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Weekend Box Office: 'Ride Along' No. 1, on Pace for $40 Million

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Comcast, Viacom, Disney and News Corp are battling for the box office

Ride Along won the Friday Box Office with $13 million, Image source: Comcast Universal

Move over, Jack Ryan, because the local police just took your place at the top -- that is, if Friday's box office numbers are any indication.


Comcast Universal's new buddy comedy Ride Along easily trounced its big-screen competition last night, earning an impressive $14.5 million.

But it shouldn't be all that surprising. The last time comedian Kevin Hart and Director Tim Story teamed up was for 2012's Think Like a Man, it easily won its respective Friday debut in 2012 with $12.1 million. If we assume a similar Friday weekend multiple this time, it should put Ride Along on pace to gather around $40 million this weekend -- not too shabby considering analysts have pegged Comcast's production budget for the film at around $25 million. 

What's more, Ride Along is the only new film this weekend to earn an "A" CinemaScore from polled audiences, which means it should also benefit from positive word of mouth.

But speaking of movies people love, Comcast also secured second place with its "A+" holdover in Lone Survivor, which earned an estimated $6.7 million last night and remains on pace for a solid $26 million second-weekend haul.

And that finally brings us to Viacom  Paramount's Jack Ryan: Shadow Recruit, which earned third place with $5.4 million yesterday -- or just over half the $10 million Friday debut enjoyed by Jack Ryan's last film in 2002, The Sum of All Fears. When all's said and done this weekend, Viacom's $60 million effort will likely gross around $17 million.

So why did Shadow Recruit disappoint? Despite Viacom's broader target PG-13 audience, I think the main culprit lies with significant overlap in interested viewers who would rather watch Comcast's R-rated Lone Survivor.

Next, Open Road Films' first jab at 3-D animation arrived this weekend with The Nut Job, which currently sits in fourth place at a modest $4.8 million en route to a likely $15 million weekend launch -- not an overwhelming debut, but reasonable when we consider Open Road's mid-range $42 million budget. 

By comparison, Disney's remarkably strong, award-winning blockbuster Frozen grabbed another $2.5 million in its eighth Friday, or down just 18% over the same day last week. However, keeping in mind Frozen enjoyed a massive late-weekend push following a light start seven day's ago, Disney's film could potentially total around $12 million come Monday.

Finally, News Corp's 20th Century Fox horrified captive audiences Friday, earning just $3.5 million with Devil's Due. Movie-goers weren't pleased, however, giving it a dismal "D+" CinemaScore. Even so, News Corp shouldn't be too concerned. The film only required a tiny $7 million budget, which all but ensures it'll prove a financial success for the studio over the long run.

I'll be sure to touch base Monday to see how the final numbers pan out. All things considered, though, it looks like the competition has plenty of catching up to do if it wants to steal Ride Along's thunder. In the meantime, just sit back and enjoy the show.

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The article Weekend Box Office: 'Ride Along' No. 1, on Pace for $40 Million originally appeared on Fool.com.

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

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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McDonald's Weak Earnings Set to Continue

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Fast-food giant McDonald's is set to release its fourth-quarter earnings on Jan. 23 before the bell, with failed promotions like Mighty Wings and weak sales in the U.S. likely to weigh on the results. McDonald's attempts to put healthier items on its menu have done little to drive sales in the United States, with domestic comparable-store sales rising just 0.1% through the end of November.

With fourth-quarter results expected to be essentially flat compared to the same quarter last year, it's unlikely that McDonald's investors will have much to cheer, as competitors like Wendy's continue to post solid results.

What analysts are expecting
Fourth-quarter revenue is expected to rise just 2.3% to $7.1 billion, up from $6.9 billion last year. For the full year, analysts expect revenue to come in at $28.1 billion, up 2% compared to 2012. If analysts are correct, 2013 will be the second year in a row that McDonald's has grown revenue at just 2%, although the Street expects growth to accelerate a bit in 2014.


Earnings per share is expected to rise a penny to $1.39 for the quarter, with the full- year result increasing to $5.55, 3.5% higher than last year. Earnings growth is also expected to pick up in 2014, with analysts looking for a 6.8% rise in EPS for the full year. Over the next five years, the average analyst estimate for annual earnings growth is a hair more than 8%. These estimates would require a significant improvement, however, and should be taken with a grain of salt.

What's going wrong at McDonald's?
For the last decade, McDonald's has been steadily growing its revenue and expanding its margins, in the process becoming a highly profitable company with a significant economic moat. But the industry has become more competitive, with chains like Chipotle stealing away younger, health-conscious customers in the United States. While McDonald's has tried introducing healthier items, like the McWrap, this has failed to revive domestic growth.

Burgers and fries are far from dead, however, and other chains may be stealing away some of McDonald's market share. Wendy's recently announced an expected 1.9% same-store sales increase for its fourth quarter, with particularly strong results in the second half of 2013 driven by premium, limited-time products like the Pretzel Bacon Cheeseburger. Earnings are expected to increase by a factor of five compared to the fourth quarter of last year, driven both by higher sales and a decrease in the number of company-operated restaurants.

McDonald's seems to be unable to hit the promotion sweet-spot like Wendy's has done, with Mighty Wings flopping and other premium items failing to move the needle. Innovation is the key, and McDonald's seems to be falling behind the competition.

One area where McDonald's is pushing hard is coffee, both in the United States and abroad. In the US, premium coffee drinks have been added to stores in an effort to boost sales, although the added complexity for employees has caused the restaurant-level efficiency to take a hit. McDonald's international coffee strategy looks more promising, with stand-alone McCafe stores being built in both Europe and Asia. Most of McDonald's future growth will come from international markets, and the expansion of both the McDonald's and McCafe brands in countries like China should help the company grow faster in the coming years.

The bottom line
McDonald's weak growth should continue in the fourth quarter, as promotions and premium menu items have failed to boost sales in the United States. McDonald's has a growth problem, and international markets may be the key to solving it, but maintaining its industry-leading margins as it expands will be a challenge.

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The article McDonald's Weak Earnings Set to Continue originally appeared on Fool.com.

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

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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How Bank of America and Others Schemed to Exploit You

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My idea of New York, and by that I mean the controlling interest there, is that they sit back and look upon the rest of the country much as Great Britain looks upon India.

