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Is AGCO Poised to Take on the Titans?

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In the 14 years between its creation in 1990 and 2004, AGCO  set out on a mission to become one of the largest agriculture equipment suppliers in the world. During that time, the firm merged with and purchased 20 companies, spending about $2.5 billion, representing 4% of sales. After 2004, the company only bought two firms, and spent just $86 million.

Why should I care?
Well, the company went on a shopping spree for years; with each swift step from one purchase to the next, it came a little closer to securing enough footing to take on giants Deere  and CNH Global . 

The lack of buying activity since 2004 shows that the firm feels comfortable in its position to take on the top dogs, and it will likely continue to make operations more efficient. But in order to know if the company is gaining market share, we need to take a look at comparative revenue increases.


AGCO Revenue TTM Chart

AGCO Revenue TTM data by YCharts

AGCO increased annual revenue by about 161% between 1997 and today. During the same period, Deere increased by 193% and CNH increased by 90%. The chart starts in 1997 because that is when CNH's revenue data started to be recorded. However, in taking a look at the earliest available data for AGCO, the company's revenue increased by 3,383%, compared to Deere's 408% increase.

But what has it done for me lately?
While these stats show AGCO's ability to go from being a small-cap company into a top player in the agriculture equipment industry, it doesn't provide much of an idea about what the firm can do while it is on top. After all, it is much easier to double up on $300 million than it is to double up on $10 billion. A more informative comparison is what the company has done since finishing its buying frenzy in 2004.

AGCO Revenue TTM Chart

AGCO Revenue TTM data by YCharts

AGCO increased annual revenue by about 215% from 2004 to now. Deere increased it by 246% in the same period, while CNH increased revenue by 100%. Again, we see that AGCO is not keeping up with Deere's revenue increase, but it is beating CNH. This evidence begins to tell the picture that at the current pace, AGCO will take the second spot away from CNH in the years ahead. That makes me want to buy AGCO and sell CNH... but hold on.

Did you forget about costs?
As a matter of fact, I didn't. Revenue is great, but if the cost of generating it is too much, a company can go bankrupt very fast. The amount of money the firm is actually earning through profit margin can better tell the story about which is the strongest.

AGCO Profit Margin Quarterly Chart

AGCO Profit Margin Quarterly data by YCharts

This chart shows that each company experienced similar fluctuations during the same quarters, and steady profits for all indicate that each firm can afford its revenue. But what I find the most interesting about this chart, is the frequency by which AGCO posted positive returns after 2004 compared to before that year, which is when it ended its buying frenzy. That means that as AGCO's operations have become more integrated, and the company has stopped spending a considerable amount on mergers and acquisitions, it has managed to keep a higher percentage of revenue.

OK, I guess you're onto something
The charts tell me two important points. First, AGCO's $2.5 billion worth of purchases from 1990 to 2004 has paid off in spades, as the company is earning higher returns as evidenced in the chart. Second, while AGCO hasn't been able to keep up with the momentum at Deere, it is on pace to overcome CHN as the second-largest agriculture equipment firm. But I wouldn't put it past AGCO to eventually take the top spot, considering its massive growth since 1990. This company is definitely worth a look in my book.

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The article Is AGCO Poised to Take on the Titans? originally appeared on Fool.com.

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

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Brown-Forman to Expand the Jack Daniel Distillery

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Brown-Forman to Expand the Jack Daniel Distillery

Global demand drives more than $100 million investment in Tennessee

LOUISVILLE, Ky.--(BUSINESS WIRE)-- Brown-Forman Corporation (NYS: BFA) (NYS: BFB) announced today the expansion of the Jack Daniel Distillery in response to global demand for its world-famous Tennessee Whiskey. The more than $100 million investment includes the addition of stills, barrel warehouses, and related infrastructure to support the expanding operations.


"The demand for Jack Daniel's Tennessee Whiskey worldwide speaks volumes for the craftsmanship and specialness of a spirit distilled from a small cave spring hollow in Tennessee," said Jeff Arnett, Master Distiller, Jack Daniel Distillery. "The expansion will help Jack Daniel's continue to bring our distinctive, charcoal-mellowed whiskey to the world and to follow Mr. Jack's belief when he said, 'Every day we make it, we'll make it the best we can.'"

Brown-Forman's investment of more than $100 million is expected to result in approximately 90 additional full-time jobs over the next five years. Construction on the expansion will begin this fall and is expected to be completed within two years.

"I want to thank the Jack Daniel Distillery for today's announcement and their continued investment in the people of Lynchburg and Tennessee," Tennessee Gov. Bill Haslam said. "This company is an American brand but, more importantly, a Tennessee brand well recognized across the world, making it a global ambassador for our home state. Jack Daniel's is one of our most historic exports, and it helps us in our efforts to bring new Tennessee products to the world marketplace."

The distillery expansion will be located on distillery property in the Lynchburg area and tied to the same source of cave spring water.

"Jack Daniel's is a globally recognized and well-respected brand that boasts a rich history filled with Tennessee tradition," Tennessee Department of Economic and Community Development Commissioner Bill Hagerty said. "The substantial expansion set to occur in the upcoming years is tremendous for the community and underscores Tennessee's No. 1 ranking for job growth in the Southeast. I appreciate the company's continued investment in the state and the jobs created from today's impressive announcement."

This year, with the support of Tennessee Governor Bill Haslam, the Tennessee General Assembly passed legislation designating that any whiskey labeled as "Tennessee Whiskey" must be charcoal mellowed and produced in the state, in effect creating a new spirit category similar to Kentucky Bourbon.

Jack Daniel's Tennessee Whiskey has grown volume for 21 consecutive years, underscoring the brand's premium, iconic image and reinforcing Brown-Forman's belief in its long-term appeal and sustained growth potential. The Jack Daniel's family of brands grew global net sales by a strong 9% in the last fiscal year.

Officially registered by the U.S. Government in 1866 and based in Lynchburg, Tennessee, the Jack Daniel Distillery, Lem Motlow, proprietor, is the oldest registered distillery in the United States and is on the National Register of Historic Places. Jack Daniel's is known for the world-famous Jack Daniel's Old No. 7 Tennessee Whiskey, Gentleman Jack Rare Tennessee Whiskey, Jack Daniel's Single Barrel Tennessee Whiskey, Jack Daniel's Tennessee Honey, Jack Daniel's Ready-to-Drink Beverages and Jack Daniel's Country Cocktails.

For more than 140 years, Brown-Forman Corporation has enriched the experience of life by responsibly building fine quality beverage alcohol brands, including Jack Daniel's Tennessee Whiskey, Southern Comfort, Finlandia, Jack Daniel's & Cola, Canadian Mist, Korbel, Gentleman Jack, el Jimador, Herradura, Sonoma-Cutrer, Chambord, New Mix, Tuaca, and Woodford Reserve. Brown-Forman's brands are supported by nearly 4,000 employees and sold in approximately 160 countries worldwide. For more information about the company, please visit http://www.brown-forman.com/.

Please enjoy your Tennessee Whiskey responsibly. For more information on Jack Daniel's, visit www.jackdaniels.com or visit Facebook at www.facebook.com/jackdaniels.

Important Information on Forward-Looking Statements:

This press release contains statements, estimates, and projections that are "forward-looking statements" as defined under U.S. federal securities laws. Words such as "aim," "anticipate," "aspire," "believe," "continue," "could," "envision," "estimate," "expect," "expectation," "intend," "may," "plan," "potential," "project," "pursue," "see," "will," "will continue," and similar words identify forward-looking statements, which speak only as of the date we make them. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. By their nature, forward-looking statements involve risks, uncertainties and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. These risks and other factors include, but are not limited to:

  • Unfavorable global or regional economic conditions, and related low consumer confidence, high unemployment, weak credit or capital markets, sovereign debt defaults, sequestrations, austerity measures, higher interest rates, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations
  • Risks associated with being a U.S.-based company with global operations, including political or civil unrest; local labor policies and conditions; protectionist trade policies; compliance with local trade practices and other regulations, including anti-corruption laws; terrorism; and health pandemics
  • Fluctuations in foreign currency exchange rates
  • Changes in laws, regulations or policies - especially those that affect the production, importation, marketing, sale or consumption of our beverage alcohol products
  • Tax rate changes (including excise, sales, VAT, tariffs, duties, corporate, individual income, dividends, capital gains) or changes in related reserves, changes in tax rules (e.g., LIFO, foreign income deferral, U.S. manufacturing and other deductions) or accounting standards, and the unpredictability and suddenness with which they can occur
  • Dependence upon the continued growth of the Jack Daniel's family of brands
  • Changes in consumer preferences, consumption or purchase patterns - particularly away from brown spirits, our premium products, or spirits generally, and our ability to anticipate and react to them; decline in the social acceptability of beverage alcohol products in significant markets; bar, restaurant, travel or other on-premise declines
  • Production facility, aging warehouse or supply chain disruption; imprecision in supply/demand forecasting
  • Higher costs, lower quality or unavailability of energy, input materials or finished goods
  • Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, for result in implementation-related or higher fixed costs
  • Inventory fluctuations in our products by distributors, wholesalers, or retailers
  • Competitors' consolidation or other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing or free goods), marketing, category expansion, product introductions, entry or expansion in our geographic markets or distribution networks
  • Risks associated with acquisitions, dispositions, business partnerships or investments - such as acquisition integration, or termination difficulties or costs, or impairment in recorded value
  • Insufficient protection of our intellectual property rights
  • Product counterfeiting, tampering, or recall, or product quality issues
  • Significant legal disputes and proceedings; government investigations (particularly of industry or company business, trade or marketing practices)
  • Failure or breach of key information technology systems
  • Negative publicity related to our company, brands, marketing, personnel, operations, business performance or prospects
  • Business disruption, decline or costs related to organizational changes, reductions in workforce or other cost-cutting measures, or our failure to attract or retain key executive or employee talent

For further information on these and other risks, please refer to the "Risk Factors" section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC.



