J.C. Penney: Not Dead Yet, cont.

JC Penney (JCP) has surged today, despite earnings that were pretty terrible.

Deutsche Bank’s Paul Trussell and Matt Siler explain why investors like JC Penney’s results:

Relative to expectations, JCP reported solid 3Q earnings, in our view. With SSS of -4.8% already known, we see 4 positives and 1 negative in today's print: (1) 3Q GPM was down 300 bps to 29.5%, above our 29.0% estimate and buy-side expectations of 27%-29%; (2) guidance for 4Q GPM is expected to improve sequentially and YOY (a positive vs. our estimate of 27.5% and Street at 29.6% GPM); (3) core SG&A dollars fell 7.5% YOY, more than the modest 1% reduction we forecasted; and (4) the company paid $200 million down on its revolver, suggesting it is comfortable with its liquidity position. One key item of focus for the Bears will be that inventory is up 11.5% YOY and the guidance is for inventory to be up 22% at year-end – presenting future GPM risk.

Sterne Agee’s Charles Grom and team believe time will tell for JC Penney:

The bull vs. bear debate on JC Penney continues. On the one hand, the company has shored up NT liquidity and is returning to its historical private brands/basic focus. On the other hand, while comp trends have improved directionally, we've been surprised that the "slope" of the improvement has not been greater, particularly considering the compares from LY. We remain sidelined – prefer Macy's (M) in the dept. store arena.

Shares of JC Penney have gained 7.6% to $9.38 at 3:40 p.m., while Macy’s has risen 1% to $50.92.

Forbes Article Misrepresents BDC Fees, Performance: Franklin Square

The title of a recent Forbes article tells you all you need to know about how it feels about nontraded business development companies — “The  Overly Expensive, Tricky To Sell Investment Product Everyone Seems To Be Buying.”

Yet it raises the question, if they’re expensive and “tricky” to sell, yet still popular, are investors dimwitted or are purveyors of the product dishonest?

Neither, said Michael Forman, CEO of Philadelphia's Franklin Square Capital Partners, the subject of the Forbes article. He believes the venerable publication made a simple mistake — an apples-to-oranges comparison.

“The focus of the article focused on two things: performance and fees,” Forman explained to ThinkAdvisor in a rebuttal of the article. “I appreciate that this would be the focus and it should, but it’s far more nuanced that the manner in which it was presented.”

Zachary Klehr, the firm’s executive vice president, addressed the Forbes description of its returns as “subpar,” noting what he feels is the misleading comparison with publicly traded BDCs. He added that the Franklin Square product has the second best return in its competitive set, with between 16% and 17% annualized returns since inception.

“The article focused on year-to-date returns,” Klehr argued. “The only way we can really compare nontraded with publicly traded BDCs is through the [net asset value] performance.  For nontraded BDCs, that means the change in the share price plus all distributions made to investors.”

The FS Investment Corp. Fund’s total return was 33.33% in 2009, 13.08% in 2010, 8.93% in 2011, 15.83% in 2012 and 7.52% so far in 2013. Total return since its Jan. 1, 2009 is 16.26%.

By comparison, the S&P 500 returned 26.46% in 2009, 15.06% in 2010, 2.11% in 2011, 16% in 2012 and 28.46% so far in 2013.

“We are very upfront with our investors and tell them what to expect,” Klehr continued. “This is a noncorrelated alternative investment meant to complimen the portfolio. Publically traded BDCs, on the other hand, are very correlated.”

As to the fees associated with the product, “it could either be a 10% upfront load or it could be nothing. If you invest through an RIA or a wrap account it might cost you a smaller amount each year, but that 10% figure cannot be taken in a vacuum.”

Noting the product is typically held for between five and seven years, Klehr figured a typical 1.5% fee charged by an advisor will end up costing more than the front-end load over the life of the investment.

“There is a premium in the market for publicly traded BDCs,” he concluded. “Our competitors are trading currently at about a 14% premium. We offer strong, stable returns at that 10% level, so you can see we are extremely competitive for the appropriate investor.”

---

Check out these related stories on ThinkAdvisor:

Mid-Morning Market Update: Markets Open Higher; FactSet Research Posts Downbeat Q4 Earnings

Following the market opening Tuesday, the Dow traded up 0.30 percent to 15,540.55 while the NASDAQ surged 0.33 percent to 3,730.07. The S&P also rose, gaining 0.29 percent to 1,702.52.

Top Headline
FactSet Research Systems (NYSE: FDS) reported a 5 percent rise in its fiscal fourth-quarter earnings. FactSet Research's quarterly profit surged to $51 million, or $1.16 per share, from $48.5 million, or $1.08 per share, in the year-ago period. Excluding one-time items, its adjusted earnings came in at $1.20 per share, versus analysts' estimates of $1.21 per share. Its revenue rose 5.6 percent to $219.3 million. FactSet Research had expected earnings of $1.18 to $1.21 per share on revenue of $218 million to $221 million. For the current quarter, FactSet Research expects earnings of $1.21 to $1.24 per share on revenue of $222 million to $225 million. However, analysts were projecting a profit of $1.23 per share on revenue of $224 million.

