Top Stocks To Buy 2016: March 2014

Monday, March 31, 2014

Dump Whole Foods Market to Buy Kroger and Costco

Whole Foods Market (WFM) released its quarterly report yesterday and the numbers were terrible. Due to the dreadful performance, shares have tanked over 8% in today's trading session. The company's previous quarterly report was also bad and I expect it to continue this trend in the upcoming quarters. Therefore, I think investors should sell their Whole Foods Market shares.

Numbers From The Quarterly Report

· Revenue came in at $4.2 billion, up 10% year-over-year, missing the consensus estimate of $4.3 billion.

· On the earnings front, the company reported EPS of $0.42 while the analysts held out for $0.42.

· Same-store sales jumped 5.4% year-over-year, marginally falling short of the analysts' estimate of 5.5%.

· Transactions increased by 3.1%, while the average basket size of customers was 2.3% higher.

· Operating income was $255 million, or 6.0% of sales, and EBITDA were $366 million, or 8.6% of sales.

· Net income was $158 million, or 3.7% of sales, and return on invested capital increased 26 basis points to 13.3%.

Opportunity Giving Rise To Competition

As consumers are becoming more aware about the effects of genetically modified, or GMO, food and repercussions of the industrial fertilizers and pesticides used in farming, they are looking for more transparency in the food they eat. As a result of this, it is expected that the market for organic food in the U.S. will exceed $80 billion by 2015. The organic and natural food market still has large potential for further growth. In 2012, this market was just 3.5% of total food sales in the U.S.A.

However, this huge growth opportunity has also given rise to stiff competition and as a result Whole Foods' underperformance is likely to continue in the upcoming quarters. In fact, the company has revised its earnings and revenue guidance downwards for FY2014 for the second time in a row. The company has reduced FY14 EPS $1.58-$1.65 which is well below the consensus estimate of $1.68.

The bad news doesn't end there. Over the past quarter, Whole Foods was cutting prices (on key products) due to increased competition by companies entering the Organic & Natural food business; particularly Costco (COST) and Kroger (KR). Continued cost reduction will directly eat into the company's gross margin, which will put downward pressure on Whole Foods' bottom-line.

On the bright, Whole Foods Market is planning to open 33-38 stores in fiscal 2014 and 38-45 more in fiscal 2015. Moreover, the company predicts that there exists room for 1,200 stores in the long run, and aims to exceed the count of 500 stores by 2017.

However, I don't think these initiatives will be enough to solve Whole Foods On-hand problems anytime soon. Moreover, Whole Foods' average dollar-volume has dropped significantly to $219.2 in the latest reported quarter. Therefore, I think investors should exit Whole Foods Market as soon as possible.

Kroger Moves

Kroger's third quarter registered positive comps of 3.5%, making it the 40th consecutive quarter of positive comps. This is no mean feat and is the result of Kroger's customer-centric business model. The company is well positioned to continue its growth momentum as well. On the back of comps growth, Kroger's third-quarter revenue jumped 3.2% over last year to $22.5 billion.

The company's customer-first strategy and the strong progress to improve the fresh products segment has been one of the growth drivers. The customer centric business model has, over a period of 10 years, been responsible for an 83% increase in loyal households that keep visiting Kroger for their grocery needs. Focusing on the most loyal brand of customers has been one of the driving forces behind the 40 consecutive quarters of positive comps, and it is all set to sustain the momentum into 41st.

Kroger is confident of its growth going forward because it is capturing only $0.50 of every $1 the loyal customer spends on products that the company sells. It is confident of achieving its fiscal 2013 earnings per share target and projects comps growth of 3% to 3.5% (excluding fuel) for the fourth quarter. For fiscal 2014, it is confident of delivering 8% to 11% earnings-per-share growth targets, which does not include the accruals coming in from the Harris Teeter Supermarkets acquisition last year.

Harris Teeter's acquisition opens up an excellent opportunity for Kroger to access areas with high median incomes such as Northern Virginia and the North Carolina research triangle. Kroger has also jumped onto the organic and natural food bandwagon, aiming at consumers who are driven toward organic and natural food items for reasons of health and supporting local farmers.

Costco Looks Good As Well

Costco's comparable-store sales witnessed a year-over-year increase of 5% in the recent quarter. The retailer's total revenue from membership and net sales inched up 5% to $24.5 billion, while on the earnings front it reported an EPS of $0.96, a penny more than the corresponding quarter of 2012.

Costco has managed to grow despite a weak economic environment, as a result of offering a wide range of merchandise at heavily discounted prices, which is what cash-strapped consumers are looking for as they aim to stretch their dollars.

Costco's growth story is primarily based on getting new memberships and also being able to retain members. New members increased by 17% year-over-year in the previous quarter and membership renewals continued their strength in the 90%-plus range. Costco opened 13 new stores in the previous quarter, as compared to 9 last year, and this has driven the new membership signups and benefited the retailer.

As part of its expansion, Costco plans to open 18 new stores in fiscal 2014 in the international markets. Also, Costco has an advantage over a retailer such as Wal-Mart as it carries fewer items, as a result of which it needs fewer staff and hence, offers them far better wages as compared to Wal-Mart.

A Bloomberg report depicts how Wal-Mart has been in a soup due to lack of proper merchandising and dis-organization. Shoppers are failing to find what they need at Wal-Mart stores, which, in turn, is a boon for peers such as Costco. Wal-Mart recently lowered its full year profit forecast and sales have fallen for three quarters straight. Its same-store sales in its recently reported quarter fell 0.3% in the U.S.

Wal-Mart's Sam's Club, which is a direct rival of Costco since it operates on an identical membership model, is also struggling. Comparable store sales at Sam's Club increased 1.1% in the previous quarter while analysts were looking for growth of 1.3%. Going forward, Wal-Mart expects Sam's Club same-store sales to range between flat and 2%. So, Costco has been doing better than Wal-Mart as far as comps growth is concerned and this outperformance could continue as it expands internationally.

Conclusion

Not only is Kroger growing faster than Whole Foods, it is also cheaper as it is trading at 12.27 times its earnings. Costco, on the other hand, should see good growth as it gradually expands its footprint in the global market. Whole Foods' growth is slowing down and I expect that trend to continue throughout 2014. Bad quarterly results never go down well with investors; therefore I think investors should dump Whole Foods Market in favor of Kroger and Costco.

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Saturday, March 29, 2014

Top 10 Integrated Utility Companies To Invest In 2014

Whether or not your employer reminds you to take a look at your 401(k) retirement account when you go through the arduous fall benefits open enrollment period, it can really pay to do so. That�� why more employers are making it part of the process, according to Aon Aon Hewitt. The thinking is that this is the time employees are allocating money among various other benefits��ransit, healthcare flexible spending, health savings accounts, voluntary life or disability insurance��nd retirement savings should be part of the picture.

The thing that�� different about 401(k) choices from the other benefits choices is that you can typically change your 401(k) choices on a payroll period basis, while the other ��afeteria��benefits can only be changed during the open enrollment period or if you have a life change like the birth of a child or a spouse who gets fired. So with the 401(k) it�� not a now or never decision, but it is a matter of making the right decisions now to secure your retirement.

Top 10 Integrated Utility Companies To Invest In 2014: Wynn Resorts Limited(WYNN)

Wynn Resorts, Limited, together with its subsidiaries, engages in the development, ownership, and operation of destination casino resorts. The company owns and operates Wynn Las Vegas casino resort in Las Vegas, which includes approximately 22 food and beverage outlets comprising 5 dining restaurants; 2 nightclubs; 1 spa and salon; 1 Ferrari and Maserati automobile dealership; wedding chapels; an 18-hole golf course; meeting space; and foot retail promenade featuring boutiques. Wynn Las Vegas casino resort also features approximately 147 table games, 1 baccarat salon, private VIP gaming rooms, 1 poker room, 1,842 slot machines, and 1 race and sports book. It also owns and operates an Encore at Wynn Las Vegas resort, a destination casino resort located adjacent to Wynn Las Vegas that features a 2,034 all-suite hotel, as well as a casino with 95 table games, 1 sky casino, 1 baccarat salon, private VIP gaming rooms, and 778 slot machines. In addition, the company operates Wyn n Macau casino resort located in the Macau Special Administrative Region of the People?s Republic of China. Wynn Macau casino resort features approximately 595 hotel rooms and suites, 410 table games, 935 slot machines, 1 poker room, 1 sky casino, 6 restaurants, 1 spa and salon, lounges, meeting facilities, and retail space featuring boutiques. Further, it operates Encore at Wynn Macau resort located adjacent to Wynn Macau. Encore at Wynn Macau resort features approximately 410 luxury suites and 4 villas, as well as casino gaming space, including a sky casino consisting of 60 table games and 80 slot machines, 2 restaurants, 1 luxury spa, and retail space. The company was founded in 2002 and is based in Las Vegas, Nevada.

Advisors' Opinion:

[By Steve Symington]
After all, even if additional states continue to pass legislation legalizing online gambling, you can bet Zynga will face intense competition from other well-funded competitors. Michael also noted there's a chance recent rumors of a Zynga partnership with Wynn Resorts (NASDAQ: WYNN ) could turn out to be true.
[By Paul Ausick]
U.S.-based casino operators Las Vegas Sands Inc. (NYSE: LVS), Wynn Resorts Ltd. (NASDAQ: WYNN), and MGM Resorts International (NYSE: MGM) already operate resorts and casinos in Macau and these companies would be much smaller without them.

Top 10 Integrated Utility Companies To Invest In 2014: Administradora de Fondos de Pensiones-Provida S.A.(PVD)

Administradora de Fondos de Pensiones Provida S.A. offers private pension fund administration and related services in the Republic of Chile. Its services include collection for individual capitalization accounts, voluntary savings accounts, voluntary pension savings, life and disability benefits, investment services, and accounts administration. The company also holds investments in private pension fund administrators operating in Peru, Ecuador, Mexico, and the Dominican Republic. As of June 30, 2005, it operated 134 branches. The company was incorporated in 1981 and is headquartered in Santiago, Chile. Administradora de Fondos de Pensiones Provida SA operates as a subsidiary of Banco Bilbao Vizcaya Argentaria, Chile S.A.

Advisors' Opinion:

[By John Udovich]
While America�� middle class appears to be shrinking with little upward mobility, small cap wealth management stocks Noah Holdings Limited (NYSE: NOAH) and A.F.P Provida SA (NYSE: PVD)�plus larger cap Affiliated Managers Group, Inc (NYSE: AMG) are managing money in places where the ranks of the middle class and the wealthy are still growing strong. Specifically, Noah Holdings Limited is based in China, Chile based A.F.P Provida SA is spreading its footprint into other Latin American countries and the�Affiliated Managers Group is growing�a global footprint. For those reasons, you have probably not heard of these wealth management stocks, but here are some reasons why you might want to consider investing in one:

Best Dividend Stocks For 2014: ProLogis(PLD)

Prologis Inc. is an independent equity real estate investment trust. It invests in the real estate markets across the globe. The firm engages in the ownership, development, management, and leasing of industrial distribution and retail properties. It was previously known as Security Capital Investment Trust. Prologis Inc. was formed in 1991 and is based in San Francisco, California with an additional office in Denver, Colorado.