Brown-Forman Corporation
Phil Lynch, 502-774-7928
Vice President
Director Corporate Communications and Public Relations
or
Jay Koval, 502-774-6903
Vice President
Director Investor Relations

KEYWORDS:   United States  North America  Kentucky  Tennessee

INDUSTRY KEYWORDS:

The article Brown-Forman to Expand the Jack Daniel Distillery 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 to Buy Bristol-Myers Squibb

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Shares of Bristol-Myers Squibb , one of the largest pharmaceutical companies in the world, have been on a steady climb since the start of 2013. While Bristol is still facing headwinds from the patent expiration of its blockbuster drug, Plavix, recent clinical trial data have reignited investor enthusiasm for Bristol's long-term prospects. In the following segment from The Motley Fool's health care show, analysts David Williamson and Max Macaluso discuss three reasons investors might consider buying this pharma stock.

One of the best parts of owning big pharma stocks like Bristol-Myers Squibb is their attractive dividends, but smart investors know the importance of diversifying -- seeking high-yielding stocks from multiple industries. The Motley Fool's special free report "Secure Your Future With 9 Rock-Solid Dividend Stocks" outlines the Fool's favorite dependable dividend-paying stocks across all sectors. Grab your free copy by clicking here.

The article 3 Reasons to Buy Bristol-Myers Squibb originally appeared on Fool.com.

David Williamson has no position in any stocks mentioned. Max Macaluso, Ph.D. 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 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Roughing It, New York Style: 'Glamping' Comes Full Circle

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Kathleen Boyle poses for a picture in a tent on the patio of her room at the Affina Hotel in New York, Thursday, Aug. 15, 2013.  A couple of New York City locales are offering an unusual option _ the chance to sleep outdoors, incredibly comfortably. It?s an urban take on ?glamping,? where hotel comforts are taken outside.  (AP Photo/Seth Wenig)
Seth Wenig/AP"Glamper" Kathleen Boyle poses for a picture in a tent on the patio of her room at the Affina Hotel in New York City.
In the pantheon of weird mash-ups, there has to be a special place for "glamping." Basically a mix of "glamorous" and "camping," the vacation trend has come into its own over the past few years, with glamping websites and companies cropping up across the U.S. and around the world. On the surface, it's not a bad idea: for people who love the outdoors in theory, but don't want to bother with tents, sleeping bags or bug repellent, it's a way to commune with nature while keeping the rough stuff to a minimum.

(Or, for those with a more historical bent, it's a way to experience the joys of being a 19th century British nobleman traveling in Africa without going through the trouble of hunting an endangered species or shooting a Boer.)

Recently, however, the glamping trend seems to have jumped the shark, with the introduction of New York City's first glamping site. AKA Central Park, a New York hotel, now offers an outdoor bedroom attached to its 17th floor penthouse. For $2,000 per night, customers can sleep under the stars ... on premium sheets, with flat screen TVs, Arne Jacobsen Egg Chairs and spa showers. As for 'smores, the urban glampers can take advantage of the handy fireplaces -- or they can just use the convection oven that comes standard with the room.
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While high, the price is actually not all that unreasonable for New York, where the average hotel room costs $281 and some suites can easily fetch a hundred times as much. For that matter, glamping isn't much cheaper: Some resorts in the U.S. charge upward of $1,000 per night for accommodations in a two-person tent.

A more reasonable question, however, is whether the entire urban glamping enterprise misses the point. After all, a visitor to New York could conceivably duplicate the urban glamping experience by leaving a window open, turning off the lights, and digging into some lukewarm carryout. For that matter, someone looking to rough it New York-style might do better to stay in one of the city's few remaining super-cheap flophouses, where screaming neighbors, roaming vermin and exposed electrical wiring hearken back to the city's rough history.

More to the point, there's something a little bizarre about attempting to experience the outdoors by building a roaring fire, making 'smores, and cranking up the air conditioner. A classic camping saying, attributed to Chief Seattle, states that one should "Leave only footprints, take only memories." For New York's first urban glampers, the carbon footprints seem likely to be large ... and lasting.

Bruce Watson is DailyFinance's Savings Editor. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

 

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2 Key Questions About Apple's Cheap iPhone

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The Wall Street Journal has confirmed that Apple has begun production on a low-cost iPhone. The budget phone could go on sale as early as next month, and will likely be introduced at Apple's event on Sept. 10.

The phone is integral to Apple's strategy long-term, but questions still remain. Specifically, how cheap will the phone actually be? And will it cannibalize sales of the more expensive iPhone?


"Low-cost" is a relative term
While the low-cost iPhone is sure to be less expensive than the premium model, its exact price point is quite crucial to its impact on Apple's business.

If the point of the phone is to appeal to emerging market consumers, which some reports have indicated in the past, then any price over $100 could be far too expensive.

Apple's chief rival in the space, Samsung , is a major player in the emerging market. But the phones it sells into these markets, like its REX series released earlier this year, cost $50-100 per phone -- a fraction of the price it charges for its more expensive Galaxy handsets.

And the Galaxy phones are where Samsung makes its money. By some estimates, it sells its cheaper phones into emerging markets near-cost -- selling into these countries just to establish market share.

Samsung shares moved lower after the company reported earnings last month. Samsung's flagship phone, the Galaxy S4, failed to sell as well as analysts had expected. To offset the decline, the company is branching out into other devices (like a smart watch that will likely be unveiled next month), but the fundamental point remains: Cheap phones do not drive profit.

If Apple were to introduce a low-cost iPhone at $350-$400, which is what Apple blogger John Gruber expects, it would probably make money off the device, but would not significantly increase its market share.

Sure, the phone would sell -- the affluent in these countries buy the iPhone right now -- but Google's Android OS, with its far more affordable phones, should continue to dominate these markets.

Color could cannibalize
Apple's decision to release its iPad Mini was necessary to defend its market share -- with Google and Samsung pushing smaller tablets, the Mini was needed to keep the iPad relevant.

However, it had the net effect of hurting Apple's gross margins. From a peak of 47% in March 2012, Apple's gross margin fell to 37% last quarter. CEO Tim Cook admitted back in January that the Mini was cannibalizing some sales of the full-size iPad.

Likewise, a cheaper iPhone (with smaller margins) could cannibalize sales of the more expensive model. At first glance, this might seem unlikely. For a consumer in the developed market with a subsidized contract, $200 for a phone isn't a lot. But people are superficial, and color matters.

The low-cost iPhone (rumored to be called the iPhone 5C) will reportedly come in a variety of colors. Apple has used this strategy in the past with its Mac computers in the '90s and its iPod Mini nearly a decade ago.

It isn't hard to imagine a consumer going for the cheaper iPhone simply because they want the one that comes in blue. Consider the tactic Google is using to sell the Moto X. The phone is underpowered compared to its rivals, but comes in a variety of different colors. Google hopes that by allowing consumers to customize their phone's look, they'll be able to sell more devices.

I would be shocked if it doesn't work. So far, Google's purchase of Motorola has looked like a failure -- last quarter, the unit lost Google $342 million and contributed to the search giant missing earnings estimates -- but the Moto X should be a winner, and that could bring Motorola back to profitability.

If the Motorola division was to go from being $342 million in the hole to breakeven, it would increase Google's earnings by about 10%. Apple's iPhone 5C could also sell well, but it isn't clear if that would be to Apple's benefit. If it cannibalizes the sales of the more expensive iPhone, it will pressure Apple's margins.

Investing around the budget iPhone
While it seems pretty clear that a budget iPhone is coming, questions still remain. First, how expensive will the phone actually be? Will it be cheap enough to appeal to consumers in the emerging market, or will it strictly serve as a slightly less expensive alternative to the full-cost iPhone?

If it is the former, investors shouldn't expect the phone to add much to Apple's bottom line. Rival Samsung sells its budget phones near-cost, with little profit margin. If it is the latter, it could actually hurt Apple's earnings in the near-term. Cannibalization from consumers eager for a brightly colored iPhone will weigh on Apple's gross margins.

Either way, investors shouldn't expect the cheap iPhone to boost Apple's earnings. While it may make sense longer-term (it could be crucial to defending Apple's market share), investors shouldn't expect the budget iPhone to be a short-term catalyst.

The tech world has been thrown into chaos as the biggest titans invade one another's turf. At stake is the future of a trillion-dollar revolution: mobile. To find out which of these giants is set to dominate the next decade, we've created a free report called "Who Will Win the War Between the 5 Biggest Tech Stocks?" Inside, you'll find out which companies are set to dominate and give in-the-know investors an edge. To grab a copy of this report, simply click here -- it's free!

The article 2 Key Questions About Apple's Cheap iPhone originally appeared on Fool.com.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. 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 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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An Undervalued Industry Giant

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INTRO 

The company


Clorox is home to some of the most popular household product brands in the world, such as Tilex, Pine-Sol, Glad, Green Works, Kingsford, and Burt's Bees. In fact, 90% of Clorox's brands hold the number one or number two ranking in its space:

Brand Market Share Ranking
Clorox Disinfecting Wipes 45% #1
Clorox Toilet Bowl Cleaner 35% #1
Pine-Sol 30% #1
Tilex / Clorox Bath Cleaner 21% #1
Kingsford / Match Light 72% #1
Brita Water Filtration 68% #1
Clorox Bleach 64% #1
Burt's Bees 20% #1
Liquid-Plumr 37% #2
Clorox Clean-Up Spray 14% #2
Clorox 2 for Colors 26% #2
Fresh Step / Scoop Away 27% #2
Glad Disposal & Food Storage 19% #2
Hidden Valley Salad Dressing 17% #2

Latest quarter results

On

Outlook

Management

Free cash flow 

The

Competitive industry

The household products industry is home to several 

The bottom line

Clorox

The article An Undervalued Industry Giant originally appeared on Fool.com.

