To no one's surprise, the new, larger phones from Apple have been a smashing success. With over 4 million units pre-sold in the first 24 hours, and 10 million the first weekend, it seems Apple's setting new sales records daily, and that's saying something. Both phones sport larger screen sizes -- the iPhone 6's display measures 4.7 inches, while the iPhone 6 Plus is officially phablet-sized with its 5.5 inch retina screen.

It wasn't that long ago Apple CEO Tim Cook went on record stating he had no intention of going down the phablet path. Thankfully for iFans, that's changed, and it appears Cook's about-face was a sound business decision for investors. How many of the 10 million units sold the first weekend were of the phablet variety we can only speculate, but based on lead times -- how long, on average, it's taking Apple to fill orders -- the company's phablet is a rousing success. Though challenges remain, look no further than industry-leading Samsung , according to new research from Adobe, Apple can expect the iPhone 6 Plus to continue flying off the shelves.

The good news
Though it hasn't happened as quickly as some industry pundits expected, the market for phablets is expected to explode. In the next five years, should the estimates prove correct, phablets will occupy an impressive 59% of the smartphone market, grow at twice the annual rate as "old-school" smartphones, and sell 1.5 billion units in 2019. Assuming growth expectations are even close, Cook really didn't have an option but to introduce Apple's first phablet to the world.

As impressive as the phablet market growth estimates are, Adobe's research may be an even better indication of why the iPhone 6 Plus is going to change the smartphone landscape. In the U.S., Apple's bread-and-butter market, a whopping 54% of all smartphone web traffic comes from Apple devices. Apple's chief smartphone manufacturing competitor, Samsung, is a distant second with a mere 24%.

What makes Adobe's smartphone web traffic stats even more impressive is as of July of this year, Apple's iOS commands "just" 42.4% of the U.S. market, while Android, thanks in large part to Samsung, runs 51.5% of the domestic smartphone operating systems. In other words, though Apple has fewer users, it drives a majority of smartphone web traffic.

Clearly, iFans like to use their smartphones for a great deal more than making and receiving calls: Their iPhones are truly mobile devices. If iPhone users are as comfortable accessing the web via their devices as Adobe's research suggests, it stands to reason they'd really enjoy their online experience on a larger screen phablet, like the iPhone 6 Plus. Also, when you factor in the proliferation of streaming videos like YouTube, movies, and games, the case for an explosion of Apple phablet sales really picks up steam.

As always, there are challenges
Overblown or not, Apple fans don't need to be reminded of what some are calling, "bendgate," the notion that the new iPhones, particularly the iPhone 6 Plus, are prone to bending. Or, the short yet rather embarrassing cellular outage miscue as a result of a faulty iOS download. Some have also complained about the iPhone 6 and iPhone 6 Plus less-than-ideal battery life.

But the biggest challenge to Apple's phablet ambitions lies with a familiar nemesis: Samsung. There's little doubt, based on Adobe's data and the fanaticism of Apple's users, that many of those folks using their existing iPhones to access the Internet will take a look at its new phablet. But what about converting the over 51% of U.S. smartphone owners who own an Android OS device? Or the nearly 85% of smartphone users worldwide that utilize an Android OS, many of which were built by Samsung? For Apple to really dominate phablets, it will need to appeal to at least some portion of the non-iOS market.

Final Foolish thoughts
Converting current iPhone owners to its new phablet already appears to be an unmitigated success, and taking Adobe's mobile online data into account, that's likely to continue. In what is expected to be an exploding market, Apple's new phablet is going to command a big piece of a huge pie. Challenges? Of course, with an expected 1.5 billion units sold in 2019, any company that builds a smartphone will soon bring its own phablet into the fray, if it hasn't already. But if the U.S. smartphone web access numbers are any indication, the iPhone 6 Plus could end up being the dominant player.

Harley-Davidson had been in high gear until recalls started causing slippage. 

Harley-Davidson really doesn't need this massive motorcycle recall right now.

The bike maker has bounced back strongly from the collapse in sales it suffered during the recession. Though the 260,000 units it shipped last year is not anywhere near the heights it hit in 2006, when it shipped 350,000 units, it still marked a healthy recovery, and its recent unveiling of the 2015 lineup set the stage for another bang-up year.

So, word that Harley is recalling its entire lineup of 2014 touring bikes, as well as its trikes and custom-designed bikes, could cause that surge to stall.

A case of road rash
The issue itself seems relatively minor, all things considered. The clutch can develop a tear that would allow the bike to creep forward when the rider intended to be at a stop, which could cause it to crash, most likely by toppling over. Harley has reported 19 such accidents, and though there have been three injuries associated with it, they've all been minor. The fix is apparently simple as well, requiring the clutch assembly to be rebuilt, which takes less than an hour.

Just because it's not a fatal flaw doesn't mean it's not a problem. Source: Flickr.

Really, the problem lies with the fact that Harley recalled a smaller number of motorcycles last year with the same part. While it only affected 29,000 bikes then, it was a far more serious issue, and a "Do not ride" letter was sent to owners along with a "Do not deliver" letter to dealers until the problem was fixed. Why can't Harley get its clutches right?

Objects are closer than they appear
Competition is heating up this year in ways Harley hasn't experienced in a while. Polaris Industries is out with a number of new models that seek to take on Harley head-to-head, and the resurrection of its Indian nameplate is turning riders' attention in a way that its Victory bikes couldn't.

Last quarter, Polaris reported that sales in its motorcycle division doubled year over year to $103.7 million, driven largely by new Indian sales, demand for which was up 50%, and outside North America, where Polaris said it was gaining market share, sales almost doubled as well.

Now, those results are about what Harley makes in a week. Its own second-quarter motorcycle sales were up 16% as revenues hit $1.48 billion, so we're talking orders of magnitude larger than what Polaris is doing.

But sales, while still growing, are growing at a slower rate than they have been. Harley can't afford to have an image of shoddy workmanship since it took a long time for the bike maker to shake off that perception following its ownership by AMF. Back then, there was a running joke that you had to buy two Harleys: one to ride and one for parts.

It was the sale of the company in 1981 that marked the start of its comeback, and it's been a heck of a ride since then. It can't afford to go back.

Not the mother of all recalls
The recall covers Harley's 2014 Touring, CVO Touring, CVO Softail, and Trike motorcycles. It's also recalling about 1,400 of its 500 and 750 Street bikes from the 2015 model year for a possible fuel tank leak.

Earlier this summer, it recalled more than 60,000 2014 Touring and CVO Touring motorcycles because of a problem with the anti-lock braking system that caused the front wheels to lock up without warning. In August, it recalled over 4,500 bikes for a faulty ignition switch. 

This year's recalls still pale in comparison to the massive 300,000 bike recall issued in 2011, but that was simply a rear brake light problem.

In its annual report filed with the SEC in February, Harley said that over the last three years, it had initiated 16 voluntary recalls that cost it some $22 million, almost half of which naturally came in 2011. While the cost decreased markedly to $4 million by the end of 2013, it jumped to almost $7 million in the second quarter, and with the latest recall, we're going to see those numbers rise once more.

For a company reporting $308 million in quarterly net income, even if the liability expenses doubled, it's still a pretty insignificant amount, but it's the credibility issue that becomes more of the problem. Polaris said its North American retail sales fell in the mid-single digits for its Victory brand primarily because of a recall related to a faulty crankcase that could cause it to seize.

Harley-Davidson has been allowing competitors to play catch-up. Source: Flickr user Matthias Schack.

Up on blocks
Quality control issues are bedeviling the auto industry, and though manufacturers are on target to sell more cars this year than ever, recalls are plaguing them, and General Motors alone has recalled nearly 29 million vehicles. At one point, it seemed the carmaker was issuing recalls every week.

If Harley-Davidson wants to avoid having the same kind of reputation for shoddy workmanship that seems to shadow some automakers (and raises the ghost of Harley's past), it would do well to get a tighter grip on this issue and instill once again the pride of craftsmanship that should be the bike maker's hallmark.

Image: Sean MacEntee, Flickr.

If you're on the lookout for the next blue chip stock, give Facebook Inc. some consideration. There's no standard definition for blue chips, but Facebook certainly meets some of the criteria many people would suggest. Let's run the company through a few of them and see how it fares.

Track record of performance over time

First off, Facebook is a young company, founded only a decade ago, in 2004, and it's been public for less than three years. It therefore doesn't have the longest track record, but it already boasts a market capitalization of about $200 billion, greater than that of venerable giants across many industries such as Coca-Cola, Toyota Motors, AT&T, and Bank of America. You don't reach such a size and end up in such company without having done a lot of things right.

Here are some eye-popping numbers from  the company itself:

• 829 million daily active users on average in June 2014.
• 654 million mobile daily active users on average in June 2014.
• 1.32 billion monthly active users as of June 30, 2014.
• 1.07 billion mobile monthly active users as of June 30, 2014.
• Approximately 81.7% of daily active users outside the U.S. and Canada.

