After a disappointing 2012 that was defined for Dendreon and its investors by several missed benchmarks, 2013 saw the stock reach the remarkable achievement of having 35.4% of its float sold short. Now as 2014 begins to kick into full gear, many investors are wondering if public sentiment will ever turn around for this much-maligned stock.

In this video, Fool health care analysts David Williamson and Max Macaluso sit down and take a look at the future of Dendreon. David notes that much of the overoptimism and subsequent fall of public opinion around the stock had to do with the reality that the launch of its prostate cancer vaccine Provenge was ultimately flawed. Management credits competition from Johnson & Johnson's Zytiga as being stronger than anticipated and damaging sales; David also mentions that Medivation's Xtandi is a strong second-line treatment that should soon be a competitor in the first-line treatment space as well.

While the company does have a couple other strategies to employ here, it's running out of time. David looks at the company's balance sheet and highlights the fact that at the company's current spending rate, it won't even make it through 2014 without some sort of capital raise, which will be dilutive for shareholders. David closes by discussing what would have to happen for the heavy short position on this stock to change.

Recently, two pharmaceutical giants received FDA approval for a new treatment for type 2 diabetes. Farxiga (dapagliflozin) is a "sodium-glucose co-transporter 2 inhibitor", or SGLT2 inhibitor for short, in tablet form which helps to block glucose reabsorption and increases glucose excretion. The approval requires drug makers Bristol-Myers Squibb and AstraZeneca to conduct post-marketing studies that look at the risks for cardiovascular (CV) disease, bladder cancer, bladder tumor promotion, and liver abnormalities. The studies also need to look at the impact the drug will have on pregnant women and pediatric patients.

Farxiga was rejected back in 2012, when the FDA ruled insufficient data was presented about the drug's risks and benefits. In March 2013, a similar drug - Invokana (canagliflozin) - received FDA approval that also required the completion of several post-market studies. The approval made Invokana, which is manufactured by Janssen Pharmaceuticals, a Johnson & Johnson company, a first-in-class treatment. As a first in class drug, Invokana was able to benefit from a period free from competition from similar drugs.

Farxiga found to be effective but long-term safety still under review
In April 2013, Bristol-Myers initiated a new randomized, placebo-controlled study, called DECLARE, with more that 17,000 adult patients suffering from type 2 diabetes. The study tested the efficacy of adding Farxiga to a patient's current anti-diabetes treatment and the risk of CV events or death. The study, which will provide additional data on the drug's long-term safety, should be completed by 2019 .

By December, an FDA advisory panel voted 13-1 in favor of Farxiga; panel members also voted 10-4 on the drug having an acceptable cardiovascular risk. According to MedPage Today, the drug's safety and efficacy was established after improvements in the average level of blood sugar were noted in over 9,400 patients. The drug has a few contraindications applicable to patients with renal disease and renal impairment and warnings for bladder cancer, low blood pressure, and others .

Bristol-Myers moving toward a simpler, specialty-based business
The approval of the drug comes on the heels of a December 2013 agreement between AstraZeneca and Bristol-Myers Squibb to consolidate their diabetes drug business. AstraZeneca is expected to acquire all of Bristol-Myers Squibb's interests in their joint diabetes portfolio for an upfront payment of $2.7 billion.

The agreement calls for additional milestone-based payments of up to $1.4 billion and royalty payments on net sales through 2025. There could also be a payment of $225 million based on the transfer of certain assets to AstraZeneca. The deal should be finalized during the first quarter of 2014. 

Third quarter results showed that Bristol-Myers' strongest segments were virology and oncology. Both segments combined made $1.88 billion, almost half of the third quarter's net sales of $4.06 billion. In contrast, the metabolics segment, which includes the diabetes portfolio, made $411 million.     The sale of the diabetes business by Bristol-Myers is part of the company's move toward more profitable specialties, while AstraZeneca continues its commitment to diabetes and metabolic disease, identified as one of several "growth platforms".

AstraZeneca shows greater focus on diabetes segment

For AstraZeneca, its diabetes business grew 60% in the third quarter of fiscal 2013 and contributed to overall growth of 8%. The diabetes franchise made $206 million, with almost half of sales provided by Onglyza, a diabetes treatment developed with Bristol Myers. Bristol-Myers also reported strong sales of Onglyza/Kombiglyze, which were up 19%. Forxiga, the European market name of Farxiga, has had good physician acceptance, however, obtaining reimbursements has been difficult. The drug had $3 million in sales during the quarter .

Competitor's drug Invokana reports strong sales

Meanwhile, Johnson & Johnson reported strong third quarter sales of Invokana and, in September 2013, approval was received to sell the drug in Europe. The company's pharmaceutical segment reported $7 billion in sales during the quarter, up 9.9% from $6.4 billion reported in the same period of 2012. Pharmaceuticals made up 40% of total third quarter sales of $17.6 billion. Sales of Invokana more than doubled during the quarter, however, specific sales figures were not provided .

My Foolish conclusion

This latest diabetes drug approval can provide AstraZeneca and Bristol-Myers Squibb with profits in the growing diabetes drug segment. The success of the drug could be limited if the post-market studies that must be conducted yield unfavorable results. Overall, the diabetes segment should continue to show strength over the long-term.

Like many Americans who shopped at Target during the holiday season, I recently received a replacement credit card from my bank as part of an effort to prevent fraud from potentially compromised credit card numbers.

For those of you like me, you may have also noticed that your new card includes a gold or silver security chip prominently displayed on the front of the card. While this may appear new to most of us in the US, these chips are actually an additional security feature that has been common place internationally for well over a decade.

Technically, this chip is part of the EMV standard, named for the three companies, Europay, MasterCard, and Visa who developed the standard. It contains the same personal information found in the strip of a standard credit card, but because it uses modern technology - versus the comparatively ancient magnetic tape technology that has been around since the mid-1900s—the data is encrypted and much harder for ne'er-do-wells to access or duplicate. In many cases the chips also provide an additional layer of security by requiring users to enter a PIN each time they pay with the credit card, in the same manner Americans are familiar with from ATM withdrawals and debit card payments.

If this technology can be used to prevent fraud, why hasn't it been widely adapted in the US? Mainly because to date, merchants and banks have believed that the risk associated with the legacy system was not large enough to justify the costs necessary to upgrade existing infrastructure to accept what are known colloquially as "smart" or "chip and PIN" cards. Historically, losses due to credit card fraud have been manageable — only 5 cents per $100 — but increasingly this doesn't reflect the full story. 

Large scale data breaches are intensifying the need for better security
Hacking incidents like those at Target and Neiman Marcus are occurring on such a large scale that they change the playing field. Besides the direct impact of huge numbers of stolen credit cards flooding the black market (in Target's case, upwards of 70 million accounts were compromised), the resulting negative press and brand damage could result in reduced sales that are orders of magnitude larger than the losses from traditional fraud. In Target's case, they have already said that as a result of the breach, they expect same store sales could be negatively affected by 2%-6% -- which in real money terms could be upwards of a billion dollars forgone. 

