Best and Worst Buys of January 2014

There is no shortage of deals in January. So if you didn't bust your budget during the holidays, here's what you can expect to find on sale this month. If you've been eyeing any of these items, now is to buy them at great discounts.

SEE ALSO: 10 Online Shopping Traps to Avoid

Broadway tickets. You can get two tickets for the price of one to several popular shows during Broadway Week in January, which actually lasts two weeks from January 21 to February 6. Some shows will even offer the discount for up to four weeks, says Erich Jungwirth, chief operating officer of the Lyric Theatre (formerly Foxwoods Theatre), Broadway's largest theater and home to Spider Man Turn Off the Dark. This biannual event also happens in September, giving theater-goers another chance to score two-for-one tickets. January and February are good months, in general, to see Broadway shows for less because it's off-season and ticket prices tend to drop. See How to Save on Tickets to Broadway Shows for more tips.

Christmas décor. After staring at Christmas decorations all December, it might be hard to think about stocking up on holiday items. But January is the ideal time to find ornaments, garland, artificial trees and décor marked down as much as 75%, according to dealnews.com. If you don't mind the red-and-green theme or chocolate shaped like a wreath, you can load up on deeply discounted edible holiday treats in January, too.

Electronics. You'll see discounts on 2013 models of cameras, audio equipment, tablets and other electronics as new versions debut this month at the Consumer Electronics Show. Dealnews.com recommends watching for announcement of new models so you know which 2013-model devices will go on sale.

Fitness equipment. Retailers know that people usually resolve to lose weight in the new year, so they tend to have sales on fitness equipment to lure consumers into stores in January. According to dealnews.com, you'll find stationary bikes, treadmills, elliptical trainers, complete home gyms, and training accessories and DVDs that are marked 30% to 70% off -- and many deals extend into February.

Furniture. Many furniture manufacturers release new styles in February, so retailers must clear out old, bulky inventory in January. So you'll see some of the most significant price cuts of the year in January, according to dealnews.com. Brett Billick, senior director of Deals2Buy.com, says some stores have discounts of up to 60%, and many offer incentives such as 0% financing.

Gift cards. Several Web sites such as Gift Card Granny buy gift cards for a percentage of the remaining value and sell them at a discount. There's typically a flood of gift cards being sold to these sites after the holidays, says Luke Knowles, the founder of Gift Card Granny. The glut of inventory on gift-card reseller sites makes it a great buying opportunity for people looking to get better-than-usual discounts on gift cards. So if you find, say, a $50 Macy's gift card for just $40, you'll automatically save $10 the next time you shop there. See 3 Simple Steps to Cash in Unused Gift Cards.

Linens. Take advantage of "white sales" this month to get new towels or sheets if the ones you have aren't looking so white anymore. Expect to see discounts ranging from 20% to 75%, with markdowns extending to a wide range of home goods.

Winter apparel. Apparel retailers aim to clear out winter gear and restock their racks by the third week of January, says Billick of Deals2Buy.com. To do so, they have clearance sales and offer plenty of coupons and merchandise promotions, such as two-for-one deals, he says. Expect sales that take up to 80% off winter apparel, and look for coupons that slash up to an extra 60% off, according to dealnews.com.

Wait a little longer to buy ...

Big-screen HDTVs. Dealnews.com doesn't expect prices to drop dramatically on name-brand HDTVs that are 55 inches or bigger until early February. Look for prices to be about 10% lower than Black Friday prices.

Gaming consoles. With demand still strong for the new Xbox One and PlayStation 4, dealnews.com doesn't expect to see any discounts on these gaming consoles until April. Even then, discounts will only be about 10%.

Develop a polices and procedures manual stat

Hi Gladys, I've owned a landscaping business for 14 years. I make a decent living and consider myself to be successful. But, I fall short in handling employee situations. I usually don't address issues related to vacation, time off or worker's comp until something happens. And I often don't give a reason for terminating an employee. I know that this is no way to run a business and friends have said that I should have the rules and regulations written down and copies given to employees so that they know what's up. That just seems like a lot of highbrow foolishness for a small outfit like mine. What do you think? -- S. E.

I often meet folks who start a business and think that because it's a small operation it doesn't need to operate as a structured business. Nothing could be further from the truth. If you are hiring people to work for you, both you and your workers should have something written to keep you both on the right track. This written document is called a policy and procedures employee manual.

You wrote, "seems like a lot of highbrow foolishness." Maybe it would be more palatable to you if you change how you think of a written polices manual. Instead of viewing it as a foolish intrusion, consider it as a way of expressing your vision and goals for your company and your employees. Also think of it as a tool that can help to keep you on track toward the growth of your company.

You can find books and templates to guide you in developing an employment policies manual. Here are a few things that come to my mind that can get you off to a good start:

Terminating an employee can be a tough situation and it is important to know what the law has to say about this.

As far as I know, employment in the United States is considered "at will." This means that either party is free to end the employment with or without notice, as long as there is no binding contract. Double check this with a lawyer and make sure that you and your workers fall under the "at will" rule in ! the state where you do business.

Worker's compensation, unemployment benefits (if you offer any), and termination polices on both parts should be spelled out in detail so that you are clear on the pros and cons of being an employee of your company.

I recall an entrepreneur called me one time to see how she could go about suing a former employee to prohibit him from collecting unemployment. During our conversation, I discovered that the woman had eliminated several positions due to a decrease in her business. She got upset with me when I told her that her former employee was entitled to unemployment comp.

In another case, I remember working with an entrepreneur who had a couple of employees who were working full time in his business and collecting unemployment at the same time. When I questioned the business owner, he seemed clueless as to how his employees could also be collecting unemployment. When I spoke with the employees in question, they said that several friends had told them that this was done all the time as a way of earning extra money. It seemed that both the entrepreneur and his employees were unaware of proper procedures, not to mention the law and possible penalties for violating it.

Get busy putting together your policies and procedures employee manual and you can make it easy by simply making of list of some of the things that you have had to address in the past. A short list could include sick time, vacations, worker's compensation, drug and alcohol use on the job and cellphone usage.

If the last two things sound strange to you, check out my last two stories.

I once had a client who owned a janitorial service. He had the contract to clean several retail clothing stores after hours. His contract was terminated because the three employees responsible for cleaning one of the stores would drink liquor while cleaning and once they got drunk they would start dancing with the mannequins. Once both the cleaning and the dancing was complete the workers! would le! ave the mannequins laying on the floor and in some cases with missing parts. A hidden camera disclosed these shenanigans.

I also remember being invited by a friend to one of her yoga classes. I was looking forward to a relaxing yoga session. But, just as the instructor of the class had moved us into the shoulder stand, her cellphone rang. I heard her say "Oops, I gotta grab this." And there we were, left with our toes pointing to the ceiling and balancing our body weight on our neck and shoulders while she answered her phone call.

Make life easier for yourself, your workers and your customers, not to mention the long-term benefits of making sure you comply with state and federal laws: Develop an employee manual ASAP.

Gladys Edmunds, founder of Edmunds Travel Consultants in Pittsburgh, is an author and coach/consultant in business development. E-mail her at gladys@gladysedmunds.com.

Facebook playing with fire by policing beheading videos

Rather than set a bright-line policy on violent images, Facebook must now decide what is the right context for clips of people being decapitated.

NEW YORK (CNNMoney) Facebook has enacted a murky, case-by-case policy on violent content, setting the company on a precarious path.

Facebook (FB, Fortune 500)temporarily banned graphic, violent content from its site back in May, when clips including a particular video of a woman being beheaded were spreading across the site. That video resurfaced recently after Facebook quietly lifted the ban on graphic videos, and it once again caused a stir.

Facebook defended its decision on Monday after a BBC article publicized the lifting of the ban, but just 24 hours later, Facebook once again decided to take the video down.

But rather than set a bright-line policy on violent images, Facebook instead backed itself into a gray area. The site removed the specific beheading video that caused the flap -- but going forward, the site said it will make a determination about each post individually.

Facebook said it will allow the videos to stay up as long as posters "condemn" the violence and warn viewers of the graphic nature of the content. But the content will be removed if it is deemed to be shared for "sadistic pleasure or to celebrate violence."