Not many companies have more than a billion customers! It's noteworthy that Facebook also has more than a billion mobile users, too, reflecting a very effective move into that fast-growing platform. (The count of mobile users jumped 31% in just one year.)

Solid balance sheet

Facebook's balance sheet is quite solid, with cash short-term investments growing more than sixfold over three years, shareholder equity growing seven-fold and no long-term debt.

The company's goodwill has been growing, too, more than 20-fold, and that's due to acquisitions made at prices over intrinsic value. It's common for an acquisition to feature a premium, but when Facebook bought the cross-platform messaging app WhatsApp for $19 billion, lots of eyebrows rose, as many saw the price as quite excessive. Interestingly, Facebook has spent more than $22 billion buying a bunch of companies in the past six years (including Instagram), and the WhatsApp purchase makes up most of that. Only time will tell whether Facebook was crazy to pay such a price. And even if it was, a blunder here or there doesn't disqualify a would-be blue chip. Just ask Coca-Cola about Classic Coke.

Mobile ad revenue is powering Facebook's growth.
Data for image retrieved from Facebook quarterly SEC filings. 

Strong revenue growth and cash flow generation

To say that Facebook's revenue and earnings are growing briskly would be an understatement. In its young life, revenue has quintupled since 2010, while net income nearly quadrupled. Better still, profit margins are up, and free cash flow tops $3 billion.

What's Facebook doing to generate so much on its top and bottom lines? It's selling a lot of advertising -- increasingly on its mobile platform. In its last quarter, revenue surged 61% year over year, while earnings soared 121%, benefiting strongly from sales of mobile ads. Mobile ads made up 62% of total ad revenue, up from 41% last year.

The company has a lot more going on, too. It recently bought the virtual reality headgear maker Oculus and is working on monetizing Instagram. It has started running video ads and is delivering a billion per day or more.

There are even rumors that Facebook is aiming to take on LinkedIn with a competing offering being referred to as "FB@work." It's not smart to make investment decisions based on rumors, but this initiative, or ones like it, are not so far-fetched, given Facebook's enormous reach. International expansion is another growth driver, and its WhatsApp purchase helps there, as it has many African users.

Source: Facebook's Facebook page.

Dividends

And now we come to dividends, as typical blue chip stocks offer them. Facebook doesn't, though, and few are holding their breath for a monthly payout. That's because young and rapidly growing companies tend to need to plow their excess cash back into the business, fueling further growth. Once they start running out of other ways to use their cash, and once management feels confident it can consistently afford a dividend payout, a dividend may be initiated.

Shareholders aren't out of luck, though. Along with stock-price appreciation, Facebook can still reward them via share buybacks, without committing to a dividend. It essentially did so in 2012, when its shares had fallen from their IPO levels. The share price has more than doubled since then, reflecting a savvy move.

Yea or nay?

Some dictionary definitions for the term "blue chip" are that the stock be of the highest quality and reliable. In other words, investments in blue chip stocks should help you sleep at night. Despite all that Facebook has accomplished, and all its potential, it fails on this last metric. It's operating in an environment that moves too fast, and its future is far from certain, though its main competitive advantage, the sheer scale of its vast network, is formidable.

This is a company that risk-takers should consider investing in, while those seeking more stable blue chip stocks might want to at least keep an eye on its progress.

The rise of email, the recession, and a massive mandate from Congress to pre-fund 75 years of retirement benefits in ten years -- a burden not legally required of any other business or government agency -- has led to difficult times for the United States Postal Service.

The agency, which operates without taxpayer funding, has weathered a drop in letter volume, and has pioneered new programs which may ultimately hold the keys to its future. Now USPS officials have asked federal regulators for permission to expand a deal with Amazon  which has postal carriers and vehicles delivering groceries and other prepackaged goods in big cities. The current arrangement is a test, operating just in San Francisco where the USPS makes early morning deliveries to customers of Amazon's grocery delivery service. 

The potential expanded arrangement would be a two year test which would expand the current setup into more cities. The Post Office requires approval from the Postal Regulatory Commission to enter an arrangement such as this one.

Deals like this are sort of the silver lining to the dark cloud the Internet has brought to the business of mail. People are sending less letters and paying bills online, but the rise of online retailers, including Amazon, has increased the number of packages being sent. It has also created a market for off hours delivery services like the USPS/Amazon arrangement which allows the postal service to take advantage of its existing infrastructure during off-peak hours.

Regular mail trucks are being used in off hours to deliver Amazon's orders. Source: USPS 

How bad are things at the USPS?
The postal service increased its loss in the third quarter to $2 billion from $740 million for the same period last year. The USPS has lost money in 21 of the last 23 quarters, only making money in two quarters where Congress rescheduled retirement benefits the Post Office is obligated to pay, according to a recent press release. 

That only tells a piece of the story however, as while it reports a loss, the USPS operations from selling postage and delivering mail actually makes money.

"The red ink at USPS has nothing to do with the mail, the Internet, or related factors," explained National Association of Letter Carriers President Fredric Rolando in an email to Fool. "It results from politics. In 2006, a lame-duck Congress mandated that the Postal Service prefund future retiree health benefits. No other public or private entity is required to prefund for even one year; USPS must pre-fund the next 75 years ahead and pay it all over 10 years. That annual charge of $5.6 billion is the red ink."

While the Internet has certainly caused some upheaval for the Post Office, it has also led to opportunity. The USPS deal with Amazon is an attempt to build on the increased demand for package delivery (shipping and package revenue was up 6.6% for the quarter) and to build for the future.  

How big a deal is Amazon grocery delivery for USPS?
The short-term financial impacts are nearly irrelevant. Revenues from the deal are not expected to top $10 million, according to the filing. 

The money in the short-term is not the point. The deal tests a path which could fundamentally change how the Post Office does business, which is part of the rationale used in the document seeking permission to expand the test.

Customized Delivery will provide the Postal Service a new opportunity to explore the demand for delivery during the 3 a.m. to 7.a.m. window at a specific location at the delivery address, particularly in the ever-growing grocery delivery market. The Postal Service believes these differences to be significant and worthy of testing in the marketplace.

Amazon may ultimately expand its grocery service from a few cities to the entire country which represents a potentially huge opportunity. Of course, the USPS is not limited to delivering groceries or working with Amazon and there are potentially many other online companies which would want to partner for quick, early morning delivery.

Will the Amazon deal work?
Amazon and the USPS are a perfect match. One wants to expand and improve its ability to deliver to customers, while the other has a huge underused capacity for delivering things.

The Post Office needs paying customers, and while Amazon has expressed a willingness to build out its own shipping fleet if it has to, that's not the company's core business. Leveraging a partner for delivery makes more sense and the USPS and online retail in general are natural partners.

Though its current fiscal health is suffering for political rather than operational reasons, the USPS does need to make deals like this one to remain viable in the long term. People won't be going back to letter writing anytime soon, and things like bills and payments will continue to move online. Working with Amazon and growing its package delivery business during off-hours offers the USPS a path for the future.

Dividend-paying stocks are a great way to bolster your portfolio, but not all dividend payers are equal. We asked some of our top contributors covering consumer goods and tech stocks for some insight on strong dividend stocks to buy right now. Read on to find out what they had to say.

Anders Bylund: Income investors love a smooth and steady history of dividend increases. The perfect dividend stock should boost its payouts every year, like luxury-quality Swiss clockwork. Wal-Mart Stores would be a fine example of this.

French telecom operator Orange SA isn't anything like a high-end Swiss watch. In fact, its dividend history is enough to give heartburn to many income investors:

ORAN Dividend data by YCharts

Over the last decade, Orange's dividend payments have decreased by 78% in a series of fitful jumps while Wal-Mart played the perfect poster boy for steady increases.

The company has been stuck in turnaround mode for several years and Orange has chosen to spend more money on network improvements and strategic acquisitions, and a bit less on dividend payments. Just two weeks ago, Orange offered to buy Spanish broadband provider Jazztel for $4.4 billion.

So Orange doesn't look likely to switch its cash flows into dividend-boosting moves anytime soon.

But you know what? Despite the unpredictable and generally shrinking dividend payouts, Orange offers a massive 6.6% dividend yield today. Wal-Mart is stuck at just 2.5%.

That's the upside of turnaround stories and falling share prices. Buy Orange today, and you'll lock in the effective yield that's currently on the table (give or take Orange's upcoming payout changes). Moreover, the company seems poised to actually execute on its long-suffering turnaround and start producing positive share price gains as well.

And that's a killer combination.

Andres Cardenal: Colgate-Palmolive , generates most of its sales and cash flows from its leadership position in the oral care industry. Management estimates that the company owns a global market share of 44.4% in toothpastes, 33.2% in toothbrushes, and 38.9% in mouthwashes.