Even before this most recent batch of incidents, MasterCard and Visa recently mandated an adoption timeline for EMV that would require retailers and banks to upgrade by October 2015  or else face increased liability exposure for using older, less secure systems. Taken together with the wake-up call offered by the relentless press coverage of the Target incident, it appears that the impetus to finally push the US companies to adopt modern payment security systems may have arrived.

Verifone and NCR could be Foolish possibilities for your portfolio
How can you position you portfolio to benefit from this coming trend? Look toward companies like VeriFone and NCR . They provide the point-of-sale (POS) and ATM systems used at the vast majority of retailers and banks that currently accept plastic. For the time being, most "smart" cards that include the "new" EMV chip still also include a magnetic strip that works with existing equipment. However, for the new standard to be truly effective the strip will need to be eliminated and this means that point of sale (POS) terminals used to read the cards must be upgraded to new ones. New POS systems can offer other benefits as well, like being able to accept contactless payment via NFC devices such as many modern mobile phones.

VeriFone in particular may be a good way to play this trend over the next 12-18 months. The stock has showed signs of a technical breakout over the last few weeks after underperforming in 2013. Expectations are still low after several years of issues concerning historical accounting errors and questionable acquisitions. However, with new management in place that is focused on recapturing lost device market share, there could be room to the upside on the stock, as noted by JPMorgan who on Tuesday upgraded the stock from neutral to overweight.

When it comes to RNAi therapeutics company Alnylam , Merck's loss is Sanofi's 's gain.

Merck is selling RNAi company Sirna -- a 2006 $1.1 billion acquisition bought in the midst of a boom surrounding RNAi technology -- to Alnylam for $175 million with only $25 million in cash. Even with $105 million promised in milestones and some royalties, Merck will not likely recoup its losses as it finalizes the moves it made to back away from RNAi in 2011 with the closure of its San Francisco Sirna research facility.

Simultaneously, while Merck is backing away, Sanofi is adding an additional $700 million  to its stake in Alnylam .

Alnylam is no stranger to fluid Big Pharma partnerships, having struck various deals with Takeda Pharmaceuticals, GlaxoSmithKline, Biogen Idec, Medtronic, Roche, Pfizer, Bristol-Myers Squibb and others.

Those partnerships have always been somewhat unstable. In 2005 it partnered with Novartis on 31 drug targets, making Novartis the second-largest shareholder at the time. The partnership ended in 2010, resulting in large layoffs for Alnylam .

 Similarly, in July 2007, Roche made a $1 billion dollar deal with Alnylam for nonexclusive licensing rights. In 2010, Roche, in the midst of major cuts, terminated its efforts in RNAi , spiraling not only Alnylam but the entire field of RNAi drug development into uncertainty.

So why all the flux?
Alnylam is a pioneering company in RNA interference (RNAi), a relatively novel discovery from 1998 that earned its scientists a Nobel Prize in 2006. Since then, pharmaceutical companies have spent billions trying to harness the discovery into therapeutics.

The technology works at the level of RNA to silence genes from producing the small molecules or proteins that conventional drugs target. As such, cancers, respiratory diseases, metabolic disorders and liver diseases that were previously untouchable by drug therapies could potentially be treated.

The discovery of RNAi set off a race to the first therapy with Alnylam and its many various and changing partnerships just one part of the complex web. As the reality of the timeline to drug development struck, companies started backing away from RNAi as a field, with Roche's 2010 retreat signaling a major chill for the field.

Nonetheless, Alynylam has continued its efforts in R&D and demonstrated methods that addressed the difficulty of delivering an extracellular drug intracellularly to where the gene targets are housed. The company presented data indicating tumor shrinkage in liver cancer from RNAi therapies and also have active trials for therapies for cholesterol, amyloidosis , hemophilia and others. Meanwhile, competitors like Arrowhead Research have been making movement on RNAi candidates for hepatitis B as well as doing their own work on nanoparticles that complement RNAi drug delivery.

Sanofi's increased investment in RNAi may signal the thawing of the field and spur others in Big Pharma to follow. Already Roche has partnered with Alnylam's competition Isis Pharmaceuticals and Santaris, and Monsanto had done the same with Tekmira. As a result, the verdict is out on specifics for Alnylam's portfolio and pipeline, but RNAi as a field is likely on its way to a comeback.

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When we talk about companies focused on diabetes care, many investors will probably think of insulin makers like Novo Nordisk, Sanofi , and Eli Lilly.

Medical giant Johnson & Johnson , best known for its pharmaceuticals, consumer health care products, and medical devices, is often overlooked. However, Johnson & Johnson has slowly but steadily expanded into the diabetes market over the past few years.

Let's take a look at three important ways the medical giant is changing diabetes treatments, and how its efforts relate to industry peers AstraZeneca , Bristol-Myers Squibb , Medtronic , DexCom , and Sanofi.

A new class of diabetes drugs
The first treatment that J&J investors should be familiar with is Invokana, a new treatment for patients with type 2 diabetes that was approved in the U.S. in March 2013 and in the EU in November 2013. Invokana belongs to a brand-new class of drugs known as SGLT2 (sodium glucose co-transporter) inhibitors, which help patients excrete excess blood sugar through the urine.

The ultimate hope is that SGLT2 inhibitors could help diabetics achieve better control over their blood sugar levels, which could lead to fewer daily insulin injections. Since this is a potentially game-changing treatment, analysts believe Invokana could eventually generate peak sales of $2.5 billion -- if it overcomes future competitors.

For now, Invokana's only competitor is AstraZeneca and Bristol-Myers' Forxiga/Farxiga, which was approved in Europe in November 2012 and in the U.S. earlier this month. However, the outlook for Forxiga is less rosy than Invokana, with peak sales estimates around $1 billion.

Investors should also note that Forxiga will soon belong solely to AstraZeneca, after it bought out Bristol-Myers' stake in their diabetes joint venture for up to $4.1 billion in December.

An artificial pancreas
In September 2013, Medtronic made history when its wearable artificial pancreas for type 1 diabetes patients was approved by the FDA. The device, known as the MiniMed 530G, connected a continuous blood glucose monitor to an insulin pump -- allowing the pump to shut off for two hours once blood sugar levels fell below preset levels.

Medtronic's device was a huge step forward for type 1 diabetics, but it cannot be considered a fully automatic artificial pancreas, which would ideally deliver insulin continuously according to fluctuating glucose levels.

Medtronic's MiniMed 530G. Source: Company website.

That's where Johnson & Johnson's Animas division and insulin pump maker DexCom come in. Together, the companies are developing a competing first-generation artificial pancreas that would go a step beyond Medtronic's device with a partially automated system.

Although patients using J&J and Dexcom's device will have to manually instruct the pump to deliver insulin at certain times (such as after meals), it will have a system that can keep blood sugar levels between a preset range -- such as 80 mg/DL and 180 mg/DL -- increasing insulin at the higher end of the range, and slowing down or turning off insulin delivery at the lower end.

