Thursday, January 29, 2015

5 Stocks Breaking Out on Big Volume

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds dont 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.

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.

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

Texura (TXTR)

This company provides on-demand business collaboration software solutions to the commercial construction industry. This stock closed up 1.7% to $30.06 in Monday's trading session. 

Monday's Volume: 1.78 million

Three-Month Average Volume: 427,662

Volume % Change: 393%

From a technical perspective, TXTR spiked modestly higher here right above its recent low of $28.50 with heavy upside volume. This stock has been downtrending over the last few weeks, with shares falling from its high of $41.50 to its low of $28.50. During that downtrend, shares of TXTR have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of TXTR are now coming off that low of $28.50 with volume. That move is quickly pushing shares of TXTR within range of triggering a near-term breakout trade.

That trade will hit if TXTR manages to take out Monday's high of $30.37 to some near-term overhead resistance at $31 with high volume. Traders should now look for long-biased trades in TXTR as long as it's trending above that recent low of $28.50, and then once it sustains a move or close above those breakout levels with volume that hits near or above 427,662 shares. If that breakout hits soon, then TXTR will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $36.63. 


Cooper Tire & Rubber (CTB)

This company produces and markets passenger, light truck, medium truck, motorsport and motorcycle tires which are sold nationally and internationally in the replacement tire market. This stock closed up 5.4% to $24.20 in Monday's trading session.

Monday's Volume: 6.54 million

Three-Month Average Volume: 1.85 million

Volume % Change: 289%

From a technical perspective, CTB spiked sharply higher here back above its 50-day moving average of $24.03 with heavy upside volume. This move is quickly pushing shares of CTB within range of triggering a near-term breakout trade. That trade will hit if CTB manages to take out Monday's high of $24.44 to some near-term overhead resistance at $24.83 with high volume. 

Traders should now look for long-biased trades in CTB as long as it's trending above $23 or Monday's low of $22.08, and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.85 million shares.

If that breakout hits soon, then CTB will set up to re-test or possibly take out its next major overhead resistance levels at $27.37 to its 200-day at $27.70. Any high-volume move above those levels will then give CTB a chance to re-fill its previous gap zone from October that started near $31. 

CVD Equipment (CVV)

This company designs, develops & manufactures customized state-of-the-art equipment and process solutions used to develop & manufacture solar, nano & advanced electronic components, materials & coatings for research & industrial applications. This stock closed up 6.3% at $14.61 in Monday's trading session. 

Monday's Volume: 181,000

Three-Month Average Volume: 46,265

Volume % Change: 154%

From a technical perspective, CVV ripped sharply higher here and broke out above some near-term overhead resistance at $14.14 with above-average volume. This move is quickly pushing shares of CVV within range of triggering another big breakout trade. That trade will hit if CVV manages to take out Monday's high of $14.76 to its 52-week high at $14.80 with high volume.

Traders should now look for long-biased trades in CVV as long as it's trending above Monday's low of $13.68 or above $13, and then once it sustains a move or close above those breakout levels with volume that hits near or above 46,265 shares. If that breakout triggers soon, then CVV will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are its next major overhead resistance levels at $16.06 to $17.95. Any high-volume move above those levels will then give CVV a chance to tag $20.   

CONMED (CNMD)

This is a medical technology company with an emphasis on surgical devices and equipment for minimally invasive procedures and monitoring. This stock closed up 1.4% to $42.48 in Monday's trading session.

Monday's Volume: 284,000

Three-Month Average Volume: 110,694

Volume % Change: 138% 

From a technical perspective, CNMD spiked modestly higher here right above some near-term support at $41.62 with above-average volume. This stock has been uptrending strong for the last four months, with shares soaring higher from its low of $30.56 to its recent high of $45.57. During that uptrend, shares of CNMD have been consistently making higher lows and higher highs, which is bullish technical price action. 

Traders should now look for long-biased trades in CNMD as long as it's trending above some near-term support at $41.62 or above more support at $39, and then once it sustains a move or close above Monday's high of $42.50 with volume that hits near or above 110,694 shares. If we get that move soon, then CNMD will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $45.57. Any high-volume move above $45.57 will then give CNMD a chance to tag $50. 

Fuel Systems Solutions (FSYS)

This company designs, manufactures and supplies alternative fuel components and systems for transportation and industrial applications. This stock closed up 3.9% at $13.46 in Monday's trading session. 

Monday's Volume: 476,000

Three-Month Average Volume: 178,754

Volume % Change: 137%

From a technical perspective, FSYS spiked notably higher here with above-average volume. This stock recently formed a double bottom chart pattern, after shares found buying interest at $12.25 to $12.26. Following that bottom, shares of FSYS have now started to uptrend and move within range of triggering a big breakout trade.

That trade will hit if FSYS can manage to take out some near-term overhead resistance levels at $13.90 to $14.01, and then once it clears its 50-day moving average at $14.54 with high volume.  Traders should now look for long-biased trades in FSYS as long as it's trending above Monday's low of $12.81 or above more support at $12.25, and then once it sustains a move or close above those breakout levels with volume that this near or above 178,754 shares. If that breakout hits soon, then FSYS will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $16.82 to $18, or
even $19.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS: >>5 Stocks Breaking Out on Big Volume >>5 Dividend Stocks Ready to Pay You More in 2014 >>5 Big Trades for Post-Taper Gains

 

Follow Stockpickr on Twitter and become a fan on Facebook.


Fed cuts QE pace to $75B on labor market outlook

interest rates, economy, bonds, fixed income, ben s. bernanke, federal reserve It starts: Fed chairman Ben S. Bernanke has started the taper. Bloomberg News

The Federal Reserve is cutting its monthly bond purchases to $75 billion from $85 billion, taking the first step toward unwinding the unprecedented stimulus that Chairman Ben S. Bernanke put in place to help the economy recover from the worst recession since the 1930s.

“In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the committee decided to modestly reduce the pace of its asset purchases,” the Federal Open Market Committee said Wednesday at the conclusion of a two-day meeting in Washington. The Fed's purchases will be divided between $40 billion in Treasuries and $35 billion in mortgage bonds starting in January.

Mr. Bernanke, in the final weeks of his eight-year tenure, is curtailing the purchases that swelled the Fed’s balance sheet almost to $4 trillion as he sought to put millions of jobless Americans back to work. The policy, supported by his designated successor, Vice Chairman Janet Yellen, stirred concern it risks inflating asset-price bubbles even as its economic benefits ebbed.

“If incoming information broadly supports the committee’s expectation of ongoing improvement in labor-market conditions and inflation moving back toward its longer-run objective, the committee will likely reduce the pace of asset purchases in further measured steps.” The committee repeated that purchases are “not on a preset course.”

Treasuries fell after the decision, pushing the yield on the 10-year note to 2.9% from 2.84% late Tuesday. Stocks extended gains.

TARGET RATE

The central bank left unchanged its statement that it will probably hold its target interest rate near zero “at least as long as” unemployment exceeds 6.5%, so long as the outlook for inflation is no higher than 2.5%.

The panel added that it “likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6.5%, especially if projected inflation continues to run below” the Fed’s 2% goal.

Price gains have lagged below the committee’s long-run target. The central bank’s preferred gauge of inflation, excluding food and energy, climbed 1.1% in the year through October. It has not breached 2% since March 2012.

Boston Fed President Eric Rosengren dissented, saying that changes on the bond-purchase program were “premature until incoming data more clearly indicate that economic growth is likely to be sustained above its potential rate.”

Policy makers met amid signs the economy and labor market were gaining strength, even as inflation remained subdued.

JOB MARKET

The jobless rate fell to 7% in November, a five-year low, as employers added a greater-than-forecast 203,000 workers to payrolls. Unemployment was down from 10% in October 2009, during the recession, and up from 4.4% in May 2007.

Retail sales climbed by the most in five months in November, a sign that consumer spending was strengthening as the holiday season began. Industrial production last mo! nth increased by the most in a year, a Fed report showed this week.

Companies including Ford Motor Co. are benefiting from rising demand for new cars. Ford said this month it plans to add 5,000 jobs in the U.S. and will introduce 16 new vehicles in North America next year. The payroll expansion will continue following the hiring of almost 6,500 people in 2013.

Stocks have surged on stronger corporate earnings and continued Fed stimulus. The Standard & Poor’s 500 Index closed at a record 1,808.37 on Dec. 9 and was up 25% for the year as of Tuesday.

The Fed’s low interest rates have prompted consumers to buy homes or refinance existing mortgages, sparking a recovery in the housing market that was at the center of the financial crisis.

Housing prices climbed 13.3% in the 12 months through September, according to an S&P/Case-Shiller index of prices in 20 cities. The pace of home construction reached a more than five-year high in November as builders added to inventory to keep pace with demand, a report Wednesday from the Commerce Department showed.