Colgate-Palmolive has done a tremendous job at expanding internationally: The company produces more than 80% of sales from global markets, and approximately 50% of revenues come from emerging markets. This has clear advantages for investors in terms of both diversification and potential for growth. Colgate is the most recommended toothpaste by dentists around the world; a big 47% of dental care professionals recommend the brand over competing alternatives. This level of brand differentiation and huge global scale are key sources of competitive strength for Colgate-Palmolive.

Dental care is an attractive product category, where strong pricing and room for innovation allow Colgate-Palmolive to generate healthy growth rates for a company of its size. Organic sales grew 4% in the last quarter, driven by 2.5% volume growth and a 1.5% increase in prices.

Colgate-Palmolive's financial strength is beyond question, and the company has consistently rewarded shareholders with growing dividends over the long term. Colgate-Palmolive has paid uninterrupted dividends since 1895, and it has raised those payments over the last 51 consecutive years. The dividend yield currently is around 2.3%, and the payout ratio is quite safe in the area of 48% of earnings estimates for 2014.

I think Colgate-Palmolive is a strong dividend stock that investors should consider buying.

Tamara Walsh: PepsiCo offers investors a reliable dividend at a reasonable price today, and with football season now under way it's a great time to own the stock. The soda and snack giant has a long-standing partnership with the NFL that allows it to uniquely promote the Pepsi brand through NFL-related sweepstakes, Super Bowl events and other season-long campaigns.

On top of this, PepsiCo boasts one of the most steadfast dividend programs available today. The company is a Dividend Aristocrat, which means it has continuously increased its dividend payout every year for at least 25 years running. In fact, Pepsi is on track to return $8.7 billion to its shareholders this year through higher cash dividends and share buybacks. That's even more impressive when you consider Pepsi has paid a dividend every year since 1952, and has increased its payout for the past 42 consecutive years.

Together with Pepsi's ability to generate strong cash flow, this tells investors that the king of pop should have no problem continuing to raise its dividend in the quarters ahead. The stock currently pays an annual dividend of $2.62 per share, with a yield of 2.83%. On that score, PepsiCo is a buy today because it promises investors low risk and high dividend growth for many years to come.

Steve Symington: I think dividend-hungry investors should consider Whole Foods Market . Shares of the top-notch organic grocer have fallen roughly 35% over the past year on the heels of slowing comps and increased competition, but I'm just not convinced the punishment fits the crime. 

Despite what its plunging share price seems to indicate, Whole Foods is still a thriving business. Last quarter, for example, it led the grocery industry with sales of over $1,000 per square foot, produced $240 million in cash flow from operations (or nearly $0.66 per share), paid $44 million in quarterly dividends to investors, and achieved solid returns on invested capital of 16.4%. In addition, Whole Foods repurchased $361 million in common stock, and even announced a new authorization allowing it to repurchase an additional $1 billion in shares through Aug. 1, 2016. That shouldn't be a problem given Whole Foods' healthy cash flows, negligible debt, and current $1.1 billion cash hoard. 

If that wasn't enough, remember Whole Foods is steadily working toward its long-term goal of more than tripling its store count from 388 locations to 1,200. For perspective on its pace, two months ago Whole Foods management told investors they expect to cross the 500-store mark by 2017.

I'll admit shares don't look terribly cheap at around 24.6 times trailing-12-month earnings. But that's also near the lowest P/E valuation Whole Foods stock has seen over the past five years, and a small price to pay for a high-quality business which offers both a 1.3% dividend yield and mouthwatering potential for long-term growth.

Yes, I've been buying a lot of Extendicare in my Special Situations portfolio. The stock comprises well over 30% of the portfolio, but I'm back to add to the position. The recent dip in the stock price in the face of an imminent, value-unlocking catalyst is just silly.

The situation is the same as before. Extendicare is selling its American unit, and is actively involved in negotiations with a buyer. It's cleared up an investigation with the U.S. government that had prevented a sale before. The resolution consists of a $38 million penalty and ongoing compliance costs of $1.5 million to $3.5 million annually for five years. Most importantly, the American unit retains its ability to participate in government health care programs. In my article from early last month, you can read further details of the resolution.

But despite the imminence of a deal, the stock continues to languish as impatient investors hit the exits. And guess what? Even without a deal to sell the American unit, the company has committed to divest the business, with a spinoff as the most likely outcome. Any split of the business here will force the market to see the value in the American unit, which it is currently drastically underestimating.

For more on Extendicare, follow me on Twitter: @TMFRoyal. And check out my dedicated discussion board. If the stock continues to drop from here without some kind of fundamental change, I expect that I will continue to buy more.

Foolish takeaway
My Special Situations portfolio is buying more Extendicare, adding about $2,000 - or about 2% of the portfolio - to my position. The stock already comprises over 30% of my holdings, but the low downside and the potential for significant upside here looks just too attractive to pass up.

If you have looked at most rig companies as investments lately, you have probably had one of two reactions:

1) Holy cow, shares are down over 30% this year! I'm not touching that with a 30-foot pole.

2) Wait, I can lock in a dividend yield between 7%-16%! Where do I sign up?

To help you better understand what the heck is going on with these companies, Motley Fool columnist Tyler Crowe sits down with host Alison Southwick in the latest energy episode of Where the Money Is to discuss the essentials of investing in this sometimes misunderstood industry. Find out if the rig market is a lucrative investment today, and which company -- Seadrill , Encso , Transocean , Diamond Offshore , or Noble  -- is the pick of the litter.

Shares of GoPro  have been on a tear since its June IPO. The stock, which recently crossed $80 for the first time (hitting a $10 billion valuation), has increased more than 70% in the past month alone. GoPro trades at a forward P/E of 77, not exactly what you would consider cheap. To justify this premium valuation, GoPro will have to sustain very strong growth in the coming years.

GoPro is evolving into more of a content and media business rather than just a camera business, but for now the company's revenue is derived solely from selling its versatile cameras (a category the company has pioneered and continues to dominate, capturing 45% of the sales in the U.S. camcorder market in 2013). Between 2009-2013, GoPro sold 8.5 million of its small HD cameras, with 3.8 million of those cameras being sold in 2013 alone.

The company is set to launch its new line of Hero 4 cameras in October, which should help boost sales and continue GoPro's streak of impressive revenue growth (which grew at an astounding compound annual growth rate of 148.2% between 2011 and 2013). However, there are growing concerns whether new rival versatile cameras from competitors such as Sony, Polaroid, Garmin, and HTC will capture a chunk of GoPro's market and diminish the company's long-term prospects.

I think many people are underestimating GoPro's brand power for a very simple reason: GoPro is more than a camera.

"Start with Why"   
This quote comes from Simon Sinek, author of Start with Why: How Great Leaders Inspire Everyone to Take Action. Sinek offers compelling arguments for what drives success for the greatest leaders and businesses of our age. In a TED Talk in 2009, Sinek explained:

"[V]ery, very few people or organizations know why they do what they do. And by 'why' I don't mean 'to make a profit.' That's a result. It's always a result. By 'why,' I mean: What's your purpose? What's your cause? What's your belief? Why does your organization exist? Why do you get out of bed in the morning?"

While most businesses start with the "what" (such as a product or service), great businesses start with "why" they do what they do. Some relevant examples today are companies such as Apple ("Think Different."), Chipotle Mexican Grill ("Food With Integrity"), and, dare I say, GoPro ("Be a Hero"). These are examples of companies that have an overarching purpose and ethos which inform every corporate decision and product and service offered to customers.

In other words, says Sinek, "the inspired leaders and the inspired organizations -- regardless of their size, regardless of their industry -- all think, act and communicate from the inside out." This is GoPro.

GoPro's advantage over the competition
Hiebing, a marketing and advertising agency, cites research which finds "brands that evoke a stronger emotional response than comparable goods are able to sell in greater volumes, create rabid customer loyalty and charge 20 to 200 percent more than their competitors."

I believe this is a significant advantage for GoPro, which is competing against companies offering little in the way of inspiration or emotional engagement with consumers. Advertising the technical specs of a camera, in other words -- as these new entrants into the versatile market are doing -- is probably not going to engage many consumers (just as some superior specs for the Zune hardly dented the success of the iPod).

A clear purpose and vision 
"We believe the best stories are being lived by our customers," said Nick Woodman, founder and CEO of GoPro. GoPro's purpose, in the words of Woodman (an avid surfer and GoPro user himself), is to help people "self-document themselves engaged in their interests or passions."

GoPro is the only company hyper-focused on this market. Garmin, HTC, Sony, and Polaroid have their hands in several sections of the electronics markets. Plus, GoPro is quickly becoming much more than a camera or hardware company. GoPro is equally focused on helping people manage, edit, and share their content through GoPro Studio and the GoPro App (both of which have been cumulatively downloaded more than ten million times), removing the friction of capturing, editing, and sharing content.

Finally, GoPro is beginning to roll out its media strategy with a new channel on Xbox Live (which was downloaded by more than 500,000 users within the span of several weeks after its July 22 launch) and a partnership with Virgin America, with more in the pipeline in the coming months and years. GoPro has millions of users capturing their passions and sharing them with the world, making for an engaged base of both camera and media users capable of propelling growth for many years to come. (GoPro is the No. 1 brand channel on YouTube, with skyrocketing user engagement numbers.)