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3 Questions for Groupon's New CEO

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Struggling coupon giant Groupon , recently promoted Eric Lefkofsky to the role of CEO, replacing the ousted Andrew Mason. This gave Groupon a post earnings boost, with the share price jumping 19% , as well as a $300 million share buyback. This bit of positive news can be seen as a start of Groupon's recovery after two brutal post-IPO years, but there are still challenges ahead, and there are some questions that will follow Mr. Lefkofsky on Groupon's future.

How do you keep local merchants coming back?

This has been one of Groupon's recurring problems since the company went public. Local merchants that advertise on Groupon run into problems regarding customers only shopping when they have Groupon vouchers, creating a dependency on Groupon for customer traffic.


Groupon has combated this by limiting how many coupons are sold to customers as well as time limits for purchases, but the dependency problem still lingers. Groupon sells long-term deal contracts with retailers to post the same deals periodically. 

The goal is to help these merchants out, but has instead been more of a short-term stimulus than creating long term customers, but businesses don't mind discounting prices to get customers through the door. A quick browse on Yelp  mobile app shows numerous local businesses offering discounts or free items for "checking in" there, while Yelp rewards regular customers with profile badges, increasing foot traffic. The discounts are smaller (at face value) than Groupon, but Yelp's clientele also pay for premium advertising. This helped Yelp earn $55 million in revenue last quarter, and report a 62% increase in premium business accounts year over year. 

Groupon has to encourage people to be regular customers at local businesses, rather than just be a Groupon bargain hunter. Otherwise, local merchants will not sign on to Groupon and instead deal with Yelp or other means of advertising.

How will you take advantage of the increase in mobile users?

One important bit of news from Groupon's second quarter earnings was the increase in mobile transactions in North America by 30-50% year over year. This drove the $40 million increase in quarterly earnings year over year, as more people rely on mobile phones rather than desktop computers.

However, this has not appeared to benefit local advertisers. Local business went from being 65% of Groupon's revenue to just 57%, not where Groupon needs to be. As people become more mobile, they will want to know about a certain local business climate. With Groupon catering to high-end local businesses that thrive when offering specialty coupons at a deep discount, a lot of local businesses are left out.

Having cheaper, smaller discounts would broaden the business base, resulting in more mobile purchases. An industry study shows that 7 out of 8 proposed deals are rejected before even going to market, limiting the selection. If Groupon were to relax that policy, more local businesses would be inclined to use Groupon. Non-Groupon foot traffic would increase and boost same-store sales, an important profit source for small businesses.

What will you do differently?

This might be the most important question facing Mr. Lefkofsky in the wake of Andrew Mason's departure. During Mr. Mason's tenure, Groupon fell from its $20 IPO price to $5/share, and declines in daily deal purchases and local business involvement. With a new captain, investors will be wanting to see what he does to revamp the company, like the expectations being placed on Zynga's  new boss Don Mattrick.

Mr. Mattrick's company is in more dire straits than Groupon, but the dynamics are the same. Zynga started out hot selling online games on Facebook, then fell off, and is now trying to retool. Like Groupon, Zynga is now trying to use the upsurge in mobile-phone users to its advantage.

Over the last three years, Zynga has seen its daily to monthly active user ratio (DAU/MAU) fall from 26% in 2011 to 21% this year, representing 20 million DAUs and 41 million MAUs. This means that Zynga has the task of trying to increase the number of regular gamers, which drove Mr. Mattrick to go get Draw Something from OMGPOP, a popular, interactive smartphone game. In addition, new titles such as a FarmVille sequel and spinoffs like ChefVille and The Ville are in the works, hoping to drive MAUs to be DAUs, as well as regrow the customer base.

Groupon's 3Q forward projections show losses similar to the second quarter projections, which were $0.01/share, or $7.6 million. This was less than expected, but still not ideal. It may take a quarter or two to mold Groupon in the Lefkofsky image, but if Groupon can make small businesses the crux of the company, this is a service that will be more customized to the mobile clientele, and will drive revenues and profits as more connections are bridged with local businesses.

Mr. Lefkofsky also has to make Groupon look like a good investment. The stock price has jumped 40% in the last year, which would be seen as a sign of improvement. Also a sign of growth can be found in the P/B ratio of 8.9. Clearly, analysts see potential in this to grow further, and a justification that there is a demand for a service like this in the Internet community. 

However, there is a price problem. It's forward P/E ratio stands at 38, which is an expensive place to be despite trading at only $10/share, but may mean that the company may be turning more consistent profits in the future. To do so though, Mr. Lefkofsky has to have a better cash flow than the $266.8 million that was reported in 2012 if he wants to erase the 3.9% profit deficit the company is running. 

Conclusion

Investors seem to approve of the change at the top thus far, given the potential for profit and strong P/B ratios, but it may take a while for Groupon to become a buy. At the moment, Yelp has a stronger allure because of the more frequent usage and connection with local businesses, but has less monetary opportunity than Groupon. If Lefkofsky brings fresh ideas to the table though, it may be a stock to watch again. 

The tech world has been thrown into chaos as the biggest titans invade one another's turf. At stake is the future of a trillion-dollar revolution: mobile. To find out which of these giants is set to dominate the next decade, we've created a free report called "Who Will Win the War Between the 5 Biggest Tech Stocks?" Inside, you'll find out which companies are set to dominate and give in-the-know investors an edge. To grab a copy of this report, simply click here -- it's free!

The article 3 Questions for Groupon's New CEO originally appeared on Fool.com.

John McKenna 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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Airlines for America: U.S. Airlines Achieve 2 Percent Net Profit Margin in First Half of 2013 and De

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Airlines for America: U.S. Airlines Achieve 2 Percent Net Profit Margin in First Half of 2013 and Deliver Solid Operational Performance Despite Challenging Weather and Economic Conditions

Customers, Employees, Investors and the U.S. Economy Benefit from Financially Improving Industry as Airlines Continue Significant Reinvestment in Travel Experience

A4A Recaps Industry's Strong Environmental Record and Commitment to Doing Even More


WASHINGTON--(BUSINESS WIRE)-- At today's Quarterly Media Briefing, Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, reported the airlines achieved a 2 percent profit margin during the first half of 2013, invested in the travel experience for customers and delivered strong operational results despite challenging weather and economic conditions. A4A also recapped the industry's environmental progress and commitments going forward.

Overall financial performance improves

Ten U.S. passenger airlines - Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit, United and US Airways - collectively reported a net profit of approximately $1.6 billion, up from $1.2 billion during the same period last year. This translates to a net margin of 2.1 percent, also improved from the 1.6 percent margin reported in the first half of 2012.

For the first half of 2013, airlines continued to reinvest this modest profitability at a rate not seen since 2001, spending approximately $6 billion. Those investments included new fuel-efficient aircraft, state-of the-art seats and interiors, modern airport terminals and customer lounges, expanded in-flight entertainment, mobile technology, Wi-Fi and gourmet meal offerings.

"While the airline industry is making the transition from razor-thin to paper-thin margins, keeping just 2.1 pennies per dollar of revenue generated in the first half of 2013, it is reinvesting in the product and travel experience for customers at a rate not seen in 12 years - to the tune of $1 billion per month," said John Heimlich, Vice President and Chief Economist for A4A. "Airline customers, employees, investors and the U.S. economy are all vastly better off with a financially strong industry that can cover its costs over an entire business cycle and compete effectively on the global stage, while expanding air service and creating even more American jobs."

Heimlich added that U.S. airlines have built a solid foundation for the future amid a challenging economic backdrop, led first and foremost by high fuel costs. He noted that an increase of just 20 cents per gallon in the price of jet fuel would have completely wiped out the airlines' first-half profits.

Despite a slight fuel-price relief during this six-month period, jet fuel remains the airline industry's single-largest and most volatile expense, having already risen 26 cents per gallon since the end of June. Every penny increase in the price of a gallon per year costs the industry $180 million annually.

"The fact that airlines are still able to post a modest profit at jet fuel prices north of $3 per gallon is nothing short of remarkable," Heimlich said. "It speaks to the work the airlines have done to transform their businesses over the past 13 years. The good news for customers is that air travel remains a great bargain with 2012 domestic round-trip airfares actually 15 percent below 2000 levels when adjusted for inflation."

Overall operational performance remains strong

U.S. passenger airlines' operational performance remained strong in the first half of 2013, showing substantial improvement from the past decade despite numerous thunderstorm and weather events, as well as air traffic control delays resulting from federal budget sequestration. According to the Department of Transportation, 99.6 percent of passengers had their bags properly handled. Also, U.S. airlines completed 98.3 percent of their flights, of which 78.1 percent arrived on time. Consumer complaints fell to just 1.13 per 100,000 passengers.

Customers continue to benefit from the proactive approach the airlines are taking to prepare for weather events and minimize travel disruptions. The airlines and their employees remain focused on providing the safest mode of transportation in the world and continuing to advocate for and improve service, efficiency and reliability for customers.

In addition, as airlines serve more international destinations, those customers visiting the country on U.S. carriers are spending three times as much on tourism as they do on airfare, which is a win-win for airlines and for the nation's economy. In the first half of 2013 alone, visitors to the U.S. spent more than $20 billion on U.S. airline flights and $67 billion on additional U.S. travel and tourism-related goods and services. Because there is such a clear benefit to the U.S. economy from international tourism, airlines are calling on the Department of Homeland Security to fix the excessive customs wait times customers face upon arrival at U.S. gateway airports before dedicating any resources to opening a Customs and Border Protection preclearance facility in Abu Dhabi. Learn more about the effort at DrawTheLineHere.com.

Commercial aviation is the green engine of the economy - and is getting greener

A4A also reported on the significant advancements airlines have made in their environmental and emissions reduction efforts. Carriers continue to reduce emissions even further through ongoing investments in new aircraft and engines, winglets and operational procedures in-flight and on the ground, among many other initiatives. And they are working to deploy commercially viable, environmentally preferred alternative aviation fuels that will bring additional emissions reductions in the future.

"The U.S. airlines are proud that their business models align with environmental interests - airlines are a green engine of the economy and we're only getting greener," said Nancy Young, Vice President of Environmental Affairs. "While aviation contributes less than 2 percent of the total U.S. greenhouse gas emissions, we are committed to doing even more to reduce our environmental footprint."

