulally last week.


Mulally will be a very hard act to follow. But Fields was a strong choice for the job, and Ford investors should look forward to seeing how Fields guides the company forward from here.

One question of great interest: How will Fields approach the ongoing effort to transform the old Lincoln brand? 

Motley Fool senior auto specialist John Rosevear thinks that Fields might bring a very different perspective to the job of overhauling Lincoln. As he explains in this video, Fields has run global luxury-vehicle brands in the past -- and that gives him a well-informed perspective on what really needs to be done to reestablish Lincoln as a luxury contender.

A transcript of the video is below.

Warren Buffett's worst automotive nightmare (Hint: It's not Tesla Motors!)
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of his favorite businesses. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to invest in this megatrend. Click here to access our exclusive report on this stock.

John Rosevear: Hey Fools, it's John Rosevear, senior auto specialist for Fool.com. So Ford has a new CEO, Alan Mulally has retired from Ford and his successor, longtime Ford veteran Mark Fields, took over on July 1st. We'll all miss Alan Mulally, I've interviewed him a few times and I can tell you he's a lot of fun to talk to, great energy, very upbeat, it's clear why Ford folks love him. But I've also spent some time talking to Mark Fields, and I think he'll be a strong CEO for Ford too.

One of the things I think will be interesting to watch is how Fields guides the development of the Lincoln brand. Years ago, Ford had a division called the Premier Automotive Group, or PAG, this had all of Ford's premium brands, at the time Ford owned Jaguar and Aston Martin and Volvo and Land Rover as well as the Lincoln and Mercury brands. All of those except Lincoln are gone now, Ford closed Mercury and sold off the overseas brands, but what's significant is that this existed as a division of Ford, all of those brands, and Mark Fields actually ran it for three years between 2002 and 2005.

So Fields has a much more in-depth understanding of what it takes to run a global luxury-car brand than the average person who maybe grew up in Detroit and is now an auto executive, and I think that's giving him a different perspective on what Lincoln could be in terms of its potential, and a perspective on how far it has to go to be really competitive with say Jaguar or even something like Toyota's  Lexus brand.

But it does have a long way to go even to be a solid profit center for Ford. Bloomberg reported last month that Lincoln was such a big money loser for Ford that Mulally wanted to just shut it down at one point last year. But Fields talked him out of it.

I think what Fields really understands is that a well-run luxury car brand can make a disproportionally big contribution to overall profits. Every time we talk about Volkswagen Group  we talk about this, how the Audi and Porsche brands represented just 18% of the VW Group's total sales last year but 65% of its pre-tax profits.

Lincoln is a long long way from making that kind of contribution to Ford's bottom line, but a luxury business has that kind of potential, and Ford probably needs it to stay competitive globally, needs that boost to profits. So how will they get there?

Obviously Lincoln needs more products that aren't just black Fords with nicer leather. The MKZ sedan is a good start, it's based on the same architecture as Ford's Fusion sedan but it's distinctively different and offers a different experience. It's the same deal with the all-new MKC SUV, it's a cousin of the Ford Escape but it's quite nice and should sell well, not just here but in China where compact premium SUVs are quite hot. A

nd we do know that China is a big part of the case for Lincoln, the brand has been rolled out in China with a big emphasis on customer service, but it's also clear that Lincoln needs more new products both here and in China, a bigger crossover SUV and an overhaul for the bigger MKS sedan, both of those are known to be under development, but this is going to take time, and it will be worth watching how Fields guides this project, because I bet he has a pretty clear vision for what needs to be done. Thanks for watching.

The article What Will Ford's New CEO Do With Lincoln? originally appeared on Fool.com.

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

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

 

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This Week in Biotech: Anacor's FDA A-OK and AbbVie's Insatiable Urge to Buy Something

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With the SPDR S&P Biotech Index up 28% over the trailing 12-month period, it's evident that investment dollars are willingly flowing into the biotech sector. Keeping that in mind, let's have a look at some of the rulings, studies, and companies that made waves in the sector last week.

Source: Sarah Reid, Flickr.

You are approved!
Sorry Suzy Orman, I'm stealing your line! Shareholders in Anacor Pharmaceuticals awoke to positive news Tuesday morning as the Food and Drug Administration approved Kerydin, its topical solution meant to treat onychomycosis of the toenail and nail bed. Anacor's CEO Paul Berns noted that whether or not the company is able to find a partner for its newly approved drug it remains on track for a launch as early as the end of the third quarter.

Before you get too excited, though, keep in mind that investors would probably much prefer Anacor find a partner as it'd likely mean a substantial upfront licensing payment and the probability of more bountiful long-term sales with a more experienced sales partner. It's also not as if Anacor's shares didn't more than double leading up to this approval. All in all this is a watchlist worthy name, but I'd need to see consistent profitability before I'd even consider throwing my investing money at Anacor.


Hitting the brakes in the fast lane
On the other hand Zogenix shareholders had a week to forget after the FDA granted privately held Purdue Pharma's investigational abuse-resistant chronic pain tablet a priority review. This is potentially worrisome because the FDA has previously stated this if a more abuse-resistant chronic pain medication came to market than Zogenix's FDA-approved Zohydro ER, it's possible that Zohydro could be pulled from market.

The good news is that Zogenix is taking steps to develop new more abuse-resistant formulations of Zohydro ER. As the company noted in the previous week, it'll likely have a new drug application filed for Zohydro capsules by October and could have a tablet version available to be filed in 2016. Still, Purdue's priority review lops at least four months off the review process and could get it to market three months or more before Zogenix's reformulated abuse-resistant capsules. As I stated earlier this week, Zogenix shareholders may have to kiss their hopes of full-year profitability by fiscal 2015 goodbye.

Source: Bristol-Myers Squibb.

Say hello to opdivo
I generally don't pay a lot of credence to biologics license application filings, but on Thursday we saw a possible landmark one from Bristol-Myers Squibb which announced its intentions to file a BLA in the third quarter for opdivo (previously known as nivolumab) as a therapy for previously treated advanced melanoma.

Opdivo is among one of the most promising immuno-oncology drugs. Known as an anti-PD-1 inhibitor, it's postulated that inhibition of the checkpoint receptor PD-1 expressed on activated T-cells could allow a person's immune system to recognize and attack cancer cells. The investigational drug leaped onto the scene in May of last year right before the American Society of Clinical Oncology's annual meeting with the combination of Yervoy (developed by Bristol-Myers) and opdivo (nivolumab) producing an astounding 40% overall response rate in previously treated melanoma patients. If approved, this combination therapy could have blockbuster potential.

Buyout chatter
In the deal that won't die, AbbVie made yet another swipe in its attempt to purchase Irish-based Shire , this time pitching its offer directly to Shire's largest shareholders. AbbVie is offering to boost its offer price by 11% to $51.3 billion with the cash component of the offer price jumping by 10%. Although the offer isn't official yet, AbbVie CEO Richard Gonzalez would be willing to move quickly on a purchase if Shire's shareholders were in favor of the buyout pitch.