Advisors' Opinion:

[By Rich Duprey]
Industrial real estate developer Prologis� (NYSE: PLD ) �has declared regular and preferred dividends for the second quarter of 2013. The company plans to distribute $0.28 per share of its common stock on June 28 to shareholders of record as of June 11. For its�8.54% Series Q cumulative redeemable preferred stock, Prologis will distribute $1.0675 per share, which will be paid on July 1 to shareholders of record at the close of business on June 18.
[By Eric Volkman]
Prologis (NYSE: PLD ) has announced that it will sell 31 million new pieces of itself. That's the number of common shares it will float in an upcoming, underwritten public stock offering. The price of the shares will be $41.60 apiece, and the company's underwriters have been granted a 30-day purchase option for up to an additional 4.65 million shares to cover overallotments, if any.
[By Dimitra DeFotis]
Among real estate trusts:
American Tower��(AMT),�the diversified �REIT, is the best performer in the index.�It was�up 4.6% after saying�Friday it will buy the parent of tower operator Global Tower Partners for $4.8 billion. HCP (HCP), a healthcare REIT, was�up 3.3%. Prologis (PLD) an industrial REIT, was�up 2.8%. Vornado Realty Trust (VNO) was�up 2.7%. Boston Properties (BXP), the office REIT, was�up 2.3%. Equity Residential (EQR), a residential REIT, was�up 2.4%. Ventas (VTR), a healthcare REIT, was�up 2%.

Top 10 Integrated Utility Companies To Invest In 2014: Inphi Corporation (IPHI)

Inphi Corporation provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter, and computing markets worldwide. Its analog and mixed signal semiconductor solutions offer high signal integrity at data speeds while reducing system power consumption. The company�s semiconductor solutions are designed to address bandwidth bottlenecks in networks, maximize throughput and minimize latency in computing environments, and enable the rollout of next generation communications, datacenter, and computing infrastructures. Its solutions provide a high-speed interface between analog signals and digital information in high-performance systems, such as telecommunications transport systems, enterprise networking equipment, datacenters and enterprise servers, storage platforms, test and measurement equipment, and military systems. The company also provides 40G and 100G high-speed analog semiconductor solutions for the communications market and high- speed memory interface solutions for the computing market. Its products include amplifiers and modulator drivers, clock and data recovery, isolation memory buffer, register, and SerDes products that perform a range of functions, such as amplifying, encoding, multiplexing, demultiplexing, retiming, and buffering data and clock signals at speeds up to 100 Gbps. Inphi Corporation sells its products directly through its sales force, as well as through a network of sales representatives and distributors to original equipment manufacturers. The company was formerly known as TCom Communications, Inc. and changed its name to Inphi Corporation in February 2001. Inphi Corporation was founded in 2000 and is headquartered in Santa Clara, California.

Advisors' Opinion:

[By Roberto Pedone]
Inphi (IPHI) provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter and computing markets. This stock closed up 4.7% at $13.25 in Monday's trading session.

Monday's Volume: 838,000

Three-Month Average Volume: 202,080

Volume % Change: 378%

From a technical perspective, IPHI jumped higher here right above some near-term support at $12.44 with heavy upside volume. This stock has been uptrending strong for the last five months, with shares soaring higher from its low of $8.62 to its intraday high of $13.85. During that uptrend, shares of IPHI have been consistently making higher lows and higher highs, which is bullish technical price action. That move briefly pushed shares of IPHI into breakout territory, since the stock flirted with some near-term overhead resistance at $13.50.

Traders should now look for long-biased trades in IPHI as long as it's trending above some near-term support at $12.44 and then once it sustains a move or close above its new 52-week high at $13.85 with volume that hits near or above 202,080 shares. If we get that move soon, then IPHI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are its next major overhead resistance levels at $14.79 to $16.94, or possibly even $18.

Top 10 Integrated Utility Companies To Invest In 2014: Banco Santander S.A.(STD)

Banco Santander, S.A. provides a range of banking and financial products. It accepts customer demand, time, and notice deposits, and international and domestic interbank deposits, as well as offers auto financing, personal loans, and credit cards; and automated cash dispensers, savings books updaters, telephone banking services, and electronic and Internet banking services. The company also engages corporate banking, treasury, and investment banking activities. It provides transaction banking services in cash management, trade finance, and basic financing; and corporate finance services for mergers and acquisitions, and asset and capital structuring, as well as involves in the origination activities and risk management, and distribution of structured products and debt in the credit markets; structuring and trading activities in financial markets of interest rate and exchange rate instruments; and activities relating to the equity markets. In addition, it engages in the des ign and management of mutual and pension funds, and life and general insurance products. The company operates primarily in Spain, the United Kingdom, other European countries, Brazil and other Latin American countries, and the United States. As of December 31, 2010, it had 6,063 branch offices in continental Europe; 1,416 branches in the United Kingdom; 5,882 branches in Latin America; and 721 branches in the United States. The company was formerly known as Banco Santander Central Hispano S.A. and changed its name to Banco Santander, S.A. in June 2007. Banco Santander, S.A. was founded in 1857 and is based in Madrid, Spain.

Advisors' Opinion:

[By Chandan Dubey]
This article will describe what a bank does. Then we will move on to reading the balance sheet of a bank. As an example, I take the balance sheet of one of my holdings, Banco Santander (STD).

Top 10 Integrated Utility Companies To Invest In 2014: Boingo Wireless Inc.(WIFI)

Boingo Wireless, Inc., together with its subsidiaries, provides mobile Wi-Fi Internet solutions. The company installs, manages, and operates wireless network infrastructure to provide Wi-Fi services at its managed and operated hotspots, such as airports, hotels, coffee shops, shopping malls, arenas, stadiums, and quick service restaurants in North America, South America, Europe, the Middle East, Africa, and Asia. Its solution includes software for Wi-Fi enabled devices comprising smartphones, laptops, and tablet computers, as well as back-end system infrastructure that detects and enables access to Wi-Fi network. The company provides its solutions to individual users and partners consisting of telecom operators, network operators, cable companies, technology companies, enterprise software and services companies, and communications companies. In addition, it provides billing system and customer support services. Boingo Wireless, Inc. was founded in 2001 and is headquartered in Los Angeles, California.

Advisors' Opinion:

[By Rich Smith]
Boingo Wireless (NASDAQ: WIFI ) has a new president.

On Monday, the provider of Wi-Fi hotspots at airports, shopping malls, restaurants, and similar locations announced that it has hired away Rubicon Project�Chief Revenue Officer Nick Hulse to become its president. Reporting to CEO Dave Hagan, Hulse will be responsible for maximizing revenue at Boingo.

Top 10 Integrated Utility Companies To Invest In 2014: Ritchie Bros. Auctioneers Incorporated(RBA)

Ritchie Bros. Auctioneers Incorporated, an industrial auctioneer, sells various equipment to on-site and online bidders. The company, through unreserved public auctions, sells a range of used and unused industrial assets, including equipment, trucks, and other assets utilized in the construction, transportation, agricultural, material handling, mining, forestry, petroleum, and marine industries. It also provides Internet bidding services, which facilitate customers access to live and online auction participation. The company primarily serves buyers and sellers of equipment, trucks, and other industrial assets; rental companies and brokers; finance companies; and truck and equipment dealers. As of December 31, 2011, it operated approximately 110 locations in approximately 25 countries, including 43 auction sites worldwide. The company was founded in 1963 and is headquartered in Burnaby, Canada.

Advisors' Opinion:

[By Canadian Value]
Australians will remember 2013 in part for the fall of some of our national corporate icons. The Ford Falcon and Holden Commodore are unlikely to be produced domestically going forward, and Qantas has unsuccessfully sought subsidies from the Federal government. Due to elevated cost structures and a high exchange rate, Australia Inc. is increasingly unable to compete in a fiercely competitive global market.High on the Reserve Bank of Australia�� (RBA) Christmas wish-list this year will be a lower exchange rate and a business community more willing to loosen its purse strings in 2014. Unfortunately, the first wish will likely need to be granted before the second can be realized. We expect the RBA will need to keep policy accommodative over the cyclical horizon and 2014 will be a critical transition year for the Australian economy.Over the year through September 2013, real growth in business investment outside the mining sector slowed to almost zero (0.5% to be precise, as shown in Figure 1). Why has Australia Inc. invested so little into its businesses this year? As RBA Deputy Governor Philip Lowe commented in a speech in late October, the lack of business investment in recent years is actually a global phenomenon across the developed world.�Although hard to quantify, this ��nvestment drought,��as Lowe described it, has likely been influenced by a lingering risk aversion after the financial crisis as well as the political uncertainty that has been common in many developed countries over the past few years. But in Australia another variable has also been restraining non-mining capital expenditure, and that is the elevated exchange rate.As Figure 1 shows, changes in the real trade-weighted exchange rate have historically led changes in non-mining business investment. As the real exchange rate appreciates, domestic products and services become less competitive relative to foreign goods and services, both at home and abroad. And of course, the reverse is true w
[By Chris Hill]
Caterpillar's (NYSE: CAT ) �first-quarter profit�fell 45% and the company lowered guidance. But its CEO said that his confidence is at a two-year high and sales in China rose. Should investors buy the stock? In this installment, our analysts discuss Caterpillar's future and explain why Ritchie Bros. Auctioneers (NYSE: RBA ) could be a hidden winner.

Top 10 Integrated Utility Companies To Invest In 2014: eHealth Inc.(EHTH)

eHealth, Inc. offers Internet-based insurance agency services for individuals, families, and small businesses in the United States. The company also offers technology licensing and Internet advertising services. Its ecommerce platforms organize and present health insurance information in various formats, as well as enables individuals, families, and small businesses to research, analyze, compare, and purchase various health insurance plans. The company offers various medical health insurance coverage plans, such as preferred provider organization, health maintenance organization and indemnity plans, Medicare plans, short-term medical insurance, student health insurance, and health savings account eligible health insurance plans, as well as ancillary plans, such as dental, vision, and life insurance. Its customers access its ecommerce platforms through its Websites, including eHealth.com, eHealthInsurance.com, eHealthMedicare.com, and PlanPrescriber.com, as well as through a network of marketing partners. The company was incorporated in 1997 and is headquartered in Mountain View, California.

