5 Uptrending, 5 Downtrending Stocks

Corey Rosenbloom of AfraidToTrade.com shares the results of his scans, which identified candidates for trading pro-trend retracement entries, aggressive reversal, or as fade candidates for counter-trend trades.

Let’s update our ongoing stock scan of the uptrending stocks most overextended and downtrending stocks most under-extended stocks from their 200-day simple moving average.

This scan provides candidates to trade pro-trend retracement entries or alternatively, aggressive reversal or ‘fade’ candidates for those inclined to trade counter-trend movement.

We’ll start with the most over-extended stocks above their rising 200-day SMA:

All five top SP500 over-extended stocks are clustered roughly 50% above their rising 200-day simple moving average so there isn’t much difference in the list this month.

GameStop (GME) and Netflix (NFLX) have experienced stellar uptrends as shown in the quick charts below:

Netflix (NFLX):

Generally, a trader would prefer to enter a stock that is rising in a persistent uptrend through a pullback or retracement, similar to a “bull flag” pattern.

While GameStop (GME) just completed a ‘flag’ retracement to the rising 20-day EMA (trade entry signal), it remains in breakout bullish mode without a clear entry signal.

Netflix (NFLX), however, is in the midst of a retracement to the rising 20- and 50-day EMAs, which marks a pivot or decision-point (inflection point) for the stock.

Another current top stock, Best Buy (BBY), has shown a persistent uptrend as well but the retracements have not been as clear (the trend has been more of a ‘creeping’ mode):

As we often discuss in these stock-scan update posts, aggressive traders can look to short-sell overextended movements away from the rising 20- or 50-day EMA to play for a ’scalp’ or retracement back to rising moving averages.

It’s often better, or at least lower-risk with higher reward potential, to join uptrending stocks as opposed to fighting them by adding shares on pullbacks to rising moving averages.

The same can be said about downtrending stocks extended down from their falling 200-day SMA:

We’ll skip News Corp. (NWSA) and focus on the other names for candidates.

Specifically, Newmont Mining (NEM) has formed an interesting retracement to compress again between the 20- and 50-day EMAs:

I highlighted each of the prior four instances during the persistent downtrend where shares have retraced into the “grey area” between the falling 20- and 50-day EMAs.

These always form decision-points where aggressive traders can play for a bullish breakout and reversal on a clean break ABOVE the 50 EMA, or else pro-trend retracement-style traders can enter the ongoing downtrend on retracements to the falling 50-day EMA or else a breakdown under the 20 EMA.

Watch the divergences—they tend to argue for a reversal play but price has to prove it is capable of reversing, else the next swing will be a simple pro-trend movement back to the $27.00 per share low.

Similarly, Cliffs Natural Resources (CLF) is threatening a bullish reversal:

I highlighted the prior “trap” on the May 2013 breakthrough above the 50 EMA, which is similar to the current breakout above $18.00 per share.

Breakouts generate excitement yet buyers/bulls must sustain the breakout and enthusiasm, lest the persistent downtrend resume with a ‘failure outcome’ and bearish trigger under $18.00 per share.

You’ll likely find familiar names like Netflix (NFLX) and Best Buy (BBY) on the upside along with Cliffs Natural (CLF) and Newmont Mining (NEM) on the downside, which simply reminds us of the power of persistent trends in motion.

By Corey Rosenbloom, CMT, Trader and Blogger, AfraidToTrade.com

Kors Continues Its Run to the Top

When I wrote about investor expectations for Michael Kors (NYSE: KORS  ) earnings earlier this week, I kind of thought that simply by my acknowledging the insane strength that the company has shown thus far, it would invariably falter. That turned out to be as far from reality as possible. Kors' earnings yesterday highlighted all of the good that the designer has offered without any of the weakness.

Kors grew revenue, saw a strong spike in comparable sales, and even managed to increase its already high margins. The earnings put a nice cap on a good week for the luxury sector, and Kors investors should be happy. Shares were up more than 3% during the day, and the strength should help the company keep on running for the next fiscal year.

Making the most out of every chance
Kors' success wasn't an accident or a stroke of good weather -- it was pure planning. The earnings started out strong, with comparable sales rising 36.7% on the back of the brand's continued strength. That foot-traffic increase was then buoyed by a rise in operating income, which hit 26% on the quarter. All that trickled down to earnings per share of $0.50, which was a 124% increase from last year's fourth quarter. 

To manage all that growth, Kors really had to hit every opportunity square on the head. Comparable sales growth came mainly from a few areas, with women's handbags driving the bulk of the revenue increase. However, Kors management said that the real volume increase came from small leather goods, which both drive new customers into the store and can act as add-on items for existing customers. Along with the small goods, Kors saw a strong increase in watch sales, which bodes well for both it and Fossil, which provides Kors with timepieces.  

Looking ahead 
Turning to the forecast for the next few quarters, Kors is starting by focusing on its biggest business, North America. According to the conference call, the company is going to expand its retail store count from its current 231 locations by close to 50 new stores. That still gives the company a ways to grow, as management estimates that the North American market can handle at least 400 stores. 

Beyond its retail expansion, Kors also plans to push forward on two other fronts. First, it's going to expand its shop-in-shop business from 500 North American locations to 1,000 locations. That's going to help the business take advantage of the strong demand on the domestic front. Last quarter, comparable sales in North America grew by 35%.

Second, Kors is going to pull its online operations in-house. Currently, the company relies on Neiman Marcus for its e-commerce business, but it wants to change that in fiscal 2014. That's going to add to the company's bottom line, and should have an impact on gross margin as well.

One last point that investors need to watch out for is the coming promotional environment. Management said once again that it was expecting to have to go on the offensive price-wise, but that the time hadn't yet come. At some point, margins are going to take a hit, but that time hasn't come yet.

Overall, Kors is well poised to take advantage of the momentum that it's built up. As long as the company can continue to keep out in front of competitors, it should have no trouble bringing strong returns to investors.

Kors is one of today's hottest high-end fashion brands, and that's translated into one of the best-performing stocks in retail -- since its debut on the market in late 2011, the share price has more than doubled. But with all that growth, has the stock finally become too expensive, or is there still room left to run? The Motley Fool's premium report on Michael Kors gives investors all the information they need to make the right decision. We cover the key must-watch areas, opportunities, and threats to the company that investors need to know. To claim your copy, simply click here now for instant access.

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Is Your Connected Car Obsolete Before You Buy It?

The Connected Car Conference -- or C3, if you wish to get your geek on -- was a big hit at CE Week in New York City. Thanks largely to navigation and entertainment apps on Apple and Google smartphones, it's easy to marvel at how far we've come in bringing our outside world inside our vehicle. But C3 also concentrated on the future, and what automakers and their partners are doing to increase your car's usefulness and safety.

Our roving reporter Rex Moore talked with General Motors' (NYSE: GM  ) chief technology officer Tim Nixon at the conference. His Chevrolet MyLink system offers Pandora and Sirius XM for entertainment, a BringGo navigation system that runs from your smartphone so your maps are never out-of-date, and Apple's Siri Eyes Free, which allows you to interact with Siri without having to view the screen. In fact, the screen won't even light up while your car is in motion.

Still, advances in consumer electronics far outpace the product cycle of a car, which could be obsolete by the time it hits the showroom floor. In the video below, Tim talks about how his company addresses these concerns.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Can You Trust the Cash Flow at International Rectifier?

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on International Rectifier (NYSE: IRF  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, International Rectifier generated $47.5 million cash while it booked a net loss of $150.9 million. That means it turned 4.9% of its revenue into FCF. That sounds OK.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at International Rectifier look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 81.1% of operating cash flow coming from questionable sources, International Rectifier investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 14.6% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 66.1% of cash from operations.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

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We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add International Rectifier to My Watchlist.

Why Hercules Offshore's Shares Sank Today

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

What: Shares of Hercules Offshore (NASDAQ: HERO  ) dropped as much as 11% today after a rig standing over a ruptured well collapsed.

So what: A fire broke out on one of Hercules's rigs yesterday, and there are now reports that the rig has collapsed and the fire has yet to be contained. All workers were evacuated and there's no evidence yet of oil escaping from the natural gas well, but the company will be on the hook for massive repair costs at the very least.

Now what: This isn't the BP spill of 2010 for a variety of reasons, but it's still not good for Hercules or the industry. It appears, for now, that it's primarily natural gas that's escaping from the well and it's in shallow water so it will be easier to work on than BP's Deepwater Horizon disaster was, limiting both environmental and financial impact. This could be a drag for the company and is definitely a black eye, but it could present an opportunity to buy because it doesn't appear that it will affect earnings potential in years to come, which is the biggest reason to own the stock.

The drilling industry will get bad press from this in the near term, but over the long term there are still plenty of opportunities, particularly for those who supply services to the industry. To get the name and detailed analysis of a company that will prosper for years to come, check out the special free report: "The Only Energy Stock You'll Ever Need." Don't miss out on this limited-time offer and your opportunity to discover this under-the-radar company before the market does. Click here to access your report -- it's totally free.

This Box Office Disaster Is Bad News for Netflix

As the video streaming wars continue to heat up, companies such as Amazon.com and Netflix  (NASDAQ: NFLX  ) are increasingly trying to find ways to differentiate themselves from their competition.