Equities Trading UP
Repros Therapeutics (NASDAQ: RPRX) shot up 29.82 percent to $27.60 after the company announced topline results from both the second pivotal efficacy study as well as the 6 month safety study of Androxal®. Shares of Kythera Biopharmaceuticals (NASDAQ: KYTH) got a boost, shooting up 26.04 percent to $42.26 after the company reported positive ATX-101 top line phase III trial results for the reduction of submental fat. Aeropostale (NYSE: ARO) was also up, gaining 16.75 percent to $10.05 after private equity firm Sycamore Partners reported that it had bought a 7.96 percent stake in the company.

Equities Trading DOWN
Shares of Outerwall (NASDAQ: OUTR) were down 16.03 percent to $47.00 after the company lowered its forecast for the third quarter and full year. Werner Enterprises (NASDAQ: WERN) shares tumbled 4.71 percent to $23.26 after the company issued a weak third-quarter profit forecast. Bank of America downgraded the stock from Buy to Neutral. Pandora Media (NYSE: P) down, falling 1.71 percent to $23.58 as the company announced its plans to sell 14 million shares of common stock, including 4 million shares from current stockholders.

Commodities
In commodity news, oil traded down 0.61 percent to $105.94, while gold traded down 0.35 percent to $1,313.20. Silver traded down 0.75 percent Tuesday to $21.85, while copper rose 0.39 percent to $3.23.

Euro zone
European shares were mixed today. The Spanish Ibex Index dropped 0.04 percent, while Italy's FTSE MIB Index rose 0.10 percent. Meanwhile, the German DAX dropped 0.04 percent and the French CAC 40 rose 0.04 percent while U.K. shares fell 0.18 percent.

Economics
The ICSC-Goldman Sachs store sales index dropped 1.6 percent in the week ended Saturday from the previous week. U.S. consumer prices increased 0.1 percent in August, while the core CPI also rose 0.1 percent. However, economists were expecting a 0.2 percent rise in both prices. The Johnson Redbook Retail Sales Index fell 0.3 percent in the first two weeks of September versus August. The NAHB housing market index remained at 58 in September. However, economists were expecting a reading of 58 in the month. August's reading was also revised to 58 versus an earlier estimate of 59. The Federal Open Market Committee begins its two-day policy meeting today. The Treasury is set to auction 4-and 52-week bills.

Deutsche Bank Wins Metals and Mining Analyst Scorecard

Almost every trading day 24/7 Wall St. covers research reports for analyst upgrades, analyst downgrades, and for new analyst coverage. We also cover specific sector calls that stand out above and beyond many of the traditional research calls. After reviewing some of these on a quiet week, it turns out that Deutsche Bank really nailed a research call on the metals and mining stocks early on in July which may have marked the formal bottom in many of these key companies.

By now you have likely noticed that silver and gold and other metals have recovered handily from the recent drop that to some felt like a death plunge. These metals are volatile and may trade in a myriad of directions before settling higher or lower from here. The wild card comes into play with the broader mining and metals stocks, where volatility around metals pricing can be more than extreme compared to the metals themselves.

So what happened in July for Deutsche Bank to get such a positive review this far after the fact? The long and short is the metals and mining research team at Deutsche Bank basically nailed the bottom and investors who listened have profited handily since. Their view was that large cap miners viewed credit markets as still open for multi-billion dollar fundings with a disconnect between equity performance and business fundamentals.

These were the contrarian stocks we covered back on July 1, 2013. We would note that consensus price targets have changed since then as well.

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) was shown by Deutsche Bank with a $40 price target and the Thomson/First call estimate was at $38. that 4.5% dividend stood out at the time. At the time its stock was at $27.30 and shares are up 13% now that the stock is up at $30.85. The stock’s 52-week range is $26.37 to $43.65 and the current consensus price target is $36.06 rather than $38 when Deutsche bank nailed it.

Thompson Creek Metals Co. Inc. (NYSE: TC) was at 54% discount to its book value of $8.30 per share at the time, and the stock price of $3.90 is up from $3.03 Deutsche Bank’s team nailed upside of more than 28% here. Its price target was $4 at the time versus a consensus target of $4.50 at the time. The 52-week range here is $2.42 to $4.55, but we would point out that the consensus price target is $3.93.

Vale S.A. (NYSE: VALE) is the world's largest producer of iron ore and pellets and has extensive China and emerging market exposure as a result. Despite the slowing emerging market story, Vale’s $14.90 share price now versus $13.15 at the time has brought gains of over 13%. Deutsche Bank target price was $22 and the consensus target was closer to $21.40 on July 1. Now the consensus price target is down to $20.16, but that is still much higher then the current price. A yield of almost 5% also stands out with a 52-week range of $12.39 to $21.88.

Coeur Mining Inc. (NYSE: CDE) was trading at $13.30 when we reviewed the Deutsche Bank call, and that was after a gain of almost 10% right before this review on July 1. At the time, Deutsche Bank had an $18 price target and the consensus price was higher at $19. With shares now up at about $16.00, Coeur is up over 20%. Coeur’s 52-week range is $11.29 to $31.97 and the consensus price target is now lower than the current share price down at $15.12.

So how does all this add up for gains? Freeport-McMoRan is still up 13%, Thompson Creek Metals is up 28%, Vale is up over 13%, and Coeur Mining is up over 20%. Those are handy gains considering that the S&P500 is still up by only about 2.4% over the same period.

