The online-retail market in the US continues to grow rapidly. As a result, eBay , Amazon and Overstock.com are innovating their mobile applications to get the most out of this growing market.

Let's see where eBay is heading and how it stacks up with its rivals.

Third-quarter report
In the third quarter, eBay reported per-share earnings of $0.53, which represents an increase of 17.7% from the comparable quarter last year. Revenue also rose 14% from the year-ago quarter and stood at $3.9 billion. Total enabled commerce volume, or ECV, jumped 21% to $52 billion as the company kept on performing well in all segments.

eBay's Marketplaces segment delivered a strong performance, with revenue jumping 12% to $2 billion. Active users for Marketplaces also rose 14% to 124 million, which was largely attributed to the company providing free shipping on more than half of US transactions. Marketplaces' popularity continued to rise as the total selection of items increased to more than 500 million listings.

PayPal continued to remain strong by contributing more than 40% of eBay's sales. PayPal's revenue increased by 19% to $1.6 billion, while total payment volume grew 25% to $44 billion. The company benefited from the success of the enhanced PayPal consumer app as the active registered accounts for PayPal increased 17% to 137 million.

As far as eBay Enterprise was concerned, its revenue grew 5% to $238 million. Its commerce technologies drove $787 million in merchandise sales, representing a 13% year-over-year increase. Also, eBay Enterprise helped its clients grow same-store sales by almost 13%.

What is eBay up to?
In the third quarter, volume for mobile-enabled commerce rose by a staggering 75%. eBay continues to regard mobile transactions as a high-growth segment. For this reason, the company is investing heavily in its apps for Apple's iOS and Google's Android. As part of this plan, eBay recently acquired Braintree, a Chicago-based payment-processing company. Through this acquisition, the company will be able to benefit from Braintree's app, Venmo, which lets customers make payments from smartphones and tablets. This will make sure that eBay's growth in online payment solutions remains on track.

PayPal's President, David Marucs, has also highlighted the fact that mobile transactions will transform the e-commerce industry, and iOS and Android will be the forces behind that revolution. According to Marcus, the company's latest innovation, PayPal Beacon, will reinvent the in-store shopping experience for customers. Beacon, based on Bluetooth low-energy, or BLE, technology, will provide a complete hands-free experience to consumers while they pay at their favorite outlets. The customers will just need to have the PayPal app installed in their phones along with the BLE hardware, while the store will need a BLE dongle provided by PayPal. The customers will be greeted at check-in and only a verbal confirmation will be needed when they pay at check-out. No card, no wallet, the customers won't even have to touch their phones to provide payments.

Fundamentals
eBay has a high operating margin of 21% in comparison with the industry average of 16%, which shows that the company generates healthy profits on its revenue. eBay's debt-to-equity ratio is 19.90, which is less than the industry average of 23.70; this indicates that its borrowed capital is on the lower side.

Low price-to-free cash flow of 16.32 and price-to-book value of 2.94 strengthens my belief that eBay is a value stock. Furthermore, the company's low forward price-to-earnings of 16.9 signifies that it's a good bargain at this moment. 

Competitors
Online retail giant Amazon posted $17.09 billion in revenue for its fourth quarter, representing a 24% year-over-year increase. Amazon expects a lot from its technology business, therefore it is investing heavily in its Kindle Fire tablets and cloud computing services. This January, the company will expand its cloud computing services to China, which it expects to be a big growth catalyst. As the company keeps on growing, it expects its fourth quarter revenue to be in the range of $23.5-$26.5 billion. For the year, the company expects double-digit revenue growth as its sales keep on rising. Considering all of this, Amazon appears to be in great shape.

In the third quarter, Overstock.com missed its earnings expectations by $0.01 and posted EPS of $0.14. Earnings, however, did grow 27% from the year-ago quarter. Sales were also up by 18% to $301.4 million. The company's sales and marketing expenses jumped by 51%, forcing its operating margin downward.

The Web Marketing Association recently named Overstock's app for Android the best mobile retail application. Overstock, like eBay, knows the importance of mobile apps for future growth as it has continued to improve its Android app which now has simplified browsing, sharper images and better search options. As the app gets more popular, the company expects more revenue in the future.

Final thoughts
eBay's third-quarter report shows that the company's revenue is still growing as it keeps on increasing its active member count. eBay's latest innovation, PayPal Beacon, promises to attract customers in large numbers as it's a one-of-a-kind product in the industry. The company is seeking to benefit from its mobile apps, which are set to become the catalysts for future growth. eBay's latest acquisition of Venmo will make sure that it remains ahead of its competitors in the mobile app world, as more user-friendly apps mean more revenue for the company. All-in-all, eBay has a great online platform that will spur high returns in the future. Taking all this into consideration, I believe that eBay presents a good investment opportunity at this point in time.

There aren't too many true bargains left in the market these days, with the S&P 500 index running up nearly 30% in 2013. But fear and pessimism can sometimes cause certain stocks to trade at outrageously low levels, a situation that seems to be occurring with networking giant Cisco . Over the weekend, Barron's published a positive piece on the company, citing overblown fears and a low valuation as reasons for a likely 20% return in 2014. While the size of Cisco's upside is debatable, Barron's has the right idea, and Cisco is one of the cheapest big tech stocks available today, a better value than even Microsoft and Apple .

A looming threat
The main reason for the pessimism surrounding Cisco is the rise of SDN, or software defined networking. Cisco dominates the market for networking hardware, with many customers locked in to Cisco due to the proprietary nature of its products. While Cisco includes embedded software with its networking hardware, SDN makes it possible for companies to buy commodity hardware and install third-party software, thus cutting out Cisco altogether.

SDN is not yet widespread, and Barron's estimates that meaningful adoption of the technology won't occur until 2017. But big tech firms like Google are already trying to cut out Cisco by buying switches directly from Asia, and it's possible that up to 20% of Cisco's customers could eventually try SDN, according to an independent analyst cited by Barron's. Cisco recently released a new line of switches called Insieme, a hybrid approach which allows for the freedom of SDN while maintaining the need for proprietary Cisco hardware, in an attempt to combat the rise of SDN. Cisco has stated that Insieme is actually 27% less expensive in the long-run than commodity hardware, citing strong sales of the platform as evidence that Cisco has chosen the right path.

While SDN is a real threat, it does seem overdone. It will be years before SDN goes mainstream, and Cisco is taking steps now to ensure that its market share and margins remain intact.