Rising stocks and home values are boosting household wealth, giving consumers the wherewithal to keep spending. Many have invested in improvements to their homes, lifting profits at companies such as Home Depot Inc., the largest U.S. home-improvement retailer.

FALSE STARTS

“This is one of the stronger-looking points of the recovery,” said Alan MacEachin, corporate economist at Navy Federal Credit Union. “We’ve had a couple of false starts, but now you’ve got the cumulative effects of an improving job market, coupled with the wealth effect from record stock levels.”

Yet with inflation so low, the economy could be at risk of deflation were growth to slip, he said. “One of the Fed’s biggest fears right now is if the economy were to slow significantly, that’s going to put more downward pressure on inflation.”

Growth so far has lagged behind previous recoveries. In the 17 qua! rters sin! ce the recession ended, the economy has expanded at an average annualized rate of 2.3% each quarter. That compares with an average of 3.2% over the same period following the 2001 and 1991 recessions, and 5% following the 1982 recession.

Gross domestic product will expand 2.6% next year after gaining 1.7% in 2013, according to the median forecast of economists surveyed by Bloomberg from Dec. 6 to Dec. 11.

Economists were divided on whether the FOMC would begin tapering bond purchases Wednesday. Thirty-four percent of economists in a Dec. 6 Bloomberg survey said the Fed would act at today’s meeting. Twenty-six percent predicted a January taper and 40% said March.

The Fed’s debate over when to taper purchases has dominated central banking discussions for much of the year, setting off waves of volatility in financial markets. In May, Mr. Bernanke told Congress that the Fed may slow its purchases during the “next few meetings.”

The yield on the 10-year Treasury climbed to as high as 3% in September from as low as 1.61% in May, as investors anticipated a reduction in Fed stimulus. The national average 30-year fixed-rate mortgage climbed to 4.58% in late August from 3.35% in May, according to Freddie Mac.

“As soon as they started talking about tapering, they raised interest rates,” said Julia Coronado, chief economist for North America at BNP Paribas in New York and a former Fed economist.

SEPTEMBER MEETING

Before the September FOMC meeting, the majority of economists in a Bloomberg survey expected the Fed to begin reducing purchases. The committee surprised mark

Wednesday, January 28, 2015

Gap’s Athleta Brand Could Win From Lululemon PR Blunder

Lululemon Athletica Inc. (NASDAQ: LULU) has a serious brand damage in the making. the question is whether it is permanent or whether or not it will pass over. The company’s scandal has moved from see-through pants and material balling up, and now it includes the company’s founder in a public relation blunder that he created. The Gap, Inc. (NYSE: GPS) may be thanking the company for both issues.

This “Size” dilemma is nothing new. Abercrombie & Fitch (NYSE: ANF) has been under fire previously for its stance against big clothing sizes. The company’s stance was that its clothes are not made for larger people. A&F’s shares have been in the gutter, but this sure seems like a series of product missteps and weaker sales which likely had nothing to do with turning larger-size buyers away.

Lululemon founder Chip Wilson has recently apologized to his workers in a video after a Bloomberg interview where he said that some of the issues from the pant dilemma are simply that the pants might not work well on women of certain sizes with rubbing issues.

The reality is that some of these comments may simply be true, but how that message is conveyed or whether or not it should have been conveyed is another issue entirely. It is true that some people just do not look good in certain clothes. How people come to that realization, and how they are told about that, is a dilemma.

Why The Gap, Inc. (NYSE: GPS) can win here is that Gap does cater to larger sizes in many cases. Its Banana Republic stores have often not really catered to larger sizes, but Old Navy and Gap have larger sizes. The real opportunity is its newer Athleta line that has grown in popularity. What the public needs to understand is that its models and its clothing are not exactly flattering in many of the larger sizes either, but the company could still possibly capitalize at Lululemon’s expenses.

Athleta has a large mail catalog business, and it has had retail stores since 2011. There is an opportunity for it to attract even more of the Lululemon customers, but the store concept just might not be widespread enough to make much of a difference. We warned back on November 1 that the risk was more than meets the eye here for Lululemon investors, and shares were closer to $67.50 then. That was before this blunder turned into something worse.

This is something that needs to be paid attention to. Lululemon shares closed down another 2.9% at $66.95 against a 52-week trading range of $59.60 to $82.50. It still has a whopping $9.7 billion market cap versus $19 billion for The Gap, but last year’s annual sales were $15.65 billion for Gap versus $1.37 billion for Lululemon.

This public dilemma of Lululemon is an interesting one. There may not be a clear answer. Companies do deserve the right to have their designs made for certain customers. Perhaps the biggest issue is simply how they handle delivering that message. Slogans like “Fat people go elsewhere” are not going to give you the best reputation in the public. Simply stating “We have a target market that includes a range of sizes, and that is what we are sticking with” may be a better direction.

Set It And Forget It: Picks For Long-term Investing

When there is as much volatility in the market as there is right now, it seems sometimes like no one wants to invest long-term. While there are good reasons for not wanting to make long-term investments, there are just as many good reason for wanting to.

There are opportunities all over the market during times like these, for the very reason that people think there aren't; because no one else wants to invest in those kinds of stocks right now.

Tradition would have you believe you should use dollar-cost averaging or a system of market timing that is more complex than most are used to. But finding good long-term stocks means finding companies that are in a position to trend for at least ten years.

So what are some of the better long-term investment picks to consider before 2013 comes to a close? According to analysts, the following companies are among the better bets:

O'Reilly Automotive (NASDAQ: ORLY). The quality of automobiles coming off the assembly lines is getting better and better with each passing model year -- and with that higher quality comes the propensity for Americans to own and drive their cars for longer periods of time than in years past.

But no matter how good the quality is there is always going to be a need for auto parts with any car on a long enough timeline. What sets O'Reilly apart from other big contenders like Napa Auto Parts (NYSE: GPC) or Pep Boys (NYSE: PBY) is that O'Reilly has a unique model for selling to both traditional customers as well as to professional garages. It is expected the company will see between five and six percent growth over the next five to eight years.

3M Co. (NYSE: MMM). A company with a household name, 3M has over 55,000 products in production and sells them in more than 200 countries around the world. Throughout its history, 3M has built a reputation for innovation, with about 6 percent of the company's revenue being spent on research and development. It has also paid a dividend annually for nearly 100 consecutive years, and more than half of those years have seen the dividend raised despite major economic setbacks.

Twenty-First Century Fox (NASDAQ: FOXA). It is easy to see this particular pick as a no-brainer, even though many of the best investors still tend to overlook it. 21st Century Fox's bread and butter businesses include Fox News and Fox Sports, and its revenues are expected to rise significantly over the next decade as the company starts charging more to cable providers for its channels and services.

Hershey (NYSE: HSY). One of the leaders in chocolate industry, Hershey annually generates upwards of $1 billion -- and uses that money to pay for expansion, to increase its dividend and to purchase back stock. But experts say there is still room for growth and the company has shown savvy in venturing into other markets. It is projected Hershey will see between 12 and 16 percent growth over the next three to five years.

Posted-In: automotive sector candies chocolate Confectioners Industry entertainment Fox News Fox Sports home entertainment household products Investing long-term investingMarkets Best of Benzinga

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Around the Web, We're Loving... Learn to Use Trading Platforms Like Hedge Fund Traders do Rumsfeld: Denial of Benefits to Fallen Soldiers' Families 'Inexcusable' Come See How the Pro's Trade in this Exclusive Webinar Facebook, Baidu Lead Big Caps Beating Shutdown What Should You Know About AMZN? Most Popular MacBook Pro 2013 Rumor Roundup Why is AT&T Selling Its Cell Towers? Facebook Status Updates Go Down In Unexpected Outage (FB) IBM's Watson Coming to Smartphones Soon (IBM) Apple's 65-Inch Ultra HD Television To Arrive In 2014 UPDATE: Drexel Hamilton Initiates Coverage on Broadcom Corporation on Positive Market Outlook Related Articles (GPC + FOXA) Set It And Forget It: Picks For Long-term Investing UPDATE: BTIG Research Upgrades 21st Century Fox on Multiple Positive Factors Earnings Scheduled For October 18, 2013 Money Never Sleeps: Top 10 Financial Films UPDATE: Wedbush Initiates Coverage on Genuine Parts Company on Continued Slow and Steady Growth 'Gravity' Keeps Flight at the Box Office With $44 Million View the discussion thread. Partner Network #marketfy-ae-block { display: none; border: 2px solid #0a3f75; overflow: hidden; width: 300px; height: 125px; text-align: center; background-color: #45719E; position: relative; z-index: 1; } #marketfy-ae-block a { display: block; width: 300px; height: 125px; position: relative; z-index: 2; color: #ffffff; text-decoration: none; } #marketfy-ae-block-countdown-text { color: #f9fc99; padding: 0px 0 0 0; font-size: 19px; font-weight: bold; line-height: 19px; } #marketfy-ae-block-countdown-text-start { font-size: 12px; } #marketfy-ae-block-countdown { padding: 5px 0 5px 0; font-size: 26px; } #marketfy-ae-block-signup { padding: 5px 47px; } #marketfy-ae-block-signup:hover { background-color: #457a1a; } #marketfy-ae-block #marketfy-ae-block-logo { display: block; padding: 3px 0 0 0; margin: 0; } #marketfy-ae-block-logo { text-indent: -9999px; } #marketfy-ae-block-free { display: block; position: absolute; top: 7px; right: -23px; width: 80px; height: 16px; line-height: 16px; text-align: center; opacity: 1; -webkit-transform: rotate(45deg); -moz-transform: rotate(45deg); -ms-transform: rotate(45deg); transform: rotate(45deg); font-size: 13px; font-weight: normal; color: #333333; background-color: yellow; z-index: 500; text-shadow: 1px 1px #999999; } #marketfy-ae-block-arrow { position: relative; width: 60px; height: 60px; z-index: 10; margin: -80px 0 13px -21px; } #marketfy-ae-block-arrow img { height: 60px; width: auto; } Marketfy's International
Traders & Investors Summit Register