Senator Henrik Shipstead, Minnesota, 1922

In the middle of 2011, Bank of America settled an otherwise nondescript lawsuit with the City of San Francisco for the paltry sum of $5 million. The case involved allegations that the bank colluded with competitors to force customers into arbitrating credit card disputes before the National Arbitration Forum, a private mediation company claiming to be a "fair, efficient, and effective system for the resolution of commercial and civil disputes in America and worldwide."

What was the city's beef? Virtually every case heard by the NAF was decided in favor of the bank and its brethren, who, not coincidentally, also financed the mediator's highly profitable operations. While few people would deny that appearing to rig an arbitration forum like this violates deep-seated notions of fair play and substantial justice, what makes this case even worse is that it's merely one in a vast series of systematic business practices employed by the nation's largest lenders over the years to unjustly tilt the financial system in their favor.


A laundry list of systematic deceit
Few practices illustrate the systematic nature of deceit that prevails at the top of the banking industry better than the "credit protection" services thrust upon unwitting customers until federal regulators and private lawsuits led banks to effectively do away with the vacuous services.

The structure of the scheme was simple. Banks used aggressive marketing techniques to persuade customers into paying monthly fees akin to insurance, covering the customer's minimum credit card payments in the event of an illness, death, disability, or job loss. Sounds pretty good, right? The problem is that banks including Capital One Financial , Citigroup , and Bank of America, among others, are alleged to have involuntarily enrolled customers in the programs while, at the same time, systematically refusing to honor the commitments based on indecipherable legalese in the service contracts.

According to legal filings in a case against Bank of America, one man paid the bank more than $700 for the service even though he never knowingly enrolled in it. When he called to terminate the charges and request his money back, the customer representative wouldn't approve a refund. The estate of a Korean War veteran who passed away from lung cancer was denied coverage because his death wasn't "accidental." And a woman who lost her job as a medical transcriptionist was denied benefits because her unemployment was not caused "exclusively by business bankruptcy, failure or loss of required equipment to conduct business, or damage to the business premises caused by fire, theft, or natural disaster."

Just to reiterate, assuming the allegations made by innumerable bank customers in myriad court filings and cases are to be believed, which isn't unreasonable given the hundreds of millions of dollars paid by the industry to resolve the claims, then these were officially sanctioned programs replete with salespeople and customer service representatives. And if the allegations are to be believed, the practices were intentionally designed to mislead customers into enrolling in the programs, whether they ultimately consented to do so or not, and then to deny benefits when ostensibly qualifying calamities occurred.

Another example of how the nation's biggest banks have systematically exploited their customers over the years involves the way debit-card overdraft fees were assessed until the industry succumbed yet again to pressure from federal regulators and private legal action.

Starting around 2001, the nation's biggest banks implemented automated overdraft programs that allowed customers' charges to go through even if they didn't have sufficient funds in their accounts. The catch was that customers would be assessed a fee ranging from $10 to $38, with a median of $27, each time an overdraft occurred. Fair enough, right? If you're not able to keep track of your account balance, then your bank should have every right to exact a fee in the event that it's required to cover the overage with its own capital.

But here's the thing: The automated systems were programmed to reorder daily transactions from largest to smallest, and not, as fairness and common sense seem to dictate, chronologically. For example, say a customer had an account with a $50 balance and made four transactions of $10 in the morning and one later transaction of $100 in the evening of the same day. In this case, the bank's automated program would debit the $100 transaction first, despite the fact that it actually occurred last, and by doing so subject the customer to five overdraft fees instead of one. The net result of this practice was that overdraft charges were commonly assessed at times when, but for the chronological manipulation, there would have been funds in the account, and thus no overdraft would have occurred.

I could go on and on with examples. In Bank of America's case alone -- and, for the record, while the Charlotte-based bank may be the worst offender in this regard, it's far from an exception -- I recently counted more than 40 legal settlements and judgments stemming from practices like these in the six years spanning from the beginning of 2008 to the end of last year.

To pick out only the most notable, in 2009, Bank of America settled with the SEC over charges that it "misled investors regarding the liquidity risks associated with auction-rate securities," a type of investment that banks allegedly marketed as equivalent to cash in terms of safety until, of course, it wasn't. One year later, it paid restitution for its part in a "nationwide scheme, including bid rigging and other anti-competitive conduct that defrauded state agencies, municipalities, school districts and nonprofits in their purchase of municipal bond derivatives." And in 2012, Bank of America joined four other mortgage servicers to resolve allegations that they routinely submitted fraudulent documents in court-administered foreclosure proceedings in the wake of the financial crisis.

Source: Jon Connell.

Six blind men describing an elephant
Over the last five years, there's been no shortage of analysts and commentators (including myself) who have derided the nation's biggest banks for any number of misdeeds. What's been missing, however, is a coherent narrative that ties these disparate acts together -- and particularly one that doesn't rely on the facts underlying the financial crisis. In this way, it's like the ancient Indian parable about six blind men charged with describing an elephant to the king. Each feels a different part of the animal only to find out that his description doesn't comport with that of the others.

My point in this column was to avoid the same pitfall. As I hope I have demonstrated, and as students of financial history won't be surprised to hear, the picture that emerges when all the pieces are put together is one of a banking system replete with subtle deceit and trickery; one that's geared toward exploiting the very customers upon which the nation's largest lenders rely. It's an unfortunate narrative to be sure, but it's nevertheless one that can be combated on an individual basis so long as you're aware of its tricks and traps.

Going forward
For investors, meanwhile, the takeaway is straightforward. It's often said that what can't go on forever, won't. This is why investors should always favor the highest quality financial institutions. Those that have proven themselves through multiple cycles to be the very best, not only at accumulating market share but also at satisfying their customers.

It's for this reason I'd strongly encourage anyone with an inclination toward bank stocks to download our invaluable free report about the one big bank that's built to last. In it, our top analysts detail one financial institution that investors as sophisticated as Warren Buffett are confident will survive and thrive for decades to come. To access this free report instantly, simply click here now.

The article How Bank of America and Others Schemed to Exploit You originally appeared on Fool.com.