The cheapest big tech stock
After announcing terrible guidance last quarter, predicting an 8% decline in revenue for the quarter ending in January, shares of Cisco crashed. Now trading around $22.50 per share, shares of Cisco are a better deal than most other cash-rich tech companies, like Microsoft and Apple.

While the standard trailing P/E ratio for Cisco is about 12, and the forward P/E ratio is closer to 11, the company's massive cash reserves bring these values down to 8.8 and 8.3 respectively. These ratios reflect a dire future for the company, and the stock is seriously undervalued as long as the absolute worst-case scenario doesn't play out.

Like Cisco, Microsoft faces challenges which have the potential to upend its business model. The rise of mobile devices, along with the decline of PCs, has put pressure on both the Windows and Office businesses from which Microsoft derives a bulk of its profit. Microsoft trades at a trailing and forward P/E ratio of 10.1 and 9.75 respectively, after backing out the net cash, inexpensive for a company with serious competitive advantages, but not as cheap as Cisco.

After releasing category-defining products like the iPod, iPhone, and iPad, Apple faces dual problems. First, increasing competition from Android and Windows devices promises to have a continued negative impact on the company's margins. And second, Apple's failure to release a revolutionary new product since the iPad has led investors to question whether Apple no longer has the magic that it once had under Steve Jobs.

Apple trades at a trailing and forward P/E ratio of 10 and 9.1 respectively, after backing out the net cash. Like Microsoft, Apple appears inexpensive, but not as good a value as Cisco.

The bottom line
The threats against Cisco, while very real, have pushed the valuation down to outrageous levels. The forward P/E ratio ex-cash of 8.3 more than accounts for the threat of SDN, which Cisco is actively fighting with its Insieme line of products. While both Microsoft and Apple also seem inexpensive, Cisco offers the best value in big tech. Barron's got this one right.

SodaStream may have signed up Scarlett Johansson to be its first-ever Global Brand Ambassador over the weekend, but its own financials are lost in translation. 

Shares of the company behind the namesake maker of carbonated beverages moved sharply lower on Monday after warning that its bottom-line results for the holiday quarter will fall well short of Wall Street's expectations. 

SodaStream now sees revenue of $562 million for all of 2013, short of the $567.2 million that was implied by its October guidance. Adjusted net income of $52.5 million and net income of $41.5 million will also be short of the $65 million and $54 million, respectively, that was proposed three months ago. If you back out the first nine months of 2013, the fourth-quarter shortfall becomes even more disastrous.

What went wrong? Naturally, seeing the bottom line being hosed down more than the top line points to pressure on SodaStream's margins. After all, SodaStream's saying that revenue in its holiday quarter rose by just 24%. That's not what investors are used to, but it's not horrible. The real problems here are the product mix, lower sell-in prices, and higher product costs.

The "product mix" remark likely refers to SodaStream selling more of its low-margin starter kits and less of its higher-margin syrups and CO2 refills. We saw this rear its ugly head during the third quarter when flavor sales rose by just 7% -- and declined in the U.S. -- but at least it was bailed out by strong carbonator sales that time. Bulls were hoping that it was just a onetime blip, but clearly it has bled over into the holidays.

Discussing lower "sell-in prices" and "higher product costs" points to a company unable to pass through its rising component costs to retailers. This has been a very competitive holiday shopping season, but that's not enough to excuse SodaStream here. For a company with no legitimate competitor in most of its markets -- including the U.S. -- it's frustrating to see that it doesn't command pricing flexibility.

Yes, this is bad. SodaStream is spilling the beans today because it's presenting at the 16th Annual ICR XChange Conference tomorrow morning. Now it can step into its presentation with its bad hand on display at the table.

SodaStream now has a lot to prove to Wall Street as it hits fresh 52-week lows today. Let's hope it keeps carbonators handy to fizz up the hype now that it's gone flat. With downward revisions coming, let's not mistake the stock for being cheap based on what will soon be obsolete 2014 targets.

It was no small chore for investors to keep up with all of the announcements from 3D Systems during the 2014 Consumer Electronics Show, or CES, held last week in Las Vegas. In total, 3D Systems made more than a dozen product and partnership announcements during the four-day event.

Unlike its EuroMold 2013 announcements, the company's CES disclosures were more geared toward the consumer and smaller business side of 3-D printing. Highlights included a revamped Cube 3-D printer for consumers, the introduction of ceramic and food 3-D printing product categories, a strategic partnership with Intel, and will.i.am from the Black Eyed Peas being named as chief creative officer.

In the following presentation, 3-D printing analyst Steve Heller highlights the most important 3D Systems announcements from CES and what investors can take away from the event.

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.

Obviously, the broad-based S&P 500 got up on the wrong side of the bed today, with the index suffering its worst loss of the year on weakening earnings expectations from other S&P components.

It was a light day on the economic data front, with the U.S. Treasury reporting a budget surplus of $53.2 billion in December, compared with forecasts that had called for a surplus of just $44 billion. This is good news, as it'd likely signal that budget deficit reductions are beginning to work, which could go a long way to reducing the exponential climb in U.S. debt that is viewed as unsustainable over the long term.

On the flipside, though, data from Thomson Reuters has shown that the vast majority of S&P 500 components that have pre-announced their earnings for the upcoming quarter have lowered their estimates -- not a good sign. It's been my contention as a tried-and-true skeptic of this rally that cost-cutting and share buybacks are masking a lack of top-line organic growth, and this is only more fuel for the fire.

By day's end, the S&P 500 had tumbled 23.17 points (-1.26%) to close at 1,819.20, its lowest close since Dec. 20. However, in spite of the significant down day, three companies scorched to the upside, leaving the S&P 500 in their dust.

Biopharmaceutical company Alnylam Pharmaceuticals topped the charts with a gain of 40.9% after announcing a collaboration/investment of $700 million with Sanofi subsidiary Genzyme. The deal is a bit complex, but the gist is that Sanofi gains access to patisiran, Alnylam's familial amyloidotic polyneuropathy drug, ALN-TTRsc, two additional early-stage products in development, and the ability to license all of Alnylam's rare genetic disease drugs, globally, with the exception of North American and Western European markets. In addition, Sanofi will be taking a 12% stake in Alnylam and purchasing those shares at a 27% premium to Friday's close, or $80 per share. Wall Street and investors are clearly pleased with the potential for a future buyout, but I'd approach things more cautiously and wait for Alnylam's pipeline to do the talking.