Related story: Facebook kills search privacy setting

In doing so, Facebook has created yet another murky policy -- and thrust itself into making difficult decisions around controversial content on a case-by-case basis.

Instead of determining whether or not this content is allowed on Facebook, the site will now play the jury for each violent post that makes the rounds. If context is truly the key, why did Facebook remove this specific beheading post from the site entirely? Surely some of the users posting it were condemning the horrific act.

In explaining the new policy, Facebook said its philosophy is that people use the site to raise awareness of important issues -- and that sometimes involves violent images.

That may be true, but by getting into the context game, Facebook is making itself an easy target for the ongoing debate over what is censored on the site. Facebook has already gotten flak over controversial policy decisions involving issues like images of breastfeeding mothers -- which are sometimes banned and sometimes not.

With over 1.1 billion Facebook users, it's only a matter of time before another shocking bit of violence goes viral on the site. And now Facebook has put itself in the position of moral compass for all of those s! candals going forward.

Is a CEO-Led Buyout Ethical?

Q: I work for a publicly traded company that is struggling, depressing the share price. Now our longtime CEO and several senior executives have joined with a private-equity firm in a bid to take our company private. They're offering shareholders—including me and a lot of my fellow employees—a modest premium over the recent share price. Our board of directors seems inclined to accept it, but I think the whole thing smells. What do you think?

See Also: Should Execs Return Bonuses They Don't Merit?

A: I'm with you. The buyout bid might turn out to be a fair price, but the CEO and other brass have a serious conflict of interest. As employees of your company, they have a duty to fix the problems and boost its value for everyone—even if it takes a while and causes some pain and volatility in share price along the way.

But as participants in the buyout bid, they have a contrary interest in paying as little as they can for the stock. They hope to share in a huge gain from engineering a fast turnaround and, ironically, possibly taking the company public again in an IPO. Key question for the CEO: "If you have a great plan for saving our company, why haven't you done it already?"

An even bigger issue is why your board is going along with this. If the members have any guts—and independence from your CEO—they should demand his resignation (and that of his fellow execs on the buyout team) as a precondition for considering the buyout offer. Then, while interim leadership runs the company, the board should solicit competing bids and also explore a turnaround plan as a public company.

Too many publicly traded companies have been taken private for too low a price in recent years, enriching the new private-equity owners at the expense of the former stockholders, especially small investors. Big institutional shareholders—university endowments, pension funds and mutual funds—should side with the small shareholders and push back against sweetheart deals like this.

Have a money-and-ethics question you'd like answered in this column? Write to editor in chief Knight Kiplinger at ethics@kiplinger.com.

Blackstone's GSO Tops Among New Kodak Shareholders as Listing Looms

NEW YORK (TheStreet) -- Eastman Kodak's new owners are poised to bring the former corporate titan back to public stock markets after the company of 8,500 workers was transformed in a bankruptcy process that took more than 18 months until it emerged from Chapter 11 protection on Sept. 3.

Kodak's equity holders disclosed on Friday their ownership in new shares of the more than 130-year company. Private-equity giant Blackstone Group (BX), through its GSO Capital Partners credit investing arm, headlines Kodak's new list of shareholders. The fund reported a 22.6% stake in Kodak's new shares. GSO also disclosed that in August it transferred a portion of its shares to Serengeti Asset Management.

Hedge fund BlueMountain Capital Management reported a 19.2% stake in Kodak shares on Friday, while Moses Marx of United Equities reported a 12.6% stake and Contrarian Capital reported a 12.1% holding. George Karfunkel will hold a 3.1% stake.

Most of Kodak's new shareholders are secured creditors who backstopped a $406 million rights offering in June that converted secured and unsecured creditor claims into new equity in the company. Forty million shares were sold overall through the rights offering. Roughly 75% of Kodak's new shares will be held among six investors, while 23% to 24% of the company's remaining shares were distributed to unsecured creditors who received about 4 cents on the dollar for their claims when the company emerged from bankruptcy. Kodak's old shares were cancelled when it emerged from bankruptcy. Since its post-Labor Day emergence, Kodak has also filed with the Securities and Exchange Commission to sell its stock by way of a small company offering and sale of securities without registration. The company expects to list on a major exchange shortly. A source familiar with the matter said Kodak will re-list its shares with the New York Stock Exchange, where the company previously had been listed. Kodak will be a dramatically different firm when it returns to public stock markets. The company has divested most of its best-known consumer products such as photographic film and digital cameras, and it is now a specialized player in high-tech manufacturing businesses that include commercial and functional printing. In contrast to the multi-decade decline of Kodak's once-dominant film business, the company expects its remaining lines of business to be positioned for sustainable growth. The bankruptcy process also cut Kodak's legacy costs, while allowing it to spin off non-core assets and gain a new foothold at the convergence of technology and manufacturing, as one investor said. The new Kodak is expected to be attached to markets as high-end as the manufacturing of touch screens, semiconductors, battery technologies, holographic images and circuitry. Kodak divested its once-dominant film business to the firm's U.K.-pension plan while in bankruptcy this summer. It also sold Kodak Gallery to Shutterfly (SFLY) and a portfolio of digital imaging patents to a consortium of technology industry giants such Apple (AAPL) and Google (GOOG). The company said in a recent investor presentation that it had 8,500 worldwide employees as of September 2013, and is on track to earn $167 million in 2013 earnings before interest, taxes, depreciation and amortization (EBITDA). Kodak forecasts it may earn nearly $500 million in EBITDA by 2017. The company expects to have approximately $500 million in equity and debts of $695 million as a result of post-bankruptcy financing arranged by JPMorgan, Bank of America and Barclays. "We have been revitalized by our transformation and restructured to become a formidable competitor -- leaner, with a strong capital structure, a healthy balance sheet, and the industry's best technology," Antonio Perez, Kodak chief executive, said in a statement when the company exited bankruptcy on Sept. 3. Check out TheStreet's series about Kodak's fall, its bankruptcy and Rochester, N.Y.'s ability to avoid Detroit's fate. -- Written by Antoine Gara and Joe Deaux in New York. Follow @antoinegara

How Can Oxford Earnings Keep Soaring?

Oxford Industries (NYSE: OXM  ) will release its quarterly report on Tuesday, and investors have stayed optimistic about the apparel company's prospects, bidding the shares to all-time record highs in the past few months. With expectations for growth in Oxford earnings so high, though, investors need to be careful not to let the company's stock price get ahead of its fundamental business prospects.

Oxford Industries offers a wide variety of apparel in both branded and private-label lines, with brands including Tommy Bahama for sportswear, women's clothing line Lilly Pulitzer, and Oxford Golf apparel for golfers. The company has also licensed brands such as Dockers and Kenneth Cole, and it has taken its own company-owned brands to license their names for a variety of other products ranging from accessories to home fashions and personal-care products. Let's take an early look at what's been happening with Oxford Industries over the past quarter and what we're likely to see in its report.

Stats on Oxford Industries

Analyst EPS Estimate	$0.98
Change From Year-Ago EPS	51%
Revenue Estimate	$243.48 million
Change From Year-Ago Revenue	18%
Earnings Beats in Past 4 Quarters	2

Source: Yahoo! Finance.

Can Oxford earnings growth keep up the pace this quarter?
Analysts have been guardedly optimistic about Oxford earnings in recent months, adding $0.03 per share to their July quarter estimates and $0.02 per share to their full-year projections. The stock, though, has been stuck in neutral, with flat performance since early June.

Oxford has undergone a long-term shift that has paid big dividends for investors over the past several years. Traditionally, Oxford focused more on tailored clothing, and that segment has been a tough one lately, with upscale-clothing retailers Men's Wearhouse (NYSE: MW  ) and Jos. A Bank (NASDAQ: JOSB  ) fighting hard against the trend away from more formal clothing toward casualwear. For Oxford's part, its move toward its lifestyle brands have given it new life outside the formalwear segment, and that has helped drive long-term growth and stock-price appreciation.

Yet Oxford's earnings growth took a hit during its previous quarter, with the company reporting a 24% decline in net income in its April quarter. But the company managed to post modest revenue growth of just over 1%, with its key Tommy Bahama and Lilly Pulitzer lines helping to make up for weaker results in some of its other brand offerings. Oxford said it would continue to invest in those top brands going forward, with plans for international expansion potentially driving future growth.