Source: Brandon Giesbrecht, Flickr.

AbbVie has stated on numerous occasions that the research and development synergies and financial clout of the two companies would create immediate and long-term benefits for shareholders. However, the big allure of this deal is the prospect of corporate tax inversion whereby AbbVie could benefit by relocating its headquarters from the U.S., with its 40% corporate tax rate, to Ireland, which has a corporate tax rate of just 12.5%. The tax savings here would be in the hundreds of millions. This is a developing deal worth keeping your eyes on.

What pain?
Ask shareholders of BioDelivery Sciences and they'll tell you it was an exceptional week, with shares finishing higher by 17% after the company on Monday delivered positive phase 3 results for BEMA buprenorphine, its chronic pain medication for patients that had previously been treated with opioid-based drugs. BioDelivery Sciences and its partner Endo Pharmaceuticals, a subsidiary of Endo Health Solutions, noted that BEMA met its primary endpoint of a statistically significant reduction in pain over a 12-week period relative to the placebo based on the daily average pain numerical rating scale. In addition, BEMA also met a number of important secondary endpoints. The duo is expected to meet with the FDA and file for an NDA soon. 

While this is undeniably great news for BioDelivery Sciences, investors would still be wise to keep in mind that the chronic pain market is a highly competitive field, and BioDelivery isn't guaranteed success even if the FDA ultimately approves its drug. I'd much prefer to stick to the sidelines in the meantime and allow BioDelivery to get a few quarters of sales (assuming approval) under its belt before committing to this stock.

Fighting dengue
It's not an illness you hear about too often in the U.S., but dengue, a flu-like illness that can result in a number of other complications, has no cure or vaccine, and infects between 50 million and 100 million people on an annual basis, may have partially met its match. The good news is that it appears Sanofi may have developed a vaccine that is moderately effective in treating three out of four strains of the disease.


Source: NIAID, Flickr.

According to a Bloomberg report released yesterday, in a clinical trial that involved more than 10,000 children in Southeastern Asia Sanofi's dengue vaccine reduced the risk of infection by 56.5% and the chance of severe complications by 88.5% based on data published in The Lancet. Unfortunately, its vaccine only worked on three out of four viruses and was the least effective in the youngest children, who, in turn, happen to be in the most affected by dengue fever and its possible complications. With nothing currently available on the market to treat dengue fever this is a big step in the right direction for Sanofi, and barring the results from its larger clinical trial in Latin America Sanofi intends to seek regulatory approval for its vaccine next year in most countries.

The enormous potential of this revolutionary product could leave all of the aforementioned health-care companies eating its dust!
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The article This Week in Biotech: Anacor's FDA A-OK and AbbVie's Insatiable Urge to Buy Something originally appeared on Fool.com.

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

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

 

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Is Lockheed Martin's Dividend in Danger?

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Photo: Wiki Commons

It's safe to say that Lockheed Martin's sailed through the past year with flying colors.


Over that time, this defense stock's picked up more than 40%, rewarding investors handsomely. For shareholders, however, one of Lockheed's biggest draws is its 3.2% dividend yield. It's an added piece of security for investors thinking about the big picture, especially as defense budgets in advanced markets -- particularly at the Pentagon -- come under fire.

But is that dividend in danger? Pressure has mounted on sales across the defense sector, with even giants such as Boeing and Raytheon feeling the heat. Can Lockheed investors count on this strong dividend yield for the long term, or should you ground this high-flying defense stock?

Defense budgets on the downswing
In a purely financial sense, Lockheed's dividend looks to be in good hands. Its dividend payout has been raised every year since 2003. A dividend payout ratio of 51% still offers Lockheed plenty of flexibility in continuing to raise that payout in the near future, and the company's producing strong cash flow. Indisputably, those factors bode well for the dividend's future.

However, there's more than just financial numbers to look at when considering this top dividend. Lockheed's managed to keep its operating income on the upswing as of late -- in its first quarter, the company grew that mark by more than 6% year over year. But those gains have come largely from cost-cutting moves. It's been a similar story around the industry: Raytheon in its first quarter boosted its operating income primarily by slashing its costs of sales by nearly 10% year over year, overcoming falling revenue. In the long term, however, Lockheed and other defense giants will need more than just cost savings to keep profits rising.

Unfortunately, the defense industry's anything but a growth haven right now. The market's long-term concerns have placed Lockheed's sales and future dividend raises in jeopardy.

The U.S. defense industry's responsible for the majority of most major defense contractors' revenues and accounted for 41% of global defense spending in 2011, according to a report by Deloitte.

Source: Deloitte 2014 Global Aerospace and Defense Industry Outlook.

Yet the Pentagon's budget is scheduled for a huge haircut through the rest of the decade: The Department of Defense requested $495 billion in its base budget for 2015, down more than 6% from 2010's base budget of $530 billion. Already, the drawdown of Western defense budgets has taken its toll on the industry: According to Deloitte, global sales at top defense companies declined fell by 1.3% in 2012 and 1.9% in 2011.

While there are opportunities for growth abroad, particularly in Asia and the Middle East, defense budgets in those regions still trail the U.S.'s significantly - and Lockheed, along with other top defense contractors, have yet to pivot significantly toward overseas markets. Raytheon, one of the better-positioned defense contractors, has boosted international sales up to 27% of total revenues, but the company's still reliant on more than two-thirds of total sales to the DOD. That's a major liability if the Pentagon continues to draw back its budget in coming years.

More pain could be on the way: 100% of aerospace and defense executives surveyed in a late 2012 study by McKinsey projected further ongoing worldwide defense budget drawbacks, particularly in North America. Worse, the Department of Defense's current projections of base budget requests between 2016 and 2019 exceed limits imposed by the Budget Control Act, per the Center for American Progress. That means more cuts likely are on the way, and while the DOD's already aiming to slash active-duty troop counts to save some money, it's likely that more headaches are on the way for top defense companies.

For Lockheed and its dividend, that trend could mean trouble.

Will the F-35 backfire?
Lockheed's sales have fallen victim to tightening budgets already: Four of the company's five business groups lost sales year  over year in the first quarter. Lockheed's aeronautics division, its top unit by revenues, was the lone area of growth -- and, disappointingly, the division's operating margin declined by 0.3 percentage points in that time.

That's a trend that's spreading across military aviation giants: Boeing's own military aircraft unit saw its operating margin shrink by more than a full percentage point in its first quarter, along with witnessing sales contract by more than 4% year over year. Overall, Boeing's defense, space, and security division revenues plunged by nearly 6% in the quarter.

 
Photo: Wiki Commons 

The F-35 Lightning II program is the bread and butter of Lockheed's aviation aspirations, and so far it's reeled in big bucks for this defense titan and kept its dividend on course. Yet Lockheed only sports a backlog of 85 aircraft for production, including international orders. Concerns over the spiraling costs for the F-35 program have put pressure on its future, and with the DOD currently planning to order more than 2,400 of the aircraft, there's a distinct possibility that the Pentagon may cut back on its orders in the future to save money.