Young noted that the U.S. airlines improved fuel efficiency by 120 percent between 1978 and 2012 - the equivalent of taking 22 million cars of the road each of those years. Further demonstrating their environmentally responsible contribution to the nation's economy, the U.S. airlines carried 16 percent more passengers and cargo in 2012 than they did in 2000, while emitting 10 percent less carbon dioxide (CO2). The airlines also reduced noise exposures by 95 percent between 1975 and 2012 as enplanements grew 259 percent.

A4A and its members are part of a worldwide aviation coalition with a significant proposal on the table for further addressing aviation CO2 through a global sectoral approach, under the United Nations body charged with setting standards for international aviation, the International Civil Aviation Organization (ICAO). When it convenes in its 38th Triennial Assembly next month, ICAO will consider such proposals towards a global agreement on aviation and climate change. The industry's proposal calls for ICAO to:

  • reaffirm the aggressive emissions goals it set in 2010, including having aviation achieve carbon neutral growth from 2020 through concerted industry and government efforts;
  • confirm and advance key pieces of ICAO work on technology, operations and infrastructure, including developing a CO2 standard for new aircraft and advancing air traffic management improvements and the deployment of commercially viable, sustainable alternative aviation fuels;
  • expand country-specific action plans for aviation fuel efficiency improvements and emissions savings; and,
  • commit to the development of a global emissions offsetting scheme that could be employed to fill the gap should aviation not reach its emissions goals through industry and government investment in technology, operations and infrastructure.

ABOUT A4A

Annually, commercial aviation helps drive more than $1 trillion in U.S. economic activity and more than 10 million U.S. jobs. A4A airline members and their affiliates transport more than 90 percent of all U.S. airline passenger and cargo traffic. America needs a cohesive National Airline Policy that will support the integral role the nation's airlines play in connecting people and goods globally, spur the nation's economic growth and create more high-paying jobs.

For more information about the airline industry, visit www.airlines.org and follow us on Twitter @airlinesdotorg.

For more information about the National Airline Policy campaign:

Visit: www.nationalairlinepolicy.com

Twitter: @Natl_Air_Policy

Facebook: facebook.com/nationalairlinepolicy



Airlines for America (A4A)
MEDIA CONTACTS:
Katie Connell
Managing Director, Airline Industry Public Relations and Communications
202-626-4034
kconnell@airlines.org
or
Victoria Day
Managing Director, Corporate and Member Communications
vday@airlines.org
or
Vaughn Jennings
Managing Director, Government and Regulatory Communications
vjennings@airlines.org
or
Jean Medina
Senior Vice President, Communications
jmedina@airlines.org

KEYWORDS:   United States  North America  District of Columbia

INDUSTRY KEYWORDS:

The article Airlines for America: U.S. Airlines Achieve 2 Percent Net Profit Margin in First Half of 2013 and Deliver Solid Operational Performance Despite Challenging Weather and Economic Conditions originally appeared on Fool.com.

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Hotel Outsource Management International, Inc. Announces Extension of Rights Offering Final Subscrip

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Hotel Outsource Management International, Inc. Announces Extension of Rights Offering Final Subscription Date to September 9, 2013

NEW YORK--(BUSINESS WIRE)-- Hotel Outsource Management International, Inc. ("HOMI") (OTC: HOUM),a multi-national service provider in the hospitality industry which supplies computerized minibars that are primarily intended for in-room refreshments, announced today that the final subscription date of the current shareholder rights offering, with a record date of July 12, 2013, was extended from August 26, 2013 to September 9, 2013.

About HOMI


HOMI is a multi-national service provider in the hospitality industry, supplying a range of services in relation to computerized minibars that are primarily intended for in-room refreshments. HOMI was incorporated under the laws of Delaware in 2000 and is listed on the Over-the-Counter "OTC" Exchange, under the symbol "HOUM."

HOMI and its subsidiaries are engaged in the distribution, marketing and operation of computerized minibars in major branded hotel chains, operating approximately 10,600 computerized minibar systems at 44 hotels located in the United States, Europe and Israel, and in the development and manufacture of a new range of computerized minibar systems, designed to improve the performance of minibar departments, thereby improving the hotel's bottom line.

HOMI offers a number of solutions that are designed to meet the hotels' needs, ranging from consultation, supervision and rental services, to full outsource installation and operation arrangements.

HOMI's leading products are the HOMI® 330, HOMI® 226 and the External Dry-Section computerized trays.

For more information about HOMI, visit: http://www.my-homi.com/

Forward-Looking Statement

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or to the company's future financial performance. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause the company's or the industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the company does not intend to update any of the forward-looking statements to conform these statements to actual results. The terms, the "Company," "we," "us," and "our" means Hotel Outsource Management International, Inc. and its subsidiaries, unless otherwise indicated.



Hotel Outsource Management International, Inc.
Jacob Ronnel
CEO / CFO
+ 972 9 9728620
jackronnel@my-homi.com
or
KM Investor Relations
Meirav Bauer
Account Director
+ 972 3 5167620
meiravb@km-ir.co.il

KEYWORDS:   United States  North America  New York  Middle East  Israel

INDUSTRY KEYWORDS:

The article Hotel Outsource Management International, Inc. Announces Extension of Rights Offering Final Subscription Date to September 9, 2013 originally appeared on Fool.com.

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TRADE NEWS: Agilent Technologies to Present Food Science Data at AOAC Conference and Expo

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TRADE NEWS: Agilent Technologies to Present Food Science Data at AOAC Conference and Expo

Key Topics to Include Pesticide Analysis, Gluten, Food Allergens, Whiskey Profiling

SANTA CLARA, Calif.--(BUSINESS WIRE)-- Agilent Technologies Inc. (NYS: A) today announced that company scientists and collaborators will present at AOAC International's Annual Meeting & Exposition in Chicago. The event, scheduled for Aug. 25-28, draws thousands of professionals from industry, government and academic organizations to share information on the latest advancements in food science.


AOAC is a nonprofit professional association and publisher focused on advancing analytical standards for the global food-science industry.

"Every year, we actively participate in this event, which is one of the most important food-science conferences in the United States," said Steve Royce, Agilent's food segment manager for the Americas.

"This year, we are proud to welcome guest speakers Dr. Jennifer Sealey-Voyksner, co-owner of LCMS Limited, and Drs. Philip Wylie and Jerry Zweigenbaum, Agilent GC/MS and LC/MS scientists, who will discuss the latest laboratory advancements in pesticide analysis, plant-based allergen testing, gluten testing, and the highly specialized field of whiskey analysis."

Agilent is an organizational affiliate of AOAC International and part of a large, cross-sector group representing food and beverage, dietary supplements, government agencies, technology providers, ingredient suppliers, contract research organizations and test-kit manufacturers.

Agilent AOAC Program Highlights

The Agilent booth (No. 200) will be open on the exposition floor every day, from Sunday through Wednesday, Aug. 25-28.

On Monday, Dr. Philip Wylie will host a session on GC/Q-TOF analyses of foodborne contaminants and residues. An Agilent-hosted luncheon seminar to follow will feature Dr. Jerry Zweigenbaum, discussing triggered MRM and all-ions MS/MS for screening pesticides, veterinary drugs, pharmaceuticals and other contaminants in food and water along with a presentation on non-volatile profiling of whiskies using UHPLC/Q-TOF MS.

On Tuesday, Dr. Jennifer Sealey Voyksner will make a presentation focused on LC/MS screening methodology for the simultaneous detection of multiple plant-based allergens and gluten.

For more details on Agilent's AOAC conference programming, click here. To sign up for Monday's luncheon seminar, complete the form on Agilent's AOAC 2013 Vendor Luncheon Seminar registration website.

Agilent provides a comprehensive portfolio of food testing and agriculture solutions for the analysis of a wide range of chemical and organic contaminants, food pathogens, trace metals, pesticides, additives and other harmful compounds. These chromatography and mass-spectrometry products are used to analyze food packaging, authenticate fish species, detect veterinary drugs in livestock and poultry, and to conduct soil analysis, mobile food testing, and consumer product testing.

About Agilent Technologies

Agilent Technologies Inc. (NYS: A) is the world's premier measurement company and a technology leader in chemical analysis, life sciences, diagnostics, electronics and communications. The company's 20,500 employees serve customers in more than 100 countries. Agilent had revenues of $6.9 billion in fiscal 2012. Information about Agilent is available at www.agilent.com.

NOTE TO EDITORS: Further technology, corporate citizenship and executive news is available at www.agilent.com/go/news.



Agilent Technologies Inc.
Susan Berg, +1 408-553-7093
susan_berg1@agilent.com

KEYWORDS:   United States  North America  California  Illinois

INDUSTRY KEYWORDS:

The article TRADE NEWS: Agilent Technologies to Present Food Science Data at AOAC Conference and Expo originally appeared on Fool.com.

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Veolia Environmental Services Opens State-of-the-Art Electronics Recycling Facility

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Veolia Environmental Services Opens State-of-the-Art Electronics Recycling Facility

Expanded Recycling Capabilities to Serve Businesses and Consumers

WEST BRIDGEWATER, Mass.--(BUSINESS WIRE)-- A new Veolia electronics recycling facility that serves businesses and consumers in the Northeast and mid-Atlantic states has opened in West Bridgewater, Mass., and features the latest state-of-the-art recycling of fluorescent lamps, ballast, batteries, computer electronics and mercury-bearing waste.

Drum of mixed batteries with various RecyclePak pails in the background ready for recycling. (Photo: ...

Drum of mixed batteries with various RecyclePak pails in the background ready for recycling. (Photo: Business Wire)


Local and state officials joined Veolia Environmental Services employees at an on-site ribbon-cutting event celebrating the new facility, which replaces one in Stoughton, where Veolia has been operating since 2000.