Foolish bottom line
GoPro users have an emotional connection with the brand that is -- and, I believe, will continue to be -- the envy of competitors trying to grab share from GoPro. A growing base of passionate consumers coupled with an engaged audience of people watching GoPro's content will be very difficult for another business to replicate. It will likely take far more than cameras with comparable technical specs to bring meaningful competition to GoPro.

Woodman asks, "How do you get millions of people on your platform sharing compelling content and giving you credit for it?" His answer is simple: "You build GoPro."

Through franchising, established restaurant chains can quickly grow their footprint while at the same time limiting risk. While franchises may not be as profitable as corporate-owned locations, they can still be extremely lucrative for both the company and its investors.

Just ask shareholders of fast-food juggernaut Yum! Brands , the $31 billion parent of Taco Bell, Kentucky Fried Chicken, and Pizza Hut. Roughly 80% of the company's more than 40,000 restaurants worldwide are owned and operated by independent franchisees. And Yum! stock has multiplied investors' money by nearly 11-fold since spinning off from PepsiCo in 1997, absolutely clobbering the broader market in the process: 

YUM Total Return Price data by YCharts.

But despite its impressive rise, Yum! Brands could still be a bargain for investors today -- that is, assuming it manages to overcome some key obstacles.

Two heaping challenges ...
First, if its fellow fast-food peers weren't enough, Yum! Brands faces competition from rising fast-casual chains such as Chipotle Mexican Grill . By serving comparably high-quality food in a timely fashion -- and at a slight price premium to chains like Yum!'s Taco Bell -- Chipotle has carved out an impressive niche by bridging the gap between fast-food chains and more expensive casual-dining restaurants.

Still, Yum! has worked to combat consumers' perception of its "lower-quality" food, hiring celebrity chef Lorena Garcia in mid-2012 to craft its "Cantina" line of fresh, Chipotle-esque burritos and salads. Earlier this year, Yum! even announced a new fast-casual concept of its own to be named "U.S. Taco Co. and Urban Taproom" -- a decision the company says was made after a segmentation study discovered a large demographic unlikely to use fast-food restaurants at all. In essence, this meant Chipotle wasn't necessarily stealing huge market share, but rather that Taco Bell was missing this group of potential diners in the first place.

Next, Yum! is also battling to repair its image in China, where August comparable-store sales plunged 13% after a local supplier was found to be improperly handling meat destined for a significant number of Yum! Brands' more than 6,000 Chinese KFC and Pizza Hut locations.  

Yum! Brands' KFC is struggling in China.

Yum! wasn't the only one affected: McDonald's  subsequently stated the same incident caused its August Asia-Pacific, Middle East, and Africa region comps to decline 14.5%. Both Yum! Brands and McDonald's have since suspended all business with the supplier, and Yum! has even voiced its intention to pursue legal action to reclaim damages. At the same time, Yum! Brands reminded investors that its business has shown resilience when faced with such incidents in the past. So, at least in theory, this time should be no different.

But those past incidents happened only a short time ago. In fact, Yum! suffered through a similar ordeal with tainted chicken from another Chinese supplier in 2012, then extended its weakness in the nation last spring after unwarranted worries from an avian flu outbreak kept consumers away from its chicken-centric brands. By April of this year, it appeared China was no longer a problem for Yum! Brands as hungry consumers flocked back to its restaurants.

For consumers, however, it's irrelevant that the blame technically sat with the suppliers and misunderstandings of avian flu. With each subsequent incident, it could arguably prove harder for Yum! Brands to bounce back.

... and several hearty servings of opportunity
That said, with Yum! Brands stock 14% off its 52-week high and roughly flat over the past year, there are several reasons to believe today's shareholders could be handsomely rewarded with a little patience and a long-term mindset.

Despite its weakness, Yum! Brands is still on pace to add another 700 new locations in China this year. That would bring its total restaurant count in the country to nearly 7,000, or just half its long-term goal of having "at least" 14,000 China locations. For perspective, McDonald's has about 14,000 locations in the U.S., the population of which represents a customer-base less than one-quarter the size of China's nearly 1.4 billion. Considering that China alone represented more than $1 billion of Yum!'s operating profit in 2012 (compared to "just" $777 million amid last year's weakness), Yum! should be poised to rebound in a big way when its China business finally takes an extended turn for the better.

Yum! is also growing in other emerging markets. That most notably includes India, where it is adding more than 100 restaurants per year but still has only 714 locations serving a potential customer base of more than 1.25 billion.

And let's not forget Yum!'s ambitious road map for nearly doubling U.S. Taco Bell sales to $14 billion by 2021. Much of that growth should come from focusing on new dayparts such as breakfast, which launched earlier this year, and the "afternoon snack," of which Taco Bell currently commands a tiny ~1% slice. Even if organic growth remains sluggish -- Taco Bell comps increased just 2% last quarter -- Yum! is growing Taco Bell's restaurant count by more than a third to 8,000, many of which will be located in smaller towns.

Finally, for investors willing to endure some short-term volatility, Yum! also recently boosted its dividend by 11% to $0.41 per share, marking its 10th-consecutive year of double-digit payout increases.

In the end, there's no shortage of opportunity for Yum! to not only improve its existing operations, but also to continue growing for the foreseeable future. All things considered, that's why I think Yum! Brands stock is definitely worth a deeper look.

It is a tough market out there. You bought that house at the beginning of the year for $1.5 million and now it's down to $287,000. Ouch. As it turns out, you're not alone. Quiksilver , purveyor of all things beachy, has taken the same sort of hit in 2014. The company's shares are down 81%, year to date, and nothing is looking sunny anymore.

Spoiler: This doesn't end well

As a general rule, strong companies don't start their earnings releases with, "We continued to execute against the key initiatives laid out in our profit improvement plan." Quiksilver's third quarter, led off with that statement, and things continued on that same path. The company has lost relevance, lost market share, and lost its way. Here's an overview of what's gone wrong and how Quiksilver can still make up some ground.

Apparently, nobody surfs
Through the first nine months of this year, Quiksilver's sales have fallen 11% compared to last year. On top of that, the company's operating margin was crushed, falling below zero. Quiksilver has taken a one-off hit to goodwill this year due to its Rossignol brand divestment, but even without that charge, the year to date operating margin is negative.

Part of the decline in sales can be linked back to Quiksilver's decision to move many of its businesses to a licensing model. The goal is to reduce SKUs, cut down on costs, and ultimately generate more income for the business. The short-term result of that switch has been a drop in revenue, and Quiksilver is still working on building its licensing business up in order to make up for the lost revenue.

One of the biggest challenges for the company, though, has been staying current. Quiksilver's retail business has put up small favorable increases in same store sales for the past year and online sales have risen, but the company's wholesale business is stagnant. Unfortunately, wholesale revenue accounts for a full 60% of the company's total.

The Quiksilver rebuilding effort
Even with poor sales, there are still some potential bright spots for Quiksilver. The licensing model could be very good news, as in the first nine months of the fiscal year, the company spent 107% of its revenue on producing and selling its products. The potential for cost reduction -- part of Quiksilver's plan -- is massive.

The next steps toward reduction are going to come from things like staff reduction due to licensing -- "rightsizing" is the term management has latched onto -- and a decrease in production costs. There is a long way to go on those fronts to get Quiksilver back into profitable territory, but there's a path in place.

Quiksilver's long game
With a market capitalization below $300 million, struggling operations, and a handful of known brands, Quiksilver looks very much like an acquisition target. Companies like VF Corp or even Nike could easily snatch up the brand portfolio and fold it into their operations. That's the sort of move that I would expect to see sooner rather than later, though.

If Quiksilver can start gaining a bit of momentum in 2015, then there might be a chance for it to work its way back into the heart of retailers and shoppers alike, putting it out of acquisition range and making it a profitable business again.

As a third option, the whole thing could just fall apart. Again, as a rule of thumb, it's not a good sign when analysts on your earnings call offer their condolences for the horrible quarter you've had. While Quiksilver has lot of solid pieces in its toolkit, the rest of the bag is just full of old buttons and surf wax containers. If that ends up being the ongoing state of affairs, I can see any reason to invest in Quiksilver.

Investors had reason to cheer when Chiquita Brands made a $1.07 billion, all-stock offer to buy Dublin-based tropical-fruit company Fyffes.

The easy metaphor to go for is that Chiquita wanted to be top banana in the industry. Already the market leader with a 13% share, buying Fyffes would give Chiquita control over nearly one-fifth of the banana export market, putting it well ahead of No. 2 Fresh Del Monte Produce with 12% and No. 3 Dole Foods at 11%.

Photo: Flickr user Mike Mozart.

So it's understandable why investors pushed Chiquita's stock almost 18% higher in the days following the deal's announcement, but what might not be so clear is why someone else would want to throw a roadblock in front of it and try to acquire Chiquita for themselves.