And for the industry leaders in video streaming over the past two years, those efforts have increasingly involved building a world-class repertoire of original series.

For Netflix, anyway, this move seemed to be paying off in a big way up until last week, after its programs received no less than 14 Emmy nods, including nine for House of Cards, two for Hemlock Grove, and even one for Arrested Development, which the company recently revived for an exclusive fourth season.

Then again, that didn't exactly help Netflix stock Tuesday, which is when it fell more than 6% after the company disappointed investors with weaker-than-expected second quarter subscriber growth.

What's more, as fellow Fool Blake Bos pointed out in March, original content can often prove undeniably expensive, so there's much to be said for the merits of signing deals for lower-cost existing programming -- of which Netflix incidentally also boasts plenty.

Netflix placed this bet too early
But what happens when some of that expensive original content doesn't perform as anticipated?

Thanks to last weekend's dismal box office debut of DreamWorks Animations'  (NASDAQ: DWA  )  Turbo, we may get the chance to find out.

Image source: DreamWorks.

Remember, as part of Netflix's huge content deal with DreamWorks announced back in February, the animation specialist agreed to create an original kids' series exclusively for Netflix, based on the feature film, and aptly named Turbo F.A.S.T.

So what's the problem? 

If Turbo's horrific $21.3 million opening weekend take is any indication, kids may simply not be all that interested in the snail-racing flick.

And considering Netflix probably promised DreamWorks a hefty sum to ensure that the series would be offered only alongside its signature red logo, something tells me the company won't be allowed to back out of the deal, as the animator undoubtedly wants to continue milking every possible penny out of the brand in an effort to recoup its estimated $135 million production budget.

Then again, perhaps Turbo is exactly the kind of show that could do exceedingly well on a streaming $8-per-month service like Netflix, so maybe this won't be a huge problem for the King of Streaming in and of itself.

The silver lining
On that note, Netflix's presumptuous bet on an unproven movie could also serve as the perfect wake-up call it needs to finally become more careful about how it spends its money promoting.

After all, from an investing standpoint, hosting all the streaming content in the world won't mean much to shareholders if Netflix can't master the seemingly simple task of keeping expenses in check.

Of course, we also need to remember Netflix isn't the only company involved in the battle for your living room.

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Hot Bank Stocks To Invest In 2014

At the end of a tumultuous five days, Bank of America (NYSE: BAC  ) is up 1.6% on the day, and 0.9% on the week, three hours into the last day of trading.

This morning, I would have said it was a 50/50 shot as to whether the June jobs report would boost the market or crash it, but it appears we can safely say now it's the former, giving a happy ending to the week for B of A investors, and investors, in general.

No June-swoon here
This morning, the Department of Labor released June payroll numbers: The U.S. economy added 195,000 private- and public-sector jobs last month, easily beating economists' expectations of 165,000.

In addition, payroll numbers for the previous two months were revised upwards, adding 70,000 to the total jobs count. And, while the unemployment rate was expected to drop from 7.6% to 7.5%, it remained at 7.6% due to higher numbers of people looking for work.

Hot Bank Stocks To Invest In 2014: National Australia Bank Ltd (NAB)

National Australia Bank Limited provides products, advice and services. In Australia, it operates through National Australia Bank, MLC and UBank. In the United Kingdom, it operates through Clydesdale Bank. In New Zealand, it operates through Bank of New Zealand. In the United States, it operates through Great Western Bank. Segments include Business Banking, Personal Banking, Wholesale Banking, UK Banking and NZ Banking, MLC and NAB and Great Western Ban. As of April 5, 2012, the Company and its associated entities ceased to be a substantial holder in BlueScope Steel Limited. On May 17, 2012, it ceased to be a substantial holder in Spark Infrastructure Group and Sandfire Resources NL. As of August 24, 2012, the Company and its associated entities ceased to be holder in Tabcorp Holdings Limited. In September 2012, the Company and its associated entities have ceased to be a substantial holder in Incitec Pivot Limited, as of August 30, 2012. Advisors' Opinion:

• [By Dale Gillham]

  NAB is still a long way from its all-time high of $44.84 from 2007, but has so far been able to hold above 50 per cent ($22.42) of its all-time high, which is a positive sign. Given that NAB has spent a lot of time in a zigzag formation above this level; you can see how strong this level has been for its shares. At present NAB is probably my least preferred bank stocks when weighing up the risks from a technical perspective, but while it stays above this 50 per cent level it has a greater probability of rising than falling.

  What is holding it back? You can see how a few months ago NAB attempted to break the $26.00 level overhead, which has proven to be an important threshold for those just not willing to pay more for NAB. If you are a bit of a contrarian and like to pick underdogs, you may decide to keep NAB on your watch list because very soon I am expecting it to show where it is headed. A move back below the 50 per cent level would not bode well for those holding NAB.

Hot Bank Stocks To Invest In 2014: Western Alliance Bancorporation (WAL)

Western Alliance Bancorporation (WAL) is a bank holding company. The Company provides full-service banking and lending to locally owned businesses, professional firms, real estate developers and investors, local non-profit organizations, high net worth individuals and other consumers through its three wholly owned subsidiary banks (the Banks): Bank of Nevada (BON), operating in Southern Nevada; Western Alliance Bank (WAB), operating in Arizona and Northern Nevada, and Torrey Pines Bank (TPB), operating in California. In addition, the Company�� non-bank subsidiaries, Shine Investment Advisory Services, Inc. (Shine) and Western Alliance Equipment Finance (WAEF), offer an array of financial products and services to small to mid-sized businesses and their proprietors, including financial planning, custody and investments, and equipment leasing nationwide. It operates in four segments: Bank of Nevada, Western Alliance Bank, Torrey Pines Bank and Other.

The Company provides a range of banking services, as well as investment advisory services, through its consolidated subsidiaries. As of December 31, 2011, WAL owned an 80% interest in Shine. As of December 31, 2011, the Company owned a 24.9% interest in Miller/Russell & Associates, Inc. (MRA), an investment advisor. MRA provides investment advisory services to individuals, foundations, retirement plans and corporations.

Lending Activities

Through the Company�� banking segments, the Company provides a variety of financial services to customers, including commercial real estate loans, construction and land development loans, commercial loans, and consumer loans. Loans to businesses consisted 89.2% of the total loan portfolio at December 31, 2011. Loans to finance the purchase or refinancing of commercial real estate (CRE) and loans to finance inventory and working capital that are additionally secured by CRE make up the majority of its loan portfolio. These CRE loans are secured by apartment buildings, professional of! fices, industrial facilities, retail centers and other commercial properties. As of December 31, 2011, 49% of its CRE loans were owner-occupied. Owner-occupied commercial real estate loans are loans secured by owner-occupied nonfarm nonresidential properties for which the primary source of repayment (more than 50%) is the cash flow from the ongoing operations and activities conducted by the borrower who owns the property. Non-owner-occupied commercial real estate loans are commercial real estate loans for which the primary source of repayment is nonaffiliated rental income associated with the collateral property.

Construction and land development loans include multi-family apartment projects, industrial/warehouse properties, office buildings, retail centers and medical facilities. Commercial and industrial loans include working capital lines of credit, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans. Commercial loans are primarily originated to small and medium-sized businesses in a variety of industries. Consumer loans are generally offered at a higher rate and shorter term than residential mortgages. Its consumer loans include home equity loans and lines of credit, home improvement loans, credit card loans, and personal lines of credit. As of December 31, 2011, its loan portfolio totaled $4.68 billion, or approximately 68.4% of its total assets.

Investment Activities

All of the Company�� investment securities are classified as available-for-sale (AFS) or held-to-maturity (HTM). As of December 31, 2011, the Company had an investment securities portfolio of $1.48 billion, representing approximately 21.7% of its total assets. As of December 31, 2011, its investment securities portfolio consisted of the United States Government sponsored agency securities, Municipal obligations, Adjustable-rate preferred stock, Mutual funds, Corporate bonds, Direct the United States obligation and government-! sponsored! enterprise (GSE) residential mortgage-backed securities, private label residential mortgage-backed securities, Community Reinvestment Act (CRA) investments, Trust preferred securities, Private label commercial mortgage-backed securities, and Collateralized debt obligations.

Sources of Funds

The Company offers a variety of deposit products, including checking accounts, savings accounts, money market accounts and other types of deposit accounts, including fixed-rate, fixed maturity retail certificates of deposit. As of December 31, 2011, the deposit portfolio consisted of 27.5% non-interest bearing deposits and 72.5% interest-bearing deposits. Non-interest bearing deposits consist of non-interest bearing checking account balances. In addition to its deposit base, it has access to other sources of funding, including Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) advances, repurchase agreements and unsecured lines of credit with other financial institutions.

Financial Products and Services

In addition to traditional commercial banking activities, the Company offers other financial services to customers, including Internet banking, wire transfers, electronic bill payment, lock box services, courier, and cash management services. Through Shine, a full-service financial advisory firm, the Company offers financial planning and investment management.