"As technology improves, we're able to break down and reclaim even more materials, especially hazardous materials, and prevent them from entering the waste stream," stated Jim Bell, CEO and president of Veolia ES Technical Solutions. "Our investment in this facility represents our commitment to finding better solutions for lighting and electronic waste as well as ways to minimize the impact of waste on our environment."

The ability to process and reclaim material instead of sending it to a landfill is a primary goal of the facility. Veolia installed new processing equipment that allows for more than 99% of a fluorescent lamp, by weight, to be recycled. The company not only separates a fluorescent lamp into its core components of glass, aluminum and mercury-bearing phosphor power, but also reclaims the mercury and works with partners to recover rare-earth elements from the phosphor powder.

Veolia currently processes approximately 15.5 million pounds of lighting and electronic waste annually and over 155 lbs. of elemental mercury is reclaimed from recycling fluorescent lamps. New state-of-the-art recycling equipment will provide for an increased capacity for fluorescent lamps by 150%.

The new 55,000 square foot West Bridgewater facility incorporates expanded employee locker rooms and decontamination area, a permitted Class C area for mercury recovery activities and a permitted TSCA/ballast processing area. The facility is conveniently located at the intersection of MA Routes 106 and 24, with access to major highways connecting to the northeast corridor.

All 75 employees from Stoughton facility are now working at the West Bridgewater site. As volumes increase, staffing levels are likely to increase as well.

The facility will serve industrial, commercial and government organizations across West Virginia, Virginia, Maryland, Delaware, Washington, DC, Pennsylvania, New Jersey, New York and the New England States. In addition, Veolia has agreed to provide its recycling services to the residents of the Town of West Bridgewater, at no charge, through the Town's transfer facility.

About Veolia Environmental Services

Based in Chicago, Veolia Environmental Services North America Corp. (VESNA) is a trusted partner to industry, helping solve the unique challenges of safely managing waste and maintaining efficient operating processes. The company's service offering includes turn-key industrial cleaning and maintenance services, and the treatment, recycling and disposal of hazardous and regulated wastes in North America. VESNA has approximately 5,400 employees and reported revenues of $800 million in 2012.

Veolia Environmental Services is the global reference in waste, cleaning and resource management. Its parent company, Veolia Environnement (NYSE: VE and Paris Euronext: VIE), recorded annual revenues of over $38.8 billion in 2012. For more information, visit the company's website at www.VeoliaES.com.



Veolia Environmental Services North America
Denisse Ike, 312-552-2800
Denisse.ike@veoliaes.com
or
On Ideas
Denise Graham/Kortney Wesley, 904-354-2600
deniseg@onideas.com
kwesley@onideas.com

KEYWORDS:   United States  North America  Massachusetts

INDUSTRY KEYWORDS:

The article Veolia Environmental Services Opens State-of-the-Art Electronics Recycling Facility 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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Innovative Solution Wins Utah.Gov Prestigious Award

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Innovative Solution Wins Utah.Gov Prestigious Award

Public Technology Institution Recognizes Utah.Gov Master Data Index

SALT LAKE CITY--(BUSINESS WIRE)-- Today Mark VanOrden, Chief Information Officer for the State of Utah, announced Utah.Gov has won the Public Technology Institution's (PTI) Web 2.0 Award. PTI recognizes public institutions that excel at engaging citizens, demonstrating government accountability and enabling department operations online. Criteria for the award includes: measuring specific tools, goals, participation rates, system integration, standards and policies, interoperability, data access and sharing, channel coordination and performance metrics.


"In this third year of the awards program," said Dale Bowen, Deputy Executive Director for Program Development of the Public Technology Institute, "the Web 2.0 and social media applications demonstrate a new level of sophistication."

Utah.gov won the award for its Master Data Index, which connects citizens to vital information and critical government services. It encourages cross-agency information sharing; enables real-time, efficient and interactive communications; engages the public in government decision-making, and empowers government staff through data access and streamlined processes.

Utah is the first state to build a Master Index of all state online services, websites, data sources, and social media sites (Facebook, Twitter, Flickr, Instagram, Pinterest, SlideShare, etc.), including 30 different content types, giving applicable state employees the capability to add new types as needed from a convenient user interface. All sources are tagged so that they can be utilized across multiple platforms and portals. The top categories currently indexed are business, health, jobs, voting and elections, public safety and corrections.

"The result is two fold," said VanOrden. "New websites can easily pull applicable social media feeds based on multiple points of data. The Master Index also allows staff to aggregate social media feeds to one page, the Connect Portal where citizens can see all the social media. In addition, the new Master Index allows us to generate customized webpages to display data to citizens in an infinite number of ways."

Government employees aware of new social media accounts or data sources now have the ability to maintain and add any indexed item, without requiring additional resources from the Utah.gov design team. This not only saves time, it also allows for the most current and relevant data to be displayed to citizens. Citizens benefit from enriched searching due to tagged data and the structure allows for more qualified, up to date, and relevant information.

To find out more information about Utah.Gov visit:
Twitter: https://twitter.com/UtahGov
Facebook: http://www.utah.gov/facebook/
RSS feeds: http://www.utah.gov/connect/feeds.html
Utah blogs: http://www.utah.gov/blogs/

About Utah.Gov

Utah.gov is the entry point to over 1000 online services and benefits over 2.7 million residents in the State of Utah. Utah.gov provides citizens and businesses with more convenient options for interacting with government. Through Utah.gov, citizens can find public meetings, renew their vehicle registration, buy a hunting and fishing license, register a business, find a transparent state budget, and much more. In 2011 alone, Utah.gov received an unprecedented 17 awards making it the nation's most honored state website.

Utah.gov is the official Web portal for the State of Utah (http://www.Utah.Gov). It is managed and operated without tax funds through a public-private partnership between the state and Utah Interactive, the Salt Lake City-based official eGovernment partner for the state of Utah. Utah Interactive is part of eGovernment firm NIC's family of companies.

About NIC

NIC (NAS: EGOV) is the nation's leading provider of government Web sites, online services, and secure payment processing solutions. The company's innovative eGovernment services help reduce costs and increase efficiencies for government agencies, citizens, and businesses across the country. The NIC family of companies provides eGovernment solutions for more than 3,500 federal, state, and local agencies across the United States. Additional information is available at http://www.egov.com.



The State of Utah
David Fletcher, 801-538-3476
Chief Technology Officer
dfletcher@utah.gov
or
Utah Interactive
Rich Olsen, 801-983-0275
General Manager
rich@utahinteractive.org

KEYWORDS:   United States  North America  Kansas  Utah

INDUSTRY KEYWORDS:

The article Innovative Solution Wins Utah.Gov Prestigious Award originally appeared on Fool.com.

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Le Meridien Breaks Ground on New Hotel in Arts District of Columbus

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Le Meridien Breaks Ground on New Hotel in Arts District of Columbus

Slated to Debut in Early 2015, Le Méridien Columbus, The Joseph, to be located in the City's Short North


NEW YORK--(BUSINESS WIRE)-- Starwood Hotels & Resorts Worldwide, Inc. (NYS: HOT) today announced the debut of Le Méridien Columbus, The Joseph, adding this cosmopolitan Midwest city to Le Méridien brand's rapidly expanding global portfolio. Owned by The Pizzuti Companies and operated by Wischermann Partners, the new build 10-story hotel will offer 135 modern rooms with all of the Paris-born brand's signature amenities and services. Located in the Short North Arts District, the city's cultural center, Le Méridien Columbus is slated to open in early 2015, and today's ground-breaking ceremony, attended by representatives from Pizzuti, Starwood, and Wischermann Partners, marked the start of construction for not only Le Méridien Columbus but also the office and retail building and parking garage that make up Pizzuti's The Joseph mixed-use development project.

"The uptick of Le Méridien hotel deals we're seeing underscores the success of the brand's recent repositioning and its popularity among cosmopolitan travelers," said Allison Reid, Senior Vice President of North America Development, Starwood Hotels & Resorts Worldwide, Inc. "We are delighted to partner with The Pizzuti Companies and expand our relationship with Wischermann Partners as we work together to bring this contemporary design-led brand to Columbus."

Le Méridien Columbus will feature a full-service restaurant, signature bar, two deluxe spa suites, and 1,200 square foot 24-hour fitness center. The hotel will be equipped with nearly 8,000 square feet of state-of-the-art meeting and event space, perfect for social occasions and business functions.

"Le Méridien Columbus, The Joseph is an exciting addition to Columbus and the Short North Arts District," said Joel S. Pizzuti, president of The Pizzuti Companies. "As part of our overall Joseph development, which also includes a mix of office, retail, parking and art exhibition space, the new Le Méridien hotel will further establish the Short North as the place to be in Columbus."

Le Méridien Columbus, The Joseph will feature a two-story signature Le Méridien Hub™ experience, which re-interprets the traditional lobby into a social gathering place for creative people to converse, debate, and exchange. The Le Méridien Columbus Hub will offer both guests and locals a creative atmosphere where contemporary, curated artwork from the famed Pizzuti Collection will set the environment. Le Méridien Hub further builds on the brand's award-winning arrival experience and coffee culture. Le Méridien arrival consists of four elements: large-scale artwork in high impact areas to reset the mind and stimulate dialogue and curiosity; the sensory experience, illustrated through Le Méridien signature scent, sound and use of light, creating a unique and distinctive atmosphere; UNLOCK ART™ programme, featuring LM100 ™ artist designed key card collections that not only offer access to the guestroom but also to Le Méridien affiliated contemporary cultural centers in the city; and a 24-hour curated soundtrack.

"We are delighted to partake in the creation of this modern classic design experience in Columbus, the fourth Le Méridien branded hotel in our portfolio," said Paul Wischermann, President of Wischermann Partners. "The Short North is the perfect setting, where Starwood's most loyal guests will be invited to discover, explore and engage with the local cultural scene."