Slipped on a banana peel
Over the past decade, Chiquita has suffered the greatest loss of marketing muscle, losing almost half of its share as small independent producers entered the market. Even today the banana industry is in the grips of a pitched battle between the multinationals and the smaller outfits that have sprung up.

According to the industry trade site Banana Link (yes, there is an organization called that), Chiquita, Fresh Del Monte, and Dole at one time controlled nearly two-thirds of the market, but by the end of last year their influence had been cut to a little more than a third, with Chiquita falling hardest and losing almost half of its share. Fresh Del Monte dropped from 20% and Dole from 16% (Fyffes actually increased its share from 4% to 6%).

Data: Banana Link.

The hard-hitting nature of the fruit business was enough to cause another fruit company, Del Monte Foods, arguably best known for its pineapples, to sell off fruit business last year for $1.68 billion to Philippines-based Del Monte Pacific, choosing to focus solely on pet food products.

Del Monte Foods, which shouldn't be confused with Fresh Del Monte Produce, as it was that company's parent prior to a spinoff, once held the largest share of the canned fruit market in the U.S. Today it sells dog food.

Yes, we have no bananas
Chiquita restructured itself in 2012 to focus primarily on bananas and salads, generating $537.3 million from in the second quarter of 2014, or 65% of its total revenue. The yellow fruit accounted for 85% of its operating profitsl. It sold $2 billion worth of bananas in 2013, though that was down 0.8% from 2012, which itself was down 2% from 2011.

That fading power underscores why Fyffes, one of the few big banana producers actually growing, is essential to Chiquitas future.

Even so, Chiquita maintains the No. 2 market position in bananas in North America, holds the top spot in U.S. supermarkets, and imports more than one-fourth of the bananas on the market today. In Europe it's the brand leader and can charge a premium for its fruit.

For its part, Fresh Del Monte Produce saw total banana revenue growth of 8% in the second quarter, with revenue reaching $436.9 million, though that was helped along by a 2% price increase. Dole, which slices and dices all kinds of fruit, trumpets that it is "the world's largest producer and marketer of high-quality fresh fruit and fresh vegetables."

Bending over backward
The deal to buy its rival would result in a new company to be called ChiquitaFyffes. It was originally structured so that Chiquita investors would own 50.7% of the company and Fyffes shareholders would get 49.3%. Because the geographies of the two companies don't overlap, and there is plenty of competition from other companies, Chiquita never felt there would be any antitrust concerns.

But there could be a problem with the deal as a tax inversion.

Inversions, when U.S. companies skip town for countries with lower taxes, have become a touchstone of controversy since the Chiquita-Fyffes deal was announced. Originally one of the first deals this year in which the American company said it would switch country headquarters, numerous other, bigger merger proposals have since followed suit, and now politicians are hopping mad (note to pols: be mad at the U.S. corporate tax structure causing them to flee, not the companies themselves).

Analysts acknowledge the tax savings would be minimal from the deal, and Chiquita says they weren't a factor in its decision -- even though Ireland's corporate income tax rate is just 12.5% compared to 35% in the U.S. Nonetheless, the political fallout from the growing indignation of companies effecting such maneuvers could derail the deal, and shares of Chiquita began falling, actually dipping well below the price they traded at before the company offered to buy Fyffes.

Juicing the deal
This development also provided the needed wedge for someone new to step in.

Brazilian orange juice maker Cutrale Group and banking conglomerate Safra Group offered in August to buy Chiquita for about $625 million, and the banana producer's shares surged 30% on the news. Even the influential proxy firm Institutional Shareholder Services recommended investors support the new bid over the acquisition.

Like a glass of sunshine. Photo: Flickr user Lisa Risager.

While Chiquita has rejected the offer, it used it to force Fyffe's to sweeten the pot. By delaying a shareholder vote on the merger until Oct. 24, Chiquita made Fyffe lower the ownership stake it would accept in the merged entity: Instead of a near 50-50 split, Fyffe's would retain a 40.4% stake, while Chiquita shareholders would get a 59.6% interest in the new company, almost 20% more value than previously allowed.

It's not expected to be a done deal, though. Analysts suspect Cutrale-Safra could still realize value if it raised its offer to about $16 or $17 per share.

While ISS has supported the counteroffer from the Brazilian groups, Cutrale says it's looking to diversify its own assets (it controls a third of the $5 billion orange juice market) and wants Chiquita to invest more in salads. It has suffered from falling global sales of orange juice and an outbreak of "greening" disease that has reduced U.S. production.

Bananas, OJ, and salads makes for a heckuva breakfast, but I'm not certain what kind of investment opportunity it would create. The Chiquita-Fyffes deal seems more synergistic and combines two strong companies together to focus on a single purpose.

Cutrale Group and Safra Group might be agitating for a change, but it's not one I'm sure investors ought to accept.

Tesla Motors CEO Elon Musk is stirring the pot again. Teasing an upcoming announcement and making a bold prediction about self-driving cars sent shares soaring nearly 5% today. Here's what you need to know.

What's the wild card?
In Tesla's most recent earnings call, Musk dropped a bombshell in the form of a surprising hint.

"In the past, we've shown all of our cards. So, people have kind of gotten used to us showing all of our cards," Musk explained. But apparently, this isn't how Tesla operates anymore. "We're not currently showing all our cards."

Again, later in the call, Musk explained that Tesla's capital expenditure and research and development expenses are actually "better than they appear because there are things you don't know about."

What sort of things could Tesla be working on? We're likely to find out on Oct. 9.

Tesla CEO Elon Musk tweeted this image Wednesday evening, saying it was "about time to unveil the D and something else." The awkward wording, he said in a tweet a few minutes later, was not intended. Image source: Tesla Motors.

The D must be one of the cards Tesla said it wasn't showing during the company's Q2 call. But Tesla says the D won't be the only surprise on October 9. The company will also announce "something else."

Given that the vehicle teased in the image looks exactly like a Model S, we're left pretty clueless as to what exactly Tesla could be planning to show off on Oct. 9. What we do know is that Musk told The Wall Street Journal last month that the company would soon be making a "significant" announcement about a product that was not a new vehicle. This has sparked speculation that the company could be announcing all-wheel-drive upgrades to the Model S or possibly new self-driving features.

Self-driving cars are coming sooner than you think
As if a teaser of a mysterious announcement wasn't enough hype, Musk told CNNMoney today that a Tesla vehicle will be 90% self-driving by next year.

"A #Tesla car next year will be 90% capable of auto-pilot" @elonmusk tells @rachcrane #autonymous https://t.co/eFDN3eRK40

— CNNMoney (@CNNMoney) October 2, 2014

"Autonomous cars will definitely be a reality," Elon Musk told CNN's Rachel Crane in an interview. Musk, who prefers to use the word "autopilot" over "self-driving," went on to say that "A Tesla car next year will probably be 90% capable of autopilot -- like, so, 90% of your miles could be on auto." And Musk said highway travel would "for sure" be autonomous by next year.

How will Tesla implement the technology?

"With a combination of various sensors. You combine cameras with image recognition with radar and long-range ultrasonics -- that'll do it," Musk said.

True to the Silicon Valley, the Model S features a 17-inch touchscreen. Image source: Tesla Motors.

Musk insisted that Tesla will be a leader in self-driving cars: "I mean, Tesla's a Silicon Valley company. If we're not the leader, then shame on us."

New announcements and a shot at leading the way in self-driving cars are definitely items that improve the outlook for Tesla's business potential. Yes, a $30 billion market capitalization has priced in both astronomical growth potential and surprises. But this California-based company continues to prove it is a disruptor. Tesla management's big ambitions, excellent execution, and huge potential give the underlying business the characteristics of the sort of company investors want in their portfolio. While it's tough to call the stock a buy at these levels, shareholders definitely shouldn't sell.

Chip giant Qualcomm is simply thriving. It's benefiting hugely from the global smartphone boom. Technology industry research group IDC earlier this year predicted that global smartphone shipments would top 1 billion units in 2014. And, in August, IDC stated that worldwide smartphone shipments topped 300 million in the second quarter, the first time that quarterly mark had been hit. That represents 25% growth from the same period last year.

Qualcomm has seen its revenue and profits rise right along with the continued boom in global smartphone sales. The company rakes in a ton of cash flow, and it's returning a lot of that cash flow to investors through dividends and share repurchases.

Qualcomm's share repurchases backed by extremely strong fundamentals
Qualcomm spent $3.3 billion on share repurchases through the first three quarters of the fiscal year. That's a huge increase versus the $1.2 billion spent on share buybacks through the same period last year. In the fourth quarter of the fiscal year, Qualcomm management stated it intends to repurchase at least $1 billion of stock. As of June 29, $6.5 billion remained on the company's authorized repurchase program.

Qualcomm can do this because it's growing very strongly. After releasing third-quarter results, Qualcomm Chief Executive Officer Steve Mollenkopf referred to the company's products as industry-leading chipset solutions. Judging by Qualcomm's performance, it's easy to agree with that assessment.