The effort here is not to tell you to keep chasing the mining stocks. Some may have more room to rise, but we cannot help but notice how the appreciation and the lowering of estimates ahead has taken share prices back up to where some of these are too close to a consensus value. The real point is that we will be paying attention very closely to the next series of upgrades or downgrades in the metals and mining stocks from Deutsche Bank.

How to Handle Collectibles as Client Assets

Collectibles can provide enjoyment and potential profits during a collector’s life.

But they’re also potential headaches for heirs, because collectibles generally are less liquid, trickier to value and less divisible than financial assets.

They also can inspire emotional attachments and disputes among heirs, so advisors should help collectors focus on these assets’ unique characteristics when designing their estate plans.

AdvisorOne asked Jim Halperin (left), co-founder and co-chairman of Heritage Auctions in Dallas for his insights via e-mail on common estate- planning mistakes with collectibles and how collectors can avoid those errors.

Halperin outlines the right strategies to take below.

What are the key steps to take when working on an estate plan that includes a collection?

The number one mistake most collectors make is not working with their family to develop a will. We advise collectors to discuss all valuable objects with their families, and decide together what should be done with them--whether selling at auction or distributing among the family.

In one memorable case, a collector meticulously divided his coins equally (by value) between his son and daughter but failed to keep them updated on the market.

Rather than get the collection appraised before his passing, he left the two with instructions that they should seek expert advice before selling.

The daughter came to Heritage and was pleased to learn that her coins were worth more than $85,000 (and subsequently sold them at auction, netting well above that amount). Unfortunately, her brother had “sold” his share just eight months earlier to a pawnbroker for less than $7,500.

If no will exists, it may be best to leave the division to a third party. Perhaps an appraiser can value items individually so each heir can ‘buy’ their share at the appraised price. 

The lesson here is that families must be involved in the estate-planning process. If they don’t share your love of collectibles, you might decide it’s better to dispose of the collection in your lifetime.

Regardless, your family should have a basic understanding of the collection, its value and how you want the proceeds distributed.

When and how do collections have to be appraised?

Of the tens of thousands of collectors Heritage has assisted in disposing their collections, about 20% didn’t know even approximately what their art and collectibles were worth.

Appraisals are required for insurance, estate taxes, charitable contributions and even gift-tax purposes, but few people realize the IRS requires different types of appraisals depending on the value and use of the collection.

Selecting a qualified appraiser is an important step and takes time. Collectors should pick appraisers who specifically confirm to Uniform Standards of Professional Appraisal Practice.

We often advocate third-party grading as the best method to protect their collection. Just like an appraisal, reliable certification can greatly increase a collection’s liquidity and value, especially for:

Certification by these major grading services both assures authenticity and adds value. However, certification fees may range from $15 to hundreds of dollars per item.

Before considering a grading company it is best to meet with an expert to determine if the added value will justify the cost of the service.

What are the best ways to sell a collection?

A common practice among inheritors is to sell a collection outright, thus generating fast cash for minimal effort, but often producing the least amount of money for the owner.

Another method is to use an agent. Generally agents charge a fix fee of 5 or 10% plus expenses.

Matching the right agent with the right material is a challenge, as it is hard for any expert to know the market on every item in a collection. Even the greatest experts often lack the imagination to predict auction values when an item is truly special. Furthermore, you need to fully trust that the agent will give you an honest accounting. Most will, but private transactions are somewhat opaque, so some agents may succumb to the temptation of using your items to return favors to friends, buying the best deals themselves or even shortchanging you outright.

That’s why the auction method of selling has always been and will likely forever remain the best method to ensure your heirs receive as much value as possible from your collection. Auction is the fastest way a truly free market can set a value based on competitive demand in a transparent, level playing field.

Auction houses work on a percentage, so the more money you receive, the more money the auction house makes. Thus, their interests are aligned with yours.

Apple Has a Bigger Problem Than You Think

Things just aren't getting any easier for the PC industry.

Industry tracker Gartner is out with its quarterly metrics for the computer market, and things don't look good for the desktop and laptop markets.

Worldwide shipments fell 10.9%, to 76 million units. It's the fifth straight quarter of declines for the industry. That's never happened.

Microsoft (NASDAQ: MSFT  ) updating its operating system late last year was supposed to be the catalyst that triggered an upgrade cycle, but we're now three quarters into the Windows 8 era. It's just not going to happen. Folks are loading up on tablets, especially in emerging markets, where tablets are the new laptops. Smartphones are also dampening the demand for full-blown PCs, and that's bad news for Microsoft in a world where most tablets and smartphones run either iOS or Android.

There were some notable moves during the period. Lenovo overtook Hewlett-Packard (NYSE: HPQ  ) to ship the most computers worldwide during the past three months. Dell (NASDAQ: DELL  ) remains a distant third.

However, things were interesting closer to home, with PC shipments only declining by 1.4%, to clock in just shy of 15 million units.

HP and Dell retained their top positions, and Dell actually saw year-over-year domestic improvement. Then we get to Apple (NASDAQ: AAPL  ) , where the Cupertino magic is running thin.