Monday, January 26, 2015

Specialized IBD to take on 50 reps and advisers from Veritrust

independent broker-dealer, representatives, reps, advisers, veritrust, planmember financial

PlanMember Financial Corp., a 400-representative independent broker-dealer that works with reps and advisers who specialize in retirement plans of school districts and other nonprofit organizations, is expanding.

The broker-dealer said today that it has agreed to become the broker-dealer and registered investment adviser for the 50 reps and advisers who have been affiliated with Veritrust Financial LLC. That firm is scheduled to close after filing its broker-dealer withdrawal notice with regulators. Veritrust's advisers will begin under PlanMember Financial next month.

Small broker-dealers such as Veritrust, which has fewer than 100 registered reps, have faced increasingly difficult business conditions since the financial crisis five years ago, forcing many to close their shutters. Compliance and technology costs have increased as regulators have put new rules on transactions in place. Record-low interest rates have crushed broker-dealer profit margins that formerly relied heavily on margin interest and spreads on money market funds.

At the end of 2008, 4,895 broker-dealers were registered with Finra. By last month, that number had dropped to 4,218, a decrease of 13.8%. Many of those were small broker-dealers.

The two firms will form a national marketing and distribution alliance, according to a joint statement.

“We are excited to have Veritrust and their independent advisers as distribution partners,” Jon Ziehl, chief executive and founder of PlanMember Financial, said in the statement.

Sunday, January 25, 2015

iPhone 5c Pre-Orders Go Live

Update from 8:29 A.M. to include additional pre-sales information.

NEW YORK (TheStreet) -- Apple's (AAPL) iPhone 5c is now available for pre-order, as the tech giant looks to ramp up sales of its largest revenue driver ahead of the upcoming holiday season. However, people who want Apple's high-end phone, the iPhone 5s, will have to wait.

When making the announcement earlier this week that the 5c would be available for pre-order starting Friday, Apple conspicuously "forgot" to mention when the 5s would be available for pre-order. The iPhone 5s will be available at 12:01 a.m. Sept. 20th for pre-order, but customers will more than lilkely have to line up at Apple Stores and the stores from Apple's carriers, including AT&T (T), Verizon (VZ), Sprint (S) and T-Mobile USA (TMUS). Apple's approach to limiting pre-orders for the 5s ensures there will be exceptionally long lines, as customer demand for the phone is said to be high.

The iPhone 5s has a host of new features to separate it from Apple's previous offerings. Sporting a fingerprint authentication -- TouchID -- on the home button, the 5s also runs a 64-bit A7 CPU, the first 64-bit chip inside a smartphone. Apple also unveiled the M7 co-processor, a chip used to track motion data. The phone comes in silver, graphite and gold, marking the first time Apple has offered the iPhone in colors other than white and black. In contrast, the 5c runs Apple's A6 processor, announced last year as part of the iPhone 5. It will come in five colors (white, pink, yellow, blue and green), and will come in 16 GB and 32 GB models. The 5c starts at $99 on AT&T, Verizon, and Sprint. T-Mobile users can purchase the phone unlocked, which starts at $549 for the 16 GB model. The yellow version of the 5c has already sold out at Sprint on the pre-order, with the carrier's Web site saying it'll do its "best to get it to you by 9/20; but because of high demand, some phones will ship in up to 2 weeks." Apple shares were lower in trading Friday, off 1% to $468.05. --Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia

Saturday, January 24, 2015

Bond Labs Continues International Growth (OTCMKTS:BNLB, OTCMKTS:CRWE)

bnlb

Bond Laboratories, Inc. (BNLB)

Today, BNLB surged (+16.79%) up +0.023 at $.163 with 185,870 shares in play thus far (ref. google finance Delayed: 11:45AM EDT July 2, 2013).

Bond Laboratories, Inc. marketed primarily through its wholly owned operating division, NDS Nutrition Products ("NDS"), previously repoted the Company has received an initial purchase order to begin supplying product for GNC® franchise locations in Mexico.

Take a look at Bond Laboratories, Inc. (BNLB) 5 day chart:

lbaschart

crownequityholdings

Crown Equity Holdings Inc. (CRWE)

Together with their digital network of Websites, Crown Equity Holdings Inc. (OTCMKTS:CRWE) (www.crownequityholdings.com ) offers advertising branding and marketing services as a worldwide online multi-media publisher. The company focuses on the distribution of information for the purpose of bringing together a targeted audience and the advertisers that want to reach them.

Today, CRWE remains (0.00%) +0.000 at $.130 thus far (ref. google finance 12:35PM EDT  July 2, 2013). Keep in mind, last Friday (June 28), CRWE had surged (+73.33%) up +0.0055 at $.0130 with 2,500 shares in play at the close (ref. google finance June 28, 2013 – Close).

Recently (June 26), CRWE Files 10-Q. To view click URL http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9371051

Recently (June 26), CRWE Files 10-K. To view click URL http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9371048

Crown Equity Holdings Inc. 5 day chart:

crwechart

Thursday, January 22, 2015

Why Array BioPharma Shares Spiked

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 Array BioPharma (NASDAQ: ARRY  ) , a biopharmaceutical company focused on the development of small molecule drugs for the treatment of cancer and inflammatory diseases, soared as much as 29% after the company reported positive phase 2 data on ARRY-502, an experimental drug designed to treat mild to moderate persistent allergic asthma.

So what: The most important aspect of the trial was that ARRY-502 met its primary endpoint of significantly improving pre-bronchodilator Forced Expiratory Volume in one second, or FEV1, a measure of lung function. For the overall patient subset, FEV1 improved by 3.9% compared to the placebo; however, patients in the pre-specified Th2 Biomarker set saw FEV1 improve by 6.8% compared to the placebo. ARRY-502 also met its secondary endpoints, which included reduced short-acting beta agonist use and symptom-free days during treatment, to name a few. Array plans to move ARRY-502 onto late-stage trials, but understanding the competitive nature of the asthma market, it is seeking a partner first. Following the news, Piper Jaffray boosted its price target on Array to $10 from $7, implying 80% upside from yesterday's close.

Now what: The downside to Array's finding is the simple fact that the asthma market is indeed very competitive. Even if Array manages to find a partner, there's little guarantee it'll be successful if ARRY-502 is approved. Even worse, it may not matter because the marketing expenses to make a dent in treating asthma patients -- and having to share royalties with a presumably much larger licensing partner -- could sap any chance it has of turning a profit. Then again, the other intriguing side to this is simply the unknown of who that partner might be. Licensing partners and the nature of the deal can make or break some of these smaller biotech companies. In the meantime, I'd suggest adding Array BioPharma to your watchlist, but sticking to the sidelines until we know who its marketing partner will be on ARRY-502.

It's no secret that biotech stocks like Array BioPharma have been soaring recently, but the best investment strategy is to pick great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" not only shares stocks that could help you build long-term wealth, but also winning strategies that every investor should know. Click here to grab your free copy today.

Wednesday, January 21, 2015

An Unobvious Play on Rising Ethanol RIN Prices

What a crazy year this has been for ethanol producers and the refiners responsible for blending it into gasoline. After barely hovering above zero for much of the past few years, ethanol renewable identification numbers, or RINs, shot up to $1.00 per gallon in mid-February before pulling back to half of that in March. Even Valero (NYSE: VLO  ) , a major refiner and ethanol producer, had sharp words criticizing the volatility. What the heck happened?