Advisors' Opinion:

[By Sean Williams]
The other option here is eHealth (NASDAQ: EHTH ) �a private health insurance platform for individuals, families, and small businesses that's been around for years. In its third-quarter results released last week, eHealth noted that membership had risen by 24% to 1.147 million from the year-ago period, clearly showing skepticism in the Obamacare health reform law suggesting the success and options its private platform offers. If there's any company that can use Healthcare.gov's nightmarish start to its advantage, it's eHealth!
[By Sean Williams]
What: Shares of eHealth (NASDAQ: EHTH ) �-- a provider of private market online health insurance services for individuals, families, and small businesses -- jumped as much as 17% after the company reported third-quarter earnings results.
[By David Williamson]
Obamacare is racking up expenses, in particular, with the creation of insurance exchanges. In this video, David Williamson looks at this feature of Obamacare, and a possible free market solution. The problem is that these exchanges are proving more expensive than originally thought, up to an estimated $5.7 billion for 2014. No wonder less than half of the states in the country have come on board. One solution is an online insurance exchange. A form of such an exchange already exists. Will it work for a nationwide insurance market?�Hard to say. On the one hand, it could offer small businesses unprecedented access to insurance plans. On the other hand, an online market may simply offer those plans with the best commissions and not the best deals.� (NASDAQ: EHTH )

Top 10 Integrated Utility Companies To Invest In 2014: United States Brent Oil Fund LP (BNO)

United States Brent Oil Fund, LP (USBO) is a commodity pool. USBO is focused on issuing units that may be purchased and sold on the NYSE Arca, Inc. The investment objective of USBO is for the daily changes in percentage terms of its units��per unit net asset value (NAV) to reflect the daily changes in percentage terms of the spot price of Brent crude oil, as measured by the daily changes in the price of the futures contract for Brent crude oil traded on the ICE Futures Exchange (the ICE Futures).

The investment portfolio of USBO will consist primarily of investments in futures contracts for crude oil, heating oil, gasoline, natural gas and other petroleum-based fuels that are traded on the ICE Futures, New York Mercantile Exchange (the NYMEX) or other United States and foreign exchanges (collectively, Futures Contracts). USBO may also take positions in other crude oil-related investments, such as cash-settled options on Futures Contracts, forward contracts for oil, cleared swap contracts and non-exchange traded (over-the-counter) transactions that are based on the price of crude oil, other petroleum-based fuels, Futures Contracts and indices based on the foregoing (collectively, Other Crude Oil-Related Investments).

Advisors' Opinion:

[By Dan Caplinger]
How to invest
If those trends persist, then it could eventually solve the problem that United States Oil Fund has had in underperforming the spot price of crude. Given Brent's stronger backwardation trend, United States Brent Oil Fund (NYSEMKT: BNO ) might be the better oil ETF to choose.
[By Dr. Kent Moors]
As I have noted before, investors can play this spread by using two exchange-traded funds (ETFs) that are already part of the Energy AdvantagePortfolio: PowerShares DB Energy Fund (NYSE Arca: DBE) and the United States Brent Oil Fund (NYSE Arca: BNO).
[By Paul Ausick]
The United States Brent Oil ETF (NYSEMKT: BNO) is up less than 0.1%, at $44.38 in a 52-week range of $36.88 to $45.05. The annual high was also set today.
[By Dr. Kent Moors]
It's time to pull back a bit on exchange-traded fund (ETF) holdings allowing moves playing the WTI-Brent crude pricing spread. I have suggested previously the two primary plays here are PowerShares DB Energy (NYSE Arca: DBE) and United States Brent Oil Fund (NYSE Arca: BNO).

Top 10 Integrated Utility Companies To Invest In 2014: HollyFrontier Corp (HFC)

HollyFrontier Corporation (HollyFrontier), formerly Holly Corporation, incorporated in 1947, is a petroleum refiner, which produces light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. HollyFrontier operates in two segments: Refining and Holly Energy Partners, L.P. (HEP). The Refining segment includes the operations of its El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries and NK Asphalt. The HEP segment involves all of the operations of HEP. The Company merged with Frontier Oil Corporation (Frontier), on July 1, 2011. On November 9, 2011, HEP acquired from the Company certain tankage, loading rack and crude receiving assets located at its El Dorado and Cheyenne Refineries.

Refinery Operations

The Company�� refinery operations serve the Mid-Continent, Southwest and Rocky Mountain regions of the United States. HollyFrontier owned and operated five refineries having an aggregate crude capacity of 443,000 barrels per day, as of December 31, 2011. During the year ended December 31, 2011, gasoline, diesel fuel, jet fuel and specialty lubricants represented 48%, 32%, 5% and 3%, respectively of its total refinery sales volumes. Its refineries are located in El Dorado, Kansas, (the El Dorado Refinery), Tulsa, Oklahoma (the Tulsa Refineries), which consists two production facilities, the Tulsa West and East facilities, a petroleum refinery in Artesia, New Mexico, which operates in conjunction with crude, vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (the Navajo Refinery), Cheyenne, Wyoming (the Cheyenne Refinery) and Woods Cross, Utah (the Woods Cross Refinery). Light products are shipped by product pipelines or are made available at various points by exchanges with other parties and are made available to customers through truck loading facilities at the refinery and at terminals.

The Company�� principal customers for gasoline include other refin! ers, convenience store chains, independent marketers, and retailers. Diesel fuel is sold to other refiners, truck stop chains, wholesalers, and railroads. Jet fuel is sold for military and commercial airline use. Specialty lubricant products are sold in both commercial and specialty markets. LPG�� are sold to LPG wholesalers and LPG retailers. HollyFrontier produces and purchases asphalt products that are sold to governmental entities, paving contractors or manufacturers. Asphalt is also blended into fuel oil and is either sold locally or is shipped to the Gulf Coast. Tulsa West facility is 85,000 barrels per stream day refinery in Tulsa, Oklahoma. It owns Tulsa East facility is 75,000 barrels per stream day refinery that is also located in Tulsa, Oklahoma. In September 2011, HEP completed the Tulsa interconnecting pipeline project which facilitated a combined crude processing rate of 125,000 barrels per stream day. The El Dorado Refinery is a coking refinery.

The El Dorado Refinery is located on 1,100 acres south of El Dorado, Kansas and is a refinery. The principal process units at the El Dorado Refinery consists of crude and vacuum distillation; hydrodesulfurization of naphtha, kerosene, diesel, and gas oil streams; isomerization; catalytic reforming; aromatics recovery; catalytic cracking; alkylation; delayed coking; hydrogen production, and sulfur recovery. Supporting infrastructure includes maintenance shops, warehouses, office buildings, a laboratory, utility facilities, and a wastewater plant (Supporting Infrastructure) and logistics assets owned by HEP, which includes approximately 3.7 million barrels of tankage, a truck sales terminal, and a propane terminal. The facility processes approximately 135,000 barrels per stream day of crude oil with the capability. The Tulsa West facility is located on a 750-acre site in Tulsa, Oklahoma situated along the Arkansas River. The principal process units at the Tulsa West facility consists of crude distillation (with light ends recovery), n! aphtha hy! drodesulfurization, catalytic reforming, propane de-asphalting, lubes extraction, methyl ethyl ketone (MEK) dewaxing, delayed coker and butane splitter units.

Tulsa West facility�� Supporting Infrastructure includes approximately 3.2 million barrels of feedstock and product tankage, of which 0.4 million barrels of tankage is owned by Plains All American Pipeline, L.P. (Plains), and an additional 1.2 million barrels of tank capacity was out of service, as of December 31, 2011. The Tulsa East facility is located on a 466-acre site also in Tulsa, Oklahoma situated along the Arkansas River. The principal process units at the Tulsa East facility consists of crude distillation, naphtha hydrodesulfurization, fluid catalytic cracking (FCC), isomerization, catalytic reforming, alkylation, scanfiner, diesel hydrodesulfurization and sulfur units. The Tulsa East facility�� Supporting Infrastructure includes approximately 3.75 million barrels of tankage capacity on the refinery�� premises, of which approximately 3.4 million barrels of tankage is owned by HEP. The primary markets for the El Dorado Refinery�� refined products are Colorado and the Plains States, which include the Kansas City metropolitan area.

The gasoline, diesel and jet fuel produced by the El Dorado Refinery are primarily shipped via pipeline to terminals for distribution by truck or rail. The Company ships product via the NuStar Pipeline Operating Partnership L.P. Pipeline to the northern Plains States, via the Magellan Pipeline Company, L.P. (Magellan) mountain pipeline to Denver, Colorado, and on the Magellan mid-continent pipeline to the Plains States. The Tulsa Refineries��principal customers for conventional gasoline include Sinclair Oil Company (Sinclair), other refiners, convenience store chains, independent marketers and retailers. Sinclair and railroads are the primary diesel customers. Jet fuel is sold primarily for commercial use. The refinery�� asphalt and roofing flux products are sold via truck or! railcar ! directly from the refineries or to customers throughout the Mid-Continent region primarily to paving contractors and manufacturers of roofing products. HollyFrontier�� Tulsa West facility also produces specialty lubricant products sold in both commercial and specialty markets throughout the United States and to customers with operations in Central America and South America.

The El Dorado Refinery is located about 125 miles, and the Tulsa Refineries are located approximately 50 miles from Cushing, Oklahoma, a crude oil pipeline trading and storage hub. Both its Mid-Continent Refineries are connected via pipeline to Cushing, Oklahoma. In addition, the Company has a transportation services agreement to transport up to 38,000 barrels per calendar day of crude oil on the Spearhead Pipeline from Flanagan, Illinois to Cushing, Oklahoma, enabling it to transport Canadian crude oil to Cushing for subsequent shipment to either of the Company�� Mid-Continent Refineries or to its Navajo Refinery. The Navajo Refinery has a crude oil capacity of 100,000 barrels per stream day.The Navajo Refinery�� Artesia, New Mexico facility is located on a 561-acre site and is a refinery with crude distillation, vacuum distillation, FCC, residuum oil supercritical extraction, (ROSE) (solvent deasphalter), hydrofluoric (HF) alkylation, catalytic reforming, hydrodesulfurization, mild hydrocracking, isomerization, sulfur recovery and product blending units. Supporting Infrastructure includes approximately 2 million barrels of feedstock and product tankage, of which 0.2 million barrels of tankage are owned by HEP.

The Artesia facility is operated in conjunction with a refining facility located in Lovington, New Mexico, approximately 65 miles east of Artesia. The principal equipment at the Lovington facility consists of a crude distillation unit and associated vacuum distillation units. Supporting Infrastructure includes 1.1 million barrels of feedstock and product tankage, of which 0.2 million barrels of! tankage ! are owned by HEP. The Lovington facility processes crude oil into intermediate products that are transported to Artesia by means of three intermediate pipelines owned by HEP. The Navajo Refinery primarily serves the southwestern United States market. The Navajo Refinery primarily serves the southwestern United States market. The Company�� products are shipped through HEP�� pipelines from Artesia, New Mexico to El Paso, Texas and from El Paso to Albuquerque and to Mexico via products pipeline systems owned by Plains and from El Paso to Tucson and Phoenix via a products pipeline system owned by Kinder Morgan�� subsidiary, SFPP, L.P. (SFPP). In addition, the Navajo Refinery transports petroleum products to markets in northwest New Mexico and to Moriarty, New Mexico, near Albuquerque, via HEP�� pipelines running from Artesia to San Juan County, New Mexico.