Distilled-spirits maker Beam , the company behind Maker's Mark whiskey and Jim Beam bourbon, soared 24.6% after announcing an agreement to be purchased by Japan's Suntory for $83.50 per share, or $16 billion including debt. The deal will result in a company with spirits product sales in excess of $4.3 billion on an annual basis, according to the companies, and would move Suntory into the role of third-largest global spirits retailer. Suntory plans to fund the transaction with cash on hand as well as a loan from the Bank of Tokyo. At nearly 30 times next year's earnings, Beam is seeings its shareholders getting a fair deal.

Finally, NII Holdings , a mobile-service provider in Latin America, gained 24.4% after it and Spain's Telefonica announced a network agreement in Mexico and Brazil. Under the terms of the deal, NII Holdings, which supplies service to Nextel brand customers in Mexico and Brazil, will be allowed to use Telefonica's network to reach those customers and hopefully expand its subscriber base. The deal works symbiotically for Telefonica, allowing its Brazilian wireless brand, Vivo, access to a larger market in Brazil. While the deal could ultimately tie Telefonica and NII Holdings at the hip, which is great news for the struggling NII, it doesn't help NII's growing debt load or bring the company back to profitability. In other words, it's one step in the right direction, but the company still has a mile to walk before it'd be a viable investment opportunity.

The gold thesis is falling apart. Inflation hasn't hit the U.S. hard, the dollar is holding its value well, and the economy is in the midst of a steady recovery, which blows away most of the reasons people buy gold. SPDR Gold Shares dropped 26% last year while the Dow Jones Industrial Average gained 26%.

What's worse is that bullish drivers are evaporating. The federal budget deficit is dropping, the Fed is slowing its money printing, and the economy is doing well, which is all bad for gold.

While gold itself has had a tough run, miners are doing even worse. Goldcorp and Barrick Gold Corporation nearly doubled the losses of gold. Gold producers are leveraged to the price of gold, so if it falls low enough, they could be out of business in a heartbeat.

Erin Miller sat down with contributor Travis Hoium to see what the future holds for gold. 

In an environment of intense global competition among auto manufacturers, it's time to push the limits -- and Ford is leading the way. The new 2015 F-150 that Ford unveiled today shows just how far the company is willing to go to set new standards.

2015 Ford F-150. Source: Ford Motor Company.

Ford's aluminum bet
"We will all remember this day," Ford chief operating officer Mark Fields told his colleagues the day Ford locked in aluminum contracts, according to The Wall Street Journal.

Taking cues from Tesla's Model S, the Jaguar lineup, and the Audi A8, Ford moved to an aluminum-alloy body built on an all-new, high-strength-steel frame. Up to 700 pounds less weight, the new material required significant investment for the company to adopt the military-grade, aluminum alloy in production.

Any significant change to the production process of the Ford F-150 is a major change for the company. The F-150, which is part of Ford's F-Series truck lineup, has been America's best-selling truck for 37 consecutive years, and its best-selling vehicle for 32 years. Even more, the F-series trucks account for an estimated 40% of Ford's global profit, according to estimates from Goldman Sachs. 

With F-150 pricing beginning at just $24,000, a move to a more expensive metal for the body is impressive. The Model S, with pricing that begins just under $70,000, is the lowest-priced aluminum vehicle in the U.S., according to the WSJ. An inside source told the Journal that the move to aluminum meant a massive multibillion-dollar investment. Unsurprisingly, Ford lowered its profit guidance for 2014 in December and cited heavy investments on product spending as one of the driving factors.

Changing industry dynamics
Ford's big bet on an aluminum body comes as a response to a U.S. government directive for an average of 54.5 miles per gallon among all automakers' full ranges of U.S. vehicles by 2025. The lighter body allows the new F-150 to sport a smaller 2.7-liter V-6 EcoBoost engine as one of the four engine options for customers. The new engine combined with the lighter body will help the company achieve fuel efficiency leadership among full-sized pickups, Ford global chief of product development Raj Nair hopes.

General Motors is taking a different route to improving fuel efficiency in 2014, returning to midsize pickup truck offerings for its 2015 models. The move will place the new 2015 GMC Canyon as direct competition to Toyota's popular Tacoma.

Beyond the government's requirement for improved fuel efficiency, customers are also showing greater interest. Ford says about 40% of F-150 buyers are now choosing the more efficient V6 engine over the traditional V8.

What's next?
Ford's multibillion-dollar bet on new production technologies and processes shows just how important fuel efficiency is to Ford today. Further, it's likely the beginning of similar big bets among global auto manufacturers. While there are major upfront costs to changes like this, investors should look forward to what is likely to be an era of bigger bets and a faster pace of innovation that will separate the winners from the losers.

There's no time for auto manufacturers to languish in technologies of the past, and Ford's big bet shows that it's willing to get its hands dirty in order to continue to set the standard among full-sized trucks.

lululemon athletica was plunging by more than 16.5% on Monday after the company cut its sales and earnings forecasts for the fiscal fourth quarter. The market tends to overreact to negative announcements, and uncertainty usually creates opportunity for investors. On the other hand, the company has made a series of expensive mistakes lately, and competitors like Gap and Under Armour are stepping up their efforts to gain market share in the lucrative yoga apparel market.

Take a deep breath
Lululemon cut its sales guidance for its fiscal fourth quarter ending Feb. 2 to between $513 million and $518 million, versus a prior range of $535 million to $540 million. Earnings per share guidance was also reduced to between $0.71 and $0.73, compared to a previous guidance of between $0.78 and $0.80 per share.

According to CFO John Currie, sales and traffic figures during January are coming in lower than the company anticipated:

We were on track to deliver on our sales and earnings guidance through the month of December; however, since the beginning of January, we have seen traffic and sales trends decelerate meaningfully. Based on this recent performance and assuming these trends continue through the remainder of January, we are reducing our outlook for the fourth quarter...

Upside down
Lululemon has made a series of expensive mistakes in the last year. In March, the company had to recall 17% of the yoga pants it had in stock because of excessive sheerness. This did not provide a definitive solution to the problem, though; customer complaints regarding product quality and poor customer service are still an issue for the company.

Adding insult to injury, founder and -- now ex -- chairman Chip Wilson made some very unfortunate comments insinuating that women's bodies may be to blame for the problems with the company's products. "Frankly, some women's bodies just actually don't work," Wilson said on Nov. 5 in an interview with Bloomberg TV.

