BofI Holding's  stock price is up an astonishing 184% year to date and currently trading near four times book value -- a good sign the market is high on the company's potential and a great reason to take a closer look. 

Recently, BofI conducted its first-quarter conference call, and today, I'll be digging into three of the most important things said by "America's oldest and most trusted Internet bank," CEO Greg Garrabrants.

"From December 2011 to September 2013, we grew our checking account balances by 554%, our money market balances by 140%."

Don't forget it wasn't that long ago we were looking at Amazon.com and wondering, "are people going to buy online?" Amazon was able to make the buying experience cheaper and easier, and this will be BofI's challenge.

So far, the company has been seen successful running promotions, including no overdraft fees and up to 1.25% APY -- which is six times the national average. The number of deposits has also been a beneficiary of the addition of Principal Bank back in June of 2013. Bank of Internet acquired approximately $173 million in deposits, along with 8,400 accounts -- 7,000 of which were checking accounts.

Just for comparison sake -- and keep in mind BofI still has a long way to go to catch either of these two banks in total deposits -- KeyCorp and Regions Financial have grown checking accounts by 23% and 25%, respectively, since 2011.

"The securitization market is still very tight, so those loans have to come through very clean."

Fannie Mae and Freddie Mac essentailly said, "Fool me once, shame on you; then we'll sue you and you won't fool us again." Okay, so maybe that's not exactly what was said, but you get the point. Regulations have been clamping down hard, and like CEO Garrabrants stated, loans have to be "very clean."

The banks that have been doing full documentation loans all along -- like Bank of Internet -- are going to have the fewest hiccups when it comes to coping with new regulations.

 "We continue to make progress in growing and enhancing our deposits franchise. Our goal is to increase our share of transaction accounts, and develop deeper customer relationships."

This, to me, is the big one. We already touched on BofI's ability to grow deposits, but it's the second half of this quote that's most important. The real question is, how will the company develop customer relationships? What will the average Bank of the Internet customer say when his buddies ask him about how he likes the new bank?

KeyCorp and Regions Financial -- along with every other brick-and-mortar bank -- have an immediate advantage over BofI. There is a sense of security, call me old fashioned if you must, with having a bank that's a physical entity. This will be BofI's greatest obstacle standing between it becoming a run-of-the-mill bank or a banking juggernaut.

How does the future look?
For the time being, things look really bright for BofI. The company has a CEO with a lot of integrity, whose chief concern is going about business the right way -- the importance of which can't be overstated. Everything that's supposed to grow is growing, and everything that is supposed to be low is low.

Investors interested in BofI need to keep an eye on the company's ability to develop customer relationships and offer a product at a better price point. If it can do both, we may very well be looking at the next banking giant.

Ford's 2015 Mustang will go on sale in Q4 2014. Photo: Ford.

You could sense anxiety and blood pressure rising in loyal Ford Mustang enthusiasts across the nation over the last year as rumors spread regarding the iconic ride's new design. Ford found itself between a rock and a hard place and its new 2015 Mustang design needed to walk a fine line. It needed to create a muscle car that appealed to a new global audience, one that the Mustang hadn't previously been sold to, which would mean a smaller and more fuel-efficient vehicle. Yet it also had to appease its loyal, power-hungry American consumer. Ford also needed to modernize the pony car to compete with General Motors'  Chevy Camaro yet keep age-old Mustang design cues.

The conclusion Ford came to is risky: It designed an American Mustang that it will sell globally, not the other way around.

Ford's 2015 Mustang design is risky. Photo credit: Ford.

"We find globally that everyone wants that piece of Americana," says Dave Pericak, Mustang chief engineer, according to Automotive News. "We designed a Mustang and decided to take it global. We did not design a global Mustang."

All you hard-core Mustang fans out there can finally take a breather; this won't look or feel like a European-style sports car. The Mustang's 5.0-liter V8 still provides tons of its iconic power, pushing out more than 420 horsepower and 390 lb.-ft of torque -- with better fuel economy, to boot. Ford will also offer a 3.7-liter V6 that pushes out at least 300 horsepower and 270 lb.-ft of torque. In addition to the V6 and V8 we've grown accustomed to, Ford has added a new option that will help the 2015 Mustang appeal to a global audience.

Ford's EcoBoost engines have been extremely popular with a 89%, 52%, and 42% take rate on its Escape, Fusion, and F-150 models, respectively. The 2015 Mustang will now have a 2.3-liter EcoBoost as an option. According to Ford, its EcoBoost engine with a unique intake manifold and turbocharger housing will enable it to push out more than 305 horsepower and 300 lb.-ft of torque. In addition to the comparisons above, my 2010 GT with a V8 pushes out about 325 horsepower -- the EcoBoost definitely makes an intriguing option.

Interior of Ford's 2015 Mustang. Photo: Ford.

Global ambitions aside, Ford's 2015 Mustang has its work cut out for it here where its archrival, the Chevrolet Camaro, has topped it in annual sales over the last three years and is on pace to do so again in 2013. One reason for the Camaro's recent success has been its sleek and modern look, while Ford was rocking a more retro look -- something that didn't appeal to as many young consumers. Moreover, as fuel efficiency gradually became one of the most important factors for car buyers, sales of the Mustang failed to recover after the recession.