Once approved, J&J and Dexcom's device could force Medtronic to answer with a fully automated system that doesn't require any manual operation at all -- dramatically improving the lives of type 1 diabetics across the world.

Wireless diabetes management via Bluetooth
J&J subsidiary LifeScan also recently launched a fascinating new wireless blood glucose monitoring solution for Apple iOS devices, known as the OneTouch Verio Sync Meter. The device was originally approved in March 2013.

OneTouch Verio Sync Meter. Source: Company website.

The Verio Sync Meter reads blood test strips, then wirelessly relays them via Bluetooth to LifeScan's OneTouch Reveal mobile app. The app then records the data, turning them into visual charts and logs, and provides high and low glucose pattern alerts accordingly.

The app also records information about food consumption, physical activity, and medications. The data can then be sent over the Internet to health care professionals or other people via text messages or email.

The OneTouch Verio Sync Meter competes against Sanofi's iBGstar, a similar product that plugs directly into the bottom of the phone, rather than communicating through a Bluetooth connection. The iBGstar was approved by the FDA in December 2011.

It remains to be seen if LifeScan's wireless solution will really be any more convenient than Sanofi's plug-and-play version, but LifeScan is apparently aiming to undercut Sanofi's device with a slightly cheaper price -- The OneTouch costs $19.99, while the iBGStar costs $24.99 (without test strips).

However, both devices are sold on the razor to razor blades model -- although the devices themselves are inexpensive, the test strips are not. A package of 100 test strips for the iBGstar costs $69.99 -- an average price of $0.70 per strip.

The Foolish takeaway
Although these three diabetes products only represent a small percentage of Johnson & Johnson's revenue, they are examples of interesting new ways the company can expand its footprint in diabetes care. More importantly, Invokana, an artificial pancreas, and a Bluetooth monitoring system can all substantially improve the lives of diabetic patients.

Looking forward, J&J is still a top investment for conservative health care investors -- the stock has climbed 30% over the past 12 months, despite negative PR regarding tainted batches of infant Motrin and Risperdal, a $2.5 billion hip implant settlement, and another $2.2 billion settlement over off-label marketing.

J&J's core strengths -- strong growth in its pharmaceuticals and consumer health care division, complemented by its robust cash position of $25.2 billion -- more than offset those weaknesses. In addition, its forward annual dividend yield of 2.8% still makes it a top choice among income investors.

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Celgene , the biotech company best known for its blood cancer treatments, has rallied nearly 70% over the past twelve months.

It has constantly fired on all cylinders, with its flagship drug Revlimid posting blockbuster sales and newer drugs like Abraxane and Pomalyst also reporting strong growth.

On January 13, Celgene announced its top and bottom line forecasts for 2014, 2015, and 2017. Although its longer-term projections for 2015 and 2017 were optimistic, its 2014 numbers slightly missed consensus estimates, causing the stock to slide nearly 3%.

Does this mean that Celgene's year-long rally has come to an abrupt end, or does this dip represent a strong buying opportunity for long-term investors?

Let's review Celgene's key fundamentals to better understand how the company compares to industry peers Amgen , Biogen , and Gilead Sciences .

A closer look at Celgene's guidance

Let's first take a look at Celgene's preliminary year-end results and its guidance.

Source: Celgene press release.

Wall Street has noticed some flaws in Celgene's 2014 projections.

Analysts polled by Thomson Reuters had expected Celgene to earn $7.29 per share on revenue of $7.43 billion. That slight miss means that Celgene could post weaker year-over-year top and bottom line growth than it did in 2013.

However, Celgene's long-term growth targets in 2017 are highly encouraging, and would represent 152% and 111% increases in earnings and net product sales, respectively, from 2014.

Investors should remember that Celgene's announcement is a preliminary earnings release. Celgene is expected to report its complete fourth quarter and full year earnings on January 30.

The Foolish fundamentals

We should also check Celgene's fundamental scaffolding to see if the stock is due for a pullback.

Let's compare its key fundamentals against three of its large cap biotech peers -- Amgen, Biogen, and Gilead Sciences.

Source: Yahoo Finance as of Jan. 14.

Celgene doesn't excel in any category, but it is competitively valued with its peers on the basis of its PEG, P/E, and P/S ratios.

However, Celgene's bottom line growth is lagging that of its peers, mainly due to increased expenses last quarter related to the European launch of Imnovid (Pomalyst) for multiple myeloma in Europe and the U.S. launch of Abraxane for pancreatic cancer.

Celgene's rally, while impressive, still can't measure up to Biogen and Gilead's growth over the past year.

Source: Ycharts.

Biogen and Gilead's whopping gains were fueled by plenty of positive headlines.

Biogen's multiple sclerosis drug, Tecfidera, was approved in March 2013 and is expected to hit peak sales of $3.8 billion. Gilead's hepatitis C drug Sovaldi was approved in December 2013, and is forecast to generate peak sales of $7 billion.

Meanwhile, Celgene's biggest headline in 2013 was the approval of Abraxane for pancreatic cancer in September. While that was a major catalyst for the stock, it couldn't match the hype generated by Biogen and Gilead.

A trio of key drugs

Looking ahead, investors should be familiar with three of Celgene's drugs -- Revlimid, Abraxane, and Pomalyst.

Source: Celgene press release.

In a nutshell, Revlimid is still expected to be Celgene's backbone for the foreseeable future. The drug has been a bigger blockbuster than ever imagined -- analysts originally expected the drug to only generate peak sales of $1.5 billion prior to its approval.

A key catalyst for Revlimid will be approval as a second-line treatment for chronic lymphocytic lymphoma (CLL), which Celgene intends to pursue with its new phase 3 CONTINUUM trial. A prior trial testing Revlimid as a CLL treatment was halted by the FDA in July 2013 due to safety concerns. Celgene also intends to pursue U.S. and EU approvals of Revlimid as a treatment for newly diagnosed multiple myeloma.

Meanwhile, Abraxane and Pomalyst are expected to become blockbusters on their own, with the former expanding Celgene's reach beyond blood cancers and the latter reinforcing its leading position in multiple myeloma treatments.

In 2014, Celgene intends to initiate two additional phase 3 trials, testing Abraxane as a treatment for adjuvant pancreatic cancer and a first-line treatment for late-stage squamous cell non-small cell lung cancer. Celgene also intends to pursue a regulatory approval for Pomalyst/Imnovid in Japan to boost global sales.

In addition to those three core drugs, Celgene's Otezla (oral apremilast), a treatment for psoriatic arthritis and psoriasis, could generate blockbuster sales of up to $1.75 billion if approved. Celgene expects the FDA to approve Otezla in 2014.

The Foolish takeaway

In closing, Celgene still has bright days ahead, and although its top and bottom line growth might stall out in 2014, long-term investors shouldn't be worried.

Celgene's three main drugs could generate $10.5 billion in combined sales by 2017, and Otezla could also emerge as another pillar of growth. In addition, Revlimid's patents won't start expiring until 2019 -- giving it plenty of time to develop new drugs to offset those eventual losses.

