Are We Headed For A 1929 Crash?

Our toppy market could be headed for a big correction, if technical analysis is any guide.

That’s the conclusion of the McClellan Market Report newsletter chart, above, published Wednesday. It shows the rising performance of the Dow Jones Industrial Average since July 7, 2012 through today, in red. The black line above it is the Dow during 1928 and into 1929.

The prediction: the market could peak in mid-January, and lose all of its 2013 gains by the end of March 2014.

The Dow is up 40.62 points or 0.25% today to 16137.95. On Wednesday, at 16097.33, the DJIA hit a new record high, which represented the 44th record close this year.

Of course, the 1929 comparison has its problems. In the 1920s, the Federal Reserve raised the discount rate as high as 5%. Moreover, the New York Stock Exchange in that era was open six days per week. Thus, there were 43 more trading days in 1928 than in 2012.

McClellan Market Report Editor Tom McClellan warns that “expectations of precision are just not warranted” and no one should assume “the equivalent of the Sep. 3, 1929 top is ideally due Jan. 14, 2014.”

However, he writes the approximate Jan. 14 market-peak date “is all the more interesting” in light of work by another newsletter writer, and another author — of a book on George Lindsay’s market analysis. These two also expect some kind of January peak. One, based on Fibonacci cycle expansion analysis, and the other based on counting the number of days forward from important market dates, and identifying “a basic advance” — sometimes not the lowest low.

For more on the “1929 Analog” from McClellan, click here.  

Wednesday’s top DJIA laggard stocks were higher, up less than a point, headed into the early 1 p.m. close today. McDonald’s (MCD), Disney (DIS), Chevron (CVX) Procter & Gamble (PG) were up, though ExxonMobil (XOM) shares were flat headed into the close. 

Among the largest components of the SPDR Dow Jones Industrial Average exchange-traded fund (DIA), Visa (V) and International Business Machines (IBM) are slighlty higher today, while Goldman Sachs (GS) shares rose nearly a point.

Emulex Announces $200M Buyback

NEW YORK (TheStreet) - Emulex (ELX) announced a $200 million share repurchase, expanded cost savings and board changes in an attempt to boost profitability and shareholder value. 

The server component specialist, the subject of sale chatter earlier this year, unveiled its capital return plan after market close on Monday. At current market prices, the $200 million share repurchase represents about 30% of the firm's outstanding shares. The company that the initial $100 million of the buyback will be completed through individual transactions and an Accelerated Share Repurchase (ASR) program, expected to be completed by the end of fiscal 2014.  Emulex will launch the second $100 million buyback immediately after the ASR is completed.

Emulex also expects to generate $30 million in annual cost savings over the fiscal 2013 spending level. This expands on a previously-announced $10 million cost savings initiative tied to the company's connectivity business. 

"We expect to achieve the $30 million annualized expense reductions by simplifying our product portfolio, discontinuing additional lower return on investment programs, pursuing some consolidation opportunities and identifying further efficiencies," said Emulex CEO Jeff Benck, in a statement. "The changes announced today mark important initial steps in our efforts to maximize operational efficiency while continuing our revenue growth initiatives, all as part of a strong commitment to generating incremental increases in stockholder value." 

Emulex expects to complete the cost savings plan in the next few quarters, with the full run-rate benefits realized in fiscal 2015.  The company is also planning to add "three new experienced executives" to its board and is "actively interviewing" candidates. Emulex will also reduce the size of its board from 12 to 11 members.  "The Emulex Board has determined that now is the appropriate time to bring additional external talent to the Board as we continue to work to increase shareholder value," said Benck, in the company's statement.  Former CEO Jim McCluney, currently executive chairman of the Emulex board, will leave the company on Feb. 6, 2014 in accordance with his contract of employment, and will not stand for re-election to the board.

Emulex shares, which have risen more than 21% over the last 6 months, crept up 0.8% to $7.60 in extended trading.

--Written by James Rogers in New York. Follow @jamesjrogers >To submit a news tip, send an email to: tips@thestreet.com.

Boomers Need to Talk About Long-Term Care

Getty Images No one wants to talk about death, illness or divorce. Unfortunately, you may have to raise some unpleasant issues when you speak with family members over the holidays if you want to ensure a successful retirement. Family issues are just about the only thing investors don't plan for, and it could hurt them in retirement, a new Bank of America Merrill Lynch and Age Wave study shows. The study, "Family and Retirement: The Elephant in the Room," conducted in August, surveyed more than 5,400 respondents and asked about family dynamics and long-term financial planning. The survey found that respondents were generous when it came to assisting family members but unrealistic in assessing some of their own needs later in life, especially long-term care. In the survey, half of pre-retirees age 50 and older said they would make major financial sacrifices for family members, and 36 percent said they were willing to endure a less comfortable post-retirement lifestyle to aid family members. Baby boomers, also known as the "sandwich generation," are in a tough spot, with one in five parents seeing their children return home to live with them as they also attempt to care for their own aging parents. Those boomers surveyed said they would not be prepared if an aging parent or older relative needed long-term care. But what about the boomers' own long-term care? The majority don't think they'll need it, with only 37 percent of survey respondents age 50 and older saying they may need long-term care in their lifetime. But according to 2013 U.S. Department of Health and Human Services data, 70 percent of retirees will eventually require it. That's a big problem, according to Matt Curfman, senior vice president of Richmond Brothers, a money management firm. He says his clients in Jackson, Miss., may spend anywhere from $2,000 to $7,000 a month on long-term care. Paying for such care is an even bigger concern when someone is married, as they have to worry about how much will be left for the healthy spouse to live on once the ill spouse passes. One option is long-term care insurance, but Curfman doesn't advise it. "The average rise of health care costs compared with what a long-term care policy offers is not great. There is an average increase of 15 percent a year and even if it's a great policy, there could be an inflation cap of 3 to 5 percent." Curfman suggests that people planning for long-term care also consider trying to use the death benefit in their life insurance policy while they're still living. "Life insurance is becoming more unique. Some policies allow access to the death benefit while alive," Curfman says. If a person can't perform two activities of daily living -- feeding and clothing yourself, for instance -- he or she can talk to a doctor, have the doctor write a note explaining their inability to succeed at those tasks and receive substantial access to the death benefit, Curfman explains. You can also receive an accelerated death benefit if you are terminally ill or have a life-threatening diagnosis such as AIDS, according to the U.S. Department of Health and Human Services. There are also hybrid life insurance policies that allow chronic illness riders, which may be helpful to boomers in their 50s and 60s. Curfman says some financial advisers are beginning to factor long-term care and assistance to family members into clients' financial plans. "I think what's happening is that a lot of advisers only deal with retirement planning through asset allocation, and that's shortsighted to help with those goals but not deal with long-term care issues. It's not so much that advisers are proactive, it's that these issues are being brought to them and now they're reacting." David Tyrie, head of retirement and personal wealth solutions for Bank of America Merrill Lynch, says the study makes it apparent that people are not having real discussions about their financial needs in retirement or how family issues complicate those goals. According to the survey, as much as 70 percent of adult children age 25 and older haven't discussed important financial issues with their parents, such as their parents' retirement, possible illnesses or anything related to aging. The survey also shows that more than half of parents age 50 or older haven't discussed inheritance, a will or where they want to live in retirement with their adult children. "It's very clear people are not talking about this. People are only reactive, doing this after an illness or death of a family member. But there is fear of conflict or what might happen as a result," Tyrie says. If families don't discuss important financial issues, debt could easily spiral out of control. Curfman gave the example of a couple he worked with who did everything right to plan for their retirement -- only they didn't account for the financial help they would need to give their children and parents.

Barnes & Noble Falls Despite Surprise Q2 Profit As Sales, Outlook Remain Gloomy

Barnes & Noble (BKS) was falling around 6% at recent check, despite reporting a surprise profit in its second quarter, as sales declined across its major segments.

The struggling bookseller reported earnings of $13.2 million, or 15 cents a share, well ahead of the seven-cent per share loss a year earlier. Analysts were expecting the company to post another loss this quarter, anywhere from three to 11 cents, depending on which source you use.

Sales fell 8% year over year to $1.73 billion, just shy of the $1.76 billion consensus.

Gross margin improved to 26.6% from 25.6%, on a 9.3% drop in costs of sales and occupancy. Selling and administrative costs were down 7.1%.

Revenues at its retail segment dropped 7.5% year over year in the quarter, while its college division reported a 4.6% decline in sales. Nook revenues dropped 32%.

Barnes & Noble also reaffirmed its previously announced full-year guidance, which calls for same-store sales declines in its retail and college stores.

It's been a tumultuous year for Barnes & Noble, as it has abandoned plans to split itself in two and Chairman Leonard Riggio decided against purchasing the company's consumer bookstores.

Illinois high court rejects ‘Amazon’ sales tax

SPRINGFIELD, Ill. (AP) — The Illinois Supreme Court threw out a state law Friday that taxes certain Internet sales, saying the so-called "Amazon tax" violated federal rules against "discriminatory taxes" on digital transactions.

The 6-1 ruling represented the first time a court had invalidated an Internet sales tax law among 18 states that have them. It brought an immediate cry from traditional, store-based retailers for Congress to step into regulating taxes on web sales.

The court determined that Illinois' 2011 "Main Street Fairness Act" was superseded by the federal law, which prohibits imposing a tax on "electronic commerce" and obligates collection that's not required of transactions by other means, such as print or television.

Illinois' law required out-of-state retailers to collect state taxes on annual sales of more than $10,000 that involve in-state "affiliates," or website operators and bloggers, that draw consumers to the retailers' sites in exchange for a cut of each sale.