Information from Automotive News DataCenter; 2013 projected through October sales.

Bottom line
Ford's been on a roll lately, launching popular designs one after another. I think it has definitely walked a fine line with its new design; it designed a Mustang that could appeal to younger and global consumers while not alienating its core consumer. Creating another American Mustang and pushing it globally is risky, to be sure, but if Ford's recent design success is any indication, we should expect the iconic pony car to gallop on the global stage with ease.

What do you think? Did Ford do enough with its new design for sales to rebound? Will it once again beat out its rival Camaro? Let me know in the comments below.

The global baked food industry is expected to be worth in excess of $310 billion by the end of 2015. In addition, the market for soups, sauces, and dressings is estimated to grow at a rate of 2.1% per year to reach $331 billion by 2015. Hectic lifestyles that leave less time to cook meals the conventional way drive demand for baked goods, soups, and sauces. This is why Campbell Soup should ideally perform well, but this hasn't been the case so far.

Campbell failed to capitalize on the growth trends above and started its fiscal 2014 on a very bad note. Its first-quarter results reminded me of Murphy's Law -- anything that can go wrong, will go wrong - and it's no surprise that the CEO had to start the earnings call with "I'm disappointed with our first quarter results."

Getting it wrong
Campbell's organic sales declined 4%, which led to an overall sales decline of 2% from the same quarter last year. Adjusted earnings from continuing operations declined a sharp 21% versus the year-ago quarter to $0.66 per share.

The negative impact of movement in retailer inventory levels due to a late Thanksgiving holiday was one of the main reasons behind such lackluster results. In addition, other factors such as weakness in the core business, the voluntary recall of a range of Plum Organics pouch products, and marketing investments to support new products and build the Bolthouse Farms brand compounded the problems.

Going forward, Campbell considers its three acquisitions -- Bolthouse Farms, Plum Organics, and Kelsen - new growth drivers with combined sales of more than $1 billion. In addition, Campbell has also focused on cost reductions. Initiatives undertaken in the first quarter are expected to deliver annualized cost savings of approximately $40 million.

There were positive takeaways from the first quarter. The global baking and snacking segment's sales increased 6% to $609 million, primarily due to the Kelsen Group acquisition. However, this wasn't enough to offset the negativity that arose from other segments.

Campbell lowered its guidance for fiscal 2014 and this spooked investors. This reduced guidance indicates that Campbell still lacks confidence about its turnaround plans. In addition, share buybacks remain suspended in order to reduce the debt incurred to finance the Bolthouse acquisition. Considering these factors, it is no surprise that Campbell has dropped 15% in the last six months and it might continue to suffer until and unless it executes its strategies in a better way.

General Mills and Flowers Foods are doing much better
General Mills and Flowers Foods haven't been struggling due to retailer inventory issues, probably because their inventory management has been better.

General Mills started fiscal 2014 on a strong note. In the first quarter, General Mills reported an 8% increase in revenue from last year to $4.37 billion. It also reported 6% year-over-year growth in earnings to $0.70 per share, in line with expectations.

General Mills has also found success in international markets. On the back of international acquisitions, the company experienced a 27% year-over-year increase in international sales to $1 billion in the first quarter of 2014. General Mills is enjoying growth from different quarters while Campbell is finding such growth hard to come by.

Flowers Foods also reported robust results for the third quarter. It achieved a 22.5% increase in sales and a 6% increase in earnings per share from the year ago period, primarily driven by acquisitions.

Flowers Foods thrives on acquisitions. In the third quarter, Flowers Foods acquired a bakery in Modesto, California. Earlier this year, it acquired the facilities and brands of Hostess in a deal worth $355 million. Flowers Foods' U.S. market share now stands at 14% and market share in its core markets of the Southeast and Southwest has risen to 30% as a result of acquisitions. More importantly, despite growing via acquisitions, Flowers Foods' total debt-to-equity ratio of 92 is much lower than Campbell's 329.4.

Bottom line
Campbell isn't executing well even though it operates in a growing market. In comparison, its peers have performed quite well. Also, at a trailing P/E of 32, Campbell is quite expensive compared to General Mills and Flowers Foods which both trade at around 20 times earnings. Hence, considering Campbell's rich valuation and its weak performance, it is a stock to stay away from.

For Amazon.com investors, trading at $400 per share is a major accomplishment and a level that many thought could never be seen. The constant debate regarding the worth of Amazon races on, but as $400 fast approaches, investors must also wonder if the stock is still a buy.

Not an ordinary company
In a previous article, I explained how Amazon might be the most disruptive company in history. Amazon has evolved from a bookstore to a retail powerhouse and is now a cloud services and grocery provider as well. There is seemingly not much that this company can't accomplish. With that said, part of what dictates how to value Amazon is determining what exactly it is.

For one thing, Amazon is not a retail company per se. The bulk of its business is in retail, but to truly get an accurate reading of this company and its valuation you must dissect its parts.

What's the value assigned to AWS?
AWS stands for Amazon Web Services, and is the company's cloud infrastructure and cloud app platform business. These are businesses made popular by the likes of salesforce.com and Workday .

The research firm Evercore estimates that Amazon will produce $3.5 billion in 2013 from AWS and is growing at a rate of more than 55% annually. With this growth and revenue in mind, Evercore also assigns a $50 billion market worth to AWS, a whopping 14.2 times sales.