Le Méridien Columbus will anchor a highly anticipated, new mixed-use Joseph development complex that is slated to open in 2014 and will include a six-story, cubist-inspired office building with 60,000 square feet of premium office and retail space, a 313-space parking garage adjacent to the office building, and the Pizzuti Collection, which houses the contemporary art collection of Ron Pizzuti, founder and CEO of The Pizzuti Companies, and will open September 7, 2013. Pizzuti announced in July that women's apparel and accessory retailer Anthropologie will occupy approximately 9,800 square feet on the first two floors of the office/retail building.

Located at 620 North High Street, Le Méridien Columbus will be one block north of the Columbus Convention Center and within walking distance to the art galleries, restaurants, coffee shops, boutiques and nightclubs of the Short North. The hotel will also offer close proximity to The Ohio State University campus and the corporate headquarters of Nationwide Insurance, Cardinal Healthcare and the Limited Brands.

About Le Méridien Hotels & Resorts

Le Méridien, the Paris-born hotel brand currently represented by nearly 100 properties in more than 40 countries, was acquired by Starwood Hotels & Resorts Worldwide, Inc. (NYS: HOT) in November 2005. With more than 80 of its properties located in Europe, Africa, the Middle East, and Asia-Pacific, Le Méridien provided a strong international complement to Starwood's then primarily North American holdings at the time of purchase. Since then, Le Méridien has gone through a brand re-launch, which included a large scale hotels product consolidation as well as redefining its brand strategy. Through creation of the LM100 artist community, Le Méridien has transformed numerous guest touch points, thus bringing unique, interactive and curated experiences to its guests. Plans call for dynamic expansion of Le Méridien Hotels and Resorts within the next five years, concentrating on markets in Asia-Pacific and the Americas. Le Méridien recently opened new hotels in Bali, Atlanta, Dallas, Istanbul, Oran (Algeria), Arlington (Virginia, USA), and Coimbatore (India), and will open in the next 12 months in Chicago, Zhengzhou (China), Mahabaleshwar (India), Ho Chi Minh City (Vietnam), Cairo (Egypt), Qingdao (China), Dhaka (Bangladesh), Tampa (Florida, USA) and Columbus (Ohio, USA). For more information, please visit www.lemeridien.com or www.facebook.com/lemeridien. Follow @lemerdienhotels on Instagram.

About The Pizzuti Companies

The Pizzuti Companies is a recognized leader in the development, marketing and management of real estate. With operations in Columbus, Chicago and Orlando, Pizzuti has developed more than 40 million square feet of Class A office, hospitality, medical and healthcare, retail, residential and institutional-quality industrial facilities throughout the Midwest and Southeast regions of the United States. Pizzuti also has considerable experience working with local governments in the development of creative public-private partnerships. A leader in sustainable design practices, Pizzuti has completed build-to-suit and speculative construction projects in each of their major markets. Pizzuti Solutions LLC, a wholly owned subsidiary, boasts a staff with decades of combined public-sector work experiences, and focuses extensively in the areas of public facilities, sports and recreation, cultural facilities, education and strategic planning.

About Wischermann Partners

Wischermann Partners, Inc. is a national hospitality firm, focused on the operations of upper upscale and luxury hotels. Recognized by clients, peers and industry experts, Wischermann Partners brings a unique mix of knowledge, experience and insight to hospitality management, development and acquisitions. Currently, Wischermann Partners operates a hotel portfolio of nearly 3,000 rooms. For more information about Wischermann Partners, please visit www.wischermannpartners.com.



Media:
Global Public Relations, Le Méridien
Trey Sarten, +1 212-380-4010
Trey.Sarten@starwoodhotels.com
or
The Pizzuti Companies
Bob Monds, +1 614-280-4058
bmonds@pizzuti.com

KEYWORDS:   United States  North America  New York

INDUSTRY KEYWORDS:

The article Le Meridien Breaks Ground on New Hotel in Arts District of Columbus 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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Dr. Reddy's Announces the Launch of Divalproex Sodium Extended - Release Tablets, USP

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Dr. Reddy's Announces the Launch of Divalproex Sodium Extended - Release Tablets, USP

HYDERABAD, India--(BUSINESS WIRE)-- Dr. Reddy's Laboratories (NYS: RDY) announced today that it has launched Divalproex Sodium Extended - Release Tablets, USP (250 mg and 500 mg), a therapeutic equivalent generic version of Depakote® ER (divalproex sodium) Tablet, Extended Release in the US market on August 19, 2013. Dr. Reddy's ANDA for Divalproex Sodium Extended - Release Tablets, USP was approved by the United States Food & Drug Administration (USFDA).

The Depakote® ER brand and generic had combined U.S. sales of approximately $194 Million MAT for the most recent twelve months ending in June 2013 according to IMS Health*.


Dr. Reddy's Divalproex Sodium Extended - Release Tablets, USP 250 mg are available in bottle count sizes of 100 and 500 mg are available in bottle count sizes of 100 and 500.

               

WARNING: LIFE THREATENING ADVERSE REACTIONS

See full prescribing information for complete boxed warning.

• Hepatotoxicity, including fatalities, usually during first 6 months of treatment. Children under the age of two years are at considerably higher risk of fatal hepatotoxicity. Monitor patients closely, and perform liver function tests prior to therapy and at frequent intervals thereafter

• Fetal Risk, particularly neural tube defects and other major malformations

• Pancreatitis, including fatal hemorrhagic cases

 
 

Disclaimer

This press release includes forward-looking statements, as defined in the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such factors include, but are not limited to, changes in local and global economic conditions, our ability to successfully implement our strategy, the market acceptance of and demand for our products, our growth and expansion, technological change and our exposure to market risks. By their nature, these expectations and projections are only estimates and could be materially different from actual results in the future.

About Dr. Reddy's

Dr. Reddy's Laboratories Ltd. (NYS: RDY) is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products - Dr. Reddy's offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars, differentiated formulations and NCEs. Therapeutic focus is on gastro-intestinal, cardiovascular, diabetology, oncology, pain management, anti-infective and pediatrics. Major markets include India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, and New Zealand. For more information, log on to: www.drreddys.com

Depakote® ER (divalproex sodium) Tablet, Extended Release is a trademark of Sanofi Corporation.
*IMS National Sales Perspectives: Retail and Non-Retail MAT June 2013



Dr. Reddy's Laboratories Ltd.
Investors and Financial Analysts:
Kedar Upadhye, +91-40-66834297
kedaru@drreddys.com
or
Saunak Savla, +91-40-49002135
saunaks@drreddys.com
or
Milan Kalawadia (USA), +1 908-203-4931
mkalawadia@drreddys.com
or
Media:
S Rajan, +91-40-49002445
rajans@drreddys.com

KEYWORDS:   Asia Pacific  India

INDUSTRY KEYWORDS:

The article Dr. Reddy's Announces the Launch of Divalproex Sodium Extended - Release Tablets, USP 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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Comcast Commemorates 50th Anniversary of the March on Washington with Unprecedented Commentary from

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Comcast Commemorates 50 th Anniversary of the March on Washington with Unprecedented Commentary from Civil Rights Leaders across Multiple Platforms

Interactive Website Chronicles Civil Rights Movement History on HisDreamOurStories.com


Video Interviews with Civil Right Leaders, Including Rev. Billy Kyles, Mamie Chalmers, Rep. John Lewis, and Former U.N. Ambassador Andrew Young to be Available through Xfinity On Demand, Online, Comcast Newsmakers and E-Book

PHILADELPHIA--(BUSINESS WIRE)-- To commemorate the 50th anniversary of the March on Washington for Jobs and Freedom, a major milestone of the Civil Rights Movement where Dr. Martin Luther King, Jr. delivered his historic "I Have a Dream" speech, Comcast has created a first of its kind video compilation to help chronicle the history and impact of the movement. Called His Dream, Our Stories, the package includes more than 80 unique and personal interviews with civic leaders, elders, clergy, and activists, and will be available on Xfinity On Demand and online through October 12th and permanently at HisDreamOurStories.com.

Through commentary and archived footage, His Dream, Our Stories chronicles the March on Washington, the legacy of Dr. Martin Luther King, Jr. and the Civil Rights Movement through interviews from influential leaders, including Rev. Billy Kyles, Rev. Jesse Jackson, Sr., former U.N. Ambassador Andrew Young, Ernest Green of the Little Rock Nine, political leaders like Rep. John Lewis and attendees of the March on Washington, the Detroit Walk to Freedom and the Selma-Montgomery March. Other topics include sit-ins of the 1960s, the Atlanta Student Movement, Memphis Sanitation Workers Strike of 1968 and the impact and legacy of the Civil Rights Movement on minority communities of all types.

In addition to viewing the full library of interviews, visitors to HisDreamOurStories.com will be able to submit their own stories commemorating the 50th anniversary of this pivotal event in our nation's history. Users will also be able to discover and learn about civil rights organizations which continue to work toward equality and freedom, including the National Coalition on Black Civic Participation, the National Urban League, the National Association for the Advancement of Colored People and the National Civil Rights Museum.

"Comcast and NBCUniversal are proud to contribute to this anniversary with such compelling content about the fight for civil rights," said Charisse R. Lillie, Vice President of Community Investment, Comcast Corporation, and President of the Comcast Foundation. "It's important to remember Dr. King's legacy, and this unprecedented interactive multimedia package enables stories to be shared like never before."

In addition to HisDreamOurStories.com, which serves as the ongoing online location for footage, features and finding and sharing information about the Civil Rights Movement, Comcast and NBCUniversal are making the content available across a variety of other platforms as part of current and planned coverage of the August 28th March on Washington anniversary.

  • Xfinity.com/MLK : Open to both Xfinity customers and non-customers, this microsite will include His Dream, Our Stories interviews as well as news articles, photo galleries and video biographies relevant to the Civil Rights Movement.