With the key back-to-school season upon us, Oxford is working to boost its sales opportunities. Last month, the company chose to use tech giant SAP's (NYSE: SAP  ) Hybris suite of commerce support products to help it boost its already-growing online business. With the ability to add in-store kiosks to its existing Internet presence, Oxford's Tommy Bahama stores hope that giving their customers as many ways to buy as possible will help increase revenue.

In the Oxford earnings report, watch to see whether the company's ancillary brands can start pulling their own weight rather than holding back growth in Tommy Bahama and other key lines. Without solid gains from all of its businesses, it'll be hard for Oxford Industries to produce the earnings growth that investors want to see from the apparel company.

Oxford and its retail peers are navigating the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.

Click here to add Oxford Industries to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Morgan Stanley Nabs Wells, UBS Reps

Morgan Stanley (MS) said Tuesday that it recruited three advisors from rival wirehouse firms with a total of $3.7 million in yearly fees and commissions, while Janney Montgomery Scott announced early Tuesday that its advisors have been joined by a team formerly with Stephens.

Arthur Levine moved to Morgan Stanley Wealth Management’s office in Ridgewood, N.J., from Wells Fargo Advisors (WFC). Levine, who has had 12-month production of more than $2.4 million, now reports to branch manager Peter Christou.

T. Samuel Coleman Sr. and T. Samuel Coleman Jr. joined Morgan Stanley in Pasadena, Calif., and Seattle, respectively, on June 7 from UBS (UBS).

The senior Coleman now reports to Cynthia Newman, the complex manager in Pasadena, and Coleman Jr. is reporting to Seattle complex manager Alex Burlingame. The father-son team has combined production of more than $1.3 million and prior client assets of $161 million.

Philadelphia-based Janney said 34-year industry veteran W.G. Simms Oliphant Jr., and 17-year industry veteran Christopher Smith are now part of its Columbia, S.C., branch office. The two advisors, who were previously with Little Rock, Ark.-based Stephens, collectively oversee about $155 million in client assets.

They are being joined by assistant Julie Boulware to form the S.C. Asset Advisors.

“Simms and Chris make a great addition to our Columbia office, as their success through the years has been defined by the way they serve their clients and the community,” said Jerry Lombard, president of the firm’s Private Client Group, in a press release.

“Like many senior advisors who have joined Janney, Simms and Chris had many choices but, after conducting their due diligence, the team was drawn to our financial strength, our client-centric support, our advanced technology and our ability to deliver all the resources needed to serve their clients,” added Lombard.

Before his seven years with Stephens, Oliphant worked for Legg Mason from 2001 until 2005, when the firm transferred its business to Citigroup (C). He was with Wachovia for seven years before transitioning to Legg Mason.

“Along with moving Southeast Regional Manager Andy Kistler to our Charlotte, N.C., office, we have made efforts to share our story with like-minded advisors throughout the Southeast region and look forward to welcoming more top-tier advisors in the coming months,” Lombard explained.

Janney currently has 735 advisors and some $58 billion in client assets under management.

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Read Recruiting Roundup: Morgan Stanley, Janney Lure Reps on AdvisorOne.

What Stocks Would Phil Fisher Buy Today?

Someone who reads my articles sent me this question:

Hi Geoff,

…Among the companies that you know well, which ones do you think would interest Phil Fisher today?

Sylvain

Wow. That's a hard question. It's a good question. But a hard one to answer. I know what companies I know well. And I think I know what companies would interest Phil Fisher. The problem is finding where those two lists overlap.

So – first of all – Phil Fisher was not concerned with price. I'm not saying he would've bought a dot-com company at the height of the bubble. But I am saying he didn't worry about price. If a stock had a P/E of 14 or 40, he might still be interested. I'm not interested in a stock with a P/E of 40.

Someone asked me the other day if I'd ever bought a stock with a P/E over 20. I'm not sure I have. I mean – I'm sure I have technically bought a stock with a P/E over 20. Because I've bought stocks in years where they had almost no earnings. The way math works, it's easy to get very big price ratios if you have a denominator close to zero. So when a company is basically just breaking even in a bad year – the P/E ratio could be astronomical. But I'm sure that's not what he meant. The question I think he was asking was whether I'd ever paid 20 times a company's record earnings.

I don't think so.

No. I'm pretty sure I've never paid 20 times a company's all-time high earnings. I think I'd remember doing that.

Well Phil Fisher was different. He would gladly pay 20 times earnings for the right company. For Phil Fisher, the right company was a fast grower.

Fisher was also very focused on a company's organization. Not just competitive advantages like Warren Buffett. But the actual people who worked at the company.

And while Buffett is interested in per share profit growth – wherever it comes from – Fisher was a much bigger believer in looking for organic sales growth. Not just growth through buyba! cks.

I tend to be much more of a Buffett investor than a Fisher investor. I am probably happiest buying a somewhat slower growing company with a lower price than a faster growing company with a higher price.

In theory, this isn't very logical. Let's look at how many earnings $100 of my capital would buy at two different companies.

First is Coach (COH). Coach costs $74.06 a share. So $100 will buy you 1.35 shares of Coach. Coach has $3.25 in earnings per share. So, 1.35 shares would deliver $4.39 in earnings. We can think of $4.39 as the amount of present earnings your $100 can buy in Coach stock.

Now let's look at Dun & Bradstreet (DNB). Dun & Bradstreet costs $80.27 a share. So $100 will buy you 1.25 shares of Dun & Bradstreet. Dun & Bradstreet has $5.29 in earnings per share. So, 1.25 shares would deliver $6.61 a share in earnings. We can think of $6.61 a share in earnings as the amount of present earnings your $100 can buy you in Dun & Bradstreet stock.

Coach grew revenue per share 20% over the last five years. While Dun & Bradstreet grew revenue per share 9% a year over the last five years.

Let's imagine – just for the sake of argument – what would happen if Dun & Bradstreet and Coach both grew their earnings for the next five years at the same pace they grew them over the last five years.

This is how much earnings my same $100 would buy in each stock:

	Coach (COH)	Dun & Bradstreet (DNB)
Today	$4.39	$6.61
2012	$5.27	$7.20
2013	$6.32	$7.85
2014	$7.59	$8.56
2015	$9.11	$9.33
2016	$10.93	$10.17

In four years, my $100 investment in Coach would be earning nearly the same amount per year as my $100 investment in Dun & Bradstreet. And in five years, Coach's earnings ! would pas! s Dun & Bradstreet's earnings.

If Coach's growth prospects still looked good in five years, the stock might have a P/E of 20. Meanwhile, Dun & Bradstreet's growth might still be barely inching along. Actual sales growth at DNB is only around 3% a year. The per share growth is due to constant share buybacks. Check out Dun & Bradstreet's 10-year financial summary for evidence of the mammoth stock buyback they've done over the last decade. Shares outstanding have declined almost 40%.

Anyway, if DNB's organic sales growth was around 3% or so five years from now – the stock could easily have a P/E of 12. So, you could certainly imagine a scenario five years from now where Coach's price per share is $219 ($10.93 * 20) while Dun & Bradstreet's stock price is only $122 ($10.17 * 12).

I can't argue with that. It's certainly possible. Personally, I'm not at all sure a P/E of 12 makes sense for Dun & Bradstreet under any circumstances. If they simply diverted all the cash they use to buy back shares to paying out dividends instead – it's unlikely even a no-growth stock would have a dividend yield of 8%. This illustrates the lunacy of focusing on growth apart from earnings retention. You can't have it both ways. Either DNB is a 9% grower – which means you count the buybacks – or DNB is a 3% grower, but it pays out all its earnings in dividends.

I'm saying that the high quality of DNB's earnings – they entirely in the form of free cash flow – and the stable nature of their wide moat business means the stock should sell for 15 times earnings even when it's barely growing. I believe that.

What do I believe about Coach? It's hard to say. I don't believe – or at least I'm not willing to act on my belief – that Coach will grow its earnings by 20% a year over the next five years. It could. But even if it does accomplish that the market's view of growth from that point on will be key.