 

Q2 2013

Share

Q2 2012

Share

Growth

HP	3,957,761	26.4%	3,976,041	26.2%	(0.5%)
Dell	3,681,725	24.6%	3,458,736	22.8%	6.4%
Apple	1,740,500	11.6%	1,818,959	12%	(4.3%)
Lenovo	1,515,562	10.1%	1,266,109	8.3%	19.7%

Source: Gartner (July 2013).

You may notice that Mac daddy posted the largest year-over-year decline, but perhaps even more surprising is that Apple is the only one of the four largest players to actually see its market share contract during the period.

Remember Apple's halo effect? When the iPod took off, it triggered a spike in Apple computer sales. The halo effect didn't show any signs of slowing during the iPhone and iPad rollouts, but the class act of Cupertino is certainly vulnerable now.

Apple is still selling plenty of iPads and iPhones, but for some reason, the halo effect is no longer working. The consumer tech giant may have done too good a job with its mobile devices, giving Mac fans fewer reasons to pony up for new Apple computers. 

There could be an even scarier explanation. What if Macs are no longer cool because Apple is pushing older iPhones and iPads that carry lower price tags, but also make Apple seem less stylish and innovative? The same halo effect that sent folks scrambling toward Apple products may now be repelling computer shoppers. That would be a dreadful scenario, and it's one that Apple better make sure isn't the case. 

Trading in halos for devil horns
Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

 

World Bank president: Debt debate could be dire

WASHINGTON — The president of the World Bank warned Tuesday that congressional maneuvering over raising the debt limit could have dire consequences on the global economy and the world's poorest people.

The effects of a default would be "really severe," Jim Yong Kim told USA TODAY's Capital Download, but even a period of uncertainty as the Treasury Department's Oct. 17 deadline approaches could unnerve stock markets and increase borrowing costs for developing countries.

"The notion that getting close to the 17th and then in the final minute doing something heroically, that will have an impact," he said in an interview at World Bank headquarters, where its annual meetings are being held this week. He issued a plea for members of Congress who are now debating what to do.

IMF: Risks to global economy growing

Some Republican lawmakers have expressed skepticism that failing to raise the debt limit would have catastrophic economic repercussions.

"Please consider politics beyond the Beltway, politics beyond your own districts," Kim said. "Really think about the impact that inaction can have on poor mothers in Africa, trying to feed their children. It will really have an impact on those mothers. It will have an impact on young men and women trying to create businesses in the Middle East. This is real. This is not a theoretical impact. It's very real."

In August 2011, when the debt ceiling was raised only at the last minute, the impact on developing countries was substantial and persisted for months, he said. "Right now, emerging economies and developing countries can't afford another set of headwinds in their effort to try to grow their economies."

A report from the International Monetary Fund on Tuesday on the world economic outlook warned that risks to the global economy were building, including likely damage from the extended U.S. partial government shutdown.

Follow @susanpage on Twitter.

Today’s 3 Worst Stocks

All in all, not a bad day for the S&P 500 Index (SNPINDEX: ^GSPC  ) , which rose to an all-time high today. Markets gained ahead of a two-day Federal Reserve meeting that begins tomorrow -- the sentiment seems to be that Chairman Ben Bernanke and the rest of the committee will continue their bond-buying program, injecting more money into the U.S. economy. That's all well and good for the markets, but the growth didn't translate to today's three major S&P laggards.

Just after the craziness of tax season, you might expect H&R Block (NYSE: HRB  ) shares to be doing just fine. Instead, its stock slipped 2.5% after investors showed serious concerns with the number of tax returns the company has prepared this year. Flat year-over-year returns means H&R Block hasn't shown it can take market shares from ambitious and prevalent competition.

Retail companies took a hit today, and shares of Kohl's (NYSE: KSS  ) lost 2% after a streak of cold weather is set to hit business. Most of the cold weather setbacks are happening in the Northeast, and Kohl's has a large portion of its business in the region. With people not venturing outdoors as much when temperatures plummet, shareholders could be in for a nasty surprise come the earnings announcement May 16. 

The last of the day's laggards, Abbott Laboratories spinoff AbbVie (NYSE: ABBV  ) , lost 1.3% Monday. Shares may have simply sold off after shares bounced on Friday, when quarterly results beat expectations. Though revenue only added a little less than 4%, the sales growth in the company's primary moneymaker, Humira, surged 16%. The CEO was tough on the company's results Friday, criticizing the effect of patent expirations on results. Today, the market realized that those concerns may be a little more material than previously expected.

In the pharma business, great success comes with a caveat. AbbVie is a perfect example, as investors in the new company are left wondering what the future holds once the company's golden goose, Humira, is cooked. The Fool's brand new premium report on the company answers the high-profile questions that AbbVie investors are asking. Simply click here now to claim your copy today.