Lockheed's no stranger to this: The F-22 Raptor, Lockheed and Boeing's previous fifth-generation fighter, saw orders drawn down from an original 648 aircraft to 183.

It's not helping Lockheed's cause that the F-35's run into trouble as of late. Earlier this month, the DOD grounded the entire fleet of Lightning IIs for inspection, and while that's not terribly troubling on its own, the Pentagon's also suspended current talks for further F-35 acquisitions for now. It may be a small issue when the facts emerge, but it's one more hit for opponents of the costly program to tout.

That's not to say that the F-35's a doomed plane. The Pentagon's rallied around the fighter's multi-role nature and stealth systems, and with so much federal money already invested, Lockheed's likely on solid footing. But with tightening defense budgets already impacting the company's other business units, Lockheed needs the Lightning II to continue to fly high in order to keep investors satisfied -- and its dividend on pace for future growth.

Facing an uncertain future
Cost-cutting is enough to keep Wall Street happy in the short term for Lockheed and its strong dividend, but this defense giant will need to do more to keep its dividend on the right track for the long term. Its reliance on its aeronautics division for sales growth -- in particular, the F-35 program -- makes the company particularly vulnerable to the fickle nature of today's budgetary climate, especially considering its reliance on the U.S. government for contracts.

Still, Lockheed's size and sway in Washington makes this company a top pick in the defense sector. This stock's certainly showed no signs of surrendering to budget cuts so far. However, as the Pentagon draws down ongoing operations overseas and fiscal hawks on Capitol Hill look for pennies to pinch, Lockheed and other top defense contractors are facing an uncertain future. This dividend's safe for now, but for long-term investors, the future's no sure thing.

Dividend investors can't afford to ignore these unbeatable stocks
Lockheed's dividend is one of the stock's biggest selling points for one crucial reason: The market's best investors know that dividend stocks crush their non-dividend-paying counterparts over the long term. Even better, a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

The article Is Lockheed Martin's Dividend in Danger? originally appeared on Fool.com.

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

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

 

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Apple, Inc. iPhone 6 Launch: Less Than 2 Months Out?

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Like clockwork, Apple's stock is trending upward in anticipation of the next-generation iPhone launch. But the pressure going into this year's launch is undoubtedly greater than the pressure going into the iPhone 5s launch. Apple stock is trading about 5% off its all-time high just over a post-split $100 a share, and about 19% higher than at any point in 2013.

4.7-inch and 5.5-inch iPhone 6 mockups pictured with the 4-inch iPhone 5s. Source: 9to5Mac, used with permission.


And just as has been the case for several years, Apple's reliance on iPhone sales for its business results is enormous. In the company's most recent quarter, iPhone sales accounted for 57% of total revenue. And, based on comments from Apple about how its gross profit margin is affected by product segments, we also know that its iPhone segment boasts higher gross profit margins than other segments. In short, Apple's iPhone business is absolutely essential to overall business performance.

When can investors expect the iPhone 6 to be announced? The first or second week of September is looking likely now, according to MacRumors (citing a "reliable source").

But this comes as no surprise, MacRumors' Juli Clover explains.

An early September event is in line with previous rumors and with the event dates of the last two iPhone generations. The iPhone 5 was announced on Wednesday, September 12 with availability occurring on September 21 and the iPhone 5s/5c was announced on Tuesday, September 10, with availability starting on September 20. 

The iPhone 6 will mark a major departure in terms of design, with both a sleeker form-factor and models with larger displays. The next-generation iPhone will allegedly come in two versions: a 4.7-inch display size and one with a phablet-like 5.5-inch display.

iPhone 6 concept. Design by Tomas Moyano and Nicolas Aichino.

The iPhone 6: A blockbuster hit?
The iPhone 6 looks poised to be a winner in the market.

Given the fact that there's likely meaningful pent-up demand worldwide for an iPhone with a new form-factor and larger display, carriers are poised to have an unusually large number of subscribers eligible for upgrades at the time of launch, and that China Mobile's (the world's largest carrier) LTE rollout will be in full swing, it's reasonable to expect iPhone unit sales in fiscal 2015 to be around 20% greater than in fiscal 2014.

At this rate of growth for Apple's most valuable segment, 15% EPS growth in fiscal 2015 is downright conservative -- especially after you take into consideration Apple's aggressive share repurchase program.

4.7-inch and 5.5-inch iPhone 6 mockups pictured with the 4-inch iPhone 5s. Source: 9to5Mac, used with permission.

Most important of all, the iPhone has served as an excellent gateway device for new Apple customers. And given the strength and "stickiness" of Apple's ecosystem, once Apple gets new customers using its products, customers often buy other products and continue to upgrade to new devices. And for customers who are already using the iPhone that decide to upgrade, the iPhone 6 will only get them even more entrenched in the ecosystem.

So though the iPhone 6 may only be the major driver for Apple sales in one fiscal year, the growth in customer base that could result is likely to have lasting effects for Apple's business.

Just about two months out from the rumored launch, we'll soon get to see the iPhone 6's impact on the business first hand. But considering the conservative valuation for the stock, I wouldn't wait until after fiscal 2015 passes to buy in to the opportunity.

Leaked: Apple's next smart device (warning -- it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee that its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming that its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts that 485 million of these devices will be sold per year. But one small company makes this gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and to see Apple's newest smart gizmo, just click here!

The article Apple, Inc. iPhone 6 Launch: Less Than 2 Months Out? originally appeared on Fool.com.

Daniel Sparks owns shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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

 

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How 3-D Printing Fits Into Advanced Manufacturing at General Electric Company

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In an effort to keep up with booming aviation demand, General Electric has pledged to invest more than $3.5 billion between 2013 and 2017 to expand its advanced manufacturing facilities. Part of this investment will be directed toward General Electric's ambitions to 3-D print up to 45,000 fuel nozzles a year for its upcoming LEAP jet engine.

General Electric has taken a liking to 3-D printing in recent years because it invites design possibilities that allow it to create fundamentally better products over conventional manufacturing methods. For instance, a 3-D printed jet engine fuel nozzle is five times stronger and 25% lighter than its conventionally manufactured counterpart, and is 3-D printed as one finished part instead of the 18 it would normally need with conventional manufacturing.

In the following video, 3-D printing specialist Steve Heller asks Stephan Biller, Chief Manufacturing Scientist at General Electric, where 3-D printing fits into the advanced manufacturing picture. Going forward, General Electric investors should continue to monitor how General Electric pushes the boundaries of 3-D printing and advanced manufacturing to determine if it can gain a competitive advantage.


A full transcript follows the video.

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Steve Heller: "Advanced manufacturing" covers a lot of different topics. In your opinion, professionally, what is your take on where 3-D printing, additive manufacturing, fits into advanced manufacturing?