While 14.2 times sales might sound outrageous, consider the fact that Salesforce trades at 8.4 times sales and Workday is even more expensive with a price-to-sales ratio of 40.4. This is a great illustration of value, as Amazon is accurately right in the middle of these two companies.

Salesforce is a major player in the cloud app platform business with an 18% market share. AWS is growing significantly faster than Salesforce in this business, however, and could soon be the new leader in the cloud app platform segment. Salesforce is also spending at a rate that is faster than its growth, suggesting that AWS is worth a heftier premium than Salesforce.

Workday develops infrastructure or sells software-as-a-service. In the company's most recent quarter, it showed accelerated growth and improved its operating margins. With 71% growth, Workday deserves a higher multiple than AWS. At the same time, the large range between Workday and Salesforce likely validates the multiple and valuation awarded to AWS at $50 billion.

What's the retail worth?
After we remove AWS, we are left with Amazon's core retail business. This gives us $66.5 billion in annual revenue remaining and a market cap of $130 billion. This applies a much more attractive price-to-sales ratio of 1.95 for its retail segment versus the 2.5 times sales that is given for the entire company.

If we look throughout retail, Amazon still looks pricey. Wal-Mart ,for instance, trades at 0.56 times sales. Wal-Mart is the largest retail company in the world, and if we're trying to determine if Amazon is expensive relative to its retail business, then we have to compare it to the best.

There is another element to the story, however, and that is growth. If we use Thanksgiving and Black Friday as a comparison, ShopperTrak estimates that brick-and-mortar stores rose just 2.3% year over- ear while e-commerce grew a whopping 17.3%. Therefore, Wal-Mart and Amazon are on two completely different levels of growth. As seen with AWS, higher premiums are normally awarded for growth.

In fact, Amazon is not just the largest e-commerce company in the U.S., but is also one of the strongest. ChannelAdvisor estimates that Amazon saw same-store sales rise 20.3%, far better than the overall industry.

With that said, Amazon is growing 10 times faster than Wal-Mart but is only 3.5 times more expensive. This fact is a good indication of investment value.

What about earnings?
Right now, bears are probably screaming that price times sales is not a fair metric. After all, Wal-Mart trades at just 14.4 times next year's earnings versus a forward P/E ratio of 146 for Amazon.

The problem with this argument is that net income or earnings is not a good valuation metric for companies at different stages in their growth cycle. Amazon is investing heavily in growth -- including new segments such as grocery -- while expanding its infrastructure. Wal-Mart, on the other hand, is large and well-established.

It is worth noting that in both Amazon's and Wal-Mart's most recent quarter, Amazon actually had a higher gross profit margin. Amazon's gross profit margin was 27.6% versus 25% for Wal-Mart. This suggests that Amazon might one day achieve profit margins greater than Wal-Mart's 3.6% once its aggressive spending subsides.

Final thoughts
There's a lot to like about Amazon, even as the stock closes in on $400. When you break it down into both retail and AWS and then consider its growth, you can see that Amazon might still have a significant amount of room to run higher.

Is Amazon a good investment right now? Unfortunately, no one can accurately predict the short-term performance of a stock or the broader market. Amazon has seen stock gains of 60% this year alone, and more than 800% during the last five years. Amazon might see a pullback after hitting $400, but for long-term investors the valuation still suggests further upside ahead.

Each week, the U.S. Energy Information Administration releases a report with the most updated natural gas information.

The most recent report indicates that demand for natural gas is rising given cold weather movements in the U.S. Additionally, it reveals that existing natural gas inventories are lower than originally anticipated. This information, coupled with the front month contract price for natural gas via Henry Hub through last Friday—up 4.7% since the prior week—is great news for EQT Corporation (NYSE: EQT), Range Resources (NYSE: RRC), and Chesapeake Energy (NYSE: CHK).

Benefits and risks of seasonal price shifts
For upstream producers, large natural gas price movements should lead to investor concern. A key reason is because volatile prices can translate into volatile revenue.

However, when prices rise, investors win. Currently, the producers are positioned to reap profits from higher margins. But short-term indicators do not tell the whole story. So while EQT, Range, and Chesapeake may record a pop in revenue for this quarter, investors must dive beneath the surface to see long-term potential.

As seen by the below image, natural gas prices are relatively low compared to recent history. 

CHK data by YCharts

So, increases in natural prices will add to bottom lines. 

Long-term growth potential
Each of the aforementioned companies is strategically positioned in at least one of the nation's largest shale gas plays, among other production regions. And given that the EIA's 2013 reference case expects shale gas production to grow 113% through 2040, the long-term picture looks bright. 

Source: EIA

Specifically, though, EQT operates in the Appalachian basin and continues to generate value for investors. During the third quarter, EQT posted a 177% increase in earnings compared to 2012 while increasing its Marcellus Shale sales volume by 72%. Its revenues are increasing at nearly two times the rate of its expenses, and it continues to innovate. For example, EQT owns and operates midstream and distribution arms, enabling it to reduce costs, streamline processes, and even generate income from competitors who utilize its services.