Celgene might not be generating as much media excitement as Gilead or Biogen, but its steady top line growth and growing portfolio of non-hematology treatments indicate that it is well positioned to grow over the next decade.

In October 2013, Pfizer began a series of Phase 3 studies for bococizumab. The company intends to dose over 22,000 patients in separate trials sorted by risk type and indication. This monoclonal antibody (MAB) is one of an emerging class of therapies that lower cholesterol through inhibition of proprotein convertase subtilisin/kexin type 9, an enzyme mercifully abbreviated to PCSK9.

Why PCSK9 is a target
Low density lipoprotein cholesterol, the "bad" kind that's often referred to as LDL-C, is typically removed from the bloodstream after attaching to LDL receptors on the surface of liver cells. PCSK9's natural function is to regulate the amount of circulating cholesterol by marking LDL receptors for destruction after they carry LDL-C into a liver cell. In theory, any drug that inhibits this enzyme should also lower circulating LDL-C, which in turn should lower a patient's risk of heart attack.

Taking the "mono" out of monoclonal
Pfizer is not alone in the race to develop a monoclonal antibody to inhibit PCSK9. Amgen has had some luck with two Phase 3 trials involving its PCSK9 inhibitor, evolocumab. In December 2013, Amgen announced its MAB met its primary endpoint of reducing LDL-C at 52 weeks in a study of 901 hyperlipidemia patients.

This data was no doubt followed by a sigh of relief at Amgen. The study is just one of 13 Phase 3 trials with a combined enrollment of over 28,000 patients.

So far, Amgen has been quiet about the details of the Phase 3 study. Results from several Phase 2 trials have shown it to be roughly as effective as Pfizer's bococizumab, however.

In May 2010, Regeneron Pharmaceuticals , while partnered with Sanofi , was the first team to show that the inhibition of PCSK9 could significantly lower cholesterol levels in humans. In mid-October 2013, the team was also the first to present Phase 3 data showing it to be highly effective with relatively low dosages over a period of 24 weeks. This was just the first of 12 Phase 3 trials with an expected total enrollment of over 23,000 patients.

During the study, 103 patients self-administered an initial low dose of alirocumab every two weeks for the first eight weeks. If LDL-C remained above the threshold of 70 mg/dL after eight weeks then the dosage was raised. The majority of patients didn't require the increased dosage, which is a pretty good sign.

Late, but hungry
Although Pfizer is late to the feast, it appears to have brought the biggest appetite. It's series of Phase 3 studies includes two dedicated cardiovascular outcomes trials. The company's competitors have limited the scope of their trials to test for surrogate markers to prove the efficacy of their compounds. In other words, Pfizer will wait five years to see how many of its patients suffer heart attacks or stroke. In an attempt to file their new drug applications faster, Pfizer's competitors appear to be limiting their observations to reductions of LDL-C and blood pressure.

Will it be necessary?
In November 2013, the American College of Cardiology and the American Heart Association updated their cholesterol therapy guidelines. The groups recommend physicians continue prescribing standard therapies like statins over fancy new drugs. The sole reason, it seems, boils down to long-term familiarity.

This was great news for Pfizer, but terrifying to its competitors. Luckily for Amgen and Sanofi, a deputy director in the drug and research branch of the FDA, Eric Colman, soothed their nerves. Apparently, PCSK9 approval decisions will remain based largely on the reduction of LDL-C and blood pressure.

That isn't a promise that's etched in stone, however. Coleman also mentioned Merck's Vytorin trial. The FDA might change its mind, depending on results from the IMPROVE-IT trial. This is a two-and-a half year trial of non-statin therapy Vytorin combined with Simvastatin, comparing it against Simvastatin alone to measure the rate of heart attack and stroke. If the statin plus non-statin therapy doesn't significantly decrease the rate of cardiovascular events, the FDA will probably change its mind. This would force Pfizer's competitors to also include cardiovascular outcomes trials before filing their new drug applications. As a result, Pfizer could find itself in the lead.

Fortune favors the bold
Pfizer might be late to the party, but I can't help but be impressed by its bold move to differentiate itself from the competition. The company's full cardiovascular outcomes trials are likely to be far more expensive than its competitors' Phase 3 programs. Given the reluctance of doctors and payers to adopt new expensive therapies without long term proof safety and efficacy, however, it has a good chance of paying off in the long run. On top of that, if regulators change their minds then Pfizer and its investors will be laughing all the way to the bank.

I've been exploring some advice from successful people lately and seeing what I can learn from them. I've found that much of what these extraordinary people say can be applied to managing your money.

Let's peek into the minds of some of the most successful people around. Whatever your goal may be, it always helps to get some advice along the way. And when it comes to money, why not seek out that advice from extraordinarily wealthy people?

Source: Flickr user Joi Ito.

Here are some sayings from these winners and some actionable tips on how to apply their rich knowledge to your personal finances.

1. "I don't think of work as work and play as play. It's all living."
--Richard Branson

Source: Flickr user David Shankbone.

Wise words from Sir Branson, here. He's reminding us that work can be play and vice versa. As far as our personal finances go, we traditionally think of saving as boring and spending as fun. I'll speak from personal experience when I say that clicking a "transfer funds" button into my savings account is not as fun as buying a new pair of shoes.

Unfortunately, it is in our nature as human beings to do fun things more often than the un-fun things. We love to play.  So to entice ourselves to save, we should take Branson's advice and make saving a playful activity. Instead of begrudgingly sticking money into a savings account every month, we could find ways to invest it and watch it grow. Here are some ideas:

• Set goals for yourself and "race" to savings totals among a group of friends or family.
• Celebrate your saving successes: Go ahead and buy that pair of shoes, but only after you reach a particular savings milestone.
• Invest in industries that you genuinely have an interest in; researching companies won't be a chore if it means reading about something you already love.
• Use beautiful and fun applications that help you save better, like Mint.com and GoodBudget.

So when it comes to your work and your money, make it playful. It's all living.

2. "Doing the best at this moment puts you in the best place for the next moment."
--Oprah Winfrey

Source: Flickr user Alan Light.

If you watch her TV network or read her magazine (quite a resume, right?), you know that Oprah is a huge proponent of goal setting. Acknowledge what you want tomorrow and start working toward it today.

Especially when it comes to finances, our long-term goals are most easily achieved if we start positioning ourselves for them now. Here are some things you can do with your finances at this very moment to have a fruitful next moment:

• Think about opportunity cost before you make frivolous purchases. That $5 you spend now is $50 you can't spend later.
• Set priorities and stick to them. Incentivize yourself to save or invest by thinking about what you'll use the money for.
• Make investing a part of your routine! Even if the amount seems small, make saving or investing a part of your everyday life, or a fixed expense in your monthly budget. Saving is easier, and more rewarding, if you do it on a regular basis.

Every investment you make has an opportunity cost.