Stephan Biller: When I think of advanced manufacturing, I think of two parts. One is product enabling; the other one is cost reducing and improving agility, and throughput, and quality, and so forth.

Additive manufacturing [3-D printing] actually fits into both, but it's mostly, I would say, product enabling. We can make parts we have never been able to make before. We [General Electric] can now reduce the number of parts in that fuel nozzle, I think, from over 30 to just a couple. Those are really amazing changes within manufacturing, that additive manufacturing [3-D printing] enables.

The article How 3-D Printing Fits Into Advanced Manufacturing at General Electric Company originally appeared on Fool.com.

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

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

 

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Bitcoin Treasure Hunt Launched in San Francisco by Mystery Donor

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If you missed out on the Hidden Cash treasure hunt last May,never fear. @SFHiddenBitcoin has arrived, transforming San Francisco into a gigantic bitcoins beta test. No one knows who is leaving the shiny bitcoin "wallets" around the city and posting tantalizing clues on Twitter. But the buzz is building for the daily crypto-currency scavenger hunt.

The wallets look like small sheets of aluminum with a QR code, a bitcoin address, and the hunt's twitter handle. Each wallet is reported to contain 0.0333 bitcoin, or about $20, which goes to those clever enough to figure out the clues. They can be discovered by following the hunt's Twitter account: @SFHiddenBitcoin.

@SFHiddenBitcoi posts the slogan: 'Bringing bitcoins to the people by hiding them. An educational experiment'. The profile tweets claim the scavenger hunt will go on for a month, with a new wallet tucked away in a new location (one's been spotted at Mark Zuckerberg's house) every day of July. They may need a new clue writer -- all of the cards have been located shortly after the clue was released.

Mainstreaming of bitcoin

This lighthearted contest adds another milestone to the mainstreaming of bitcoin. Over the last weekend in June, California Governor Jerry Brown signed into law a major milestone in commerce -- a bill that, like the Internet, "could change everything." Given that California is the eighth largest economy in the world with a staggering GDP, AB 129 is likely a game changer.

AB 129 legalizes Bitcoins and other digital currencies for transactions in California.The "Lawful Money" law repeals a provision that banned the use of "anything but the lawful money of the United States."

Bitcoin's evolution of late has been rife with both potholes and possibilities. After a tenuous period during the collapse of Mt. Gox, government crackdowns, Silk Road bitcoin seizures, and even rumored crypto-currency-related deaths, a significant upturn began this spring.

E-commerce influencers such as Overstock, eBay, Apple, Google, Expedia and Yahoo took steps to recognize Bitcoin as legit. Bitcoin accelerators are quickly emerging via organizations like 500Startups, which recently funded five startups.

Then in April, MIT announced the Bitcoin Project, an experiment that provides every undergraduate student on campus with $100 in bitcoins. The central idea behind the Bitcoin Project is to work with professors and researchers at MIT to see how students use their Bitcoins when their whole community has them.

 

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The World Still Needs Saudi Arabia's Oil

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

Economic analysts are torn as to how important Saudi Arabia will prove to the global economy in years ahead. In the first half of 2014, the US surpassed Saudi Arabia to become the world's foremost oil producer. This sparked widespread predictions that the US would soon become an oil exporter, reducing its dependency on Riyadh and harming Saudi Arabia's leading role in the Middle-East. However, the ISIS invasion of Iraq and Syria, the Boko Haram insurgency and continued oil theft in Nigeria, unrest in Venezuela and ongoing violence in Sudan and South Sudan have changed the deal.

The US extracted a record 11.2m bbl/d in April 2014, as compared to 9.69m bbl/d for Saudi Arabia in March 2014. But this increase in American oil is hardly enough to mitigate the devastating impact on oil prices that would be seen, should oil facilities in countries at war stop producing. ISIS alone has spooked oil markets with its gains. It has captured the al-Omar oil field in Syria (75,000 bbl/d) and five others, seized control of Baiji, Iraq's largest refinery, for over a month, while trouble still brews not far from the Kirkuk oil field (260,000 bbl/d) and repair work has halted on the Kirkuk-Ceyhan pipeline (capable of transporting 300,000 bbl/d). The US may be boasting of energy independence thanks to its shale gas boom, but the situation in Iraq still threatens to deal an uppercut to global oil prices. Exxon and BP even began evacuating workers from Iraq in June as ISIS continued its advance. Spooked markets already saw the Brent crude price in June hit its highest level since September, although it has begun to lower again in July.

The US and Saudi Arabia have stood alongside one another as unlikely partners for decades, ignoring each other's unsavory activities in the name of mutual prosperity and a shared loathing of Iran and Al Qaeda. The UN had the Oil-for-Food program, but Saudi Arabia pioneered the Oil-for-Safety tactic. However, this dependency on American foreign policy goodwill may have had deeper consequences than the House of Saud expected. The administration of US President Barack Obama took a dim view to Saudi Arabia's interference in Bahrain during the Arab Spring, and Riyadh's threat-laden rhetoric against Tehran seems to have abated under pressure.


The US shale boom also seems to have made a direct dent in Saudi Arabia's production plans. Talk of adding 2.5m bbl/d to Saudi Arabia's capacity has stopped as the US has scaled up its daily production ability.  Therefore, could the former oil king be counted upon to scale production up to 12.5m bbl/d, should at-risk OPEC members drop the ball. Seth Kleinman, Citigroup's Head of Energy Research, doesn't think so, writing that "the market has never seen Saudi Arabia hold production over 10 million barrels a day...a combination of skepticism and caution seems warranted." Critics also point out that Saudi Arabia has made no new discoveries in years.

A silver lining came last week in the shape of a deal in Libya between the government and rebels to reopen eastern ports that handle half of the country's oil exports. The agreement to reopen the ports of Es Sider and Ras Lanuf has already led to production restart at the Sharara oil field, with a capacity of 340,000 bbl/d. Active exports are expected in late July, once the Zawiya refinery also gets under way. Despite this good news, it is difficult to see this as anything more than a stop-gap.

US shale finds show no sign of abating but neither do crises in the Middle-East. The good news out of Libya may help to stabilize oil prices for now, but this may not hold true in the long-term. With ISIS now having announced the desire to one day attack Saudi Arabia and destroy the Kaaba, the old pact between the US and Saudi Arabia may gain a new lease of life. While the US maintains its unwilling burden to guarantee the security of its Middle-East allies, Saudi Arabia will remain in the familiar position of being the world's most trusted source of oil.

OPEC is absolutely terrified of this game-changer
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour (That's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

 

The article The World Still Needs Saudi Arabia's Oil originally appeared on Fool.com.

Written by Chris Dalby at  Oilprice.com.

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

 

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Tesla Motors, Inc. Wants to Annihilate Range Anxiety

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The biggest concern consumers seem to have about electric vehicles is charging; it's been dubbed "range anxiety." Electric-car maker Tesla Motors is attempting to tackle this concern and crush it once and for all. Nowhere is this clearer than by looking at the rapid expansion of Tesla's Supercharger network.