Hot Cheap Stocks To Watch Right Now: Canadian Imperial Bank of Commerce(CM)

Canadian Imperial Bank of Commerce provides various financial products, services, and advice to individual, small business, commercial, corporate, and institutional clients in Canada and internationally. The company offers retail markets services comprising personal banking, business banking, and wealth management services, as well as investment management services to retail and institutional clients. It also provides wholesale banking services, including credit, capital markets, investment banking, merchant banking, and research products and services to government, institutional, corporate, and retail clients. The company provides its services through its branch network, automated bank machines, mobile banking, and online banking site. As of June 3, 2011, it operated approximately 1,100 branches and 4,000 automated bank machines in Canada. The company was founded in 1867 and is headquartered in Toronto, Canada.

Advisors' Opinion:

• [By ETF Authority]

  Canadian Imperial Bank of Commerce (NYSE:CM): Up 0.89% to $69.33. Canadian Imperial Bank of Commerce provides banking and financial services to consumers, individuals, and corporate clients in Canada and around the world.

Hot Bank Stocks To Invest In 2014: Citigroup Inc.(C)

Citigroup, Inc., a global financial services company, provides consumers, corporations, governments, and institutions with a range of financial products and services. The company operates through two segments, Citicorp and Citi Holdings. The Citicorp segment operates as a global bank for businesses and consumers with two primary businesses, Regional Consumer Banking and Institutional Clients Group. The Regional Consumer Banking business provides traditional banking services, including retail banking, and branded cards in North America, Asia, Latin America, Europe, the Middle East, and Africa. The Institutional Clients Group business provides securities and banking services comprising investment banking and advisory services, lending, debt and equity sales and trading, institutional brokerage, foreign exchange, structured products, cash instruments and related derivatives, and private banking; and transaction services consisting of treasury and trade solutions, and securiti es and fund services. The Citi Holdings segment operates Brokerage and Asset Management, Local Consumer Lending, and Special Asset Pool businesses. The Brokerage and Asset Management Business, through its 49% stake in Morgan Stanley Smith Barney joint venture and Nikko Cordial Securities, offers retail brokerage and asset management services. The Local Consumer Lending business provides residential mortgage loans, retail partner card loans, personal loans, commercial real estate, and other consumer loans, as well as western European cards and retail banking services. The Special Asset Pool business is a portfolio of securities, loans, and other assets. Citigroup Inc. has approximately 200 million customer accounts and operates in approximately 160 countries. The company was founded in 1812 and is based in New York, New York.

Advisors' Opinion:

• [By Elissa]

  Citigroup is an investment on the rise because the company owns more than 1.8 trillion dollars in assets, serves more than 200 million customer accounts, and conducts business in over 140 countries. It operates in the lines of consumer banking and credit, corporate banking, wealth management and securities brokerage.

Is Scotts Miracle-Gro Destined for Greatness?

Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Scotts Miracle-Gro (NYSE: SMG  ) fit the bill? Let's take a look at what its recent results tell us about its potential for future gains.

What we're looking for
The graphs you're about to see tell Scotts' story, and we'll be grading the quality of that story in several ways:

Growth: Are profits, margins, and free cash flow all increasing? Valuation: Is share price growing in line with earnings per share? Opportunities: Is return on equity increasing while debt to equity declines? Dividends: Are dividends consistently growing in a sustainable way?

What the numbers tell you
Now, let's take a look at Scotts' key statistics:

SMG Total Return Price data by YCharts

Passing Criteria

3-Year* Change

Grade

Revenue growth > 30%	(12.8%)	Fail
Improving profit margin	(49.4%)	Fail
Free cash flow growth > Net income growth	(16%) vs. (55.9%)	Pass
Improving EPS	(53.5%)	Fail
Stock growth (+ 15%) < EPS growth	15.8% vs. (53.5%)	Fail

Source: YCharts. * Period begins at end of Q1 2010.

SMG Return on Equity data by YCharts

Passing Criteria

3-Year* Change

Grade

Improving return on equity	(57.9%)	Fail
Declining debt to equity	8.7%	Fail
Dividend growth > 25%	160%	Pass
Free cash flow payout ratio < 50%	52.5%	Fail

Source: YCharts. * Period begins at end of Q1 2010.

How we got here and where we're going
Scotts wilts under the pressure today, earning only two out of nine possible passing grades -- one of which was granted mainly due to a technicality. Despite this weakness, Scotts shares have hit new peaks since emerging from the crash of 2008. But how can Scotts keep outperforming in the future? Will these financial doldrums reverse, or is Scotts' future looking a little bit too weedy? Let's dig a little deeper.

Scotts Miracle-Gro's management blamed colder weather, and a delayed start to the spring season, for the slump in sales, which resulted in a steep revenue miss in the second quarter. Despite major headwinds, the company experienced strong performance from non-weather-affected areas. Purchases in California were up 43%, exemplifying the overall sales performance seen on the West Coast. Consumer purchases were also up 19% year over year as the weather improved during the first month of the third quarter, leaving purchases down 9% year to date. However, the company acknowledged that there's a chance that the shorter season will lead to some lost sales.

Net sales decreased by 5% over the past four quarters, while inventory increased by 2%. Work-in-progress inventory was the fastest-growing segment, and that rose by 11%. Although Scotts shows inventory growth that outpaces revenue growth, the company may also display positive inventory trends if we assume that management sees increased demand on the horizon.

In the past month, Scotts announced a restructuring in the size and composition of its board of directors, a decision previously contemplated, but now accelerated by the resignations of three board members. That could be a red flag for shareholders, as it's not a typical year when so many board members voluntarily step down before first confirming a replacement. With so little real news, this board issue could set the pace for the second half of Scotts' year.

Putting the pieces together
Today, Scotts Miracle-Gro has few of the qualities that make up a great stock; but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy -- or to stay away from a stock that's going nowhere.

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Top 5 Cheap Companies To Invest In Right Now

The S&P 500 (SNPINDEX: ^GSPC  ) has never been higher; in fact, if you had invested in March 2009 -- the Great Recession's market bottom -- you'd be looking at a 150% return in just over four years. That might make you think stocks are too expensive, but if you look at a few individual companies in the S&P 500, that's not necessarily the case.

One way to measure whether a stock is "cheap" is by its price tag. That's not the best measure, though; it's highly influenced by how many shares a company has outstanding. A different metric to use is a company's price-to-earnings ratio. This tells you how much a stock is worth, relative to how much money its company made over the past year. Right now, the average S&P 500 stock trades for a P/E of 19.3.�

But even when we find companies with low P/E ratios, it doesn't necessarily mean they're a good investment -- these stocks could be trading cheaply for a reason. To dig deeper, let's investigate the five cheapest stocks in the S&P 500.

Top 5 Cheap Companies To Invest In Right Now: Express-1 Expedited Solutions Inc.(XPO)

XPO Logistics, Inc. provides third-party logistics services using a network of relationships with ground, sea, and air carriers in the United States, Mexico, and Canada. It operates in three segments: Express-1, Concert Group Logistics, and Bounce Logistics. The Express-1 segment offers ground expedited surface transportation services for freight. It operates a fleet ranging from cargo vans to semi tractor trailer units. The Concert Group Logistics segment provides domestic and international freight forwarding services through a network of independently owned stations. Its domestic freight forwarding services include air charter, expedites, and time sensitive services, as well as cost sensitive services comprising deferred delivery, less than truckload, and full truck load services; and international freight forwarding services consist of on-board courier and air charters, time sensitive services, less-than-container and full-container-loads, and vessel charters. This segm ent also offers documentation on international shipments, customs clearance and banking, trade show shipment management, time definite and customized product distributions, reverse logistics and on site asset recovery projects, installation coordination, freight optimization, and diversity compliance support services. The Bounce Logistics segment provides premium freight brokerage services for truckload shipments. The company serves approximately 4,000 retail, commercial, manufacturing, and industrial customers through 6 U.S. operations centers and 22 agent locations. It offers its services to the automotive manufacturing, automotive components and supplies, commercial printing, durable goods manufacturing, pharmaceuticals, food and consumer products, and high tech sectors. The company was formerly known as Express-1 Expedited Solutions, Inc. and changed its name to XPO Logistics, Inc. in September 2011. XPO Logistics, Inc. was founded in 1989 and is based in Buchanan, Michi gan.

Advisors' Opinion:

• [By Skousen]

  There is nothing exciting about the shipping business except that the growth in this industry can be exponential in an economy that is barely improving. Business conditions for shippers improve much more dramatically than the overall economy, and that’s exactly why you want to own shipping stocks in an economy emerging from recession — like we are right now — and avoid them in a slowing economy. Of all the shipping and transport companies out there right now, I like -1 Expedited Solutions Inc. (AMEX: XPO) the best because it grows faster from a tiny revenue base.

  In November, XPO announced Q3 results that beat by 150%, coming in at 5 cents per share versus an analyst estimate of 2 cents. Revenue rose by 70% to $44.4 million, up from $26.1 million in the same quarter of last year. The stock soared flowing the report and should continue to gain as shipping and freight companies are the first to rebound in an economic recovery. Buy XPO below $3.