Like EQT, and with operations in some of the richest shale plays in America, Range expects continued expansion. It forecasts a 20%-25% line of sight production growth for many years to come. Additionally, without quantifying its potential within the Utica Shale, Range's resource potential is 9-13 times its proven reserves. For perspective, even if Range ceased its forward thinking capital expenditure and exploration projects, it would be able to produce 10 times its current production rate. That's a nice hedge of protection, not even considering over 50% of its 2014 projected production is hedged for maximum benefits against major price swings. 

Chesapeake is a different animal
Though it operates heavily in the natural gas space, Chesapeake Energy earned less than a third of its revenue from its natural gas, oil, and natural gas liquid operations in the third quarter.  So, even though Chesapeake benefited from the 15% realized rise in natural gas and oil prices during the third quarter, its revenues from each resource only increased 3.7% and 1.4% respectively. 

The good news is that the streamlined company is repositioned for long-term growth. For instance, Chesapeake continues to strengthen its cash position, eliminate waste and inefficiencies, and expand its presence as the top driller in Ohio in the Utica Shale. For instance, natural gas production in the Utica soared 91% between the second and third quarters of 2013. Plus, Chesapeake is now utilizing the rapidly developing infrastructure of midstream businesses to expedite its process, thereby leading to opportunity for additional production capacity. It reportedly connected 63 wells to sales during the third quarter.

A glance in the future
America's energy industry looks quite optimistic on a macro level, and EQT Corporation, Range Resources, and Chesapeake Energy are all poised to benefit, making them great opportunities for the coming year.

On Thursday, PetroChina announced a deal with ExxonMobil to acquire a 25% stake in the West Qurna-1 oil field project in southeastern Iraq. With an estimated 43 billion barrels of recoverable reserves, West Qurna is estimated to be the second largest oil field on the planet. Reports also say that ExxonMobil sold an additional 10% stake to Indonesia's state oil company, PT Pertamina.

With these moves, ExxonMobil's ongoing divestment in West Qurna is over half completed. PetroChina, for its part, is now the single largest player in this huge field. The two companies are going in opposite directions, but in the grand scheme of Iraq's complicated internal political situation, the deal stands to benefit both parties greatly.

Iraq is a lot more than just this one (admittedly enormous) field, and ExxonMobil has an opportunity for much better margins dealing with the Kurdistan Regional Government on smaller northern fields. When ExxonMobil made it clear it was going this route, it sparked major threats from Iraqi officials, who told them to choose between Kurdistan and West Qurna. Juggling politics between the autonomous Kurds and the Iraqi central government is tricky business, and ExxonMobil has chosen the relative calm of Iraqi Kurdistan over the higher profile southeast.

Kurdistan enjoys close ties with the U.S. (former U.S. Ambassador Peter Galbraith helped negotiate the Iraqi constitution on Kurdistan's behalf to secure them friendly terms on oil revenue sharing), and ExxonMobil is in a great position to take advantage of these fields, with easy access to Western markets by way of Turkey.

West Qurna and PetroChina
PetroChina, on the other hand, gains major credibility by taking such a big portion of the responsibility for the West Qurna field, and beyond the scope of this single deal, it sets them up as a major player for other high-profile developments that may come along in the future. This is particularly important if diplomatic rapprochement brings Iranian oil fields back online and the Iranian Oil Ministry needs big (likely non-American) companies to help get them back up to speed.

In becoming the single largest company involved in developing one of the world's largest oil fields, PetroChina officially graduates in the minds of many from a secondary player into a credible global power, on par with Total SA and Royal Dutch Shell , both of which were high on the list of bidders for big Iraqi projects but now find themselves smaller players in the oil-rich southeast when compared to PetroChina.

A win-win
In selling out, which is still an ongoing process, ExxonMobil doesn't lose its own status as a major candidate for any development deals, but it will free itself from any leverage the Iraqi central government may wish to exert on it for its work in Kurdistan. For PetroChina, the West Qurna field is no burden at all, but rather an opportunity to prove its maturation into one of the world's big players in oil production.

Big deals like this lend themselves to debating winners and losers, but in this case both sides appears very well served by the deal, and could both reap benefits beyond a single transaction.

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

Expect a flat start to the stock market today, as the Dow Jones Industrial Average will fall by an insignificant eight points at the opening bell, according to index futures. Apple dropped some big news on the market about its foreign business, while Costco logged a slowdown in sales growth. Meanwhile, Dollar General continued its impressive retailing run in the third quarter.

Starting with tech, it's official: Apple is coming to China Mobile. The company finally signed a deal to get its iPhones onto the massive foreign network, The Wall Street Journal reported this morning. With more than 700 million subscribers, China Mobile represents a huge market opportunity for the Mac maker to boost smartphone sales abroad next year. The deal should also help Apple gain some ground in its battle with Samsung, which controls about three times Apple's market share in China. Apple's stock is up 1.5% in premarket trading.

Next, Costco said this morning that U.S. comparable-store sales were up only 2% in November, which included the critical Black Friday shopping weekend. While that's likely a better result than many of its rivals will see, it's still a big slowdown from the roughly 4% pace that Costco has been logging. Store expansions helped push overall sales higher by 5% to hit $8.78 billion in the month, though. And investors can expect more growth along those lines: The company has aggressive expansion plans for 2014 that should lay the foundation for continued sales increases. Costco's stock is down 1.8% in premarket trading.