RINs are created with each lot of biofuels produced and act as a way for the industry to track production. They are normally sold with the corresponding amount of biofuels, but can be sold on secondary markets without a physical volume to back it up. Speculation by third parties and fear of running into the 10% ethanol blend wall in 2013 and 2014 caused prices to spike. The volatility may continue for the medium term, but investors may be able to find solace in the country's leading biodiesel producer Renewable Energy Group (NASDAQ: REGI  ) . Fool contributor Maxx Chatsko explains why in the following video.

If you're on the lookout for some currently intriguing energy plays, check out The Motley Fool's "3 Stocks for $100 Oil." For FREE access to this special report, simply click here now.

Apple's CEO Should Leave Nike's Boardroom

Apple (NASDAQ: AAPL  ) CEO Tim Cook is once again dodging questions about wearable computing beyond calling it an area of "incredible interest" for his company. However, he had no problem showing off Nike's (NYSE: NKE  ) FuelBand that he has been wearing since early last year. Cook even sits on Nike's board.

In this video, longtime Fool contributor Rick Munarriz argues that Cook's presence on Nike's board may be creating a conflict of interest when it comes to wearable computing. Google's (NASDAQ: GOOG  ) Eric Schmidt left Apple when he rightfully sensed a growing conflict of interest between the two tech titans. It could be time for Cook to follow suit with Nike's boardroom.

Got Apple? Get smart.
There's a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Monday, January 19, 2015

IRS Gets Big Win In Court As Judge Dismisses Tea Party Targeting Cases

Years ago, I found myself sitting in law school in Moot Court wearing an oversized itchy blue suit. It was a horrible experience. In a desperate attempt to avoid anything like that in the future I enrolled in a tax course. I loved it. I signed up for another. Before I knew it, in addition to my JD, I had a LL.M Taxation. I needed only to don my cape…. taxgirl® was born. Today, I live and work in Philadelphia, PA, one of the best cities in the world (I can't even complain about the sports teams these days). I landed in the City of Brotherly Love by way of Temple University School of Law. While at law school, I interned at the estates attorney division of the IRS. At IRS, I participated in the review and audit of federal estate tax returns. I even took the lead on a successful audit. At audit, opposing counsel read my report, looked at his file and said, "Gentlemen, she's exactly right." I nearly fainted. It was a short jump from there to practicing, teaching, writing and breathing tax.

Contact Kelly Phillips Erb

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

Saturday, January 17, 2015

The Top Net Buys Of The Hedge Fund Gurus

Now that the second quarter portfolios have been filed with the SEC, I used the GuruFocus S&P 500 Grid to get a look at what the hedge fund gurus have been buying. I prefer to use "net buys" over "buys" because it also factors in what the hedge fund gurus have been selling. When using the S&P 500 Grid, I adjusted the settings to only include the hedge fund gurus and examined the results for both S&P 500 and non-S&P 500 companies. The top results were MasterCard (MA), eBay (EBAY), Occidental Petroleum (OXY), Ally Financial (ALLY), Actavis (ACT), and Allergan (AGN).

MasterCard Inc (MA)

Market Cap: 87.81 billion, P/E: 27.40

Business Predictability: 1/5, Financial Strength: 9/10, Profitability & Growth: 8/10

At the top of the hedge fund list for net buys is MasterCard. There were 10 buys and 2 sells resulting in 8 net buys. The list of purchasers includes Steve Mandel, Jim Chanos and Jim Simons, although one of the sellers was George Soros.

1409773403087.png

MasterCard is the well-known credit card company. In its 10-k, it describes itself as a technology company in the global payments industry that connects consumers, financial institutions, merchants, governments and businesses worldwide, enabling them to use electronic forms of payment instead of cash and checks.

The macro view of the growth in electronic transactions and MasterCard's high return on equity (ROE) support the rationale for buying the stock. ROE has averaged a high 38.25 percent over the past five years. Although the long-term prospects look good, the stock has climbed 269 percent over the past five years and has gotten ahead of itself and could lead to subpar performance over the next year. The stock has a high P/E of 27.7. According to the GuruFocus DCF Calculator, earnings will need to grow at a rate of 19.54 percent to justify its current price using a discount rate of 12 percent. The annualized 5-year growth rate in EPS has been 23.10 percent, but earnings growth has slowed to 14.5 percent over the past 12 months.

eBay Inc (EBAY)

Market Cap: 67.7 billion, P/E: N/A

Business Predictability: 4/5, Financial Strength: 8/10, Profitability & Growth: 8/10

eBay had 12 buys and 5 sells resulting in 7 net buys. When considering all of the gurus we follow, not just the hedge funds, eBay had the most net buys. The hedge fund buyers include Carl Icahn, Jim Chanos, Seth Klarman and Leon Cooperman.

1409776248084.png

eBay is the online auction website that enables global commerce and payments on behalf of users, merchants, retailers and brands of all sizes. Its three reportable segments are Marketplaces, Payments and Enterprise. The Payments segment includes PayPal. The Enterprise segment includes eBay's acquisition of GSI Commerce in June of 2011, which provides commerce technologies, omnichannel operations and marketing solutions for large, nationally recognized retailers and brands. The activist investor, Carl Icahn (Trades, Portfolio), was pushing for a spinoff of the PayPal division earlier in the year, but pulled back on his demands after speaking with the CEO. The idea of a spinoff came to the forefront again in late August. A spokeswoman for eBay said that the board will continue to assess all alternatives to create long-term value and enhance growth and competitive positions of both eBay and PayPal.

The company's negative earnings report in the first quarter was due to a $3 billion tax charge from bringing offshore money back to the United States. Bringing the cash back to the U.S. increased its available cash by $6 billion. Adding the tax charge back to earnings results in a P/E ratio of 25. According to its historical P/S ratio, the stock is now fairly valued and is trading right at its 5-year median P/S ratio of 4.2. The opportunity is in the possible spinoff of PayPal that could unlock value.

Occidental Petroleum Corp (OXY)

Market Cap: 80.11 billion, P/E: 13.70

Business Predictability: 2.5/5, Financial Strength: 5/10, Profitability & Growth: 9/10

Occidental had 7 buys with no sellers. The buyers include Stanley Druckenmiller, George Soros, Jim Simons, and Joel Greenblatt.

1409776449332.png

Occidental engages in the acquisition, exploration and development of oil and gas properties in the United States and internationally. Its three segments are Oil and Gas, Midstream and Marketing, and Chemicals.

The stock is undervalued by about 10 percent according to its Peter Lynch Earnings Line value of $113.80. Revenue and earnings per share have been growing at annual rates of 14.5 and 13.9 percent over the past five years. The company has a low debt-to-equity ratio of 0.16 and is expected to spin off its California assets within the next year.

Ally Financial Inc (ALLY)

Market Cap: 11.89 billion, P/E: N/A

Business Predictability: Not Rated, Financial Strength: 5/10, Profitability & Growth: 5/10

Ally had 7 buyers and no sellers. The hedge fund buyers include George Soros, John Paulson, Howard Marks, and Daniel Loeb.

1409776737988.png

Ally Financial is one of the largest providers of automotive financing products, including wholesale loans and retail loans and leases, a leader in direct banking, and the 19th-largest bank holding company in the United States based on total assets.

Before rebranding itself as Ally Financial, the old GMAC fell into trouble with its subprime mortgages. During its restructuring, the bank was able to shed its mortgage division and has come out with a stronger balance sheet. The stock is trading at a P/B ratio of 0.9 and could still be carrying the stigma of the old GMAC that went through financial troubles. Banks tend to trade in a P/B range of 1.2 to 1.3 in normal times. Ally Financial could revert to those levels making the stock undervalued by over 30 percent. A P/B ratio of 1.2 would value the stock at about $33 per share.

Actavis Plc (ACT)

Market Cap: 60.4 billion, P/E: 488.70

Business Predictability: 1/5, Financial Strength: 5/10, Profitability & Growth: 8/10

Actavis had 9 buys and 3 sells resulting in 6 net buys. The hedge fund buyers include Leon Cooperman, George Soros and Jim Simons.

1409777279570.png

Actavis is a leading integrated global specialty pharmaceutical company engaged in the development, manufacturing, marketing, sale and distribution of generic, branded generic, brand, biosimilar and over-the-counter pharmaceutical products.

Actavis bought Forest Labs for about $25 billion earlier in the year, and the company is continuing to grow through acquisitions. The current P/E ratio is listed as a sky-high $488.70, but the forward guidance given by Actavis includes an expected EPS between $15.60 and $16.80 for 2015. Using the midpoint of the range leads to a forward P/E ratio of 14.2. Analysts are estimating a 5-year expected PEG ratio of 0.87. If analysts' estimates are correct, the stock is undervalued with a growth rate that is higher than its P/E ratio.