A simple way of looking at this is to see that! Coach is! trading at a multiple that's around two times Dun & Bradstreet's multiple. What are the chances Coach's multiple will contract from the roughly 24 times earnings range to the roughly 16 times earnings range? And what is the chance that DNB's multiple will expand from around 12 times earnings to around 16 times earnings?

Both of those events are real possibilities. And I tend to see the investment world in that way. I think it's very possible $100 invested in Coach and $100 invested in DNB will produce similar amount of earnings five years from now – and those earnings may be valued in similar ways.

Coach's growth could falter before the five years is up. Or Coach could so wow investors in terms of its truly long-term growth prospects that the stock still fetches a P/E of 20 to 25 half a decade from now.

It would be hard for me to choose between those two stocks. Quantitatively it would be impossible. If forced to choose, I'm sure I'd pick Dun & Bradstreet. But that's a qualitative decision. I think I understand DNB's business – its competitive advantage – better than I understand Coach. That would be the only reason for picking DNB over Coach. I can't argue mathematically that Coach is an inferior stock at this price. In fact – by the numbers – Coach looks absolutely wonderful.

That's how I look at stocks. But that's not how Phil Fisher looked at stocks.

I don't think Phil Fisher would actually be attracted to either Dun & Bradstreet or Coach. I think he would consider both stocks outside of his circle of competence. In one of his books, he explains how he personally focused on manufacturing businesses with a significant technical aspect. Something scientific. That was his niche. Fisher didn't argue that his general approach couldn't be applied to food companies, retailers, media businesses, etc. He just didn't invest in those companies himself.

I'm sure Fisher would consider commercial databases and luxury goods way ou! tside his! circle of competence. So, Fisher's approach might work for those stocks. But they wouldn't be stocks he'd buy personally.

Here are some stocks Phil Fisher might be interested in:

· Waters (WAT)

· Balchem (BCPC)

· Idexx (IDXX)

· II-VI (IIVI)

· Mesa Laboratories (MLAB)

· Masimo (MASI)

I don't know most of those companies very well. I probably know Waters the best out of that group.

Obviously, there are companies outside of Phil Fisher's area of focus – manufacturing with technical elements – that fit many of his principles.

Among really high profile companies, the three that stand out are:

1. Amazon (AMZN)

2. Netflix (NFLX)

3. Wells Fargo (WFC)

Of those 3, Amazon stands out the most. Jeff Bezos often seems to be channeling Phil Fisher. And I imagine that if Fisher were ever interested in a retailer it would be a retailer with Amazon's attitude about technology, customers, growth, and the long-term. More than anything though it's Amazon's constant internal push to develop new sales and especially new ways to serve existing customers without being prompted by outside forces that makes me think it's a company Phil Fisher would be very interested in.

Fisher liked companies that had a philosophy of growth. Something internal to the organization that caused it to seek ways to grow sales, win new customers, develop new products. Fisher obviously wanted a great organization in an industry with great long-term prospects. But I think a lot of growth investors focus more on the latter issue than Fisher would. I know they don't focus enough on the first issue. Fisher wanted a great organization first and foremost.

I'm not sure any of the stocks I've mentioned in this article are necessarily good buys. The one exception is Wells Fargo. I'm never comfortable calling a bank entirely safe. So I'm less sure about suggesting any financial stock as a good buy than I am about stocks! in most ! industries. But if you look at what Wells Fargo has achieved and what they are likely to achieve over the next ten years or so and then consider the price you are paying for the stock today – I think it's pretty hard to come up with reasonable assumptions that tell you Wells Fargo is too expensive right now. Maybe you don't feel the same way I do about the organization and the opportunities in cross-selling products to existing customers. That's fine. But if I had to pick one stock I mentioned here as a stock worth investigating as a long-term buy – and long-term is the only kind of buy Phil Fisher believed in – it's Wells Fargo.

Waters is not especially cheap. But that's also an interesting company. It might be a bit slow growth – a lot of the EPS growth you see there is from buybacks – for Phil Fisher's taste. But it seems like a perfectly good company to me.

There is one stock in one industry that is pretty far afield from the kind of companies Phil Fisher actually invested in during his lifetime that I'm definitely interested in and I actually think lines up pretty well with a bunch of Fisher's principles.

That stock is DreamWorks Animation (DWA).

I won't try to defend DreamWorks as a Phil Fisher stock. I'm sure a lot of you are scratching your heads right now about that name and what it has to do with Phil Fisher. If you are – I'd suggest learning more about DreamWorks.

It's no use reading the financials. This is a movie studio. It makes a couple movies a year. You won't find a pattern in the summary financial data.

But I think if you learn about the management, organization, employees, their attitude toward technology and growth and so on – I think you'll find DreamWorks to be surprisingly in sync with Fisher's philosophy.

Which brings me to my most important point. Just about all the stocks I talked about are pretty big stocks. Because people think of Fisher as being synonymous with world class quality they t! end to lo! ok at bigger stocks than Fisher himself usually did.

The important thing is taking Phil Fisher's philosophy and applying it to the industries you know best. It's Fisher's general approach that matters. Not necessarily his focus on any one specific industry.

And try to apply Fisher's ideas to the smallest stocks you can find. Everyone is looking for high-quality companies with good long-term growth prospects among the biggest companies out there.

The best place to apply Fisher's ideas is somewhere that's considered highly speculative. If other investors are buying and selling some stocks without regard to the quality of the businesses – that's the place you'll get the most use out of Fisher's ideas.

But the most important part of Fisher's philosophy is the holding. You need to buy a stock with the intent of holding it forever. You need to wait 3 years before you'll know if the stock is panning out.

I'm serious about the 3 year part. Fisher mentions 3 years as the amount of time you should wait if you like a company, buy its stock, and then watch its stock go nowhere. He says you should wait 3 years before you call it quits.

That's simple advice. But it's probably the part people have the hardest following.

Ask Geoff a Question About Phil Fisher

Helmerich & Payne's Upcoming Earnings: What You Need To Know

Helmerich & Payne (NYSE: HP  ) is expected to report Q3 earnings on July 26. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Helmerich & Payne's revenues will expand 3.1% and EPS will compress -2.2%.

The average estimate for revenue is $845.0 million. On the bottom line, the average EPS estimate is $1.34.

Revenue details
Last quarter, Helmerich & Payne tallied revenue of $838.3 million. GAAP reported sales were 8.9% higher than the prior-year quarter's $770.0 million.

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

EPS details
Last quarter, non-GAAP EPS came in at $1.36. GAAP EPS of $1.39 for Q2 were 18% higher than the prior-year quarter's $1.18 per share.

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

Recent performance
For the preceding quarter, gross margin was 44.9%, 310 basis points better than the prior-year quarter. Operating margin was 27.2%, 130 basis points better than the prior-year quarter. Net margin was 18.0%, 120 basis points better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $3.38 billion. The average EPS estimate is $5.47.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,030 members out of 1,105 rating the stock outperform, and 75 members rating it underperform. Among 206 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 194 give Helmerich & Payne a green thumbs-up, and 12 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Helmerich & Payne is outperform, with an average price target of $70.81.

Is Helmerich & Payne the right energy stock for you? Read about a handful of timely, profit-producing plays on expensive crude in "3 Stocks for $100 Oil." Click here for instant access to this free report.

Add Helmerich & Payne to My Watchlist.

SanDisk Buying SMART Storage for $307 Million

In one sense, at least, SanDisk (NASDAQ: SNDK  ) is getting smarter.

On Tuesday, the flash memory giant announced it has signed an agreement to acquire private-equity-owned enterprise solid state drive developer SMART Storage Systems for $307 million, cash, plus certain unspecified "equity-based incentive awards" that could increase the deal's value.

SMART, currently owned by a parent company that is itself owned by private equity firm Silver Lake, generated $25 million in revenues in its most recent quarter, and, according to SanDisk, is growing rapidly. Thus, exclusive of the cost of the equity component of the price, today's purchase appears to value SMART at approximately 3 times annual revenues -- roughly on par with SanDisk's own 2.9 price-to-sales ratio.