Supercharging data as of July 10, 2014. Image source: Tesla Motors.

The fastest-growing charging network on the planet
Not only is Tesla's network of Superchargers the fastest-growing charging network on the planet, but it is also now the largest fast-charging network on the planet, period.


Just how big is the network? It now enables owners of Tesla vehicles to travel the entire width of the U.S., and up and down the West and East coasts. By the end of next year Tesla says that there will be a charging station within 100 miles of 98% of the population, giving almost any Model S owner in the U.S. the ability to travel long distances using Superchargers only. Best of all, supercharging is free for life for Model S owners.

This sort of scale is helping Tesla achieve big milestones, which the company shared in a blog post.

In June, Tesla's Supercharger network passed a charging milestone, delivering more than 1 GWh of energy to Model S vehicles in a single month. That energy accounts for a collective 3.7 million miles driven, 168,000 gallons of gas saved, and 4.2 million pounds of carbon dioxide offset. That's like driving to the moon and back seven and a half times, and nixing a day's worth of CO2 from 73,684 Americans. 

Tesla's Supercharger network is overseas, too. There are already 32 in Europe (eight were built in the last week alone), and the network is just beginning in China.

Model S charging at a Tesla Supercharger station. Image source: Tesla Motors.

This network would be insufficient if Tesla's vehicles couldn't drive long distances on a single charge. Fortunately, the entry-level Model S with a 60-kWh battery gets 208 miles of range -- plenty to drive locally without ever needing to charge anywhere accept at home. The larger 85-kWh battery boasts 265 miles of range.

Further, charging must be fast enough to not be an inconvenience while traveling long distances. Tesla has addressed this concern, too. Model S owners can get a 50% charge in 20 minutes and an 80% charge in 40 minutes. Tesla-branded charging stations are about 16 times faster than most public charging stations. Considering that Tesla drivers only have to rely on Supercharger stations on long distance trips (assuming they charge while asleep at home for local driving), 20-40 minutes is reasonable -- especially when it's free.

The next steps
Tesla doesn't want to stop at serving its own vehicles with its Superchargers. The company's CEO, Elon Musk, has said that he would be open to letting other manufacturers tap into the network if they made cars capable of handling the charge and contributed their fair share toward the capital required for the network. Shortly after Tesla opened up its patents for peers to use "in good faith," it got together with Nissan and BMW to discusses a new level of collaboration on charging networks, the Financial Times reported. 

Tesla plans for 98% of the U.S. population to be within range of a Tesla Supercharger by 2015. This map shows Tesla's planned Supercharger locations for the end of 2015. Image source: Tesla Motors.

For Tesla to succeed, a robust and convenient charging network is key. And if it can inspire other manufacturers to join the race with comparable charging stations, total charging convenience may come sooner than we think. While there's bound to be many challenges and hurdles along the way, Tesla shareholders should hope that the company continues to address range anxiety -- and eventually crush the concern once and for all.

How to invest in a new, revolutionary vehicle technology
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of his favorite businesses. An executive at Ford called the technology "fantastic."
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The article Tesla Motors, Inc. Wants to Annihilate Range Anxiety originally appeared on Fool.com.

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

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

 

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Amazon.com: I've Read This Fairy Tale Before

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Today I would like to try to illustrate the difference between picking a good company and picking a good stock. I recently wrote about how I have a short position in Amazon.com , and then went on to express my belief that Amazon has a bright future. No, I'm not off my meds. I just get this recurrent feeling of deja vu when I look at Amazon, and I'll try to explain the reason for this sensation in the corniest way I can come up with.

Once upon a time
A long time ago in an enchanted world referred to as the 1990's, little boys and girls had no Internet. Then, thanks to the tireless work of Al Gore (among others), this lost world began to slowly get connected computer by computer, and the worldwide web was born. Stock traders recognized the unprecedented economic opportunity that the Internet would create and began buying up shares of any "Dot Com" that moved.

Many of these companies, such as Pets.com and TheGlobe.com, were not profitable and never would be profitable. However, there were many companies with excellent business models that actually were very well-positioned to capitalize on the long-term Internet boom. Today I'm going to talk about one of these companies, and I'm going to call her "Goldilocks."


In the 1990′s, Goldilocks manufactured computer networking equipment, and her products were in high demand. Investors piled into Goldilocks' stock because they could see that her products would play an integral part in the expansion of Internet connectivity that started in the 90′s and would last indefinitely. To investors, Goldilocks looked like one of those rare companies an investor could buy and hold until retirement and never have to worry about. Let's take a look at some of Goldilocks' numbers at the time.

Goldie1

A quick glance at Goldilocks' share price and revenue from 1995-2000 paints a beautiful picture. With annual revenue that exceeded $13 billion by the dawn of the new millennium, this company was far from a mom-and-pop operation. And yet, the future remained so bright that many of Goldilocks' shareholders thought that its revenue would continue to grow rapidly for decades to come. It seemed clear that the Internet was the future, and Goldilocks' products would remain in high demand indefinitely.

The good news for Goldilocks' shareholders is that they were right about the future of the business. Here's a chart of Goldilocks' revenue from January 2000 to date.

Goldie2

Revenue has more than quadrupled to over $47 billion, with no sign of a slowdown anytime soon. That porridge tastes just right. Clearly the company has continued to perform exceptionally well over the last 13-plus years. But if you joined the other shareholders in ignoring that orange line on the first chart, you might be surprised to see what Goldilocks' stock has done since 2000.

Goldie3

No, that graph is not upside down. That porridge is cold. Let me summarize: for the past 13 years, Goldilocks' revenue is up about 250%. For that same period, the S&P 500 is up 34.5% as a whole. And finally, Goldilocks' share price is down well over 50% for that 13-year period.

A nearly limitless number of metrics are available for stock analysis, but I'm a big fan of keeping things simple. At the end of the day, the only two things that matter about a stock are the performance of the company and the price of the stock. If a company does not perform, it's typically only a matter of time before its stock price reacts poorly. And if a stock gets too expensive relative to the earnings that the company is generating, it's typically only a matter of time before the stock price reacts poorly.

And now for the big reveal...
For "Goldilocks," which readers might have recognized as Cisco Systems , the performance of the company was not to blame for the collapse in share price. The Dot-Com Bubble euphoria that drove Cisco's P/E ratio to 200 was to blame. That large of a multiple for that large of a company has repeatedly proven to be unsustainable over the long term, and Cisco was no exception.

And that brings us to Amazon. Let's first look at a chart of some numbers on Amazon.

AMZN1

Amazon is the standard-bearer for worldwide Internet retail, and I would be foolish to argue that Amazon will not continue to dominate the online marketplace for decades. However, it seems equally as foolish to me that investors are currently paying well over 500 times earnings for shares of Amazon stock.

Will Amazon follow in Cisco's footsteps?
History has shown with Cisco and countless other examples that large-cap stocks cannot maintain such high P/E ratios for extended periods of time, regardless of how well the companies perform. Maybe Amazon will prove to be the exception to the rule, but I'm certainly not betting on it.