Top 5 Cheap Companies To Invest In Right Now: WebMediaBrands Inc(WEBM)

WebMediaBrands Inc., an Internet media company, provides content, education, and career services to media and creative professionals through a portfolio of vertical online properties, communities, and trade shows. The company operates mediabistro.com, a blog network that provides content, education, community, and career resources about media industry verticals, including new media, social media, Facebook, TV news, sports news, advertising, public relations, publishing, design, mobile, and the semantic Web. Its mediabistro.com also includes a job board for media and business professionals focusing on various job categories, such as social media, online/new media, publishing, public relations/marketing, advertising, sales, design, and television. The company also operates a network of online properties, including AdsoftheWorld, DynamicGraphics, LiquidTreat, BrandsoftheWorld, Graphics.com, StepInsideDesign, Creativebits, and GraphicsDesignForum that provide content, educatio n, community, career, and other resources for creative and design professionals. In addition, it offers community, membership, and e-commerce offerings comprising a freelance listing service, a marketplace for designing and purchasing logos, and premium membership services. Further, the company provides online and in-person courses, panels, certificate programs, and video subscription libraries for media and creative professionals. Additionally, it organizes various trade shows that include Semantic Technology Conference, Monetizing Social Media, Social Media Optimization Conference, Social Gaming Summit, and Virtual Goods Summit. The company was formerly known as Jupitermedia Corporation and changed its name to WebMediaBrands Inc. in February 2009. WebMediaBrands Inc. was founded in 1999 and is based in New York, New York.

Best Stocks To Buy For 2014: Horace Mann Educators Corporation(HMN)

Horace Mann Educators Corporation, through its subsidiaries, operates as a multiline insurance company in the United States. The company underwrites and markets personal lines of property and casualty insurance, retirement annuity, and life insurance products. Its products include private passenger automobile and homeowner?s insurance coverage; tax-qualified individual and group annuities in fixed account and combination contracts; and individual and joint whole and term life insurance products. The company offers its products primarily to K-12 teachers, school administrators, education support personnel, and other employees of public schools and their families. It markets its products through its sales force, as well as through independent agents. Horace Mann Educators Corporation was founded in 1945 and is based in Springfield, Illinois.

Advisors' Opinion:

• [By Chris Stuart]

  Horace Mann Educators(HMN), which provides car and homeowners insurance for teachers and other educators, recently lowered its full-year profit forecast because of a spike in tornado- and storm-related disasters during April and May. Management reduced 2011 EPS guidance to $1.10-$1.30 from a previous $1.75-$1.95.

  With the shares down 10% over the past three months, investors might want to consider the recent dislocation as a buying opportunity. At the midrange of restated guidance, the shares are trading for 12.8 times fiscal 2011 estimates and, more importantly, at just 0.7 times book value. TheStreet Ratings has a $20 price target on Horace Mann.

Top 5 Cheap Companies To Invest In Right Now: LifePoint Hospitals Inc.(LPNT)

LifePoint Hospitals Inc., through its subsidiaries, operates general acute care hospitals in non-urban communities in the United States. The company?s hospitals provide a range of medical and surgical services comprising general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, rehabilitation services, and pediatric services, as well as specialized services, such as open-heart surgery, skilled nursing, psychiatric care, and neuro-surgery. Its hospitals also offer outpatient services, including one-day surgery, laboratory, x-ray, respiratory therapy, imaging, sports medicine, and lithotripsy. As of December 31, 2009, LifePoint Hospitals owned or leased 47 hospitals with a total of 5,552 licensed beds in 17 states. The company was founded in 1997 and is headquartered in Brentwood, Tennessee. Lifepoint Hospitals Inc. (NasdaqNM:LPNT) operates independently of HCA Inc. as of May 11, 1999.

Advisors' Opinion:

• [By Vatalyst]

  Life Point Hospitals (LPNT) operates general acute care hospitals in growing, non urban areas in the US. It looks to acquire hospitals where it will be the sole provider to the community.

  On the earnings front, it had a good first quarter, beating analyst estimates. The common stock currently trades at a price to earnings ratio of 10.1, well below its 10 year historical average of 13.5. Its price to book ratio stands at 0.82 with price to cash flow being 5.1.

Top 5 Cheap Companies To Invest In Right Now: CVS Corporation(CVS)

CVS Caremark Corporation operates as a pharmacy services company in the United States. The company?s Pharmacy Services segment provides a range of pharmacy benefit management services, including mail order pharmacy services, specialty pharmacy services, plan design and administration, formulary management, and claims processing; and drug benefits to eligible beneficiaries under the Federal Government?s Medicare Part D program. This segment primarily serves employers, insurance companies, unions, government employee groups, managed care organizations and other sponsors of health benefit plans, and individuals. As of December 31, 2010, it operated 44 retail specialty pharmacy stores, 18 specialty mail order pharmacies, and 4 mail service pharmacies located in 25 states, Puerto Rico, and the District of Columbia. This segment operates business under the CVS Caremark Pharmacy Services, Caremark, CVS Caremark, CarePlus CVS/pharmacy, CarePlus, RxAmerica, Accordant, and TheraCom names. The company?s Retail Pharmacy segment sells prescription drugs, over-the-counter drugs, beauty products and cosmetics, seasonal merchandise, greeting cards, and convenience foods through its pharmacy retail stores and online, as well as offers film and photo finishing, and health care services. This segment operated 7,182 retail drugstores located in 41 states, Puerto Rico, and the District of Columbia; and 560 retail health care clinics in 26 states and the District of Columbia under the MinuteClinic name. It has a strategic alliance with Alere, L.L.C. for the management of disease management program offerings that cover chronic diseases, such as asthma, diabetes, congestive heart failure, and coronary artery disease. CVS Caremark Corporation was founded in 1892 and is based in Woonsocket, Rhode Island.

Now We Know Why Hasbro Was Doing Backflips

Hasbro's (NASDAQ: HAS  ) $112 million deal for a majority stake in small yet profitable mobile games developer Backflip Studios became clearer after the country's second-largest toy maker posted disappointing quarterly results.

Hasbro's 35% drop in toys for boys may explain why it's expanding its licensing deal with Disney (NYSE: DIS  ) for more Marvel and Star Wars playthings, but it also helps explain the push for digital downloads. Kids are moving away from traditional toys, and if that wasn't evident when Mattel (NASDAQ: MAT  ) posted a 12% drop in Barbie sales last week, it is now.

In this video, longtime Fool contributor Rick Munarriz discusses the mad scramble to gain dot-com relevance with young and potentially jaded gamers.

Toys may not be hot, but these retailers are doing just fine
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Mueller Industries Beats Analyst Estimates on EPS

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.

EPS details
EPS came in at $0.90. The three earnings estimates compiled by S&P Capital IQ averaged $0.85 per share. Non-GAAP EPS of $0.90 for Q2 were 91% higher than the prior-year quarter's $0.47 per share. GAAP EPS of $3.23 for Q2 were much higher than the prior-year quarter's $0.47 per share.

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 13.9%, 190 basis points better than the prior-year quarter. Operating margin was 6.5%, 150 basis points better than the prior-year quarter. Net margin was 15.7%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $509.7 million. On the bottom line, the average EPS estimate is $0.73.

Next year's average estimate for revenue is $2.31 billion. The average EPS estimate is $3.32.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 155 members out of 162 rating the stock outperform, and seven members rating it underperform. Among 49 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give Mueller Industries a green thumbs-up, and give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Mueller Industries is buy, with an average price target of $61.00.

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Add Mueller Industries to My Watchlist.

Why United Natural Foods's Earnings May Not Be So Hot

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on United Natural Foods (Nasdaq: UNFI  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, United Natural Foods generated $18.9 million cash while it booked net income of $100.9 million. That means it turned 0.3% of its revenue into FCF. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at United Natural Foods look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 15.3% of operating cash flow coming from questionable sources, United Natural Foods investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 17.4% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 71.0% of cash from operations.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

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We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add United Natural Foods to My Watchlist.

Meet the Man Behind Netflix and "Arrested Development"

Ted Sarandos, chief content officer at Netflix. Source: Netflix.

CEO Reed Hastings is not an iron-fisted dictator at Netflix  (NASDAQ: NFLX  ) . In particular, I'd imagine that Hastings would have an increasingly hard time doing his job without longtime lieutenant Ted Sarandos.

Sarandos is Netflix's longtime chief content officer. He's been in charge of the movie catalog since the year 2000, when Netflix was just a tiny upstart stuffing DVD discs into red mailers. Back then, it was mostly a matter of finding cheap and plentiful sources of any DVD release the company's early customers might want. The so-called first-sale doctrine makes it legal and not terribly difficult to buy and then rent out hard-copy movies.

As Netflix moved deeper and deeper into the digital era, Sarandos' job changed dramatically. That handy doctrine doesn't apply to digital media, so now it's all about licensing the streaming rights to all the right content.

Now Sarandos is asked to curate the vast seas of available content. Sarandos' job is not about bulk distribution anymore. He's being asked to collect the attractive gems and reject movies and TV shows when they're not worth the investment. And he's even creating new content, in the sense that he's greenlighting a hand-picked selection of big-budget production deals.

Sarandos in the spotlight
This expanded role is putting Sarandos in the spotlight more than the old DVD-slinging job ever did. And for good reason, too. When Netflix invests millions of dollars (the exact amounts are rarely disclosed) in a long-term content deal with Walt Disney, Sarandos led the team that negotiated the agreement. If that expensive contract doesn't help Netflix attract and retain the right amount of subscribers, then Sarandos didn't do his homework.