Through the first three quarters of the fiscal year, Qualcomm had generated $6.3 billion in free cash flow. This is up 15% versus the same period last year. Management expects 2014 to be a great year. Full-year expectations call for 6%-9% revenue growth and between 17%-21% earnings growth. This is due to rising shipments of its products, particularly in new markets. For example, Qualcomm sees China as a huge opportunity thanks to its developing 4G LTE rollout. Total shipments of Qualcomm's MSM chips soared 31% year over year in the most recent quarter. 

As a result of its cash generation, Qualcomm has a balance sheet that is flush with cash. At the end of the most recent quarter, Qualcomm reported $32.7 billion in cash, cash equivalents, and marketable securities. This provides a huge cushion for the company to increase the amount of cash it returns to shareholders.

More than enough cash to go around
One concern for income investors might be that the company is short-changing its dividend policy with such aggressive buybacks. But Qualcomm is in the rare position of generating enough cash to simultaneously buy back boatloads of stock, as well as pay a competitive dividend. Qualcomm has increased its dividend by 20% compounded annually over the past five years, and yields a very healthy 2.3%.

Qualcomm can afford to buy back stock and pay dividends, primarily because the company does not have overly burdensome investing needs. Capital expenditures totaled just $955 million over the first nine months of the year, meaning Qualcomm can keep investing to grow the business and also reward shareholders.

The Foolish takeaway
Qualcomm is in an enviable position. While some companies have to make hard choices between investing in the business to secure future growth, paying dividends, or buying back stock, Qualcomm is no such company. It's putting up enough growth to accomplish all of these initiatives to benefit shareholders.

As global smartphone shipments continue to rise, Qualcomm's cash flow keeps getting stronger. The company holds a mountain of cash on the books, and is deploying a lot of cash to investors. The primary way Qualcomm does this is by buying back billions of dollars' worth of stock, which will help boost earnings growth even more down the road. This is why shareholders should see Qualcomm's huge share buyback program as a great sign that business conditions are very positive, and getting stronger with each passing quarter.

WhiteWave Foods is enjoying a record year in 2014, with shares up a whopping 76%. Investors pushed shares of the packaged foods and beverages company higher recently after WhiteWave delivered record sales growth for its second quarter. With the stock now trading near all-time highs of around $36 a pop, many investors fear they missed the rally. Not to worry -- here are three catalysts that should drive WhiteWave Foods stock higher in the year ahead.

Source: WhiteWave Foods.

International expansion in China
WhiteWave Foods has been heavily investing in the Chinese market throughout much of the past two years, and investors should begin to see the fruits of its labors in 2015. Instead of going it alone in this massive market, WhiteWave teamed up with one of China's largest dairy companies, Mengniu Dairy. As part of the deal, WhiteWave will own a 49% stake in the joint venture, and Mengniu a 51% stake. This creates a significant opportunity for the company in the years ahead, as China is the world's largest consumer market with over 1.3 billion consumers and a rapidly growing middle class.

WhiteWave has made many investments to support this joint venture, including the purchase of a production facility where it plans to begin manufacturing its products for the Chinese market as soon as next year. WhiteWave poured roughly $47.3 million into the project during the first two quarters of 2014. These strategic investments will likely lower WhiteWave Foods fiscal 2014 earnings by around $0.05 per share. However, that is a small price to pay given the long-term sales potential this creates for WhiteWave in China's multi-billion dollar nutritious products channel.

Production and sales in China are set to begin in late 2014, according to a recent SEC filing. This should be a boon for the company's international sales in 2015 as Chinese consumers become more familiar with WhiteWave's products over the year ahead.

Smart acquisitions and brand building
In addition to expanding its footprint in key overseas markets, the company is also growing its portfolio of leading brands. At the end of last year, WhiteWave jumped into the fast-growing organic produce channel by acquiring Earthbound Farm for $600 million. Earthbound is the largest organic produce brand in North America -- generating net sales in excess of $500 million in 2013.

This should pad the company's pockets in the year ahead, as more consumers are buying organic produce today. Moreover, the organic packaged salad category boasts a five-year compound annual growth rate of 15% according to data from Credit Suisse.

Source: WhiteWave Foods.

More recently, WhiteWave scooped up dairy-free beverage and desserts maker So Delicious for a cool $195 million. While it will take the remainder of the year to integrate So Delicious into its business, this deal should fuel earnings growth for WhiteWave Foods in 2015 as it increases the company's market share in the fast-growing plant-based beverage and non-dairy creamers category. As WhiteWave Foods chief executive Gregg Engles points out, "So Delicious is recognized as the #1 plant-based frozen dessert brand in the United States, and it will provide WhiteWave entry into the growing, plant-based frozen dessert category."

These acquisitions should pay off for WhiteWave Foods in 2015, with its Earthbound, Silk, International Delight, and Horizon Organic products each on pace to becoming billion dollar brands.

Favorable industry dynamics
WhiteWave Foods is still in the early stages of its growth story. Yet one of the most important catalysts for the stock going forward is that it operates in an increasingly lucrative industry. Growth in the organic category continues to outpace that of the overall food and beverage industry today. Meanwhile, the dairy sector alone was estimated to be a $51 billion market in the U.S. last year. These represent two key areas in which WhiteWave's products are uniquely positioned.

From its beverages platform, which includes coffee creamers and iced coffee products under the International Delight and Land O'Lakes brands as well as its premium dairy products and organic produce, WhiteWave is at the forefront of evolving consumer trends. This trend toward organic and plant-based foods should act as a tailwind for WhiteWave in the quarters ahead.

The big takeaway here for investors is that WhiteWave Foods has a long runway of growth still ahead of it. It seems the company's international expansion, recent acquisitions and market position in fast-growing categories like organic and plant-based products should only drive the stock higher in 2015.

This article originally appeared as part of ongoing coverage in our premium Motley Fool Rule Hidden Gems service...we hope you enjoy this complimentary peek!

The last year hasn't been kind to AZZ , with the company missing adjusted earnings estimates in 2 of it past 4 quarters and the stock trading 21% off its high. 

AZZ data by YCharts.

Following the release today of the company's second-quarter earnings, shares plunged 10% before recovering nearly completely to yesterday's closing price. Let's examine what has been going wrong with the company and see if a turnaround is around the corner. 

AZZ Price data by YCharts.

Q2 results
Analysts had expected AZZ to report $0.64 per share in earnings from $208.18 million in sales. Instead, the company reported $0.53 per share in earnings from $193.4 million in revenue, a miss of 17.2% and 7.1%, respectively. This represents the largest earnings miss for the company in the last four quarters. 

Digging into the numbers
Compared to last year's second quarter, sales were up 1.9% but earnings plunged 17.2%. What explains these disappointing results? As management explained, the company took a $4 million pre-tax reorganization charge this quarter, equivalent to $0.11 per share, due to its reduction in management headcount and a write-off of certain underperforming assets. Adjusted for this expense, earnings were $0.63 and close to expectations of $0.64 per share. 

In addition to the one-time charge, AZZ during the quarter sustained $8.6 million in cost overruns that compressed margins and project shipping delays in its energy segment, specifically in its Nuclear Logistics (NLI) and WSI subsidiaries.. 

In a press release, President and CEO Tom Ferguson said of the results: 

Revenue levels reflected the seasonal nature of our business, but the margins were disappointing.  Although I am not satisfied with the results for this quarter, I do recognize that margins were affected by a number of operating inefficiencies within our Energy Segment. We have identified and corrected those items under our control, and do not expect them to recur. We have also taken realignment charges to clean up some non-performing assets and recognize the cost of building a more effective leadership team. With the realignment largely completed, we have already seen positive change as we now have the right personnel and leadership in place.  

Some good news
Despite the disappointing quarterly results, the news wasn't all bad for AZZ. While the energy segment saw a 3.4% decline in revenue and operating income declined by 110.4% due to the problems at NLI and WSI, the galvanizing services segment reported improved results.

Sales for the segment (which coats steel in protective zinc to prevent rusting) were up up 8.4%, mainly due to the return of the company's Joliet, Ill., galvanizing plant (one of 36 it operates in 15 states and three Canadian provinces) which suffered a major fire in 2012.

Sales were also boosted by the company's June 30 acquisition of Zalk Steel & Supply, which operates a galvanizing facility in Minnesota.

However, operating income from this segment wasn't nearly as impressive as the revenue growth, declining 12.3% from the same quarter last year. The reason for this? Margin compression from 30.6% operating margin to 24.8%, due to a combination of factors. These include the $2.7 million insurance payment the company received last year for the business interruption it suffered due to the Joliet facility fire, which wasn't repeated this year. This segment also incurred added costs in the form of increased depreciation and amortization expenses from the Zalk Steel acquisition, costs associated with reopening the Joliet facility, and a portion of the reorganization charge discussed earlier.  