Warren Buffett: This new technology is a "real threat"
At the recent Berkshire Hathaway annual meeting, Warren Buffett admitted this emerging technology is threatening his biggest cash-cow. While Buffett shakes in his billionaire-boots, only a few investors are embracing this new market, which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

The article Amazon.com: I've Read This Fairy Tale Before originally appeared on Fool.com.

Wayne Duggan is the author of Beating Wall Street with Common Sense and the developer of tradingcommonsense.com. Wayne Duggan  is short shares of Amazon.com. The Motley Fool recommends Amazon.com and Cisco Systems. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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

 

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Have You Overlooked Grocery Retailers?

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Investing in retail companies can be a volatile ride. Most retailers rely heavily on the holiday shopping season, and factors like weather and slips in the economy can wreak havoc on a retailer's bottom line. However, at some point, everyone needs to go to a grocery store. But with increasing competition from Internet retailers, is there room for bricks-and-mortar grocery retailers in your portfolio?

Groceries at your doorstep
Kroger is the largest supermarket chain in America. In fact, with nearly $94 billion in annual sales, Kroger is the second largest retailer of any kind, just behind Wal-Mart . With 2,642 supermarkets and over 700 convenience stores nationwide, chances are you've bought something from a Kroger store. With its share price hovering near its all-time high, a P/E of 15.2, and a dividend yield of 1.33%, Kroger appears to be a great addition to any portfolio.


A concern for some has been the threat of large Internet retailers like Amazon.com, who have entered the grocery delivery industry -- a valid concern since Kroger's online sales are currently limited to its King Soopers stores in Denver and 154 Harris Teeter stores in the Southeast. However, just before the long Independence Day weekend, Kroger showed Wall Street that it is serious about strengthening its online presence when it announced plans to buy Vitacost.com for $280 million in cash. Compared to Kroger or Amazon, Vitacost.com is a small company, but it offers some 45,000 products and reported sales of $383 million last year. More importantly, Vitacost provides Kroger with a tested Internet sales model to build on, helping Kroger stay in step with larger, more established online retailers.

Groceries in your neighborhood
You can buy just about anything at Wal-Mart, and that includes groceries. But when all you need is a gallon of milk and some bread, the idea of wandering through a gigantic Wal-Mart store is not appealing. Wal-Mart has addressed this issue by opening several smaller stores under the Wal-Mart Neighborhood Market name. These markets are about a quarter the size of a typical Wal-Mart and offer all of the groceries and personal care items you're likely to find at traditional supermarkets, like those operated by Kroger. At present, Wal-Mart operates just over 400 of these smaller stores.

Wal-Mart has had a strong online presence for years, and consumers have always liked Wal-Mart for its competitive prices. Many customers also know Wal-Mart will match the advertised prices of its competitors. So, where does Wal-Mart go from here? Well, it is launching a digital savings program it calls Savings Catcher, which is rolling out nationally this summer. With Savings Catcher, customers simply scan receipts into their smartphones (or they can enter a code on Wal-Mart's website), and if an independent tracking company finds that a local competitor offers the same items at lower prices, customers automatically receive a refund. The refunded money is loaded onto a gift card that customers can use online or in stores. Savings Catcher should help Wal-Mart attract even more bargain-minded customers, and it will aid the company in capturing data from customers, similar to loyalty card programs offered by other retailers.

Groceries in bulk
Sometimes, the best savings come from buying in bulk. Through its Sam's Club warehouse stores, Wal-Mart has a good foothold in this market, but perhaps arguably, Costco is an even bigger name in the wholesale niche of the industry. Costco operates 464 locations in 43 U.S. states and its customers tend to be very loyal. Since Costco's customers must pay for a membership in order to shop in a Costco store, the company has a built-in data collection system without a loyalty card program. The membership dues add to the company's bottom line, too. Costco tends to operate with small margins in order to offer customers low prices, but it still reported $25.23 billion in net sales for Q3, with a net income of $473 million.

While Costco shows strong sales in its stores, it lacks an online presence, something that makes Amazon a strong threat to Costco. With its Amazon Prime membership option, customers pay an annual fee that entitles them to free two-day shipping on anything Amazon stocks in its warehouses, including groceries.

Bottom line
Like most industries, the Internet and the ubiquity of smartphones have changed the way people buy groceries. While Kroger and Wal-Mart are keeping in step with new technologies, Costco has stuck with its bricks-and-mortar roots. So far, this strategy is working, but as Amazon and other online retailers find new ways to deliver products to customers' doorsteps at even lower prices, traditional grocery retailers will need to reinvent themselves.

You can't afford to miss this
"Made in China" -- an all too familiar phrase. But not for much longer: There's a radical new technology out there, one that's already being employed by the U.S. Air Force, BMW and even Nike. Respected publications like The Economist have compared this disruptive invention to the steam engine and the printing press; Business Insider calls it "the next trillion dollar industry." Watch The Motley Fool's shocking video presentation to learn about the next great wave of technological innovation, one that will bring an end to "Made in China" for good. Click here!

The article Have You Overlooked Grocery Retailers? originally appeared on Fool.com.

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

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Debt in America: Why We Should Aim to Be Debt-Free

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Debt is one of those things that's OK until it isn't. You can skate by for a while on minimum payments or introductory terms -- perhaps even convincing yourself that it's sustainable -- but then that balloon payment pops up, or your income is disrupted, or interest simply gets out of hand.

The Great Recession reacquainted the public consciousness with the dangers of debt and the folly of a hope-for-the-best approach to personal finance. And while credit card debt trends showed that we learned our lesson in the immediate, anemic aftermath, a recent reversal in course and our overall body of work has to make you wonder: Did anything stick? Just consider the current state of affairs:

National debt (as of June 2014) $17.5 trillion
Credit card debt (as of Q1 2014) $801.3 billion
Student loan debt (as of June 2014) $1.2 trillion
Individual bankruptcy filings (2009-2012) ~ 7.5 million
Number of foreclosures (2009-2012) ~ 13.5 million

Why be debt-free?

  1. It's cheaper: Debt obviously comes at a significant cost, and the more you rely on it, the more expensive it becomes. The same principles of compound interest that enable early savers to accumulate a great deal of long-term wealth work against you when you're constantly playing from behind. Finance charges incur finance charges, minimum payments rise, and things can quickly become unsustainable.
  2. It's less stressful: Americans are becoming increasingly stressed, according to the American Psychological Association, and the effects can be corrosive to our mental, physical, and financial health. The primary causes of this stress: 1) money, 2) work, and 3) the economy. Having to scratch and claw to make monthly debt payments exacerbates this high-stress state of affairs, potentially resulting in physical and mental illnesses that can drive up costs and make it even more difficult to get back in the black.
  3. You'll have a better retirement: The sooner you can divert funds away from debt payments and into a retirement account, the better. Time is your biggest ally when it comes to retirement planning. It enables you to benefit as much as possible from compound interest and reduces the need to take unnecessary investment risks as you get closer to the age at which you'd like to exit the workforce. It's human nature to prioritize the tangible now over the distant future, but if you can empathize with your future self and consider the quality of life you'd like to have, you'll be less likely to rob from yourself in the short term.
  4. Debt dictates lifestyle: Taking on a significant amount of debt can limit the options available to you in various aspects of life, from the types of jobs you can afford to accept to the way you can spend leisure time to your ability to leave a dysfunctional relationship.