That prompted several high-profile departures from the Prairie State by companies such as CouponCabin.com, which fled rather than lose so-called "click-through-nexus" payments from the Internet retailers.

But Justice Anne Burke, writing for the court's majority, questioned whether there was any substantial difference between out-of-state businesses reaching Illinois consumers through a click-through-nexus approach or through other approaches that aren't taxed.

"The click-through link makes it easier for the customer to reach the out-of-state retailer," Burke wrote. "But the link is not different in kind from advertising using promotional codes that appear, for example, in Illinois newspapers or Illinois radio broadcasts."

Justice Lloyd Karmeier dissented, saying the federal law does not apply because the state statute doesn't "impose any new taxes or increase any existing taxes," but rather changes the definition of who's obligated to collect them.

But Illinois residents sho! uld not expect refunds for the books, neckties, CDs or other items they bought by click during the past two years. Regardless of how an item is purchased, Illinois shoppers must pay 6.25 percent sales tax. If a retailer doesn't collect it online, taxpayers must do the math and add the owed sales tax when figuring their state income-tax return in the spring.

Illinois' tax collector, the Department of Revenue, said it's considering asking the U.S. Supreme Court to intervene. Amazon.com did just that in August, when it sought a review of the New York Court of Appeals' March ruling upholding the law there. The Empire State was among the first to argue that a business with "affiliates" within its borders gives the company a physical presence there — a must if a state hopes to collect taxes from it, according to a 1992 U.S. Supreme Court ruling.

Revenue officials also said they would continue to push the "Marketplace Fairness Act" in Congress to "level the playing field for all businesses." Its sponsor is Sen. Dick Durbin, an Illinois Democrat.

Friday's Illinois ruling "underscores the need" for Capitol Hill action, said David Vite of the Illinois Retail Merchants Association.

"Brick-and-mortar businesses, which pay property taxes, and income taxes, and are hiring people, are at a significant competitive disadvantage with their remote-selling counterparts," Vite told The Associated Press. "It's time for the federal government to clarify and finish putting retailers, who are making payroll and putting people to work, on equal footing."

An Amazon spokeswoman did not immediately return a message seeking comment Friday.

Neither proponents nor opponents of the measure could say how much Illinois had collected, but just as the law's backers trumpet economics, so do those opposing it. George Isaacson is a lawyer from Lewiston, Maine, who represents the plaintiffs in the case, Performance Marketing Association. Its members are the affiliates who post the retailers' links.

"! Our under! standing is that the primary economic impact, the effect of the legislation, was in forcing the web affiliates to lay off people," Isaacson said. "That's less income, less income tax. The law was self-defeating in terms of economic impact."

Top High Tech Companies To Own For 2014

American Electric Power Co., Inc. (AEP) has decided to retire unit 5 of its coal-fueled Muskingum River Plant in 2015. Located in Beverly, Ohio, the coal plant has an electric generation capacity of 585 megawatt (MW).

The company arrived at this decision as it was unwilling to spend additional capital on refueling the plant. In February this year, the company had modified the 2007 New Source Review Consent Decree that gave the company an option to either retire Muskingum River Unit 5 or refuel it with natural gas.

The company expects to incur a non-operating, pre-tax impairment charge for the unit in the range of $150 million to $170 million in the second quarter of 2013. However, this will not impact the company�� full year earnings guidance range of $3.05 to $3.25 and long-term earnings growth rate in the range of 4% to 6%.

Earlier, the company had announced that it will shut down Muskingum�� four other units. The closure of these units would affect approximately 95 employees. The company will either move these employees to other units or compensate them with severance benefits.

Top High Tech Companies To Own For 2014: BRITANNIC GROUP gbp0.05(RSL.L)

Resolution Limited engages in life assurance business in the United Kingdom and internationally. It offers various protection products, including life cover, critical illness cover, income protection, and business protection. The company also provides investment and savings consisting of wealth solutions bond, a lump sum investment with a wide choice of funds; and protected investment portfolio bond that allows investing in a range of funds, as well as offers a guaranteed minimum payment on death. In addition, it provides individual personal pension, individual stakeholder pension, and online stakeholder pension that offer a tax efficient way of saving for retirement; and corporate pensions. Further, the company offers various solutions for inheritance tax planning, such as making a will, making gifts, and trusts; and annuities. Additionally, it provides life assurance-based tax and estate planning solutions for high and ultra-high net worth individuals. The company offers its products through employee benefit consultants, consulting actuaries, independent financial advisers or distribution agreements, strategic partnerships, and relationships with private banks and specialist advisors. The company was founded in 1832 and is based in St Peter Port, the Channel Islands.

Top High Tech Companies To Own For 2014: Cedar Mountain Exploration Inc (CED.V)

Graphite One Resources Inc., a mineral exploration company, engages in the identification, acquisition, and exploration of mineral properties. The company primarily explores for graphite deposits. It owns an option to earn 100% interest in the Graphite Creek Property that consists of 72 claims covering 3,108 hectares and is located to the north of Nome on the Seward Peninsula of Alaska. The company was formerly known as Cedar Mountain Exploration Inc. and changed its name to Graphite One Resources Inc. in March 2012. Graphite One Resources Inc. was founded in 2006 and is based in Vancouver, Canada.

Hot Small Cap Companies To Buy Right Now: Medifocus Inc (MDFZF)

Medifocus Inc.(Medifocus) is a Canada-based company. The Company is engaged in the business of development and commercialization of minimally invasive, focused-heat tumor targeted cancer treatment devices and systems. Medifocus operates through its wholly owned subsidiary, Celsion (Canada) Limited (Celsion). Celsion had purchased from Celsion Corporation (United States), all of the assets relating to breast cancer Microfocus APA 1000 System (System), consisting of the microwave machine, the adaptive phased array (APA) technology licensed from Massachusetts Institute of Technology (MIT). The Company focuses on breast cancer treatment by using microwave heating to enhance neoadjuvant chemotherapy to provide tumor shrinkage and control. Advisors' Opinion:

• [By Peter Graham]

  Small cap stocks KBridge Energy Corp (OTCMKTS: BMMCF), Medifocus Inc (OTCMKTS: MDFZF) and Inscor Inc (OTCMKTS: IOGA) have been getting some attention lately in various investment newsletters and some of it is deserved as the first stock sank 35% on Friday, the second one recently released its financials (which did show a big improvement, but there is also a big catch for investors) and the third one has been the subject of a very aggressive promotional campaign. But are any of these three small caps really all that hot for investors? Here is a quick reality check:

• [By EquityOptionsGuru]

  Over the past few years, and especially months, biotechnology stocks have been soaring on heightened investor expectations. Investors looking for a unique opportunity to participate in a massive bull rally over the next few years might want to pay special attention to one small but growing company called Medifocus (OTCMKTS:MDFZF).

Top High Tech Companies To Own For 2014: Cardero Resource Corp (CDU.TO)

Cardero Resource Corp., together with its subsidiaries, engages in the acquisition, exploration, and development of mineral properties in Mexico, Peru, Argentina, Ghana, the United States, and Canada. It primarily explores for metallurgical coal, titanium, and iron ore with titanium and vanadium by-products. The company holds a 75% interest in the Carbon Creek deposit, a metallurgical coal development project located in the Peace River Coal Field of northeast British Columbia, as well as holds an option to acquire a 100% interest in the Trefi Metallurgical Coal deposit comprising 15 coal licenses and 3 license application areas totaling 9,437 hectares located in northeastern British Columbia. It also holds an option to acquire a 90% joint venture interest in the Sheini Hill Iron Project located in Ghana; a 100% in the Iron Sands deposit in southern Peru; and an 85% interest in the Longnose property, as well as holds a 100% leasehold interest in the Titac property located i n Minnesota in St. Louis County. The company was formerly known as Sun Devil Gold Corp. and changed its name to Cardero Resource Corp. in May 1999. Cardero Resource Corp. was founded in 1985 and is headquartered in Vancouver, Canada.

Top High Tech Companies To Own For 2014: Youku.com Inc.(YOKU)

Youku.com Inc. operates as an Internet television company in the People?s Republic of China. Its Internet television platform enables consumers to search, view, and share video content across various devices. The company?s services for users comprise video content library consisting primarily of professionally produced content, including television serial dramas, movies, event reports, variety shows, and music videos under the Youku brand. It also provides user-generated content through Youku Paike and Youku Niuren programs; and produces a range of content, such as sponsored Web serial dramas, reality shows, interviews, and variety shows under Youku Originals brand. The company?s other services for users comprise online video search and discovery, online community, video space, real time commenting, and searchable community message board, as well as wireless video, iPhone channels and iPad, and P2P downloadable software client services. In addition, it offers online advert ising services to various advertising companies operating in fast moving consumer goods, information technology services, automobile manufacturing, electronics, telecommunications, financial services, e-commerce, and online game industries. The company?s products and services for advertisers and customers include online advertising services, such as in-video, display, sponsorship, and other forms of advertisements; targeting solutions; viral video advertisements; product placements; subscription-based services that enables users to watch advertisement-free premium content, such as high-definition movies; and sub-licensing content. It sells its advertising services through third-party advertising agencies comprising members of American Association of Advertising Agencies and Chinese advertising agencies. The company was formerly known as 1Verge Inc. and changed its name to Youku.com Inc. in June 2008. Youku.com Inc. was founded in 2005 and is headquartered in Beijing, the Peo ple?s Republic of China.

Advisors' Opinion:

• [By Jake L'Ecuyer]

  Shares of Youku Tudou (NYSE: YOKU) got a boost, shooting up 11.08 percent to $29.28 after the company reported a Q3 gross profit of RMB82.3 million (US$13.4 million).