3. "We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don't let yourself be lulled into inaction." 
--Bill Gates
Here's one way to interpret what Mr. Gates is saying: 1) invest early and 2) have patience.

The time value of money works such that the earlier a dollar is invested, the larger a sum it can potentially grow to become. So listen up, teenagers: Contribute to your 401(k), even if you're earning a measly wage at a part-time job. And hey, young professionals! Start investing through mutual funds or ETFs, even if your balance feels small. They may not pay off immediately, but they will pay dividends in the long term. When saving, avoid inaction. Even a tiny step forward is better than staying in the same place.

Investing in your future isn't something that starts when you "grow up" or "settle down" or make a certain amount of money. It should happen now. Don't underestimate the big rewards that can come from small actions.

4. "Winners never quit, and quitters never win." 
--Vince Lombardi
Hey, nobody's perfect. Even the hallowed coach Lombardi lost a few games. So financially, allow yourself failures. There will be financial setbacks in life -- unexpected expenses, gaps in employment, impulse purchases that we later regret. But losing a battle doesn't mean losing the war (or the league championship).

When these hardships come along, savings and investments can seem like easy places to cut back. But heed the coach's wisdom here: Challenges aren't a reason to quit. Maybe savings deposits become smaller, but they shouldn't completely disappear. Keep going, keep saving, and keep setting goals. Winners never quit, therefore winners don't go broke.

5. "I think if you do something and it turns out pretty good, then you should go do something else wonderful, not dwell on it for too long. Just figure out what's next."
--Steve Jobs
The founder of Apple could have easily been talking about diversification here. Invest in as many wonderful things as possible and don't put all your eggs in one basket. Diversifying our investments is the safest way to build wealth.

But Jobs' quote here is also about not putting a ceiling on what you can achieve (or save). Steve Jobs was nothing if not ambitious. He set his sights on changing the world -- and he did. So with our income, let us set our sights just as high. By its nature, money grows exponentially; the more you have, the more you can make. So don't limit yourself with small goals. Building wealth shouldn't be about putting a finish line in the sand and crossing it. It should be about continuing to look forward and figuring out what's next.

This refrain from Jobs is actually a common theme from these extremely successful people: Aim high. In 2014, let's not be afraid to set some big financial goals and make it a habit to work toward achieving them every day.

Pandora is making a concentrated effort at customization. The company announced that it has launched personalized station recommendations in its mobile app. Users will be offered up to six such recommendations at a time. These will be displayed in their individual station lists, and when adding or deleting a station.

Describing the technology behind the customization as "the most sophisticated music recommendations system ever created," Pandora said it improves the more a listener engages with the app. The software "learns" a listener's tastes and makes suitable recommendations.

The company added that at the moment, its audience consists of just over 76 million monthly active users. Its app is available for both Android and iOS devices.

Pandora is slated to release its next set of financial results on Feb. 5. 

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

Another positive day in the stock market contributed to another down day for most precious metals, with a $3 drop in spot gold prices to $1,242 per ounce corresponding to a 0.2% decline in SPDR Gold . Silver's equally minor nickel-per-ounce drop to $20.20 sent iShares Silver down 0.1%, but positive moves in palladium and copper hinted at the underlying strength in the economy and the potential for rising demand in industrial metals. Platinum fell $1 to $1,425, but palladium gained $4 to $741.

Image sources: Wikimedia Commons; Creative Commons/Armin Kubelbeck.

Interestingly, gold and silver largely shrugged off some minor signs of inflationary pressure, with today's report on the Producer Price Index showing a rise of 0.4%. Even with the gains, though, longer-term inflation seems in check, with year-over-year gains of 1.2% for the overall index and 1.4% for the core rate excluding food and energy. Without much higher inflation rates, investors are unlikely to start worrying enough to use gold as an inflation hedge.

But the good news on the day came from the copper market, which rose to nearly $3.35 per pound today. Solid signs of manufacturing strength pointed to greater demand for copper, and that helped lift shares of Freeport-McMoRan Copper & Gold by 1.4% and Southern Copper by 0.9%. If China continues to see economic growth prospects pick up, then greater demand for copper could translate into even more price gains for the metal.

More generally, mining stocks outperformed bullion, with the Market Vectors Gold Miners ETF rising 1.3%. In particular, Barrick Gold rose 1.4% as major investor Oldfield Partners called for Anthony Munk, son of founder Peter Munk, to leave the board of directors. Investors are seeing signs of activist moves as positive for stocks generally, signaling a desire to shore up their strength in anticipation of a turnaround in the metals markets. Whether that bounce comes in the short run or not remains to be seen, but after the huge hit that mining stocks have suffered, even the hint of respite is drawing some positive responses from investors.

Earnings season is picking up steam, and the expectations game has commenced. For some companies, like Bank of America, the bar was relatively low, so investors cheered a surprise beat. For others, like General Electric , a similar feat will prove more difficult.

GE enters the ring following a stellar 2013 for the stock with a great deal of fanfare. Regardless, Friday's announcement will speak volumes about the company's current momentum, the validity of a recent downgrade, and where opportunities lie ahead for investors.

Tune out the noise
Whether it was GE's own predictions in December, the media's echo chamber, or Jim Cramer's recent bullishness on the stock, a high bar has been set for this industrial giant. And, frankly, that seems to suit GE just fine. 

Over the past year, most manufacturing stocks have been plagued by earnings due to the constant comments about an economy teetering on a cliff. Meanwhile, the American economy's chugged along, and even Europe -- which cast a cloud over GE in early 2013 -- seems to be turning a corner. All the while, the average diversified industrial stock returned 43% in 2013. Not too shabby.

But concerns about the economy still exist. Investors are debating the impact of "tapering", and a declining employment figure can be chalked up to less available workers. So, in my opinion, the changing sentiment must be driven by strong business fundamentals at companies like GE. In other words, the stock market and media are now focusing on the underlying drivers of a business! Imagine that.

At the Motley Fool, we call that a "good start." Now, let's look at what investors should pay attention to on Friday.

Focus on the nuts and bolts
Last year, GE wrapped up a solid 2012 with notable improvements in three categories: growth, profit margins, and cash management. Since the storyline at GE remains the same -- downsizing GE Capital, jump-starting industrial businesses, and returning cash to shareholders -- there's no reason to change our focus this time around. That being said, here are the key metrics as GE closes the curtain on 2013:

Growth: Wall Street analysts are predicting $0.53 per share in fourth-quarter net income, which amounts to 20% growth year over year. While that sounds substantial, GE has a few things going for it. First off, the company defied expectations and beat earnings-per-share targets each of the last four quarters, albeit by small margins. Now, past performance doesn't guarantee future results, but GE's management team seemed optimistic after the third quarter. Commenting on double-digit-earnings gains on the industrial side, Immelt noted, "[We] expect a stronger fourth quarter in that regard." Further, the company expects organic growth to accelerate in the year ahead, so the wind is blowing in the right direction. Expect revenue growth in 2013 to be modest -- around 2% -- but earnings to be quite robust.