John Maxfield owns shares of Bank of America. The Motley Fool recommends Bank of America and Goldman Sachs. The Motley Fool owns shares of Bank of America, Capital One Financial, Citigroup, and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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IPO Costs Drag Down Results at The Container Store

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IPO-related expenses caught up with The Container Store Group in its latest financial release. When the company went public in November with 12.5 million shares priced at $18 per share, the sharp rise in share price during the first day of trading caught investors by surprise as shares closed at $36.20.

The company's sales improved in the third quarter ended Nov. 30, but revenue from its Elfa-branded storage system decreased. After the news, The Container Store's shares fell 14% to $39.01.

While The Container Store's net sales grew 7% to $188.3 million, the company incurred a net loss of $9.5 million, or ($1.39) per share. The company noted strong performance among new and existing stores and stated that comp store sales rose by 4.7%, which surpassed the consensus estimate of 4%. The market expected earnings of $0.08 per share and $188.9 million in revenue.  


Successful (and expensive) IPO
The increase in third-quarter sales was not enough to counter the 8.7% rise in selling, general, and administrative, or SG&A, expenses, which rose to $88.8 million. The expenses associated with the IPO caused SG&A as a percentage of net sales to increase by 60 basis points. The third quarter's net loss of $9.5 million included $14.6 million worth of expenses for IPO-related stock options.

Third-quarter adjusted net income, which excludes items unrelated to ongoing operating performance such as IPO-related expenses, was $5.2 million or $0.11 per diluted share. With the effect of the IPO excluded, the latest results do not vary much from fiscal third-quarter 2012's net income of $5.3 million and diluted EPS of $0.11.

Full-year fiscal 2013 forecasts estimate adjusted net income of $0.40 per share and sales of $754 million . Analysts estimate that The Container Store's full-year results will be $0.38 per share and $756.2 million in revenue.

Lower expenses at other specialty retailers

At The Container Store, SG&A expenses made up almost half of net sales. In contrast, at rival specialty retailer Williams-Sonoma  SG&A expenses for fiscal 2013's third quarter made up 29.8% of net revenue and showed an improvement from the same period in 2012. The company's net revenues rose 11.3% to $1.05 billion. Direct-to-customer (DTC) revenues did better than retail revenues, generating 49% of the quarter's total net revenues. Higher sales at Pottery Barn and West Elm contributed to strong results in DTC and retail.

Furniture and room decor stores West Elm and Pottery Barn are the company's top-growing brands, along with PBteen, which specializes in furniture and room decor for teens. Because of the outperformance of the third quarter, the company raised its guidance for fiscal 2013. Revenues for the year is expected to range between $4.29 billion and $4.35 billion, while diluted EPS is estimated to range between $2.76 and $2.83.  .

Another rival, Bed Bath & Beyond , reported SG&A expenses for fiscal 2013's third quarter that were 26% of net sales. The company's third-quarter net sales rose 6% to $2.87 billion and comp-store sales also rose but lower than the increase reported in the third quarter of 2012. Diluted EPS for the third quarter was $1.12 and came in just below the expected $1.15 per share. The market responded to the missed target and shares fell by about 12% after the earnings announcement .

Heavy coupon use by customers can be partly to blame for the company's diminishing returns. Playing it safe, the company lowered its fiscal 2013 guidance to $4.79-$4.86 from a previous estimate of $4.88-$5.01. Analysts expect Bed Bath & Beyond's EPS for the year to come in around $5.01. The company is currently working on store expansion; by the end of the current fiscal year, it expects to have 33 new stores opened. There is also ongoing work related to store renovations and store repositioning in certain markets .

My Foolish conclusion
The Container Store, much like its rivals, will need to monitor and contain its costs moving forward. As the business absorbs its IPO-related expenses, future operating revenue and expenses should provide a clearer picture of how well the company will grow its business. 

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The article IPO Costs Drag Down Results at The Container Store originally appeared on Fool.com.

Eileen Rojas has no position in any stocks mentioned. The Motley Fool recommends Bed Bath & Beyond, The Container Store Group, and Williams-Sonoma. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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3 Retailers With Outstanding Dividend Growth Prospects

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The retail environment has been notoriously challenging and competitive lately. For this reason, investors need to be particularly selective when investing in the sector. Dividend growth is a clear and transparent sign of fundamental strength, and companies like Costco , CVS , and Macy's have what it takes to deliver growing dividends for years to come.

Costco is smart and effective
Costco has a smart and effective business model: The company makes most of its profits from membership fees, as opposed to margins on sales, and this allows it to charge competitively low prices for its products. In addition, Costco prioritizes efficiency and low prices over product variety when it comes to sourcing and inventory decisions.

Customers seem to be quite happy with the company. Renewal rates have been consistently above 85% over the last several years, and the last quarter was as strong as usual. The global renewal rate remained 87%, and key markets like the U.S. and Canada performed particularly well, with renewal rates of more than 90%.


The company continues delivering healthy sales growth in spite of the challenging retail environment, and comparable sales excluding the impact of foreign exchange fluctuations and gasoline prices increased by 5% in the U.S. and 7% in international markets during December.

The dividend yield is quite modest at 1.1%, but payments have increased materially from $0.10 in 2004 to $0.31 currently. The company has a resilient business model and a conservatively low payout ratio in the area of 25% of earnings, so Costco is well positioned to continue raising dividends in the coming years.

CVS for healthy dividend growth
CVS is both one of the leading U.S. pharmacy retailers and a major pharmacy benefit manager. The company benefits from its vertically integrated operations and scale advantages, which generate cost efficiencies and negotiating power with suppliers.

Factors like an aging population, technological advancements in the health care industry and the broadening of medical insurance coverage represent considerable tailwinds for the company over the medium and long term.

CVS is firing on all cylinders from a financial point of view; the company expects to deliver adjusted earnings-per-share growth of between 10.25% and 13.75% during 2014, and CFO Dave Denton is quite optimistic about the future of the business:

CVS Caremark has a strong track record of meeting or exceeding our financial targets. The outlook for 2014 is bright, and we are focused on strategies that will lead to solid, long-term enterprise growth. We continue to generate a substantial amount of free cash flow and we remain committed to disciplined capital allocation practices that drive value for our shareholders.

The company announced a whopping dividend increase of 38% in December, and it still has a lot of room for dividend growth considering its fundamental strength and safe payout ratio near 25%. The dividend yield is 1.6%.