Chicken Recall for Salmonella Expanded to 16 States

www.kochfoods.comAn Antioch Farms product -- raw stuffed chicken breast breaded, boneless breast of chicken with rib meat a la Kiev -- was linked to salmonella. A recall of chicken contaminated with salmonella that at first appeared to be limited to Minnesota has been expanded to 16 states, according to the U.S. Department of Agriculture. The initial recall notice issued last week only mentioned that the products had been shipped to distribution centers and retailers in Minnesota. But a list of retailers that sold the chicken --including Albertsons and Shaw's -- includes stores in 16 states. Aspen Foods, a division of Koch Meats in Chicago, announced the recall at the request of the USDA's Food Safety and Inspection Service after Minnesota health officials and the U.S. Centers for Disease Control and Prevention identified a cluster of salmonella cases that appeared to be connected to Antioch Farms prepackaged chicken Kiev. In addition to Minnesota, the chicken was sold in Colorado, Idaho, Illinois, Massachusetts, Maine, Michigan, Montana, North Dakota, New Hampshire, Nevada, Rhode Island, Vermont, Utah, Wisconsin and Wyoming. Salmonella Linked to Chicken Kiev The recall involves 28,980 pounds of chicken products with sell-by dates of Oct. 1, 2015 and Oct. 7, 2015. Each package should have a USDA inspection mark with the facility number "P-1358" inside. The product identified by health officials as having caused the illnesses is "raw stuffed chicken breast breaded, boneless breast of chicken with rib meat a la Kiev." The first cases of salmonella were brought to the USDA's attention earlier this month. At least six people have had confirmed cases, with one hospitalized, the USDA said. An investigation tied the illnesses back to the facility where the chicken was produced. Consumption of food contaminated with salmonella can cause salmonellosis, the USDA says. The most common symptoms are diarrhea, abdominal cramps and fever within 12 to 72 hours after eating the contaminated product. The illness usually lasts four to seven days, and most people recover without treatment. Older adults, infants and people with weakened immune systems are more likely to develop a severe illness. More from Mitch Lipka
•Gerber Sued by FTC for Deceptive Claims About Baby Formula •FTC Bans Diet Pill Seller from the Weight-Loss Business •Texting Scammers to Pay $10 Million to Settle FTC Suit

Ford Motor: Wait, I Thought General Motors Was the One With All the Problems?

As General Motors (GM) went through its recalls this year, it was easy to feel confident in Ford Motor (F), which appeared to have avoided most of its competitor’s missteps. Until today that is.

Reuters

Shares of Ford plunged more than 7% today, with much of that occurring during the last hour of trading, after the automaker warned that its previous earnings guidance was way to high. The Wall Street Journal has the details:

Ford Motor Co. warned operating profit this year would be sharply below its earlier estimate, citing higher than expected warranty costs for auto-safety recalls and weakness in Europe.

The nation’s no. 2 auto maker said it expects before-tax earnings of between $6 billion and $7 billion for the full year, compared to a January forecast of between $7 billion and $8 billion.

Shares of Ford dropped 7.5% to $15.11 today–and is down another 0.6% in after-hours trading–while General Motors fell 2.9% to $32.22 today.

Why Express and OpenTable Shares Spiked Today

Stocks closed the week on a positive note, but gains were limited, as investors kept one eye on the simmering conflict in Iraq. All three major indexes finished the day up 0.3% as the Dow Jones Industrial Average  (DJINDICES: ^DJI  ) added on 42 points. Oil prices also hit a nine-month high on the Iraq concerns, climbing to $106.77. 

In today's economic news, the Producer Price Index showed wholesale prices falling by 0.2% in May after a jump of 0.6% in April, which may just be a correction after outsized growth in April, as food prices soared in that month. While it's surprising to see prices falling, the PPI shows that inflation continues to be under control, which should ease any concerns the Fed may have about overstimulating the economy. Elsewhere, the preliminary reading of the University of MIchigan consumer confidence index showed the gauge at 81.2, falling slightly from June's total of 81.9, and missing estimates of 82.9. It was a three-month low for the index, but consumer confidence remains relatively strong, though concerns about Iraq and higher fuel prices may be weighing on the average American. 

Among stocks making headlines today was Express  (NYSE: EXPR  ) . Shares jumped 21% after private equity firm Sycamore Partners said it was interested in acquiring the struggling apparel retailer. In a regulatory filing, Sycamore revealed it had accumulated a 9.9% stake in Express, and it sent a letter to the retailer expressing its interest in taking the company private. In response, Express established a special committee to "determine its best course of action," and adopted a shareholder rights plan, also known as a poison pill, to dissuade Sycamore, or another investor, from acquiring more than a 10% stake in the company. Express has stumbled upon tough times as same-store sales dropped 10% in its last quarter and it lowered its guidance, and the retailer has also missed earnings estimates in it last three reports. In recent years, Sycamore has taken clothing chains such as Hot Topic and Talbot's, private so the two may be a perfect match. Considering the steep sales declines Express has faced, a buyout may be the best option for shareholders.

Elsewhere, OpenTable  (NASDAQ: OPEN  ) rocketed 48% higher after priceline.com snatched up the reservation specialist for $2.6 billion. Priceline shares fell 3% on the day, perhaps a reflection of the steep premium it paid. The acquisition gives the online travel leader an avenue in the restaurant industry, as airline and hotel reservations have become highly competitive, and provides it with ready-set relationships with more than 23,000 restaurants. OpenTable generates revenue by charging restaurants $1 every time a diner makes a reservation through its system. Priceline has risen to a valuation of more than $60 billion, in large part due to acquisitions of companies such as Kayak and Booking.com, so OpenTable should continue its strong growth under its auspices. The news also sent shares of Yelp up 13% as investors speculated that the business-review site could be an attractive acquisition target, as well.