Allergan Inc (AGN)

Market Cap: 49.07 billion, P/E: 38.80

Business Predictability: 3/5, Financial Strength: 9/10, Profitability & Growth: 9/10

Allergan had 9 buys and 3 sells resulting in 6 net buys. The hedge fund buyers include Bill Ackman, John Paulson, Jim Chanos and Paul Singer.

1409777922530.png

Allergan discovers, develops and commercializes a diverse range of products for the ophthalmic, neurological, medical aesthetics, medical dermatology, breast aesthetics, urological and other special markets in more than 100 countries around the world. A majority of the company's revenue comes from eye care pharmaceuticals and Botox.

The value of the stock lies within the activist position that Bill Ackman (Trades, Portfolio) has taken. His hedge fund, Pershing Square, now owns 9.71 percent of the company and has made Allergen its largest equity holding. He has been working with Valeant Pharmaceuticals (VRX) to help the company buyout Allergan. A bid from Valeant to purchase Allergan was valued at $181 per share earlier in the year. Ackman is not backing down and is still focused on getting a transaction completed to maximize the value of his investment.

The S&P 500 Grid is an excellent tool that can help gain insights into the activities of the top investing gurus. The grid can be customized to display results based on different lists of gurus, whether they are buying or selling, by market cap, and can even be narrowed down to specific sectors. The grid can also be customized to display the picks of your own personalized list of gurus. It is quick and easy to use and gives instant results. Give it a try through the following link: S&P 500 Grid.

Not a Premium Member of GuruFocus? Try it free for 7 days here!

Also check out: Steven Mandel Undervalued Stocks Steven Mandel Top Growth Companies Steven Mandel High Yield stocks, and Stocks that Steven Mandel keeps buying Jim Chanos Undervalued Stocks Jim Chanos Top Growth Companies Jim Chanos High Yield stocks, and Stocks that Jim Chanos keeps buying Jim Simons

Wednesday, January 14, 2015

5 Stocks Under $10 Set to Soar

DELAFIELD, Wis. (Stockpickr) -- There isn't a day that goes by on Wall Street when certain stocks trading for $10 a share or less don't experience massive spikes higher. Traders savvy enough to follow the low-priced names and trade them with discipline and sound risk management are banking ridiculous coin on a regular basis.

>>5 Big Stocks to Trade for Gains

Just take a look at some of the big movers in the under-$10 complex from Thursday, including Rexahn Pharmaceuticals (RNN), which is exploding higher by 19%; Synthetic Biologics (SYN), which is jumping higher by 17%; Skilled Healthcare Group (SKH), which is trending to the upside by 12%; and Ambient (AMBT), which is ripping higher by 12%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

One low-priced stock that recently ripped higher was integrated mining player Pretium Resources (PVG), which I highlighted in April 24's "5 Stocks Under $10 Set to Soar" at around $6 per share. I mentioned in that piece that shares of PVG were trending sideways and consolidating for the last three months or so, with the stock moving between $5 on the downside and $7.49 on the upside. This stock was just starting to spike higher above support at $5.50 and it's was quickly moving within range of triggering a near-term breakout trade above its 200-day at $6.21 and its 50-day at $6.32 a share.

>>5 Stocks Insiders Love Right Now

Guess what happened? Shares of Pretium Resources triggered that breakout a few trading sessions later. This stock ran sharply once those key moving averages were taken out with decent volume, and shares of PVG tagged a recent a high of $7.70 a share. That represents a very nice gain in a tough market environment of right around 30%.

Low-priced stocks are something that I tweet about on a regular basis. I frequently flag high-probability setups, breakout candidates and low-priced stocks that are acting technically bullish. I like to hunt for low-priced stocks that are showing bullish price and volume trends, since that increases the probability of those stocks heading higher. These setups often produce monster moves higher in very short time frames.

>>Hedge Funds Hate These 5 Stocks -- Should You?

When I trade under-$10 names, I do it almost entirely based off of the charts and technical analysis. I also like to find under-$10 names with a catalyst, but that's secondary to the chart and volume patterns.

With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels.

Adamis Pharmaceuticals


One under-$10 biopharmaceutical player that's starting to trend within range of triggering a near-term breakout trade is Adamis Pharmaceuticals (ADMP), which is engaged in the development and commercialization of specialty pharmaceutical and biotechnology products in the therapeutic areas of respiratory disease, allergies, oncology and immunology. This stock is off to a decent start in 2014, with shares up 6.5%.

If you glance at the chart for Adamis Pharmaceuticals, you'll notice that this stock has been uptrending for the last month and change, with shares moving higher from its low of $4.66 to its intraday high of $6.99 a share. During that uptrend, shares of ADMP have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of ADMP have recently crossed back above both its 50-day and 200-day moving averages. That move has now pushed shares of ADMP within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in ADMP if it manages to break out above some near-term overhead resistance levels at $6.90 to $7.25 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 159,259 shares. If that breakout triggers soon, then ADMP will set up to re-test or possibly take out its next major overhead resistance levels at $9 to $10 a share.

Traders can look to buy ADMP off weakness to anticipate that breakout and simply use a stop that sits right around its 50-day moving average of $5.97 a share. One can also buy ADMP off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Charles & Colvard


An under-$10 jewelry player that's starting to push within range of triggering a big breakout trade is Charles & Colvard (CTHR), which manufactures, markets and distributes moissanite jewels and finished jewelry featuring moissanite worldwide. This stock has been destroyed by the sellers so far in 2014, with shares off by 52%.

If you take a look at the chart for Charles & Colvard, you'll notice that this stock has been downtrending badly for the last six months, with shares sliding lower from around $6 to its recent 52-week low of $1.87 a share. During that move, shares of CTHR have making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of CTHR have started to rebound higher off that $1.87 low and it's now moving within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Market players should now look for long-biased trades in CTHR if it manages to break out above some near-term overhead resistance levels at $2.49 to $2.52 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 148,820 shares. If that breakout kicks off soon, then CTHR will set up to re-test or possibly take out its next major overhead resistance levels at $2.75 to its 50-day moving average of $2.92 a share. Any high-volume move above those levels will then give CTHR a chance to tag $3.25 to $3.50 a share.

Traders can look to buy CTHR off weakness to anticipate that breakout and simply use a stop that sits right around $2.15 or at $2 a share. One can also buy CTHR off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Gordmans Stores


One under-$10 apparel stores player that's starting to move within range of triggering a near-term breakout trade is Gordmans Stores (GMAN), which operates department stores under the Gordmans name in the U.S. Its merchandise selection includes a range of apparel, footwear and home fashions products, as well as accessories. This stock has been hit hard by the bears so far in 2014, with shares down sharply by 38%.

If you take a glance at the chart for Gordmans Stores, you'll notice that this stock recently formed a triple bottom chart pattern at $4.31, $4.33 and $4.43 a share. This bottom is coming after shares of GMAN downtrended badly over the last six months, with the stock falling from over $10 to its recent low of $4.31 a share. Shares of GMAN are now starting to bounce higher off those near-term support levels and it's quickly moving within range of triggering a major breakout trade.

Traders should now look for long-biased trades in GMAN if it manages to break out above some near-term overhead resistance levels at $5.02 to $5.03 a share and then once it takes out its 50-day moving average of $5.16 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 86,113 shares. If that breakout materializes soon, then GMAN will set up to re-test or possibly take out its next major overhead resistance levels at $5.55 to around $6.50 a share.

Traders can look to buy GMAN off weakness to anticipate that breakout and simply use a stop that sits right below $4.43 or $4.31 a share. One can also buy GMAN off strength once it starts to push above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Actuate


Another under-$10 technology player that's starting to trend within range of triggering a major breakout trade is Actuate (BIRT), which provides software solutions and services to corporate and government customers worldwide. This stock has been under the control of the sellers so far in 2014, with shares off by 47%.

If you look at the chart for Actuate, you'll see that this stock recently gapped down sharply from over $5.50 to its 52-week low of $3.41 a share with heavy downside volume. Following that move, shares of BIRT have started to rebound off that $3.41 low and it's now moving within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Market players should now look for long-biased trades in BIRT if it manages to break out above some key near-term overhead resistance levels at $4.03 a share to its gap-down-day high of $4.10 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 509,657 shares. If that breakout starts soon, then BIRT will set up to re-fill some of its previous gap-down-day zone from earlier this month that started at $5.50 a share.

Traders can look to buy BIRT off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support around $3.77 a share. One can also buy BIRT off strength once it starts to move above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Elbit Imaging


One final under-$10 real estate player that's starting to trend within range of triggering a big breakout trade is Elbit Imaging (EMITF), which is engaged in commercial and entertainment centers, hotels, medical, residential projects and fashion apparel businesses in Israel, Western Europe, Central and Eastern Europe and internationally. This stock has been destroyed by the sellers so far in 2014, with shares down big by 83%.