On the other hand, he catches some of the credit when things work out. The big-budget political thriller House of Cards would be one example. Netflix's first foray into high-concept show production is paying off with glowing reviews and Emmy consideration. What about direct sign-up effects? Nobody outside Netflix really knows, but the subscriber trends are certainly pointing in the right direction. If the first season pulled in 1 million subscribers for about seven months of Netflix viewing (well, eight if you account for the 30-day free trial deal), then the show paid for itself.

The importance of Sarandos' work is being noticed. Time magazine put him (but not Reed Hastings) on its 2013 list of the 100 most influential people in the world. To introduce Sarandos for Time's readers, actor Jeffrey Tambor explained how the CCO inspired the cast of Arrested Development: "You always want to have a fan in your corner. For Arrested Development, we were the little engine that could, and we needed a hero. Our hero came along."

Building an audience, one niche at a time
Sarandos gets another turn in the limelight this week as Netflix introduces Orange Is the New Black. The fish-out-of-water dramedy about a suburban socialite being thrust into the harsh reality of a women's prison draws another round of pre-launch critical applause.

Crucially, this show might appeal to a whole different audience than politico thriller House of Cards, quirky comedy Arrested Development, or horror romp Hemlock Grove. It's Sarandos' job to fan out in every direction to find quality eyeball magnets in a wide variety of genres. Use exclusive content to get a variety of different tastes in the door, and then see if the wider catalog gives them a reason to stick around.

That's how Netflix plans to become the next HBO before Time Warner's (NYSE: TWX  ) premium cable service becomes the next Netflix. Yep, it was Sarandos and not Reed Hastings who dropped that aspirational nugget. That's only fitting, since Sarandos sits closest to the actual effort of beating HBO at its own game.

It's also a strikingly different approach from what Amazon.com (NASDAQ: AMZN  ) is doing. When Amazon wanted to dip its toe into the media-production waters, it put together pilot episodes of a baker's dozen candidates and then asked viewers to vote on which shows to move into full production. Amazon is doing production deals by committee, whereas Netflix trusts the creative instincts of Ted Sarandos -- leaning on the oodles of viewership data that also powers the recommendation systems.

The Foolish takeaway
This man is crucial to Netflix's future. He's responsible for the content choices that keep Netflix running -- like the blood coursing through your veins. Every exclusive production deal goes through Ted Sarandos. So does every resurrected TV show, every back-catalog agreement with a big studio, and yes, every decision to part ways with a content provider.

That's why Time tagged this content guru as more important than his own boss. And it's why Netflix investors need to know Ted Sarandos.

The television landscape is changing quickly, with new entrants like Netflix and Amazon.com disrupting traditional networks. The Motley Fool's new free report "Who Will Own the Future of Television?" details the risks and opportunities in TV. Click here to read the full report!

2 New Ways to Treat Psoriasis Symptoms

Obesity is linked to a whole host of health problems, but as its heavy cost on our society becomes apparent, we could see more emphasis placed on healthy living. To that end, a new study links a reduction in body mass to an improvement in psoriasis -- what looks like dry, red itchy skin but is in fact autoimmune condition.

In this video, health-care analyst David Williamson discusses the findings of this study along with a new potential drug aiming to treat psoriasis suffers with arthritis, a common condition that could add another blockbuster product to this biotech stocks portfolio.

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

Pentagon Issues Few New Contracts Tuesday

Continuing to laze its way through summer, the U.S. Department of Defense announced only nine mostly small new contracts Tuesday, totaling just a bit over $87 million in aggregate value. Winners today included:

Lockheed Martin (NYSE: LMT  ) , which was awarded a $53.6 million firm-fixed-price contract to supply the Air Force with six B-2 "line replaceable units, data, material lay-in, and overhaul management." Lockheed will perform task orders under the contract as they are placed, and is expected to continue working on this contract through at least July 2016. The contract may, however, be extended by a two-year option period through July 2018. Lockheed -- again -- this time in the form of its HELLFIRE Systems LLC joint venture with Boeing (NYSE: BA  ) . The HELLFIRE JV was awarded a $7.6 million contract modification to convert HELLFIRE II Romeo Air-to-Ground Missiles to the AGM-114R2 and AGM-114R9E configurations for customers in Australia, Saudi Arabia, and the United Arab Emirates. The Pentagon notes that the cumulative value of the underlying contract here has now passed $873 million. AECOM (NYSE: ACM  ) , URS (NYSE: URS  ) , and two privately held companies, all four of which were awarded the right to compete for $9 million in funds under an indefinite-delivery/indefinite-quantity, firm-fixed-price, multiple-award, foreign-military-sales contract. Under this contract, the winners will bid to complete individual orders to provide "administrative and general management consulting services" to the governments of Australia, Bangladesh, Cambodia, the Maldives, the Marshall Islands, Micronesia, Mongolia, New Zealand, Palau, and Papua New Guinea.

Top Tech Companies To Invest In 2014

Up about 250% year to date, Tesla Motors'� (NASDAQ: TSLA  ) stock has been soaring. In fact, in the last two months alone, the stock has raced upwards by more than 100%. Does this mean it's time to sell the stock?

Fool contributor Daniel Sparks thinks that, as long as the business is meeting or exceeding your expectations, there's no reason for long-term investors to sell -- whether the stock is overvalued or not. And, as Daniel explains in the video below, Tesla's business is firing on all cylinders.

While Tesla continues to disrupt the auto industry, this stock is changing everything we know about professional networking. Watch our jaw-dropping investor alert video today to find out why The Motley Fool's Chief Technology Officer is putting $117,238 of his own money on the table. And why he's so confident this will be a huge winner in 2013 and beyond. Just click here to watch!

Top Tech Companies To Invest In 2014: Nippon Telegraph and Telephone Corporation(NTT)

Nippon Telegraph and Telephone Corporation, together with its subsidiaries, provides telecommunications services to residential and corporate customers in Japan. It offers fixed and mobile voice related services, IP/packet communications services, system integration and network system services, and other telecommunications related services; sells telecommunications equipment; and operates telephone networks. The company provides intra-prefectural and inter-prefectural communications, international communications, mobile telephone services, and related ancillary services; and data communications services, such as strategic planning, systems planning and systems design, and information communications systems and computer networks installation. It also engages in building maintenance, real estate property rental, systems development, leasing, and research and development activities. As of March 31, 2011, the company provided telephone and ISDN services to 34,884 thousand subs cribers; broadband services to 15,059 thousand FLET?S Hikari subscribers and 2,858 thousand FLET?S ADSL subscribers; and mobile phone services to 58,010 thousand subscribers. It also offered Plala Internet connection service to 3,101 thousand subscribers and Open Computer Network service to 8,234 thousand subscribers. Nippon Telegraph and Telephone Corporation was founded in 1952 and is based in Tokyo, Japan.

Top Tech Companies To Invest In 2014: SK TELECOM ADR EACH REP 1/9 KRW500(CIT)

SK Telecom Co., Ltd. provides wireless telecommunications services using code division multiple access (CDMA) and wide-band CDMA technologies. It offers cellular voice services, such as wireless voice transmission services; and wireless global roaming services. The company also provides wireless data transmission services, such as wireless Internet access services, which allow subscribers to access online digital contents and services, as well as to send and receive text and multimedia messages. In addition, it offers broadband Internet and fixed-line telephone services, such as video-on-demand and IP TV services; and local, domestic, and international long-distance fixed-line telephone services to residential and commercial subscribers. Further, the company provides wireless entertainment-related contents and services, wireless finance-related contents and m-commerce services, and wireless news and search services; and international calling services, such as direct-dial, pre and post paid card calling services, bundled services for corporate customers, voice services using Internet protocol, Web-to-phone services, and data services. Additionally, it offers satellite digital media broadcasting services; telematics services; and fixed-line and online community portal services. The company also operates 11th Street, an online shopping mall; and T Store, an online open marketplace for mobile applications. As of March 31, 2011, SK Telecom Co. had 26 million wireless subscribers. It has strategic alliances with Bridge Alliance; Orange SA; Telecom Italia Mobile S.p.A.; T-Mobile International AG & Co; and Teliasonera Mobile Networks AB. The company was formerly known as Korea Mobile Telecommunications Co., Ltd. and changed its name to SK Telecom Co., Ltd. in March 1997. SK Telecom Co., Ltd. was founded in 1984 and is based in Seoul, South Korea.

Advisors' Opinion:

• [By Goodwin]

  Morgan Stanley looks cheap at 10X trailing earnings and 8.6X forward earnings at a price to book value of just .85X. MS is actually much more highly leveraged than it was pre-crisis and even though the company could be through the worst of the mortgage mess that brought the shares to around $10 in the summer of 2008, the shares are not for the faint of heart and the risks are still quite pertinent.

Best Stocks To Watch For 2014: Responsys Inc.(MKTG)

Responsys, Inc. provides on-demand software and professional services primarily in North America, the Asia Pacific, and Europe. The company offers Responsys Interact suite, a software-as-a-service platform that provides marketers with a set of integrated applications to create, execute, optimize, and automate marketing campaigns in various channels, including email, mobile, social, and the Web. Its platform also leverages third-party applications and data from real-time sources allowing customers to deliver targeted content to its customers and known prospects as part of their interactive marketing campaigns. In addition, it provides professional services, such as strategic, creative, deliverability, campaign, and education services. The company offers its on-demand software and professional services to retail and consumer, travel, financial services, and technology industries through a direct sales force. Responsys, Inc. was founded in 1998 and is headquartered in San Bru no, California.