Are you ready for this $14.4 trillion revolution?
Have you ever dreamed of traveling back in time and telling your younger self to invest in Apple? Or to load up on Amazon.com at its IPO, and then just keep holding? We haven't mastered time travel, but there is a way to get out ahead of the next big thing. The secret is to find a small-cap "pure-play," and then watch as the industry -- and your company -- enjoy those same explosive returns. Our team of equity analysts has identified one stock that's ready for stunning profits with the growth of a $14.4 TRILLION industry. You can't travel back in time, but you can set up your future. Click here for the whole story in our eye-opening report.

M&A frenzy as Pfizer amasses AstraZeneca critics

LONDON — Fears that a proposed $106 billion takeover of British pharmaceuticals firm AstraZeneca by Pfizer, its New York-based rival that makes the erectile dysfunction drug Viagra, would lead to job losses and tax sidestepping is ruffling political feathers on both sides of the Atlantic even as merger activity in the pharma sector hits record levels.

Since the start of the year, the value of deal-making maneuvers in the global pharmaceutical sector has hit nearly $240 billion, making 2014 the busiest year ever, according to Thomson Reuters data.

"What the Pfizer bid for AstraZeneca has done is to highlight that the next cycle in the bio-pharmaceutical business is M&A," says Basil Petrides, an analyst at Beaufort Securities, a London-based wealth management company.

"There are always synergies to be had in terms of minimizing overlap, but the deals we have seen recently are not necessarily all about cost-cutting either," he says. "Intellectual property rights on drugs only last for a certain amount of years and after that they are opened up to other manufacturers. Pfizer has been circling this deal for a long time. Its pipeline of drugs is slowly eroding and the easiest way to get value for shareholders is to take over companies that have 'pipe' and proven technology."

In addition to Pfizer's spurned cash and stock bid for AstraZeneca on May 2 — worth a bit less after shares in Britain's second-largest drugs firm closed down 2.4% Friday — Germany's Bayer agreed to purchase New Jersey-headquartered Merck's consumer care business on May 6 for $14.2 billion.

On April 22, activist investor Bill Ackman teamed up with Canada's Valeant Pharmaceuticals for a $47 billion bid for Allergen, the maker of Botox. That same day, Novartis of Switzerland and Britain's GlaxoSmithKline said they would swap assets and combine units in a deal valued at around $16 billion.

Pfizer's so-far rebuffed interest in AstraZeneca is confronting particularly intensive scrutiny in Britain th! ough. The pharmaceutical industry is thought of, by Prime Minister David Cameron's coalition government and key by opposition parties, as a "jewel in Britain's scientific and industrial crown," as the Association of the British Pharmaceutical Industry (ABPI) has put it.

The ABPI, whose current president is Pfizer's managing director in Britain, declined to comment on the proposed deal, but did provide data showing that the pharmaceutical industry directly employs 73,000 people in Britain and as a sector "represents 25% of all expenditure on R&D in U.K. businesses" — a figure that fell to about $29 billion in 2012, according to the Office for National Statistics.

Critics of the deal say losing AstraZeneca, which employs around 6,700 workers in Britain and makes a sizable contribution to its R&D efforts, would weaken Britain's claim to being a major global player in science and technology. Foes of the proposal, including the opposition Labour Party leader Ed Miliband, accuse Cameron of being a "cheerleader" for the takeover, arguing that Pfizer has failed to provide sufficient assurances that it won't shed jobs or gut a planned research center AstraZeneca is building in the technology hub of Cambridge.

''Let me be absolutely clear — I'm not satisfied. I want more. But the way to get more is to engage," Cameron has said, responding to allegations he has been too supportive of the proposal.

Others, including some from the prime minister's Conservative Party, have voiced suspicions that Pfizer is concerned chiefly with lowering its tax liabilities by shifting its domicile to the United Kingdom, where the corporate tax rate is lower, and have called for a public interest test.

"If such a test were applied in this case, then I believe Pfizer's bid would fail. It doesn't have a great track record in honoring its undertakings and the suspicion remains it is primarily interested in reducing its tax bill," David Davis, a senior Conservative politician, told the Times of Lo! ndon.

!

On Tuesday and Wednesday, Ian Read, Pfizer's Scottish-born CEO, and Pascal Soriot, AstraZeneca's French boss, will appear before two separate panels of British lawmakers to face questioning about the deal's potential impact.

One relatively recent test case that may arise is U.S. foods company Kraft's 2010 takeover of British chocolate maker Cadbury. "Kraft implied it was going to keep staff on at Cadbury, but as soon as the deal was done it didn't," says Petrides, the Beaufort analyst. A factory that was slated to remain open was also closed.

Anders Borg, Sweden's foreign minister, already warned this week that Pfizer failed to live up to pledges it made over keeping jobs in that country following its acquisition of drug maker Pharmacia in 2002.

"Our experience shows that their track record is not very convincing and I think one should take these kind of promises not only with a pinch of salt but a sack full of salt," Borg said, speaking on British radio.