If you take a glance at the chart for EMITF, you'll notice that this stock recently formed a double bottom chart pattern at 16 cents to 17 cents per share. Following that bottom, shares of EMITF have now started to bounce off those support levels and it's quickly moving within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in EMITF if it manages to break out above some near-term overhead resistance levels at its 50-day moving average of 21 cents per share to some more key resistance at 24 cents per share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1.15 million shares. If that breakout hits soon, then EMITF will set up re-test or possibly take out its next major overhead resistance levels at 28 cents to 30 cents per share. Any high-volume move above those levels will then give EMITF a chance to make a run into its previous gap-down-day zone from February that started at 90 cents per share.

Traders can look to buy EMITF off weakness to anticipate that breakout and simply use a stop that sits right around those double bottom support zones at 17 to 16 cents per share. One can also buy EMITF off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

To see more hot under-$10 equities, check out the Stocks Under $10 Setting Up to Explode portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.


RELATED LINKS:



>>3 Stocks Spiking on Unusual Volume



>>5 Rocket Stocks to Beat a Sideways Market



>>5 Hated Earnings Stocks You Should Love

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.


Tuesday, January 13, 2015

Average Wall St. bonus jumps 15% to $164,530

Sports car sellers and Hampton's beach house realtors rejoice: Wall Street bonuses hit their highest level since 2007.

The average bonus paid to securities industry employees in New York City in 2013 grew 15% to hit $164,530 in 2013, according to estimates released Wednesday by New York State Comptroller Thomas P. DiNapoli. That includes cash for the current year and compensation deferred from prior years.

This marks the third biggest bonus on record, says DiNapoli. The other two stand-out years: 2006, when workers gleaned $191,360 and 2007, when they gained $177,830.

THREATS: Record margin debt poses risk for bull market

The comptroller's office examines personal income tax trends to get the estimate. The bonus figures don't include stock options or other forms of deferred compensation for which taxes haven't been withheld.

Although profits were lower than in past years, Wall Street still had a healthy 2013, DiNapoli said in a statement.

Firms had to deal with costly legal settlements, higher interest rates and an evolving regulatory environment, yet "Wall Street continues to demonstrate resilience," he says.

Wall Street, which had record losses during the financial crisis, has shown profits for five consecutive years, he says.

Profits for the broker/dealer operations of New York Stock Exchange member firms totaled $16.7 billion in 2013. That is 30% less than in 2012, DiNapoli said in the statement, "but still strong by historical standards."

Even with the strong profits, Wall Street's overall recovery isn't coming along "as fast as we had all hoped," says financial industry compensation consultant Alan Johnson.

He likened the recovery process to "two baby steps forward and then a step backwards."

The securities industry in New York City is making its comeback with fewer workers. It had about 165,200 workers in December, which is 12.6% less than before the financial crisis. Those tough economic times brought about massive layoffs as well! as the demise of entire financial firms.

Technological shifts, such as the move to electronic trading, has also reduced the ranks of Wall Street workers, as has the move to outsource operations to other parts of the U.S. and overseas.

For the firms that remain in New York City, offering healthy bonuses is a strategic way to recruit and retain top talent, says Johnson.

"Outside of the industry, bonuses generally make up a small part of people's pay," he says. "In the industry, they can make up a big part of the pay."

By offering robust bonuses, firms are better able to lure in those who would consider jobs in other financial areas such as working for hedge funds or consulting firms.

"Many high-performing people have a number of (job) choices," Johnson says.

Monday, January 12, 2015

Corn Closes Higher, Soybeans Down

U.S. Grain Futures ended Monday's session with Soybeans down more than 3 percent and Corn higher on the day. Wheat also ended the session lower.

March Soybeans last traded at 1016 1/2, down 35 3/4 cents. March Soymeal was down 7.9 at 341.20. March Soybean Oil was lower by 1.08 at 32.60.

March Corn was up 1 3/4 cents at 402.

March Chicago Wheat was lower at 555 1/2, down 8 1/4 cents. March Kansas City Wheat was down 10 cents at 590 1/2.

Posted-In: Futures Commodities Markets

© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Related Articles Cybersecurity Stocks To Watch Following U.S. Central Command Twitter Hack Credit Suisse's 4 Tech Stocks To Own (And 4 To Avoid) Clear Channel Outdoor, Oasis Petroleum And Other Insiders Have Been Buying NY Soft Commodities Close Mixed How Apple Is Creating A Whole New Industry Through Its Apple Watch These Funds Domicile Homebuilders' Stocks Around the Web, We're Loving... World Cup Championship of Binary Options! Huanity's Last Great Hope: Venture Capitalists Don't Miss The Next Webinar to Advance your Trading Will Apple Redefine How We Shop? What Did Josh Brown Say On Our Morning Show? We're Now Hiring Journalists for our Newsdesk!

Mid-Afternoon Market Update: Markets Continue Rally as Tesla Guidance Lifts Stock

Toward the end of trading Tuesday, the Dow traded up 0.63 percent to 16,361.14 while the NASDAQ surged 1.66 percent to 4,181.62. The S&P also rose, gaining 1.05 percent to 1,838.09.

Top Headline
J.P. Morgan Chase & Co (NYSE: JPM) reported a 7% drop in its fourth-quarter profit.

J.P. Morgan's quarterly profit declined to $5.3 billion, or $1.30 per share, versus a year-ago profit of $5.7 billion, or $1.39 per share. Its adjusted earnings came in at $1.40 per share.

Its revenue dropped 1% to $24.1 billion, versus $24.4 billion. However, analysts were projecting earnings of $1.32 per share on revenue of $23.81billion. J.P. Morgan's mortgage originations tumbled 54% y/y to $23.3 billion, while investment banking net income slipped 57%.

Equities Trading UP
Shares of Tesla (NASDAQ: TSLA) were on the rise Tuesday afternoon, gaining 15.47 percent to $161.10 after the company issued some positive fourth quarter guidance at the Detroit Autoshow, leading to an upgrade from Baird.

VeriFone Systems (NYSE: PAY) shot up 5.00 percent to $28.77 after JP Morgan upgraded the stock from Neutral to Overweight.

Google (NASDAQ: GOOG) was also up, gaining 2.41 percent to $1,150.97 after the company announced its plans to acquire Nest Labs for $3.2 billion. Analysts at Wells Fargo upgraded Google from Market Perform to Outperform.

Equities Trading DOWN
Shares of GameStop (NYSE: GME) were down 20.62 percent to $36.17 after the company cut its profit outlook for the holiday quarter.

Intercept Pharmaceuticals (NASDAQ: ICPT) was also down, falling 26.36 percent to $268.60 after a Wall Street Journal article Friday reported that the NIH had said patient's of the company's drug had more bad cholesterol than when they had started treatment.

Stratasys (NASDAQ: SSYS) was down, falling 8.83 percent to $118.51 after the company issued downbeat FY14 earnings outlook.

Commodities
In commodity news, oil traded up 0.75 percent to $92.49, while gold traded down 0.70 percent to $1,242.40.

Silver traded down 1.05 percent Tuesday to $20.17, while copper fell 0.42 percent to $3.33.

Eurozone
European shares were mostly higher today. The Spanish Ibex Index rose 0.06 percent, while Italy's FTSE MIB Index gained 0.17 percent. Meanwhile, the German DAX climbed 0.23 percent and the French CAC 40 rose 0.26 percent while U.K. shares gained 0.16 percent.

Economics
The NFIB Small Business Optimism Index rose to 93.90 in December, versus a prior reading of 92.50. However, economists were expecting a reading of 93.10.

The ICSC-Goldman Sachs store sales index dropped 1% in the week ended Saturday versus the earlier week.

U.S. retail sales increased 0.2% in December, versus economists' estimates for a 0.1% gain.

The import price index came in unchanged in December, while the export index climbed 0.4% in the month.

The Johnson Redbook Retail Sales Index declined 0.3% in the first week of January versus December.

U.S. business inventories rose 0.40% in November, versus economists' expectations for a 0.30% gain.

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

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

  Most Popular Earnings Expectations For The Week Of January 13: Big Banks, GE, Intel And More ETFs Poised For Apple Rally (AAPL, IYW, XLK, QQQ, GOOG, MSFT) China Gold Stone Mining Reports Cash Tender Bid for Allied Nevada Shares, Tendering Holders Will Be Paid $7.50/Share in Cash UPDATE: JMP Securities Reiterates Coverage on ARIAD Pharmaceuticals, Sees Market Share Regain UPDATE: Stifel Downgrades Cree on Recent Performance Coming Soon: 3D Printing For Everyone Related Articles (GOOG + GME) Google's Deal to Purchase Nest Labs Sends a Surge Through the Home Automation Industry Market Wrap For January 14: Markets Rebound On Earnings Season Kickoff Analysts React To Google's Acquisition Of Nest Labs Mid-Afternoon Market Update: Markets Continue Rally as Tesla Guidance Lifts Stock Mid-Day Market Update: Stratasys Drops On Downbeat Profit Outlook; Google Shares Surge FBN Securities Initiates Coverage on Internet Industry Around the Web, We're Loving... Lightspeed Trading Presents: Thunder and Tubleweeds: Trading Techniques for the New Market Enviroment Pope Francis Rips 'Trickle-Down' Economics Come See How the Pro's Trade in this Exclusive Webinar Wynn, MGM, Other Casino Giants Vying For U.S. Turf What Should You Know About AMZN? View the discussion thread. Partner Network

Saturday, January 10, 2015

Top Insider Trades: USAK OHI INWK SAEX

span.style4 {font-size: 10px; font-weight: bold; } span.style5 {font-size: 10px}

By Jonathan Moreland, founder of Insider Insights and author of Profit From Legal Insider Trading.