Top Tech Companies To Invest In 2014: CSG Systems International Inc.(CSGS)

CSG Systems International, Inc. provides business support solutions primarily to the communications industry. Its suite of solutions comprises Advanced Convergent Platform, a billing and customer care, and business optimization platform; Singleview suite, an integrated customer care, billing, and real-time rating and charging solution; Total Service Mediation (TSM) framework supports offline, and real-time mediation requirements, as well as service activation; and Wholesale Business Management (WBM) solution, a wholesale settlement and routing solution that handles various types of traffic consisting of voice, data, and content. The company?s solutions also include customer interaction management solutions that deliver interactive voice, SMS/text, print, email, Web, and fax messages on behalf of clients; analytics and intelligence services suite delivers an approach for enhancing the customer experience, increasing sales opportunities, and optimizing business; and Content Direct solutions, which enable content providers to manage subscriber preferences and offer digital content. It also licenses software products, such as WBM solution, TSM, and Singleview products; and offers professional services to implement these software products. The company also provides its services to financial services, healthcare, utilities, entertainment, and content distribution industries. It operates in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company was founded in 1994 and is headquartered in Englewood, Colorado.

Mobile Internet Usage Hits New Heights in China

As Internet access spreads across China, its citizens are embracing the mobile Internet as never before.

According to the China Internet Network Information Center (CNNIC), a state-affiliated research organization, 464 million people have mobile access to the Internet. With total Internet penetration at 591 million, that means about four out of every five Internet users are accessing the Internet through their smartphones.

Perhaps even more telling, the report says that seven out of 10 Chinese say they first experienced the Internet on their mobile devices -- not on a desktop computer.

These changes have come only of late. Looking at the first six months of 2013, CNNIC credits the rise of mobile Internet penetration to the expansion of 3G-wireless communication, increases in public and private Wi-fi networks, and innovative apps.

Still, the country seems far away from reaching full Internet penetration through any and all devices. Currently, China's population totals more than 1.35 billion people.

Nonetheless, the country has made strides. As the report notes, the overall penetration rate has grown from 41.1%, to 42.2%. While seemingly small, CNNIC still predicts the number of Internet users to grow to 800 million by 2015.

And, as Internet usage spreads, mobile Internet usage should continue to grow, too.

10 Best Biotech Stocks For 2014

 A "stealth" uptrend we've been tracking for more than a year just hit an important new high...

 

As longtime readers know, biotech is one of the greatest "boom and bust" sectors known to man... Every few years, it draws in "hot money," fueling a huge run.

 

Since 1983, the sector has seen four triple-digit runs... and one quadruple-digit run of 1,347% in the early 1990s. The busts were equally spectacular, taking the entire sector down by as much as 70%.

 

Ride the booms and avoid (or even short) the busts, and you can make a fortune.

 

10 Best Biotech Stocks For 2014: Johnson & Johnson(JNJ)

Johnson & Johnson engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The Consumer segment provides products used in baby care, skin care, oral care, wound care, and women?s health care fields, as well as nutritional, over-the-counter pharmaceutical products, and wellness and prevention platforms under the brands of JOHNSON?S, AVEENO, CLEAN & CLEAR, JOHNSON?S Adult, NEUTROGENA, RoC, LUBRIDERM, DABAO, LISTERINE, REACH, BAND-AID, CAREFREE, STAYFREE, SPLENDA, TYLENOL, SUDAFED, ZYRTEC, MOTRIN IB, and PEPCID AC. The Pharmaceutical segment offers products in various therapeutic areas, such as anti-infective, antipsychotic, contraceptive, dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain management, and virology. Its principal products include REMICADE for the treatment of immune me diated inflammatory diseases; STELARA for the treatment of moderate to severe plaque psoriasis; SIMPONI, a treatment for adults with moderate to severe rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis; VELCADE for the treatment of multiple myeloma; PREZISTA and INTELENCE for treating HIV/AIDS patients; NUCYNTA for moderate to severe acute pain; INVEGA SUSTENNAtm for the acute and maintenance treatment of schizophrenia in adults; RISPERDAL CONSTA for the management of bipolar I disorder and schizophrenia; and PROCRIT to stimulate red blood cell production. The Medical Devices and Diagnostics segment primarily offers circulatory disease management products; orthopaedic joint reconstruction, spinal care, and sports medicine products; surgical care, aesthetics, and women?s health products; blood glucose monitoring and insulin delivery products; professional diagnostic products; and disposable contact lenses. The company was founded in 1886 and is based in Ne w Brunswick, New Jersey.

Advisors' Opinion:

• [By Steven Goldberg]

  Johnson & Johnson (symbol JNJ, price $85.12, yield 3.1%), the world's largest health care company, makes and sells pharmaceuticals, medical devices and diagnostics, as well as consumer products. The stock trades at 14 times analysts' estimated earnings for the coming 12 months. Few of J&J's patents are expiring soon, and the company has launched several new drugs that have the potential to become blockbusters. J&J just hiked its quarterly dividend by 8.2%, to 66 cents per share. The stock is, incidentally, a member of the Dow Jones industrial average. (Share prices and related data are as of April 26; the yield is based on a recently announced increase in the dividend rate.)

10 Best Biotech Stocks For 2014: NeoStem Inc (NBS)

NeoStem, Inc., incorporated on September 18, 1980, operates in cellular therapy industry. Cellular therapy addresses the process by which new cells are introduced into a tissue to prevent or treat disease, or regenerate damaged or aged tissue, and consists of a separate therapeutic technology platform in addition to pharmaceuticals, biologics and medical devices. The Company�� business model includes the development of novel cell therapy products, as well as operating a contract development and manufacturing organization (CDMO) providing services to others in the regenerative medicine industry. Progenitor Cell Therapy, LLC, the Company�� wholly owned subsidiary (PCT), is a CDMO in the cellular therapy industry. PCT has provided pre-clinical and clinical current Good Manufacturing Practice (cGMP) development and manufacturing services to over 100 clients advancing regenerative medicine product candidates through rigorous quality standards all the way through to human testing.

PCT has two cGMP, cell therapy research, development, and manufacturing facilities in New Jersey and California, serving the cell therapy community with integrated and regulatory compliant distribution capabilities. Its core competencies in the cellular therapy industry include manufacturing of cell therapy-based products, product and process development, cell and tissue processing, regulatory support, storage, distribution and delivery and consulting services. The Company�� wholly-owned subsidiary, Amorcyte, LLC (Amorcyte) is developing its own cell therapy, AMR-001, for the treatment of cardiovascular disease. AMR-001 represents its clinically advanced therapeutic product candidate and enrollment for its Phase II PreSERVE clinical trial to investigate AMR-001's safety and efficacy in preserving heart function after a heart attack in a particular type of post Acute Myocardial Infarction (AMI) patients.

Through the Company�� subsidiary, Athelos Corporation (Athelos), the Company is collaborating w! ith Becton-Dickinson in early stage clinical development of a therapy utilizing T-cells, collaborating for autoimmune and inflammatory conditions, including but not limited to, graft vs. host disease, type 1 diabetes, steroid resistant asthma, lupus, multiple sclerosis and solid organ transplant rejection. The Company�� pre-clinical assets include its Very Small Embryonic Like (VSEL) Technology platform. The Company has basic research and development capabilities, manufacturing facilities on both the east and west coast of the United States.

5 Best Stocks To Buy Right Now: Medivation Inc.(MDVN)

Medivation, Inc., a biopharmaceutical company, focuses on the development of small molecule drugs for the treatment of castration-resistant prostate cancer, Alzheimer?s disease, and Huntington disease. The company?s product candidates under clinical development include MDV3100, which is in Phase 3 development for the treatment of castration-resistant prostate cancer; and dimebon, which is in Phase 3 clinical trial for the treatment of Alzheimer?s disease and Huntington disease. It has collaboration agreements with Pfizer Inc. to develop and commercialize dimebon; and Astellas Pharma Inc. to develop and commercialize MDV3100. The company was founded in 2003 and is based in San Francisco, California.

10 Best Biotech Stocks For 2014: Gilead Sciences Inc.(GILD)

Gilead Sciences, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutics for the treatment of life threatening diseases worldwide. Its products include Atripla, Truvada, Viread, Emtriva for the treatment of human immunodeficiency virus infection in adults; Hepsera, an oral formulation for the treatment of chronic hepatitis B; AmBisome, a amphotericin B liposome injection to treat invasive fungal infections; Letairis, an endothelin receptor antagonist for the treatment of pulmonary arterial hypertension; Ranexa for the treatment of chronic angina; Vistide, an antiviral medication for the treatment of cytomegalovirus retinitis in patients with AIDS; and Cayston, an inhaled antibiotic used as a treatment to enhance respiratory systems. The company?s products also comprise Tamiflu, an oral antiviral for the treatment and prevention of influenza A and B; Macugen, an intravitreal injection for the treatment of neovascular a ge-related macular degeneration; and Lexiscan/Rapiscan, an injection used as a pharmacologic stress agent in radionuclide myocardial perfusion imaging. Its products under the Phase III clinical trials consist of Cobicistat, a pharmacoenhancer that is under evaluation as a boosting agent for HIV medicines; Elvitegravir, an oral integrase inhibitor being evaluated as part of combination therapy for HIV; Integrase Single-Tablet, a ?Quad? regimen of elvitegravir, cobicistat, tenofovir disoproxil fumarate, and emtricitabine for the treatment of HIV/AIDS in treatment-naive patients; and Aztreonam for inhalation solution for the treatment of cystic fibrosis patients with Pseudomonas aeruginosa. The company?s Phase II clinical trials products comprise Cicletanine, Ranolazine, and Aztreonam, as well as GS 9190, GS 9256, and GS 9451. Its Phase I clinical trial products include GS 7340, GS 5885, GS 6620, GS 9620, and GS 6624. The company was founded in 1987 and is headquartered in Fost er City, California.

