Vistaprint (VPRT): The Makings of a Moat?

Someone who reads my articles sent me this email:

Hi Geoff,

I am doing my quarterly 13-F review and the first thing I stumbled onto when looking for info on Vistaprint (VPRT) was your article on Glenn Greenberg.

I didn't realize that you also look at this type of company.

Looking through some investor presentations, I'm not really convinced that they can maintain current growth rates of 20%.

Their production facilities are all based in high cost developed nations.

Why could this not be copied in Asia?

I just don't see the moat.

Current valuation assumes double digit performance for several years, one small dip and the stock dives, no margin of safety here...

Regards,

Rijk

You bring up an interesting point about cost. But I'm not sure how much a small price differential matters to customers in this kind of business. I would have to look into that. Any logistical problems would lose you a customer. Also, that assumes the lowest labor costs lead to the lowest production costs – I'm not sure that's true in the printing industry.

I've had business cards printed. And screwed up (not by Vistaprint). As long as the price was reasonable, I would've gone with "the best". And I would've had no way to know who "the best" was other than the most recognized name. Actually, I remember that being the problem when I needed some business cards, company stationary, etc., printed. I had to visit a couple websites. Look at them. Try to guess which was the best. Or at least decent. It was like getting a plumber or something. I had very little ability to separate the good guys from the bad guys. I wasn't spending time thinking about price – many printers had prices that seemed awfully similar to me. Instead I was just overwhelmed how frustratingly identical all the choices were.

I had no way to make an informed decision.

I can certainly imagine ways of saving money. But I really doubt labor is a good! place to try to find those savings. Small orders to small customers that need to be timely are the thing low-cost Asian countries don't do well.

Take George Risk (RSKIA). All of their competitors moved overseas. They're still in Nebraska. Management doesn't really claim they can either be better or cheaper than their competitors. They know they can't be cheaper. And as far as better – this isn't dark chocolate they're selling. Beyond customization, timeliness, and reliability – I'm not sure the idea of "quality" has much meaning in that business. It's either frustration-free or it's not. The two things George Risk can be are timely and customized. Both of those things are easier to be – for American customers – if you are manufacturing in the U.S.

The easiest thing to offshore seems to be mass-produced copies.

I know someone who works in the (high end) shoe business who is constantly traveling to China. He tells me that if you bring an actual new shoe over to a factory in China you can start mass producing it in no time. But if you try to make the slightest alteration after the fact – telling your guys in China to tweak some little thing with the design – the results are disastrous. His company experienced some production fiascoes at first. So now they never try to tweak anything. They always make sure there's an exact copy on site. And they don't change any detail – ever. Everything has to be perfect on their end before it goes to China. If changes need to be made – they get made in the U.S. without suggestions from over there. Apparently, this had not been the normal procedure for production in the U.S., Italy, Brazil, etc.

Not sure why this is. But I think the companies that had trouble with moving production to Asia have been businesses that needed at least a modicum of customization. Standardization is what Asia does really well right now.

Overall though I don't think costs are going to be the most important part of! this a p! rinting business. Certainly not labor costs.

It's an image business. If you screw something up that has to do with your customer's image – which is a lot of Vistaprint's business – you alienate that customer.

Costs are important. But what's the trade-off between dollar costs to the customer and costs that come in the form of a lack of customization. Can a printer really try to cut costs by sacrificing customization?

That doesn't sound right to me.

Also, I think the business scales really well. It's really expensive to compete for new business. Repeat business is easier for little, local guys to do well. But this is a business – because of the huge number of small businesses, their failure rate, etc. – where you constantly have first time customers who are doing their first ever product search. This is an industry with churn. Old businesses fail – new ones start up. Every year. Won't people use the service they've heard of? I'm not sure how you get your name out there. How you get to the top of Google, etc. if you are a competitor of Vistaprint.

None of the individual orders – or customers – are very valuable. Being the go-to source for some totally new business is key. Basically, you want to be the first guy a new business owner orders from for the first time. I think that's the key to this business. If you get that first look – you'll have success. If you don't – you won't. So if the economics of the orders works for you at the same time you have the kind of profile that gets you that first look – I think you've got a recipe for long-term profitable growth.

As far as the rate of growth, I don't know how sustainable it is. That's a really high growth rate. Vistaprint has talked about 20%. It's hard to predict how achievable that kind of growth is. They probably aren't going to have the same growth rate they had in the past. We certainly can't assume they will.

But I don't know if the price really! is facto! ring in a huge growth rate. It's definitely factoring in growth. But the current stock price isn't assuming blistering growth.

Predictable, profitable companies are worth a high multiple even if they are pretty slow growers. Vistaprint is the kind of company that could be very stable and very predictable at some point. Even when the growth stops – Vistaprint could end up a very steady business. And it could end up with the kind of multiple very steady businesses get. That sort of multiple isn't much lower than where Vistaprint's stock is trading right now. Today, there's maybe a 50% "growth premium" in the stock. In other words – Vistaprint shares might be about 33% lower if its growth prospects were no better than anybody else's.

Does that mean there's a margin of safety?

Absolutely not. There's no quantitative margin of safety in Vistaprint's shares. But Glenn Greenberg likes businesses he can buy and hold that are trading at a fair price. Greenberg's margin of safety is always the business. It's rarely the price. I don't think he wants to own an average business trading at a great price. I think he wants to buy a great business at an average price. In this case – I'd say it's an above average price. I mean, there are certainly good companies trading for less right now.

But highly fragmented businesses where competition is from local small businesses are the easiest to grow for a long, long time. It's the Starbucks (SBUX), Barnes & Noble (BKS), etc. formula. It's really easy to grow against local competition. It gets hard when you start facing the same (large) competitor across all geographies.

I think there's the potential for a durable moat in this kind of business. I'd have to study Vistaprint. But this kind of business has an immediate appeal to me.

The more I read about Vistaprint the more of a moat I see. I think the idea that you could use cheaper labor actually illustrates a point here. That's not wha! t matters! . It isn't the labor that matters. It's applying the principles of mass production to small orders. Vistaprint is really about reconciling those two things. Getting small orders to work smoothly for the customer and large production to work smoothly for Vistaprint.

I think I'm getting an idea of the importance of reconciling the taking of small orders from the customer with the use of huge production facilities. Printers really need both. So the printers with the lowest costs – historically – couldn't take small orders. And the folks who could take small orders couldn't be world class when it came to production costs.

The internet solves this.

Vistaprint may be an example of Warren Buffett's idea that sometimes it's better to invest in the company that benefits from some technology (like GEICO) than to invest in the company that pioneers that technology (phone, internet, etc.).

I haven't had enough time to really delve into Vistaprint as a possible investment. I hope to this weekend. But I am intrigued by the possibility of a moat here. I've been reading about their production facilities. And the centralized way orders are handled. These are some really tiny orders going to really huge production facilities. Reading about the facilities orders are routed to has got me extremely interested in the stock.

Vistaprint has the kind of business strategy I look for.

This one goes to the top of my research pile.

Talk to Geoff About Vistaprint (VPRT) geoff@gurufocus.com

Stocks Market News for July 8, 2013 - Market News

Top 10 Biotech Stocks To Watch Right Now

Better-than-expected non-farm payroll numbers overshadowed investor concerns about the Fed tapering its bond buying program, lifting benchmarks higher on Friday. Major indices finished in the green in a holiday-shortened week. Aluminum giant Alcoa will officially kick off the second quarter earnings season on Monday after the market closes. In the later part of the week, major companies from the banking sector are expected to report their quarterly results. The financial sector was the biggest gainer among the S&P 500 industry groups. Utilities stocks were the only losers.

For a look at the issues facing today's markets, read our Ahead of Wall Street for July 8 article.

The Dow Jones Industrial Average (DJI) gained 1.0% to close the day at 15,135.84. The S&P 500 added 1.0% to finish Friday's trading session at 1,631.89. The tech-laden Nasdaq Composite Index rose 1.0% to end at 3,479.38. The fear-gauge CBOE Volatility Index (VIX) tumbled 8.1% to settle at 14.89. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 4.9 billion shares, significantly lower than 2013's average of 6.4 billion shares. Advancing stocks outnumbered the decliners. For the 53% that advanced, 45% declined.

The Dow Jones gained 1.5%, the S&P 500 rose 1.6% and the Nasdaq added 2.2%, over the last week. The previous week's gains were primarily driven by encouraging domestic reports. When the government reported healthy numbers on the job market, investors were confused as to how to react to this report. Benchmarks opened higher but declined as the day progressed. Better-than-expected non-farm payrolls numbers increased investor concerns about the Fed slowing its bond buying program. But markets recovered after investors ultimately accepted that the report was a positive indication ! for the economy. The S&P 500 posed its best weekly performance in the last three weeks.

According to the U.S Department of Labor, the U.S economy added 195,000 jobs in the month of June. This was considerably higher than the consensus estimate of 162,000. Increase in employment in the previous month was primarily boosted by strong hiring from leisure and hospitality, professional and business services, retail trade, health care, and financial activities. Leisure and hospitality added 75,000 jobs whereas employment in professional and business services increased by 53,000. Retail, health care and financial activities added 37,000, 20,000 and 17,000 jobs respectively. But the unemployment rate remained unchanged at 7.6%. This was marginally higher than the consensus estimate of 7.5%.

Encouraging reports from the private and the government sector on the job markets is indicative of a healthy job market. In the previous week, a report from the ADP Research Institute revealed that a total of 188,000 people were added to the private sector in the month of June. Improvement in the job market is boosted by consumer spending and the recovery in the housing sector. Consumer confidence touched its highest level in more than 5 years.

On the earnings front, Alcoa Inc. (NYSE:AA) is scheduled to report its quarterly results after the close of markets on Monday. Banking giants JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo & Co (NYSE:WFC) are due to report quarterly results on Friday. Investor attention will turn to the earnings season from this week.