Macy's is outperforming
While most department stores are reporting dismal sales figures for the key holiday season, Macy's is performing materially better than its peers thanks to its omnichannel strategy, its focus on private-level offerings, and its price optimization initiatives.

The company has delivered growing earnings per share over the last 15 consecutive quarters, and it recently announced a healthy increase of 4.3% in comparable sales, including departments licensed to third parties during the holiday shopping season. Management is expecting comparable sales growth between 2.3% and 2.5% in the fourth quarter and comparable sales growth in the range of 2.5% to 3% for 2014. 

Macy's is implementing a series of initiatives aimed at reducing $100 million in annual expenses starting in 2014, so the company is not resting on its laurels and remains focused on maximizing efficiency and generating profitability for shareholders.

The company had to cut its dividend and restructure operations because of the recession in 2009, but it has emerged stronger than ever and has been delivering outstanding dividend growth since then. What was a $0.05-per-share dividend in 2010 has now grown into $0.25 per share, and the comfortably low payout ratio of 26% means plenty of potential for further dividend growth. Macy's pays a dividend yield of 1.8%. 

Bottom line
Growing dividends don't only provide income for investors, they also reflect a sound and healthy business. Even in a challenging economic scenario for retailers, Costco, CVS, and Macy's offer outstanding dividend growth prospects, and that says a lot about the fundamental quality of these companies.

Looking for more great dividend picks?
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The article 3 Retailers With Outstanding Dividend Growth Prospects originally appeared on Fool.com.

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

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Capital One Trips Up

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Shares of Capital One fell more than 4% Friday on news that the company missed expectations this quarter both in earnings and revenue. In this video, Fool analyst Brendan Mathews digs into what happened this quarter with Capital One and its outlook over the next few years.

Capital One, like many financial businesses at the moment, struggled with net margin compression this quarter, or the spread between what it pays out to depositors versus what it earns on its investments. Combining that broad trend with the company's heavy reliance on credit card and auto loans, which are struggling markets at the moment, Capital One certainly faces some near-term headwinds.

That said, Brendan really likes the company's long-term prospects. Capital One 360 is currently the nation's largest Internet bank, and he considers CEO Richard Fairbank to be a very savvy leader. He sees Capital One at 11 times earnings as a great opportunity to buy a stock that could beat the market over the next three to five years.


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The article Capital One Trips Up originally appeared on Fool.com.

Brendan Mathews and Fool contributor Mark Reeth have no position in any stocks mentioned. The Motley Fool owns shares of Capital One Financial.. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why the Mortgage Crisis Is Far From Over

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The housing market has recovered sharply from its worst levels following the mortgage crisis. But even five years later, millions of homeowners are still struggling under huge amounts of home debt.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at recent data from RealtyTrac noting that 9.3 million homeowners remain underwater on their homes by at least 25%. Dan points out how even a big rise in prices and efforts from JPMorgan Chase , Bank of America , and Wells Fargo to agree to modify customer mortgages haven't made a huge dent in those numbers. Dan notes that big problems exist in hard-hit states like Nevada and Florida, causing potential problems for Hovnanian , PulteGroup , and other homebuilders seeking to recover from the worst of the crisis. 

Get smart about your money
The housing market's gains still emphasize the importance of having money outside your home to invest. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal-finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.


The article Why the Mortgage Crisis Is Far From Over originally appeared on Fool.com.

Fool contributor Dan Caplinger owns warrants on Bank of America, JPMorgan Chase, and Wells Fargo. The Motley Fool recommends Bank of America and Wells Fargo and owns shares of Bank of America, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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The Dow's Biggest Losers Last Week

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

Even without the release of any major economic data this past week, the major indexes had quite a volatile few days and ended the week mixed. Despite a 179-point drop on Monday and a smaller one on Thursday, the Dow Jones Industrial Average finished the week higher by 21 points, or 0.13%, and now rests at 16,458.56 after starting the week at 16,437.05. The Nasdaq saw similar swings, but it managed to be the week's best performing index, gaining 22 points, or 0.54%. Meanwhile, the S&P 500 lost ground over the past five trading sessions, down 0.19% for the week.


Before we get to the Dow's biggest losers of the week, let's review its top performer. Visa gained 4.99% this past week, following a big gain on Friday after American Express reported better-than-expected results for the fourth quarter and a massive increase in customer spending. If the same spending trend holds true for Visa, it should see a huge boost in revenue and, more importantly, profits when it reports earnings on Jan. 30.  

Last week's big losers
Taking the third worst performing spot on the Dow this past week was Wal-Mart , which lost 2.37% over the past five days, with the bulk of the decline coming on Thursday. That was the same day Best Buy said it experienced a 0.9% same-store-sales decline during the holiday shopping season, which could signal an industrywide slump. Wal-Mart also announced on Thursday that it had joined the initiative to require Florida tomato suppliers to increase farmer pay and provide workers with a safe working environment. It's hard to miss the irony here, as Wal-Mart stands firm against raising wages for its own employees, but the bigger issue for investors is that it may signal a sign of things to come. If Wal-Mart increases its workers' wages, corporate profits could suffer.  

The second worst performer on the Dow last week was UnitedHealth Group , which fell 2.91%. The company reported an 18% year-over-year earnings increase, while revenue rose 8% as its membership base increased by 170,000. It was the company's forecast that worried investors, as management believes Medicare Advantage cuts in 2015 could cause weak earnings growth, if not negate earnings altogether. Despite the customer count increase, a result of the Affordable Care Act's individual mandate, UnitedHealth needs Medicare rates to remain strong if it wants to continue pumping out strong earnings growth, and it appears that may not always be the case in the coming years.  

Finally, the worst performing Dow component this week was Nike , losing 4.58% following big declines on both Thursday and Friday. An analyst at Macquarie initiated coverage this week with a "neutral" rating and an $80 price target on the stock. That doesn't lend a whole lot of upside to the shares, which closed Friday at $73.39 and traded as high as $76.83 during the beginning of the week. That was really the only bad news on the week, so it's difficult to say what caused the massive sell-off, especially with the Olympics about to start. The Games are typically a good showcase for the athletic-apparel company.  