Finally, Dollar General this morning reported third-quarter earnings that rose by 19% from the year-ago period. Total sales jumped 10.5% higher, as the retailer benefited from heavier traffic and a higher average transaction. Comparable-store sales were up a healthy 4.4% in the quarter. Dollar General's biggest sales gains continued to come from its consumables business, which also pushed profitability down slightly: gross margin fell by about half a percentage point, to 30.3%. The company expects to open 700 new stores next year, compared to the 650 it will open in 2013. The stock is up 2% in premarket trading.

One year ago, on Dec. 4, 2012, the real-money Inflation-Protected Income Growth portfolio launched. The portfolio attempts to generate an income stream that increases each year at least as fast as inflation. It strives to reach this goal by owning a fairly diversified collection of stocks that all share a handful of key characteristics:

• Reasonable valuations, based on some level of financial fundamentals,
• Histories of paying increasing dividends that were covered by cash flows,
• Reasons to believe those dividends could continue to increase, and
• Healthy enough balance sheets that maturing debts wouldn't cause much worries

In the Foolish spirit of Learning Together, the portfolio is managed in public, with selection articles announcing each pick and weekly updates (once the portfolio got going) monitoring its progress. Over its first year of existence, the portfolio exceeded my wildest expectations, and I'm optimistic that the portfolio can continue to meet its primary objective.

How'd it do?
From the portfolio's primary goal of investing in companies with rising dividends thus far, it has been a stupendous success. The table below shows all but one iPIG selection and its dividend behavior since being picked:

Data from Yahoo! Finance and the iPIG portfolio selection articles, as of Dec. 4, 2013.

Every selection but megabank Wells Fargo has increased its dividend by more than the official 1% inflation rate since being picked for the portfolio. Wells Fargo did increase its dividend shortly before being selected, though, and its ability to recover its dividend after the financial crisis faster than many other banks played a key part in its getting picked. As Wells Fargo has increased its dividend within the past year, any additional dividend increase would have been an unexpected bonus.

Texas Instruments provided the biggest surprise from a dividend perspective. The semiconductor giant has raised its dividend twice since being picked in January, for a total increase of nearly 43%. Texas Instruments' dividend increases came in spite of some downbeat forecasts driven by the wind-down of its wireless business. Texas Instruments has been making choices to focus on higher-margin businesses, and investors are seeing the benefits in the form of those higher dividends.

As for the "can't mention" stock -- the Fool's disclosure rules prohibit me from mentioning a company within two days of transacting in its security, which I did in my wife's IRA on Dec. 4, 2013. That company will be covered in the upcoming weekly review article, after the disclosure rules allow.

Beyond the dividends
In addition to that awesome dividend growth, the iPIG portfolio benefited from the market's rapid rise over the past year. All told, as of the market's close on Dec. 4, 2013, the iPIG portfolio achieved a 28% total return. That's slightly ahead of the gain in the S&P 500 over that same time, but below the index's return when dividends are included. Over the past year, what started as $30,000 has turned into $38,409.89 thanks to a combination of dividends and a rising market.

Including Teva Pharmaceutical's December dividend, which was expected to arrive this Tuesday, the iPIG portfolio would have had another $10 or so in its account above that total level. As an Israeli company, though, Teva's dividend has to go through ADR transfer agents, currency translations, and a mandatory Israeli withholding tax before getting passed on to American shareholders. As a result, Teva's dividend often shows up a bit later than expected. It hasn't arrived as of this writing, but I expect to see it soon.

Looking forward
While dividends are never guaranteed payments and capital gains often come and go at the whim of the market, the companies in the iPIG portfolio get regularly reviewed to determine whether they still fit. Thus far, there hasn't been a compelling need to sell any existing pick.

That won't last forever, and in fact there is one virtually guaranteed sale for the iPIG portfolio in the near future. NV Energy , Nevada's regulated electricity producer, is in the process of getting bought out for $23.75 per share in cash, with the deal expected to close in the first quarter of 2014.

As the iPIG portfolio picked up its shares in NV Energy on Dec. 31, 2012, waiting until January 2014 to sell will let the position be eligible for long-term capital gains tax treatment. Since NV Energy's shareholders have already approved the sale, it's a simple choice to wait a few weeks to get the lower long-term gains tax rate on what at this point is a virtually guaranteed gain.

When NV Energy's shares get sold, that will free up enough capital to place another company's stock in the portfolio. The market's rapid rise over the past year has made great fits for the iPIG portfolio's criteria tougher to find, but it likely won't take too long for something worth owning to come along.

To follow the IPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the IPIG portfolio, simply click here.

J.M. Smucker , the marketer of branded food products, reported second-quarter results that were below expectations, which led to a drop in the stock price. 

The miss
J.M. Smucker transferred lower commodity prices to its customers by decreasing coffee prices. This led to revenue dropping 4% over last year to $1.56 billion. The top line missed estimates despite the acquisition of Enray in August 2013 and a new Cumberland distribution agreement it entered in July of this year.

Also, J.M. Smucker's international, foodservice, and natural foods segment was a laggard, witnessing 10% lower volumes during the quarter. This was mainly due to the elimination of certain parts of the business in this segment. However, the addition of Enray and the distribution agreement should benefit this segment going forward.