In a statement, SanDisk warned that the purchase will be slightly dilutive to earnings in H2 2013, before becoming accretive in 2014. This is the company's fourth acquisition in the enterprise storage market. The deal is expected to close in August. Approximately 250 employees of SMART Storage Systems will join SanDisk when the deal is done.

link

The Curse of Success, and Why Most Mutual Funds Fail Miserably

We spend a lot of time harping on mutual funds. Frankly, they deserve it. Most underperform their benchmarks and charge fees multiple times higher than passive index funds. The result is a giant wealth transfer from investors to fund managers. 

But after speaking with a fund manager recently, I realize this story is more complicated than I've made it out to be. Mutual fund investors may only have themselves to blame for awful returns.

Most dismal mutual-fund returns are the result of managers engaging in the classic "buy high, sell low" dance. But those buy and sell decisions don't necessarily reflect the will of the investment manager. Fund investors are constantly adding to and withdrawing from the fund's they invest in -- almost always at the worst time possible.

"You would be surprised how easy it is for a fund's investors to take control of the fund," the manager told me.

Imagine you're a smart fund manager who thinks stocks are overvalued. You don't have any good ideas to invest in. But you come into the office one morning and your secretary says, "Congratulations, your investors just sent you another $1 billion." What do you do? You can:

Keep it in cash or bonds. Close down your fund and refuse new investments. Grit your teeth and buy overvalued stocks.

The first choice isn't even an option for some funds, as their charters mandate that they stay almost fully invested. Even if they can, bulking up cash dilutes the investments of existing investors. Fund managers rarely take this option -- equity mutual fund cash levels have fluctuated in a tight band of between 4%-6% over the last decade.

The second option is the noble choice, but rarely occurs because funds earn fees on assets under management. When a fund manager goes to his or her boss and says, "I'd like to turn down $10 million in annual fees," the results are entirely predictable. Greenwich real estate doesn't buy itself, you know.

Option three is usually what happens.

As Maggie Mahar writes in her book Bull!:

Everyone realized that as a fund manager, you were basically just a purchasing agent. As a purchasing agent, it was your job to put the money that showed up in whatever stocks your fund was supposed to invest in -- large-cap growth or technology or whatever. If you're a purchasing agent, price is not the issue ... you're like the produce manager in the supermarket -- you have got to have lettuce on sale the next day. No matter what the price. Maybe you can decide to buy the curly lettuce instead of the romaine. But the equity fund manager has to have stocks. You have limited control over what you're doing. 

Now imagine it's 2009, and everything is going to hell in a handbasket. Stocks are the cheapest you've seen in your career, and the last thing you want to do is sell them. But you come into the office one morning and your secretary says, "Your investors want to withdraw $5 billion."

Source: WikiMedia Commons.

You only have one option to meet that demand: sell cheap stocks. Forget about all the buying opportunities -- your traders are working overtime to liquidate the portfolio whether you like it or not. 

Sadly, that affects all of a fund's investors. Even if one fund investor has a long-term outlook and no intention of selling, the fund's buy and sell actions can be dictated by maniac deposits and panic withdrawals. Other investors' decisions can hurt you. That's why they call it a mutual fund.

For talented fund managers, this cycle is accentuated by "the curse of success." Once the media labels you a "star," investors are going to break down your doors and throw more money at you than you know what to do with. Then, once you have a bad year, they're going to rip it away as fast as it came in.

Take Bill Miller of Legg Mason. Miller was one the best investors in the 1990s and early 2000s before suffering huge losses during the financial crisis that sullied his long-term track record.

What happened? In part, he made some bad calls. But Miller's early success and media fame led investors to give him a net $4.4 billion in new cash to invest just as stocks were getting expensive last decade. As his skill came into question, they then yanked nearly $10 billion out just as stocks were the cheapest they had been in years. Miller's wisdom didn't really matter last decade. His investors were calling the shots.

Think of it this way, and Warren Buffett's success is likely due in part to Berkshire Hathaway's business model. As a public company, rather than a mutual fund, investors can sell Berkshire shares, but they can't take capital away from Buffet's hands. He's in control.

So, what do we learn from this?

One, be wary of celebrity fund managers. They aren't as adored today like they were in the 1990s, but every few years, about half a dozen fund managers grace the covers of the big finance magazines, get praised as geniuses on CNBC, and have buckets of money thrown at them. The results are almost always the same: eventual disappointment. The correlation between fame and regret in the mutual fund world is highly negative.

Two, this is a good reminder of how important it is to learn to invest on your own. Whether that's passively through index funds or actively by buying a portfolio of high-quality stocks, your money is ultimately your responsibility. Unless you want to leave the outcome in a stranger's hand, you need to learn the ropes and take control. 

Texas is Booming and So Are These Texas Stocks (EE, TPL & ATO)

Texas has just set another record for job creation – meaning it might be worth it for investors to take a closer look at Texas based stocks like El Paso Electric Company (NYSE: EE), Texas Pacific Land Trust (NYSE: TPL) and Atmos Energy Corporation (NYSE: ATO) that have good exposure to the booming Texas economy. I should mention that I wrote about these stocks before back in late 2012 (see: Do These Texas Stocks offer Texas Sized Returns? EE, ATO & TPL), but the Texas Workforce Commission has reported that the Texas economy added 36,400 jobs in September while over the past 12 months, employers added 413,700 jobs — the most ever recorded by the state. In addition, several companies surveyed by the Dallas Fed responded that they are seeing labor market tightness plus companies are saying they are experiencing upward wage pressures while staffing firms note that candidates are often receiving multiple offers. Given that Texas is a deep "red state" with a business friendly climate where taxes and regulations are much lighter than in any "blue state," there is no reason to believe the boom won't continue.

With that in mind, here is a look at three Texas stocks that are sure to benefit from the Texas economic miracle:

El Paso Electric Company. A regional electric utility, small cap El Paso Electric Company provides generation, transmission and distribution service to approximately 394,000 retail and wholesale customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico. The company's service territory extends from Hatch, New Mexico to Van Horn, Texas and includes two connections to Juarez, Mexico and the Comisión Federal de Electricidad (CFE), Mexico's national utility. El Paso Electric Company's principal industrial and large customers would include steel production, copper and oil refining, and United States military installations including the United States Army at Fort Bliss in Texas and the White Sands Missile Range and Holloman Air Force Base in New Mexico. In early August, El Paso Electric Company reported second quarter net income of $30.1 million verses $29.2 million for the same period last year with the next earnings report scheduled for November 5th. El Paso Electric Company has a trailing P/E of 16.92 and a forward P/E of 15.23 along with a $1.12 forward dividend for a 3.10% dividend yield. On Friday, small cap El Paso Electric Company fell 0.225 to $35.72 (EE has a 52 week trading range of $33.44 to $40.43 a share) for a market cap of $1.44 billion plus the stock is up 2.29% since the start of the year, up 0.82% over the past year and up 87.3% over the past five years.

Texas Pacific Land Trust. One of the largest landowners in Texas with around 911,217 acres located in eighteen different counties, small cap Texas Pacific Land Trust was created in 1888 as a result of a reorganization of the Texas and Pacific Railway Company following receivership. Holders of Texas and Pacific Railway Company bonds received 3.5 million acres of land in Texas which had been earned by the railroad and pledged as security against bonds. The Trust was then created by the bond holders with converted bonds to shares of proprietary interest in the Trust which was also put in charge of managing and selling the land. Texas Pacific Land Trust does not produce much news with the last Form 10-Q noting that total second quarter operating and investing revenues rose 56.6% to $15,583,264 due primarily to increases in oil and gas royalty revenue, easement and sundry income, and land sales. Texas Pacific Land Trust has a trailing P/E of 41.99 and a forward dividend of $0.27 for a 0.20% dividend yield. On Friday, small cap Texas Pacific Land Trust rose 9.4% to $164 (TPL has a 52 week trading range of $83.50 to $242.00 a share) for a market cap of $1.39 billion plus the stock is up 65.2% since the start of the year, up 94.9% over the past year and up 411.7% over the past five years.