The financial sector was the biggest gainer among the S&P 500 industry groups and the Financial Select Sector SPDR (XLF) gained 1.8%. Stocks such as JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Co (NYSE:WFC), Bank of America Corp (NYSE:BAC), Citigroup Inc. (NYSE:C) and Goldman Sachs Group Inc (NYSE:GS) added 2.3%, 2.1%, 1.8%, 1.8% and 1.9%, respectively.

! The util! ities sector was the only loser among the S&P 500 industry groups and the Utilities SPDR (XLU) lost 0.5%. Stocks such as Public Service Enterprise Group Inc. (NYSE:PEG), NRG Energy Inc (NYSE:NRG), Exelon Corporation (NYSE:EXC), Duke Energy Corp (NYSE:DUK) and Wisconsin Energy Corporation (NYSE:WEC) declined 0.4%, 0.5%, 1.1%, 0.2% and 0.1%, respectively.

Saks Accepts $16 - Is That Enough?

Top 5 Dividend Companies To Own In Right Now

Saks (NYSE:SKS) announced July 29 that it was accepting the Hudson's Bay Company's (TSE:C.HBC) $2.9 billion dollar acquisition offer. Bringing Saks under the same roof as Hudson's Bay and Lord & Taylor, the trio will have annual revenues of $7.3 billion making it a formidable department store chain in both Canada and the U.S.

HBC is paying $16 per share. Is this enough? Could the price go higher? I'll have a look.

Go Shop
Saks has 40 days to find a better deal. The company says it's unlikely to find such a beast. However, Barron's featured a guest column July 30 from Maxim Group, a New York-based investment bank, that puts the value of its stock at $18.50 per share. Maxim gets to this number by projecting EBITDA all the way out to 2017 ($443 million) and then applying a multiple of seven times those earnings to arrive at an enterprise value (less $600 million for flagship real estate) of $3.28 billion, $375 million higher than the current deal.

And here's where it gets interesting.

Some experts value the Fifth Avenue location at $1 billion or more. In early 2012, I recommended Saks' stock when it was trading around $9. In that article I reminded investors that the flagship store on Fifth Avenue generates 22% of its overall annual revenue or approximately $700 million. It's a business unto itself. If you substitute Maxim's $600 million valuation on its flagship store for the billion-dollar figure being thrown around, its enterprise value jumps to $3.68 billion and a per share value of $21.33, 33% higher than Hudson's Bay's existing offer of $16 per share.

Who Might Bid
Well, if the news is to be believed, there weren't too many interested parties in the first place. Now that an offer is on the table, it does seem unlikely that someone new would put in a bid, but maybe they should. Perry Caicco, an analyst with CIBC World Markets told clients that the REIT Hudson's Bay is considering for some of its real estate as well as Saks' Fifth Avenue and Beverly Hills stores is absolutely essential to the financing of the deal. Currently, it has total debt that is 2.7 times EBITDA; buying Sakes takes this to 5.7 times EBITDA. In Caicco's words: "That's a big stretch for any retailer, especially one that has now hitched its future to the fickle U.S. luxury department store market and, as such, the U.S. economy." Despite this skepticism, Caicco has a price target of $20 for HBC.

SEE: Understanding Leverage Ratios

The problem that I see with Hudson's Bay buying Saks is that they both have a number of terrible locations mixed in with some very valuable retail properties. In Saks case, it really only has two that carry substantial value. HBC has 56 properties that it owns out of a total of 207, but even then many of the locations both in the U.S. and Canada don't carry as much value as HBC would like to think they do. Canaccord Genuity analyst Derek Dley puts the value of HBC real estate in a REIT at $13 per share. Add in another $8 per share for Saks' real estate and the company would reap $2.56 billion from the spin-off. If that were to come true, HBC's pro forma debt would be reduced to $640 million according to Caicco. I see the number a little higher at $1 billion. I'm skeptical that it can hit $2.56 billion but Richard Baker's pulled rabbits out of his hat before.

The most obvious choice to put in a last minute bid would be Dillard's (NYSE:DDS), who originally were interested in the company back in 1990 when British American Tobacco (NYSEMKT:BTI) put the luxury retailer up for sale. It ultimately was sold for $1.5 billion to Investcorp, a holding company located in Bahrain. It would be a stretch for the Arkansas-based, family-run, department store chain. But even if paid $18.50 and financed most of the purchase, its debt-to-EBITDA would still be less than HBC's on a pro forma basis. It's a long shot though. The Dillard family seem happy with the status quo.

As for private equity, unless there's a lot of growth on the table, most investment firms are steering clear of the big names. Saks has a name but its growth is limited. Otherwise, KKR (NYSE:KKR) would have bought it and merged it with Neiman Marcus.

Bottom Line
While I think Saks is worth more than $16, I just don't see another company stepping to the plate. Richard Baker will either become the King of North American retail or he'll fail in a less spectacular fashion than Robert Campeau, who bought Allied Stores in 1986 and then Federated Department Stores two years later, only to lose both to bankruptcy. Whatever happens, it sure will be interesting to watch.

Guided Therapeutics Reports Q2 2013 Results (OTCBB:GTHP)

Guided Therapeutics, Inc. (GTHP)

Last Friday, GTHP had shed (-2.16%) down -0.015 at $.679 with 39,538 shares in play at the close (ref. google finance August 23, 2013 – Close).

Guided Therapeutics, Inc. previously reported its operating results for the second quarter and six months ended June 30, 2013.

Revenue and other income for the second quarter of 2013 was approximately $338,000, including $116,000 in sales of LuViva® devices and disposables associated with its European launch, with the remainder of revenue representing contract and grant income. This compares to revenue of approximately $944,000 in the second quarter of 2012, which was comprised almost solely of contract and grant income. Revenue for the first six months of 2013 was $637,000, including $248,000 in sales of LuViva device and disposables. Revenue in the first six months of 2012 was $1.6 million, which was comprised almost solely of contract and grant income. The year over year decline in contract and grant income for both periods was primarily due to bringing the worldwide rights to the Company's esophageal cancer detection technology back in house.

Guided Therapeutics, Inc. (GTHP) 5 day chart:

30 Best Paying College Majors: 2013

As college graduates head out into the real world, we thought it would be interesting to look at what kind of pay they can expect.

Many of the spots are occupied by occupations in some field of engineering or another. For the record, coming in dead last is Child and Family Studies with a starting salary of $29,300 and a mid-career salary (15 years in) of $37,700.

Last year, we looked at which degrees were paying the most. This year, we drilled down into specific majors using data from payscale.com. Payscale lists 130 majors on its site.

(Also check out Top 30 Colleges for Highest Starting Salaries and 2012’s Top 15 Best Paying College Degrees.)

The rankings below are based on data collected from 1,000 universities and include graduates with bachelor’s degrees only. The universities surveyed include 88% of U.S. schools with an enrollment of more than 5,000.

Take a look at the 30 Best Paying College Majors for 2013:

30. INFORMATION TECHNOLOGY

Starting Salary: $49,700

Mid-Career Salary: $81,300 (Rank: 35th)

29. COMPUTER INFORMATION SYSTEMS

Starting Salary: $49,000

Mid-Career Salary: $84,800 (32nd)

Retirees Need Advisors’ Help in Transition to Medicare

For retired workers and those just beginning the transition from employee to retiree, securing health care coverage is new territory. Fewer employers are providing benefits for retirees than just a few years ago, according to a survey released Monday by Allsup.

Data from the Kaiser Family Foundation show just a quarter of employers offered health benefits to retired workers in 2012, Allsup found, down from 32% in 2007.

Allsup provides Social Security and Medicare compliance and selection services for individuals, employers and insurers.

“At many companies, retiring used to mean transitioning from your employer’s health plan to a retiree health plan,” Paula Muschler, manager of the Allsup Medicare Advisor, said in a statement. “Now, rather than selecting from one or two employer-provided options, more and more individuals are faced with trying to navigate through dozens of different Medicare plan options.”

Muschler stressed the importance of advisors discussing Medicare planning with clients before their 65th birthday and throughout their retirement.

“Since fewer employers offer retiree coverage, it’s important that people begin to study their options early enough to make good choices based on their needs,” she said.

Pre-retirees have the three-month period before and after their 65th birthday to select their Medicare plan without penalties. “If a client is past their initial enrollment period, then financial advisors can intervene to help them make wise choices going forward,” Mushcler added.

Top Stocks To Invest In Right Now

Allsup noted retirees have an average of 31 plans for prescription drug coverage and 20 Medicare Advantage plans. Retirees can also be covered by a spouse’s plan or veterans’ benefits, which could affect the type of Medicare plan they choose.

Workers who are older than 65 and already enrolled in Medicare may be able to apply for supplemental coverage. “Retiree coverage is secondary to Medicare, so they already would have Parts A and B, but losing their retiree group health coverage triggers their option to buy Medigap,” Muschler said.

“Health care is one of the primary financial concerns for seniors, and financial advisors can reassure their clients with careful preparation and expert Medicare assistance,” Muschler said.

Hain Celestial - A Healthy Option - Analyst Blog

A leader in natural food and personal care products categories with an extensive portfolio of well-known brands and strong fundamentals, The Hain Celestial Group Inc. (HAIN) offers a healthy investment opportunity for investors. The stock is poised to surge as the economy gradually revives and the appetite for organic food increases.

An Attractive Investment Prospect

Hain Celestial remains a healthy option for the investors. Barring a few hiccups, the shares have been portraying an upward trend since February end, and is gradually inching closer to its 52-week high of $73.72. Considering the last traded price of $67.69 on Jul 8, the stock has amassed a year-to-date return of roughly 20%. The long-term EPS growth rate stands healthy at 14.9%.