Advisors' Opinion:

• [By TheStreet Staff]

   Gilead Sciences (GILD) hits a snag that delays the filing, approval or launch of its all-oral Hepatitis C drug regimen. Investors also wake up to the realization that the commercial market for Hep C drugs is far smaller than expected. Gilead shares close in the red for the year. This is my Black Swan prediction for 2013.

10 Best Biotech Stocks For 2014: Cubist Pharmaceuticals Inc.(CBST)

Cubist Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the research, development, and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment. The company markets CUBICIN (daptomycin for injection), a once-daily, bactericidal, intravenous, antibiotic with activity against gram-positive organisms, including methicillin-resistant staphylococcus aureus. Its clinical development product pipeline consists of CXA-201, which is in the phase III clinical trial for patients with complicated urinary tract infections; and in phase II clinical trial for patients with complicated abdominal infections. The company is also developing CXA-201 for the treatment of hospital acquired pneumonia. In addition, its product under development comprises CB-183,315, an oral, bactericidal lipopeptide with in vitro bactericidal activity against C. difficile, for the treatment of clostridium difficile-associated diarrhea (CDAD). Further , the company?s pre-clinical programs include therapies to treat various bacterial infections and agents to treat acute pain. Additionally, it promotes MERREM I.V. (meropenem for injection), a carbapenem class intravenous antibiotic, in the United States under a commercial services agreement with AstraZeneca Pharmaceuticals, LP; and DIFICID as the treatment for CDAD in adults under the co-promotion agreement with Optimer Pharmaceuticals, Inc. The company also has collaborations with Forma Therapeutics, Inc. to discover and develop antibacterial compounds; an agreement with the Broad Institute to transform natural products discovery; a collaboration with Hydra Biosciences, Inc., to develop ion channel drugs; and a collaboration agreement with Alnylam Pharmaceuticals, Inc., for the development and commercialization of Alnylam's RNAi therapeutics as a therapy for the treatment of respiratory syncytial virus. The company was founded in 1992 and is headquartered in Lexington, Mas sachusetts.

Advisors' Opinion:

• [By Melly Alazraki]

  Cubist Pharmaceuticals (CBST)rounds out the top five best biotech performers in the S&P 1500, according to Capital IQ, with a 16.3% return year-to-date. The smaller company ($1.48 billion market cap) relies on its anti-bacterial drugCubicin, used in hospitals for difficult-to-treat infections, including MRSA, formost of its revenue.
  
  While the company'spipelineconsists of otherantibiotic potentialsto address this unmet need area of severe infections, its revenue source is in jeopardy: Generic drugmaker Teva Phamaceutical (TEVA) istrying to enter the market.

• [By Dug]

  Cubist Pharmaceuticals(CBST) is a major player in anti-infectives, which prevent and treat diseases, specifically those caused by drug-resistant pathogens. For example, Cubist's major product, Cubicin, is used to treat complicated skin and skin structure infections as well as bacterimia.

  The company has two anti-biotics that are in stage two of FDA approval. Since 2008, Cubist has grown sales and earnings per share 29% and 24% annually, on average. Its stock delivered annualized gains of 8.9% over that period. Recent deterioration of growth has led to a sell-off in Cubist, disconcerting investors.

  Its stock is down 4% over the past three months. Fourth-quarter adjusted earnings decreased 28% year-over-year, but did beat the consensus estimate by 38%. The top-line, down 3%, missed consensus by 1.1%. The operating margin strengthened during the quarter, from 28% to 29%, indicating pricing strength. Jefferies is optimistic about the outcome of a patent litigation lawsuit, which has a trial date in April, and considers the small-cap undervalued, at just 13-times forward earnings, a 39% peer discount. But, it considers reliance on Cubicin a concentrated risk.

  Bullish Scenario: Jefferies expects Varian to rise 39% to $31.

  Bearish Scenario: ThinkEquity foresees a drop of 10% to $20.

10 Best Biotech Stocks For 2014: Bioanalytical Systems Inc.(BASI)

Bioanalytical Systems, Inc. provides drug discovery and development services for pharmaceutical, biotechnology, academic, and government organizations primarily in North America, the Pacific Rim, and Europe. The company operates in two segments, Contract Research Services and Research Products. The Contract Research Services segment offers various services, including product characterization, method development, and validation; bioanalytical testing to measure drug and metabolite concentrations in complex biological matrices; stability testing to establish and confirm product purity, potency, and shelf life; in vivo sampling services for the continuous monitoring of chemical changes in life; and pharmacokinetic and safety testing services, as well as provides screening and pharmacological testing, preclinical safety testing, formulation development, regulatory compliance, and quality control testing services. The Research Products segment offers analytical products compris ing liquid chromatographic and electrochemical instruments with associated accessories; in vivo sampling products, such as Culex family of automated in vivo sampling and dosing instruments; and Vetronics? products consisting of instruments and related software to monitor and diagnose cardiac function, and measure other vital physiological parameters in cats and dogs. The company was founded in 1974 and is headquartered in West Lafayette, Indiana.

Advisors' Opinion:

• [By Tom Bishop]

  Bioanalytical Systems, Inc. offers one of the top rated biotechnology stocks found on the NASDAQ market. This stock now stands close to three hundred percent over the recent fifty two week low.

10 Best Biotech Stocks For 2014: Navidea Biopharmaceuticals Inc (NAVB.A)

Navidea Biopharmaceuticals, Inc. (Navidea), formerly Neoprobe Corporation, incorporated in 1983, is a biopharmaceutical company focused on the development and commercialization of precision diagnostic agents. As of December 31, 2011, the Company�� radiopharmaceutical development programs included Lymphoseek (Lymphoseek, Kit for the Preparation of Technetium Tc99m for Injection), a radiopharmaceutical agent for lymph node mapping; AZD4694, an imaging agent, and RIGScan, a tumor antigen-specific targeting agent. In January 2012, the Company executed an option agreement with Alseres Pharmaceuticals, Inc. (Alseres) to license [123I]-E-IACFT Injection, also called Altropane, an Iodine-123 radiolabeled imaging agent, being developed as an aid in the diagnosis of Parkinson�� disease, movement disorders and dementia. In August 2011, the Company sold its gamma detection device line of business (the GDS Business) to Devicor Medical Products, Inc.

Lymphoseek

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Navidea�� pipeline includes clinical-stage radiopharmaceutical agents used to identify the presence and status of disease. Lymphoseek (Kit for the Preparation of Technetium Tc99m for Injection) is a lymph node targeting agent intended for use in intraoperative lymphatic mapping (ILM) procedures and lymphoscintigraphy employed in the overall diagnostic assessment of certain solid tumor cancers. The lymph system is a component of the body�� immune system. The key components of the lymph system are lymph nodes-small anatomic structures that contain disease-fighting lymphocytes, filter lymph of bacteria and cancer cells, and signal infection in response to heightened levels of pathogens. In Navidea�� Phase III clinical studies of Lymphoseek, it detected over 99% of positive nodes identified by vital blue dye (VBD). As of December 31, 2011, Navidea, in co-operation with UC, San Diego affiliate (UCSD), completed or initiated five Phase I clinical trials, one multi-c enter Phase II trial and three multi-center Phase II trial! s ! involving Lymphoseek. Two Phase III studies were completed in subjects with breast cancer and melanoma. During the year ended December 31, 2011, data from NEO3-09 were released, which indicated that all primary and secondary endpoints for the study were met. As of December 31, 2011, third Phase III clinical trial for Lymphoseek in subjects with head and neck squamous cell carcinoma (NEO3-06) was in progress.

AZD4694

AZD4694 is a Fluorine-18 labeled precision radiopharmaceutical candidate for use in the imaging and evaluation of patients with signs or symptoms of cognitive impairment such as Alzheimer's disease (AD). It binds to beta-amyloid deposits in the brain that can then be imaged in positron emission tomography (PET) scans. Amyloid plaque pathology is a required feature of AD and the presence of amyloid pathology is a supportive feature for diagnosis of probable AD. Patients who are negative for amyloid pathology do not have AD. AZD4694 has b een studied in several clinical trials. Clinical studies through Phase IIa have included more than 80 patients to date, both suspected AD patients and healthy volunteers. No significant adverse events have been observed. Results suggest that AZD4694 has the ability to image patients quickly and safely with high sensitivity.