Nonetheless, the retail coffee segment performed well as great demand resulted in higher volumes. Moreover, lower costs for green coffee helped expand the company's gross margin and led to higher earnings of $1.52 per share.

J.M. Smucker faces stiff competition in the K-cups segment. Sales of K-cups are declining since the segment is overpopulated with a large number of players. However, Smucker was the first company to start selling K-cups that were licensed by the coffee maker Green Mountain Coffee Roasters .

Although J.M. Smucker was the first one to get the license and this greatly benefited the food retailer, Green Mountain's licenses to other players has made the competition stiff. Starbucks and other companies started making their own single-serve pods, which have hampered Green Mountain's sales. Nonetheless, Green Mountain plans a new Keurig 2.0 platform, which will add to its product portfolio.

Measures galore
Despite difficulties and challenges, J.M. Smucker is taking a number of measures to boost its top line and stir demand. For instance, it plans to introduce 100 new products this year, which should bring in more revenue.

In order to strengthen its K-cups business and bring back consumer interest in the product, the food and beverage retailer plans to experiment with new flavors. It will add three new flavors by the year 2015, which should lure more customers. Also, J.M. Smucker will make these products available through its e-commerce channel, adding convenience for its customers. Additionally, the retailer will strengthen its marketing strategies in general and, for the 2014 Winter Olympics 2014 in particular. 

The future looks bright
J.M. Smucker lowered its revenue outlook for the year due to declining K-cup sales and a weak international business. However, the efforts the company has undertaken can change things for the better. New flavors for K-cups and marketing initiatives should add to its revenue.

Also, the acquisition of Enray, a manufacturer of premium organic products, will add to the strength of Smucker's natural foods business. This will expand the international and natural food segment in the months to come.

TreeHouse Foods  has also resorted to an acquisition strategy to grow its business. The food manufacturer acquired Associated Brands in October this year, expanding its presence in the powdered drink and specialty tea category. TreeHouse Foods' single-serve business will benefit from the sale of specialty tea which offers many nutritional benefits, adding to its growing coffee segment.

Associated Brands is not the only acquisition TreeHouse made this year--TreeHouse acquired Cains Foods, a manufacturer of shelf-stable dressings and sauces, in July. This acquisition has already started yielding benefits which are reflected in TreeHouse's recently reported quarter. Its revenue grew 5.4% to $567.2 million over last year, driven by the benefits of Cains Foods. Therefore, J.M. Smucker's acquisition looks attractive enough for a brighter future.

Final words
Overall, J.M. Smucker looks decently placed for the forthcoming holiday season. New products, new flavors for K-cups, and an acquisition which expands its natural foods segment should help the food retailer register higher sales in the months to come. Moreover, improved marketing efforts and the Winter Olympics are additional tailwinds. Therefore, this company could prove to be a good bet going forward.

The retail industry has become increasingly competitive, with each player trying to capture more market share. Every retailer is planning its own way of luring customers and making its products attractive. One company's gain in customers is a loss for others.

For example, J.C. Penney , the owner of a chain of department stores, lost customers because of poor strategic decisions such as eliminating promotions for its products and removing private-label brands from its stores. This led to a sharp decline in customer traffic, which largely affected sales. This benefited its rivals such as Macy's , which reported a great third quarter that was beat analysts' expectations. The positive report then sent Macy's shares higher.

Macy's success
Macy's revenue surged 3.3% to $6.28 billion over the prior year, and earnings jumped 31% to $0.47 per share. This was all thanks to strong marketing efforts by the company. Its increased promotions led to higher customer traffic with a bigger average transaction size, resulting in a comparable-store sales growth of 3.5%.

Macy's witnessed growth in all of its segments in all regions, and especially in the women's section. Products for women were not faring well in the last few months, but strong results for women's apparel, handbags, cosmetics, and jewelery made the company optimistic about this segment's future.

Not all companies have benefited from J.C. Penney's customers, however. Another player, Kohl's , witnessed a decline in customer traffic which led to lower revenue. Kohl's comparable-store sales decreased 1.6%, which disheartened its investors. The retailer's lackluster performance was not limited to just the top line, though; its bottom line also shrank and was accompanied by a lowered outlook for the year. Nonetheless, Kohl's is trying to revive its business by adding new brands and focusing on marketing strategies to help it attract customers.

J.C. Penney is making efforts to improve its sales as well. It has restarted its promotional activities and issued discount coupons. It has also reintroduced the private-label brands which were previously removed from its stores. These strategies could help the company to stage a comeback.

Macy's is doing well compared to peers such as Kohl's and J.C. Penney, and this is reflected in its stock price performance over the past year.

M data by YCharts.

Macy's continued marketing efforts, the expansion of its online business, and new store openings enabled the company to perform well and led to a 37.6% surge in its stock price. Although Kohl's is struggling, it has managed to provide a 23.8% return to its investors. On the other hand, J.C. Penney's stock price plunged 43.2%, mainly because of the missteps taken last year.

The peak season
Macy's seem to be well positioned for a great holiday season as it enters with a large customer base.

Moreover, the decline in gas prices has left potential customers with more money. This means that customers will be willing to spend during the holiday shopping season, which is the peak season for all retailers. This has already started showing up as October sales were good for Macy's. Even rival J.C. Penney witnessed a 0.9% increase in sales over last month. In fact, its online sales jumped 37.6% over October 2012, making retailers even more hopeful about the holiday season.