Atmos Energy Corporation. One of the country's largest natural-gas-only distributors, mid cap Atmos Energy Corporation serves over three million natural gas distribution customers in over 1,400 communities in eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy Corporation also manages company-owned natural gas pipeline and storage assets, including one of the largest intrastate natural gas pipeline systems in Texas and provides natural gas marketing and procurement services to industrial, commercial and municipal customers primarily in the Midwest and Southeast. In early August, Atmos Energy Corporation reported that fiscal third quarter net income, excluding net unrealized margins, was $46.1 million compared with consolidated net income, excluding net unrealized margins and a gain on sale, of $39.4 million. The CEO commented:

"While we continue to focus on providing safe and reliable service to our customers, the predictable and stable nature of our regulated operations offers strong earnings growth. As we enter the final quarter of our fiscal year, we remain on track to meet our earnings guidance of between $2.80 and $2.90 per diluted share in fiscal 2014," Cocklin concluded."

Atmos Energy Corporation has a trailing P/E of 17.77 and a forward P/E of 17.21 along with a forward dividend of $1.48 for a dividend yield of 2.90%. On Friday, mid cap Atmos Energy Corporation rose 2.22% to $50.21 (ATO has a 52 week trading range of $42.49 to $53.47 a share) for a market cap of $5.04 billion plus the stock is up 11.1% since the start of the year, up 16.9% over the past year and up 73.7% over the past five years.

Finally, here is a look at the long term performance chart for all three Texas stock:

As you can see from the above performance chart Texas Pacific Land Trust has produced a Texas sized return for investors while El Paso Electric Company and Atmos Energy Corporation have also produced good and steady returns as well.

Congress May Control the Stock Markets' Destiny With These 3 Upcoming Votes

Source: Flickr user Ryan McFarland.

Since March 2009 the Dow Jones Industrial Average and S&P 500 have been practically unstoppable. Neither abnormally bad weather in the U.S. nor the threat of geopolitical tensions has changed the rising tide of America's iconic stock market.

However, ask Americans how they truly feel about the U.S. as whole or the economy, and you're likely to be painted a far different picture. Based on a Pew Research study released in September, 62% of respondents noted that they were unhappy with the way things were going within the U.S. (note that this was an all-encompassing and general question), while 58% viewed the current economic situation as "bad." Furthermore, 30% expected the economy to worsen over the next 12 months, with an additional 33% predicting that it would "stay the same." It's tough to imagine the economy rising when so many investors have such a bleak view of the economy. 

However, one source could hold the answer as to where stocks head next: the U.S. Congress.

Investors aren't oblivious to the fact that fiscal policy set by lawmakers can affect the course of the U.S. economy and therefore the stock market. Things like corporate and individual tax rates, as well as annual government spending levels, are all determined by the actions of Congress and the president. Actions taken by the U.S. Congress can therefore have wide-ranging impact on the overall health of the U.S. economy and, ultimately, the stock market.

This is an important point to understand, as there are three upcoming issues that Congress will soon have to vote on that could guide where the stock market will head next.

1. The Highway Trust Fund
One of the more pressing issues currently facing Congress is what to do about the Highway Trust Fund. The Fund, which generates revenue from federal gasoline and diesel taxes, is responsible for providing money to assist in constructing and maintaining bridges, roads, mass-transit systems, and select aspects of America's energy infrastructure. According to The Wall Street Journal, roughly $216 billion is spent annually on highway and mass-transit construction and improvements, with the Highway Trust Fund kicking in about one-quarter of that total.

The problem is that the Highway Trust Fund is heading toward insolvency. Had Congress not voted to extend funding through May 2015 (kicking the can down the road once again), the Fund would have been running a negative cash balance by September 2014.  

Source: U.S. Department of Transportation.

The bigger problem is that infrastructure jobs comprise about 14.2 million jobs in this country -- 10% of our workforce -- according to a study from Brookings. In other words, if funding begins to get cut to individual states, the trickle-down effect from contractors to individual workers could result in substantial layoffs. A failure of both political parties to work together on this issue could be devastating to select states that have a higher concentration of infrastructure jobs, as well as the U.S. economy as a whole.

2. The U.S. debt ceiling
Speaking of "kick the can," perhaps no Congressional topic has resulted in more pushback from our nation's two-party system than the debt ceiling.

Source: Flickr user Alan Cleaver.

Put simply, the debt ceiling is the amount of money the U.S. government is authorized to borrow in order to meet its expenses, given that it often runs a budget deficit. Without the ability to borrow money, the U.S. government could potentially default on some of its outstanding loans and may have to shut down critical federal programs, which would entail the furlough of some federal employees.

As you might imagine, the consequences on a financial level of not raising the debt ceiling could be dramatic. Based on data from The Washington Post in October 2013, total government payments sent out would drop by roughly one-third, and Goldman Sachs at the time estimated that U.S. GDP would see a decline of more than 4%! Thankfully, congressional voting diffused the October 2013 government shutdown and, following the 78th debt-ceiling limit hike since 1960, pushed the next U.S. debt ceiling vote out to March 2015.

But what happens next is anyone's guess. Elections are constantly changing the makeup of the House and Senate, which have the potential to alter the debt-ceiling vote. In addition, the lack of a balanced budget remains a constant hindrance to members of Congress opposed to further debt-ceiling raises. Needless to say, March 2015 promises to be quite interesting.

Source: White House via Flickr.

3. The president's annual budget
Lastly, investors will want to keep a close eye on the U.S. budget presented by President Obama, which is usually due by February of the year prior to implementation. In this case, President Obama should be laying out his budget for fiscal 2016 as of February 2015.

The approval of the president's budget proposal by Congress could actually be the most important market-mover of them all, and not necessarily because it may be the first major congressional vote in 2015. I say this because the president's budget includes spending actions that could directly impact the aforementioned Highway Trust Fund and the U.S. debt ceiling, and it could also clue investors in on how much funding is expected to go to GDP-critical industries, particularly the defense and security industries, which accounted for about 19% of the $3.5 trillion spent in 2013.

A drawn-out approval process could dampen investor sentiment and reduce foreign investors' confidence in the U.S. economy, possibly hurting the Dow and S&P 500.

Regardless of how Congress votes, it may be in your best interest to take advantage of this little-known tax "loophole!"
Recent tax increases have affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "The IRS Is Daring You to Make This Investment Now!," you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

Retirement Reality Bites: It's Time To Bite Back

I am a Certified Financial Planner(TM) and President of Financial Life Focus, LLC, a Fee-Only Independent Registered Investment Advisory firm in Livingston, New Jersey. I began my career over 30 years ago as an accountant, focusing on tax, audit, financial accounting and forensic accounting. In the mid '80s, I shifted my attention to personal financial planning, tax planning, investment strategy and wealth management. I have embraced a Financial Life Planning approach in my work with clients, having customized if for my practice after participating in training with Money Quotient(TM) and the Kinder Institute. Life planning goes beyond numbers. It's not just about making money and investing money, but about using the money to fulfill your dreams. Inspired by the impact this approach has had on my life and that of my clients, I wrote a book for other advisors - The Business of Life: An "Inside-Out" Approach to Building a More Successful Financial Planning Practice (published November 2010).

Contact Michael F. Kay

The author is a Forbes contributor. The opinions expressed are those of the writer.

Stocks Going Ex-Dividend on Thursday, June 19 (GE, MTN, More)

Ex-dividend dates are very important to dividend investors, since you must purchase a stock prior to its ex-dividend date in order to receive its upcoming dividend payout. For more information, check out Everything Investors Need to Know About Ex-Dividend Dates.

Below we highlight six big-name stocks going ex-dividend on Thursday, June 19.

1. Vail Resorts, Inc.

Vail Resorts, Inc. (MTN) offers a dividend yield of 2.21% based on Tuesday’s closing price of $75.09 and the company's quarterly dividend payout of 41.5 cents. The stock is up 0.13% year-to-date. Dividend.com currently rates MTN as “Neutral” with a DARS™ rating of 3.4 stars out of 5 stars.