• [By Rick Munarriz]

  Youku Tudou (NYSE: YOKU  ) commands a $3.3 billion market despite losing money, and the assets that Baidu has collected in recent months make it a top player in video. An IPO or spinoff would also help improve Baidu's bottom line as video may be a big drag on its bottom line as it was for Google (NASDAQ: GOOG  ) after its initially controversial move to acquire YouTube.�

• [By Rick Munarriz]

  However, the real development here is that fortifying its video offerings through iQiyi and PPS.tv will make Baidu a legitimate competitor to Chinese top dog Youku Tudou (NYSE: YOKU  ) .

Top High Tech Companies To Own For 2014: SigmaTron International Inc.(SGMA)

SigmaTron International, Inc. provides electronic manufacturing services. The company offers printed circuit board assemblies and assembled (box-build) electronic products services. It also provides various services, including automatic and manual assembly and testing of products; material sourcing and procurement; design, manufacture, and test engineering support; warehousing and shipment services; and assistance in obtaining product approval from governmental and other regulatory bodies. It primarily serves appliance, consumer electronics, gaming, fitness, industrial electronics, medical/life sciences, semiconductor, telecommunications, and automotive industries. SigmaTron International markets its services through 13 independent manufacturers? representative organizations. The company was founded in 1993 and is headquartered in Elk Grove Village, Illinois.

Top High Tech Companies To Own For 2014: Ym Biosciences Inc Com Npv (YM.TO)

YM BioSciences Inc., a drug development company, engages in developing hematology and cancer-related products. Its products include CYT387, a dual inhibitor of the JAK1 and JAK2 kinases, which has implicated in a family of hematological conditions known as myeloproliferative neoplasms, including myelofibrosis, as well in various other disorders comprising indications in hematology, oncology, and inflammatory diseases. The company is evaluating, CYT387, in a Phase I/II trial and a Phase II trial for the treatment of patients with myelofibrosis, a chronic debilitating disease in which a patient�s bone marrow is replaced by scar tissue. It is also developing nimotuzumab, a humanized monoclonal antibody, which is in various Phase II and III trials worldwide targeting epidermal growth factor receptor antibody. In addition, the company has various preclinical research programs underway with candidates from its library of compounds. YM BioSciences Inc. has collaboration agreemen ts with Daiichi-Sankyo Pharmaceutical Co. Ltd., Kuhnil Pharmaceutical Company, Innogene Kalbiotech, Oncoscience AG, the Center of Molecular Immunology, Pulmokine Inc, and Cancer Therapeutics CRC Pty Ltd. The company was formerly known as York Medical Inc. and changed its name to YM Biosciences Inc. in February 2001. YM BioSciences Inc. was founded in 1994 and is headquartered in Mississauga, Canada.

Top High Tech Companies To Own For 2014: Tekmira Pharmaceut Com Npv (TKM.TO)

Tekmira Pharmaceuticals Corporation, a biopharmaceutical company, focuses on developing ribonucleic acid interference (RNAi) therapeutic product candidates and providing its lipid nanoparticle delivery technology to pharmaceutical partners in the Canada. The company�s internal product development candidates include TKM-PLK1, an oncology product candidate that is in Phase I clinical trials to kill cancer cells; and TKM-Ebola, an antiviral product, which is in Phase I of clinical trials for the treatment of the Zaire species of Ebola virus infection. It also develops TKM-ApoB that has completed Phase I clinical trials to reduce the production of apolipoprotein B 100 in patients with high levels of low-density lipoprotein cholesterol. In addition, the company has licenses from Alnylam targeting two validated oncology targets, WEE1 and CSN5; and to develop TKM-ALDH2, a systemically delivered RNAi therapeutic that utilizes lipid nanoparticle technology for the treatment of alc ohol dependence. Tekmira Pharmaceuticals Corporation was founded in 1992 and is headquartered in Burnaby, Canada.

Top Warren Buffett Companies To Invest In Right Now

The Motley Fool's health-care show Market Checkup focuses this week on cholesterol, one of America's most notable health-care concerns.

High cholesterol may not seem particularly dangerous on the surface, but when you add up the amount of at-risk Americans (71 million) and its link to the nation's most prevalent killer (heart disease, at 600,000 deaths per year), the gravity of the situation becomes quickly apparent. The good news is that pharmaceutical products and healthier lifestyles have contributed to combat this problem head-on.

In this video, health-care analysts David Williamson and Max Macaluso discuss the next wave of high-cholesterol-reducing drugs: PCSK9 inhibitors. These are injected biologic products that are producing startling results in clinical trials. Find out how one woman's genetic defect helped inspire a treatment revolution, which stocks are at the cutting edge of this research, and how doctors may receive this new class of drugs.

Rising health-care costs continue to be a hotly debated topic, and even legendary investor Warren Buffett called this trend "the tapeworm that's eating at American competitiveness." To learn more about what's happening to the health care system -- and how to potentially profit from this trend --�click here�for free, immediate access.

Top Warren Buffett Companies To Invest In Right Now: Life Partners Holdings Inc(LPHI)

Life Partners Holdings, Inc., through its subsidiary, Life Partners, Inc., operates in the secondary market for life insurance in the United States. It facilitates life settlement transactions by identifying, examining, and purchasing the policies as agent for the purchasers. The company?s financial transactions involve the purchase of life insurance policies at a discount to their face value for investment purposes. It serves institutional purchasers, which include investment funds designed to acquire and hold life settlements; and retail purchasers, such as high net worth individuals. The company was founded in 1971 and is based in Waco, Texas.

Top Warren Buffett Companies To Invest In Right Now: Snai Ord Spa(SNA.MI)

Snai S.p.A. provides hardware and software systems for accepting bets, pools, and bingo games. It is also involved in the installation and management of slots machines; management of digital system for online data transmission through cable and satellite; and organization and sales services related to bet acceptance activities and the game of bingo. In addition, the company designs gaming terminals and sets up acceptance points; defines and manages communication initiatives; owns and manages gallop and trot race tracks; and manages satellite TV channels for horse races, and broadcasts in-depth programs on subjects related to gaming and betting, as well as sells and installs information technology (IT) systems and equipment. Further, it operates a Web site, snai.it, which enables users to place bets, and play pools and skill games, such as poker and Texas hold?em, and black jack; and engages in publishing and real estate ownership activities, as well as owns the image righ ts for Varenne, a trotter in history. Additionally, the company provides help desk, customer care, telemarketing, and telesales services through its contact center. The company was founded in 1990 and is based in Porcari, Italy. As of March 29, 2011, Snai S.p.A. operates as a subsidiary of Global Games Srl.

Top Heal Care Companies To Invest In Right Now: MICRO FOCUS ORD GBP0(MCRO.L)

Micro Focus International plc provides enterprise application management solutions worldwide. The company offers software that allows companies to develop, test, deploy, assess, and modernize business-critical enterprise applications. Its product portfolio includes i.Sight, an application portfolio management and analysis tool that enable strategic planning, and application overhaul and modernization; Caliber, a enterprise software requirements definition and management tool, which is used to drive the development and testing of applications to the exact and changing needs of end users; and Rumba, a terminal emulation and user interface modernization tool that streamlines and modernizes key business processes. The company also offers Enterprise, a platform modernization tool, which modernizes application portfolios and platforms; StarTeam, a software change and configuration management tool that tracks changes across the software development lifecycle; and VisiBroker, a CO RBA middleware and application server. In addition, it provides Micro Focus Developer COBOL and software developer tools to modernize business-critical enterprise applications; and Silk software test management, test automation, and performance testing suite. Further, the company offers professional services comprising value profile day services; test process, portfolio, language, platform, and resource modernization services; test data management; value assurance; health check; field development solutions; software process improvement; project review services; customer care and education; and training services. Micro Focus International plc was founded in 1976 and is headquartered in Newbury, the United Kingdom.

Top Warren Buffett Companies To Invest In Right Now: Tennant Company(TNC)

Tennant Company engages in the design, manufacture, and marketing cleaning solutions worldwide. The company offers floor maintenance and outdoor cleaning equipment; chemical-free cleaning technologies; and specialty surface coatings and related products for protecting, repairing, and upgrading floors. Its products are used to clean and coat surfaces in factories, office buildings, parking lots and streets, airports, hospitals, schools, warehouses, shopping centers, and other retail environments. The company also provides parts, consumables, and service maintenance and repair; business solutions, such as pay-for-use offerings, and rental and leasing programs; and cleaning technologies that enhance the performance of its cleaning equipment. In addition, it offers Green Machine 500ze, an electric vacuum street sweeper to clean crowded urban areas. The company serves building service contract cleaners, end-user businesses, healthcare facilities, and schools, as well as local, state, and federal governments through its direct sales and service organization, and authorized distributors. Tennant Company was founded in 1870 and is based in Minneapolis, Minnesota.

Advisors' Opinion:

• [By Seth Jayson]

  Tennant (NYSE: TNC  ) reported earnings on April 22. Here are the numbers you need to know.

  The 10-second takeaway
  For the quarter ended March 31 (Q1), Tennant missed estimates on revenues and missed estimates on earnings per share.