All of this will be accompanied with increased promotional activity from all of the retailers. It will be interesting to see how discounting strategies help each of the players enhance their sales during the peak season.

The bottom line
Although all retailers are trying to attract customers through various means, Macy's has done the best. Its great results and bright outlook make the company even more interesting. Moreover, it has performed better than its peers. This company should be a rewarding one in the coming months.

Generating 10.6% revenue growth and 20% income growth (24% adjusted) sounds pretty good for a company with a market cap north of $100 billion. Schlumberger attributes part of this growth to North America, which saw record revenue.

Strong offshore drilling activity combined with a seasonal rebound in Western Canadian activity have driven Schlumberger's recent growth.

Schlumberger is different than other oilfield-services companies like Baker Hughes, as only about a third of Schlumberger's revenue comes from North America, while the rest comes from its international assets.

Sequentially, Schlumberger posted improvements in margins all across the board, with each division posting an operating margin north of 20%.

Future plans
Going into 2014, Schlumberger sees five markets providing strong growth: Russia, Sub-Saharan Africa, the Middle East, China, and Australia.

In the UAE, Schlumberger has been gaining market share and expects to continue to do so going forward. Schlumberger recently won a major contract in the UAE and has been moving the necessary resources to the UAE to keep gaining market share. This contract was a big win for Schlumberger and allowed it to post 25% year-over-year revenue growth.

Schlumberger also sees Iraq and Saudi Arabia as major growth drivers for 2014. Schlumberger is moving additional workers and equipment into Saudi Arabia to keep up with the workload, while Iraqi output is expected to keep climbing, which will increase demand for Schlumberger's services.

Even further out, the return of Libyan production over the next few years will provide a new area of growth from the Middle East. In Schlumberger's latest quarter, it noted that in North Africa it saw a "challenging quarter" due to lower rig activity in Libya spawning from security concerns. While there is still a high chance of continued civil conflict, eventually Libya will want to return to pre-civil war levels of output.

China
The Middle East has treated Schlumberger well in the past and will provide high levels of growth and margin expansion in the future. A relatively new market has emerged for Schlumberger, however; China's shale gas.

PetroChina , the lead company developing China's shale reserves, doesn't have the expertise to drill for gas with a high sulfuric content. 12% of the Sichuan Basin's reserves are considered to be high in sulfuric content, which is why PetroChina sought out Chevron's help in developing the field.

Chevron teamed up with PetroChina to develop the Luojiazhai sour gas field in southwestern China's Sichuan province. PetroChina lacked the necessary anti-erosion and reinjection technology to be able to develop the field, which leaves the area wide open for companies like Chevron and Schlumberger to come in and showcase their new technology.

Schlumberger is going to help manage the Ordos Basin in China and currently has signed a contract for its first SPM (Statistical Parametric Mapping) project in the area. The U.S. Energy Information Agency estimates that China could hold 50% more shale gas than the U.S. Most of that is located in three main areas, one of which is in the Ordos Basin.  

China's shale reserves are thought to be the biggest in the world, which will create a whole new market for Schlumberger to cater to. PetroChina is building three gas processing plants near the Sichuan Basin with the capability to process gas with a high sulfuric content, which means it's confident that its partnership with Chevron will successfully yield high levels of gas output.

Schlumberger is well positioned to leverage its expertise from North American fracking operations and put talented men and women on the ground, which it plans to do in the forth quarter. China has plenty of reasons to tap into shale gas, the biggest of which being that it wants to lower its pollution rate through cleaner burning natural gas and "un-smog" some of its cities.

Schlumberger is well positioned to capitalize on growth all around the globe, which is why it was able to grow into such a big company. Looking ahead, Schlumberger appears to still have plenty of oomph left, and that is just from two of its five major growth areas.

North America
While Schlumberger didn't note North America as a major growth segment, it still can't be discounted. In the third quarter, Schlumberger added four new hydraulic fracking fleets in North America, which led to a 7% sequential increase in its completed stage count.

Schlumberger also created a data consortium business model, which allows various customers with neighboring acreage to share reserve and production data with each other. This allows for the construction of better 3D reservoir models and for exploration and production players to co-fund part of their projects. 

Better modeling and lower costs gives Schlumberger a compelling selling point, and gives a big incentive for companies to partner up with Schlumberger to gain access to that data.

Utilizing 3D seismic models and production levels from various parts of a play has enabled E&P players to find the best locations to drill, which is why production and recovery rates per well have increased.

Final thoughts
Schlumberger is a huge company, and the law of large numbers makes it harder for the business to grow as time wears on. Schlumberger isn't afraid of getting bigger; it knows how to keep on growing no matter how big it gets. Schlumberger's mentality has greatly rewarded long-term investors, which is why it has beaten the market by 400% over the past decade while paying out a 1.4% dividend. 

Emerson Electric will soon be in sole possession of a joint venture it has operated with SPX since 1997. Both companies announced in separate press releases Wednesday that Emerson will purchase SPX's 44.5% stake in EGS Electrical Group. The price is $571 million.

EGS is a manufacturer of specialty electrical goods for industrial and hazardous environments. It's widely dispersed around the globe, as its most significant markets are the U.S., Brazil, Canada, and France.