2. General Electric

General Electric

Wintry Weather Blamed for Walmart's Earnings Drop

Steven Senne/AP NEW YORK -- Walmart's first-quarter net income fell 5 percent as the world's largest retailer was hurt by bad winter weather and continues to see its low-income customers struggle in the U.S. and around the globe. The company's performance missed Wall Street's expectations, and it gave a weak second-quarter earnings forecast. Walmart's (WMT) stock fell nearly 3 percent in premarket trading Thursday. The results underscore the big challenges facing Walmart's new CEO, Doug McMillon, who took over the top role on Feb. 1. The retailer is considered an economic bellwether, with the company accounting for nearly 10 percent of nonautomotive retail spending in the U.S. Walmart's latest performance appears to show that many people are having a hard time stretching their money between paychecks. For the period ended April 30, the Bentonville, Arkansas, company earned $3.59 billion, or $1.11 a share. That compares with $3.78 billion, or $1.14 a share, a year ago. Walmart Stores said that bad weather hurt earnings by about 3 cents a share. Its performance was also dinged by a higher-than-expected tax rate. Income from continuing operations was $1.10 a share. Analysts, on average, expected earnings of $1.15 a share, according to a FactSet survey. "Like other retailers in the United States, the unseasonably cold and disruptive weather negatively impacted U.S. sales and drove operating expenses higher than expected," President and CEO Doug McMillon said in a statement. But Walmart has been suffering from weak sales in the U.S. for some time. Sales at U.S. stores open at least a year slipped 0.2 percent in the quarter, the fifth consecutive quarter of decline the metric, considered a key gauge of a retailer's financial performance. Analysts had been expecting the measure to be flat. In the U.S., while jobs are easier to get and the housing market is gaining momentum, these improvements haven't been enough to get Americans to spend. On top of that, the Nov. 1 expiration of a temporary boost in food stamps is hurting its shoppers' ability to spend. Total revenue rose 1 percent to $114.96 billion. Wall Street was calling for higher revenue of $116.43 billion. Revenues Rise McMillon said in a prerecorded call that U.S. sales rose during the second half of the quarter, but that Sam's Club had lower-than-expected sales. While membership income climbed, McMillon said it was mostly because of a fee increase started last year. Total U.S. revenue rose 2 percent to $67.85 billion. Walmart International's sales rose 3.4 percent in the quarter, on a constant currency basis. Walmart, which has 10,994 stores in 27 countries, is facing stiff completion from dollar chains and online king Amazon.com (AMZN). Walmart has been sharpening its focus on everyday low prices at U.S. stores and further pushing that strategy abroad. Walmart also said earlier in the year that it will speed up growth plans for its smaller Neighborhood Markets and Walmart Express stores that cater to shoppers looking for more convenience with fresh produce and meat and household and beauty products. In a call with the media, Walmart executives said super centers are getting bigger purchases on each trip from people stocking up on bulk items, but traffic has been weaker, particularly in the bottom performing 10 percent of its stores. At Neighborhood Markets, on the other hand, traffic is up 4 percent as people buy fill-in items at the smaller stores. For the second quarter, Walmart anticipates earnings from continuing operations in a range of $1.15 to $1.25 a share. Analysts predict earnings of $1.28 a share. The company's shares fell $2.41, or 3.1 percent, to $76.33 in premarket trading just before the market opened.

The Royce Funds Culture

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Source: roycefunds

Also check out: Chuck Royce Undervalued Stocks Chuck Royce Top Growth Companies Chuck Royce High Yield stocks, and Stocks that Chuck Royce keeps buying
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This Year's Batch of Super Bowl Ads? Meh.

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NEW YORK -- Which Super Bowl ads will people discuss at the office a day after the biggest event of the year on American television? There were no crude jokes during the Super Bowl, the NFL championship and most-watched U.S. sporting event. Sexual innuendo was kept to a minimum. And uncomfortable scenes were missing. In short, there wasn't much shock value. Sure, RadioShack (RSH) poked fun at its image by starring '80s icons like Teen Wolf in its ad. And Coca-Cola (KO) struck an emotional chord by showcasing people of different diversities in its spot. As did Chrysler, with its "Made in America" message. But with a 30-second Super Bowl commercial fetching $4 million and more than 108 million viewers expected to tune in to Sunday night's game, advertisers tried to keep it family friendly with socially conscious statements, patriotic messages and light humor. After all, shocking ads in previous years haven't always been well received. (Think: GoDaddy.com's ad that featured a long, up-close kiss was at the bottom of the most popular ad lists last year.) "A lot of brands were going with the safety from the start," said David Berkowitz, chief marketing officer for digital ad agency MRY. Many advertisers played it safe by promoting a cause or focusing on sentimental issues. Chevrolet's (GM) ad showed a couple driving through the desert in remembrance of World Cancer Day. And Bank of America (BAC) turned its ad into a virtual video for singing group U2's new single "Invisible" to raise money for an AIDS charity. The song will be a free download on iTunes for 24 hours following the game and Bank of America will donate $1 each time it is downloaded to the Global Fund to Fight AIDS. Meanwhile, a Microsoft (MSFT) ad focused on how its technology helps people in different ways. The ad is narrated by Steve Gleason, a former prof football player who is living with ALS, a disease of the nerve cells in the brain and spinal cord that control voluntary muscle movement. He uses a Microsoft Surface Pro tablet running eye gazer technology to speak. And an Anheuser-Busch (BUD) "Hero's Welcome" ad was an ode to U.S. soldiers. The spot showed how Anheuser-Busch helped prepare big celebration that included a parade with Clydesdales as a surprise for a soldier returning from Afghanistan. Many advertisers took the safe route by playing up their Americana roots. Coca-Cola's ad showed scenes of natural beauty and families of different diversities. The tune of "America the Beautiful" could be heard in different languages in the spot. Chrysler also went with a U.S.A. theme. It had a two-minute ad starring music legend Bob Dylan discussing the virtues of having cars built in Detroit, a theme the car maker has stuck with in previous ads with rapper Eminem and actor Clint Eastwood. "Let Germany brew your beer. Let Asia assemble your phone. We will build your car," Dylan said in the ad. Barbara Lippert, ad critic for Mediapost.com, said the ads were an attempt to connect with viewers on a more personal level. "We want to be able to feel through all these screens and through all the hype there's a human element and in the end were all human," Lippert said. Jokes were also tamer. "A few years ago we had a lot of physical slapstick, this year there's a lot less of that," said Berkowitz, with digital ad agency MRY. Even advertisers that typically go with more crude humor toned it down. GoDaddy.com's ad, for instance, showed it helping a small-business owner quit her job. "Women were fed up and parents were fed up and advertisers listened," said Mediapost.com's Lippert. Other advertisers went with light humor as well. There were mini sitcom reunions: in an ad for Dannon Oikos, the "Full House" cast reunited. And "Seinfeld" alums Jerry, George and even Newman came back to Tom's diner in New York City for an ad for Jerry Seinfield's show "Comedians in Cars Getting Coffee." Late-night political satirist Stephen Colbert appeared in a pair of 15-second ads for Wonderful Pistachios. In one he predicted the nuts would sell themselves because "I'm wonderful, they're wonderful." He was back a few seconds later covered in bright green branded messages because the nuts hadn't sold out in 30 seconds. Another light-humored ad came from RadioShack, which featured 1980s pop culture figures including Teen Wolf, Chucky, Alf and Hulk Hogan, destroying a store and a voiceover that said: "The 80s called, they want their store back. It's time for a new RadioShack."