Moreover, the company's last traded price was above the 50 and 200-day moving averages, which stand at $66.50 and $60.73, respectively. In fact, the stock has been consistently trading above its 200-day moving average since Mar 19, 2013, but has remained above the 50-day moving average since Jul 1, 2013.

If we look at the company's earnings surprise history for the last 10 quarters, Hain Celestial has topped estimates by an average of 4.6%. In the last concluded quarter, the company posted earnings of 72 cents a share that came in line with the Zacks Consensus Estimate and surged 28.6% year over year. Management cited that strong top-line growth, integration of acquired businesses, focus on high margin carrying brands, and elimination of underperforming private label brands facilitated the bottom-line growth.

Acquisitions Driving Growth

Acquisitions have played a vital part in Hain Celestial's strategy of building market share. These acquisitions have not only widened the company's geographical presence, but have also provided opportunities to cross-sell products in the U.S., Canadian, and European markets.

The company recently acquired leading package! d grocery brands Hartley's, Gale's Robertson's, Frank Cooper's and Sun-Pat from Premier Foods plc. The company also acquired Ella's Kitchen Group Limited that offers organic baby food products under approximately 80 brands and provides them in easy to carry pouches. Management believes the acquisition to be accretive to the company's earnings by 5 cents to 8 cents a share in fiscal year 2014.

Closing Commentary

Going forward, we believe that the company will be able to mitigate the cost pressures through increased productivity and efficient pricing. Moreover, Hain Celestial has undertaken a number of initiatives to improve its performance and positioned itself on the growth trajectory. The company's Stock Keeping Unit ("SKU") rationalization program has helped eliminate SKUs, which had lower sales volume or weak margins.

However, the company's customers remain sensitive to macroeconomic factors including interest rate hikes, increase in fuel and energy costs, credit availability, unemployment levels, and high household debt levels, which may negatively impact their disposable income, triggering a shift in focus from higher priced organic products to cheaper private label brands.

Top 5 Undervalued Stocks To Watch Right Now

Currently, Hain Celestial carries a Zacks Rank #3 (Hold). Other stocks worth considering in the food-miscellaneous sector include B&G Foods Inc. (BGS) and Flowers Foods, Inc. (FLO) both of which hold a Zacks Rank #1 (Strong Buy), and Campbell Soup Company (CPB) carrying a Zacks Rank #2 (Buy).

Are Earnings No Longer Relevant? - Ahead of Wall Street

Wednesday, July 24, 2013

The flood of earnings reports this morning presents a mixed picture, with positive momentum from the likes of Boeing (BA) and Ford (F) undercut by the pronounced weakness from Caterpillar (CAT). The results from these three corporate leaders aren't surprising and fit neatly into a broader narrative of a slowing global economy with pockets of strength in commercial aviation worldwide and domestic auto and housing.

China's weak July manufacturing numbers overnight further confirm that while the outlook for the U.S. economy may be improving, the decelerating trend in the Chinese economy has not fully played out yet. Caterpillar didn't cite China specifically for its earnings miss and lowered guidance, but the global mining slowdown that some are referring to as the end of the commodity super cycle is a direct offshoot of developments in China.

The downshift in China's growth outlook is likely more secular and enduring than equipment suppliers like Caterpillar and commodity exporting nations like Australia and Brazil are willing to acknowledge at this stage. Caterpillar blamed temporary inventory issues and mining weakness as the reason for the quarterly miss and lowered guidance. But they probably need to realign their business for a long period of sub-par demand growth from the emerging world.

Facebook (FB) will be reporting after the close today, but including this morning's reports from Boeing, Ford, Caterpillar, Pepsi (PEP) and others, we now have Q2 results from 170 S&P 500 companies or 34% of the index's total membership that combined account for 46.6% of its total market capitalization.

Total earnings for these 170 companies are up +3.8%, with 64.1% beating earnings expectations. On the revenue side, we have a growth rate of +3.6%, with 44.1% coming ahead of top-line expectations. The earnings and revenue growth rates and the revenue beat ratio seen thus far are broadly in-line with what we saw from the same group of 170 ! companies in Q1, while the earnings beat ratio is tracking a bit lower.

As we have been pointing out from the get-go in this space that while the aggregate numbers for the S&P 500 as a whole look not so bad, a lot of that respectability is coming from the strong Finance sector results.

Once we take Finance out of the earnings reports that have come out thus far, what is left behind isn't satisfactory by any measure. Total earnings growth outside of Finance is tracking a decline of -4.2% (vs. +3.8% for the S&P 500 as a whole). Even the beat ratios are tracking below what we have been seeing in recent quarters once Finance is stripped out of the aggregate numbers.

Lack of growth notwithstanding, total Q2 earnings are on track to reach a new all-time quarterly record. But it is extremely hard to square this sub-par earnings growth picture with a stock market that is making new all-time highs almost daily. Makes one wonder whether earnings growth has become a non-issue for stock market investors in the current environment of a very supportive Fed. Perhaps investors will start paying attention to the earnings picture once the Fed shifts its stance. For now at least, investors are behaving as if there is no tomorrow.

Sheraz Mian
Director of Research





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Staying Neutral on Mack-Cali - Analyst Blog

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On Jul 11, 2013, we reiterated our long-term recommendation on Mack-Cali Realty Corporation (CLI) at Neutral. The decision is based on the company's decent leasing activity and diversifying moves. Yet, amid the current unimpressive demand for office space, we are concerned about the company's capability to hold up occupancy levels and raise rents.

Why the Neutral Stance?

Mack-Cali has a strong presence in high barrier-to-entry markets in the Northeast region in the U.S. Yet, holding occupancy and increasing rents are a concern due to the tough environment in the office sector along its footprints. Hence, Mack-Cali is on a revamp mode. It sold a number of office properties in recent times and also inked deals to expand its multifamily residential platform.

Alongside, it slashed dividend. Though discouraging for shareholders in the near term, this dividend cut would ultimately help save cash for meeting Mack-Cali's investment needs. Nevertheless, the portfolio is exposed to concentration risks while the series of acquisitions has raised upfront costs. Hence, our Neutral recommendation remains in place.

The Zacks Consensus Estimate for 2013 FFO (funds from operations) per share fell marginally to $2.47, while for 2014, it moved south nearly 2.0% to $2.50, over the last 60 days.

The Zacks Consensus Estimate for FFO (funds from operations) per share for the upcoming quarter is pegged at 62 cents per share. The earnings ESP (Read: Zacks Earnings ESP: A Better Method) for Mack-Cali is +1.61% for the second quarter.. However, we are skeptical about a positive earnings surprise owing to the company's Zacks Rank #4 (Sell).

Other Stocks to Consider

Some better performing REITs include Sunstone Hotel Investors Inc. (SHO), W. P. Carey Inc. (WPC) and Winthrop Realty Trust (FUR). All these stocks carry a Zacks Rank #1 (S! trong Buy).

Want a stable portfolio? Focus on asset allocation

Here is the edited transcript of the interview on CNBC-TV18.

Q: What is the importance of asset allocation and how is it different from diversification?

A: I think asset allocation is a very important part of the portfolio because it is a process or a strategy that allows an investor to actually spread his investment across various asset classes such as equity, debt, gold and real estate. As we know that different asset classes behave differently over different time periods, it kind of brings a stabilizing effect on the portfolio.

For example, a booming economy is good for the stock market whereas the recessionary periods are not and is exactly the opposite for a bond market. I think it brings in a stabilizing effect on the portfolio. It is also a process that allows our investors to know what kind of risk will a person be taking on his portfolio and the kind of return he can expect from the portfolio.

If the portfolio has very high exposure to equity for instance, over a longer period the portfolio will give you higher returns, but at the same time it is most likely to experience more volatility during the short-term and medium-term. I think it's a very important process from the investor's point of view.

Q: If you can give us something also by way of percentages, exactly how much should be put into each asset class? Something on those lines, which are the assets that you are thinking of for lay investors and what would be the percentage allocation that is normally recommended?

A: Actually there are a couple of factors which play an important role in deciding the asset allocation. There is a thumb rule to asset allocation that says that whatever your age is that much portion should be in debt and the rest should be in equity. There are a couple of factors which are very important and the most important factor is the time horizon.

When we invest for the short-term, our priority is to preserve the capital. Therefore, the money has to be invested in debt and debt related instruments. When we invest for the long-term the priority has to be to beat inflation which means that equity has a bigger role to play. In addition to these two, gold can play a role in long-term investment because it acts as a hedge against inflation. In addition to this if an investor ensures that he has created an emergency fund which is equivalent to 3-6 months of his monthly expenses, there will never be a situation where an investor has to make some ad hoc decisions.

Many a times we see investors exiting from an asset class completely or having a very high exposure. I think to create the right balance in the portfolio, if you follow the right process looking at your time horizon it helps in ensuring a balance in the portfolio. Another important factor is risk tolerance.

It is very important because all of us as investors have a certain risk tolerance level. Any portfolio which takes you beyond that will mean that you are going to have sleepless nights. As an investor it is not good, but if the perceived fear is on account of not having enough knowledge about a particular asset class, I think investors should make efforts to learn more about that asset class.

Another important factor is while you decide your asset allocation, it is equally important to rebalance it. For example, if equities have done well and someone who has invested in equity to the extent of 50% and now the exposure is 60% or 70% it takes it beyond his risk taking capacity. This process of rebalancing means that you bring the asset allocation back to the original level. It means you book profit from equity and invest more in debt.

Similarly, if the equity markets are not doing well and exposure has gone down from 50% to 30% to 40% you rebalance it by investing more in equity which normally an investor would not do.

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Tags: Asset allocation, portfolio, Hemant Rustagi, Wiseinvest Advisors

No intent to control capital; fund-raising door open: FM

No intent to control capital; fund-raising door open: FM

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Hot Stocks To Buy For 2014

Mueller Industries (NYSE: MLI  ) reported earnings on July 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 29 (Q2), Mueller Industries met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly. Non-GAAP earnings per share grew significantly. GAAP earnings per share grew significantly.