  • Xfinity On Demand: Xfinity TV customers can access the "March on DC at 50" folder to watch 80+ video interviews.
  • Xfinity TV Player App: Xfinity TV customers can view 80+ video interviews on mobile devices.
  • His Dream, Our Stories e-book: In late August, an educational e-book from NBC Publishing including 25 videos and an introduction from news journalist Lester Holt will be available to download for free on iTunes, Amazon and Nook stores.
  • MSNBC: MSNBC will feature His Dream, Our Stories content online.
  • NBC Owned Television Stations: NBC stations (including New York, Southern California, Chicago, Philadelphia, Dallas-Fort Worth, Bay Area, Washington, D.C., South Florida, San Diego and Connecticut) will have His Dream, Our Stories content on their websites.
  • InteractiveOne.com: The website from the RadioOne/TVOne family will provide access to the videos on their NewsOne site as well as local sites.
  • Comcast Newsmakers: Selected interviews will be inserted on CNN Headline News as part of the National Edition of Comcast Newsmakers.
  • RollingStone.com: Rolling Stone will feature His Dream, Our Stories content online.

Additionally, anyone interested in utilizing the rich content library of His Dream, Our Stories can embed any of the videos to share content on their own websites, blogs and social media platforms.

For more information about Comcast and NBCUniversal's diversity and inclusion efforts, visit www.comcast.com/diversity.

About Comcast Corporation:

Comcast Corporation (Nasdaq: CMCSA, CMCSK) is a global media and technology company with two primary businesses, Comcast Cable and NBCUniversal. Comcast Cable is the nation's largest video, high-speed Internet and phone provider to residential customers under the XFINITY brand and also provides these services to businesses. NBCUniversal operates 30 news, entertainment and sports cable networks, the NBC and Telemundo broadcast networks, television production operations, television station groups, Universal Pictures and Universal Parks and Resorts. Visit www.comcastcorporation.com for more information.



Comcast Corporation
Katie Lubenow, 215-286-5691
Katie_Lubenow@comcast.com

KEYWORDS:   United States  North America  District of Columbia  Pennsylvania

INDUSTRY KEYWORDS:

The article Comcast Commemorates 50th Anniversary of the March on Washington with Unprecedented Commentary from Civil Rights Leaders across Multiple Platforms 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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Thursday's Top Upgrades (and Downgrades)

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This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, our headlines feature upgrades for oceangoing shipper DryShips , and also for motion-detecting electronics-parts maker InvenSense  alike. The news isn't all good, however, so before we get to those two, let's find out why...

Abercrombie & Fitch is going out of style

The day dawned dark for shareholders of clothier Abercrombie & Fitch , which opened today down nearly $10 a share after reporting second-quarter earnings. Why the sell-off? Take your pick of the reasons:

  • Earnings per share of $0.14 were just half of the $0.28 expected.
  • Sales of $946 million were $50 million shy of what analysts had been expecting.
  • Same-store sales fell 10%, with especial weakness in the U.S.

Topping it all off, Abercrombie warned that third-quarter earnings will range between $0.40 per share and $0.45 -- both numbers well short of the $1.06 that Wall Street had expected Abercrombie to earn.


About the only good news that Abercrombie had to report was the fact that gross margins on its merchandise grew 160 basis points in comparison to last year, ending at 63.9%. Not that this helped net profits one whit.

Little wonder, then, that this morning, analysts at Janney Capital announced they were downgrading Abercrombie shares to neutral, reducing their price target to $40, and blasting management on its "lack of visibility on the turnaround." According to StreetInsider.com, Janney says it "no longer [has] confidence that the cost savings initiatives are sufficient to bolster top-line and have lost faith in the turnaround."

I have to admit, although I own Abercrombie & Fitch shares, after seeing these numbers, I'm starting to lose faith myself. Taking next quarter's earnings estimate as a given, and adding it to the numbers from the past three quarters, I get "current earnings" of about $2.31 per share for Abercrombie, and a P/E ratio near 17 -- too high for the company's anticipated 15% growth rate, and much too high a price to pay if Abercrombie keeps shrinking.

DryShips floats this analyst's boat
Moving on now to happier tidings, dry bulk shipper DryShips reported a $0.05 per-share loss earlier this month. That sounds bad, but it was actually $0.02 better than what analysts had been expecting. This news, plus anticipation of "potentially significant price appreciation" at the company's Ocean Rig UDW  subsidiary, has analysts at Imperial Capital feeling optimistic about DryShips. Imperial initiated coverage of the company this morning with an outperform rating and a $2.75 per-share price target. But here I have to disagree.

Neither DryShips nor its UDW subsidiary are currently profitable. Both carry significant debt loads -- $2.6 million net of cash at UDW; nearly $4.2 billion at DryShips. DryShips looks particularly unseaworthy, inasmuch as it has been burning cash consistently for the past three years, burned more than $515 million in the past 12 months, and is experiencing declining levels of operating cash flow as well.

Despite trading for only a fraction of its book value, DryShips' heavy debt load and inability to generate cash for shareholders tells me this is a company best to be avoided.

Sensing value at InvenSense
Wrapping up, we now turn to InvenSense, a maker of tiny electronic widgets that, for example, tell your tablet computer which way is up. InvenSense shares received a new buy rating from Needham & Co. this morning, which initiated the company at a $20 price target. According to Needham, "InvenSense offers investors a unique opportunity to capitalize on the rapidly expanding motion sensor capabilities found in mobile handsets as well as numerous other electronics devices. InvenSense has a winning technology approach that we believe will remain ahead of competitive offerings and extend its customer penetration from Samsung and smaller mobile handset vendors such as HTC, into other major opportunities such as Apple." 

Many other analysts agree. On average, Wall Street estimates that InvenSense will grow its earnings at 18.5% annually over the next five years. That's not a half-bad growth rate, albeit probably a little expensive given that the stock trades for 28 times trailing earnings today. The bigger problem at InvenSense is that its cash profits don't measure up to the earnings it's reporting under GAAP.

Trailing free cash flow at the company amounts to only $35 million -- about $0.64 per $1 reported as GAAP profits. This means that the company is trading for approximately 43 times free cash flow today. So even if analysts are right about the growth rate -- even if Needham is right about InvenSense's opportunities -- the price is still so high as to make it unlikely that InvenSense will "grow into its valuation" anytime soon.

Long story short: I like the company, I like the business, but I just can't recommend buying InvenSense at this valuation.

Fool contributor Rich Smith owns shares of Apple and Abercrombie & Fitch. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and InvenSense. 

The article Thursday's Top Upgrades (and Downgrades) originally appeared on Fool.com.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Homebuyers Beware: Mortgage Rates on the Rise

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A sign stands outside a new home for sale in the D.R. Horton Inc. Cambridge at Southbury development in Oswego, Illinois, U.S., on Tuesday, Aug. 20, 2013. The Commerce Department is scheduled to release new home sales figures on Aug. 23. Photographer: Daniel Acker/Bloomberg via Getty Images
Daniel Acker/Bloomberg via Getty Images
By MARCY GORDON

WASHINGTON -- Average U.S. rates for fixed mortgages rose this week to their highest levels in two years, driven by heightened speculation that the Federal Reserve will slow its bond purchases later this year.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan jumped to 4.58 percent, up from 4.40 percent last week. The average on the 15-year fixed loan rose to 3.60 percent from 3.44 percent. Both averages are the highest since July 2011.

Rates have risen more than a full percentage point since May. Last week's spike comes after more Fed members signaled they could be open to reducing the bond purchases as early as September. The purchases have helped keep long-term interest rates low, including mortgage rates.
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Despite the increase, mortgage rates remain low by historical standards. And recent reports suggest the jump in rates has yet to sap the housing recovery's momentum.

In July, previously occupied homes in the U.S. sold at the fastest pace since 2009. Sales jumped 6.5 percent last month to a seasonally adjusted annual rate of 5.4 million, the National Association of Realtors reported Wednesday. During the past 12 months, sales have surged 17.2 percent.

Last week, the National Association of Home Builders said its measure of confidence among builders rose this month to its highest level in nearly eight years.

Mortgage rates are rising because they tend to follow the yield on the 10-year Treasury note. The yield has also surged on speculation that the Fed's stimulus will slow. It rose to 2.90 percent Thursday morning, its highest level in two years.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
  • The average fee for a 30-year mortgage rose to 0.8 point from 0.7 point. The fee for a 15-year loan increased to 0.7 point from 0.6 point.
  • The average rate on a one-year adjustable-rate mortgage was unchanged at 2.67 percent. The fee edged up to 0.5 point from 0.4 point.
  • The average rate on a five-year adjustable mortgage declined to 3.21 percent from 3.23 percent. The fee held at 0.5 point.


 

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Can Facebook Gain From Testing Mobile Payment Arena?

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You can't accuse Facebook (NASDAQ: FB) of just resting on its laurels, the company just confirmed yet another new product, this time a mobile payment service. In a report from AllThingsD, the company confirmed that it was preparing to test a mobile payment service that allows purchases to be made with just a Facebook login. This isn't the first time Facebook has tried to get a slice of e-commerce, but this one is designed to ease mobile transactions unlike their previous Credits system. Their ill-fated first attempt was shut down primarily because the namesake secondary currency complicated things.

What difference can mobile payments make?

The newest iteration, if successful, could significantly improve their ad service, giving the company precious insight into our buying habits. As it stands, advertising revenue accounts for 88% of total revenue for the company, according to their most recent earnings release. Improving the efficacy of advertising with shopping data could have a tremendous effect on the company's revenues. As of June 30, the company reported 819 million mobile monthly active users, just convincing a fraction of them to use their payment system could be a big coup. And if the company decides they then want to join the payment processing business it has the potential to become a major source of revenue.


While the company has been clear to say they are not entering eBay's (NASDAQ: EBAY) turf with this test run of the service, it isn't a stretch to think they might at some point in the future. eBay's PayPal unit is a major source of revenue for the company and commands a massive amount of processing traffic. In their most recent quarterly earnings release, PayPal brought in $1.6 billion of the company's $3.9 billion in revenue. It is hard to ignore the lure of such a lucrative market, particularly if Facebook's user base gets used to letting Facebook handle their sensitive financial data.

Can Facebook Pull It Off?