The other Dow losers this week:

  • Boeing, down 1.01%
  • Chevron, down 1.42%
  • ExxonMobil, down 1.35%
  • General Electric, down 1.4%
  • Goldman Sachs, down 1.18%
  • Home Depot, down 1.23%
  • JPMorgan Chase, down 0.65%
  • McDonald's, down 0.9%
  • Procter & Gamble, down 0.52%
  • Coca-Cola, down 2.11%
  • Travelers, down 0.85%
  • Walt Disney, down 1.87%

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The article The Dow's Biggest Losers Last Week originally appeared on Fool.com.

Fool contributor Matt Thalman owns shares of Home Depot, JPMorgan Chase, and Walt Disney.  Check back Monday through Friday as Matt explains what caused the big winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513 The Motley Fool recommends American Express, Chevron, Coca-Cola, Goldman Sachs, Home Depot, McDonald's, Nike, Procter & Gamble, UnitedHealth Group, Visa, and Walt Disney and owns shares of Coca-Cola, General Electric, JPMorgan Chase, McDonald's, Nike, Visa, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Investors Should Be Excited About NVIDIA's New Tegra Chips

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The Fool headed out to Vegas to check out the 2014 International Consumer Electronics Show. With more than 3,200 exhibitors, including 88% of the top retailers in consumer electronics, the CES is the place to be to see what's coming up in tech.

NVIDIA has brought its advanced Kepler GPU architecture to a mobile chip in the Tegra K1. It's also looking forward to the release of its Denver CPUs, available in 32- and 64-bit flavors later this year.

Even more exciting than this revolutionary technology are the incredible profits to be made from it, and when it comes to cashing in on big trends, no one is better than David Gardner. Click here now to uncover the one stock he's buying now.


A full transcript follows the video.

Evan Niu: Hey, Fools. Evan Niu here at CES 2014, and we're at NVIDIA's booth. Earlier this week they announced their brand new Tegra K1 chip. We're here with Doug with NVIDIA. Tell us about this new chip; it sounds pretty crazy!

NVIDIA Representative: The Tegra K1 is the latest chip in the Tegra family. It brings the Kepler architecture to mobile for the first time, so that's a significant accomplishment for the industry.

The Kepler architecture is something NVIDIA has across the line. It's the most advanced GPU in the industry, it's the most energy-efficient GPU in the industry, so bringing it to mobile means that you get all the advantages of having a very mature GPU architecture. It'll support DX11, OpenGL 4.4, OpenGL ES 3.next. From a graphics perspective, it's completely buzzword-compliant.

Niu: This is really console-level graphics in a mobile chip. Some of these demos we're seeing, it's pretty nuts to see on a smartphone or a tablet.

NVIDIA Representative: Absolutely. You look at the demo that's on-screen now; that's our FaceWorks demo, and it is a photorealistic rendering. That's actually a video, but it's captured live off the chip. You see the subsurface scattering, so you get genuine skin response -- it actually looks natural -- you've got ray tracing on Ira's eyes. What we're capable of is pretty impressive.

Niu: I know the Denver CPUs are coming out pretty soon, too. Those look really exciting to me, because that's really NVIDIA's big first step into real custom cores, really taken to the next level, to compete better with Qualcomm  and Apple  and all the other chip players. Could you tell us a little bit more about Denver?

NVIDIA Representative: Sure. The bigger story is that the chip comes in two flavors -- the 32-bit version with our 4-plus-1 A15 architecture, and then Denver in the 64-bit. Really excited about Denver; we just showed it for the first time on Sunday night.

It's brand new, back from the fab, so lots to see there, but the good news is that both chips will be in consumer devices this year. We'll see a 32-bit version in production devices by Q2, and we'll see the 64-bit version in production devices by the end of the year.

Niu: Thanks a lot. There you have it, Fools. For all the latest on NVIDIA and CES, make sure to go to Fool.com. 

The article Why Investors Should Be Excited About NVIDIA's New Tegra Chips originally appeared on Fool.com.

Evan Niu, CFA, owns shares of Apple and Qualcomm. The Motley Fool recommends Apple and NVIDIA and owns shares of Apple and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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JPMorgan Healthcare Conference Highlights: Sarepta Therapeutics

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The past four days have brought together pharmaceutical, biotechnology, and medical device makers all under one roof in what is arguably the most important health care conference of the year, the 2014 JPMorgan Healthcare Conference.

Just like the recently concluded Consumer Electronics Show in Las Vegas, this annual event gives health care companies a chance to demonstrate to investors and Wall Street where they've been and where they're headed. Because earnings guidance can be somewhat irrelevant for clinical-stage biotech and medical device companies, consider this event your chance to gain guidance from some 300 top health care companies.

Today, we're going to take a closer look at Sarepta Therapeutics' presentation, which was delivered Wednesday by President and CEO Chris Garabedian.


Sarepta Therapeutics' past year
Like many of the companies we've chronicled this week, Sarepta's had a wild ride over the past year, flying high at one point on continued follow-up data of its relatively small midstage study of eteplirsen for Duchenne muscular dystrophy, or DMD, a disorder that results in muscle degeneration and early death in boys.

Shares of Sarepta climbed to a 52-week high of $55.61 in September shortly after an experimental rival drug, drisapersen, developed by Prosensa and GlaxoSmithKline , missed its primary end point by a mile in late-stage trials. However, Sarepta also tanked just weeks later after the Food and Drug Administration decided against supporting an accelerated drug approval for eteplirsen; the agency would not make the connection that increased dystrophin production led to its remarkable trial results. Also, given the recent failure of drisapersen in a phase 3 study, the FDA felt it pertinent that Sarepta engage in a broader study. Shares ultimately dipped as low as $12.12. 

What Sarepta had to say
As you might expect, with Sarepta being the leading DMD drug developer, Garabedian spent pretty much the entirety of his JPMorgan conference presentation discussing the benefits of eteplirsen and its potential superiority over other treatment possibilities. He also alluded to a number of new pipeline products.

The two factors that I found most intriguing from Sarepta's presentation were its new DMD and infectious disease ventures and the recently released 120-week data on eteplirsen.