Margins expanded across the board.

Revenue details
Mueller Industries logged revenue of $582.3 million. The one analyst polled by S&P Capital IQ anticipated revenue of $579.9 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

Hot Stocks To Buy For 2014: Tesla Exploration Ltd (TXL.TO)

Tesla Exploration Ltd., a geophysical services company, provides specialized seismic services to the oil and gas exploration industry primarily in North America, Europe, and Africa. It offers three component (3C) technologies for full wave seismic recording services. The 3C technology helps its clients acquire shear wave seismic data in addition to the pressure wave data captured and processed for seismic imaging. The company also provides geophysical services, including survey design and management; seismic data acquisition; seismic data processing and reprocessing; seismic data interpretation; in-seam seismic data acquisition, processing, and interpretation; coal bed methane and gob gas assessments; borehole geophysics, processing, and interpretation; and site investigation geophysics, acquisition, processing, and interpretation. In addition, it offers survey services, which comprise geophysical survey services; precision navigation and survey service support; and data p rocessing, interpretation, and analysis of geological and archaeological resources, as well as involved in the rental of acquisition equipment. The company provides its services to oil and gas exploration and production companies, and marine construction contractors, as well as to the mining industry and engineering firms for environmental applications and mining applications. Tesla Exploration Ltd. was founded in 1999 and is headquartered in Calgary, Canada.

Hot Stocks To Buy For 2014: Kellogg Co (K)

Kellogg Company (Kellogg), incorporated in 1922, is engaged in the manufacture and marketing of ready-to-eat cereal and convenience foods. Kellogg�� principal products are ready-to-eat cereals and convenience foods, such as cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles and veggie foods. As of February 28, 2012, these products were, manufactured by the Company in 17 countries and marketed in more than 180 countries. It also markets cookies, crackers, and other convenience foods, under brands, such as Kellogg��, Keebler, Cheez-It, Murray, Austin and Famous Amos, to supermarkets in the United States. Its cereal products are generally marketed under the Kellogg�� name and are sold principally to the grocery trade through direct sales forces for resale to consumers. Effective June 1, 2012, Procter & Gamble Co announced that it has completed the sale of its Pringles business to Kellogg.

As of February 28, 2012, Kellogg operated manufacturing plants and distribution and warehousing facilities totaling more than 30 million square feet of building area in the United States and other countries. Its manufacturing facilities in the United States include four cereal plants and warehouses located in Battle Creek, Michigan; Lancaster, Pennsylvania; Memphis, Tennessee; Omaha, Nebraska and other plants or facilities in San Jose, California; Atlanta, Augusta, Columbus, and Rome, Georgia; Chicago, Illinois; Seelyville, Indiana; Kansas City, Kansas; Florence, Louisville, and Pikeville, Kentucky; Grand Rapids and Wyoming, Michigan; Blue Anchor, New Jersey; Cary and Charlotte, North Carolina; Cincinnati, West Jefferson, and Zanesville, Ohio; Muncy, Pennsylvania; Rossville, Tennessee; Clearfield, Utah; and Allyn, Washington. As of February 28, 2012, outside the United States, the Company had, additional manufacturing locations, some with warehousing facilities, in Australia, Brazil, Canada, Colombia, Ecuador, Germany, Great Britain, India, Japan, Mexico, Russia, S! outh Africa, South Korea, Spain, Thailand and Venezuela.

The Company�� trademarks include Kellogg�� for cereals, convenience foods and its other products, and the brand names of certain ready-to-eat cereals, including All-Bran, Apple Jacks, Bran Buds, Cinnamon Crunch Crispix, Choco Zucaritas, Cocoa Krispies, Complete, Kellogg�� Corn Flakes, Corn Pops, Cracklin��Oat Bran, Crispix, Cruncheroos, Crunchmania, Crunchy Nut, Eggo, Kellogg�� FiberPlus, Froot Loops, Kellogg�� Frosted Flakes, Kellogg�� Krave, Frosted Krispies, Frosted Mini-Wheats, Fruit Harvest, Just Right, Kellogg�� Low Fat Granola, Mueslix, Pops, Product 19, Kellogg�� Raisin Bran, Raisin Bran Crunch, Rice Krispies, Rice Krispies Treats, Smacks/Honey Smacks, Smart Start, Kellogg�� Smorz, Special K, Special K Red Berries and Zucaritas in the United States and elsewhere; Crusli, Sucrilhos, Vector, Musli, NutriDia, and Choco Krispis for cereals in Latin America. Vive and Vector are brands in Canada; Coco Pops, Chocos, Frosties, Fruit�� Fibre, Kellogg�� Crunchy Nut Corn Flakes, Honey Loops, Kellogg�� Extra, Sustain, Muslix, Country Store, Ricicles, Smacks, Start, Pops, Optima and Tresor for cereals in Europe; and Cerola, Sultana Bran, Chex, Frosties, Goldies, Rice Bubbles, Nutri-Grain, Kellogg�� Iron Man Food, and BeBig for cereals in Asia and Australia. In additional, the Company trademarks are the names of certain combinations of ready-to-eat Kellogg�� cereals, including Fun Pak, Jumbo, and Variety.

Other Company brand names include Kellogg�� Corn Flake Crumbs; All-Bran, Choco Krispis, Froot Loops, Special K, NutriDia, Kuadri-Krispis, Zucaritas and Crusli for cereal bars, Komplete for biscuits; and Kaos for snacks in Mexico and elsewhere in Latin America; Pop-Tarts and Pop-Tarts Ice Cream Shoppe for toaster pastries; Pop-Tarts Mini Crisps for crackers; Eggo, Eggo FiberPlus and Nutri-Grain for frozen waffles and pancakes; Rice Krispies Treats for baked snacks and convenience foods; Special K! and Spec! ial K2O for flavored protein water mixes and protein shakes, and Nutri-Grain cereal bars, Nutri-Grain yogurt bars, for convenience foods in the United States and elsewhere. Brands like K-Time, Rice Bubbles, Day Dawn, Be Natural, Sunibrite and LCMs for convenience foods in Asia and Australia; Nutri-Grain Squares, Nutri-Grain Elevenses, and Rice Krispies Squares for convenience foods in Europe; Kashi and GoLean for certain cereals, nutrition bars, and mixes; TLC for granola and cereal bars, crackers and cookies; Special K and Vector for meal replacement products; Bear Naked for granola cereal, bars and trail mix and Morningstar Farms, Loma Linda, Natural Touch, Gardenburger and Worthington for certain meat and egg alternatives. It also markets convenience foods under trademarks and trade names, which include Keebler, Austin, Keebler Baker�� Treasures, Cheez-It, Chips Deluxe, Club, E. L. Fudge, Famous Amos, Fudge Shoppe, Kellogg�� FiberPlus, Gripz, Jack��, Jackson��, Krispy, Mother��, Murray, Murray Sugar Free, Ready Crust, Right Bites, Sandies, Special K, Soft Batch, Stretch Island, Sunshine, Toasteds, Town House, Vienna Creams, Vienna Fingers, Wheatables and Zesta.

The Company�� trademarks also include logos and depictions of certain animated characters in conjunction with its products, including Snap!Crackle!Pop! for Cocoa Krispies and Rice Krispies cereals and Rice Krispies Treats convenience foods; Tony the Tiger for Kellogg�� Frosted Flakes, Zucaritas, Sucrilhos and Frosties cereals and convenience foods, and Ernie Keebler for cookies, convenience foods and other products. It also includes the Hollow Tree logo for certain convenience foods; Toucan Sam for Froot Loops cereal; Dig ��m for Smacks/Honey Smacks cereal; Sunny for Kellogg�� Raisin Bran and Raisin Bran Crunch cereals, Coco the Monkey for Coco Pops cereal; Cornelius for Kellogg�� Corn Flakes; Melvin the Elephant for certain cereal and convenience foods, and Chocos the Bear, Sammy the Seal (aka Smaxey the Seal! ) for cer! tain cereal products.

Advisors' Opinion:

• [By Portfolio Grader]

  Kellogg (NYSE:K) is seeing ratings go up from a B last week to an A this week. Kellogg and its subsidiaries make and market of ready-to-eat cereal and convenience foods. 

Top High Tech Stocks To Own For 2014: Valley National Bancorp(VLY)

Valley National Bancorp operates as the bank holding company for Valley National Bank that provides various commercial, retail, trust, and investment services. The company?s deposit products include savings accounts, negotiable order of withdrawal accounts, money market accounts, time deposits, certificates of deposit, and non-interest-bearing accounts. Its loan portfolio comprises floating and adjustable rate commercial and industrial loans, as well as fixed rate owner occupied and commercial real estate loans; and consumer loans, such as residential mortgage, automobile, home equity, and credit card loans, as well as lines of credit. The company also provides fixed rate investments, trading securities, and federal funds; and international banking services, such as standby letters of credit, documentary letters of credit, and related products, as well as ancillary services. In addition, it offers asset management advisory services that comprise investment services to ind ividuals and small to medium sized businesses; trust services, such as living and testamentary trusts, investment management, custodial and escrow services, and estate administration primarily to individuals; brokerage services; and title insurance agency and asset-based lending support services. Further, the company provides property and casualty, life, and health insurance; financing for general aviation aircraft, and servicing for existing commercial equipment leases; health care equipment and other commercial equipment leases; and owns real estate related investments. Valley National Bancorp also offers automated teller machines, telephone and Internet banking, overdraft facilities, drive-in and night deposit services, and safe deposit facilities. As of December 30, 2011, it operated 211 branches in 147 communities serving 16 counties throughout northern and central New Jersey, Manhattan, and Long Island. The company was founded in 1927 and is headquartered in Wayne, New Jersey.