Convincing the user base might be the company's biggest hurdle. As it is the social giant doesn't have a shining security track record and it isn't clear that the user base will trust it with their credit card numbers and purchase histories. Hard to imagine that the company that made its name on people over sharing would have trouble convincing them to share, but when it comes to financial matters incumbency matters.

Even if Facebook doesn't venture into the payment processing business, the company still can gain tremendously from data it can glean from the payment service. Given the number of choices available in today's market, user data has become the biggest differentiator for successful companies. That's why Google (NASDAQ: GOOG), Square, every major retailer and the entire credit card industry is interested in offering their own payment solution.

Companies like eBay, and more recently Groupon (NASDAQ: GRPN) have scrambled to get their payment systems in place in physical storefronts. This move is likely an effort spur wide adoption. Groupon just landed a major hardware partner, inking a deal with VeriFone Systems (NYSE: PAY) to offer Groupon's payment service on VeriFone's terminals. This puts Groupon's service on a point of sale device that holds significant market share in most markets. Of course, Groupon isn't the only company to make their way on to VeriFone's POS devices, Google and PayPal already have similar deals in place, but it is still an important step.

Interestingly it seems VeriFone's shareholders are very concerned about disintermediation. In fact, the concern is so great that the company has taken the time to put together a FAQ about the disintermediation threat on their website. While the company makes a good argument it does have something to worry about. The biggest tell is that the company specifically addresses its plan to act as an open source platform so it doesn't have to pick the winner.

Can Anyone Win in the Mobile Payment Space?

Google's solution, Google Wallet, is the logical extension for the company designed to add purchase behavior to its already massive stockpile of data. Despite some major advantages, namely Android, the company has yet to really make Google Wallet happen. This isn't a big shock since mobile payments in general haven't taken off as expected. According to eMarketer, which predicted $2 billion in mobile payments for 2013 only to cut it in half this month, mobile payment growth is partly stymied by a congested landscape and adoption issues. In the end the strongest solution may simply be the first to gather a significant amount of market share.

At this phase there is no clear winner, particularly with the number of start-ups and established players showing interest in the field. If a company on the front lines like VeriFone isn't willing to pick, I'm not sure I am either. If Facebook payments manage to gain widespread adoption, it could be a strong catalyst for the company, but that's a big if. Google and eBay are fearsome competitors in their own right; it would be hard to bet against either. In the long-run Facebook has plenty to gain, but the road to success is riddled with competition, don't expect overnight success.

The article Can Facebook Gain From Testing Mobile Payment Arena? originally appeared on Fool.com.

Chris Moore has no position in any stocks mentioned. The Motley Fool recommends eBay, Facebook, and Google. The Motley Fool owns shares of eBay, Facebook, and Google. 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 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Slow Growth May Be In Store For This Restaurant Chain

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When a company starts paying a dividend, investors often view the announcement as good news. But a dividend represents money that is not reinvested back into the business, and it's an admission by management that growth opportunities may be drying up. A fast-growing company should be shoveling all of its earnings back into the business, not paying off investors.

This leads me to steakhouse operator Texas Roadhouse . The stock currently trades for around $25 per share, and with earnings of $1 per share last year this puts the P/E ratio at a lofty 25. Texas Roadhouse operates about 400 restaurants, and in 2012 recorded $1.26 billion in revenue. It seems that the company is being valued at a high multiple like many other small to mid-sized restaurant chains. But there's a big problem.


In 2011 Texas Roadhouse initiated a dividend, and in 2012 it paid 36% of its earnings out to investors. It has raised its dividend twice in the past year, and barring another increase will pay out $0.48 per share in dividends over the next year. Based on the average analyst estimate of $1.15 for 2013 EPS, the payout ratio for this year will be about 42%.

Not enough growth

For a company that only generated $71 million in net income in 2012, paying out over 40% of that as dividends leaves very little to invest back into the business. The second quarter of this year saw flat earnings on 10% revenue growth, and if this trend continues full year earnings could come in lower than analysts expect. This would lead to an even higher payout ratio and even less cash to invest back into the business.  

A dividend is an admission that management has nothing better to do with the money, and the aggressive dividend hikes so far lead to me believe that growth is going to slow down at Texas Roadhouse in the future. In 2013 the company expects to open 28 new restaurants, around a 7% store growth rate. With margins being compressed by higher food costs, earnings growth in the short term will be slow, with a longer term low-teens growth rate the best case scenario.

I don't know about you, but I find it difficult to pay 25 times earnings for a modestly-growing steakhouse that is spending half of its earnings on a dividend instead of on expansion. The stock price and the P/E ratio have become inflated, and I don't expect it to last.

A slew of competition

The steakhouse category is a crowded one, making expansion difficult and keeping margins low. The problem Texas Roadhouse is likely facing is finding locations that have a large enough population and aren't already saturated with competitors.  LongHorn Steakhouse, a chain with 430 stores and operated by restaurant giant Darden Restaurants , is roughly the same size as Texas Roadhouse with $1.2 billion in annual sales. In Darden's 2012 annual report the company states that it will build 37-40 new locations in the following year, quite a bit more than Texas Roadhouse. Darden believes that the restaurant could grow to between 600-800 locations, generating up to $2.5 billion in annual sales.

This goal likely also applies to Texas Roadhouse, and with the slower store count growth it will take longer to get there. Texas Roadhouse is not the type of company that will grow to thousands of locations, and investors seem far too optimistic about the future.

Darden also pays a dividend, but given that the company has brands such as Red Lobster and Olive Garden that provide consistent earnings and don't require much investment, it makes sense for the company to pay out a substantial amount of its earnings. After the dividend there is still plenty left over to fully fund concepts like LongHorn and build them quickly into national brands. Darden pays a massive 4.6% dividend, one of the highest in the restaurant industry, and is a great dividend growth opportunity.

Another steakhouse operator which recently started paying a dividend is Ruth's Hospitality Group . Ruth's is a small company that operates a handful of restaurant concepts, mainly steakhouses. In 2012 the company recorded about $400 million in revenue and $16 million in net income. The stock trades for about 27 times earnings.

Ruth's size apparently leads people to believe that fast growth is ahead, but the company isn't investing very much in its growth. For the last four years capital expenditures have been less than depreciation, not a characteristic of a fast growing company. In addition, just this year Ruth's started paying a small $0.04 quarterly dividend. The payout ratio based on 2012 will be about 34%.

Ruth's paying a dividend makes no sense if the company plans to expand, and investors paying 27 times earnings are making a serious mistake. Much like Texas Roadhouse, Ruth's has a growth stock multiple which it doesn't deserve.

The bottom line

When small, supposed growth companies begin paying dividends its a bad sign for future growth. Texas Roadhouse is growing slower than Darden's competitor, and with the stock trading at lofty valuations it's hard to see the appeal. It seems that small restaurant stocks are universally being given high multiples by the market, but only some companies deserve it. Texas Roadhouse is not one of them.

The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

The article Why Slow Growth May Be In Store For This Restaurant Chain originally appeared on Fool.com.

Timothy Green has no position in any stocks mentioned. The Motley Fool recommends Texas Roadhouse. The Motley Fool owns shares of Darden Restaurants. 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 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Microsoft Finally Makes the Right Choice: CEO Ballmer Is Done

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Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Microsoft is finally doing what it should have done years ago. Is this the start of a new era in Redmond, or is it a day late and a dollar short?

The world's largest software company is about to get a new CEO. Longtime leader Steve Ballmer will leave the CEO chair sometime in the next 12 months.


Investors love the very idea of losing Ballmer. Microsoft shares jumped as much as 9.4% on the news. That's good for a cool $28 billion in extra market cap value overnight, and the peak burst of positive energy added 23 points to the Dow Jones Industrial Average index.

The announcement comes just weeks after Ballmer's latest radical reorganization of Microsoft's leadership teams, meant to transform the company into a "devices and services" operation. Ballmer puts a positive spin on the timing of it all, claiming that it's a good idea to bring aboard fresh long-term leadership in the middle of this important transformation. "There is never a perfect time for this type of transition, but now is the right time," Ballmer said in an internal memo.

I'm not sure I buy that argument.

This summer's reorg seemed like a power play that consolidates even more power in the CEO's office. Announcing your retirement right after an audacious power grab doesn't make much sense. I'd argue that the board of directors finally got tired of Ballmer's antics and pushed him out, as graciously as possible.

Feel free to refute my conclusion in the comments box below, but keep in mind that Ballmer isn't part of the team that's looking for a successor. His input on who's to sit in his chair next will be, shall we say, limited.

Instead, the special committee is chaired by Microsoft's lead independent director, John Thompson. Chairman and industry legend Bill Gates is on the team, alongside the chairs of the audit and compensation committees.

And if you thought this crack team would look only at internal promotion candidates, headhunter firm Heidrick & Struggles is there to vet the field of outsider candidates. It's a high-profile contract for Heidrick, but the stock fell 0.7% today anyhow. The lack of popping champagne corks in the company's Chicago headquarters is an indication of just how tough this recruitment drive will be.

Many single-day price jumps are destined to fade away, but this one makes sense in a long-term perspective. Ballmer's heavy-handed management style and lack of innovative vision held the company back over the last 13 years. Replacing him won't automagically fix all of Microsoft's problems, such as missing out on the mobile computing trend and botching the Windows 8 release several times over, but it's definitely a step in the right direction.

The tech world has been thrown into chaos as the biggest titans invade one another's turf. At stake is the future of a trillion-dollar revolution: mobile. Microsoft could use a top-tier talent in Ballmer's old office to secure a long-term place in the new era. To find out which of these rivaling giants is set to dominate the next decade, we've created a free report called "Who Will Win the War Between the 5 Biggest Tech Stocks?" Inside, you'll find out which companies are set to dominate and give in-the-know investors an edge. To grab a copy of this report, simply click here -- it's free!

The article Microsoft Finally Makes the Right Choice: CEO Ballmer Is Done originally appeared on Fool.com.

Fool contributor Anders Bylund holds no position in any company mentioned. Check out Anders' bio and holdings or follow him on Twitter and Google+The Motley Fool owns shares of Microsoft. 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 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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