Understandably, this has produced further disappointment and even infuriation among Lululemon's customers. Wilson has apologized and resigned the chairman position after the scandal, but it certainly has not helped Lululemon or its image among customers.

For a company like Lululemon, which sells high-priced products at a steep premium to competing alternatives, these kinds of mistakes can have serious consequences in terms of reputation and brand value. Especially if they become a recurring issue for the company, customers could easily turn to other brands.

An uncomfortable position
Competition in the yoga business has been increasing lately, and players like Gap and Under Armour, among others, are more than happy to capitalize on Lululemon's mistakes to gain market share in the segment.

Gap's Athleta yoga brand is becoming a direct challenge for Lululemon. Gap is opening new Athleta stores near existing Lululemon locations, benefiting from its traffic and undercutting Lululemon products in price by a considerable difference. Gap is also imitating Lululemon's marketing strategy by hooking up with yoga instructors and sponsoring all kinds of classes and similar activities to increase brand awareness.

Athleta offers a wider variety of sizes than Lululemon, providing an alternative for customers who prefer a more inclusive brand -- and capitalizing on Wilson's unfortunate comments.

Under Armour is also stepping up its efforts in women's apparel; CEO Kevin Plank believes women's apparel will generate around $1 billion in revenue for the company in 2016, and yoga could be a considerable opportunity for Under Armour in the coming years. Under Armour is clearly going after Lululemon with its marketing campaigns; the company recently launched a big campaign for its studio yoga line using the tagline "We've Got You Covered," in clear reference to Lululemon's sheerness problem.

Considering its innovative drive and reputation for quality when it comes to fabrics and designs, competition from Under Armour represents a material risk for Lululemon in the middle term.

Lululemon has been one of the most successful brands in the sports apparel business over the last several years, but success attracts competition, and the company is now facing serious pressure while at the same time it struggles to leave its quality problems in the past and repair its image.

Bottom line
Every business has its ups and downs, and exaggerated price fluctuations can be a source of opportunity for long-term investors. However, it's hard to tell at this stage if Lululemon's problems are simply transitory, or if competition is making a permanent dent and affecting the company´s pricing power and growth prospects for years to come. Lululemon's visibility problems go well beyond its pants. 

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

What: Shares of ClickSoftware Technologies Ltd. rose more than 21% Monday after the company increased fourth-quarter revenue expectations.

So what: Quarterly revenue is now expected to be approximately $30.5 million, handily exceeding the company's own guidance for sales of $26 million to $28 million. Better yet, based on preliminary operating cost results, ClickSoftware says it expects to achieve profitability in Q4 as well. By contrast, analysts were expecting ClickSoftware to turn in a $0.04-per-share loss on sales of $26.02 million.

Now what: ClickSoftware Founder and CEO Dr. Moshe BenBassat said, "We saw a remarkable improvement in our business during the fourth quarter, leading to strong results that exceeded expectations."

To be sure, BenBassat also pointed out that the company added 19 customers in the quarter, 50% of which will use ClickSoftware's promising cloud-based offerings. As a result, and noting this should go a long way toward boosting ClickSoftware's important recurring revenue stream going forward, I think investors would be wise to at least add it to their watch lists. If ClickSoftware can indeed achieve sustained profitability over the long-term, the stock could still reward patient investors handsomely.

In the rare event that you have been enjoying a lengthy cruise on the Mediterranean and haven't heard about the recent and unfortunate Target news, the company has been the victim of a security breach that affected 40 million customers. However, the word "victim" is used loosely.

A retailer has a responsibility to protect the financial information of its customers. Despite the excuses its given, Target has failed. This has led to an enormous number of angry customers and negative press, and the situation has only gotten worse. They say that when it rains it pours, but this is a monsoon. Rather than Target seamlessly dealing with its security breach situation, it has fumbled the ball more than once. In addition to the loss of 40 million credit card numbers, Target has also admitted that 40,000 gift cards were incorrectly scanned by cashiers, resulting in these cards not being activated. 

Empty gifts
Some people love gift cards; others hate them. But they are certainly popular. And receiving one gives you the freedom to shop for whatever you want.  All is well until you receive a phone call, text, or email from your aunt, where she states that her Target gift card doesn't work. This makes it look like you attempted to pull a fast one on a relative -- not good. Your heart immediately sinks to your gut, a lump forms in your throat, and beads of sweat appear on your forehead. You attempt to comfort your aunt by telling her that you will get to the bottom of it. Meanwhile, in the back of your mind, you feel rage toward Target for embarrassing you. The only way to get revenge is to switch to a competitor, such as Wal-Mart or Amazon .

While this is a hypothetical scenario, it likely has plenty of merit. If 40 million people were victimized financially because they shopped at Target, and up to 40,000 gift cards weren't activated, then it's highly likely that at least a small portion of these shoppers are going to switch brands. Their decision will depend on whether they prefer to shop live or online. 

As far as finding the solution for ole' aunty, all you have to do is visit a Target customer service desk or call the number on the back of the card for assistance. Easy solution, right? Not exactly.

High call volumes
Due to recent developments, Target is unable to handle extremely high call volumes. That might sound like a justifiable excuse, but given Amazon's deep commitment to its customers above all else (including sacrificing consistent profits), this would likely never happen at Amazon. It's also highly unlikely to happen at Wal-Mart, because Wal-Mart knows that it can ill afford such a misstep if it wants to keep Amazon from stealing more market share. Target was in the same boat, and recent Target misfortunes are likely to favor Wal-Mart.

So you wait on the phone for a Target customer representative, but to no avail. The wait is likely lengthy, but be thankful that you're not Katie Johnson from Arizona, who waited 5 hours and 45 minutes before giving up. She bought her boyfriend an iPod Nano, but it was stolen from the porch. She attempted to visit a Target store's customer service desk, but a representative told her to call the same number. She then emailed and tweeted the company, but only received automated responses. The message being sent from Target: "You're just a number to us." It took media attention for Target to contact Johnson directly. After these events, Johnson no longer wants to shop at Target even though she used to love the store.

Considering all these negative events, Target is now flirting with incompetence. 