HollyFrontier has refined product storage through its pipelines and terminals agreement with HEP at terminals in El Paso, Texas; Tucson, Arizona; and Artesia, Moriarty and Bloomfield, New Mexico. The Company uses a common carrier pipeline out of El Paso to serve the Albuquerque market. In addition, HEP leases from Mid-America Pipeline Company, L.L.C., a pipeline between White Lakes, New Mexico and the Albuquerque vicinity and Bloomfield, New Mexico. HEP owns and operates a 12-inch pipeline from the Navajo Refinery to the leased pipeline, as well as terminalling facilities in Bloomfield, New Mexico, which is located in the northwest corner of New Mexico, and in Moriarty, which is 40 miles east of Albuquerque. The Navajo Refinery is situated near the Permian Basin. The Company purchases crude oil from independent producers in southeastern New Mexico and west Texas, as well as from oil companies.

HollyFrontier also purchases volumes of isobutane, natural gasoline and other feedstocks to supply the Navajo Refinery from sources in Texas and the Mid-Continent area that are delivered to its region on a common carrier pipeline ! owned by ! Enterprise Products, L.P. The Cheyenne Refinery has a crude oil capacity of 52,000 barrels per stream day and the Woods Cross Refinery has a crude oil capacity of 31,000 barrels per stream day. The Cheyenne Refinery processes Canadian crudes, as well as local sweet crudes, such as that produced from the Bakken shale and similar resources. The Woods Cross Refinery processes regional sweet and black wax crude, as well as Canadian sour crude oils into light products. The Cheyenne Refinery facility is located on a 255- acre site and is a refinery with crude distillation, vacuum distillation, coking, FCCU, HF alkylation, catalytic reforming, hydrodesulfurization of naphtha and distillates, butane isomerization, hydrogen production, sulfur recovery and product blending units. Supporting Infrastructure includes approximately 1.6 million barrels of feedstock and product tankage, of which 1.5 million barrels of tankage are owned by HEP.

The Woods Cross Refinery facility is located on a 200-acre site and is a fully integrated refinery with crude distillation, solvent deasphalter, FCC, HF alkylation, catalytic reforming, hydrodesulfurization, isomerization, sulfur recovery and product blending units. Supporting Infrastructure includes approximately 1.5 million barrels of feedstock and product tankage, of which 0.2 million barrels of tankage are owned by HEP. The facility processes or blends an additional 2,000 barrels per stream day of natural gasoline, butane and gas oil over its 31,000 barrels per stream day capacity. The Company owns and operates four miles of hydrogen pipeline that connects the Woods Cross Refinery to a hydrogen plant located at Chevron�� Salt Lake City Refinery. The Cheyenne Refinery primarily markets its products in eastern Colorado, including metropolitan Denver, eastern Wyoming and western Nebraska. Crude oil is transported to the Cheyenne Refinery from suppliers in Canada, Nebraska, North Dakota and Montana via common carrier pipelines owned by Kinder Morgan, Plains All Am! erican Pi! peline and Suncor Energy, as well as by truck.

The Woods Cross Refinery obtains its supply of crude oil from suppliers in Canada, Wyoming, Utah and Colorado as delivered via common carrier pipelines that originate in Canada, Wyoming and Colorado. HollyFrontier manufactures and markets commodity and modified asphalt products in Arizona, New Mexico, Oklahoma, Kansas, Missouri, Texas and northern Mexico. The Company has three manufacturing facilities located in Glendale, Arizona; Albuquerque, New Mexico; and Artesia, New Mexico. The Company's Albuquerque and Artesia facilities manufacture modified hot asphalt products and commodity emulsions from base asphalt materials provided by its refineries and third-party suppliers. The Company�� Glendale facility manufactures modified hot asphalt products from base asphalt materials provided by its refineries and third-party suppliers. HollyFrontier�� products are shipped via third-party trucking companies to commercial customers that provide asphalt based materials for commercial and government projects.

The Company owns Ethanol Management Company, is 25,000 barrels per calendar day products terminal and blending facility located near Denver, Colorado. It also owns a 50% joint venture interest in Sabine Biofuels II, LLC, a 30 million gallon per year biodiesel production facility located near Port Arthur, Texas. The Company owns a 75% joint venture interest in the UNEV Pipeline, a 400 mile 12-inch refined products pipeline from Salt Lake City, Utah to Las Vegas, Nevada, together with terminal and ethanol blending facilities in the Cedar City, Utah and North Las Vegas areas and storage facilities at the Cedar City terminal with Sinclair, its joint venture partner, owning the remaining 25% interest. The pipeline has a capacity of 62,000 barrels per calendar day (based on gasoline equivalents). The pipeline was mechanically completed in November 2011.

Holly Energy Partners, L.P.

As of December 31, 2011, the Compa! ny owned ! a 42% interest in HEP, including the 2% general partner interest. HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines and terminal, tankage and loading rack facilities in the Mid-Continent, Southwest and Rocky Mountain regions of the United States. Revenues are generated by charging tariffs for transporting petroleum products and crude oil through its pipelines and by charging fees for terminalling petroleum products and other hydrocarbons, and storing and providing other services at its storage tanks and terminals. In additioin, HEP owns a 25% interest in the SLC Pipeline LLC (SLC Pipeline) that serves refineries in the Salt Lake City, Utah area. Revenues from the HEP segment are earned through transactions with unaffiliated parties for pipeline transportation, rental and terminalling operations, as well as revenues relating to pipeline transportation services provided for its refining operations. HEP has a 15-year pipelines and terminals agreement with Alon USA, Inc.

Advisors' Opinion:

[By Dimitra DeFotis]
Among energy stocks, refiners, whose input costs are rising, were losers: Marathon Petroleum�(MPC) had dropped by 0.72%, while�Valero Energy�(VLO),�HollyFrontier�(HFC) and�Tesoro�(TSO) were down fractionally. Shares of integrated oil-and-gas producer and refiner ExxonMobil (XOM) were up 0.22% to $87.65. Exploration companies have been winners with the price of both oil and natural gas moving higher in July and August.
[By Ben Levisohn]
Refiners like Phillips 66�(PSX), Valero Energy�(VLO), Holly Frontier�(HFC), Marathon Petroleum�(MPC) and Tesoro (TSO) had a painful start to the year. The pain might be about to turn to gain, according to Barclays.
[By Dan Caplinger]
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks more closely at inflation and its impact over the past 12 months. Dan notes that for those who've seen little wage growth, stable prices have been good, but the Federal Reserve would prefer to see inflation at somewhat higher levels of around 2%. Dan points to the energy markets as a key reason for low inflation, as gasoline prices are down more than 5% from year-ago levels. Dan explains how that's been bad news for refiners Marathon Petroleum (NYSE: MPC ) , Valero Energy (NYSE: VLO ) , and HollyFrontier (NYSE: HFC ) , even though cheap crude availability has still allowed them to be profitable. Dan concludes that if plentiful energy supplies keep prices low, it could further dampen inflationary pressure for years to come.�

South Carolina plant to become BMW's largest

The BMW plant in Spartanburg, S.C., is expanding its output by 50%.

NEW YORK (CNNMoney) German automaker BMW announced a $1 billion investment in its South Carolina plant that will increase its capacity by 50%. That will make it BMW's biggest factory in the world.

The automaker said it plans to hire 800 additional workers at its Spartanburg factory, which would be an increase of 10%.

The plant already makes its luxury crossover SUV X series there, including the the X3, X5 and X6 models. And it is set to start production on the soon to be introduced X4 model. Friday's announcement included plans for another entry in the series, the larger X7.

The plant currently builds about 300,000 cars a year, and about 70% of that production is exported elsewhere in the world. That makes it the U.S. auto plant with the most exports.

Top 5 Heal Care Stocks To Own For 2014

But exports from U.S. plants have been growing across the industry. Japanese automaker Honda Motor (HMC) announced last year that it exported more cars from its U.S. plants than it imported into the U.S. market. And U.S. manufacturers General Motors (GM, Fortune 500), Ford Motor (F, Fortune 500) and Chrysler Group have all reported increased exports from its U.S. plants.

The plant opened in 1994, and this will be its fifth expansion since then.

Why BMW built a bobsled

The expansion will take capacity of the BMW plant up to 450,000 by the end of 2016. With the expansion, the plant is set to overtake BMW's largest plant, which is currently outside of Munich and builds about 340,000 cars a year.

Thursday, March 27, 2014

Amgen: Overlooked, Worth Buying, Morgan Stanley Says

Biotech stocks have been slammed recently and Morgan Stanley believes it’s time to start differentiating between the fundamentals of companies like Amgen (AMGN), Biogen Idec (BIIB), Celgene (CELG) and Gilead Sciences (GILD).

Shares of Amgen have dropped 1% this month, while Biogen Idec has fallen 9.5%, Gilead Sciences has declined 13% and Celgene is 0ff 11%.

Morgan Stanley decided that those drops made it a fine time to resume coverage of the biotech sector. That’s allowed it to come at companies like Amgen with a clean slate and consider what investors might have missed, both good and bad, as the sector surged during the past three years, and then sold off. Analysts Matthew Harrison and David Friedman explain:

Over the last 5 years, there have been extraordinary changes and major de-risking events at most of the large biotechnology companies. Total revenues for the major 4 biotechs (Amgen, Biogen, Celgene and Gilead) are expected to move from a total of $175B over the last 5 years to a total of $335B over the next 5 years. And if you exclude Amgen which is a more mature company, we expect total revenues to move from $94B to $229B, or 2.5x the prior period.

Based upon these fundamental changes in the business prospects for these companies, the market has rewarded the significant progress seen across the industry. The average 1 year forward P/E multiple for the 4 large caps has expanded from 13x vs the S&P to 16x (S&P of 14.5x) over the last 3 years and the cumulative performance of the industry has been multiples above the market with the major 4 biotechs rising ~328% over the last 3 years compared to 143% for the S&P, or 2.3x…

During the rapid expansion of the industry and its valuation over the last 3 years have: a. Risks been overlooked in the exuberance? b. Reasonable scenarios priced into stocks such that they are fairly valued? c. Or is there still upside based upon fundamental operating drivers?

When it comes to Amgen, at least, Harrison and Friedman believe it’s been overlooked because of its “lack of mega blockbusters.” They explain:

[As] investors have only focused on the mega blockbuster, we believe they have overlooked the fundamental flexibility in Amgen's business – including the significant margin flexibility that comes with the Enbrel stepdowns (we estimate ~$1.4B through 2016) – that will allow it to deliver predicable, growing (or stable in a downside scenario) cash flows. And deliver more of that money than its peers to shareholders through its aggressive capital allocation program. Thus, Amgen offers much more downside support than its peers and a pipeline which when considered in aggregate can grow the cash flows and likely deliver that growth to investors in much less risky way than the estimated growth at its peers.

Harrison and Friedman initiated Amgen and Biogen with Buy ratings but slapped Neutral ratings on Gilead and Regeneron.

Shares of Amgen have gained 1.9% to $122.39 at 11:09 a.m., while Biogen Idec has risen 0.4% to $307.17, Gilead Sciences has dropped 0.9% to $72.07 and Regeneron has fallen 0.4% to $141.99.