Hot Stocks To Buy For 2014: BCSB Bancorp Inc.(BCSB)

BCSB Bancorp, Inc. operates as the holding company for Baltimore County Savings Bank, F.S.B. that provides various banking and financial services for consumers and businesses in the Baltimore Metropolitan Area. The company?s deposit products include checking accounts, money market accounts, statement and passbook savings accounts, individual retirement accounts, and certificates of deposit. Its loan portfolio comprises single-family residential mortgage loans; real estate loans comprising construction, single-family rental property, and commercial real estate loans; consumer loans, including automobile loans and home equity lines of credit; and commercial lines of credit. The company also offers life and annuity insurance products. As of September 30, 2009, it operated 18 branch offices in Baltimore County, Harford County, Howard County, and Baltimore City, Maryland. The company was founded in 1955 and is based in Baltimore, Maryland.

Hot Stocks To Buy For 2014: Sennen Resources Ltd. (SN.V)

Sennen Resources Ltd. engages in the acquisition and exploration of mineral properties. It holds an option to acquire 80% interest in the La Nava-El Paredon, a sulphide mineral deposit, which consists of 1 permit covering an area of 6 square kilometers and is located to the northwest of Cordoba in the Andalucia region of southern Spain. The company is headquartered in Vancouver, Canada.

Hot Stocks To Buy For 2014: Gemina(GEMI.MI)

Gemina S.p.A. engages primarily in the airport infrastructure business in Italy. It operates the Leonardo da Vinci airport of Fiumicino and the G.B. Pastine airport of Ciampino in Rome. The company also provides airport management, airport engineering, telecommunications, advertising, real estate, and Internet services. In addition, it involved in the production of electricity. The company was founded in 1961 and is headquartered in Fiumicino, Italy.

Is JPMorgan Still Undervalued?

With shares of JPMorgan Chase & Co. (NYSE:JPM) trading at around $53.40, is JPM an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

The Financial sector is in an interesting position right now. On the positive side, home prices have been increasing, loan defaults have been decreasing, the stock market has consistently moved higher, interest rates are finally moving higher, monetary stimulus is now on a global level, and cost-cutting has led to increased profitability. However, while some of these are real positives, we should take a closer look at some others.

Are home prices increasing due to speculation? Much of the recent real estate boom has been in thanks to invest firms looking to make profits, not families going out and buying new homes because their pocketbooks are fat and they can afford an upgrade. The stock market is an important factor because financials almost always move with the market. The big question here is when (or if) Bernake will begin to taper. It could be later this year, but that's not likely. It's more likely that Bernake put that possibility out there to see how markets would react. With unemployment ticking up, it's less likely that he will move. This is good news for the stock market, but it also indicates that the economy is weaker than had been anticipated by many. Yes, it's an interesting and wacky world we live in at the moment. As far as cost-cutting goes, this is good for bottom lines, but considering much of this cost-cutting comes in the way of layoffs, this isn't going to boost consumer spending. This trend is taking place in many industries.

Looking closer at the interest rate situation, the cost of mortgages are increasing, and there has been a recent decline in refinancing old loans. On the other hand, mortgage applications are still on the rise. The big question here is whether or not interest rates and the economy can grow at the same time. Many economists are predicting this to be a possibility. That seems to be overly ambitious. In addition to domestic dilemmas, rising interest rates will lead to increased borrowing costs for other counties, which are currently dealing with massive debt burdens. The good news for those investing in the stock market is that interest rates have the potential to come back down. (Note: This isn't to say interest rates should remain at record lows. This is what caused many problems in the first place.)

Other negatives include Europe as well as domestic regulations. For JPMorgan, an added negative has been the London Whale debacle, which never seems to go away. CEO Jamie Dimon recently had an interesting quote regarding this issue: "We did what was the right thing to do. No hiding, no lying, no bullshit. Period!" He then went on to apologize for the trade that lost more than $6 billion – again.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

Top 5 Small Cap Stocks To Own For 2014

Speaking of Jamie Dimon, some investors love him and some don't. Those who happen to be unsure might want to know what 2,410 JPMorgan employees think of him. According to Glassdoor.com, 86 percent of employees approve of Jamie Dimon. This is a high number, and it shows that employees trust their leader. As far as company culture, employees have rated their employer a 3.3 of 5, and 64 percent of employees would recommend the company to a friend.

JPMorgan is currently trading at just 10 times earnings whereas Bank of America (NYSE:BAC) is trading at 41 times earnings, and Citigroup (NYSE:C) is trading at 18 times earnings. Profit margin is a great measure of efficiency. JPMorgan has a profit margin of 24.90 percent whereas Bank of America has a profit margin of 6.43 percent, and Citigroup has a profit margin of 13.81 percent. JPMorgan's profit margin has steadily improved since 2009, and it should continue to grow. So far, it looks as though JPMorgan is the best investment.

To further the strengthen the bull case for JPMorgan when being compared to peers, it currently yields 2.80 percent whereas Bank of America yields 0.30 percent, and Citigroup yields 0.10 percent. Bank of America and Citigroup would offer a higher yield if they felt comfortable doing so. In other words, it's a good sign that JPMorgan is comfortable offering a 2.80 percent yield.

JPMorgan has seen a decline in revenue over the past three years, but the company's focus is the bottom line. Earnings have consistently improved on an annual basis. Financial sector earnings are also expected to improve in Q2.

Let's take a look at some important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

Despite all the drama, JPMorgan has been on a tear over the past year.

	1 Month	Year-To-Date	1 Year	3 Year
JPM	9.77%	23.84%	68.53%	50.81%
BAC	0.92%	13.28%	81.06%	-14.73%
C	2.71%	26.62%	89.29%	29.38%

At $53.40, JPMorgan is trading above its averages.

50-Day SMA	51.38
200-Day SMA	47.86

E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for JPMorgan is stronger than the industry average of 2.10.

	Debt-To-Equity	Cash	Long-Term Debt
JPM	1.58	954.87B	725.60B
BAC	1.36	502.26B	617.76B
C	1.46	754.95B	560.08B

E = Earnings Have Been Strong

Earnings have consistently improved on an annual basis.

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in millions	101,491	115,632	115,475	110,838	108,184
Diluted EPS ($)	1.37	2.26	3.96	4.48	5.20

Looking at the last quarter on a year-over-year basis, revenue declined, but earnings improved.

Quarter	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012	Mar. 31, 2013
Revenue ($) in millions	26,712	22,180	25,146	23,653	25,122
Diluted EPS ($)	1.31	1.21	1.40	1.39	1.59

Now let's take a look at the next page for the Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

Conclusion

JPMorgan has weathered many storms throughout its history. It has always managed to survive and then thrive. With the right leadership in place, a focus on consistently improving the bottom line, strong margins, and a superb valuation, JPMorgan is an OUTPERFORM.

Humans, Computers and Market Volatility

Humans used to execute all stock trades. Actual people coming together face-to-face. Humans are slow, but they can think. That helped alleviate tension when market panics came up. 

Then computers came along. Computers are lighting fast, but they can only follow programmed rules, without thought. Problems tend to feed on themselves when computers are in charge. That's been a factor in market volatility over the last decade, as more trading at exchanges like the New York Stock Exchange moved from human interaction to computers. 

I recently met up with longtime floor trader Dorren Mogavero at the NYSE. Here's what she had to say about how her job has changed with computer trading (transcript follows):  

Doreen Mogavero: Well, I think the function that we perform is still very similar to the one that we always did perform, and that was to keep our customers involved in the market in a very proactive way, not a reactive way. Electronic markets tend to be very reactive. Markets that have people involved tend to be much more proactive, and that sort of mitigates volatility and it also keeps the flow of information going to the customers back and forth in a very real-time way.

Morgan Housel: So with the amount of trading that is now done by computers instead of people, how has that changed the stability and volatility of markets?

Best Clean Energy Stocks To Own For 2014

Doreen Mogavero: Well as markets have gotten more electronic, they have gotten more volatile, that's definitely, and our market has gotten more volatile as well, but still remains less volatile than a fully electronic one.

EUR/USD scope for movement up to 1.3417

FXstreet.com (New York) - The EUR/USD foreign exchange rate has seen its rally falter at the 1.3360 region Thursday morning during US trading, as this level has seemingly derailed any prolonged attempts higher thus far.

In the United States, Initial Jobless Claims (August 3) were reported at 333K, beating expectations of 336K. Moreover, Continuing Jobless Claims (July 27) yielded a figure of 3.018M, relative to a projection of 2.950M.

EUR/USD strategic bias

According to Karen Jones, an analyst at Commerzbank, "EUR/USD has started to erode the 2013 resistance line currently at 1.3327 - directly overhead lies the key resistance at 1.3346/1.3417. This is where the 2011-2013 downtrend, the 200-week MA and the June high meet and we look for it to hold the topside and provoke failure. Loss of last weeks low at 1.3188 is needed to alleviate immediate upside pressure. Intraday charts are suggesting the 1.3417 high will be tested, but that it is likely to hold."

EUR/USD technical levels

At the time of writing, the EUR/USD is presently operating at 1.3360 Thursday, climbing at a rate of +0.18% above its opening. Having settled after its initial spark towards 1.3370 (intraday high), the pair has maintained a far narrower path around the 1.3360 region. Technically speaking, the EUR/USD is constrained by resistances at 1.3362, onto 1.3396, and finally 1.3446, calculates the Mataf.net analyst team.

This Simple Strategy Has Never Lost Money

I'm going to show you a simple strategy that has never lost money in the market.

A recent study by mega-investment firm Oppenheimer proved just as much. Don't worry, it's not some "too good to be true" story. But there are some caveats.

First, I could tell 100 people about this strategy... and I'd guess 99 of them would flat ignore it. That's despite the evidence I'll show you backing it up.

"That strategy is for suckers."

 

"Its time has passed."

"You have to be an idiot to think that would work today."