Market share shift
No guarantees can be made, but investing is more logical than most people realize. If millions of Target customers are disappointed, then some of them are going to switch to Wal-Mart or Amazon. This will lead to market-share gains for Wal-Mart and Amazon. One company's loss is another's gain. Over the past year, Wal-Mart has delivered top-line growth of 1.22%, slightly higher than Target at 0.69%. Wal-Mart had already established a lead over Target in the brick-and-mortar retail world, and recent events are likely to expand this lead. However, please do your own due diligence prior to investing. 

Follow @TMFZahrim

Charter Communications has offered to buy Time Warner Cable in a blockbuster deal that would combine the second and fourth largest American cable operators.

The offer consists of about $83 in cash plus $47 of Charter stock per Time Warner Cable share. Accounting for Time Warner Cable's $25 billion of net debt, the enterprise value of this arrangement works out to roughly $61 billion. Charter is the smaller company in this proposed merger, with market cap and enterprise value less than half of Time Warner Cable's.

Time Warner Cable's stock didn't move much on the news, having traded above $130 since November. Charter says the high stock price rests on leaks and rumors about Charter's interest, and that the expected buyout premium has already been priced into Time Warner Cable's stock.

In a letter addressed to Time Warner Cable CEO Robert Marcus, Charter CEO Tom Rutledge noted that the companies have talked about a combination since June without reaching any agreement. Rutledge wants to return to the negotiating table and hammer out an agreement and is "preserving all options going forward."

However, he is also prepared to take this deal structure directly to Time Warner Cable's shareholders as a hostile takeover bid, with or without having Time Warner Cable's management agree to terms.

Charter said it has secured financing for the entire proposal and wants to "finalize a deal on an extremely expedited basis," because "time is of the essence."

Follow @SelenaMaranjian

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some international telecom stocks to your portfolio but don't have the time or expertise to hand-pick a few, the SPDR S&P International Telecommunications Sector ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual-fund cousins. This ETF, focused on international telecom stocks, sports a relatively low expense ratio -- an annual fee -- of 0.5%. It recently yielded about 2.8% and is fairly small, so if you're thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This international telecom stocks ETF topped the world market's performance over the past three years but lagged it over the past five. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why international telecom stocks?
Investors should seek international diversification, lest a major U.S. downswing devastate your portfolio. International telecom stocks are appealing because the telecommunications industry is dynamic and growing, and many of its denizens offer tasty dividends, too.

More than a handful of international telecom stocks had solid performances over the past year. Vodafone surged 53%, for example, yielding 2.8%. The U.K.-based telecom titan offers a handy way to profit from Europe's rebounding economy, and it's making further investments in Europe as well. Vodafone is setting its sights further, too, recently winning approval to buy all of its Indian subsidiary (it currently owns 64% of it) and positioning itself to benefit more from India's growth. Bears don't like Vodafone's shrinking free cash flow, but bulls like its hefty dividend. There's speculation that AT&T might buy Vodafone. Vodafone's first half of fiscal 2014 offered revenue and operating income slightly above expectations.

Nippon Telegraph and Telephone jumped 28%, yielding about 3%. The company has a 50% market share in Japan's wireline telecommunications. It's not a cash cow on its own, but its NTT DoCoMo subsidiary is a noteworthy contributor to its performance, with a dominant position in Japan's wireless arena. In a November conference call, management noted two key business strategies of Nippon Telegraph and Telephone: expansion of global cloud service and a strengthening of network service competitiveness.

Telefonica SA , which is also known as Telef, gained 18%, and its recently reinstated dividend yields about 5.7%. The Spanish telecom concern serves Europe, which is recovering from economic troubles, and Latin America, which offers a brisker growth rate than Europe. Telefonica is saddled with a lot of debt, though, in part from its investments in Latin America, which will take time to deliver results. Telefonica has shuttered some of its offerings, such as its U.S.-based voice-over-IP service Jajah and its free messaging service, Tu Me. It also sold its Czech-based subsidiary for $3.3 billion. Some see  Telefonica as a possible acquisition target or merger candidate.

Orange advanced 17% and yields 4.3%. Formerly known as France Telecom, it has been shedding some non-core assets and focusing on some faster-growing ones. (Its operations in Africa and the Middle East, for example, are promising.) Orange has a lot of debt, but is working on paying that down. Analysts at Zacks Equity Research recently upgraded the stock to outperform, liking its 4G expansion and improved market position. Some balk at Orange's steep P/E ratio and growing competition in France, but bulls like the international telecom stock's solid cash flow and emerging market potential -- not to mention its dividend.

The big picture
If you're interested in adding some international telecom stocks to your portfolio, consider doing so via an ETF. A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in it and profiting from it that much easier.

It wasn't long ago that Air Canada had a real threat of insolvency on its hands. A pension deficit of more than $4 billion occurring in a time of record low interest rates had many investors fearing the Canadian flag carrier's second restructuring this millennium.

But fast-forward to today, and Air Canada's pension and share price are in a much improved situation. How did the airline do it, what does it mean for investors, and what could happen over the next several years?

A pension deficit in the billions, with a "B"
With a questionable economy and a pension deficit in the billions of dollars, Air Canada looked ripe to be burned by this liability. The years before had been a two-pronged attack on the airline's solvency. The slowing economy drove down air travel demand, while central banks were slashing interest rates.

Many economic models for dealing with recessions focus on cutting interest rates to boost growth. However, large companies with larger pension deficits see the size of their pension deficits dramatically increase under this scenario.

With pension issues threatening insolvency at Air Canada, the airline turned to the federal government for an exemption from the funding deadline for the pension plan. Rival carrier WestJet Airlines noted its opposition to having the government give Air Canada an exemption from immediate full funding of the pension plan. A WestJet spokesperson expressed the carrier's view:

But at a general level, we are concerned about the impact on the state of competition caused by Air Canada repeatedly asking the federal government for special assistance, especially at a time when they are expanding their fleet, buying new aircraft, and have billions of dollars on the balance sheet.

Nevertheless, the federal government granted an exemption for Air Canada (after the airline's unions got on board as well) on the grounds that the collapse of Canada's largest airline would negatively affect the Canadian economy.

Pension turnaround
Last year was a great one for pension funds, as both the stock market and bond yields rose. The Globe and Mail reports that Air Canada's pension deficit, once topping $4 billion, fell to $2.8 billion by May 31 and is expected to fall another $1.1 billion after additional changes receive regulatory approval. The Globe also notes that 2013 helped other companies with pension deficits as well, including plane and train maker Bombardier , which saw an improvement of more than $660 million in its pension deficit.