Top Warren Buffett Companies To Invest In Right Now: National Beverage Corp.(FIZZ)

National Beverage Corp., together with its subsidiaries, develops, manufactures, markets, and distributes beverage products in the United States. The company offers a range of flavored soft drinks, juices, sparkling waters, energy drinks, and nutritionally-enhanced waters. It provides its soft drink products under the Shasta and Faygo names. The company also provides health-conscious beverage products, including juice and juice based products under the Everfresh, Home Juice, and Mr. Pure brand names; sparkling and spring water products under the LaCroix, Crystal Bay, and ClearFruit brand names; and nutritionally enhanced water under the Asante brand. In addition, it offers energy drinks under the brand, Rip It; fruit-flavored drinks under the Ohana brand name; holiday soft drinks under the brand, St. Nick?s; and effervescent powder beverage enhancers under the NutraFizz brand name. Further, the company develops and produces soft drinks for retailers and beverage companies . National Beverage provides its products through national and regional grocery stores, warehouse clubs, mass-merchandisers, wholesalers and dollar stores, convenience stores, gas stations, and independent and specialized distributors, as well as through direct store distribution facilities. The company was founded in 1985 and is based in Fort Lauderdale, Florida.

Top Warren Buffett Companies To Invest In Right Now: Newell Rubbermaid Inc.(NWL)

Newell Rubbermaid Inc. designs, manufactures, and markets consumer and commercial products. It operates in three segments: Home & Family, Office Products, and Tools, Hardware & Commercial Products. The Home & Family segment offers indoor/outdoor organization, food storage, and home storage products; infant and juvenile products, such as car seats, strollers, highchairs, and playards; drapery hardware, window treatments, and cabinet hardware; gourmet cookware, bakeware, cutlery, and small kitchen electrics; and hair care accessories and grooming products to mass merchants, specialty stores, and grocery/drug and department stores. The Office Products segment provides writing instruments, including pens, pencils, markers and highlighters, and art products; fine writing instruments and leather goods; office technology solutions, such as label makers and printers, interactive teaching solutions, and on-line postage to mass merchants, warehouse clubs, grocery/drug stores, office superstores, contract stationers, and retailers. The Tools, Hardware & Commercial Products segment offers industrial bandsaw blades and cutting tools for pipes and HVAC systems; hand tools and power tool accessories; manual paint applicators, window hardware, and convenience hardware; cleaning and refuse products, hygiene systems, material handling solutions, medical and computer carts, and wall-mounted workstations to mass merchants, home centers, department stores, hardware and commercial products distributors, industrial/construction outlets, custom shops, select contract customers, and professional customers. It sells its products under Rubbermaid, Graco, Aprica, Levolor, Kirsch, Amerock, Calphalon, Goody, Sharpie, Expo, Dymo, Paper Mate, Parker, Waterman, Lenox, Irwin, Shur-line, and Bulldog brands. The company operates in North America, Europe, the Middle East, Africa, Latin America, and the Asia Pacific. Newell Rubbermaid Inc. was founded in 1903 and is headquartered in Atlanta, Georgia.

Advisors' Opinion:

• [By Lauren Pollock]

  Among the companies with shares expected to actively trade in Friday’s session are United Parcel Service Inc.(UPS), Newell Rubbermaid Inc.(NWL) and National Oilwell Varco Inc.(NOV)

• [By Shauna O'Brien]

  Newell Rubbermaid Inc. (NWL) announced on Wednesday that it has finalized the sale of its Hardware business.

  The sale, which was first reported on August 9, was completed on Wednesday. Nova Capital has acquired NWL’s Hardware business which includes the Amerock, Ashland, Bulldog and Shur-Line brands.

  NWL will receive approximately $175 million in after-tax proceeds from the sale.

  Newell Rubbermaid shares were mostly flat during pre-market trading Wednesday. The stock has increased 18% YTD.

Goldman Sachs Upgrades Royal Dutch Shell to “Buy” (RDS-A)

Goldman Sachs reported on Monday that it has raised its rating on Royal Dutch Shell plc (RDS-A).

The firm has upgraded Shell from “Sell” to “Buy,” and has raised the company’s price target from $69 to $71. This new price target suggests a 7% upside from the stock’s current price of $65.88.

An analyst from the firm noted: “We believe that the underlying business is sound and highly cash generative, with higher exposure than peers to long-lived assets and slightly better production/cash flow growth in the coming years. TOTAL's 15% outperformance since indicating a capex reduction and upside to disposals shows in our view how eager the market is for improvements in capital efficiency, and we believe that Shell's new management is most likely to steer the market in that direction from very low expectations.”

Royal Dutch Shell shares were mostly flat during pre-market trading Monday. The stock is down 4% YTD.

Advisers meet record-setting rally with joy and skepticism

Financial advisers watched with a mix of joy and growing skepticism about the forces behind the record rally as two of the most widely followed stock market indexes touched new highs Monday.

The Dow Jones Industrial Average surpassed 16,000 shortly after the opening bell, reflecting a gain of more than 22% from the start of the year. The broad market S&P 500, which has gained 26% so far this year, crested 1,800 for the first time ever.

Meanwhile, the Nasdaq Composite Index, which is up more than 31% this year, is still well off its peak of more than 5,000, a level reached during the tech bubble in the late 1990s. Still, the technology-heavy index is hovering just below the 4,000 mark for the first time in more than a decade.

The milestone coincidences may be just that, according to Sam Jones, president of All Season Financial Advisors, who described the index performance levels as “math magic.”

Like a lot of advisers, Mr. Jones is happy to take what the equity markets are giving, but he is also growing increasingly wary of the market's extended run.

“I think this market is way overbought,” he said. “Over the past 12 months, we haven't had a correction of more than 5%, and people are starting to think that's normal.”

The fact is, with the Federal Reserve's record level quantitative easing program now in its fifth year with no specific end in sight, it has been difficult to apply any parameters to quantify the current bull market.

“Oftentimes, in a great bull market, it doesn't feel that way,” said Marty Leclerc, chief investment officer at Barrack Yard Advisors.

“Advisers have to remind their clients that this past few years is pretty unusual and they have to have a Plan B for when things change,” he added. “This has all been predicated on cheap money and that seems to be here for a while.”

Joseph Witthohn, vice president of product development at Emerald Asset Management, looked past the index milestones to put the market rally in perspective.

“The S&P is up over 26% and of course this is causing some concern, but we've seen it before,” he said. “The S&P's total return has risen more than 26% 13 times since it was created in 1950, which is one out of every five years, and it might just be that this is one of those years. So relax.”

But while Mr. Witthohn is relaxing, Mr. Jones prefers a more cautious approach to current market conditions.

“We've gotten really accustomed to a friendly market, but people need to be reminded that this is not normal,” he said. “It just feels like a setup to me, and that doesn't mean I'm going to act on it or start hedging positions, but I am conscious ! of it and ready to cut and run if I need to.”

Top 10 Warren Buffett Companies To Buy Right Now

LONDON -- One of�Warren Buffett's famous investing sayings is "be fearful when others are greedy and greedy only when others are fearful" -- or, in other words, sell when others are buying and buy when they're selling.

But we might expect Foolish investors to know that, and looking at what Fools have been buying recently might well provide us with some ideas for good investments.�

So, in this series of articles, we're going to look at what customers of The Motley Fool ShareDealing Service have been buying in the past week or so, and what might have made them decide to do so.

Triple-whammy
The share price of�FirstGroup� (LSE: FGP  ) -- the bus and rail operator -- has plunged over 40% in the past couple of weeks, following a triple-whammy announcement of a rights issue, a dividend cut and a profit warning in its preliminary final results, and the loss of chairman Martin Gilbert, who agreed to stand down once a successor has been found.

The cash-call was necessary to avert a potential downgrading of debt-laden FirstGroup's credit rating to "junk status", which could have forced up interest rates on its existing debt, and also caused serious problems, or even disqualification, when bidding for things like rail franchises.

Top 10 Warren Buffett Companies To Buy Right Now: SPROTT INC.(SII.TO)

Sprott Inc. is a privately owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.

Top 10 Warren Buffett Companies To Buy Right Now: Kodiak Oil & Gas Corp (KOG)

Kodiak Oil & Gas Corp. (Kodiak) is an independent energy company focused on the exploration, exploitation, acquisition and production of crude oil and natural gas in the United States. Kodiak has developed an oil and natural gas asset base of proved reserves, as well as a portfolio of development and exploratory drilling opportunities on high-potential prospects with an emphasis on oil resource plays. The Company�� oil and natural gas reserves and operations are primarily concentrated in the Williston Basin of North Dakota. As of January 31, 2012, it had approximately 169,000 net acres under lease, including 157,000 net acres in the Bakken oil play in the Williston Basin of North Dakota and Montana. In January 2012, the Company acquired Williston Basin oil and gas producing properties and undeveloped leasehold. On January 10, 2012, it acquired certain oil and gas leaseholds, overriding royalty interests and producing properties located in North Dakota. Advisors' Opinion:

• [By Matt DiLallo]

  What's most interesting is that these assets are natural-gas-gathering lines in the Bakken, which is known for its oil. What you might not know is that Bakken oil producers desperately need natural gas infrastructure. Kodiak Oil & Gas (NYSE: KOG  ) is an unfortunate example of this. While growing its oil volumes by 265% year over year it also grew its associated natural gas volumes by 398%. The problem here is that the company was forced to flare 3.3 billion cubic feet of natural gas after flaring 807 million cubic feet of gas the year before because it had no where else for the gas to go. This lack of natural gas gathering and takeaway capacity in the region has been a real problem and assets like Bison are an important solution in solving this problem.

• [By Tyler Crowe]

  The implications of this gas find could mean a large uptick in the company's reserves. With the company valued at $1.00 per thousand cubic feet equivalent of proved reserves, WPX is one of the lowest-valued gas company's on the market. Also, even though the company has a gas-heavy portfolio, its liquid component just happens to be in one of the best tight oil plays in the U.S. -- the Bakken. In this video, Fool.com contributor Tyler Crowe talks about how the low market value per proven reserve could be an opportunity to get in on a strong natural gas play that just also happens to have the same amount of proven oil reserves in the Bakken as Kodiak Oil & Gas (NYSE: KOG  ) .