I know some people will say this -- because they already have. We asked some of our regular readers to give us their thoughts on this strategy. Those were the type of responses I heard from some people. I was shocked.

Second, you can't use this strategy for every stock. Use it on the wrong ideas, and you can still lose money. But across the market as a whole, it hasn't failed once in the past 60 years.

The truth is, you don't have to trade every day... or every week... or even every year to beat the market. In fact, your success actually increases with the fewer trades you make and the longer you hold.

The best proof comes from a recent study by Oppenheimer. They looked at the S&P 500... going all the way back to 1950. Over that time, the S&P 500 has NEVER suffered a loss in a 20-year period.

Of course, we all know you can't say the same for holding stocks for a year or two. When you hold stocks for a short period of time, your odds of losing money are much, much higher.

And you can lose a boatload of money in a hurry. In fact, in its worst one-year period, the S&P 500 dropped 44.8%.

No wonder Warren Buffett has always said his favorite holding period is "forever."

But it's surprising how many investors still fight it. The average holding period for an investment was seven years in 1940, according to William Hutchings of the Financial News. By 2010, that period had shrunk to just six months.

So while all the evidence points to longer holding periods being better for your portfolio... most investors are doing the exact opposite.

I even did a little digging on my own. I looked at the annual returns of the S&P 500 myself, going back to 1950.

You can see what I found in my chart... 

On a rolling annual basis, the S&P 500 has dropped 16 times over a one-year period since 1950... but zero times in any 20-year period.

The trend is clear. The longer you hold an investment, the better your chances of making money.

But unfortunately, you can't just buy any stock, hold it forever, and expect to come out ahead. The market is littered with Enrons, WorldComs, even General Motors. Holding forever didn't matter a lick with them.

What you have to do is find a handful of companies that enjoy huge (and lasting) advantages over the competition... companies that pay their investors each and every year by dishing out fat dividends... and companies buying back massive amounts of their own stock.

These are the kinds of companies that can make you money no matter what. Once you find them, the strategy is simple -- just buy their shares and hold "Forever."

My research team and I have done a ton of research on the impact of holding stocks "Forever." Here are a few success stories we've even heard from investors like you:

-- George A. from Seattle has a similar story. George says he bought $2,000 of Apple (Nasdaq: AAPL) and $2,000 of Amazon (Nasdaq: AMZN) back in October 2000. About 10 years later, he says his Apple shares are worth $60,100 and the Amazon shares are worth $11,600.

-- William M. is an investor in Boynton Beach, Fla., who says he's held over 60 stocks for more than 35 years. He bought just five shares of AT&T (NYSE: T) in 1950. Now, thanks to splits, spin-offs, and dividends, he owns 4,000-plus shares of the stock. Today he's been retired about 27 years, is a member of two private country clubs, and has homes in both Florida and Massachusetts.

With that as an inspiration, my Top 10 Stocks research staff and I pinpointed our "10 Best Stocks to Hold Forever." Because of the success of these stocks, we are re-releasing the report.

This project took about six months, and! it wasn&! #39;t cheap. By my back-of-the-napkin calculation, the total cost of gathering, analyzing and distributing this data comes to about $1.3 million.

But time has shown that these are 10 ideas that you can buy, forget about, and hold "Forever."

You can learn more about what we've uncovered -- including some names and ticker symbols -- by viewing our latest research here.

What Does the Future Hold for GameStop?

By almost any measure, GameStop (NYSE: GME  ) is a difficult nut to crack. The company has been fighting obsolescence ever since digital distribution caught on, and news swirling around next-generation consoles seems to turn against the retailer every other day. On the other hand, GameStop reports having a 47% market share of the new games market for Xbox and PlayStation, and it's built a symbiotic relationship with game and hardware makers.

Earnings from the last quarter were disappointing -- which isn't exactly a new theme -- but also pointed to a catalog of strengths that the company still sits on. Here's a look through the release, and a look at what could be coming next for GameStop.

The first quarter at GameStop
Let's look at the bad news first. GameStop's comparable sales fell 6.7%, bringing total sales down 6.8% to $1.9 billion. New game sales dropped 3.8%, pre-owned games were down 7.8%, and hardware was down 30.6%. All of those falls are a result of two factors -- the end of a console generation and the rise of digital sales.

On the plus side, GameStop's new-game sales drop compared to an industry average decline of more than 14%. The company also managed to get more out of its meager sales, and gross margin increased by 1 percentage point. That increase was at least partially due to the company's jump in digital and mobile sales, which grew 47% and 290% respectively -- and no, that's not a typo.

What does the next generation mean for GameStop?
GameStop's results summarize the market pretty well -- people are buying more casual and digital games, while holding out on new and used games for the arrival of a new series of consoles. That next wave comes in the form of the Sony (NYSE: SNE  ) PlayStation 4 and the Microsoft (NASDAQ: MSFT  ) Xbox One.

New game sales for the new consoles won't throw anyone a curveball, and GameStop should be in a good place to capitalize on those sales. What's concerning to investors is the future of used games. Both Sony and Microsoft have said that used games will be playable on the next-gen consoles, but that doesn't answer all the questions.

One of the answered questions is that neither new system will be capable of backward compatibility. That's bad news for GameStop, as a backward-compatible system would likely have generated sales of used hardware, but now gamers are much less likely to ditch their old boxes.

The bigger question surrounds how used games will work. Right now, Microsoft has offered the most information, and that's not much. The issue is whether gamers will have to pay an extra fee to install a used game. Right now, it looks like the answer is no -- but that's subject to change.

Microsoft has clouded the issue by not spelling out exactly how it's going to work, but saying that if you and a friend both install a game from one disc, then there will be a fee for the friend to pay. That's been extrapolated into a fee that a person purchasing your used game would have to pay, but that seems not to be the case. That's good for GameStop, as an additional fee could either cut into the company's profit or deter buyers from purchasing used games.

The future
GameStop is by no means sitting pretty, but I think the company has a bright future ahead of it. The whole gaming industry is a network, and investors can't overlook the fact that GameStop accounts for 13% of Electronic Arts sales and 10% of Activision Blizzard sales. Game makers and hardware providers have a vested interest in keeping GameStop's doors open, and used games are a big part of that. I think GameStop is going to surprise a lot of people when this time next year rolls around.

Play on
While Activision and Microsoft have been taking the headlines when it comes to console gaming, investors following the gaming sector would do well to also keep tabs on Electronic Arts. We can help. The Motley Fool's special report breaks down the risks and opportunities facing the company to help you decide if EA is right for your portfolio. Click here to get your copy now.

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Home Inns & Hotels Management Posts a Surprise Profit

Home Inns & Hotels Management (Nasdaq: HMIN  ) reported earnings on May 13. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Home Inns & Hotels Management missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased. Non-GAAP earnings per share grew. GAAP loss per share contracted.

Margins grew across the board.

Revenue details
Home Inns & Hotels Management notched revenue of $213.7 million. The six analysts polled by S&P Capital IQ predicted a top line of $219.2 million on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $199.2 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.11. The three earnings estimates compiled by S&P Capital IQ averaged -$0.05 per share. Non-GAAP EPS were $0.11 for Q1 against -$0.09 per share for the prior-year quarter. GAAP EPS were -$0.07 for Q1 against -$0.36 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 27.1%, 250 basis points better than the prior-year quarter. Operating margin was 0.3%, 250 basis points better than the prior-year quarter. Net margin was -1.4%, 680 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $260.7 million. On the bottom line, the average EPS estimate is $0.50.

Next year's average estimate for revenue is $1.03 billion. The average EPS estimate is $1.32.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 463 members out of 531 rating the stock outperform, and 68 members rating it underperform. Among 108 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 85 give Home Inns & Hotels Management a green thumbs-up, and 23 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Home Inns & Hotels Management is outperform, with an average price target of $36.28.

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Add Home Inns & Hotels Management to My Watchlist.

Avanir Reports Strong Revenue but Misses on Earnings

Avanir Pharmaceuticals (NASDAQ: AVNR  ) reported its fiscal second-quarter results after the market closed on Wednesday. Here are the key points that investors need to know.

Results
The company reported a net loss for the quarter of $16.5 million, or $0.12 per share. That loss reflects improvement over the net loss of $17.0 million, or $0.13 per share, for the same period in fiscal 2012. However, the net loss failed to meet analyst expectations. The average analysts' estimate called for a loss of $0.09 per share.

Avanir's revenue for the fiscal second quarter totaled $17.4 million, a 74% year-over-year increase. The revenue result met analyst expectations.

Most of the company's revenue stemmed from Nuedexta. The drug used to treat pseudobulbar affect garnered gross revenue of $20.8 million and net revenue of $16.5 million during the quarter. Avanir also received nearly $900,000 in royalties for cold sore medicine Abreva from GlaxoSmithKline (NYSE: GSK  ) .

While revenue growth was strong, the company's expenses derailed any hopes of meeting bottom-line expectations. Avanir reported total operating expenses, excluding cost of sales and share-based compensation, of $30.1 million. This figure was much higher than the $25.3 million in expenses incurred in the same quarter last year, reflecting sizable increases in research and development, selling and marketing, and general and administrative costs.

Avanir reported cash, cash equivalents, and restricted investments of $70.2 million as of the end of March. Of that total, $67.9 million came from cash and cash equivalents.

Looking ahead
The company received welcome news a couple of weeks ago from Europe. The Committee for Medicinal Products for Human Use, or CHMP, announced a positive recommendation for Nuedexta. This bodes well for ultimate approval for the drug in Europe.

Avanir also claims a couple of drugs in its pipeline with potential. AVP-923 is under evaluation in several mid-stage trials for the treatment of levodopa-induced dyskinesia in Parkinson's disease, central neuropathic pain in multiple sclerosis, and agitation in Alzheimer's disease. The company also announced positive results earlier this year from a study of experimental drug AVP-786 that shows possibility for it to treat similar indications.