RadioImmunoGuided Surgery

As of December 31, 2011, RIGScan had been studied in a number of clinical trials, including Phase III studies. Navidea has conducted two Phase III studies, NEO2-13 and NEO2-14, of RIGScan in patients with primary and metastatic colorectal cancer, respectively. Both studies were multi-institutional involving cancer treatment institutions in the United States, Israel, and the European Union.

The Company competes with Pharmalucence, Eli Lilly, Bayer Schering, General Electric and GE Healthcare.

10 Best Biotech Stocks For 2014: Organovo Holdings Inc (ONVO.PK)

Organovo Holdings, Inc. (Organovo), formerly Real Estate Restoration & Rental, Inc., incorporated in 2007, is a development-stage company. The Company has developed and is commercializing a platform technology for the generation of three-dimensional (3D) human tissues that can be employed in drug discovery and development, biological research, and as therapeutic implants for the treatment of damaged or degenerating tissues and organs. On December 28, 2011, Real Estate Restoration and Rental, Inc.�� (RERR) entered into an Agreement and Plan of Merger, pursuant to which RERR merged with its, wholly owned subsidiary, Organovo (Merger Sub). On February 8, 2012, the Company merged with and into Organovo Acquisition Corp. (Acquisition Corp.), a wholly owned subsidiary of Organovo, with the Company surviving the merger as a wholly owned subsidiary of Organovo Holdings (the Merger). As a result of the Merger, Organovo acquired the business of Organovo, Inc.

The C ompany has collaborative research agreements with Pfizer, Inc. (Pfizer) and United Therapeutic Corporation (Unither). As of March 31, 2012, it has five federal grants, including Small Business Innovation Research grants and developed the NovoGen MMX Bioprinter (its first-generation 3D bioprinter). The Company is engaged in the development of specific 3D human tissues to aid Pfizer in discovery of therapies in two areas of interest. In addition, in October 2011, it entered into a research agreement with Unither to establish and conduct a research program to discover treatments for pulmonary hypertension using its NovoGen MMX Bioprinter technology. Additionally, under the research agreement with Unither, the Company granted Unither an option to acquire from the Company a worldwide, royalty-bearing license in certain intellectual property created under the research agreement solely for use in the treatment or prevention of pulmonary hypertension and all other lung diseases.

The Company�� NovoGen MMX Bioprinter is an aut! om! ated device that enables the fabrication of three-dimensional (3D) living tissues comprised of mammalian cells. A custom graphic user interface (GUI) facilitates the 3D design and execution of scripts that direct precision movement of the dispensing heads to deposit cellular building blocks (bio-ink) or supporting hydrogel. The Company is using a third party manufacturer, Invetech Pty., of Melbourne, Australia, to manufacture its NovoGen MMX Bioprinter. Its bioprinting technology and surrounding intellectual property and commercial rights serve as a platform for product generation across multiple markets that employ cell- and tissue-based products and services.

The Company competes with Organogenesis, Advanced BioHealing, Tengion, Genzyme, HumaCyte and Cytograft Tissue Engineering.

10 Best Biotech Stocks For 2014: Telik Inc (TELK.PH)

Telik, Inc. (Telik), incorporated in 1988, is a clinical-stage drug development company focused on discovering and developing small molecule drugs to treat cancer. The Company discovers its product candidates using the Company�� drug discovery technology, Target-Related Affinity Profiling (TRAP). TELINTRA, its principal drug product candidate in clinical development, is a small molecule glutathione analog inhibitor of the enzyme glutathione S-transferase P1-1 (GST P1-1). TELCYTA, its other product candidate, is a small molecule cancer drug product candidate designed to be activated in cancer cells.

Clinical Product Development

TELINTRA is the Company�� lead small molecule product candidate in clinical development for the treatment of blood disorders, including cancer. It has a mechanism of action and acts by inhibiting GST P1-1, an enzyme that is involved in the control of cellular growth and differentiation. Inhibition of GST P1-1 results in the activation of the signaling molecule Jun kinase, a regulator of the function of blood precursor cells. Preclinical tests show that TELINTRA is capable of causing the death or apoptosis of leukemic or malignant blood cells, while stimulating the growth and development of normal blood precursor cells. TELINTRA has been studied in Myelodysplastic Syndrome (MDS) using two formulations. A liposomal formulation was developed for intravenous administration of TELINTRA and was used in Phase I and Phase II studies in MDS patients. The results from the Phase II intravenous liposomal TELINTRA clinical trials demonstrated that TELINTRA treatment was associated with improvement in all three types of blood cell levels in patients with all types of MDS, including those in intermediate and high-risk groups. An oral dosage formulation (tablet) was subsequently developed and results from a Phase I study with TELINTRA tablets showed clinical activity and the formulation to be well tole rated. In June 2011, the Company initiated a Phase II clini! c! al trial to evaluate TELINTRA tablets. In October 2011, the Company initiated an additional Phase IIb clinical trial to evaluate TELINTRA tablets. '

The activity and safety profile of tablet formulation allowed the Company to complete a Phase II trial of TELINTRA tablets in MDS. The primary objective of the Phase II TELINTRA tablet study was to determine the efficacy of TELINTRA. A multivariate logistic regression analysis was conducted to identify MDS disease prognostic factors associated with erythroid improvement response rates, including prior MDS treatment, age, gender, the international prognostic scoring system (IPSS), risk, Eastern Cooperative Group performance status, years from MDS diagnosis, MDS World Health Organization subtypes, anemia only versus anemia plus other cytopenias, dose schedule and starting dose. Results from this study show that TELINTRA is the first GSTP1-1 enzyme inhibitor shown to cause clinically reductions in red blood cell transf usions, including transfusion independence in low to intermediate-1 risk MDS patients, as well as improvement in platelet count and white blood cell levels in certain patients. TELINTRA, administered orally twice daily, appeared to be convenient and flexible for chronic treatment administration.

TELCYTA is a small molecule drug product candidate that the Company is developed for the treatment of cancer. TELCYTA binds to GST. TELCYTA has been evaluated in multiple Phase II and Phase III clinical trials, including trials using TELCYTA as monotherapy and in combination regimens in ovarian, non-small cell lung, breast and colorectal cancer. Results from these clinical trials indicate that TELCYTA monotherapy was generally well-tolerated, with mostly mild to moderate side effects, particularly when compared to the side effects and toxicities of standard chemotherapeutic drugs. When TELCYTA was evaluated in combination with standard chemotherapeutic drugs, the tolera bility of the combinations was similar to that expected! of e! ac! h drug ! alone.

Clinical activity including objective tumor responses and/or disease stabilization was reported in the TELCYTA Phase II trials; however, TELCYTA did not meet its primary endpoints in the Phase III studies. Positive results from a Phase I-IIa multicenter, dose-ranging study of TELCYTA in combination with carboplatin and paclitaxel as first-line therapy for patients with non-small cell lung cancer, or NSCLC, were published in a peer reviewed publication. Clinical data demonstrated positive results of TELCYTA in combination with carboplatin and paclitaxel in the treatment of first-line lung cancer followed by TELCYTA maintenance therapy. As of December 31, 2011, the Company had an on-going investigator-led study at a single site of TELCYTA in patients with refractory or relapsed mantle cell lymphoma, diffuse B cell lymphoma, and multiple myeloma.

Preclinical Drug Product Development

The Company has a small molecule compound, TLK60 404, in preclinical development that inhibits both Aurora kinase and VEGFR kinase. Aurora kinase is a signaling enzyme whose function is required for cancer cell division, while VEGF plays a key role in tumor blood vessel formation, ensuring an adequate supply of nutrients to support tumor growth. These lead compounds prevented tumor growth in preclinical models of human colon cancer and human leukemia by inhibiting both Aurora kinase and VEGFR kinase. A development drug product candidate, TLK60404, has been selected.

The Company, using its TRAP technology has discovered TLK60357, a novel, potent small molecule inhibitor of cell division. TLK60357 inhibits the formation of microtubules that are necessary for cancer cell growth leading to persistent G2/M cancer cell cycle block and subsequent cell death. This compound demonstrates potent broad-spectrum anticancer activity against a number of human cancer cells. This compound also displays oral efficacy in multipl e, standard preclinical models of cancer. TLK6059! 6, a pote! nt! VGFR kin! ase inhibitor, blocks the formation of new blood vessels in tumors. Oral administration of TLK60596 to animal models of human colon cancer reduced tumor growth.

10 Best Biotech Stocks For 2014: Sanofi(SNY)

sanofi-aventis engages in the discovery, development, and distribution of therapeutic solutions to improve the lives of everyone. The company offers a range of healthcare assets, including a broad-based product portfolio in prescription drugs, OTC/OTX, generics, vaccines, and animal health. It has a strategic alliance with Regulus Therapeutics Inc. to discover, develop, and commercialize micro-RNA therapeutics, initially in fibrosis. The company was founded in 1970 and is headquartered in Paris, France.

Advisors' Opinion:

• [By Michael]

  Sanofi is a global and diversified healthcare company. Cramer holds 2,600 shares of SNY stocks. SNY has a dividend yield of 5.40% and returned 7.19% since the beginning of this year. It has a market cap of $87.11B and a P/E ratio of 14.42. Ken Fisher invested nearly $600 million in SNY.