According to Emerson, more than half of EGS' total sales are derived from the oil, gas, and chemical markets. In its press release, the former company cited growth opportunities in these sectors as a key reason for its purchase.

Emerson expects the deal to be "slightly accretive" to its earnings per share in 2014. It said that EGS, which will become part of its industrial automation segment, posted annual revenues of more than $500 million in 2013. 

SPX anticipates it will book a Q1 2014 after-tax gain of roughly $300 million from the sale.

Both companies expect the deal to close in Q1 2014, pending approval from the relevant regulatory bodies.

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The Department of Defense announced eight defense contracts on Wednesday. Worth $198.4 million in total, the contracts ranged in value by a factor of 10 -- from as much as $80 million to as little as $7.7 million. Yet it was that very smallest of the eight contracts awarded yesterday that was the most interesting.

The Defense Advanced Research Projects Agency (DARPA) awarded Pfizer a $7.7 million contract to research whether it might be possible to "identify and subsequently induce the production of protective antibodies to an emerging pathogen directly in an infected or exposed individual."

The traditional method of "curing" a disease -- from which DARPA is deviating -- involves extracting a pathogen, isolating its antigen, and using that antigen to create a vaccine in vitro. This vaccine is then injected into a patient to stimulate his or her immune system to fight off subsequent exposures to the pathogen. DARPA, however, appears to be tasking Pfizer with finding a shortcut, whereby all of this would happen in vivo, within the patient's body, thus dramatically cutting the time between the discovery of a pathogen and the military's ability to treat it. Incidentally, if Pfizer is successful in this work, its research could have significant applications in the civilian world as well.

Pfizer's DARPA contract will run through Dec. 8, 2016.

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Amazon.com is continuing to put up a determined fight in the tablet wars. The retailer said in a press release Wednesday that this past Thanksgiving weekend was "the best ever" for sales of its Kindle line of tablets and e-readers. Additionally, the HDX 7" and HD configurations of the Fire tablet were the top-selling goods on Amazon.com over that stretch of time.

Both models belong to the new generation of the Fire series unveiled by the company this past September. Tablets in the series range in price from $139 for the 7" HD model with 8 GB of storage to $594 for the Fire HDX with a 8.9" display, 64 GB, Wi-Fi and 4G LTE, and no lock screen advertisements.

According to a poll from the National Retail Federation, approximately four in ten Thanksgiving weekend 2013 shoppers surveyed bought at least some of their goods online. Those consumers spent an average of $177.67 each on Internet purchases, which was roughly 43.7% of their total spending that weekend. The latter figure was three percentage points higher than the 40.7% in the same period last year.

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The U.S. Defense Security Cooperation Agency notified Congress Thursday of plans to sell the government of Kuwait $150 million worth of follow-on "contractor engineering technical services" for that country's fleet F/A-18 C/D Hornet fighter jets, plus necessary equipment, parts, and logistical support.

The principal contractors on this project will be the publicly traded defense contractors Boeing and General Electric , and also the privately owned U.S. company Kay and Associates Incorporated and England's Industrial Acoustics Corporation.

DSCA describes the purpose of the sale helping the Kuwait Air Force to "ensure the reliability and performance of its F/A-18 C/D aircraft."

DSCA assures Congress that "the proposed sale of this equipment and support will not alter the basic military balance in the region," nor will it have any "adverse impact on U.S. defense readiness."

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The U.S. Defense Security Cooperation Agency notified Congress Thursday of plans to enter into a pair of foreign military sales contracts with the Kingdom of Saudi Arabia. If approved, the two contracts combined could be worth as much as $1.07 billion to principal defense contractor Raytheon . They involve a truly staggering amount of ordnance.

Together, the proposed transactions about which DSCA notified Congress call for the sale of:

• 9,650 BGM-71 2A Tube-launched, Optically tracked Wire-guided (TOW) Radio-Frequency (RF) missiles
• 4,145 BGM-71 2B TOW Aero RF missiles
• 1,000 BGM-71 2A TOW missiles
• 750 BGM-71 2B TOW missiles
• and an assortment of 154 "fly to-buy" TOW2B and TOW2A missiles.

Thus, Saudi Arabia is seeking to purchase 15,699 missiles in total. All TOW missiles are designed primarily to be used as anti-tank weapons. TOW Aero missiles have greater range than the base model, while the TOW RF variant is designed so that it can be guided not only by wire but also radio-controlled. TOW Aero RFs have both extended range and the ability to be guided by radio control. Meanwhile, "fly to-buy" units are selected from a delivery lot at random for test firing as a cost-effective way of ensuring that a given batch of missiles is in working order. (They must still be paid for, however. Hence the name.)

DSCA did not say precisely why Saudi Arabia is stocking up such a very large amount of munitions, noting only that "the proposed sale will support the Ministry of the National Guard's defense and counter-terrorism missions. The sale will also improve Saudi Arabia's capability to meet and defeat current and future threats from enemy armored vehicles. Saudi Arabia will use the enhanced capability as a deterrent to regional threats and to strengthen its homeland defense."

At the same time, DSCA assured Congress that the proposed sales "will not alter the basic military balance in the region, and that they will not have any "adverse impact on U.S. defense readiness."

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