Profit margins: Stock price appreciation can come from two sources -- an increasing price multiple (less ideal for investors) or earnings growth (more ideal). Earnings growth can be driven by climbing revenue or margin expansion. While either method of growth is attractive to investors, GE has lagged when it comes to revenue due to a shrinking GE Capital unit. So, for 2013, investors should fixate on profit margin increases, which are expected to grow 0.7 percentage points to 15.3%. GE's cost-cutting programs will help deliver future expansion, and Immelt has set a margin target of 17% for 2016. As of the last quarter, GE seems on track in this department.

Cash and dividends: There are few companies that compare to GE when it comes to cash. Even management remarked on the "ton of cash" currently sitting on its balance sheet in December, $90 billion of which will be available over the next three years. The good news is GE has been putting that cash to work or shoveling it to investors. I would expect that to continue, as GE will look for opportunities for small, bolt-on acquisitions, or incrementally raise its dividend as it did a few weeks back. Management will likely remark on any new initiatives, but expect the dividend increases to continue. GE's latest was its sixth increase since the recession.

Foolish takeaway
In my opinion, investors tuned into GE's progress over the past few years should not be disappointed on Friday. However, if growth in revenues, profitability, and dividends fail to surpass expectations, we'll look to understand whether this is a short-term hiccup or an underlying business problem. None of these can grow without signs of a strengthening market for GE's products or operational improvements. 

For Fools who've held General Electric shares over the past five years, these positive trends have translated to handsome returns in excess of 95%. Ironically, plenty of other folks are just waking up to this great business.

There is little doubt that PCs are being cannibalized by tablet and smartphone sales. However, it is also true that to get any real work done, most businesses need at least a decent word-processing program, and many can't live without a spreadsheet program as well. Microsoft Office has become the dominant offering for productivity software, but the company may be slowly bleeding its cash cow dry.

The contenders
Many businesses are still choosing Microsoft Office, and the company carries a commercial gross margin of better than 80% because of the sales of this highly profitable software. In addition, Microsoft generated almost $7 billion in free cash flow in just the most recent quarter alone. A large portion of this free cash flow comes from the company's sale of Microsoft Office to both consumers and businesses. Apple recently tried to rock Microsoft's boat by bundling for free its Pages software with any new Mac, iPad, or iPhone purchase.

For those who prefer the use of cloud-based solutions, Google Docs is a compelling solution. If you want to avoid using any of these options, there are also options like OpenOffice. The bottom line is Microsoft is not the only game in town, and each option offers its benefits and drawbacks. The question is, what can investors learn from what each company offers?

The Apple gamble
Apple's tight integration of Pages, Numbers, and Keynote with iCloud is a stroke of genius. In theory, as customers put more documents in iCloud, combined with their pictures, videos, and apps from their iPad and iPhones, they might need to purchase additional storage. This could lead to additional revenue and higher retention rates for the company's already loyal user base.

The idea that a customer can start a document on their Mac, update it on their iPad, and finish it on their iPhone sounds great on paper. However, Apple is missing some key features. First, the lack of file management is a key issue, as today you can only really see all of your iCloud items on the iCloud web site.

In addition, customers can only store documents, spreadsheets, and presentations in iCloud. The lack of a full-featured cloud storage option is a big missing piece if customers everywhere are going to use Apple's storage exclusively. In addition, Apple's web based versions of these apps are woefully weak and missing key features. In addition, a shared Pages document doesn't work well with mobile apps like Office2, Kingsoft Office, or others unless it is exported as a Word document first.

That being said, if a customer doesn't need to share their documents and just needs simple word processing or spreadsheets, do they really need Microsoft Office? Apple's gamble may pay off, but some of these issues are indicative of a company that spends just 3% of revenue on R&D.

The cash cow killer?
While Apple's gamble may take an incremental amount of sales from Microsoft Office, Google Docs has the potential to take down the whole ship. There are several big differences between Google Docs and Apple or even Microsoft's programs.

First, Google Docs saves everything automatically. While Microsoft Office documents can be saved to Skydrive, and Pages or Numbers can be saved to iCloud, it is still a process of typing Ctrl + S or Command + S as the case may be. If you work on a document, forget to save, and the program crashes, you still lose data. With Google Docs, the system constantly saves updates as you type or create.

Second, Google Drive can save everything and works well with PC, Mac, and devices. Just download the Google Drive program on your PC or Mac and tell it what to save to the cloud. While Skydrive does this too, without a Microsoft Office subscription of $99 a year, you get about half the storage space (7GB with Skydrive versus 15 GB with Google Drive).

Third, and maybe most important, Google Docs is free. The common user can create a document, share it, download it as a Word file, and it costs exactly nothing. To do this same thing with Microsoft Office costs about $140 for a single-user license, or $99 a year.

If Google can convince users to buy into Google Docs, it's not hard to imagine more usage of Gmail, Google+, and other services. The bigger the tie into Google's offerings, the more opportunity to sell ads for the search king.

Final thoughts
Microsoft's Office 365 subscription service of $99 a year gives you 5 licenses for computers and 5 licenses for mobile phones. The question many users may begin to ask is, do I want to pay $99 every single year if I just need to create documents or spreadsheets? The better question is, if I own two computers do I want to pay $280 (two $140 licenses) so I don't have to pay $99 a year?

Though the economy is improving and customers want to use what they are comfortable with, the idea of paying hundreds of dollars to use Microsoft Office might be asking too much. With Apple and Google offering real alternatives to users, Microsoft's own pricing might bleed its cash cow dry.

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

Investors took heart as the House of Representatives approved a $1.1 trillion spending bill without all the drama and rancor we had become accustomed to. That was reason enough to push stocks to a new record high -- by a mere two hundredths of a point -- as the S&P 500 gained 0.52% on Monday. The narrower Dow Jones Industrial Average was up 0.66%.

Call it mean reversion or call it a change in sentiment; either way, the trajectory of Netflix's stock appears to be broken. In 2013, the streaming video provider was the best-performing stock in the S&P 500, with shares quadrupling; however, it has gotten off to a rocky start this year, and today was no exception, as the shares fell 2.2% (the orange line represents the S&P 500):

NFLX data by YCharts

First, Nomura Equity Research initiated coverage of Netflix with a "neutral" rating (or "hold" in plain English) and a $360 price target. In his note, analyst Anthony DiClemente writes:

We believe Street models already forecast healthy expectations for subscriber growth; while we are positive on original content and cable box integration, we do not believe these are material subscriber acquisition channels.

DiClemente's thesis appears to be that, given the reach it has now achieved in the U.S. -- Netflix surpassed HBO in terms of U.S. subscribers last year -- it should no longer to be considered as fundamentally different from competitors HBO or Showtime. Despite that, he believes Netflix is valued at a massive premium to those peers:

An important question: Is Netflix valued appropriately? The market currently believes Netflix is worth 50-60% more than HBO (within TWX) and more than double Showtime (within CBS). As a multiple, we believe most investors value HBO at a 2015E EV/EBITDA of 9-10x, whereas Netflix trades at roughly double that multiple.