Garabedian wasted no time by pointing out early that Sarepta exon-skipping technology would add another three exons to its clinical focus -- exon 52, exon 55, and exon 8 -- which are currently in the lead sequence identification process. DMD has many genotype variables, so this isn't a disorder where one therapy fixes all. Sarepta anticipates having the lead sequence selected for all three exons by the second quarter, and plans to file two or more investigational new drug applications for these compounds in the latter half of the year. In addition, it expects to have a pre-investigational new drug application meeting with the Food and Drug Administration over exon 53 sometime this quarter. All told, as you can see below, Sarepta is now targeting eight specific exons. Most importantly, it expects to dose the first patient in its critical phase 3 trial for exon 51 with eteplirsen in the second quarter.


Source: Sarepta Therapeutics.

Garabedian, toward the end of his presentation, also noted Sarepta's burgeoning infectious disease pipeline, with an influenza, Marburg virus, and Ebola virus all in early stage clinical trials, and additional infectious disease drugs in the discovery stage, including tuberculosis and dengue.

What really stole the show, however, was the release of new data that demonstrated that eteplirsen's clinical benefit continued well into the 120th week. Sarepta's study is small, but it's working with two specific patient cohorts - an eteplirsen intent-to-treat, or ITT, arm and a placebo arm that was switched over to eteplirsen after noticeable six-minute walk test, or 6MWT regression at the 24-week mark. The results at 120 weeks are nothing short of remarkable with the ITT-eteplirsen arm showing only a 13.9-meter decline in 6MWT, or less than 5%, since the baseline more than two years prior. Even the placebo group has stabilized, with the walk test regression since week 36 totaling roughly 9 meters.


Source: Sarepta Therapeutics.

Even more impressive, whether they were patients well above 350 meters in the 6MWT or below 350 meters, the benefits have been similar, meaning it's helping at all stages of the disease.

Dystrophin production and safety were two other focal points of the presentation, with Garabedian focusing on demonstrable increases in dystrophin production at both doses in its phase 2 trial compared to the placebo, and in demonstrating that this medication leads to a sustained and statistically significant response in the body. Furthermore, even though the sample size is incredibly small, eteplirsen hasn't led to any serious adverse events.

Making sense of it all
Sarepta's presentation was certainly one of the most anticipated and exciting of the week, and yesterday's 40% climb in the company's share price indicates it did not disappoint. The stock stood at $28 on Friday morning.

What we heard was a lot of encouraging news from its CEO about the company's exploration of new exon-skipping technology and expansion of its portfolio beyond DMD.

We also received interesting news earlier this week when GlaxoSmithKline announced it would not renew its pact with Prosensa in developing drisapersen, leaving the small-cap company without a development partner. Although Prosensa announced yesterday that a further study of its phase 3 clinical results leads it to believe that earlier and longer treatment of patients on drisapersen would delay the disease progression, it only appears to further clarify that Sarepta's eteplirsen is in the driver's seat.

The real focus and ultimate share price driver for Sarepta in 2014 is going to be the design and data from its upcoming phase 3 trial for eteplirsen. This quarter will be spent out hashing out the details and end points of this study with the FDA, followed by enrollment and dosing beginning next quarter. Based on the length of time before notable results were delivered in the phase 2 study, we're probably looking at the second quarter of 2015 before truly meaningful data is available. If this new data supports the small sample size data from its phase 2 trial, then Sarepta will likely own 13% of all DMD cases with its exon 51-skipping eteplirsen and could therefore add some validity to the remainder of its DMD pipeline.

My suggestion would be not to get too caught up in Sarepta's wild swings this year, as we shouldn't have the juicy pieces of evidence until closer to the midpoint of 2015. That doesn't mean eteplirsen won't be a success, but it means we're just going to be witnessing a lot of very early stage moves this year (new indication filings) rather than much in the way of late-stage advancement. So keep that in mind as you watch Sarepta vacillate wildly up and down this year.

Sarepta is off to the races so far, but it may not be able to keep up with this top stock for the remainder of the year!
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The article JPMorgan Healthcare Conference Highlights: Sarepta Therapeutics originally appeared on Fool.com.

Fool contributor  Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name  TMFUltraLong , track every pick he makes under the screen name  TrackUltraLong , and check him out on Twitter, where he goes by the handle  @TMFUltraLong . Try any of our Foolish newsletter services  free for 30 days . We Fools may not all hold the same opinions, but we all believe that  considering a diverse range of insights  makes us better investors. The Motley Fool has a  disclosure policy .

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Is One of China's "Top Employers" Worth Knowing About?

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Johnson Controls employs 25,000 people in China, and it was recently one of only 36 companies to be voted a "Top Employer" by the Corporate Research Foundation. Obscure awards aside, the company has a big-time opportunity in China and investors stand to benefit handsomely. 

In this video, Fool.com contributor Aimee Duffy talks to Tyler Crowe about Johnson Controls' automotive business, and how its success parallels that of Ford and General Motors . She also discusses another specific opportunity for the company's building efficiency unit, and why it is better positioned than most international companies to succeed in China.

Two more auto plays in China
U.S. automakers boomed after WWII, but the coming boom in the Chinese auto market will put that surge to shame! As Chinese consumers grow richer, savvy investors can take advantage of this once-in-a-lifetime opportunity with the help from this brand-new Motley Fool report that identifies two automakers to buy for a surging Chinese market. It's completely free -- just click here to gain access.


The article Is One of China's "Top Employers" Worth Knowing About? originally appeared on Fool.com.

Fool contributor Aimee Duffy owns shares of Ford. Tyler Crowe has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Myth Busting: Insurers Hate Obamacare

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A common misconception is that the Patient Protection and Affordable Care Act, also known as Obamacare, is bad for the health-insurance business. In reality, however, Obamacare is a pretty good deal for health insurers. In this video, Motley Fool health-care analyst David Williamson takes a good look at health insurers, and the Obamacare enrollment numbers that would need to take place for this to be financially beneficial. He also focuses on customer mix and looks at how many young, healthy people need to enroll in order to benefit insurers, and how likely it is that that customer mix ratio will happen.

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The article Myth Busting: Insurers Hate Obamacare originally appeared on Fool.com.

David Williamson owns shares of UnitedHealth Group. The Motley Fool recommends UnitedHealth Group and WellPoint and owns shares of WellPoint. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Friday's Biggest Health-Care Winner: Illumina, Inc.