Management reiterates guidance
Investors looking for some silver lining to a bad quarter can take heart in the company's strong backlog of projects, which increased 11.9% to $329.1 million. Management also reiterated its guidance for full fiscal year sales and earnings of $850 million-$900 million and $2.40 per share-$2.80 per share, respectively. 

Management also showed confidence in its claims that the reorganization is largely complete by increasing the quarterly dividend by 7.1%, from $0.14 per share to $0.15 per share. 

What to watch going forward
Despite AZZ's difficulties this year, analysts are still bullish on the company's growth prospects. Next year's earnings are expected to grow at 28.6%, with a five-year annual earnings growth projection of 13.95%. 

In order to achieve this long-term growth, investors and potential investors should keep an eye on whether the reorganization is truly over. Specifically, this means whether the company has to take any more charges in the future. In addition, investors should watch to make sure that cost overruns at NLI and WSI don't continue to hurt margins and that customers don't continue to delay orders. 

The growing backlog is a certainly a positive for the company (last quarter it grew by 14.2%) . And as long as the company continues to grow at a steady clip, management can complete its reorganization on schedule, and costs are kept under control, AZZ's likelihood of achieving the strong earnings and dividend growth that analysts are expecting will be greatly increased.  

It seems to happen every year -- that energy bill arrives in the depths of a harsh winter and it's almost impossible to believe the total. You've been careful to conserve heat and power, so why in the world is that bill so high?

Even with all your preparations and care, you might be surprised by exactly where all that heat is going. A good home energy audit before the winter wind begins to blow can help you figure out where you need to tighten things up around the house. This do-it-yourself audit isn't as thorough as an energy audit by a contractor, but it can definitely provide you with some energy savings through the winter.

Start with a serious cleaning
Spring cleaning is important, but so is the autumn cleaning, when you dive into changing filters, cleaning out ducts, and replacing those old, worn-out seals around the doors and windows.

Start with a thorough filter cleaning; if your furnace filters are disposable, make sure you have enough new ones on hand to get through the winter. Use your vacuum to suck up any debris or accumulated dust around the furnace filter, and then tackle the vents throughout the house for good measure. A very clean furnace runs much more efficiently.

Then look at the weather-stripping around the doors and windows. Over time, these seals begin to crack and compress, and that can invite drafts. Remember this rule of thumb: close the window or door on a one-dollar bill. If you can pull the bill out of the closed door or window, it's time for new weather-stripping. Most weather-stripping is very affordable and takes only minutes to replace, so make a point of doing it now, before the weather gets too cold.

Check for drafts
Speaking of cold, nothing is worse than feeling an unwelcome breeze around your ankles during the depths of winter. Eliminate as many drafts as you can by using the incense test. Here's how you do it: Turn off the furnace, all fans, and any other air that is flowing through your home. Close all the windows and doors. Then light a stick of incense (choose one that smells great to you -- why not?). Move the stick of incense slowly around your doors and windows, and watch the smoke. When it is blown away or sucked in, there's a draft. Mark that spot and come back to it with more weather-stripping.

There are other areas of your house that are prone to drafts -- places like the outlets, light switches, areas where the baseboard meets the floor, and areas cut for pipes, dryer vents, cable and telephone lines, and the like. Remedy the problem by placing small insulation panels behind the outlet and light switch covers, then using wrap insulation to fill up any spaces around pipes, vents and the like. Use that incense stick around the baseboards, and use small slips of insulation underneath to block out that air.

Inspect the insulation
That brings us to insulation, which is the gold standard of energy-efficiency for any home. To check on how much insulation you have, start with the attic. Make note of what kind of insulation you have, how thick it is, and the R-value, if possible. Then move to the exterior walls. You can do this by opening up the electrical outlets and shining a flashlight behind the box -- you should see insulation there, and you might be able to tell how thick it is.

This Insulation Fact Sheet from the U.S. Department of Energy can help you understand how to find the R-value, and determine if your home has enough insulation for the coming winter. If it doesn't, it's time to get in touch with a professional contractor who can help you keep things cozy.

Tighten things up
Once you have attended to the things discussed above, it's time to take additional steps that can keep your home cozier in the winter -- and save on those heating bills.

If you have ceiling fans in the house, now is the time to reverse them. Turning your blades to the clockwise direction can help circulate warm air down into the room. Most fans have a switch on them that moves the blades from one direction to another.

If your windows are still drafty despite new weather-stripping or caulking, turn to window plastic for a quick fix. This thin layer of protection can keep things surprisingly warm, and if the plastic is applied correctly, it can be barely visible.

Wrap up any pipes that might freeze during a cold snap, and remember to wrap up your hot water heater, too. This is especially helpful if the water heater is in an unheated area, such as a garage. If it is well-insulated, it has less work to do to heat your water, which means more energy-efficiency.

Finally, remember your thermostat. Turn it down as low as you can and still be comfortable -- and don't forget that wrapping up with warm sweaters and blankets can allow you to turn it down even lower. Lower the heat even more when you leave the house, but don't let it drop below 55 degrees unless you want to come home to frozen pipes!

Now that you know how to conduct a do-it-yourself home energy audit, it's time to get moving! The key to a cozy winter is getting all of this done long before the snow flies.

This article originally appeared on improvementcenter.com.

Related links:

• Back-to-school upgrades to make life easier
• Your home's secret money saver
• 6 high-tech options to make your home stand out

Source: Flickr user Marjan Lazarevski

The third quarter certainly wasn't the most exciting for investors of telecommunications giant AT&T , with its stock closing essentially flat from where it ended in the second quarter. However, if there was one bright spot investors could focus on, it was that insider buying at AT&T during the quarter was quite strong according to data provided by S&P Capital IQ.

As famed Wall Street investor Peter Lynch once said, "There are many reasons insiders sell, but only one reason insiders buy." With that in mind, let's have a quick look at the differences between insider buying versus insider selling, see what those differences could mean for investors, and then finally take a closer look at the suspected catalysts behind AT&T's insider buying spree.

The many reasons insiders sell stock
Often when an insider, or someone on the company's board of directors or executive management team, sells shares in his or her company, the immediate reaction is one of shock and horror by a good number of investors. However, the truth of the matter is that not all insider selling is necessarily bad.

For example, some insiders sell some of their shares after monstrous runs higher in the underlying stock price. Bill Gates, co-founder and former CEO of Microsoft , for example, has sold off a large portion of his Microsoft stock over many decades in order to diversify his investments beyond just a single company. In instances where insiders have made a fortune off their stock it's not uncommon or necessarily bad news if they sell a bit.

Another common reason you might see insiders selling a portion of their holdings is for tax purposes. Factoring in salaries, bonuses, and other forms of income, insiders can sometimes turn to selling shares of their stock to pay their tax obligation. This is, again, an orderly disposition of shares and rarely worth worrying about.

Insiders can also sell stock because options they were granted as a bonus or purchased are close to expiring. By executing options and selling shares insiders aren't necessarily placing their vote against their company's future so much as ensuring those options don't expire worthless.

The one situation where insider selling can be a potential concern is when an executive or director unloads a sizable portion of his or her holdings on a percentage basis, especially if the stock has been largely underperforming the overall market.

Source: AT&T

The one reason insiders buy
On the flipside, there's one reason insiders buy their own stock: they believe it'll head higher. A lot of investors place heavy credence in insider buying as they understand that no one understands a business better than its insiders. In other words, if insiders are buying, the business must clearly be in good shape.

Of course, it's worth noting that even insider buying has its caveats and is by no means a guarantor that a stock will head higher. For instance, insiders can set up regularly recurring monthly or quarterly stock purchases in order to average into their stock over the course of the year instead of buying in one lump sum. These recurring purchases might make it appear as if insider buying interest is off the charts, but it might be nothing more than these prescheduled monthly or quarterly buys.

Additionally, investors have to remember that while insider buying is a signal worth watching, there are more factors that influence the direction of a stock. It's the collective trading of millions of investors that determines which way a stock heads and not the collective trades of a handful of executives and directors.

The catalysts behind AT&T's insider buying
In AT&T's case, factoring in both nonopen market transactions and direct purchases, I count more than 40 share acquisitions by company insiders during the third quarter. What's the reasoning behind AT&T insiders' bullishness you ask? I believe there are three possibilities.

First, I do suspect that a number of purchases being made were orderly buys on a monthly or quarterly basis. Examining the buy and sale records, which are required to be filed with the Securities and Exchange Commission, you'll see a lot of the same names and very similar share buy counts on a quarter-to-quarter basis.

Secondly, I suspect that some purchases could have to do with AT&T being a premier defensive play. AT&T is a dividend aristocrat that's currently yielding in excess in 5% and which has raised its dividend for an impressive 30 straight years.

T Dividend data by YCharts

During rampant bull markets AT&T's growth rate doesn't stand a chance of keeping up with high-flying tech companies. However, with the stock market stalling in recent weeks, QE3 continuing to taper off, and geopolitical tensions rising around the globe, we could begin to see investors cycle back into defensive names like AT&T. This "cycling" could cause AT&T's stock to move higher, which is a move some insiders may want to be well in front of.