Top 10 Small Cap Stocks To Invest In 2014: XCHANGING PLC ORD GBP0.05 WI(XCH.L)

Xchanging plc, together with its subsidiaries, provides business processing, human resources (HR), technology, and procurement services worldwide. It offers various business processing services, such as policy administration, claims services, broking services, workers? compensation claims processing services, securities processing services, investment account administration, fund administration and portfolio management, and offshore services, as well as HR services, including total workforce management, global mobility, learning and development, payroll, employee services and awards, recruitment, and HR administration services. The company also offers technology services that consist of application development and maintenance services comprising custom development, testing, and system integration and middleware; enterprise solutions consisting of product life cycle management, e-Business excellence in partnership with Oracle, data warehousing, business intelligence, docum ent management, and business process management; infrastructure services, such as infrastructure outsourcing, IT consultancy and implementation, managed services, and network and security services; and insurance-specific software solutions. In addition, it provides procurement services, including strategic sourcing, category management, spend management, spend analytics, e-procurement services, stakeholder and supplier management, contract management, and procure to pay systems. Further, the company engages in the property development business. Xchanging plc offers its services to the aerospace and defense, automotive, bank and financial services, energy and utilities, FMCG, food and beverage, healthcare, insurance, manufacturing, public sector, real estate, retail, supply chain and logistics, telecommunications, and transportation, travel, and leisure sectors. The company is headquartered in London, the United Kingdom.

Top 10 Warren Buffett Companies To Buy Right Now: Quest Pharmatech Inc. (QPT.V)

Quest PharmaTech Inc. engages in the discovery, development, and commercialization of pharmaceutical products for the treatment of cancer and dermatological conditions based on its SonoLight technology platform. The company�s development products include oregovomab that completed Phase I and Phase II clinical trials for the treatment of ovarian cancer; SL017, which is in Phase II clinical trial for dermatology applications; SL052 that is in Phase I clinical trial for the treatment of prostate cancer; and Anti-MUC1, which is in Phase I clinical trial for the treatment of prostate cancer. It has strategic partnerships with IntelligentNano to develop water-soluble nanoformulations of SL052 and SL017; and Alberta Research Council to develop fermentation based technology to manufacture Hypocrellin B. The company was formerly known as Altachem Pharma Ltd. and changed its name to Quest PharmaTech Inc. in September 2005. Quest PharmaTech is headquartered in Edmonton, Canada.

Top 10 Warren Buffett Companies To Buy Right Now: Global Cash Access Holdings Inc. (GCA)

Global Cash Access Holdings, Inc., through its subsidiaries, provides cash access and data intelligence services and solutions to the gaming industry in the United States and internationally. Its cash access products and services include Casino Cash Plus 3-in-1 ATM, a cash-dispensing machine that offers patrons to access cash through ATM cash withdrawals, point-of-sale debit card transactions, and credit card cash access transactions; check verification and warranty services, which allow gaming establishments to manage and reduce risks on patron checks that they cash; QuikCash, a non-ATM cash access kiosks; and money transfer services. The company also offers cash access equipment, such as full service kiosks, a multi-function patron kiosk for cash access into self-service kiosks for slot ticket redemption and bill breaking services, as well as jackpot kiosks. In addition, it provides information services, such as Central Credit, a gaming patron credit bureau that allows g aming establishments in credit-granting decisions; QuikCash Plus Web and QCPXpress that are cash access transaction processing systems for cashier operations; QuikReports, a browser-based reporting tool that provide access and analysis of information on patron cash access activity; and QuikMarketing/Casino Share Intelligence database services, as well as various Xchange Xplorer products. Further, the company offers cashless gaming products comprising QuikTicket that allows cash access transaction to be completed with a bar coded ticket in lieu of cash. Global Cash Access Holdings, Inc. sells its products and services primarily through direct sales force to traditional land-based casinos, riverboats and cruise ships with gaming operations, gaming establishments operated on Native American lands, pari-mutuel wagering facilities, and card rooms. The company was founded in 1998 and is headquartered in Las Vegas, Nevada.

Advisors' Opinion:

• [By Evan Niu, CFA]

  What: Shares of Global Cash Access (NYSE: GCA  ) have plunged today by as much as 10% after the company reported first-quarter earnings.

• [By Seth Jayson]

  Global Cash Access Holdings (NYSE: GCA  ) reported earnings on May 7. Here are the numbers you need to know.

  The 10-second takeaway
  For the quarter ended March 31 (Q1), Global Cash Access Holdings missed slightly on revenues and missed estimates on earnings per share.

Top 10 Warren Buffett Companies To Buy Right Now: Taylor Wimpey(TW.L)

Taylor Wimpey plc operates as a homebuilding company primarily in the United Kingdom and Spain. Its product range includes high-rise condominiums, single family homes, townhomes, full service country club communities, apartments, and five bedroom houses. The company offers its products under Taylor Wimpey, George Wimpey, and Bryant Homes brands in the United Kingdom and Spain. Taylor Wimpey plc manages a portfolio of approximately 170,000 land plots across the United Kingdom and Spain. The company was founded in 1880 and is headquartered in High Wycombe, the United Kingdom.

Top 10 Warren Buffett Companies To Buy Right Now: Renold(RNO.L)

Renold plc, together with its subsidiaries, engages in the manufacture and sale of industrial chains and torque transmission products in the United Kingdom, North America, and internationally. Its products include transmission and conveyor chains; leaf chain for materials handling applications; Smartlink; industrial gearboxes and gears; industrial, marine, power generation, military navy, and mass transit couplings; spindles; Sprag Clutch freewheels; Sprag Cage assemblies; and trapped roller freewheels that are used in overrunning, backstopping, and indexing, as well as supplies material handling equipments. The company provides its products for heavy duty, high precision, indoor or outdoor, clean or contaminated, and temperature environmental applications; and conveying applications, including theme park rides, water treatment plants, cement mills, agricultural machinery, mining, and sugar production. Renold plc was founded in 1864 and is based in Manchester, the United K ingdom.

Top 10 Warren Buffett Companies To Buy Right Now: Wilson HTM Investment Group Ltd(WIG.AX)

Wilson HTM Investment Group Ltd provides various financial planning services in Australia. It operates through three segments: Capital Markets, Wealth Management, and Business Investment. The Capital Markets segment engages in selecting outperforming sectors and companies; providing equity capital markets, and merger and acquisition advisory services; offering research on ASX listed entities; and providing stock broking services to institutional clients. The Wealth Management segment offers stock broking, financial planning, and discretionary fund management services to retail and wholesale clients; manages specialty fund investments, including Priority Growth Fund and Priority Core Fund; provides cash and fixed interest services, and equity products and investment accounts; and offers attribution and risk analysis services to fund managers. The Business Investment segment develops and operates boutique fund management businesses; provides back office support and administr ation services to start-up fund managers; and invests in equity and fund investments. The company serves personal investors, self managed super fund investors, corporate and institutional, and advisers. Wilson HTM Investment Group Ltd was founded in 1895 and is headquartered in Brisbane, Australia.

Top 10 Warren Buffett Companies To Buy Right Now: JA Solar Holdings Co. Ltd.(JASO)

JA Solar Holdings Co., Ltd., through its subsidiaries, engages in the design, development, manufacture, and sale of photovoltaic solar cells and solar products, which convert sunlight into electricity in the People's Republic of China. The company?s principal products include monocrystalline and multicrystalline solar cells, as well as various solar modules. It also provides silicon wafer and solar cell processing services. The company sells its products primarily under the JA Solar brand name, as well as produces equipment for original equipment manufacturing customers under their brand names. It sells its solar cell and module products primarily to module manufacturers, system integrators, project developers, and distributors in the Germany, Italy, the United States, Hong Kong, Spain, India, the Czech Republic, France, and South Korea. The company has strategic partnerships with various solar power companies, such as BP Solar, Solar-Fabrik, and MEMC/SunEdison. JA Solar Holdings Co., Ltd. was founded in 2005 and is based in Shanghai, the People?s Republic of China.

Advisors' Opinion:

• [By Paul Ausick]

  Big earnings movers: Campbell Soup Co. (NYSE: CPB) is down 3.2% at $43.30. Corinthian Colleges Inc. (NASDAQ: COCO) is down 10.3% at $2.34. JA Solar Holdings Co. Ltd. (NASDAQ: JASO) is down 6.9% at $7.40.

• [By Paul Ausick]

  JA Solar Holdings Co. Ltd. (NASDAQ: JASO) stands to benefit from the increased demand for solar power from China. That country is set to overtake Europe, the U.S., and Japan as the world�� largest consumer of solar panels and modules. That�� good for the Chinese solar makers, but it will be difficult for U.S. analysts and investors to figure out exactly what�� happening with the individual companies due to the lack of real transparency into their operations.

Top 10 Warren Buffett Companies To Buy Right Now: Ramtron International Corporation(RMTR)

Ramtron International Corporation, a fabless semiconductor company, designs, develops, and markets specialized semiconductor memory, microcontroller, and integrated semiconductor solutions. It integrates ferroelectric materials into semiconductor products, which enable the development of ferroelectric random access memory (F-RAM) products that merge the multiple memory technologies into a single device. The company?s F-RAM product line includes various interfaces and densities, such as industry-standard serial and parallel interfaces; industry standard package types; and 4-kilobit, 16-kilobit, 64-kilobit, 256-kilobit, 1-megabit, 2-megabit, and 4-megabit densities. Its serial F-RAM devices allow more frequent data transfers over the serial bus to the processor; parallel F-RAM products are drop-in replacements for battery-backed SRAM products; and integrated F-RAM products, also known as processor companions, are single-chip solutions that replace a number of individual sys tem components to reduce cost and board space. The company?s products also include integrated F-RAM enhanced microcontrollers that offer a solution for a range of signal conditioning, data acquisition, and control applications; and F-RAM enabled wireless memory products, which allows mobile data collection and storage. Its products are used in various applications in automotive, metering, computing, industrial, scientific, medical, and wireless markets. The company sells its products through direct sales force, manufacturer?s representatives, and distributors in the Americas, Europe, the Asia Pacific, and Japan. The company was founded in 1984 and is headquartered in Colorado Springs, Colorado.