True debt freedom instead entails wielding leverage with responsibility and purpose, rather than out of necessity or rashness. Stay tuned for tomorrow's follow-up article on how you can become debt-free -- and stay that way.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

The article Debt in America: Why We Should Aim to Be Debt-Free originally appeared on Fool.com.

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

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Why Home Depot, Goldman Sachs, and Chevron Hurt the Dow Last Week

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The Dow Jones Industrials weren't able to build on their momentum from before the July 4th holiday, falling 125 points as news both expected and unexpected forced investors to reassess their overall views on the stock market's likely future direction. From steady-as-we-go comments from the Federal Reserve to financial-system stresses in Portugal, investors had to consider a wide range of different factors in their short-term investing views. Among the biggest victims of the week were Home Depot , Goldman Sachs , and Chevron , which all fell more steeply than the Dow.

HD Chart

Dow data by YCharts


Home Depot fell almost 3% in sympathy with poor performance from a niche player in the home-improvement sector. Poor results from hardwood-flooring specialist Lumber Liquidators led many investors to conclude that the prospects for the whole industry aren't as favorable as they've been in recent years, with Lumber Liquidators saying that traffic was well below expectations and that same-store sales would plunge more than 7% from year-ago levels. Home Depot's own comparables were sluggish last quarter, but the home-improvement leader still expects solid sales gains for the full year. Moreover, Home Depot has done a good job of thwarting negative views even when the housing market wasn't as healthy as it has been lately, so this week's declines might be overblown if the company can give a strong report later this earnings season.

Goldman Sachs gave up 2.75% in the aftermath of an analyst firm cutting its earnings estimates for the investment bank. Investors might believe that a steady bull market would be the best of all worlds for an investment bank, but Goldman has suffered from relatively low levels of volatility and a resulting lack of trading activity in many of its key markets. In particular, the Fed's course on interest rates is likely to lead to higher yields and lower bond prices in time, and that could put pressure on Goldman's fixed-income business. Moreover, the constant threat of regulation has led many investors to wonder if Goldman can ever fully recover to its pre-financial crisis pace of growth.

Chevron declined more than 2%, with most of the loss coming as a result of its preliminary results for the second quarter. Most headlines touted how Chevron would post better net income figures than the previous quarter, but most of the profit jump comes from one-time gains on strategic sales of assets. Production levels were down overall, and a roughly 10% decline in natural-gas prices in the U.S. didn't help on the revenue front. With geopolitical risk weighing on the entire energy industry, Chevron will need to address its production challenges more head-on in order to give investors the long-term confidence they need.

Do you know this energy tax "loophole"?
You already know record oil and natural gas production is changing the lives of millions of Americans. But what you probably haven't heard is that the IRS is encouraging investors to support our growing energy renaissance, offering you a tax loophole to invest in some of America's greatest energy companies. Take advantage of this profitable opportunity by grabbing your brand-new special report, "The IRS Is Daring You to Make This Investment Now!," and you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

The article Why Home Depot, Goldman Sachs, and Chevron Hurt the Dow Last Week originally appeared on Fool.com.

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

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

 

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800 Degree Heat From Solar Mirrors Frying Birds Mid Air

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

There is growing evidence that birds flying in the vicinity of a solar thermal power project in California's Mojave Desert are being injured and even killed either by the solar heat that's focused with mirrors on its three energy-collecting towers, or by colliding with the mirrors themselves.

Yet a task force set up to investigate the problem at the Ivanpah Solar Electric Generating System (ISEGS) has brushed aside several recommendations by the forensics laboratory of the U.S. Fish and Wildlife Service (FWS), according to the minutes of a meeting on the subject obtained by the Los Angeles public television station KCET.

The FWS had said wildlife mortality and injury at ISEGS may have been underrepresented because of inadequate searches for injured and dead animals, and it suggested ways to make those searches more thorough.


The panel - the Avian & Bat Technical Advisory Committee (TAC) - met in Nipton, Calif., on May 20, where it dismissed several FWS recommendations.

ISEGS is a solar thermal power generator that uses arrays of mirrors, called heliostats, that reflect and narrowly focus solar heat to "power towers" filled with water. The focused solar heat reaches a temperature of 800 degrees Fahrenheit, boiling the towers' water to generate electricity.

Dead and injured birds have been found at the plant site, having been burned, evidently by the reflected solar heat, or with other injuries because they evidently failed to recognize the mirrored heliostats as solid surfaces, much the same way that birds crash into windows.

The purpose of the May 20 meeting was to assess whether ISEGS presents a hazard to birds flying nearby and, if so, what could be done to mitigate the hazard. The TAC agreed to one FWS proposal, using specially trained dogs to find bird carcasses within the site's borders.

But the minutes of the meeting show that the TAC perfunctorily swept aside other suggestions that would have improved the accuracy of such surveys.

One proposal was to search for injured or dead birds outside the site. This was based on the observation of a large bird that had caught fire above ISEGS, become unstable in flight, but did not land until after it glided beyond the perimeter fence. That was rejected because the ecological consulting firm H.T. Harvey found that nearly 95 percent of singed birds were found at the plant, not outside it.

ISEGS is only one of three solar power plants in Southern California that are believed to be responsible for killing and injuring birds in flight. The other two are the Genesis Solar Energy Project in the state's Colorado Desert and the Desert Sunlight Solar Farm, which is still under construction.

Do you know this energy tax "loophole"?
You already know record oil and natural gas production is changing the lives of millions of Americans. But what you probably haven't heard is that the IRS is encouraging investors to support our growing energy renaissance, offering you a tax loophole to invest in some of America's greatest energy companies. Take advantage of this profitable opportunity by grabbing your brand-new special report, "The IRS Is Daring You to Make This Investment Now!," and you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

 

The article 800 Degree Heat From Solar Mirrors Frying Birds Mid Air originally appeared on Fool.com.

Written by Andy Tully at  Oilprice.com.

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

 

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Should You Work in Retirement?

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So you've paid your dues for decades, and it's time to decide whether you're ready to retire. You're not only wondering whether you can afford to live off your savings, but you're wondering how leaving the workplace could affect your life in general. And you're certainly not alone. In fact, according to the 2014 Retirement Confidence Survey by the Employee Benefit Research Institute (EBRI), 65% of people consider working for pay after they've retired. However, a much lower number -- about 27% of those surveyed -- actually do.