NEW YORK (TheStreet) -- It is a victory for common sense. Tracking the trading behavior of company executives, directors and large shareholders in the stocks of firms they're registered in as "insiders" has proven to be profitable, according to both academic studies and (more importantly) the experience of professional investors.

Below are lists of the top 10 mainly open-market insider purchases and sales filed at the Securities and Exchange Commission Wednesday, Nov 20, 2013, as ranked by dollar value. Please note, however, that these are only factual lists, not buy and sell recommendations. Dollar value is only one metric to assess the importance of an insider transaction, and, frankly, often not even the most important metric that determines if an insider transaction is significant. At InsiderInsights.com, we find new investment ideas just about every day using these and more intricate insider screens to determine where we should focus our subsequent fundamental and technical analysis. And while stocks don't (or shouldn't) move up or down based on insider activity alone, insiders tend to be good indicators of when real stock-moving events like earnings surprises, corporate actions, and new products may be in the offing. So use these regular Top Insider Trades columns as the initial research tools they are meant to be, and click the links in the tables to analyze a company's or insider's full insider history. Also feel free to contact us with any questions on our proprietary insider data, and how it is best analyzed.

Relypsa (RLYP)

The Facts On Obamacare: Will It Make America Sick?

When Congress passed the Social Security Act in 1935, it represented the most sweeping shift in American social policy in the history of our nation. Moreover, the entire legislation contained approximately 15,283 words. When the president signed the Patient Protection and Affordable Care Act in 2010, most lawmakers had read little, if any, of the 679,000+ words contained in the bill.

 

Some believe Obamacare will occupy a place in history as one of the most intrusive and freedom inhibiting regulations ever forced upon the American people. This is because every citizen is now required to purchase an acceptable health insurance policy or pay a penalty. There are some qualified exemptions which we'll discuss another time. Despite legal challenges from at least 27 states, the Supreme Court ruled that as long as the non-compliance penalty is considered a tax, Obamacare does not run afoul of the Constitution. This is because Article One, Section Eight of the U.S. Constitution grants Congress the power to collect taxes for the "general welfare of the nation." Hence, Obamacare has become the law of the land. Coincidentally, this is the same position the Supreme Court took in 1937 when it ruled on the constitutionality of Social Security.

 

If you find yourself confused over the complexities of Obamacare, you're not alone. The problem is that there has been a tremendous amount of rhetoric from both sides of the political aisle. This, coupled with media spin, has created a great deal of confusion among the population. Although it cannot be stated with certainty if there is some Machiavellian motive lurking beneath the surface, we can draw some factual conclusions from what has already transpired. Of course, there are also unintended consequences to consider. First, let's cover some background.

 

The Three Types of Universal Health Universal Health Care

There are three basic types of universal health care. They include: Single Payor (SP); Two Tiered (TT); and Insurance Mandate (IM). A Single Payor system is completely government run. In at least one country, the government places its citizens into one of two categories. The medical services available to an individual are then based on their category. If they need services which are not included in their category, they must petition their government. In a Two-Tiered System, the government provides or mandates a minimum amount of insurance coverage for every citizen. With an Individual Mandate, the government mandates that all citizens purchase insurance, whether from private, public, or non-profit insurers. Moreover, insurance companies must accept all applicants, regardless of health. Obamacare falls under the Insurance Mandate system.

 

What Has Occurred Thus Far

Friday, January 9, 2015

Everything You Need to Know About Lending Club

"Lending Club's platform has the potential to profoundly transform traditional banking over the next decade."
--Larry Summers, 71st U.S. Treasury secretary and Lending Club board member. 

Lending Club's (NYSE: LC  ) stock is up a stellar 66% since the company went public in December. The peer-to-peer lending specialist offers an alternative to the traditional banking system with an online platform for borrowers and lenders. It has a leading 40% share of the peer-to-peer lending market, far outstripping No. 2 player Prosper.com and its 8% market share. 

Value proposition
Lending Club offers a more efficient, transparent, and customer-friendly way to process transactions between a lender and a borrower than most traditional banks. As the company has no branch infrastructure, its cost structure is relatively lower than that of standard banks. The online system and sound technology help the company lower the cost of credit and pass the savings back in the form of lower rates for borrowers and solid returns for investors.

How does Lending Club make money?
Lending Club generates revenue from transaction fees (from its platform's role in matching borrowers with investors to enable loan originations), servicing fees (from investors), and management fees (for investment funds and other managed accounts). The borrower pays a one-time origination fee that ranges from 1.11% to 5% of the loan amount, depending on loan grade and term. Origination fees account for 88% of the company's revenue. Investors, meanwhile, pay a 1% service fee on each payment received from a borrower.

What do consumers and employees think?
Based on 1,398 reviews, the company is rated four out of five by customers on Credit Karma, a personal loans website. According to those reviewers, Lending Club's application process is easy and quick, borrowers can get loans at lower interest rates, and the feedback mechanism helps them voice their opinions to management. Employees give the company a rating of 4.6 out of 5 out of Glassdoor, and CEO Renaud Laplanche has an approval rating of 100%. According to Laplanche, the company is primarily focused on prime and superprime borrowers. That indicates borrowers don't come to Lending Club because they are declined by banks, but rather because they seek better rates.

How robust is the lending process?
The average Lending Club borrower has a FICO score of 699 (a credit score in the range of 690 to 720 is considered good), debt-to-income ratio of 16.9% (excluding mortgage), and a credit history of 15.8 years. Based on personal income, Lending Club's average borrower is in the top 10% of the U.S. population. Moreover, Lending Club approves only 10% of the total applications it receives.

Who is the CEO, and who backs up the company?
Laplanche has a 2.4% stake in the company. He developed the idea for Lending Club when he realized that his credit card carried an 18% interest rate, while he was only earning 1.5% from his bank on high-yield certificates of deposit. Laplanche thought that connecting investors directly with borrowers would be a useful platform for both sides of the loan process and would cut the banks out of the equation.

Interestingly, Norwest Venture Partners, an investment arm of Wells Fargo Investment Group, has a 14% stake in Lending Club. Banking is a highly regulated industry. So, backing from an established bank gives more credibility to the business.

Opportunity ahead
In the first three quarters of 2014, Lending Club issued $3 billion in loans -- more than double the amount it had issued in the same period of the previous year. Given that total consumer debt outstanding in the U.S. is $3.3 trillion, Lending Club accounts for 0.09% of U.S. lending business. In other words, there is plenty of potential for this technology to displace brick-and-mortar banking. 

Foolish takeaway
It is difficult for brick-and-mortar businesses to lower their costs to the level of online innovators. This is why bookstores can't compete with Amazon.com and travel agents can't compete with Priceline.com. According to Laplanche, banks will be unable to compete with Lending Club in the future. Fools, be ready to witness a revolution in the banking industry and enjoy its benefits as a customer as well as an investor.. 

Bank of America + Apple? This device makes it possible.
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming it's destined to change everything from banking to health care. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here! 

Earnings Scheduled For September 17, 2013

FactSet Research Systems (NYSE: FDS) is expected to report its Q4 earnings at $1.21 per share on revenue of $218.93 million.

Tower Group International (NASDAQ: TWGP) is projected to post a Q2 loss at $0.52 per share on revenue of $421.10 million.

Coty (NASDAQ: COTY) is expected to report its Q4 earnings at $0.01 per share on revenue of $1.05 billion.

Sutor Technology Group (NASDAQ: SUTR) is projected to report its Q4 earnings at $0.10 per share on revenue of $152.96 million.

Le Gaga Holdings (NASDAQ: GAGA) is estimated to report its Q4 earnings.

Adobe Systems (NASDAQ: ADBE) is expected to post its Q3 earnings at $0.34 per share on revenue of $1.01 billion.

ALCO Stores (NASDAQ: ALCS) is projected to post its Q2 earnings.

Digital Cinema Destinations (NASDAQ: DCIN) is estimated to post a Q4 loss at $0.11 per share on revenue of $11.17 million.