Capitol Hill is paying attention, too. Sen. Carl Levin, D-Mich, said Thursday he would push for legislation aimed at closing a loophole that permits companies to re-incorporate in overseas territories with lower tax bases.

"Companies that exploit this loophole benefit from the protections and services the federal government provides, including patent protection, research and development tax credits, national security and more," said Levin. Senate Finance Committee chairman Ron Wyden, D-Ore., supports Levin's initiative.

Also Thursday, Delaware Gov. Jack Markell and Maryland Gov. Martin O'Malley sent a letter to Pfizer's Read, expressing concern over how a deal with the British drug maker may affect the 5,700 workers in their states.

"Our states have invested substantially to make AstraZeneca a success in our communities. Elected officials and the public have a right to know Pfizer's intentions with respect to the key U.S. operations of AstraZeneca and the thousands of employees in our states whose jobs may b! e jeopard! ized by Pfizer's desire to reduce its tax liabilities," they wrote.

In a video posted on Pfizer's website over the weekend, Read shot back at critics who have called into doubt his firm's motives, saying the deal would be a "win-win" for society and investors. He has previously written to Cameron, confirming a commitment to Britain's science sector.

Read said Saturday that gaining access to AstraZeneca's R&D was a key motivation for the bid. "When we looked at AstraZeneca, we liked their science. We liked where their science is being done, which is in the U.K., and we know we have good science in the U.K. in Cambridge, Oxford, London and other universities," he said. No new pledges were made.

Since rejecting Pfizer's bid as "inadequate" and subsequent comments from Soriot that shareholders have been "supportive" of that move, AstraZeneca has made few public comments.

Follow Kim Hjelmgaard on Twitter @khjelmgaard

3 Ways to Win the Retirement Planning Game

Getty Images When you speak to investors on a daily basis -- as I used to -- you often get to see the seedy underbelly of their retirement planning, or lack thereof. From those who were not saving for retirement because they didn't trust the stock market to those who were struggling with paying off debt, many people I spoke with had allowed circumstances to hold them back from properly preparing for life after work. My experience is not unique: Statistics show that 36 percent of Americans have nothing saved for retirement, and the average retirement savings of a 50-year-old is just over $43,000. As a former stockbroker, I've been asked often how to succeed at retirement planning, and I usually offered the tips below. 1. Don't Let Your Starting Amount Hold You Back One of the most common beliefs with investing for retirement is that you need to start with a lot of money. Of course, having more is better, but starting with less should not hold you back. When you delay your retirement planning, you lose out on the biggest ally -- time. Think of saving for retirement as a marathon, not a sprint. It's less important to get a fast start out and more important that you pace yourself for the long haul. If you start to invest with little money now, you will develop a discipline that will help your retirement planning in the long run and give your money more time to grow. Many online brokerages have minimum opening account balances of $1,000 or less. Less traditional, though still good, options like ShareBuilder from Capital One (COF) or Motif Investing allow you to start investing for as little as $250. 2. Be Cheap About Fees Among the biggest impediments to building up your retirement nest egg are fees, such as the commissions associated with buying and selling individual stocks, or the "load" and management fees charged by mutual funds or exchange-traded funds.

What Long-Term Care Costs Now

How much does care in a nursing home cost? Does home care cost less?

Long-term-care insurer Genworth just came out with its annual cost of care study, which found that the national median rate for a private room in a nursing home is $240 per day ($87,600 per year). That's a 4.35% increase over 2013. But the cost varies a lot by location. For example, it's $91,615 per year in Florida and $104,025 in California, but $65,700 in Texas and $59,860 in Missouri. If you're estimating costs for your future – or looking for care for a parent –compare costs for all the cities where you (or your parent) would consider living. See Genworth's interactive map to compare costs across the country.

SEE ALSO: How to Make Long-Term Care More Affordable

Home care costs more per hour than a nursing home, but if you don't need round-the-clock care, it could cost less overall. The national median rate for a home-health aide is $20 per hour, which is a 1.59% increase from last year. If you needed, say, 44 hours of care per week, the median cost would be more than $45,000 per year. Assisted living has a median cost of $3,500 per month ($42,000 per year), which is a 1.45% increase over last year, according to Genworth.

Long-term-care insurance can cover all of these types of care, but the policies have been getting a lot more expensive. Many people now buy policies that fill in the gap between the estimated cost of care (a typical long-term-care claim is about three years) and the amount they can afford to pay out of savings. For more information about calculating how much coverage to get and which policy features to choose, see Options for Covering Long-Term-Care Costs. Also see our Long-Term-Care Special Report.

For help finding a nursing home or assisted living facility, see Choose the Right Long-Term-Care Facility for Your Parents.

Got a question? Ask Kim at askkim@kiplinger.com.

Even for Institutions, Investment Decisions Go Beyond Money

Almost 90% of institutional investors sometimes consider nonfinancial information when making investment decisions, a report released Tuesday by EY found. The survey of 163 institutional investors found 89% said nonfinancial information played a “pivotal role” in at least one decision in the past 12 months.

Among investors who don’t consider nonfinancial information like environmental, social or governance factors in their investment decisions, half said it was because they were not sure it would have a material impact.