Last year was also a turnaround year for Air Canada itself. Strong profits and positive views on cost cuts made Air Canada a multibagger investment, beating out almost every other major airline except for AMR, the bankrupt parent of American Airlines that traded over the counter. This improved outlook on the earnings side gives better hope to Air Canada's ability to pay down its pension deficit over time.

Going forward
Air Canada hasn't released all the up-to-date information on the state of its pension funding but is expected to provide more detail in its full-year results (expected Feb. 12, according to Air Canada's website). Trends for large pensions have been favorable in 2013, so I would expect these results to show significant improvement in the pension situation. While there are no guarantees, positive news on the pension front could provide another positive to Air Canada's results.

Farther into the future, Air Canada may be able to exit the pension relief program if favorable trends let the airline fully fund the pension plan. By doing this, the airline would be allowed to pay dividends and buy back shares once again. Although this does seem attractive at first, even if Air Canada eliminates the deficit, billions of dollars have already been committed to fleet modernization, which will likely use up most of the airline's spare cash.

Ready for flight
I have held my current shares of Air Canada since the summer of 2013, with occasional buys and sells in 2012. It has since proved to be one of my best investments, thanks in no small part to the airline's having gotten its pension problems under control.

Air Canada shares have risen sharply and may take some time to consolidate. However, I still see long-term upside at this airline from an improving economy, a reduction in pension issues, and international expansion.

Shares of Select Comfort  dropped by 19% because of its cloudy fourth-quarter earnings outlook. With this decline, Select Comfort now trades 40% off of its 52-week high. Should investors stay away from Select Comfort because of its sluggish outlook, or does the recent drop make Select Comfort a better investment opportunity than Tempur Sealy International and ?

Product innovations could lead Select Comfort's growth
In the third quarter, Select Comfort did not deliver a satisfactory financial performance. Although net sales increased by 7% to $264 million, same-store sales were down 1% and earnings per share dropped by 22%. Thus, Select Comfort's sales growth came mainly from new store additions. Select Comfort expects to have around 435 to 445 stores by the end of 2013. Recently, Select Comfort announced that it expects around $231 million in revenue, 5% more than it delivered in the same period last year, with flat comparable sales growth at company-controlled stores. Its fourth-quarter EPS might come in at the mid-point of the $0.18-$0.26 guidance range. 

Looking forward, Select Comfort's potential growth lies in the area of product innovations. In the middle of October, it introduced the new Performance Series with advanced DualAir technology, which will become the core platform of the company's entire product line. Consumers can also enjoy contouring support and soft cushioning comfort for pressure relief with the PlushFit foam. The company will start to introduce new and transformational products in the first quarter of the next fiscal year, leveraging its R&D investment and the acquisition of Comfortaire. 

Tempur Sealy and Mattress Firm have better operating performances
Both Tempur Sealy and Mattress Firm have managed to improve their operating results. In the third quarter, Mattress Firm's revenue grew by 17%, whereas its bottom line rose 44.8% to $18.1 million. If the cost of its ongoing ERP implementation project was excluded, Mattress Firm's adjusted EPS would reach $0.55 per share, 18.1% growth from last year's adjusted EPS. 

Tempur Sealy also delivered solid earnings results in its most recent quarter. It reported EPS of $0.73, far above analysts' estimates of $0.68. Tempur Sealy also enjoyed 111.4% sales growth and 2,110% net income growth. This significant growth in Tempur Sealy's operating results was mainly due to the acquisition of the Sealy business in 2013. 

What makes investors feel safe about Select Comfort is its strong balance sheet. As of September 2013, it had $226 million in stockholders' equity, $139 million in cash, and no debt. In contrast, Tempur Sealy has quite a weak balance sheet, with a lot of leverage. While Tempur Sealy had only $83 million in equity, it had $1.82 billion in long-term debt. Tempur Sealy's EBITDA (earnings before interest, taxes, depreciation and amortization) is only $278 million, so it has a net debt/EBITDA ratio of 6.23. Indeed, Tempur increased its debt level significantly to finance the purchase of Sealy and assume Sealy's existing debt. Mattress Firm also employs some leverage in its operations. With a trailing-twelve-month EBITDA of $126 million, its leverage ratio is much more reasonable at 1.67. 

What is the best buy now?
In terms of valuation, investors might get excited the most about Select Comfort as it has the lowest EBITDA multiple of the three at 8.12. Mattress Firm has a valuation a bit higher at 12.17 while Tempur Sealy has the highest EBITDA multiple of the three at 15.76. With a debt-free, strong balance sheet, Select Comfort has little downside risk for investors. Despite its sluggish outlook, I personally think Select Comfort is the best pick among the three as it has the most conservative capital structure and the lowest valuation. 

It's a done deal - Fiat and Chrysler rang in the new year by joining forces as Fiat bought out the 41.5% interest in the American automaker owned by the United Auto Workers' union health care trust. Shares of Fiat rose 16% as the market approved of the purchase price of $4.35 billion, which met market expectations of a price under $5 billion.

The combined automaker is expected to bring numerous benefits and provide competitive advantages to both companies. Sergio Marchionne, CEO of Fiat, will be integrating several of Fiat and Chrysler's operating areas including production, sales, and engineering. While these changes will take time to be put in place, it will position Fiat-Chrysler into a global player that will be better able to compete with the likes of Volkswagen and General Motors.

Meanwhile, others in the market are concerned about the impact that the deal will have on the company's liquidity. As a result, Moody's Investor Services announced that it would review Fiat's credit for a possible downgrade.

Merger can help Chrysler deliver more fuel-efficient cars
The combined company is expected to gain from its dual presence in the U.S. and Italy. Fiat has struggled to sell its models in the U.S., while Chrysler has had similar problems in Europe. Since its bankruptcy, Chrysler's profits have come mostly from its line of Jeep SUVs and Ram pickup trucks. Fiat has yet to deliver on its promise to help the American automaker build more fuel-efficient cars.

According to The Wall Street Journal, the government recently ranked the average fuel efficiency of 11 car companies, and Fiat-Chrysler came in last place. Chrysler could face challenges in meeting federal fuel efficiency mandates and needs additional R&D investments in this area.

Fiat has fallen on hard times since its heyday in the 1990s when it was Europe's second-largest car brand. The company is currently in seventh place with a 6.2% share of the European car market, well behind front-runner Volkswagen. 