Chicago Booth Claims MBA Stock Picker Victory

CHAPEL Hill, N.C. (TheStreet) -- The University of Chicago's Booth School of Business defeated 14 of the nation's top MBA programs Friday in a stockpicker competition in Chapel Hill, N.C.

Students Kyle Akin, Aaron Bianco and Mac Elatab cruised to a unanimous No. 1 performance in the final round of the Alpha Challenge as judges from various asset management firms favored the Booth team's mock pitch to take a long position on DigitalGlobe (DGI) and a short position on GenCorp (GY).

The event, hosted by the University of North Carolina, showcased top student talent, many of whom said they hoped to eventually work in investment management.

It was a "great" contest with a high level of competition and challenging questions from the judges, Elatab said. When asked if his Booth team would celebrate the victory, Elatab chuckled and said, "I think there's a Tar Heels game in town." Each business school represented consisted of three MBA students, who received a universe of 90 publicly traded companies on Nov. 3 and submitted by Nov. 11 a power point presentation pitching one company to "short" and one company to hold "long." Friday morning featured a preliminary round of 15 teams, including Yale University, University of Virginia's Darden School of Business -- who finished second and third, respectively -- UNC's Kenan-Flagler Business School and Columbia University, among others. The 15 teams were split into four different groups, in which they presented a 15-minute verbal pitch and answered judges' questions for an additional 20. The top team from each group advanced to the final round. Judges throughout the tournament represented buy-side firms, including Fidelity Investments, T. Rowe Price, Carlson Capital, William Blair, and others. Shares of DigitalGlobe, a provider of government and commercial earth imagery products, gained 3.6% to close Friday at $36.81. Aerospace and defense manufacturer GenCorp tacked on 0.4% to 17.69. -- Written by Joe Deaux in Chapel Hill, N.C. >Contact by Email. Follow @JoeDeaux

Deutsche Bank Raises Price Targets on Wynn Resorts, Las Vegas Sands (WYNN, LVS)

Deutsche Bank analysts raised their price target on Wynn Resorts, Limited (WYNN) and Las Vegas Sands (LVS) on Wednesday due to continued strength in Macau gaming.

The analysts rate WYNN as “Buy” and now see shares reaching $190, up from the previous target of $156. This new price tar

3 Enticing Value Opportunities in Latin America

Latin American economies have been hit hard by the uncertainty surrounding the global GDP growth. The drivers of which, are the mixed economic data coming out of China and gyrating demand for commodities. This has affected commodities prices and affected the regions' economic growth, primarily because Latin America's economies are export oriented with commodities being among the key exports. This has created a number of bargains for investors among some of the region's largest publicly traded companies.

Latin America's economic outlook downgraded
Already the 2013 outlook for Latin America's economic growth has been cut significantly. At the end of 2012 the International Monetary Fund had forecast 2013 GDP growth of 3.4% but it has already revised that figure to 3% annually. More concerning is that Spanish banking giant BBVA has recently forecast even lower annual GDP growth of 2.7% for the region.

This decline in economic growth has triggered significant capital outflows, growing sovereign bond spreads, stock market volatility and currency devaluations across the region. As a result many Latin American economies have weakened, further leaving major publicly traded companies trading at what appears to be significant discounts to their non-Latin American peers.

What are some of the best bargains?
Growing resource nationalism, continuing government interference in the energy sector, falling crude prices and the pessimistic economic outlook has seen investors shy away from investing in Latin American energy companies. This has seen many of the region's major energy companies including Colombian government controlled Ecopetrol (NYSE: EC  ) , Brazilian government controlled Petrobras and Argentine government controlled YPF fall to new 52 week lows.

But it is Ecopetrol who is down 27% year-to-date that offers an intriguing value for investors. On the basis of its enterprise-value to EBITDA – which allows for an apples-to-apples comparison with competitors – of six times appears moderately priced.

Company

Enterprise-value to EBITDA

Ecopetrol	6
Petrobras	7
Chevron	5
Exxon	6
Anadarko	8

                              Source data: Company financial filings second quarter 2013.

Ecopetrol's weakness can be attributed to lower crude prices, softer margins and ongoing investor concern over Ecopetrol's low proved reserves of 1.8 billion barrels of oil. But among Latin American oil companies it is one of the best managed in conjunction with the least amount of political interference. In addition, the company offers a dividend yield of over 6%, making the equity look attractive while investors hold out for capital appreciation.

Bancolombia appears attractively priced
Another Colombian company that appears under-valued is the Andean country's largest commercial bank Bancolombia (NYSE: CIB  ) . For the year-to-date Bancolombia's share price fell 17% because of a weak second quarter bottom-line. This decline was primarily caused by the bank's net income plunging by 41% year-over-year because of mark-to-market losses caused by the value lost in the bank's securities portfolio.

Investors sold-off the bank, touching a new 52 week low in July, leaving behind a compelling valuation proposition. 

Company

Price-to-book ratio

Bancolombia	1.2
Banco Bradesco	1.8
Itau Unibanco	1.9
Wells Fargo	1.5

                               Source data: Ycharts.

Despite its poor second quarter 2013 result Bancolombia's fundamentals remain strong. Net loans for that period were up by 22% year-over-year and impaired loans remained at an acceptable 2.8% of total loans. Capital adequacy is also high, with the bank having a tier-one-capital ratio of just under 12% at the end of the second quarter. This indicates that Bancolombia remains in a strong financial position and is well placed to continue capitalizing on the growth potential that exists in its key markets of Colombia and El Salvador.

Bancolombia pays a healthy dividend yield of just under 3%, which is significantly higher than the token yields paid by Bank of America and Citibank. It is also comparable to U.S. giants, Wells Fargo and JP Morgan, which have yields of around 3%. Finally, for those investors concerned by the quality of governance in Latin American financial institutions, Bancolombia has been a regular recipient of awards recognizing its strong internal governance and management practices.

Vale appears irresistibly cheap
Latin America's commodities sector has been particularly punished by the market, primarily because of unpredictable economic data coming out of China. One company that now appears to be an irresistible value is the world's second largest mining company, Brazil's Vale (NYSE: VALE  ) . For the year-to-date Vale has seen its share price plunge 24% and in July it touched a new 52 week low.

The key drivers are concerns over the direction of the price of iron-ore, from which Vale derives over 60% of its revenue. This makes Vale particularly vulnerable to movements in iron ore prices. For the year-to-date iron-ore has softened by 9%, but up signiciatly from last Septermber's low of $100 per metric ton. 

The gyrations in the price of iron ore have affected earnings, but with Vale having realized $1.6 billion in cost savings during the first-half of 2013, it is now well positioned to take advantage of the bounce prices.  

Finally, Vale's compelling dividend yield of 5% is superior to competitors  BHP Billiton's 3.6%, Rio Tinto's 4% and Cliff Natural Resources 3% yield. This means it will reward patient investors as its share price grows in value on the back of cost reductions and stabilized iron ore price.

Foolish final take
The worse than expected outlook for Latin American economies, in conjunction with recent currency devaluations across the region and outflows of capital has seen investors reduce their exposure to the region. 

Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

 

Brinker: The Pick of the Lot in a Struggling Restaurant Industry

A Blackbox International study has shown that 2013 hasn't been a great year for the restaurant industry. A drop in same-store sales has been witnessed in three out of the last four quarters. For the third quarter of this year, industrywide same-store sales, or comps, were down 0.20%, which represents a sequential drop of 0.60%. Thus, it isn't a surprise that many restaurants are coming out with weak results one after another.

Brinker International (NYSE: EAT  ) has been no exception to the trend of falling comps, while BJ's Restaurants (NASDAQ: BJRI  ) and Darden Restaurants (NYSE: DRI  ) have also followed along .

What's up with Brinker?
In case of Brinker, both Chili's and Maggiano's witnessed a drop in traffic of 3.4% and 2.1%, respectively, in the previous quarter. The acquisition of 11 Chili's units in Canada helped in compensating the fall in comps at company-owned Chili's stores. Comps at franchised restaurants increased 1%, driven by the 2.7% comps growth at the international franchise restaurants, offset by a 2.6% decline in domestic comps. Consolidated franchise comps were much lower than the year-ago quarter's comps growth of 2.9%.

As a result, Brinker International suffered a 3.3% decline in guest count, leading to muted consolidated comps of 1.3% in the first quarter, much lower than the year-ago quarter's comps growth of 2.6%. As a result of weak sales, quarterly revenues grew by a minuscule 0.06% year over year to $683.9 million, and missed the consensus estimate of $687 million .

As a result of a favorable product mix, resulting from the addition of new menu items and better pricing, cost of sales declined by 60 basis points to 27.2%. Brinker posted quarterly earnings of $0.43 per share, which represents a 16% increase over the same quarter last year and the 13th conservative quarter of EPS growth for Brinker. However, it could not meet the consensus expectations of $0.46 due to muted sales as a result of weak store traffic in general.