How to Get Your Insurance Claim Paid

Getty Images When emergencies like car accidents, medical scares or house fires strike, filing an insurance claim may not be top of mind. But once the dust settles and the bills start pouring in, many consumers are relieved to know that insurance could help protect them against financial losses resulting from these calamities. However, the claims process doesn't always run smoothly. If, for instance, you forget to submit a key piece of documentation, your loss falls under an exclusion or you use an out-of-network provider, your insurance provider may not cover your losses. Here's a look at strategies for maximizing the chances that your claim will get paid. Know what's covered. Ideally, you'd be familiar with the ins and outs of your policy before you actually need it, including the amount of any deductibles you are responsible for, how long you have to file a claim and how long the process takes. Knowing this can help you set realistic expectations and choose providers that are likely to be covered (auto insurers may try to steer you toward a certain body shop, but you are not required to use the shop they prefer). Issues around health care insurance claims often center on whether the medical provider is in-network or out-of-network, according to Martin Rosen, executive vice president, chief marketing officer and co-founder of Health Advocate, an independent health care advocacy and assistance company. In-network doctors have a contracted rate set with your insurance company, so you'll typically pay less out of pocket. "If you go out of network, doctors are able to bill their regular list charges and then to the extent that you've met your deductible and your insurance kicks in, insurance companies only pay what's usual and customary," Rosen explains. Unfortunately, the in-network issue isn't always clear to the patient. Say you have a doctor who's in-network and refers you to a hospital. You might assume that the hospital would also be in-network, but Rosen says this isn't necessarily the case because some doctors practice at multiple hospitals. "All of this ends up in confusion depending on what you did," he adds. Understanding your policy is also key with property and casualty insurance, where there's an important distinction between replacement cost and actual cash value for your car, home or possessions. Say a tree falls through the roof of your house and destroys your eight-year-old washing machine. "With a replacement cost policy, the insurance company would pay to replace the old machine with a new one," explains Loretta Worters, vice president of the Insurance Information Institute. "If you had an actual cash value policy, the company would pay only a part of the cost of a new washing machine because a machine that has been used for eight years is worth less than its original cost." When it comes to destruction from floods, standard homeowners and renters insurance policies do not cover flood damage, but separate flood coverage is available from the federal government's National Flood Insurance Program and a few private insurers. Keep detailed documentation. Maintain records of all communication with your insurance company, including copies of documents you mail and logs of phone conversations, the date of each call, the name of the person you spoke to and what was said. If you need to appeal a decision, this documentation can prove critical, according to Rosen. Amy Bach, executive director of United Policyholders, a nonprofit that advises consumers on the claims process, suggests following up on each conversation to create a paper trail. "If you've had a conversation with the adjuster, follow up on it with a short email confirming what's been agreed to and what still remains outstanding," she says. "Make it clear in your communications that you are a proactive consumer, give your insurer proof of your losses and be very specific in asking for the dollar amounts you are entitled to." Keep receipts for all out-of-pocket expenses such as a hotel stay while your home is being repaired or towing your car to a body shop following an accident. Here are your options if your claim is denied and you still believe it should be covered: File an appeal. Once you've exhausted your insurer's internal channels for filing a claim, you can generally appeal with an external review through the government agency that oversees insurance companies in your state. "The insurance company is obligated to provide you with this information, but it might not be in the easiest-to-understand way," Rosen says. In cases when an insurance company has denied coverage for a medical condition that's considered an emergency, you may be able to apply for an expedited review. Even if it's not an emergency, pay attention to timelines. "Don't ignore things because there are limits on how long you have to appeal [claims], and the clock is running," Rosen says. Hire a professional. For smaller claims, it may not make financial sense to hire an attorney, advocate or public adjuster to help argue your case. But if large sums of money are at stake or the issue is complex, the math may pencil out. Depending on your state and the size of your claim, you may be able to hire a lawyer on a contingency basis, which means the lawyer "will only get paid if they recover for you, and their fee will be a percentage of what they recover for you," Bach says, adding that good contingency lawyers won't take on cases of less than $50,000 because their fee wouldn't be large enough to make it worth their while.

2 Stocks on the Verge of Breakouts

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

>>5 Stocks Poised for Breakouts

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

>>5 Big Stocks to Trade for Big Gains

With that in mind, let's take a look at several stocks rising on unusual volume today.

Ligand Pharmaceuticals

Ligand Pharmaceuticals (LGND) is a biotechnology company that operates with a business model focused on developing or acquiring assets. This stock closed up 7.4% at $52.54 in Friday's trading session.

Friday's Volume: 568,000

Three-Month Average Volume: 273,763

Volume % Change: 91%

>>5 Stocks With Big Insider Buying

From a technical perspective, LGND spiked sharply higher here right above its 50-day moving average $48.96 with above-average volume. This move is quickly pushing shares of LGND within range of triggering a big breakout trade. That trade will hit if LGND manages to take out some near-term overhead resistance at $55 and then once it clears its 52-week high at $58.48 with high volume.

Traders should now look for long-biased trades in LGND as long as it's trending above Friday's low of $49.43 and then once it sustains a move or close above those breakout levels with volume that's near or above 273,763 shares. If that breakout hits soon, then LGND will set up to enter new 52-week-high territory above $58.48, which is bullish technical price action. Some possible upside targets off that breakout are $63 to $65.

Acacia Research

Acacia Research (ACTG) acquires, develops, licenses and enforces patented technologies. This stock closed up 4.9% at $15.10 in Friday's trading session.

Friday's Volume: 1.22 million

Three-Month Average Volume: 642,120

Volume % Change: 110%

>>5 Stocks Under $10 Set to Soar

From a technical perspective, ACTG spiked higher here right off some near-term support at $14.08 with above-average volume. This stock recently gapped down sharply from $20.50 to $14.74 with heavy downside volume. Following that gap down, shares of ACTG went on to tag a new 52-week low of $14.08. Shares of ACTG have now started to rebound off that $14.08 low and it's quickly moving within range of triggering a major breakout trade. That trade will hit if ACTG manages to take out Friday's high of $15.65 to more near-term overhead resistance at $16.28 with high volume.

Traders should now look for long-biased trades in ACTG as long as it's trending above Friday's low of $14.33 or above $14.08 and then once it sustains a move or close above those breakout levels with volume that's near or above 642,120 shares. If that breakout hits soon, then ACTG will set up to re-fill some of its previous gap down zone from October that started near $20.50.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>4 Stocks Under $10 to Trade for Breakouts

>>2 Airline Stocks You Really Should Own in 2014

>>Why You Should Buy Hedge Funds' 5 Favorite Stocks

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Can Sirius XM Radio Continue to Rise?

With shares of Sirius XM Radio (NASDAQ:SIRI) trading around $4, is SIRI an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock's Movement

Sirius XM Radio broadcasts its music, sports, entertainment, comedy, talk, news, traffic, and weather channels in the United States on a subscription fee basis through its two satellite radio systems. Subscribers can also receive music and other channels over the Internet, including through applications for mobile devices. Audio entertainment has always pleased consumers and is a medium that is growing in popularity. Sirius XM Radio is looking to expand its audio entertainment channels to every audio medium possible, which will surely translate to rising profits.

Sirius XM Radio reported third-quarter earnings on Thursday morning after the opening bell, giving results and guidance that missed analyst expectations. Sirius's income was $62.89 million, down from $74.5 million a year ago, and although revenue grew 11 percent to $961.5 million, that figure fell short of estimates by over $10 million. Revenue per subscriber was also up to $12.29 from $12.14 last year, but again missed forecasts. Sirius said it expects to make $4 billion in revenue in 2014, a figure below Wall Street expectations.

T = Technicals on the Stock Chart Are Strong

Sirius XM Radio stock has established higher highs and higher lows in the last few years. The stock is currently trading slightly below highs for the year and looks set to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Sirius XM Radio is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Sirius XM Radio options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Sirius XM Radio Options	31.54%	0%	0%

What does this mean? This means that investors or traders are buying a very small amount of call and put options contracts as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
November Options	Flat	Average
December Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very small amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let's take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Sirius XM Radio's stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Sirius XM Radio look like and more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	0.00%	-95.83%	0.00%	104.80%
Revenue Growth (Y-O-Y)	11.00%	12.23%	11.52%	13.87%
Earnings Reaction	-3.82%*	2.71%	5.86%	1.26%

Sirius XM Radio has seen mixed earnings and rising revenue figures over the last four quarters. From these numbers, the markets have had conflicting feelings about Sirius XM Radio's recent earnings announcements.

* As of this writing

P = Weak Relative Performance Versus Peers and Sector

How has Sirius XM Radio stock done relative to its peers, Pandora (NYSE:P), CBS (NYSE:CBS), Cumulus Media (NASDAQ:CMLS), and sector?

	Sirius XM Radio	Pandora	CBS	Cumulus Media	Sector
Year-to-Date Return	36.51%	191.10%	56.86%	115.00%	98.76%

Sirius XM Radio has been a poor relative performer, year-to-date.

Conclusion

Sirius XM Radio provides audio entertainment and information via subscription services to a growing listener base. A recent earnings release has the markets expecting more from the company. The stock has been trending higher in recent years and is currently near highs for the year. Over the last four quarters, earnings have been mixed while revenues have been rising which has produced conflicting feelings among investors. Relative to its peers and sector, Sirius XM Radio has been a weak year-to-date performer. Look for Sirius XM Radio to OUTPERFORM.