Mid-Day Market Update: Five Below Jumps On Upbeat Results; Exelixis Shares Decline

Related BZSUM Mid-Afternoon Market Update: Markets Turn Red as Dish Network Rises Mid-Morning Market Update: Markets Open Higher; Francesca's Issues Downbeat Q1 Forecast

Midway through trading Wednesday, the Dow traded up 0.11 percent to 16,386.22 while the NASDAQ dropped 0.22 percent to 4,225.05. The S&P also rose, gaining 0.12 percent to 1,867.77.

Leading and Lagging Sectors
Healthcare sector moved up 0.39 percent, with Keryx Biopharmaceuticals (NASDAQ: KERX) moving up 15 percent to gain the top spot. Top gainers in the sector included China Biologic Products (NASDAQ: CBPO), with shares up 7.4 percent, and Laboratory Corp. of America Holdings (NYSE: LH), with shares up 5.5 percent.

In trading on Wednesday, basic materials shares dropped by 0.30 percent. Among the sector stocks, Amyris (NASDAQ: AMRS) was down more than 8.5 percent, while Universal Stainless & Alloy Products (NASDAQ: USAP) tumbled around 5 percent.

Top Headline
Francesca's Holdings (NASDAQ: FRAN) reported a 29% drop in its fiscal fourth-quarter earnings and issued a weak first-quarter outlook. Francesca's expects current-quarter earnings of $0.20 to $0.24 per share on sales of $85 million and $90 million. However, analysts projected earnings of $0.28 per share on sales of $92 million. Francesca's posted its quarterly profit of $10.6 million, or $0.25 per share, versus a year-ago profit of $14.9 million, or $0.33 per share.

Excluding special items, its adjusted earnings came in at $0.27 per share. Its revenue rose 6.3% to $92.1 million. The company had projected a profit of $0.27 to $0.29 per share on sales of $93 million to $95 million. Its gross margin shrank to 50.6% from 53.4%, while comparable-store sales slipped 6%.

Equities Trading UP
Five Below (NASDAQ: FIVE) shares shot up 13.11 percent to $42.98 after the company reported better-than-expected fourth-quarter results. The company posted its quarterly adjusted earnings of $0.47 per share on revenue of $212 million. However, analysts were projecting earnings of $0.45 per share on revenue of $207.8 million.

Shares of Steelcase (NYSE: SCS) got a boost, shooting up 12.21 percent to $16.36 after the company reported better-than-expected fourth-quarter earnings. Steelcase reported its Q4 earnings of $0.18 per share, beating analysts' estimates by $0.01 per share. Raymond James upgraded the stock from Outperform to Strong Buy and lifted the price target from $17.50 to $19.00.

Movado Group (NYSE: MOV) was also up, gaining 9.18 percent to $45.89 after the company reported upbeat Q4 earnings and issued a strong FY15 outlook.

Equities Trading DOWN
Shares of Exelixis (NASDAQ: EXEL) were down 36.18 percent to $4.11 after the company issued an update on ongoing COMET-1 phase 3 pivotal trial in men with metastatic castration-resistant prostate cancer. Stifel Nicolaus lowered the price target on the stock from $11.00 to $9.00.

Francesca's Holdings (NASDAQ: FRAN) shares tumbled 14.43 percent to $17.85 after the company reported a 29% drop in its fiscal fourth-quarter earnings and issued a weak Q1 outlook.

International Game Technology (NYSE: IGT) was down, falling 8.82 percent to $13.54 after the company announced its plans to lower 7% of its workforce and cut its earnings guidance for the year.

Commodities
In commodity news, oil traded up 0.60 percent to $99.79, while gold traded down 0.52 percent to $1,304.60.

Silver traded down 0.67 percent Wednesday to $19.85, while copper fell 1.31 percent to $2.97.

Eurozone
European shares were higher today.

The Spanish Ibex Index rose 1.49 percent, while Italy's FTSE MIB Index climbed 1.14 percent.

Meanwhile, the German DAX jumped 1.12 percent and the French CAC 40 rose 0.83 percent while U.K. shares surged 0.15 percent.

Economics
The MBA reported that its index of mortgage application activity dropped 3.50% in the week ended March 21.

US durable-goods orders gained 2.2% in February, versus economists' expectations for a 0.8% rise.

The preliminary reading of the Markit services PMI came in at 55.50 in March, versus economists' expectations for a reading of 54.00.

Crude stockpiles climbed 6.6 million barrels for the week ended March 21, the US Energy Information Administration reported. However, analysts were expecting a gain of 2.6 million barrels.

Gasoline supplies slipped 5.1 million barrels, while distillate stockpiles increased 1.6 million barrels.

Posted-In: Earnings News Guidance Eurozone Futures Forex Global Econ #s Economics Intraday Update Markets Movers Tech

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Wednesday, March 26, 2014

Why Darden Restaurants Is a Sell in the Near-Term

Darden Restaurants Inc. (DRI) is the world's largest publicly held casual dining restaurant company. It owns and operates the Olive Garden®, Red Lobster®, LongHorn Steakhouse®, The Capital Grille®, Yard House®, Bahama Breeze®, Seasons 52®, Eddie V's Prime Seafood® and Wildfish Seafood Grille® restaurant brands.

Below Analysts' Expectations

Darden Restaurants is the largest full-service restaurant company in the world. As of May 26 2013, the company operated 2,138 restaurants in the U.S. and Canada, all of which are owned by the company, except three restaurants located in Florida and three restaurants located in California that are owned by joint ventures managed by the company. As of the same date, the company had 37 franchised restaurants in Japan, the Middle East, Puerto Rico and Mexico pursuant to area development and franchise agreements. But unfortunately, sales declined at its best known brands. Darden´s performance was hurt by a sales drop at its Red Lobster chain, which it plans to separate the segment either through a spin-off or sale. This transaction could take place in 2015. Olive Garden also underperformed analysts' expectations for the major part of fiscal 2013.

Inflation Risk

Outlook for food inflation at Darden is higher than in the past, so food and beverage expenses ratio will be higher year over year. Commodity inflation will be between 2.5% to 3.0% in fiscal 2014 and most of the food inflation will come from proteins, particularly beef and seafood. Furthermore, energy costs are also likely to be up year over year. As a matter of fact, earnings for fiscal 2014 are probably declining in the range of 15% to 20%.

Best Media Stocks To Buy For 2014

Long-Term Drivers

The Specialty Restaurant Group (SRG), which includes Bahama Breeze and The Capital Grille, has grown over the last couple of quarters. Eddie V's Restaurants and Yard House might be m! eaningful long-term drivers, as we think most of the growth in the next years will come from the acquisition of those restaurants.

Analyst Recommendation

The firm is currently Zacks Rank # 3 - Hold, and it also has a longer-term recommendation of "Underperfom." For investors looking for a Zacks Rank # 1 – Strong Buy, Ignite Restaurant Group Inc. (IRG) and The Wendy's Company (WEN) could be the options.

P/E, Earnings and ROE

In terms of valuation, the stock sells at a trailing P/E of 18.5x, trading at a premium compared to the industry. Earnings per share (EPS) decreased by 42.3% in the most recent quarter compared to the same quarter a year ago. The company missed the Zacks Consensus Estimate for both earnings and revenues in fiscal second quarter 2014.

Finally, I always like to see one of the most important financial ratios applying to stockholders, the best measure of performance for a firm's management: the return on equity. The ratio has decreased when compared to the same quarter one year prior. Let´s compare the current ratio with the peer group in the next table:

Ticker	Company Name	ROE (%)
DRI	Darden Restaurants	20
WEN	Wendy´s	2.36
EAT	Brinker International, Inc.	109.37
BWLD	Buffalo Wild Wings, Inc.	15.36
DNKN	Dunkin Brands Group Inc	36.06

As we can see, the firm has a higher ROE than Wendy´s and Buffalo Wild Wings, Inc. (BWLD), but far less than the ones from Dunkin Brands Group Inc (DNKN) and Brinker International, Inc. (EAT).

Final Comment

As outlined in this article, the company underperformance in its c! ore brand! s, Red Lobster and Olive Garden resulted in lower sales in the last quarter. Darden was not the only one facing trouble, other restaurants such as Dine Equity (DIN) and Yum! Brands (YUM) have also fallen short. On the other hand, we see we think Darden can continue to get benefitted from the acquisitions.

With a closed price level that was not very different from its closing price of one year earlier, in this opportunity I would recommend investors to stay away from this stock. Hedge fund gurus have also been active in the company in fourth quarter 2013. Gurus like Jim Simons (Trades, Portfolio), David Dreman (Trades, Portfolio) and Westport Asset Management (Trades, Portfolio) have sold or reduced positions in it.

Disclosure: Victor Selva holds no position in any stocks mentioned.

Also check out: David Dreman Undervalued Stocks David Dreman Top Growth Companies David Dreman High Yield stocks, and Stocks that David Dreman keeps buying Jim Simons Undervalued Stocks Jim Simons Top Growth Companies Jim Simons High Yield stocks, and Stocks that Jim Simons keeps buying

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Monday, March 24, 2014

Time to Dust Off Universal Display (OLED)

Have you ever noticed how small cap stocks rarely seem to dole out the huge gains investors - and the media - can't shut up about, then once that buzz dies down, the stocks nobody cares about anymore end up going hog-wild when nobody's looking? Yeah, well, you can add Universal Display Corporation (NASDAQ:OLED) to that list of stocks the market mis-times.

OLED was all the rage back in 2011 when the company was a $2.5 billion outfit that struggled to generate $61 million in revenue, and barely turned a profit that year. Yet, shares rallied a stunning 400% leading up to the early-2011 peak price of $63.58, as the market was sure Universal Display Corporation was poised to make a small fortune. Big mistake. Since then, OLED shares were more than cut in half as the company failed to meet ridiculously high expectations. Even at its current price of $34.50, the stock's still only worth 54% of its former highest value. Translation: The thrill is gone. Faith is lost. The party's over. Insert any other "thing's will never be the same again" cliche you want to here - the point is, traders think Universal Display blew its one and only chance to hand out big rewards. Thing is, it didn't. Slowly and quietly, while few have noticed, this stock has dropped hints that it's about to finally reward patient shareholders.

Just a little background... Universal Display Corporation makes materials and technologies used in flat panel screens. Its claim to fame is that its technology works on flexible devices, and can bend, twist, and flex without breaking. The display, made by organic matter, produces a higher-quality image than most - and the most common - LCD screens. Though it's not the only revenue-bearing technology OLED has, it's the highest-profile technology that Universal Display offers, and has been underscored by the fact that the Apple iWatch has a design patent on a wrap-around wristphone, while LG and Samsung have both announced an impending flexible smartphone screen. [LG is a competitor of OLED, while Samsung is a partner of Universal Display Corporation's.]

That's not the interesting part of the story here, however. It's the catalytic part, but not the interesting part.