Finally, don't discount the effect that new technology can have on a telecom provider like AT&T. The release of the Apple iPhone always proves to be a big customer driver for the company and it can lead to robust growth in wireless subscriptions, especially in the third and fourth quarter. With the iPhone 6 redesigned and beefed up in size AT&T's insiders could be expecting that growth will surprise Wall Street this holiday season.

The case for AT&T: higher or lower?
While I certainly wouldn't say that AT&T's periodic insider buying is a bad thing, I doubt it holds much bearing on where the company will head next.

Source: AT&T

Instead, investors are going to want to focus on the company's third and fourth-quarter subscriber figures, which, as I mentioned above, should be buoyed by the iPhone 6 release. In addition, AT&T's churn rate, or the number of customers it loses year over year, will be an important factor worth eyeing. Currently AT&T's churn rate is among the lowest in the industry, which is one reason why Brand Keys ranked AT&T as the top wireless company in terms of keeping its customers loyal to the brand. In my opinion, as long as subscribers are up, average revenue per user is steady or rising, and its churn rate remains relatively low, there's no reason to believe that AT&T won't head higher. 

We asked some of our best contributors who cover technology stocks to talk about a top stock pick for October. Read on to find out what they had to say and see whether these stocks might fit in your portfolio.

While names such as Facebook and Twitter usually attract more attention in the technology sector, investors should not underestimate LinkedIn and its tremendous potential for growth in the years ahead.

The company makes approximately 60% of revenues from its talent solutions segment, while premium subscriptions and marketing solutions each generate 20% of sales. Importantly, the three business segments are firing on all cylinders; sales increased more than 40% annually in the three divisions during the second quarter of 2014.

LinkedIn has 313.4 million active members and 28,080 corporate solutions clients as of the last quarter. This means the company has already gone through the inflection point and consolidated its leadership position in the industry. Users and companies attract each other to the platform. The bigger LinkedIn gets, the more valuable the service becomes for the different parties involved. This creates a self-sustaining virtuous cycle of growth and increasing customer value over the long term.

The market opportunity in talent solutions is truly amazing for LinkedIn. Management believes the company could generate nearly $10 billion in revenues with its current user base and considering only current products and prices, that's roughly 10 times the revenues LinkedIn produced in that division over the last 12 months. On a longer term basis, the total size of the market could be a jaw-dropping $85 billion based on management estimations.

Those are some of the reasons I think LinkedIn is a top stock now.

Nathan Hamilton:  Providing a valuable service for consumers is one of the most powerful forces for service companies. For wireless carriers, value boils down to pricing and network quality. T-Mobile is delivering on both.

T-Mobile moved aggressively on pricing in 2013 to attract subscribers with promotions. Accordingly, it's selling, general and administrative expenses have increased 42% since the first quarter of 2013. The results are paying off as T-Mobile netted more than 1 million subscribers in each of the past five quarters. Average revenue per postpaid subscriber also declined to $49.32 in the most recent quarter from $54.07 in the first quarter of 2013. Most investors shun declining revenue per subscriber, but long-term investors should focus on T-Mobile's attracting subscribers and gaining share from the entrenched behemoths.

Network-wise, RootMetrics recently reported T-mobile no longer has the worst network among the major carriers: T-Mobile improved to third place. In the past 12 months, T-Mobile spent over $3 billion on blocks of low-frequency spectrum -- the most desirable bands for coverage. The company also plans to participate in highly sought after spectrum through upcoming auctions in November and into 2015.

Taking pricing trends and improving network quality into account, T-Mobile is providing a valuable service and subscribers are flocking to the company. This is what makes the stock a buy in October.

Anders Bylund: Last October, Google CEO Larry Page shared a thrillingly simple message with Google's investors: "We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device."

The next day, Google shares jumped more than 13% higher and haven't looked back since.

OK, so Page's message was paired with a good earnings report. Google exceeded analyst targets on both the top and bottom lines that quarter. But what Page said cuts to the heart of why Google is such a great long-term investment. It's not all about monetizing every click, or beating some arbitrary competitor in a single market.

Instead, Google attacks a broad range of markets, sometimes far outside its comfort zone. And in each case, the company aims to improve on whatever was there before -- again and again. "Because great is just never good enough," as Page said later in the same earnings call.

Google is a blue chip stock for the long haul. The company dominates online search and advertising today, and will explore new markets for many decades to come.

To be honest, this October isn't a unique opportunity to buy Google shares. But the earlier you get in on a fantastic investment for the really long haul, the better. So why not start a Google position today? You'll thank me 30 years from now.

Tim Beyers: Why aren't more investors interested in Twitter ? The Rodney Dangerfield of social media doesn't get nearly the respect that Facebook does. Big mistake.

But don't take my word for it; look at the numbers. Revenue growth improved five percentage points from Q1 to Q2. Active users jumped 24% year-over-year. And revenue per 1,000 timeline views -- a key measure of Twitter's ability to monetize engagement -- doubled to $1.60.

Optionality also factors into the Twitter stock story. Hardly a year after introducing direct access to TV programs and enhanced services for helping broadcasters connect with audiences, the microblogger is now working with studios on highly targeted ads for movie buffs. Adding a "buy" button takes Twitter from distributor of Grumpy Cat photos and assorted interesting things to mobile commerce mogul in the making. The difference hasn't yet shown up in the stock price, but it will.

GoPro just unveiled its cheapest camera ever, the $129 entry-level HERO. The device can record 1080p wide-angle video at 30fps, 720p video at 60fps, take five-megapixel photos at up to five frames per second, and is waterproof in depths up to 131 feet.

GoPro's new cameras. Source: GoPro.

GoPro unveiled the camera alongside two new pricier devices, the $499 HERO4 Black and the $399 HERO4 Silver. The HERO4 Black can capture 4K video at 30fps, 2.7K video at 50fps, 1080p video at 120fps, and can take up to 30 12-megapixel photos per second. The HERO4 Silver can capture 2.7K video at 30fps, 1080p video at 60fps, 720p video at 120fps, and sports the same fast-shooting 12-megapixel camera.

While the HERO4 Black and Silver are welcome upgrades for GoPro's core product line, investors are probably wondering if the $129 HERO will cannibalize sales of its pricier products and result in lower margins.

Why GoPro needs a low-end action camera
According to IDC, GoPro controls 47.5% of the action camera market. Sony trails in a distant second with a 6.5% share. The rest of the market is fragmented among new players like Polaroid, Spy Tec, and Monoprice. Here's how GoPro's new HERO measures up against the low-end competition:

Source: Company and industry websites.

The new HERO doesn't really stand out in any department except for two things -- its brand name and its superior water resistance. Whether those two factors can convince casual action camera users to pay $30 more for the device, however, remains to be seen.

L to R: Polaroid's Cube, Spy Tec's SJ1000, and Monoprice's MHD Action Camera. Source: Company websites.

But the real threat doesn't come from individual competitors -- it's the fact that cheaper action cameras will lower customer price expectations, widening the rift between action camera enthusiasts and casual users. Another problem is that previous HERO users might realize they didn't need all the bells and whistles of the higher-end devices, and in the future purchase the cheaper GoPro HERO instead of the Silver and Black versions.

Margins vs. market share
This means that GoPro could soon be forced to sacrifice margins to preserve its market share.

Last quarter, GoPro's revenue soared 38% year over year to $244.6 million, but its generally accepted accounting principles-adjusted net loss nearly quadrupled to $19.8 million. That loss was mainly due to triple-digit increases in research, sales, marketing, and administrative expenses. Exacerbating the problem, GoPro still hasn't secured a contract manufacturing deal with Foxconn, which owns 8.88% of the company. Such an agreement could help GoPro lower development and manufacturing costs.

What's troubling was that GoPro posted gross margin of 42% last quarter, up from 32% a year earlier, which was completely offset by rising expenses. The company also stated in its 10-Q filing that it expects gross margins to decline sequentially in the third quarter.

Therefore, adding a low-cost camera that could cannibalize sales of higher margin ones is risky, but it's a necessary tactic to counter the rise of $100 action cameras.

The Foolish takeaway
GoPro's forward P/E of 88 and five-year PEG ratio of 3.4 clearly suggests the stock -- which has soared 280% since its June IPO -- is overvalued and has limited bottom-line growth potential. Launching cheaper cameras while incurring higher marketing expenses will also probably keep the company in the red for at least a few more quarters.

However, investors should remember that margins aren't everything. If GoPro can conquer the low-end action camera market with the new HERO, it can offset lower profit per unit with higher sales volume. The low-end HERO could also help GoPro expand into a new market that wasn't interested in the company's cameras before, dramatically increasing its user base and overall market share. That could fuel the growth of its video sharing network, which the company has repeatedly highlighted as a possible new source of revenue.

These factors could all lead to higher revenue growth, which might keep investors interested in GoPro, despite its bottom-line issues.