Perhaps the explanation for that discrepancy can be found in another analyst report published today, this one from MKM Partners. Analyst Rob Sanderson maintained his "buy" rating on the stock, but raised his price target from $370 to $440. Netflix remains one of his top picks for 2014 on the basis of its growth prospects globally:

We think NFLX is in by far the best position to grow a very large, global subscription business in this emerging opportunity. The company has the lion's share of know-how, scale advantages over other OTT providers and the most actual data on viewing behavior of any provider of video services across any platform. The base of roughly 40mn paying subscribers globally is just the beginning. We think this business will scale to 150-175mn global subscribers over time.

In other words, DiClemente may be right that the shares look a bit pricey -- if one is reasoning on the basis of expectations for the next 12 months. However, if one takes a longer-term view, over the next three to five years, say, that concern may prove overblown -- assuming Netflix is able to capitalize on the global growth opportunity Sanderson highlights.

Netflix is a remarkable business, but buying the stock at current its current valuation assumes one has an ultra-long time horizon (by today's standards, anyway -- I mean something on the order of five years or longer). Otherwise, as I wrote on Jan. 7, "if ... you're just getting into the shares now, hoping that last year's momentum will persist in 2014, you may want to re-examine your goal and your assumptions."

Cisco Systems ended 2013 as one of the worst-performing stocks in the Dow. Sure, some of that pessimism was warranted, given the networking giant's slowing sales growth. But have investors gone too far in selling off the shares? A bullish piece (registration required) in Barron's magazine says that they have -- and that Cisco shares could jump by 20% this year as a result.

In the video below, Fool contributor Demitrios Kalogeropoulos discusses Cisco's recent struggles and agrees with Barron's conclusion that the stock looks cheap right now. Despite what's sure to be a tough year for the business, Cisco could be a good buy for conservative investors who are looking for dividend income along with a decent chance at long-term capital appreciation.

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

The S&P 500 Index capped off 2013 with a "Santa Claus Rally" that sent the index to fresh all-time highs and secured the benchmark its best year since the 1990s. Then, when 2014 got under way and the stock market started retreating from its record levels, shortsighted headlines started popping up in financial media bracing us for a year full of financial calamity. But with a brief two-day rally sending the S&P to record highs once again, all order has been restored to the universe and the overly bullish headlines have returned. While stocks may still be a little pricey, investors didn't seem to care, and the S&P 500 rose 9 points, or 0.5%, to close at 1,848, an all-time high. 

Shares of Regeneron Pharmaceuticals certainly didn't do their part in pushing the index to new highs, as the stock slumped 4.3% Wednesday. If you're a Regeneron Pharmaceuticals shareholder and your neck's bugging you, that's because you're an unfortunate victim of Wall Street whiplash. When CEO Len Schleifer blabbed on about how great he thought domestic sales of the company's age-related macular degeneration drug would turn out to be in the fourth quarter, shares surged 11.8% yesterday. Then Regeneron announced a new partnership with Bayer later in the day, which kept the bull run going -- until today. Trading at a 40 P/E, short-term investors anxious to lock in profits did exactly that, selling the stock en masse and giving unwitting long-term investors a distinct pain in the neck. 

Oil refiners have seen finer days than today as well. Out of the 17 largest publicly traded refiners in the world, 13 of these industry titans saw their stock slip Wednesday. As one might imagine, this was no coincidence, and industry-specific dynamics were to blame. The homegrown Texas refiner Tesoro ended in especially bad shape, losing 3.3% as the price of oil rallied above $94 a barrel. Stock in oil refiners often display an inverse relation to the price of oil itself, as better margins tend to go with falling oil prices.

This phenomenon plagued Marathon Petroleum investors as well today, as the stock took a 2.8% haircut. One long-term situation to watch in the oil refinery space is what ends up happening with the legality of U.S. oil exports. Current policies all but ban U.S. companies from exporting oil abroad, a stance that's allowed companies like Marathon Petroleum to refine U.S. oil until it's no longer technically oil, and then sell their product abroad. Interestingly, Marathon Petroleum maintains it would not protest if the antiquated laws were done away with, as the policy shift would embrace the idea of free markets. Should the effective export ban be lifted, only time will tell if shareholders find themselves in agreement.

Shares of East Coast railroad CSX hit a 52-week high today, continuing a winning streak that's included a 42% run-up over the past year. However, the stock veered off-course after hours when CSX reported a drop in coal volume for the fourth quarter. While coal might be its Achilles' heel, CSX has a proven ability to adapt in adverse conditions. It's quite nimble -- for a railroad -- and the last quarter of 2013 was no exception.

View from the top
From 20,000 feet, CSX proved resilient in the fourth quarter of 2013, turning in results that neither floored nor devastated investors, given a mediocre operating environment. On the top line, CSX reported a 5% quarter-over-quarter increase in revenue to $3 billion, which was accompanied by a 2.9% decline in earnings from $449 million to $426 million. As a result, earnings per share fell 2 cents, from $0.44 per share in the fourth quarter of 2012 to $0.42 in 2013.

For the entirety of 2013, the company netted $1.83 per share, up slightly from $1.79 in 2012. At the same time, revenue increased 2% to $12.0 billion.

The revenue and earnings-per-share figures were both in line with analysts' expectations, so there were no major surprises there. Furthermore, the tailwinds of a steady, growing economy seemed to be offset by the headwinds of the coal market, as CEO and Chairman Michael Ward alluded to in the press release: "Supported by the strength of an expanding economy, we delivered 6% volume growth in the quarter, despite another sharp decline in coal."

CSX remains one of the American railroads most heavily reliant on coal, yet a bustling economy has blunted the impact of this commodity's downturn.

3 key takeaways
For investors, it's important to take a closer look beyond the financial statements to answer three basic questions. For a railroad like CSX, what's fueling growth? Secondly, how is the engine running? And finally, what lies ahead? Let's tackle the latest quarter from this perspective and see what 2014 might look like for CSX and the rail industry as a whole.

What's fueling growth? For CSX, the intermodal and merchandise categories continue to shoulder the burden of deteriorating coal shipments. While coal volumes dipped 5% during the course of 2013, intermodal and merchandise climbed 11% and 7%, respectively.

The key drivers of such strong merchandise volume growth were agricultural and industrial chemicals, which grew 16% and 18%, respectively. Overall, these two categories -- bolstered by strong energy and auto markets -- helped lift CSX's total volume growth by 6% for the year.  

How's the engine running? To assess the efficiency of CSX's engine, we need to look at the operating ratio the company reported. The operating ratio shows the efficiency of a railroad by comparing operating expenses with sales.

In my opinion, this remains an area of particular concern. While CSX made dramatic improvements over the past decade to streamline operations and cut costs, this downward trend ceased several quarters ago. In the latest year-end results, the operating ratio increased, from 70.6 in 2012 to 71.1 in 2013. While the company claims in the press release that the railroad remains on track for a high-60s target in 2015, minimal insight is provided in how it aims to get there. Investors should pay close attention to what management has to say regarding potential cost-cutting measures in the year ahead.