The interesting, and bullish, part of this story is how as of August of last year OLED shares have pushed past the falling resistance line that's been in place since 2011. Better still, that uptrend materialized thanks to some help from a rising support line that's been in place since June of last year. In the meantime we've made higher highs, and it even looks like the 200-day moving average line (green) is providing support for the new rally.

The clincher is the fact that Universal Display shares have a ton of room to use before bumping into its new, rising resistance line.

With all of that being said, it's worth adding that Universal Display Corporation doesn't have to be a merely technical trade - the fundamentals are pointed in the right direction too. The pros expect the company to earn $1.07 per share of OLED in 2014, marking the fourth straight year of profits, and the fifth straight year of improved earnings. It's not a value idea by any means, with a trailing P/E of 49 and a forward-looking P/E of 31.7. But, with earnings expected to grow 53% this year and at a 55% clip next year, the frothy valuations seem quite normal.

Hot Medical Companies To Watch For 2014

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Top Airline Companies To Own For 2014

NEW YORK (AP) ��A day after setting off an uproar among travelers opposed to in-flight phone calls, the chairman of the Federal Communications Commission Chairman backtracked, saying he personally isn't in favor of calls on planes.

The role of the FCC, he added, is to advise if there is a safety issue with using phones on planes. He said there is "no technical reason to prohibit" the use of mobile devices on planes.

"We understand that many passengers would prefer that voice calls not be made on airplanes. I feel that way myself," chairman Tom Wheeler said in a Friday statement.

The decision to allow calls will ultimately rest with the airlines, Wheeler emphasized.

Just three weeks into his job, Wheeler struck a nerve with travelers Thursday when he said it was time for the agency to review "our outdated and restrictive rules" about mobile services on airplanes. The rules have been in place for 22 years. A tentative agenda for the FCC's Dec. 12 meeting, posted Thursday, listed the proposed revision. It was the first the public heard of the change.

Top Airline Companies To Own For 2014: Gogo Inc (GOGO)

Gogo Inc incorporated on December 14, 2009, is a holding company. The Company operates through its two operating subsidiaries, Gogo LLC and Aircell Business Aviation Services LLC. The Company provides in-flight connectivity and wireless in-cabin digital entertainment solutions. It provide turnkey solutions for passengers to extend their connected lifestyles to the aircraft cabin. It operates in two segments: commercial aviation (CA) and business aviation (BA). Its CA business provides in-flight connectivity and digital entertainment solutions to commercial airline passengers through their personal Wi-Fi enabled devices.

The Company provides Gogo Connectivity to passengers to nine North American airlines that provide Internet connectivity to their passengers. It provide Gogo Connectivity to passengers on Delta Air Lines, American Airlines, Virgin America, Alaska Airlines, US Airways, Frontier Airlines and Air Tran Airways. It also provide Gogo Connectivity to passengers on a small number of aircraft operated by United Airlines and Air Canada. As of September 30, 2011, the Company had equipped 1,177 commercial aircraft, representing approximately 85% of Internet-enabled North American commercial aircraft, which were operated on more than 4,200 daily flights.

The Company�� BA segment sells equipment and provides services for in-flight Internet connectivity and other voice and data communications under its Gogo Biz and Aircell branded products and services. BA�� customers include original equipment manufacturers of private jet aircraft such as Gulfstream, Cessna, Hawker Beechcraft, Bombardier, Dassault, Embraer, NetJets, Flexjets, Flight Options and CitationAir. It sells equipment for three of the primary connectivity network options in the business aviation market: Gogo Biz, through which it delivers broadband Internet connectivity over its (air-to-ground )ATG network, and the Iridium and Inmarsat SwiftBroadband satellite networks. As of September 30, 2011, the Company had m! ore than 700 Gogo Biz systems in operation and more than 4,600 aircraft with Iridium satellite communications systems in operation, and it has sold more than 100 Inmarsat SwiftBroadband systems. It provides in-flight broadband connectivity across the contiguous United States and portions of Alaska through 3 MHz of FCC-licensed ATG spectrum and its network of cell sites.

Through its Gogo platform, the Company provides passengers with a convenient and easy way to access the Internet, view video content, send and receive email and instant messages, and access corporate VPNs on Gogo-equipped commercial aircraft. It provides Internet access through Gogo Connectivity, on-demand streaming video offerings through Gogo Vision and access to a variety of free entertainment and service offerings, customized for each airline, through Gogo Signature Services.

The Company competes with Panasonic Avionics, Row 44, OnAir, LiveTV and Thales.

Advisors' Opinion:

[By John Udovich]
Small cap Gogo Inc (NASDAQ: GOGO) leaped 10.04% yesterday after announcing its first international deal where it would provide in-flight Internet service on the entire domestic fleet of Japan Airlines (JAL)��meaning it might be a good idea to take a closer look at the stock along with�Iridium Communications Inc (NASDAQ: IRDM), another formerly highflying communications stock that hit heavy turbulence and ultimately crashed over a decade ago.
[By Lisa Levin]
Gogo (NASDAQ: GOGO) shares gained 9.19% to touch a new 52-week high of $30.90 on Jim Cramer/Mad Money mention.

Western Digital (NASDAQ: WDC) shares rose 2.75% to reach a new 52-week high of $74.43 after the company's board declared a cash dividend of $0.30 per share for the quarter ending Dec. 27, 2013.
[By Whitney Kisling]
After his holdings of Yelp Inc. and Pandora (P) Media Inc. doubled earlier this year, the 50-year-old manager is adding a new stock: Gogo Inc. (GOGO), an unprofitable provider of in-flight Wi-Fi that�� up 63 percent since its June public offering.

Top Airline Companies To Own For 2014: Gol Linhas Aereas Inteligentes SA (GOL)

Gol Linhas Aereas Inteligentes S.A. (GoL) is a low-cost, low-fare airline in the world providing service on routes connecting all of Brazil�� cities and from Brazil to cities in South America and select touristic destinations in the Caribbean. As of March 31, 2010, GoL offered approximately 800 daily flights per day to 61 destinations connecting cities in Brazil, as well as destinations in Argentina, Bolivia, Curacao, Aruba, Chile, Colombia, Paraguay, Uruguay and Venezuela. GoL is a holding company, which owns directly or indirectly shares of five subsidiaries: VRG Linhas Aereas S.A. (VRG) and four offshore finance subsidiaries, Gol Finance Cayman and GAC Inc., which owns Sky Finance and Sky Finance II. VRG is the Company�� operating subsidiary, under which it conducts its business. Gol Finance, GAC Inc., Sky Finance and Sky Finance II are off-shore companies established for the purpose of facilitating cross-border general and aircraft financing transactions.

GoL�� passenger transportation services include ticketless travel; online sales, check-in, seat assignment and flight change and cancellation services; online flight status service; Web-enabled cell phone ticket sales and check-in; self check-in at kiosks at designated airports; designated female lavatories; friendly and efficient in-flight service; modern aircraft interiors; quick turnaround times at airport gates; free or discounted shuttle services between airports and drop-off zones on certain routes; buy on board services on certain flights; mobile check-in and boarding pass (100% paperless boarding), and iPhone application for check-in, electronic boarding pass and Smiles account management. On December 31, 2009, the Company had an operational fleet of 108 operational aircraft and a total fleet of 127. As of March 31, 2010, one of its Boeing 767 aircrafts was subleased to a charter company in the United States, one is under final formalization process for a wet lease to a Brazilian company for flights connecting Brazil to! Angola and three are under final stages of negotiation to be chartered to operate intercontinental flights. At December 31, 2009, GoL had a total of 127 aircraft, 94 of which were under operating leases and 33 were under finance leases.

The Company competes with TAM Linhas Aereas S.A.

Advisors' Opinion:

[By Jake L'Ecuyer]
Gol Linhas Aereas Inteligentes (NYSE: GOL) was down, falling 6.31 percent to $4.0850 after the company posted a loss in the third quarter.
Commodities
In commodity news, oil traded up 1.33 percent to $94.28, while gold traded up 0.28 percent to $1,274.70.
[By Jon C. Ogg]
Gol Linhas A茅reas Inteligentes S.A. (NYSE: GOL) is a Brazilian airline carrier, as well as a mail and cargo carrier. At $4.65, the 52-week trading range is $2.74 to $7.67.

Best Cheap Stocks To Own Right Now: WestJet Airlines Ltd (WJA)

WestJet Airlines Ltd. (WestJet) provides airline service and travel packages with scheduled service to more than 85 destinations in North America, Central America and the Caribbean, and has partnership agreements with over 30 airlines around the world. WestJet operates a fleet of more than 100 Boeing Next-Generation 737 and Bombardier Q400 NextGen aircraft. The Company�� subsidiaries include WestJet Investment Corp., WestJet Operations Corp., WestJet Vacations Inc. and WestJet Encore Ltd. Advisors' Opinion:

[By Gerrit De Vynck]
Closely held Porter unveiled plans in April to add as many as 30 CSeries jets in an order valued at as much as $2.1 billion from Montreal-based Bombardier to reach as far as Los Angeles and the Caribbean as it challenges the country�� two biggest carriers, Air Canada and WestJet Airlines Ltd. (WJA) The order, which would be Bombardier�� first for the aircraft with a Canadian carrier, is conditional on the runway extension and a removal of the jet ban.
[By Eric Lam]
BlackBerry, the smartphone maker looking to sell itself, lost 3.6 percent to pace declines among technology stocks. WestJet (WJA) Airlines Ltd. dropped 2.5 percent as load factor slipped in September. Valeant Pharmaceuticals International Inc. rose 1.4 percent after receiving approvals for products in the U.S. and Canada. Agrium Inc. added 0.7 percent after naming a successor for its retiring chief executive officer.

Top Airline Companies To Own For 2014: Delta Air Lines Inc (DAL)

Delta Air Lines, Inc. (Delta) provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company�� route network gives it a presence in every domestic and international market. Delta�� route network is centered around the hub system it operate at airports in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. Each of these hub operations includes flights that gather and distribute traffic from markets in the geographic region surrounding the hub to domestic and international cities and to other hubs. The Company�� network is supported by a fleet of aircraft that is varied in terms of size and capabilities.

Delta has bilateral and multilateral marketing alliances with foreign airlines to improve its access to international markets. These arrangements can include code-sharing, reciprocal frequent flyer program benefits, shared or reciprocal access to passenger lounges, joint promotions, common use of airport gates and ticket counters, ticket office co-location, and other marketing agreements. Its international code-sharing agreements enable it to market and sell seats to an expanded number of international destinations. The Company has international codeshare arrangements with Aeromexico, Air France, Air Nigeria, Alitalia, Aeroflot, China Airlines, China Eastern, China Southern, CSA Czech Airlines, KLM Royal Dutch Airlines, Korean Air, Olympic Air, Royal Air Maroc, VRG Linhas Aereas (operating as GOL), Vietnam Airlines, Virgin Australia and WestJet Airlines.