Apart from this, Brinker opened three international franchised restaurants. At the end of the first quarter, Brinker operated 1,596 restaurants, of which 1,552 were Chili's (including domestic and international) and the remaining 44 were Maggiano's. In fiscal 2014, Brinker expects to open 44-52 restaurants (domestic and international included) under the Chili's brand .

Brinker has been witnessing tepid sales growth in the past two quarters due to a continuous decline in traffic, which has been an industry trend this year as per Blackbox Intelligence's report. A lowered outlook for fiscal 2014 adds to the woes. However, the company is looking to brave these negative market sentiments with various sales-driving initiatives, including new kitchen equipment systems, effective marketing strategy, and an integrated POS system.

BJ's continues to disappoint
Investors don't like a poor quarterly report, and companies missing earnings usually get punished heavily. This is precisely what happened in case of BJ's Restaurants, which missed on both earnings and revenue. In fact, BJ's has missed earnings for four consecutive quarters, so it's no surprise that year-to-date the company's stock has lost 20% of its value.

It reported earnings of $0.13 per share, a sharp decline of 45.8% versus the same quarter a year ago . The weak earnings were due to sluggish top line growth and margin contraction. Comps declined 2.2% as BJ's lacked product innovation. It reported third-quarter revenue of $188.2 million, while analysts had expected  $195 million.

Going forward, out of the six new restaurants planned for the fourth quarter, three are already operational. Management has plans to open 17 to 19 new restaurants in 2014. Two-thirds of these new restaurants will be developed under the new format, which will cost the company $1 million less than the current format. In addition, there are plans to roll out a new menu beginning November and in the first quarter of 2014, which, along with other initiatives, should help in repositioning the brand.

Darden down the same route
Given the declining traffic trends of the above two companies, it wasn't surprising to see Darden suffer as well. According to Darden's management, a sluggish macroeconomic recovery, the effects of the Affordable Care Act, and weakening consumer confidence led to weaker traffic at its locations and a 3.3% decline in comps .

In its recent quarter, Darden missed consensus estimates on both revenue and earnings. Darden's earnings declined around 37% from the prior year period as a result of increased expenses and weak store traffic. Its earnings of $0.53 per share missed consensus estimates by more than 23%.

Looking ahead, Darden doesn't expect a rosy future. Management expects the business environment to remain tepid in fiscal 2014 as well, driven by a sluggish economic recovery. However, Darden is looking to reduce its reliance on just one market by expanding its business internationally. Darden is expanding its presence in Asia by way of a local chain known as Secret Recipe, which has more than 300 locations in Malaysia, China, Thailand, Indonesia, Singapore, Philippines, Brunei, Cambodia, India, and Australia.

These moves could help Darden get its same-store sales up, but not instantly. Darden is doing right by diversifying, but investors will need to be patient until the company's initiatives bear fruit.

Final words
Of the three, Brinker looks like a stock worth investing in. It is expected to grow its earnings at a CAGR of 15% over the next five years and is following sound strategies to grow its business. In comparison, BJ's seems to be losing steam, and investors should stay away from it until and unless there are signs of a turnaround. Also, Darden might turn out to be a good pick if its strategy of diversification clicks, but investors should wait and watch how its plans play out.

Is Brinker one of the Fool's favorite growth stocks?
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The Seven Best Paying Jobs With Only High School Diploma

Close to a third of the adult U.S. population has a college degree. While it no longer necessarily guarantees a job, as it once did, graduating from college is a prerequisite for the vast majority of high-paying jobs.

Of the job categories that earned a median of at least $60,000 in 2012, just a handful did not require at least some college education. The top-paying job categories all required a bachelor's degree, and in many cases, a master's or doctoral degree.

But for those who cannot go to college, there are still hundreds of thousands of high-paying jobs that only require a high school diploma. 24/7 Wall St. reviewed 2012 occupational profiles from the Bureau of Labor Statistics (BLS) to identify the jobs that pay the most money and generally do not require any more formal education than a high school diploma.

Click here to see the best paying jobs

Very few of these positions, however, are instantly accessible to a person fresh out of high school. Some of these positions do not require a bachelor's degree, but do involve a great deal of additional on-the-job training or certification. Most require years of work at lower positions before workers can move up the ranks.

Many of these jobs are compensated well because of the dangerous or unfavorable conditions associated with them. Subway operators, paid a median of nearly $63,000 a year, spend long hours underground. Elevator repairers and nuclear power plant operators work in potentially life-threatening positions and are paid more, accordingly.

In order to identify the high-paying jobs you can get with a high-school degree, 24/7 Wall St. 24/7 Wall St. reviewed wage and employment data from the Bureau of Labor Statistics' Occupational Employment Statistics database and job descriptions from the Occupational Outlook Handbook. The jobs that made the list had a median annual salary of at least $60,000 and did not require formal education beyond a high school diploma, according to the BLS.

These are the seven best-paying jobs you can get with a high school diploma.

Nobel Winners Are Economic Prizes

The Nobel Memorial Prize in Economic Sciences doesn't necessarily recognize the newest or most "cutting edge" ideas within economics and finance, but instead focuses on those that employ a more wait-and-see approach. After all, Merton and Scholes didn't get their prize until 1997, long after their option pricing formula had become a ubiquitous tool for traders and portfolio managers.

In this article, we'll look at some past winners whose contributions are particularly well known and useful to our everyday investing lives.

About the Prize
The late Alfred Nobel didn't decree a prize for economics in his will like he did for literature, physics, chemistry, medicine and peace. The Nobel Memorial Prize for Economic Sciences didn't arise until 1968, when the Bank of Sweden established it on its 300th anniversary in memory of Alfred Nobel.

Also of note, the criteria for the prize were expanded in 1995 to include social sciences as a whole, so contributions in fields like sociology and political science could also be recognized. They are often intertwined in modern economic theory as governments, companies and individuals all work to solve the same problems and allocate the same resources.

Lastly, awards can only be given to the living. Alas, for late greats like Adam Smith and John Maynard Keynes, there will be no (well-deserved) posthumous prize.

Economic Theories Take Time to Prove
In economics, more so than most fields, it takes many years for a given theory or discovery to truly be proven effective or even correct. The study of economics, especially macroeconomics, is usually one of trends and cycles, market shocks and hindsight studies. For example, if one's theory is on how inflation responds at the beginning and end of a bull market, it could take 10 years or more to even reach the end of a bull market, and historical economic data may be limited or difficult to correlate to the present.

In time, however, economists whose insights truly change the field do get recognized by the committee. Winning the award brings in a nice paycheck (roughly $1.5 million) and possibly some long-overdue credit and attention, especially in some of the younger economic fields such as microfinance and behavioral finance.

Past Winners of Note
Many economists never achieve much fame outside the ivory towers in which they operate, but some have made direct contributions to the economics of individual investors and companies. These past winners deserve a special nod for their tools and theories, which have helped investors better understand markets and their own portfolios. Leonid Hurwicz, Eric Maskin, Roger Myerson Provide Framework for Analyzing Market Conditions
All three of the 2007 Nobel Memorial winners have made major contributions to mechanism design theory, which provides a framework for analyzing market conditions under less-than-ideal scenarios. Hurwicz first introduced the theory in the 1960s. His work was later expanded by his college classmates Maskin and Myerson. They were able to expand the range of uses for mechanism design theory to a wide array of financial mechanisms such as international trade, elections and other voting procedures. They even expanded the theory's uses into private social institutions, whose overarching goals (usually to benefit the broadest number in the best overall way) may not run parallel to the individual goals of their leaders.

Many aspects of the modern economy do not fit neatly into classical definitions of markets, where perfect competition and "equilibrium conditions" always exist. The trio's work has validated the use of auction-style markets for many types of trade and opened up new schools of thought for dealing with social problems and the transmission of public goods.

Samuelson Helps Turn Economics into a Pure Science
Paul Samuelson won the second prize ever awarded in 1970; he was recognized for his game-changing contributions that married economics with mathematics. Before Samuelson, economists and investors struggled to conduct mathematical and scientific analysis on markets because there was no consistent way to compare situations under different conditions. His 1947 book, "Foundations of Economic Analysis," has sold more copies than any other textbook on economics, and Samuelson is considered one of the founders of modern neoclassical economics.

Milton Friedman Redefines Role of Economics and Government
Milton Friedman won in 1976 for his groundbreaking studies of consumption analysis and monetary theory, and he has been considered by some to be the most important economist of the 20th century. Friedman advocated a small government and a hands-off approach to markets - theories that became the cornerstone of many political and economic movements beginning in the early 1980s. Friedman believed that markets played an instrumental role in politics and government; so much so that some problems, he said, could only be solved through the use of market forces.

One of Friedman's biggest fans was Alan Greenspan, who used Friedman's theories on monetary supply and economic output to guide the U.S. economy through a record expansionary period between the mid-1980s and 2006.

The 1990 'Investor's Trio': Markowitz, Sharpe and Miller
These three winners may have shared the 1990 prize, but each made extraordinarily useful individual contributions to investors. Harry Markowitz is the godfather of modern portfolio theory, having given us the same theories of mean-variance portfolio analysis that most money managers still use today. His mathematical approach to creating an optimal portfolio opened the door to modern diversification techniques and educated us on the critical tradeoffs between risk and return.

Markowitz's ideas were later picked up by William Sharpe to create the backbone of the capital asset pricing model (CAPM), which is used extensively today by both investors and company managers to determine the required level of return on an asset. The success of the CAPM and its associated "Beta" coefficient helped standardize the process of evaluating assets and their risk premium.

Merton Miller doesn't have the honor of having a financial term named after him, but he brought long-overdue attention to corporate finance and individual investors. His theories have helped guide the way managers run companies on behalf of shareholders. Specifically, he proved that because investors can diversify portfolios on their own, companies should simply try to maximize shareholder value and not worry about finding the perfect ratio of debt capital to equity capital.