Volkswagen has about a 25% share of the European car market. The company's latest 2013 results showed a delivery of over 400,000 models for the second consecutive year. However, year-to-date total units sold dropped 6.9%. For 2014, the company will be introducing new vehicles in the Golf family and expects consumer interest to continue in its other core models. The company's luxury lines - Audi, Porsche, and Bentley - posted record unit sales for 2013. 

Debt refinancing may be necessary to pool cash resources
Fiat's plans to lift the company out of its funk include expanding its profitable luxury brand, Maserati, with a goal to increase sales to 50,000 models from the 6,000 cars sold in 2012. Fiat also has plans to relaunch its Alfa Romeo brand in the U.S., where it sees potential for greater sales volume.

Both companies are looking to streamline the number of platforms its car models are based on. A key aspect for the company will be to build models that don't require major revisions to sell well in different markets.

The Journal reports that sources close to the matter believe that Chrysler may need to refinance about $6.1 billion in debt to eliminate restrictions that prevent the two companies from combining their cash accounts. A credit downgrade for Fiat by Moody's Investor Services could adversely affect Chrysler's efforts to obtain financing. 

Credit rating pending review
Moody's announcement places Fiat's corporate family rating and probability of default rating under review for possible downgrade. Three of Fiat's subsidiaries have also been placed on review for downgrade of their issued debt. Currently the debt items under review carry a "speculative grade" rating and are considered high risk.

Moody's decision to review Fiat's credit is a result of the $1.73 billion (1.27 billion euros) cash payout the company will issue when the transaction closes on Jan. 20. After the payment, Fiat's cash balance is expected to approximate $9.65 billion (7.1 billion euros), an amount Moody's believes will materially affect the company's liquidity. Despite the impact of the cash transaction, Moody's expects Fiat to have sufficient cash to meet its obligations for 2014. 

My Foolish conclusion
If Fiat's future liquidity is questionable, Chrysler-Fiat's plans to combine both businesses and implement new growth strategies may stall. A credit downgrade could also lead to a drop in the price of Fiat's shares. It will be interesting to see how the company jumps through this new hurdle and moves forward.

Despite beating the market over the past two years, shares of Goldman Sachs are still trading at historically low valuation multiples as the bank's operating performance has failed to regain its pre-crisis form. With current returns on equity in the low-teens, should investors be demanding more from Goldman Sachs?

In this segment of The Motley Fool's financials-focused show, Where the Money Is, banking analysts Matt Koppenheffer and David Hanson discuss Goldman's valuation versus somes peers and how the company can still be a long-term winner.

Problem: Your commute is long and boring. Solution: Subscribe to our daily podcast Where the Money Is! https://t.co/jAnlvNyUDV

— MotleyFoolFinancials (@TMFFinancials) December 9, 2013

Think the Container Store Group will never become a household name? Think again. The Container Store still has the opportunity to gain greater consumer loyalty, raise traffic through its stores and website, and raise awareness by investing additional resources into three key areas that are sure to generate more sales. Investors interested in the future growth and success of The Container Store should be optimistic. 

Customize your storage
The Container Store has a real advantage over its peers with its Elfa product division. Based in Sweden, Elfa allows consumers to customize their own storage units with drawers, shelves, and compartments that will function in any space within a home or office such as the closets, kitchen, laundry room, or garage.

According to its S-1 filing, The Container Store has been the exclusive distributor of Elfa since 1999, and in fiscal year 2012, Elfa sales represented 13% of the company's total net sales.  Elfa is the crown jewel of The Container Store as no other retailer offers customers the option to personally design their own storage system needs. With the proper tools and strategy in place, The Container Store has the potential to make a huge profit from Elfa products as the public becomes more and more aware of this trendy option.

Increasing marketing efforts
If The Container Store is going to gain a larger consumer base, it needs to market itself more effectively. Because it has the biggest opportunity with Elfa products, The Container Store needs to highlight Elfa's rarity in the industry of organization and storage solutions and note Elfa's customizable features and designs. 

Secondly, The Container Store might want to place an advertisement in the paper that includes a coupon since people love to dig through advertisements to find coupons and the best deals. Almost every week, competitor Bed Bath & Beyond offers a 20% off coupon in the paper to generate store traffic. Despite its generous offer, Bed Bath & Beyond still manages to bring in a much larger profit than The Container Store.

Overall, The Container Store needs to market its products through television commercials, newspaper advertisements with attached coupons, and social media outlets. If it can boost its marketing efforts, The Container Store will attract more customers to its stores and website, and thus strengthen its brand name.

Expanding its geographic footprint
After 35 years in operation, The Container Store has only 63 stores throughout the United States. In 2013, the company opened six new stores, and it plans to open seven stores in 2014. Its executive management team noted in the company's prospectus that they believe the company has the potential to grow to 300 stores, but offered no time frame as to how soon this could happen.  

Its rival Wal-Mart operates in over 26 countries and has over 11,000 stores, while Bed Bath & Beyond has over 1,470 stores under five different brands throughout the United States, Canada, and Mexico. If The Container Store can grow to a small fraction of the size of its competitors, it would be a huge boost for shareholders. Put simply, The Container Store has the opportunity to expand its chain to other locations throughout the United States, and possibly internationally at some point. Its expansion is just getting started.

Foolish takeaway
It is understandable to still remain skeptical about The Container Store's future. However, as one can see The Container Store has not taken full advantage of its Elfa division, marketing resources, and means of expansion. Foolish investors should do additional research into the opportunities that still await The Container Store, as any one of them could be game changers. Once The Container Store acts on these opportunities, investors can get excited, but until then, keep an eye on the company's stock and any improvements the company makes to its business.

iOS in the Car. Source: Apple

The 2014 Consumer Electronics Show has now come and gone. While Apple has no official presence, the Mac maker will inevitably be affected by some of the trends emerging from the largest tech trade show. In particular, there's one key reason why I'm scared for Apple after CES.

Driving change
To kick off the festivities last week, Google announced the formation of the Open Automotive Alliance, which consists of Google, chipmaker NVIDIA, and a handful of automakers. Audi, General Motors, Honda, and Hyundai are onboard thus far and committed to bringing Android to cars this year. At first this will come in the form of integration, but eventually the car itself will run Android.