The motivation for many to remain in the workforce is largely positive. Many cite a desire to stay involved, remain active, and work simply for enjoyment. The EBRI survey found that for many people, work is fulfilling and constitutes a big part of their life. 

Still, many seniors facing retirement are driven to remain working by one of their biggest fears: running out of money. Retirees seek additional income for a variety of reasons, whether they want to live it up, simply try to make ends meet, make sure their nest egg sees them through retirement, or maintain health insurance and other benefits. 


The ultimate decision comes down to the individual's financial needs. To help you make the right decision for you, here are some pros and cons of working during retirement.

Investments and Income
Pro:
Putting in additional time in the workforce can help your nest egg continue to grow before you tap into it. Two "extra" years compounded at 6% annually can turn $1 million into a little more than $1.12 million and make a 4% savings withdrawal rise from $40,000 to almost $45,000 (assuming an annual withdrawal rate of 4%).

Con: If you have a traditional Individual Retirement Account (IRA), you must begin taking required minimum distributions at 70-1/2 years of age. These withdrawals count as income, so this could mean more of your Social Security benefits would be taxed. Having a Roth IRA may pose a different dilemma. Although Roth IRAs are not subject to required minimum distributions (RMDs) during the owner's lifetime, there are distribution requirements in the event of the account owner's death. The special circumstances surrounding your Roth IRA now obligate you to consider RMDs in your estate planning.

Social Security Benefits
Pro:
If you work during retirement, you'll earn more over time, which will increase the amount of your Social Security benefits. Also, the longer you delay collecting Social Security beyond your full retirement age, the higher your benefits will be. Consider this example:

Worker Joe Jones is eligible for a monthly Social Security benefit of $1,960 at his full retirement age of 66. Let's compare the total amount of benefits he would receive over his lifetime at full retirement and delayed retirement (assuming he lives until age 90):

  • Starting at age 66 (taking full benefits): $564,480
  • Starting at age 70 (taking advantage of delayed-retirement credits): $620,928

The difference in this case is more than $56,000 in retirement income.

Con: If you do keep working and boost your retirement income above a certain amount, you may be subject to income taxes on your Social Security benefits. You'll end up paying federal income taxes if your combined income -- based on the sum of nontaxable interest, your adjusted gross income, and half your Social Security benefits -- exceeds $25,000 for an individual return or $32,000 for a joint return.

Career and Lifestyle
Pro:
Aside from the financial advantages of staying in the game longer, you also may be eligible for valuable medical benefits provided by your employer. Those who continue working past the age of 65 have the option of Medicare, their company-sponsored health care plan (if offered), or a combination of both.

Con: Many retirees assume that Medicare will afford them the coverage they might need. Not so, financial experts say. According to EBRI, Medicare currently covers only 62% of the expenses associated with health care services. Seniors have to tap into their own personal savings to fill the gap.

There are numerous advantages to working in retirement, but it comes with some downsides as well. You may want to meet with a qualified financial professional to discuss the pros and cons of working longer. With proper guidance, you can create a winning game plan to make the most of any extra income you earn during your retirement years.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

The article Should You Work in Retirement? originally appeared on Fool.com.

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

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3 Reasons Kroger's Market-Trouncing Run Won't End Soon

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Kroger has been good to investors over the last 10 years, easily surpassing the market's total return.

Kroger has the tools to overcome competition and take market share away from Wal-Mart , Costco , and Safeway , and continue its outperformance of the market. Kroger will achieve this thanks to three key factors: its strong financial position, use of smart acquisitions, and growing geographical reach.


Low profit margin, yet high profitability ratios
Over the last 10 fiscal years, Kroger has averaged a net profit margin of 1.2%. At first glance, this does not appear overly attractive; however, over the same period, Wal-Mart, the largest retailer of the group by sales, averaged 3.5%, Costco averaged 1.8%, and Safeway averaged 1.1%. Because of economies of scale in the industry, these ratios not so coincidentally go hand in hand with the rank of each company by sales.

Businesses typically need to sell either a small number of high-margin products or a large number of low-margin products to earn a solid profit. The grocery retail business falls in the latter of those two choices. A reasonable assumption would be that Kroger's net profit margin will grow to become more comparable with its larger counterparts as the company continues to increase sales.

Though Kroger has slim profit margins, from the standpoint of return on equity invested, or ROE, Kroger is very profitable. Over the same period discussed above, Kroger's return on equity averaged 19.9%, and it has been above 30% in the last two fiscal years. This is very favorable compared to both Costco and Safeway, which averaged 13.2% and 9.5%, respectively, yet falls a bit short of Wal-Mart, which has averaged 21.6% over the last 10 fiscal years.

Kroger's high return on equity helps display how well the company's management can reinvest earnings at a high rate for shareholders.

Industry consolidation
Many times in this industry, it is more profitable for companies to make acquisitions and let synergies take affect rather than build from the ground up to get into new markets. Kroger recognizes this, and making smart acquisitions will be the next key to unlock future growth for shareholders.

Kroger's merger and acquisition strategy is primarily based on in-market acquisitions, or acquisitions of companies that operate in the same nature as Kroger's brands. These acquisitions produce higher returns because of higher synergies in overhead, marketing, and distribution. An example of such a purchase would be the company's acquisition of Harris Teeter earlier this year.

Another recently announced acquisition is the takeover or Vitacost.com , an online retailer of healthy living products. Though it may not produce the large and immediate synergies as the Harris Teeter acquisition, the purchase of Vitacost.com gives Kroger more exposure to the e-commerce and healthy living booms, for a relatively small price of $280 million.

Cross-country journey
As of the end of fiscal year 2013, Kroger only has a geographic reach into 34 states and Washington D.C. with 2,640 total stores. This is easily trumped by Wal-Mart, which has nearly 11,000 stores in all 50 states and worldwide. Costco, on the other hand, has a greater geographic reach and greater revenues with only 658 warehouse stores in 43 different states and eight international countries.

This shows how much room Kroger, even as a fairly mature company, still has to grow. Kroger plans to enter different geographic markets by means of acquisition, as touched on earlier. The Harris Teeter acquisition put Kroger into the fast-growing southeast United States marketplace.

As Kroger grows further, we can expect to see the company take market share from its two larger competitors, Wal-Mart and Costco. As said earlier, higher sales should result in higher profit margins as well -- an overall win-win for investors.

The bottom line on Kroger
Kroger reported outstanding first-quarter earnings on June 19, and shares shot up 5% that day; even with that bump in price, the stock still sells at 17 times earnings. This compares very favorably to the market, which is selling at nearly 19 times earnings.

Finding a company like Kroger, that's on solid financial footing, has high-growth prospects, and sells at a discount to the market is a steal for a long-term investor.

With a 1.3% dividend yield, investors can buy a piece of this company and pump dividends back into Kroger shares to cost-average their share price and be very happy for many years to come.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

The article 3 Reasons Kroger's Market-Trouncing Run Won't End Soon originally appeared on Fool.com.

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

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

 

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