In addition to the Company�� marketing alliance agreements with individual foreign airlines, it is a member of the SkyTeam airline alliance. Delta also has frequent flyer and reciprocal lounge agreements with Hawaiian Airlines, and codesharing agreements with American Eagle Airlines (American Eagle) and Hawaiian Airlines. It has air service agreements with multiple do! mestic regional air carriers that feed traffic to its route system by serving passengers primarily in small-and medium-sized cities.

Through the Company�� regional carrier program, it has contractual arrangements with 10 regional carriers to operate regional jet and, in certain cases, turbo-prop aircraft using its DL designator code. In addition to Delta�� wholly owned subsidiary, Comair, it has contractual arrangements with ExpressJet Airlines, Inc. and SkyWest Airlines, Inc., both subsidiaries of SkyWest, Inc.; Chautauqua Airlines, Inc. and Shuttle America Corporation, both subsidiaries of Republic Airways Holdings, Inc.; Pinnacle Airlines, Inc. and Mesaba Aviation, Inc. (Mesaba), both subsidiaries of Pinnacle Airlines Corp. (Pinnacle); Compass Airlines, Inc. (Compass) and GoJet Airlines, LLC, both subsidiaries of Trans States Holdings, Inc. (Trans States), and American Eagle.

The Company�� SkyMiles program allows program members to earn mileage for travel awards by flying on Delta, Delta�� regional carriers and other participating airlines. Mileage credit may also be earned by using certain services offered by program participants, such as credit card companies, hotels and car rental agencies. In addition, individuals and companies may purchase mileage credits. The Company reserves the right to terminate the program with six months advance notice, and to change the program�� terms and conditions at any time without notice.

SkyMiles program mileage credits can be redeemed for air travel on Delta and participating airlines, for membership in the Company�� Delta Sky Clubs and for other program participant awards. Mileage credits are subject to certain transfer restrictions and travel awards are subject to capacity controlled seating. During the year ended December 31, 2011, program members redeemed more than 275 billion miles in the SkyMiles program for more than 12 million award redemptions. During 2011, 8.2% of revenue miles flown on Delta were from a! ward trav! el.

The Company generates cargo revenues in domestic and international markets through the use of cargo space on regularly scheduled passenger aircraft. Delta is a member of SkyTeam Cargo, an airline cargo alliance. SkyTeam Cargo offers a network spanning six continents and provides customers an international product line.

The Company has several other businesses arising from its airline operations, including aircraft maintenance, repair and overhaul (MRO); staffing services for third parties; vacation wholesale operations, and its private jet operations. Delta�� MRO operation, known as Delta TechOps, is an airline MRO in North America. In addition to providing maintenance and engineering support for its fleet of approximately 775 aircraft, Delta TechOps serves more than 150 aviation and airline customers. Its staffing services business, Delta Global Services, provides staffing services, professional security, training services and aviation solutions to approximately 150 customers. The Company�� vacation wholesale business, MLT Vacations, is the provider of vacation packages in the United States. Its private jet operations, Delta Private Jets, provides aircraft charters, aircraft management and programs allowing members to purchase flight time by the hour.

The Company competes with SkyTeam, United Air Lines, Continental Airlines, Lufthansa German Airlines, Air Canada, American Airlines, British Airways and Qantas.

Advisors' Opinion:

[By Ben Levisohn]
As a result, shares of American Airlines has dropped 1.2% to $36.11 at 1:54 p.m. today, while United Continental Holdings (UAL) has fallen 2.1% to $44.27 and Delta Air Lines (DAL) is off 1.8% at $33.05.
[By abirk]
In 2013, compared to its peers Delta Air Lines (DAL) and Southwest Airlines (LUV), Spirit�� stock was higher by more than 153%. The company�� adjusted net income for the third quarter 2013 increased 130.3% to $57.9 million ($0.79 per diluted share) compared to $25.2 million ($0.35 per diluted share) for the third quarter 2012. Spirit achieved an adjusted pre-tax margin of 20.3%, the highest quarterly adjusted pre-tax margin in the Company's history. Its return on invested capital (before taxes and excluding special items) for the last twelve months ended September 30, 2013 was 31.3%. Spirit ended the third quarter 2013 with $540 million in unrestricted cash.

Top Airline Companies To Own For 2014: Indonesia Transport & Infrastructure Tbk PT (IATA)

PT Indonesia Transport & Infrastructure Tbk, formerly PT Indonesia Air Transport Tbk, is an Indonesia-based air transport service provider. The Company provides air transportation, hiring and/or leasing aircrafts, repairs and maintenance of aircrafts and trading of aviation technical equipment and related spare parts. It also provides medical evacuation services, tourism and scheduled flight services to several routes in central and eastern Indonesia. The Company operates various types of fixed wing aircrafts and helicopters, such as EC 155 B1, AS 365 Dauphin N2 twin turbine helicopter, Beechcraft 1900D, ATR 42-300, ATR 42-500 and Fokker 50. Advisors' Opinion:

[By Shereen El Gazzar]
The forecast, from the International Air Transport Association (IATA), sees the Middle East and the Asia-Pacific region with the strongest international passenger growth, with a compound average growth rate of 6.3% and 5.7% respectively.

Top Airline Companies To Own For 2014: Southwest Airlines Co (LUV)

Southwest Airlines Co., incorporated on March 9, 1967, operates Southwest Airlines, a passenger airline, which provides scheduled air transportation in the United States. As of December 31, 2011, the Company was serving 72 cities in 37 states throughout the United States. During the year ended December 31, 2011, the Company added addition services in two new states and three new cities: Charleston, South Carolina; Greenville-Spartanburg, South Carolina; and Newark, New Jersey. Southwest provides point-to-point. On May 2, 2011, the Company acquired AirTran Holdings, Inc. (AirTran).

AirTran�� route system provides hub-and-spoke, rather than point-to-point, service, with approximately half of AirTran�� flights originating or terminating at its hub in Atlanta, Georgia. AirTran also serves a range of markets with non-stop service from bases of operation in Baltimore, Maryland; Milwaukee, Wisconsin; and Orlando, Florida. As of December 31, 2011, AirTran was serving 68 United States and near-international destinations, including San Juan, Puerto Rico; Cancun, Mexico; Montego Bay, Jamaica; Nassau, The Bahamas; Oranjestad, Aruba; Punta Cana, Dominican Republic, and Bermuda. As of January 31, 2012, AirTran served 65 destinations. During 2011, approximately 71% of Southwest�� customers flew non-stop, and Southwest�� average aircraft trip stage length was 664 miles with an average duration of approximately 1.8 hours.

As of December 31, 2011, Southwest offered 25 weekday roundtrips from Dallas Love Field to Houston Hobby, 13 weekday roundtrips from Phoenix to Las Vegas, 13 weekday roundtrips from Burbank to Oakland, and 12 weekday roundtrips from Los Angeles International to Oakland. Southwest offers connecting service opportunities from over 60 Southwest cities to different Volaris airports in Mexico including Aguascalientes, Guadalajara, Mexico City (MEX), Mexico City-Toluca (TLC), Morelia, and Zacatecas. The Company�� International Connect portal conducts two separate transac! tions: one with Southwest�� reservation system and one with Volaris�� reservation system.

Southwest bundles fares into three categories: Wanna Get Away, Anytime, and Business Select. Wanna Get Away fares are lowest fares. Business Select fares are refundable and changeable, and funds may be applied toward future travel on Southwest. Business Select fares also include additional perks, such as priority boarding, a frequent flyer point multiplier, priority security and ticket counter access in select airports, and one complimentary adult beverage coupon for the day of travel. The Company�� Internet Website, southwest.com, is the avenue for Southwest Customers to purchase tickets online. During 2011, southwest.com accounted for approximately 78% of all Southwest bookings. During 2011, approximately 84% of Southwest�� Passenger revenues came through its Website, including revenues from SWABIZ, the Company�� business travel reservation Web page.

Advisors' Opinion:

[By Asit Sharma]
The airline industry has a singular talent for draining the pockets of well-intentioned investors. Highly leveraged balance sheets and bankruptcies are the norm. Significant labor costs and unpredictable jet fuel prices wreak havoc on variable costs. Yet some airlines generate solid returns quarter after quarter. Alaska Air Group (NYSE: ALK ) , Ryanair (NASDAQ: RYAAY ) , Southwest Airlines (NYSE: LUV ) , and Copa Holdings (NYSE: CPA ) each manage to be consistently profitable. Let's examine a few themes they share in common, and zero in on their individual strategic ideas.

Top Airline Companies To Own For 2014: JetBlue Airways Corporation(JBLU)

JetBlue Airways Corporation provides passenger air transportation services in the United States. As of December 31, 2011, it operated approximately 700 daily flights to 70 destinations in 22 states, Puerto Rico, and Mexico; and 12 countries in the Caribbean and Latin America through a fleet of 120 Airbus A320 aircraft and 49 EMBRAER 190 aircraft. The company, through its subsidiary, LiveTV, LLC, provides in-flight entertainment, voice communication, and data connectivity systems and services for commercial and general aviation aircraft, including live in-seat satellite television, digital satellite radio, wireless aircraft data link service, and cabin surveillance systems. JetBlue Airways Corporation was founded in 1998 and is based in Forest Hills, New York.

Advisors' Opinion:

[By Eric Volkman]
JetBlue (NASDAQ: JBLU ) had a pretty good April. The company has released its metrics for the month, and for the most part they're up on a year-over-year basis. Revenue passenger miles climbed skyward by nearly 5% over April 2012's number to reach just under 3 billion. Available seat miles advanced to 3.58 billion, which was 6.5% higher than in the year-ago period.
[By Adam Levine-Weinberg]
However, the American Airlines bankruptcy allowed Virgin America to buy slots and begin service three times a day on both routes. The Newark-San Francisco and Newark-Los Angeles routes appealed to Virgin America for a few reasons. First, the carrier already has a major presence in San Francisco and Los Angeles. Furthermore, Virgin America specializes in long-haul flying and offers more passenger amenities than United. Virgin America has joined JetBlue (NASDAQ: JBLU ) in offering free in-flight satellite TV and other entertainment options, which are particularly nice to have if you're going to be on an airplane for six hours. Lastly, Virgin America recently achieved the top ranking in the Airline Quality Rating survey, whereas United was last. When competing directly with United, Virgin America can try to win customer loyalty by providing a clearly superior service.
[By Ben Levisohn]
JetBlue Airways (JBLU) has gained 3.7% to $8.78. Anyone see a catalyst?

Nike (NKE) is off 0.5% to $77.90 despite beating earnings forecasts.�
[By Sital S. Patel]
Delta Air Lines Inc. (DAL) , JetBlue Airways Corp. (JBLU) �and United Airlines (UAL) �said Saturday that they don�� expect delays..