What lies ahead? For insight into the future, investors will have to dive into the company's conference call. In the latest quarterly press release, CEO Michael Ward had this to say about the company's prospects: "As the economy continues to expand, CSX is well positioned to leverage that environment to create sustainable long-term value for our customers and shareholders."

Not too much in the way of specifics, although the company does foresee a "favorable outlook for majority of markets in 2014."

Foolish takeaway
In all, CSX's latest results bode well for the railroad and the industry as a whole. With the largest public carrier, Union Pacific, set to report earnings next Wednesday, investors will get a broader sense of what's in store for railroads in 2014. Union Pacific, because of its geographical position, is less reliant on coal traffic and has thus outperformed CSX in recent years. But CSX trades at a relative discount, with a price-to-earnings ratio of 15, versus 18 for Union Pacific. Still, over the long haul, both railroads appear poised to deliver for investors.

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 Nu Skin Enterprises were taking it on the chin today, falling as much as 19% and finishing down 16% after its business practices in China were attacked in the People's Daily newspaper.

So what: The official paper of the Chinese Communist Party accused the seller of skin-care products of being a "suspected illegal pyramid scheme." The charge hurts not just because those allegations have come up before against the multilevel-marketing company, but because different laws apply in China where direct sellers are under strict regulations. Despite the claims, Nu Skin carries "direct selling licenses" in 19 of China's 32 provinces and municipalities, and the company also issued its own rebuke. In a press release, Nu Skin said the article contains inaccuracies and exaggerations and that the reporters did not verify any of their information with Nu Skin. It added that it has been doing in business in China in full compliance for 11 years.

Now what: The pyramid-scheme attack is nothing new for companies like Nu Skin and peer Herbalife, and both have bounced back repeatedly from such charges. Still, in its most recent quarter Nu Skin derived about half of its revenue from greater China where it saw a whopping growth rate of 240% so these charges warrant investor attention. Among other claims, the People's Daily said Nu Skin brainwashes its trainees. Doing business in China always carries a level of shadiness whether it be investing in Chinese stocks or through American companies selling in China. The People's Daily story typifies this kind of risk, but it's unclear if the charges bare any actual teeth. I'd expect shares to bounce back, but investors should be aware that this is a riskier stock than most.

J.C. Penney announced today that will close 33 stores across the U.S. as it seeks to consolidate its resources and focus on its "highest-potential growth opportunities."

J.C. Penney said it anticipates that while it will incur charges of $26 million in the fourth quarter of its 2013 fiscal year, and $17 million in future periods as a result of the closings, the company will also see annual savings of $65 million.

At the end of its third quarter, which ended Nov. 2, J.C. Penney had approximately 1,100 stores, and its selling, general, and administrative expenses stood at $3.1 billion through the first nine months of the year. 

"As we continue to progress toward long-term profitable growth, it is necessary to re-examine the financial performance of our store portfolio and adjust our national footprint accordingly," said J.C. Penney CEO Mike Ullman.

The closings are expected to be completed by May, with the inventory to be sold in the interim. J.C. Penney said approximately 2,000 positions will be lost, and employees who don't stay with the company will receive severance packages. The release also said the company still plans to open its store in Brooklyn later this year.

Ullman concluded by noting, "While it's always difficult to make a business decision that impacts our valued customers and associates, this important step addresses a strategic priority to improve the profitability of our stores and position JCPenney for future success."

The closed stores will be across 20 states, including five in Wisconsin, three in Pennsylvania, and two each in New Jersey, Mississippi, Indiana, Illinois, and Florida.

When investors are talk about auto companies, they are usually referring to Ford or General Motors . However, there is one auto manufacturer that investors almost never talk about: Tata Motors 

Tata is an Indian auto producer, and one of the largest commercial vehicle manufacturers in the world. Prospective investors are getting spooked by the losses in Tata's domestic business, driven by the many low-cost (or even money-losing) vehicles it sells within India. But those investors don't seem to understand that Tata's got an ace up its sleeve: the high-end Jaguar Land Rover division.

A diamond in the haystack 
Jaguar Land Rover, as its name implies, designs and produces the British Jaguar and Land Rover auto brands. Seventy-eight percent of Land Rovers are exported to 169 countries around the world, and 70% of Jaguars are exported to 63 countries. The rest are sold within the U.K. -- and sales have been booming.

Jaguar Land Rover vehicles may not be considered ultra-luxury supercars, but they're certainly not cheap. In that middle-of-the-road position, the cars have no comparable peers.

As a result, Jaguar Land Rover vehicles are highly desired and sales are really taking off. For the half year ended Sept. 30 2013, the division's global sales expanded 19.7% year on year. Meanwhile, Ford expects 2013 total new vehicle sales to expand 14.2% within China, 7% within the U.S. but falling 2% within Europe. GM lagged the pack here with sales only expanding 4% during the first half of this year. Although these statics are over different time periods they still highlight the significant variation in the sales figures of these companies.

Furthermore, thanks to a mix of new products and efficient production, Tata's revenue for the first half of this year jumped 26% while profit before tax jumped 42%!

Undervalued
These impressive growth and margin figures, along with the Jaguar Land Rover brand heritage, inspired Julian Sinclair, chief investment officer of Talisman Global Asset Management, to state back in October that the Jaguar Land Rover business alone could be worth around $17 billion. This makes Tata's current market capitalization of $19.6 billion look conservative.

Nonetheless, it looks as if the Jaguar Land Rover business is holding Tata together. For example, for the fiscal second quarter, Tata as a group made a profit of $577 million -- but Jaguar Land Rover contributed $811 million in profit, even thoughTata's domestic business actually lost $130 million.

That means Tata is relatively undervalued considering the gains and value of its luxury Jaguar Land Rover brand, and extremely undervalued compared to U.S. peers.

Putting it all together
So, it would appear that the Jaguar Land Rover brand is worth more than the current market capitalization of Tata. This does imply that Tata is undervalued as investors are planning no value on the rest of the business. That being said, Jaguar Land Rover's valuation is only implied, meaning that, in reality it may be worth much more or much less than the figure above.

With that in mind, let's take a look at some more conventional valuation methods which also show how undervalued Tata is in comparison to both GM and Ford. In particular, let's take a look at the enterprise value, or EV divided by earnings before interest tax amortization and depreciation, or EV/EBITDA.

According to Yahoo! Finance, Tata currently trades at a EV/EBITDA figure of 5.5, while GM and Ford trade at a figure of 7 and 13, respectively. So, even using the simple EV/EBITDA metric we can see how undervalued Tata is.

Foolish summary
So all in all, Tata's Jaguar Land Rover business is highly lucrative, pulling the company ahead of its U.S. peers on several metrics. This helps make Tata look cheap on a number of metrics. Even with its Indian operations losing money, the company could still be a better play than its U.S. peers.