Derivatives Take Center Stage – Merton and Scholes in 1997
The year 1997 brought long-overdue acclaim to the creators of the definitive options pricing mechanism. The Black-Scholes-Merton formula was developed by Robert Merton and Myron Scholes. Fischer Black passed away in 1995. The award came long after Black-Scholes pricing had permeated the world of stock options pricing, and terms like "time value" and "the Greeks" were already in the option investor's vocabulary.

The three investors' work in standardizing options pricing led to a broad expansion in derivative securities as a whole; futures, employee stock options and commodities have all flourished since. Most importantly, it took an area of finance that had a limited audience and brought it to the world through the common language of mathematics.
Conclusion
Nobel Memorial Prize winners have given us much more than fodder for dissertations and masters' theses. Past winners have provided real investors with tools that are used every day and open up new ways to view assets, the markets and our role in making them work. The first step in learning to use these models is to introduce yourself to their creators.

Top Portfolio Products: New Bond ETFs from ProShares, Franklin Templeton

New products and changes introduced over the last week include an investment-grade bond ETF from ProShares with a built-in interest rate hedge and several other exchange-traded funds, along with Mercer’s Advisor Portal.

Here are details on the latest product developments of interest to advisors:

1) ProShares Launches First Investment-Grade Bond ETF with Hedge

ProShares announced the launch of ProShares Investment Grade-Interest Rate Hedged (IGHG), the first investment grade bond ETF in the U.S. that provides a built-in hedge against rising interest rates, it says.

IGHG targets a duration (a measure of interest rate sensitivity) of zero by shorting Treasury futures. It tracks the Citi Corporate Investment Grade (Treasury Rate-Hedged) Index, which is a U.S. dollar-denominated index that measures the performance of investment grade corporate debt.

The index consists of a long position in investment grade corporate bonds and a duration-matched short position in U.S. Treasury bonds. The investment grade portion of the index offers exposure to the more liquid, cash-pay bonds.

2) Franklin Templeton Launches Short-Duration U.S. Government ETF

Franklin Templeton Investments announced the introduction of Franklin Short Duration U.S. Government ETF (FTSD), which is an actively managed ETF that seeks a high level of current income and preservation of capital by following a short-duration U.S. government portfolio strategy. It tracks the Barclays U.S. Government 1-3 Year Index, but can also take advantage of opportunities outside the index.

FTSD is managed by Roger Bayston and Patrick Klein. Under normal market conditions, it will invest at least 80% of its net assets in securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, including government-sponsored entities.

It generally will invest a substantial portion of its assets in mortgage-backed securities including ARMS, but will also invest in direct obligations of the U.S. government (such as Treasury bonds, bills and notes). It may also invest in U.S. inflation-indexed securities issued by the government.

4) Global X Funds Launches Next Emerging & Frontier ETF

Global X Funds announced the launch of its Global X Next Emerging & Frontier ETF (EMFM), which tracks the Solactive Next Emerging & Frontier Index and has exposure to economies such as the Philippines, Nigeria, Chile, Panama, Pakistan and the Czech Republic.

Countries included in the index represent 24% of the world's population, but just 12% of the world's gross domestic product and 8% of the world's equity market cap. The index does not include equities from the BRIC countries (Brazil,  Russia, India, and China) and other, more advanced economies like South Korea or Taiwan.

Based on the youth of the populations present in the countries tracked by the index, Global X expects those countries to generate more competitive labor forces that likely will become the world's major supplier of low-cost labor.

The firm also expects these countries to provide low correlations to both developed markets and each other, since they are driven by domestic-focused sectors including agriculture, construction and local banking. The index incorporates a capping mechanism to ensure diversification across sectors and individual countries.

5) Mercer Teams with FE, Lipper to Deliver Mercer Advisor Portal

Mercer has announced that it has teamed up with FE and Lipper to provide the technology and data behind the consultancy’s Mercer Advisor Portal (MAP). FE will provide, through the Mercer-branded MAP tools, Mercer’s research analysis of investment strategies combined with advanced analytical functionality.

Financial intermediaries will be able to select and analyze funds, assess their clients’ investment fund and portfolio risk and conduct analysis of fund sectors. There will also be data feeds of prices, dividends, corporate actions and documents for approximately 300,000 funds from markets across the world.

FE capabilities and data will be used in most markets outside the U.S. Within the U.S., Mercer and FE will be using Lipper as the main source of investment data.

6) Robot Will Ring Closing Bell to Mark Launch of ROBO-STOX ETF

The UR5 robot arm from Universal Robots will ring the NASDAQ closing bell on Nov. 12 to mark the launch of the ROBO-STOX Global Robotics and Automation Index ETF (ROBO). Exchange Traded Concepts, LLC, is the advisor to ROBO, and Index Management Solutions will act as subadvisor.

ROBO seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the ROBO-STOX Global Robotics and Automation Index, which benchmarks the value of robotics, automation and related technologies.

ROBO invests primarily in the equity securities of robotics and automation companies, and seeks to take advantage of the robotics trend as it continues to grow through capturing a representative portfolio of the industry.

Read the Nov. 1 Portfolio Products Roundup at ThinkAdvisor.

Cablevision Systems Corporation Shares Rise on Q3 Earnings Beat; Dividend Maintained (CVC)

Regional cable TV and Internet provider Cablevision Systems Corporation (CVC) on Friday announced better-than-expected third quarter earnings results, reversing a year-ago loss.

Cablevision’s Q3 Earnings in Brief
- Net income totaled $294.6 million, or $1.10 per share, reversing last year’s loss of $3.79 million, or -1 penny per share.
- Revenue rose 1.8% from last year to $1.57 billion.
- Analysts expected much lower earnings of just 11 cents per share, on matching revenue.

Latest Dividend Reiterated; Yield Surpasses Peers
In its earnings release, Cablevision announced it would continue its dividend payout of 15 cents per share. The latest dividend will be paid on Dec. 13 with an ex-dividend date of Nov. 20. The company has not raised its dividend payout since May of 2011.

Despite the lack of dividend raise, CVC’s dividend yield of 3.84% compares favorably with other stocks in its industry. Time Warner Cable (TWC) offers a yield of 2.2%, while Comcast Corporation (CMCSA) yields just 1.65%. The average dividend yield for S&P 500 companies is around 2.5%, so Cablevision’s yield is well above both its industry average as well as the wider market average. Still, its lofty yield has come more as a result of poor price performance, rather than dividend increases.

Shares Rise, but Still Tail Indexes
Cablevision shares rose more than 2% in early trading on Friday, but the company’s stock performance has lagged the wider markets for quite some time. Year-to-date, CVC has gained about 6%, compared with a 24% gain in the benchmark S&P 500 index. The stock was trading around the $38 level as recently as early 2011, so its dividend yield has risen significantly as its stock price plunged to around $16.

Can Office Depot Really Benefit From the Merger?

Office Depot (NYSE: ODP  ) scored a win in its merger with fellow big-box supply store retailer Office Max (NYSE: OMX  ) , but is the company out of the proverbial weeds? The Depot saw its shares decline more than 6% Wednesday due to an earnings report that came in under estimates and altogether left investors and analysts unimpressed. No one has any delusions as to the intense technology-fueled disruption facing Office Depot and its recently acquired competitor, but there are levers the company can pull to remain relevant in the future.

Tough earnings recap
Despite the news that the two big "Office" stores are joining forces to fight back against Amazon.com  (NASDAQ: AMZN  ) , the market had a hard time being enthused about Office Depot's $0.02-per-share earnings in the just-ended quarter -- a drop off of two-thirds since the year-ago quarter. Wall Street was expecting earnings to drop as well, but only by one penny.

Revenue wasn't as bad of a story -- down just 3% to $2.62 billion and slightly above analyst expectations. Management has been working to reel in costs in the face of falling sales, but the latter proved too substantial in the three-month period.

In North America, same-store sales dropped 2% while revenue dropped roughly 4%. Order values, transaction count, and traffic all trended down year over year. Both the company's Business Solutions and International divisions saw low-single-digit drops in sales figures as well.

Good news was tough to find, and the saving grace seems to be just the merger. But even as a mammoth office supplier, can the enlarged Office Depot compete?

Monolith
The new Office Depot will have around $17 billion in sales this year, 66,000 worldwide employees, and more than 2,000 locations. For comparison, the traditional industry leader, Staples (NASDAQ: SPLS  ) , did $24.38 billion in sales last year with roughly 50,000 employees and a similar number of stores.

Staples is able to do more with less because of its online business as it's the second largest Internet retailer in the world, right behind Amazon. Besides the interesting fact that Staples managed to develop such a tremendous presence in the e-commerce world, this spells bad news for Office Depot, regardless of the merger.

Office Depot is set to save around $600 million in costs by the third year of the merger, which is fantastic. The company will eliminate duplicate systems, stores, employees, and the whole like, as it moves to compete with Staples and Amazon. The thing is, Staples and Amazon control the office supply e-commerce space. Office Depot will have to reduce its margins to nearly nothing to be able to price competitively, not to mention Amazon's advantages in the shipping arena.

In the short term, this merger may help the company and investors juice some cash flow -- a story that is nothing to scoff at. But in the long term, it is hard to identify Office Depot's competitive advantages and what will keep the company afloat, let alone growing. For an attractively priced office supply pick, Staples is a much more compelling choice. For an expensive yet promising growth option, Amazon is the pick.

Want more promising growth options?
Tired of watching your stocks creep up year after year at a glacial pace? Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.