Top Airline Companies To Own For 2014: US Airways Group Inc (LCC)

US Airways Group, Inc. (US Airways Group) is a holding company whose primary business activity is the operation of a network air carrier through its wholly owned subsidiaries, US Airways, Piedmont Airlines, Inc. (Piedmont), PSA Airlines, Inc. (PSA), Material Services Company, Inc. (MSC) and Airways Assurance Limited (AAL). MSC and AAL operate in support of the Company�� airline subsidiaries in areas, such as the procurement of aviation fuel and insurance. It has hubs in Charlotte, Philadelphia and Phoenix and a focus city in Washington, D.C. at Ronald Reagan Washington National Airport (Washington National). During the year ended December 31, 2011, it offered scheduled passenger service on more than 3,100 flights daily to more than 200 communities in the United States, Canada, Mexico, Europe, the Middle East, the Caribbean, and Central and South America. It also has an East Coast route network, including the US Airways Shuttle service.

The Company had approximately 53 million passengers boarding its mainline flights in 2011. During 2011, the Company�� mainline operation provided scheduled service or seasonal service at 133 airports, while the US Airways Express network served 156 airports in the United States, Canada and Mexico, including 78 airports also served by its mainline operation. US Airways Express air carriers had approximately 28 million passengers boarding their planes in 2011. As of December 31, 2011, the Company operated 340 mainline jets and was supported by its regional airline subsidiaries and affiliates operating as US Airways Express under capacity purchase agreements, which operated 233 regional jets and 50 turboprops. The Company�� prorate carriers operated seven turboprops and seven regional jets at December 31, 2011.

In May 2011, US Airways Group and US Airways entered into an Amended and Restated Mutual Asset Purchase and Sale Agreement (the Mutual APA) with Delta Air Lines, Inc. (Delta). Pursuant to the Mutual APA, Delta agreed to acquire 132 slot pa! irs at LaGuardia from US Airways and US Airways agreed to acquire from Delta 42 slot pairs at Washington National and the rights to operate additional daily service to Sao Paulo, Brazil. On December 13, 2011, the transaction contemplated by the Mutual APA closed and ownership of the respective slots was transferred between the airlines. During 2011, the US Airways Express network served 156 airports in the continental United States, Canada and Mexico, including 78 airports also served by its mainline operation. During 2011, approximately 28 million passengers boarded US Airways Express air carriers��planes, approximately 44% of whom connected to or from its mainline flights.

The Company competes with Southwest, JetBlue, Allegiant, Frontier, Virgin America and Spirit.

Advisors' Opinion:

[By WALLSTCHEATSHEET]
US Airways is an airline that operates passenger and freight planes. The company, AMR Corp., and the Department of Justice are currently attempting to reach a settlement regarding the US Airways and AMR Corp. merger. The stock has struggled this year and is currently trading near the lower-end of its yearly range. Over the last four quarters, earnings have been mixed while revenues have been rising which have pleased investors in the company. Relative to its peers and sector, US Airways has been a weak year-to-date performer. WAIT AND SEE what US Airways does this coming quarter.
[By Jonathan Yates]
Stock prices for United Continental (NYSE: UAL), US Airways Group (NYSE: LCC), and Delta Airlines (NYSE: DAL) have soared for 2013.

Pretty remarkable, when you consider the level of debt each of these companies is carrying.�When the market turns, as it always does, the heavy leverage will be a tremendous burden on the ability of all of these airlines to compete and survive.
[By Adam Levine-Weinberg]
While no carrier is likely to win supremacy in this highly competitive market, Delta is well-positioned to pick up market share over time. Delta's slot swap with US Airways (NYSE: LCC ) , which was completed last year, gives it the largest market share at LaGuardia Airport, which is the most convenient airport for many New Yorkers. The airline is also expanding at JFK, the region's largest airport. Most importantly, Delta has the best reputation for customer service among the legacy carriers, which gives high-paying business travelers a good reason to choose Delta.

Top Airline Companies To Own For 2014: Latam Airlines Group SA (LFL)

LAN Airlines S.A. (LAN), incorporated in 1983, is the international and domestic passenger airline in Latin America and the cargo operator in the region. As of February 9, 2012, LAN and its affiliates provided domestic and international passenger services in Chile, Peru, Ecuador, Argentina and Colombia and cargo operations through the use of belly space on its passenger flights and cargo freighter aircraft through its cargo airlines in Chile, Brazil, Colombia and Mexico. LAN and its affiliates offered passenger flights to 15 destinations in Chile, 59 destinations in other South American countries, 15 destinations in other Latin American countries and the Caribbean, five destinations in the United States, two destinations in Europe and four destinations in the South Pacific and, through various codeshare agreements, service to 25 additional destinations in North America, 16 additional destinations in Europe, 27 additional destinations in Latin America and the Caribbean (including Mexico), and two destinations in Asia, as of February 9, 2012. LAN and its affiliates provide cargo service to all of their passenger destinations and to 20 additional destinations served only by freighter aircraft. LAN also offers other services, such as ground handling, courier, logistics and maintenance. LAN and its affiliates operated a fleet, with 135 passenger aircraft and 14 cargo aircraft as of December 31, 2011. On February 15, 2011, Lan Pax Group S.A., subsidiary of Lan Airlines S.A. acquired 100% of Colombian society AEROASIS S.A.

LAN is primarily involved in the transportation of passengers and cargo. Its operations are carried out principally by Lan Airlines and also by a number of different subsidiaries. As of February 28, 2011, in the passenger business the Company operated through six main airlines: Lan Airlines, Transporte Aereo S.A. (which does business under the name Lan Express), Lan Peru S.A. (Lan Peru), Aerolane Lineas Aereas Nacionales del Ecuador S.A. (Lan Ecuador), Lan Argentina S.A. (Lan ! Argentina, previously Aero 2000 S.A.) and the Aerovias de Integracion Regional, Aires S.A. (Aires). As of February 28, 2011, the Company held a 99.9% interest in Lan Express through direct and indirect interests, a 70.0% interest in Lan Peru through direct and indirect interests, a 71.9% indirect interest in Lan Ecuador, a 99.0% indirect interest in Lan Argentina and a 94.99% indirect interest in Aires (a Colombian entity which was acquired on November 26, 2010). Its cargo operations are carried out by a number of companies, including Lan Airlines and Lan Cargo. As of February 28, 2011, the Company held a 69.2% interest in Aero Transportes Mas de Carga S.A. de C.V. (MasAir), through direct and indirect participations, a 73.3% interest in ABSA through direct and indirect participations, and a 90.0% interest in LANCO through direct and indirect participations. In the cargo business, the Company markets itself primarily under the Lan Cargo brand. In addition to its air transportation activities, the Company provides a series of ancillary services. It offers handling services, courier services and logistics, small package and express door-to-door services through Lan Airlines and various subsidiaries.

Passenger Operations

As of February 28, 2011, the Company operated passenger airlines in Chile, Peru, Ecuador, Argentina and Colombia. As of February 28, 2011, our passenger operations were performed through airlines in Chile, Peru, Ecuador, Argentina and Colombia where we operate both domestic and international services. As of February 28, 2011, the Company�� network consisted of 15 destinations in Chile, 14 destinations in Peru, four destinations in Ecuador, 14 destinations in Argentina, 24 destinations in Colombia, 14 destinations in other Latin American countries and the Caribbean, five destinations in the United States, one destination in Canada, three destinations in Europe and four destinations in the South Pacific. Within Latin America, it has routes to and from Argentina, B! olivia, B! razil, Chile, Colombia, Cuba, the Dominican Republic, Ecuador, Mexico, Peru, Uruguay and Venezuela. The Company also flies to a variety of international destinations outside Latin America, including Auckland, Fort Lauderdale, Frankfurt, Los Angeles, Madrid, Miami, Mount Pleasant (Falkland Islands), New York, Toronto, Papeete (Tahiti), Paris, San Francisco, and Sydney. In addition, as of February 28, 2011, through its various code-share agreements, the Company offered service to 25 additional destinations in North America, 16 additional destinations in Europe, 25 additional destinations in Latin America and the Caribbean (including Mexico), and two destinations in Asia. As of February 28, 2011, the Company operated scheduled international services from Chile, Peru, Ecuador and Argentina through Lan Airlines; Lan Express in Chile; Lan Peru in Peru; Lan Ecuador in Ecuador; Lan Argentina in Argentina and Aires in Colombia. Its international network combines the Company�� Chilean, Peruvian, Ecuadorian, Argentinean and Colombian affiliates. It provides long-haul services out of its four main hubs in Santiago, Lima, Guayaquil and Buenos Aires. It also provides regional services from Chile, Peru, Ecuador and Argentina.

Cargo Operations

The Company�� cargo business operates on the same network used by the passenger airlines business, which is supplemented by freighter-only operations. The Company carries cargo for a variety of customers, including other international air carriers, freight-forwarding companies, export oriented companies and individual consumers. As of February 28, 2011, the Company operated a fleet of 140 aircraft, comprised of 126 passenger aircraft and 14 cargo aircraft.

The Company competes with UPS, FedEx, Centurion, Transportes Aereos Mercantiles Panamericanos S.A., Polar Air, Cargolux, Lufthansa Cargo, Martinair and Air France-KLM.

Advisors' Opinion:

[By Laura Brodbeck]
Notable earnings releases expected on Monday include:
LAN Chile S.A. (NYSE: LFL) is expected to report fourth quarter EPS of $0.24 on revenue of $3.50 billion, compared to last year�� EPS of $0.02 on revenue of $3.48 billion. JA Solar Holdings, Co. Ltd (NASDAQ: JASO) is expected to report EPS of $0.03 on revenue of $291.75 million, compared to last year�� loss of $2.65 per share on revenue of $268.09 million. Sterling Construction Company, Inc�(NASDAQ: STRL) is expected to report a fourth quarter loss of $1.47 per share on revenue of $153.07 million, compared to last year�� EPS of $0.18 on revenue of $158.09 million.
Economics

Top Airline Companies To Own For 2014: Controladora Vuela Compania de Aviacion SAB de CV (VLRS)

Controladora Vuela Compania de Aviacion SAB de CV (Volaris Aviation Holding Company) is a Mexico-based company principally engaged in the airline passenger transportation industry. The Company is a law-cost carrier airline. Controladora Vuela Compania de Aviacion SAB de CV offers direct, point-to-point flights. The Company serves through secondary, lower cost airports and provides a single class of service. The Company utilizes such aircraft as the Airbus A319 and A320 families, among others. The Company has such subsidiaries as Comercializadora Volaris SA de CV, Servicios Corporativos Volaris SA de CV, Concesionaria Vuela Compania de Aviacion SAPI de CV, Deutsche Bank Mexico SA Trust 1484, among others. Advisors' Opinion:

[By John Udovich]
When most American investors think of discount airline stocks, they probably think of relatively large capped Southwest Airlines Co (NYSE: LUV)�or sort of small cap�JetBlue Airways Corporation (NASDAQ: JBLU) rather than�small cap Controladora Vuela Co Avcn SA CV (NYSE: VLRS) which owns Volaris��a discount airline serving the�Mexican market. However, any investor who has read Benjamin Graham�� Intelligent Investor might want to remember his sage advice about avoiding airline stocks��mainly because airlines were such a new and unproven sector that had yet to make money. But could Controladora Vuela Co Avcn SA CV actually be an airline stock worth owning?