The survey, “Tomorrow’s Investment Rules,” was conducted by Institutional Investor magazine for EY in September. Respondents were predominantly from North America and include third-party investment managers, banks, pension funds, foundations, endowments, sovereign wealth funds, insurance companies and family offices. Almost 60% of respondents were at firms with at least $10 billion in assets under management.

While two-thirds of investors who incorporate nonfinancial information in their decision-making process have some sort of technique to do so, only half of those have a structured process in place.

Investors favored annual reports, integrated reports and company websites as sources of nonfinancial information over third-party indexes, however, many shared frustrations over which issues would have the biggest impact on shareholder returns.

“What investors are telling us is that they’re using nonfinancial information to inform their decision-making – whether or not the companies are providing it themselves,” Dr. Matthew Bell, EY Australia climate change and sustainability services partner, said in a statement. “They’ve also identified weaknesses in current reporting, and so companies now need to consider a more structured approach. By using an integrated framework companies can report what is material to them, provide further information, and point to where an investor may find the raw or unabridged data that bigger investment teams will find useful.”

Despite what you might think, investors aren’t investigating nonfinancial information to ensure it’s in line with personal values; at least, not many of them. The most important nonfinancial issue was the impact regulation had on business for more than half of respondents. Just 17% of respondents said a firm’s personal values were “essential” information they needed as an investor.

Almost 36% said they wanted that data to help minimize risk. In fact, the investing stage where many investors look for nonfinancial data indicates it is part of a “general risk-weighting assessment,” according to the report. Eighty-eight percent of respondents said they take environmental, social and governance factors into account “frequently or occasionally” when examining industry dynamics and regulation. More than 86% do so when examining the risk of an investment and how long to hold it.

More than 42% of respondents said they would rule out an investment if it lacked a clear strategy to create value in the future. Thirty percent said a history of poor governance would make them unwilling to invest, and nearly 22% said the same of investments with human rights risks from operations.

Other issues might cause investors to reconsider a particular investment, but wouldn’t necessarily rule it out entirely. Almost three-quarters said unaddressed risk in the supply chain would cause them to reconsider, but only 12% said it would rule the investment out. More than half said risk from climate change was cause for concern, but just 8% said they would walk away from such an investment.

About 48% of respondents were based in the United States and Canada, but only 15% of that group said a firm’s nonfinancial information "frequently played a pivotal role" when making investment decisions. More than 30% of respondents from the rest of the world agreed.

Of respondents who do look for nonfinancial information, most came from emerging-market countries. The report found 70% of institutional investors who said they “frequently or occasionally” use that kind of data are based in emerging markets, compared with 49% of investors in developed markets.

Risk management was a big factor in analyzing nonfinancial information overall, but the report found it was especially important to investors outside of developed markets. Emerging-market investors called nonfinancial information “essential” to decision making by a wide margin: 43% compared to 29% of developed-market investors.

Stocks Hitting 52-Week Highs

Related MW Jos. A. Bank And Men's Wearhouse Finally Cozying Up To Each Other? Stocks Hitting 52-Week Highs Related JOSB Men's Wearhouse Welcomes Jos. A. Bank's Invitation to Conduct Due Diligence Benzinga's M&A Chatter for Thursday February 27, 2014

Pioneer Energy Services (NYSE: PES) shares touched a new 52-week high of $11.58. Pioneer Energy shares have jumped 40.39% over the past 52 weeks, while the S&P 500 index has gained 21.92% in the same period.

Jos. A Bank Clothiers (NASDAQ: JOSB) shares reached a new 52-week high of $62.80 as Men's Wearhouse (NYSE: MW) announced a non-disclosure agreement with Jos. A. Bank.

RF Micro Devices (NASDAQ: RFMD) shares reached a new 52-week high of $7.24 after Bank of America upgraded the stock from Underperform to Buy and lifted the price target from $5.50 to $10.

Fred's (NASDAQ: FRED) shares touched a new 52-week high of $21.05. Fred's trailing-twelve-month revenue is $1.98 billion.

Posted-In: 52-Week HighsNews Intraday Update Markets Movers

(c) 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Most Popular Weekly Highlights: Tesla's $5 Billion Gigafactory, Ford's Tech Plans And More Earnings Expectations For The Week Of March 3: Costco, SolarCity And More Short Sellers Pick Up Some Avon And Rite Aid (AVP, RAD, SVU) Harley-Davidson Thinks Beyond 2 Wheels, Rolls Out 3-Wheeled Motorcycle In Japan #PreMarket Primer: Monday, March 3: Markets Unsteady On The Prospect Of War In Ukraine Earnings Scheduled For March 3, 2014 Related Articles (FRED + JOSB) Stocks Hitting 52-Week Highs Jos. A. Bank And Men's Wearhouse Finally Cozying Up To Each Other? Benzinga's Weekend M&A Chatter Market Wrap For February 28: Markets Unable To Hold On To Gains Stocks Hitting 52-Week Highs Men's Wearhouse Welcomes Jos. A. Bank's Invitation to Conduct Due Diligence Around the Web, We're Loving... Jos. A. Bank Set to Begin Talks with Men's Wearhouse Create an Account With Options House and Get 150 Free Trades! Pope Francis Rips 'Trickle-Down' Economics Wynn, MGM, Other Casino Giants Vying For U.S. Turf