How will Android work inside of the automobile?
We're working with our partners to enable better integration between cars and Android devices in order to create a safer, car optimized experience. We're also developing new Android platform features that will enable the car itself to become a connected Android device. Stay tuned for more details coming soon.

Source: Open Automotive Alliance

The Open Automotive Alliance was not an official CES announcement, but it did coincide with the show and all of the members attended in some capacity. We stopped by the GM booth, but GM reps declined to elaborate beyond the press release. What we did see, however, was the beginning of a new phase of technological innovation in cars.

For instance, a couple Fools and I attended a keynote with AT&T's Executive Vice President of Network Operations John Donovan. When asked what excites him the most about where technology is headed, Donovan pointed to the connected car.

Cars are everywhere, and we're now only seeing the tip of the iceberg in terms of where the innovation will go, according to Donovan. A wide range of players is all jumping in and everyone is innovating at breathtaking pace. Donovan predicts that in three years, the car will "blow us away" and the entire experience will be changed. Indeed, we saw cars with 4G LTE connectivity running on AT&T's network while on the floor, while there were plenty of self-driving cars on display.

Much like in smartphones, Apple risks seeing Android hegemony take hold of the upcoming onslaught of connected cars.

How it's different this time
In contrast, when Google first announced the Open Handset Alliance in 2007 to launch Android, it was essentially a nonstarter. Apple had just launched the original iPhone to much fanfare, and no one knew what Android was. It wouldn't be until 2010 that Android would finally get its act together as a platform and subsequently proceed to take the mobile world by storm.

Now that Android has become a household name, the launch of the Open Automotive Alliance should absolutely turn some heads. Unlike in smartphones in 2007, the odds are stacked very clearly in Google's favor.

To be clear, Apple has already begun to partner with automakers to hitch a ride, starting as early as 2012 with the announcement of Siri Eyes Free in iOS 6. Apple took it to the next level in iOS 7 with iOS in the Car, which will integrate iOS devices with in-dash systems.

Apple has definitely made serious inroads with integration. Upward of 95% of cars sold today integrate iOS devices for music playback and controls. But the current state of platform competition is about to expand to the car and everything is about to change.

How it's the same this time
Now, the familiar strategic differences between Apple and Google come back to the forefront. 

Apple's strategy is to integrate iOS devices with cars. Google's strategy is to power the car itself with Android. Short of making an entire car (which Steve Jobs once dreamed of), iOS will never completely run an in-dash system. To get the benefits and features of iOS in the Car, your ride will need to be tethered to your iOS gadget.

We've seen several examples of connected devices that rely on being tethered for full functionality -- and they fall flat. Think of BlackBerry's original PlayBook. Think of Samsung's Galaxy Gear.

What if you forget your iPhone at home? What if a friend or family member wants to borrow your car? In these cases (among others), integrating with another device is less than ideal. Furthermore, what happens if your car runs Android but your phone runs iOS? On the automotive front, how does Apple compete in a world full of Android cars? Will Android enjoy a first-mover advantage in third-party automotive apps?

This is Android's biggest advantage in capturing the connected car. Google will go where Apple won't in order to power the connected cars of the future. Assuming Apple won't compromise its core philosophy of vertical integration, it will face an uphill battle for automotive relevance.

The battle for the connected car is only just beginning, and a lot remains to be seen. Consumers, automakers, and developers will have a say. I don't necessarily believe that Apple will lose the upcoming skirmish -- I just can't figure out how it can win.

Maybe Apple needs to change gears every once in a while.

That's not all from CES 2014
Thanks to an uncanny ability to identify key trends in technology, David Gardner has established a market-thumping track record. Investors have seen a slew of storylines coming out of CES 2014, but the real challenge is recognizing where the opportunities truly lie. Click here to get David's latest thinking on where you should be invested to profit on the future of technology.

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A Nest thermostat in action. Image source: Nest.

Google just announced a $3.2 billion cash agreement to buy privately held Nest Labs. Nest is best known as designer of the Nest Learning Thermostat and generally aims to "reinvent unloved but important devices in the home" such as thermostats and smoke alarms.

In a corporate blog post, Nest CEO and co-founder Anthony Fadell noted that Nest has been working closely with Google almost since the company was started in 2010. Google's investment arm has participated in several rounds of Net's venture investor funding, including the $150 million round that valued Nest at $2 billion two weeks ago.

Nest is growing quickly on its own, Fadell said, but putting Google's resources behind the company will accelerate the growth curve. "Google is committed to helping Nest make a difference, and together, we can help save more energy and keep people safe in their homes," he said.

Google plans to operate Nest as a separate company, keeping the Nest brand intact. Nest co-founder and engineering chief Matt Rogers said that the company's products will continue to support both Android and iOS apps, and that users should see almost no change to their Nest experience under Google's control.

After going through the usual regulatory approvals and other closing conditions, the deal is expected to close "in the next few months."

Quattro. Source: Adept Technology

Investors in once-little-known small-cap Adept Technology   had a riveting 2013, with shares up more than 400%. Those kinds of monster gains are nothing to laugh at, and leave investors with several questions: What caused this incredible rally, and is the party over yet?

Before buying or selling any stock, it can be very helpful to analyze why the stock has moved in order to evaluate what the stock market's expectations are for that particular company. When an investor has a good idea of what the market expects out of a company, then she can better evaluate if an investment is warranted. For Adept Technology's share price, the 400% change can be evaluated by looking at revenue and the price-to-sales ratio.

*ADEP Revenue (TTM) data by YCharts.

According to this graph, Adept's revenue, the orange line, is unchanged over the last five years. The blue line represents Adept's P/S multiple changing over time and shows that in the last year it has increased by more than 400%. 

Which brings us to the two factors that can cause a price to increase. A stock price is equal to how the company is doing (sales) multiplied by how the market feels about the company's future prospects, which is expressed by the P/S multiple.

If a company can increase sales or if the market raises its expectations, it causes the stock price to go up.The higher the multiple, the more optimistic the market is about a company's future. So just why has the stock market raised it expectations for Adept over the past year?

The market's changing expectations
The incredible rally in shares of Adept largely began when the company's new management team started to show signs of increased profitability. This perceived turnaround sent shares higher, and when Google started acquiring numerous robotics firms, shares went supernova and exploded in hopes of an acquisition of Adept. 

In the video below, Motley Fool analyst Blake Bos describes what caused Adept's incredible rally, delves into whether the company's turnaround efforts warrant the huge spike in share price, and points out what to watch for in the future.