Abreva loses patent protection in the U.S. in April. This likely means less royalty payments from Glaxo in the not-so-distant future. However, those royalties aren't very large, so this won't be a significant negative for Avanir.

My view is that Nuedexta sales will continue to experience strong growth in the U.S. and get a nice bump if European approval is granted, which I expect will be the case. Avanir does need to get its expenses under control somewhat to please analysts. The latest quarterly results could drive shares down with the earnings miss. However, for investors willing to take on some risk, Avanir offers good upside potential.

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Googorola Fails to Take Microsoft Hostage

Search titan Google (NASDAQ: GOOG  ) may have just detailed a new open-source patent initiative aimed at facilitating IP cease fires, but those good intentions don't apply to a long-standing legal battle between subsidiary Motorola and Microsoft (NASDAQ: MSFT  ) . Google did say it would only return fire if "first attacked," and Motorola and Microsoft have been going at it for years.

The pair has been duking it out in a patent court of law since 2010 over numerous standards-essential patents that Motorola is required to license to Microsoft. At issue is how much the software giant should pay for access to these patents, since standards-essential patents must be licensed at fair, reasonable, and non-discriminatory, or FRAND, rates. Trouble is that there's plenty of wiggle room, since FRAND is a somewhat objective description.

Best Performing Companies To Watch For 2014

The IP in question relates to 802.11 Wi-Fi and H.264 video encoding standards, both of which are virtually unavoidable in today's gadgets. Motorola has been trying to finagle an outrageous 2.25% royalty rate from both Microsoft and Apple for years. Such a high rate would effectively take related products hostage, since that's a huge cut to send to Moto. That would include all Xbox 360 gaming consoles and all PCs running Windows 7.

The total annual royalty revenue stream that Motorola was originally hoping to extract from Microsoft was an incredible $4 billion. Microsoft maintained that it shouldn't have to pay a penny more than $1.2 million per year. To put Motorola's figure into perspective, that's nearly a fifth of Microsoft's operating income over the past four quarters from all segments.

Suffice it to say, that's hardly reasonable (the "R" in "FRAND").

The U.S. District Court for the Western District of Washington is siding with the software giant, and has determined appropriate FRAND rates for the dispute. The court's total was just under $1.8 million, or 99.96% less than what Motorola was asking for. Sorry, Moto.

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10 Best High Tech Stocks To Invest In Right Now

On Friday, American Superconductor (NASDAQ: AMSC  ) will release its latest quarterly results. After the loss of its largest customer two years ago, the company has had to make a massive readjustment in its business model, and investors still aren't sure whether it can bounce back from that major setback.

Now, American Superconductor is looking at the solar-inverter market, which has gone through its own tough times but which has the potential to produce long-term profits. But as a small player, the company faces plenty of competition from a wide range of much larger rivals. Let's take an early look at what's been happening with American Superconductor over the past quarter and what we're likely to see in its quarterly report.

Stats on American Superconductor

10 Best High Tech Stocks To Invest In Right Now: Retail Star Ltd (RSL.AX)

Resource Star Limited engages in the exploration of uranium properties primarily in Malawi and Western Australia. The company�s key projects include 100% owned Edith River uranium project in the Northern Territory; and joint ventures with Globe Metals & Mining Limited on the Machinga Niobium-Rare Earths Project and the Livingstonia Uranium Project in Malawi. The company was formerly known as Retail Star Limited and changed its name to Resource Star Limited in July 2008. Resource Star Limited is headquartered in Melbourne, Australia.

10 Best High Tech Stocks To Invest In Right Now: Aegon NV (AEV)

AEGON N.V. provides life insurance, pension, and asset management products and services primarily in the Americas, Europe, and Asia. The company offers a range of life and protection products, including traditional, universal, endowment, term, employer, and whole life insurance products; and accidental death and dismemberment, critical illness, cancer treatment, disability, income protection, and long term care insurance. It also offers individual savings and retirement products, including fixed and variable annuity products, retail mutual funds, and mortgages; employer solutions and pensions comprising individual and group pensions, as well as 401(k) plans and similar products sponsored by or obtained through an employer; and general insurance products, including automotive, liability, fire protection, and household insurance. AEGON N.V. markets its products directly, as well as through various sales and distribution channels, including independent and career agents, fina ncial planners, registered representatives, independent marketing organizations, banks, broker-dealers, benefit consulting firms, wirehouses, affinity groups, institutional partners, independent managing general agencies, specialized financial advisors, and the Internet. The company was founded in 1900 and is headquartered in The Hague, the Netherlands.

Top 10 Stocks To Invest In 2014: Boyuan Constr Group Inc (BOY.TO)

Boyuan Construction Group, Inc. constructs residential and commercial buildings, municipal infrastructures, and engineering projects in the People�s Republic of China. Its building construction projects include residential areas consisting of housing projects for multi-home neighbourhoods and condominium projects; customized factory construction for the purpose of production, manufacturing, and processing; business and residential building construction for the purpose of tourism, restaurants, entertainment, office, and mixed use office/residential buildings; and public infrastructure projects, such as bus stations, squares, traffic hubs, nursing homes, and government institutions for urban development. The company�s municipal infrastructure projects comprise roads and bridges. It primarily serves engineering construction management, project management, and real estate development companies. Boyuan Construction Group, Inc. is headquartered in Jiaxing Port, China.

10 Best High Tech Stocks To Invest In Right Now: Prima BioMed Ltd (PRR)

Prima BioMed Ltd is a biotechnology company is engaged in the development and commercialization of medical therapies with a focus on oncology. Its product candidates in development include Cvac, an autologous dendritic cell vaccine for ovarian cancer, monoclonal antibodies for multiple tumour types, and an oral formulation for the human papilloma virus (HPV), vaccine. Its product candidate Cvac is a dendritic cell therapy, for which it is conducting a Phase IIb trial for the treatment of ovarian cancer. Cvac is designed to target the tumour antigen mucin-1, which is expressed at high levels on different tumour types. It also has two preclinical product development programs. In May 2011, Prima BioMed GmbH, a 100 % owned subsidiary of Prima BioMed Ltd, was incorporated in Germany. In May 2011, Prima BioMed Middle East FZLLC, a 100 % owned subsidiary of Prima BioMed Ltd, was incorporated in the United Arab Emirates.

10 Best High Tech Stocks To Invest In Right Now: Catalyst Pharmaceutical Partners Inc.(CPRX)

Catalyst Pharmaceutical Partners, Inc., a development-stage biopharmaceutical company, focuses on the development and commercialization of prescription drugs targeting diseases of the central nervous system with a focus on the treatment of drug addiction and epilepsy. It is evaluating its lead product candidate, CPP-109, a GABA aminotransferase inhibitor candidate, which is under Phase II(b) clinical trial for the treatment of cocaine addiction, as well as focuses on evaluating CPP-109 for the treatment of other addictions and obsessive-compulsive disorders. The company is also developing CPP-115, a GABA aminotransferase inhibitor for various indications, including drug addiction, epilepsy, and for other selected central nervous disease indications. It has license agreements with Brookhaven Science Associates, LLC on various patents and patent applications relating to the use of vigabatrin as a treatment for cocaine and other addictions, and obsessive-compulsive disorders; and with Northwestern University to commercialize GABA aminotransferase inhibitors worldwide, as well as a definitive clinical trial agreement with the National Institute on Drug Abuse to jointly conduct a U.S. Phase II(b) clinical trial evaluating CPP-109 for the treatment of cocaine addiction. Catalyst Pharmaceutical Partners, Inc. was founded in 2002 and is based in Coral Gables, Florida.

10 Best High Tech Stocks To Invest In Right Now: World Energy Solutions Inc(DE)

World Energy Solutions, Inc. provides a range of energy management solutions to commercial and industrial businesses, institutions, utilities, and governments. It offers technology-enabled solutions, such as online audits of facilities to identify retrofit options and project management services for retrofit implementation, as well as cross-selling opportunities for commodity auctions. The company primarily focuses on retail and wholesale energy procurement clients via its online auction platforms, including the World Energy Exchange, the World Green Exchange, and the World DR Exchange. The World Energy Exchange enables energy consumers in North America to negotiate for the purchase or sale of electricity, natural gas, and other energy resources from energy suppliers who have agreed to participate on auction platform. The World Green Exchange enables buyers and sellers to negotiate for the purchase or sale of environmental commodities, such as renewable energy certificates , verified emissions reductions, and certified emissions reductions. The World DR Exchange enables curtailment service providers and energy consumers to negotiate in structured auction events designed to yield price transparency. The company was formerly known as World Energy Exchange, Inc. World Energy Solutions, Inc. was founded in 1996 and is headquartered in Worcester, Massachusetts.

Advisors' Opinion:

• [By Dave Friedman]

  The shares closed at $76.50, up $1.53, or 2.04%, on the day. They have traded in a 52-week range of $60.45 to $99.80. Volume today was 4,679,892 shares, against a 3-month average volume of 5,720,140 shares. Its market capitalization is $32.11billion, its trailing P/E is 13.15, its trailing earnings are $5.82 per share, and it pays a dividend of $1.64 per share, for a dividend yield of 2.20%. About the company: Deere & Company manufactures and distributes a range of agricultural, construction and forestry, and commercial and consumer equipment. The Company supplies replacement parts for its own products and for those of other manufacturers. Deere also provides product and parts financing services.

• [By David Sterman]

   Deere & Co. (NYSE: DE) is the world’s largest equipment manufacturer for the farming, construction and forestry industries, and a top producer of lawn and garden tractors for homeowners. It has a strong balance sheet and shares currently trade at a forward P/E of 9.6. Recently, Bill Gates purchased 7.5 million shares of Deer & Co., his biggest purchases in recent history.