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One of the big winners in the health-care space on Friday was Illumina , up 10% for the day after the company outlined its strategic vision. The big news from the report was its new genome sequencer machine, designed to process a staggering 20,000 genomes a year, at a price point of $1,000. This price has long been a target for the industry, and Illumina's reaching it should lead to widespread use of its machine. Releasing its sequencer now also gets it out ahead of competitor Life Technologies' $1,000 sequencer, and it positions Illumina to dominate what could be a $20 billion market. In this video, Fool health-care analyst David Williamson tells investors just how big the potential for Illumina in this space could be, and what to watch for from here.

Looking for more great ideas in health-care technology?
The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. In The Motley Fool's brand-new free report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that Big Pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.

The article Friday's Biggest Health-Care Winner: Illumina, Inc. originally appeared on Fool.com.

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

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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2014 Trend Alert: Health-Care M&A

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The CEOs of both Bristol-Myers Squibb and Teva Pharmaceutical Industries  have indicated that they're looking to make deals at the moment. In this video, Motley Fool health-care analyst David Williamson looks at both companies and how successful some of their recent mergers and acquisitions were. He also examines several possible takeover candidates and discusses just how likely each might be for an acquisition by BMY or TEVA. Finally, David tells investors which of the two he sees as stronger at the moment, and how this pricey bull market may affect the companies' decisions.

What's the best way to play the biotech sector?
The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. In The Motley Fool's brand-new free report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that Big Pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.

The article 2014 Trend Alert: Health-Care M&A originally appeared on Fool.com.

David Williamson has no position in any stocks mentioned. The Motley Fool recommends Teva Pharmaceutical Industries. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Abbott Laboratories Will Keep Running in 2014

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While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Abbott Laboratories opened up slightly this morning after Morgan Stanley upgraded the health care giant from equal weight to overweight.

So what: Along with the upgrade, analyst David Lewis planted a price target of $45 on the stock, representing about 14% worth of upside to yesterday's close. While value investors might be turned off by the stock's surge since October, Lewis believes there's more room to run given Abbott's seemingly underappreciated growth prospects.


Now what: Morgan Stanley sees headwinds ahead for Abbott in the near term, but thinks that its long-term risk/reward trade-off is attractive at this point. "ABT's 40% emerging market revenue mix is largely unhedged, implying '13 FX moves could pressure 1H margins, in line with [Covidien ] and [Johnson & Johnson ] commentary," noted Lewis. "We are comfortable with the consensus '14 outlook for revenue growth >5% and EPS at $2.21/up 10%." With stock up about 10% over the past month alone, and trading at a forward P/E near 20, however, Fools might want to wait for a wider margin of safety before betting on it.

More compelling income opportunities

One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

The article Why Abbott Laboratories Will Keep Running in 2014 originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Covidien and Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Friday's Biggest Health-Care Loser: Nu Skin Enterprises, Inc.

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Nu Skin Enterprises fell an additional 10% on Friday after Thursday's plummet of 29%, following a report that the Chinese government will investigate the company as a possible pyramid scheme. Nu Skin is heavily reliant on the Chinese market for growth, so such an investigation will affect the stock negatively, even if nothing is found.

In this video, Fool health-care analyst David Williamson looks at Nu Skin and its relationship with the Chinese market. He tells investors just how strong of an impact this investigation could have on the stock, and whether this week's precipitous fall means a buying opportunity, or that it's time to get out.

Looking for more interesting plays in health care?
The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. In The Motley Fool's brand-new free report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that Big Pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.


The article Friday's Biggest Health-Care Loser: Nu Skin Enterprises, Inc. originally appeared on Fool.com.

David Williamson has no position in any stocks mentioned. The Motley Fool has options on Herbalife. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Are Closed-End Funds a Big Bargain?

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Closed-end funds aren't the best-known investments in the market, but they often come at discount prices compared to the value of their underlying holdings. Does that make closed-ends bargain opportunities?

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at closed-end funds and whether discounted shares are bargains. Dan looks closely at Adams Express and Petroleum & Resources , two closed-ends that perennially trade at discounts to their net asset value. Dan notes that Adams Express gives investors cheap exposure to Apple and other lucrative dividend-paying stocks, while Petroleum & Resources focuses on energy investment ExxonMobil , Chevron , and other high-income stocks in the energy sector. Dan runs through the pros and cons of the discounts, noting that the best of all worlds would be to buy at a discount but sell at no discount.

Why focusing on dividends makes sense
Getting discounts on dividend stocks is usually a smart move, because one of the dirty secrets that few finance professionals will openly admit is that dividend stocks as a group handily outperform their non-dividend-paying brethren. The reasons are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.


The article Are Closed-End Funds a Big Bargain? originally appeared on Fool.com.

Fool contributor Dan Caplinger owns shares of Adams Express, Apple, and Petroleum & Resources. The Motley Fool recommends Apple and Chevron and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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The New Margin Booster for the Auto Industry?

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Get a glimpse of what's on the tech horizon with Foolish reports from the field at the 2014 International Consumer Electronics Show. Companies ranging from start-ups to Fortune 100 firms launch and showcase thousands of products at the event, which attracts visitors from around the world.

As fuel economy standards tighten, high-tech options such as wireless connectivity and alternative fueling systems may be more attractive than larger engines as a high-margin upsell.

There were countless trends emerging from CES 2014 this year, but the real question for investors is how to capitalize on these revolutionary opportunities. Fortunately for you, David Gardner has an idea or two on how to invest in these new emerging technologies -- and how you can profit. Get in on the ground floor now by clicking here.


A full transcript follows the video.

Eric Bleeker: Hey, Fools. I'm Eric Bleeker with Austin Smith, from the floor of CES. One of the amazing things about CES -- it is essentially a car show. This is one of the coolest car concepts I've ever seen in my life. We're at Toyota's booth right now, and you are seeing technology as a differentiator.

When we're looking at the broader automobile space, we see Tesla  with such enviable margins. Can some of these advanced technologies -- that are relatively cheap to manufacture, relative to cost and upselling -- can this be a differentiator to increase margins across the industry?

Austin Smith: I think so, absolutely. You look at Tesla -- enviable near-25% gross margin, something Ford , Toyota, General Motors  would be absolutely salivating over. And Tesla, in many ways, is a very high-tech vehicle.

I'm starting to see a lot of these technologies and think that these could be very legitimate upsells for customers at the point of purchase. Normally it's going from maybe that small engine to the big engine, where you're getting that high-margin upsell. But when you have CAFE standards that are really going to be crippling a lot of these automakers in the next five to 10 years on what sort of engines and features they can upsell you on, these tech products -- which, as you pointed out, are very, very affordable to manufacture at scale -- could actually replace a lot of those engines as the big upsells for a lot of these vehicles: 4G connectivity, something Audi, General Motors, and a lot of companies here have talked about. We're standing right by a Ford C-MAX concept that has solar panels on the roof to charge this hybrid vehicle ...

So I can very easily see the car -- the upsell, the more premium vehicle that's going to get you those wider gross margins -- actually being much more tech-themed over the next few years, as opposed to performance-themed, which lines up very well with the CAFE restrictions these automakers are going to be placed under, and maybe even get them closer to those enviable Tesla 20%-plus gross margins.

Eric: Awesome. There you have it; something far more exciting than curved TVs -- automobiles! Who would have believed that, a decade ago? That's it for this look at auto news. For all your news on CES, head back to Fool.com. Fool on!

The article The New Margin Booster for the Auto Industry? originally appeared on Fool.com.

Austin Smith owns shares of Ford and General Motors. Eric Bleeker, CFA, has no position in any stocks mentioned. The Motley Fool recommends Ford, General Motors, and Tesla Motors and owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Prediction: We'll Get a Justice League Movie in 2016

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With all the casting rumors , Fool contributor Tim Beyers says it's likely that Time Warner and DC Entertainment are under way with plans to bring a Justice League movie to theaters by 2016.

The latest rumblings have either Dwayne Johnson or Denzel Washington in line to play the Green Lantern John Stewart, and Josh Holloway up for Aquaman. All potentially solid choices, Tim says.

But the bigger news may be that we're hearing anything at all. DC and Warner have their hands full with Arrow, which returned from midseason hiatus this week, a pilot for The Flash TV series starring Grant Gustin, and 2015's Batman vs. Superman. Gal Gadot will star as Wonder Woman in that film, joining Ben Affleck's Batman and Henry Cavill's Superman. With so much going on already, it's hard to imagine adding more characters to the mix -- unless the plan is to shoot Justice League right after Batman vs. Superman, building momentum for the DC Cinematic Universe.


Tim says that's likely, and preparing for it now is smart business. Marvel signed most of its stars to multipicture deals just as it was building out the universe. In one extreme case, the comic book king agreed to a nine-picture deal with Samuel L. Jackson to play S.H.I.E.L.D. boss Nick Fury. DC may be taking the same approach by courting Johnson, Washington, and Holloway now, before an official Justice League film is in the works.

Now it's your turn to weigh in. Who would you choose for the next Green Lantern? Who would you want as Aquaman? Please watch the video to get Tim's full take, and then leave a comment to let us know whether you would buy, sell, or short Time Warner stock at current prices.

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The article Prediction: We'll Get a Justice League Movie in 2016 originally appeared on Fool.com.

Fool contributor Tim Beyers is a member of the  Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Time Warner at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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Why Investors Should Be Encouraged By the Outlook for Coal

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The past few years have seen a severe deterioration of the coal industry, as it nearly drowned under the weight of several overhanging factors. First, more restrictive environmental protection standards have made it very difficult to build new coal-fired plants in the United States. In addition, booming natural gas production has served to undercut coal.

As demand for natural gas rises in the United States, the price of natural gas is starting to increase in tandem. This may finally ease the pain for coal producers, whose end-users are now incentivized to once again return to coal. That's why, at least in the short term, coal is likely to see a rebound.

Evidence that coal's decline is leveling off
Fortunately for coal companies, there's already evidence suggesting a slight recovery in coal. In fact, the U.S. Energy Information Administration expects coal production to increase by 3.6% in 2014, following a 9% production decline from 2011 to 2013, and cites higher natural gas prices as the primary reason.


While shipment volumes to industrial end-users remain in decline, the nation's railroads are beginning to see some signs of stabilization in the coal market. For example, even though its coal volumes remain challenged, Union Pacific grew its coal freight revenues by 2% in both the most recent quarter as well as through the first nine months of the year. The fact that railroads like Union Pacific are seeing coal revenues increase signals at least some measurable improvement.

Will utilities return to coal?
As previously stated, it's extremely difficult for utilities to build new coal-firing plants, due to increasing regulatory scrutiny. However, some utilities, including Southern Company , are devoting billions to research new coal-processing technologies that may result in a promising future for coal after all.

Southern Company considers its Kemper facility to be the future of coal. It employs a revolutionary technology that utilizes lignite coal, which converts to gas at a much lower cost than traditional gasification techniques. It's a much more environmentally friendly process as well, and the facility is expected to become operational by the end of the year.

A spectacular coal MLP to capitalize on the recovery
Alliance Resource Partners stands atop the list of coal companies in the United States, thanks to its extremely advantageous cost structure. It produces primarily Illinois Basin and Northern Appalachian coal, which are low-cost sources that compete very well with natural gas on pricing.

This is what has allowed Alliance Resource Partners to keep increasing coal production, and profits, even during the difficult environment afflicting the entire industry. This is illustrated by the fact that the company has realized 12 consecutive years of record results in terms of tons produced and sold.

Alliance Resource Partners is the first and largest master limited partnership that engages in the production and marketing of coal. As an MLP, it's required to transfer the bulk of its cash flow through to investors as a distribution. Amazingly, Alliance Resource has raised its distribution for 22 quarters in a row, and yields 6% at its recent unit price.

If natural gas prices keep rallying, coal should be a winner
As it's often been reported, the United States is sitting on an ocean of natural gas supply that is now commercially viable thanks to new, advanced drilling techniques. Depressed prices in recent years have only accelerated natural gas' momentum. Of course, once demand catches up, the price of natural gas is likely to catch up. This should actually work in coal's favor, and is already happening as natural gas prices have risen steadily in recent months.

If natural prices keep going up, utilities will once again consider returning to coal. And, since utilities like Southern Company are developing cleaner-burning coal technologies, the future for coal may be bright after all.

Position yourself for higher natural gas prices
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The article Why Investors Should Be Encouraged By the Outlook for Coal originally appeared on Fool.com.

Bob Ciura owns shares of Alliance Resource Partners, L.P.. The Motley Fool recommends Alliance Resource Partners, L.P. and Southern Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

 

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