10 Best High Tech Stocks To Invest In Right Now: TOR Minerals International Inc(TORM)

TOR Minerals International, Inc., a specialty chemical company, engages in the manufacture and marketing of mineral products. Its mineral products are used as pigments, pigment extenders, functional fillers, and flame retardants for the manufacture of paints, coatings, plastics, catalysts, and solid surface applications. The company?s principal product includes HITOX, a light buff-colored titanium dioxide pigment used in paints, coatings, plastics, paper, and various other types of products. It also offers ALUPREM (premium alumina) products that are used for color critical applications as fillers and flame retardants; BARYPREM, which provides whiteness for color critical applications; TIOPREM, a series of heat stable colored TiO2 hybrid pigments used in various applications, such as engineered plastics, laminates, window profiles, plastic lumber, roofing granules, and ceramic coatings; and SYNTHETIC RUTILE used as a feed stock for white TiO2 and as a component in welding rod flux. In addition, the company provides BARTEX, an inert extender pigment, which offers weight and body to products comprising powder coatings used in automotive, appliance, and office furniture finishes; rubber products, such as carpet and curtain backings; and plastics, including billiard balls and poker chips; and HALTEX/OPTILOAD used in technical applications, including thermoset composites, sheet molding compounds/bulk molding compounds, thermoplastic profiles, electrical wire and cable insulation, mining conveyor belts, specialty coatings, and adhesives and sealants. TOR Minerals International sells its products through a network of direct sales representatives and independent stocking distributors in the United States, as well as through distributors and agents internationally. The company was founded in 1973 and is headquartered in Corpus Christi, Texas.

10 Best High Tech Stocks To Invest In Right Now: Abbot Grp.(ABG.L)

African Barrick Gold plc primarily engages in the exploration and production of gold properties in Tanzania. It also explores for silver and copper. The company has four producing mines in northwest Tanzania, including Bulyanhulu, Buzwagi, Tulawaka, and North Mara; and seven principal exploration prospects in Tanzania at various stages of development. As of November 2010, it hold interest in 318 granted prospecting licenses, prospecting licenses reconnaissance, special mining licenses, and mining licenses covering approximately 4,881 square kilometers in Tanzania; and approximately 303 pending applications for prospecting licenses and prospecting licenses reconnaissance covering approximately 3,551 square kilometers in Tanzania. The company is headquartered in London, United Kingdom. African Barrick Gold plc is a subsidiary of Barrick Gold Corporation.

10 Best High Tech Stocks To Invest In Right Now: Kraft Foods Inc.(KFT)

Kraft Foods Inc., together with its subsidiaries, manufactures and markets packaged food products worldwide. The company offers biscuits, including cookies, crackers, and salted snacks; confectionery products, such as chocolate, gum, and candy; beverages comprising coffee, packaged juice drinks, and powdered beverages; cheese products, including natural, processed, and cream cheeses; grocery items consisting of spoonable and pourable dressings, condiments, and desserts; and convenient meals, which comprise processed meats, packaged dinners, and lunch combinations. Its primary brand portfolio includes Oreo, Nabisco, and LU branded biscuits; Milka and Cadbury branded chocolates; Trident branded gum; Jacobs and Maxwell House branded coffees; Philadelphia branded cream cheeses; Kraft branded cheeses, dinners, and dressings; and Oscar Mayer branded meats. The company sells it products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributor s, convenience stores, gasoline stations, drug stores, value stores, and retail food stores. Kraft Foods Inc. was founded in 2000 and is based in Northfield, Illinois.

Advisors' Opinion:

• [By JON C. OGG]

  Kraft Foods Inc. (NYSE: KFT) recently closed at $34.87 and the analyst community’s price target objective is $37.69.  The dividend yield is 3.3% and the stock is down only 3.9% from its 52-week high.  The price to book value is 1.5 and its return on equity is 8.5%.S&P has a local long-term rating of “BBB” and a stable outlook despite the recent proposed break-up.  The break-up here is only adding value to holders in what was becoming a very dead-money stock for investors.  Its Cadbury deal added leverage and Warren Buffett had backed off his holdings on that ac quisition.

• [By Scott Rothbort]

  There is a special situation in the consumer staples sector that offers a unique opportunity in 2012. Just last year, Kraft Foods (KFT) purchased Cadbury, the U.K.-based confectionary company. At the time, Kraft Foods was forced to pay up for Cadbury, and I criticized CEO Irene Rosenfeld for the expensive price tag and the huge amount of debt -- about $9.5 billion -- that Kraft Foods would have to issue to finance that acquisition.

  Earlier this year, Kraft Foods, in a seeming about-face announcement, apparently bowing to pressure from activist investors, disclosed that the company would split into two companies. Sometime in 2012, Kraft Foods will split itself into separate grocery and snack companies.

  Recall that Kraft Foods was spun off from Altria (MO) in 2007. That spinoff helped to unlock the value of Altria but not Kraft Foods. The reason was that at the time Kraft Foods’ food/grocery business was not all that attractive. To some extent, that is still the case from a growth perspective. However, the new snack business will marry Cadbury with other popular and attractive Kraft Foods snacks, such as Oreo cookies and Trident gum

  The split will separate low-growth grocery brands from the high-growth snack brands. This will unlock the value of the snack business. Rosenfeld has decided to take over as CEO of the global snacks company, which sends an important message to investors.

  So, as a standalone company, Kraft Foods offer a compelling risk investment for 2012. However, once the spinoff takes place, I believe that the sum of the parts will be greater than the whole as it now exists.

• [By Jim Cramer]

  This packaged food company just can't seem to do anything to boost its earnings power. CEO Irene Rosenfeld, who, along with J&J's William Weldon, resides on my Mad Money Wall of Shame, will be a hindrance to value. She managed to overpay for Cadbury, an acquisition that drew the wrath of the formerly patient Warren Buffett. If it didn't have a decent dividend, I think the stock would slink to $25. But, barring a firing of Rosenfeld for her subpar job, I think it can hang around $28. You don't want a slow-growing packaged goods story in a nascent expansion in the United States, and Kraft won't be able to buck that trend. A real disappointer.

10 Best High Tech Stocks To Invest In Right Now: L Brands Inc (LTD)

L Brands, Inc., formerly Limited Brands, Inc, incorporated on March 16, 1982, operates in the specialty retail business. The Company is a specialty retailer of women�� intimate and other apparel, beauty and personal care products and accessories. The Company operates in two segments: Victoria�� Secret and Bath & Body Works. It sells its merchandise through Company-owned specialty retail stores in the United States, Canada and the United Kingdom, which are primarily mall-based, and through Websites, catalogue and international franchise, license and wholesale partners. The Company operates in brands, such as Victoria�� Secret, Victoria�� Secret Pink, Bath & Body Works, La Senza, and Henri Bendel. The Company�� business for both the Victoria�� Secret and Bath & Body Works segments is principally conducted from office, distribution and shipping facilities located in the Columbus, Ohio area.

As of February 2, 2013, it operated 255 retail stores located in leased facilities, primarily in malls and shopping centers, throughout the Canadian provinces. As of February 2, 2013, it operated two retail stores in London. As of February 2, 2013, it operated 2,619 retail stores located in leased facilities, primarily in malls and shopping centers, throughout the United States. As of February 2, 2013, it also had 339 licensed La Senza stores in 32 countries; 38 franchised Bath & Body Works stores in nine countries; three franchised Victoria's Secret stores in two Middle Eastern countries, and 108 independently owned Victoria�� Secret Beauty and Accessories stores and various small-format locations in over 50 countries.

Victoria�� Secret, including Victoria�� Secret Pink, is a specialty retailer of women�� intimate and other apparel with fragrances and cosmetics, supermodels and runway shows. The Company sells its Victoria�� Secret products at more than 1,000 Victoria�� Secret stores in the United States, Canada, United Kingdom and through the Victoria�� Secret catal! ogue and online at www.VictoriasSecret.com. Additionally, Victoria�� Secret brand products are also sold in stores operated by partners under a franchise or wholesale model throughout the world.

Bath & Body Works is a specialty retailer of home fragrance and personal care products, including shower gels, lotions, soaps and sanitizers. The Company sells its Bath & Body Works products at more than 1,600 Bath & Body Works stores in the United States and Canada and online at www.BathandBodyWorks.com. Additionally, Bath & Body Works brand products are available at franchise locations throughout the world.

La Senza is a specialty retailer of women�� intimate apparel. The Company sells its La Senza products at more than 150 La Senza stores in Canada and online at www.LaSenza.com. Additionally, La Senza has more than 330 stores in 32 countries operating under franchise and licensing arrangements. Henri Bendel sells upscale accessory products through its New York flagship and 28 other stores, as well as online at www.HenriBendel.com.

Advisors' Opinion:

• [By Jonas Elmerraji]

  L Brands (LTD) rounds out our list of stocks that institutions hate right now. Don't feel bad if the name doesn't sound familiar; after unloading its namesake The Limited stores in the wake of the Great Recession, management picked the new name as a stopgap until it comes up with something better. Maybe that lackluster naming strategy is what's sending funds that own LTD running for the door. Funds sold 49 million shares of the firm in the first quarter, cutting their stake by more than half.

  L Brands' crown jewel is Victoria's Secret. The store chain has a strong brand with celebrity exposure, it operates in the extremely high margin lingerie business, and it sports an economic moat for its trouble. As retailers continue to look for their ideal model, Victoria's Secret will continue to be it.

  The firm's less entrenched brands, such as Bath & Body Works and Henri Bendel, don't sport the same level of an economic moat that Victoria's Secret does, but they've been buoyed by a stellar uptick in consumer spending in the last few quarters. As LTD looks for a new direction, investors can find some solace in the fact that management and investors are one in the same. Founder Leslie Wexner and his wife Abigail own a massive chunk of outstanding shares, keeping incentives skewed towards owners over than management.

  Hefty margins and a big geographic footprint make LTD a solid way to gain retail exposure, even if the institutional investors don't agree.