Thursday, January 8, 2015

U.S. Consumer Debt Rises Over $14 Billion in November

Stickers on the door of a restaurant in New York on Tuesday October 21 2008 show the logo of American Express Richard Levine/Alamy WASHINGTON -- U.S. consumers increased their borrowing in November, as stronger demand for auto and student loans offset a drop in credit card debt. The Federal Reserve said Thursday that consumer borrowing rose by $14.1 billion following a $16 billion increase in October. The gains have pushed consumer debt excluding real estate loans to a record level of $3.3 trillion. The latest figures suggest that an improving economy and strong employment gains over the past year may be making consumers more comfortable with ramping up their borrowing. The category that includes credit card debt fell by $946 million after an increase of $1.48 billion in October. The decline was outweighed by a $15 billion increase in the category that covers auto and student loans. Borrowing for education and cars has risen rapidly this year. The Fed's monthly consumer credit report excludes mortgages and other loans secured by real estate. It also doesn't immediately provide separate data for auto loans and student loans for November. But a quarterly report issued by the New York Federal Reserve Bank that tracks all types of consumer borrowing shows that total household debt, including home mortgages, increased by $78 billion in the July-September quarter to $11.7 trillion. That is still slightly below the peak for total debt of $12.7 trillion reached in the third quarter of 2008 amid a deepening recession and job losses that prompted households to cut back on their borrowing. Because of the severity of the recession, consumers had been more hesitant about adding to debt. In particular, mortgage debt has been slower to recover after millions of homeowners lost their homes to foreclosures and banks tightened lending standards. But economists say that a stronger labor market may be setting the stage for increases in borrowing as consumers grow more confident about the future. The November increase in the Fed's monthly credit survey put total borrowing 7 percent above where it was a year ago. Auto and student loans are up 8.4 percent, while credit card debt has risen a much smaller 3.4 percent from year-ago levels. The big rise in auto loans reflects the strong sales year enjoyed by automakers. Student loans have been surging since the recession ended as many people who couldn't find jobs decided to go back to school to improve their job skills. But there is a concern that young Americans are being saddled with debt that will keep them from buying homes or spending as previous generations have been able to do after college. Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. More from The Associated Press
•Market Wrap: After Rough Start to '15, Stocks Bounce Back •Mortgage Rates Hit New Lows, but Buyers Remain Hesitant •J.C. Penney to Shut 40 Stores, Cut 2,250 Jobs

Tuesday, January 6, 2015

Apple Stock: Goodbye, Growth; Hello, Income

When it comes to Apple (NASDAQ: AAPL  ) , its revolutionary products and its iconic founder, Steve Jobs, have usually been the places where the media has shone its spotlight. The curious case of Apple stock itself, however, is almost as interesting. For the past decade, it has defied gravity, climbing up 5,825%. But the most intriguing part of the Apple stock story began with Jobs' death in 2011, and it carries on to the stock's confrontation with the Law of Large Numbers today. A close look at the stock's story reveals just how mad the market really is.

An expectation for perfection
"Apple is a normal company. Why does the public constantly expect them do the impossible?" vented Slashdot commenter "pi radians" more than a decade ago. The quote was buried in a discussion forum titled "Apple releases iPod," dated Oct. 23, 2001. At an invitation-only event, Apple had just released its new MP3 player.

Little did pi radians know that Apple was just getting revved up. The company, and Apple stock, surely went on to do the impossible, blowing away investor expectations. The iPod dominated the MP3 player market and was the driving force in the decline of the CD.

As Apple continued to astound consumers, Apple stock followed suit. The stock rode the waves of one successful product launch after another, including the iPod Mini in 2004, the iPod Touch and iPhone in 2007, and the iPad in 2010. An investor who bought $100,000 in Apple shares 10 years ago would have almost $6 million today.

Two years of Apple stock madness
Then, on Aug. 24, 2011, Jobs resigned from Apple, as his illness made it impossible for him to "meet [his] duties and expectations as Apple's CEO." Less than two months later, Jobs died.

Not long afterward, Apple's stock began to soar as the company's iPhone and iPad line continued to obliterate expectations. "Apple's monstrous quarter" was common earnings-release headline lingo. And now, after a meteoric rise to $700 per share in September 2012, Apple stock now hovers near its 52-week low, around $428.

Apple's 5,825% rise over the past year had little to do with investor optimism. In fact, the company's earnings and free cash flow growth both outpaced the growth in the stock price. But what makes the Apple stock story really interesting is that even at $700 per share, Apple appeared to be fundamentally cheap, trading at about 16 times earnings. As a comparison, Google (NASDAQ: GOOG  ) trades at 24.5 times earnings.

It's all about expectations
When it comes down to it, the iPhone 5 didn't live up to the Street's expectations. Google's free Android mobile OS has empowered an onslaught of competing devices at lower price points. Many consumers aren't as willing to shell out premium dollars for a smartphone when they can find a cheaper alternative elsewhere.

Ultimately, stock prices are all about expectations. Investors expect Google to continue to grow its revenues and earnings and, hence, its business, so the stock trades at a nice premium of 24.5 times earnings. In other words, investors expect Google to grow into its stock price.

If there's any chart that explains why Apple has lost its nice price-to-earnings multiple of 16, when the stock traded at an all time high of $700, it's this one:

AAPL EPS Diluted Quarterly YoY Growth Chart

AAPL EPS Diluted Quarterly YoY Growth data by YCharts.

Growth rates exceeding 25% no longer seem attainable. In three of the past four quarters, Apple reported decelerating year-over-year growth rates in EPS.

But the tension persists. Analysts, on average, expect Apple earnings to increase at 20% annually for the next five years. At just 10 times earnings, however, this expectation isn't priced into the stock. On Apple's Motley Fool CAPS page, 61 of 61 analysts rank Apple stock as an "outperform." Even so, the market refuses to pay a premium now for an expectation of growth down the line.

Officially an income investment?
Now investors are wondering what's next. Is Apple stock exiled from growth portfolios and reassigned to the income investment community once and for all?

With a very likely dividend boost just around the corner, Apple might morph into a great dividend stock. But will it ever be a growth stock again? Let us know your thoughts.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Editor's note: A previous version of this article incorrectly stated an investor who bought $1,000 in Apple shares 10 years ago would have almost $6 million today. The Fool regrets the error.

Can't Seem to Save? You're Not Following These Simple Rules

#fivemin-widget-blogsmith-image-68382{display:none}.cke_show_borders #fivemin-widget-blogsmith-image-68382,#postcontentcontainer #fivemin-widget-blogsmith-image-68382{width:570px;display:block} Can't Seem to Save? You're Not Following These Simple Rules How's your bank balance? It should be healthier than this time last year. And if it isn't? Only a few explanations exist for this lack of progress: The past 12 months were filled with budget busters such as car trouble, medical co-pays and the need to replace major appliances. You were already living paycheck to paycheck, and the increased costs of food and other essentials sent you into the red. You simply didn't make it your business to save. It's vital to have an emergency fund and, ideally, additional savings for future goals (replacement vehicle, home of your own, college fund). But these accounts don't build themselves. You have to take responsibility for making them happen. Maybe you've had bad luck, as noted above. Or maybe you just haven't figured out how to save. Money Talks News founder Stacy Johnson suggests beginning by talking about goals. Simply saying "I want to save money" is a dream, not a plan. Without a specific destination in mind, you'll probably never get started. Break it down So pick a path. A specific need/want is a good start. Suppose $3,000 would put your kid through an advanced music camp this summer. Maybe you'd like to save enough for a reliable used car. Perhaps you and your spouse want to have at least three months' worth of living expenses in the bank. Do those kinds of numbers make you feel faint? Start smaller: "In the next year, I will save $1,000." Now subdivide that goal: $1,000 divided by 52 is about $19.23 a week, or about $2.74 a day. Thinking in terms of a daily three bucks is a lot more manageable than wondering how you'll come up with a grand. As Johnson notes, the easiest way to start is to figure out ways you might be wasting money. Let a budgeting app do the work for you. He likes a free service called PowerWallet. For example, it might reveal that 40 percent of your total food budget is spent on meals away from home. This kind of wake-up call will help you trim the fat, so to speak. Divert Some Funds If you've been paying extra on certain items (mortgage, student loans), stop doing that for a while. Yes, getting ahead is great, but not at the expense of having no savings to cover that car repair or balky fridge. Suppose you've been putting an extra $100 on your house payment each month. Instead, throw that hundred toward your savings goal. It won't take as long as you think to hit that sweet spot because this won't be the only way you save. Or it shouldn't be. All sorts of ways exist to carve a few dollars here and a few dollars there from your current budget; remember, we're talking fewer than three bucks per day. For some easy everyday tactics, see "15 Simple, Proven Strategies to Save On Everything You'll Ever Buy" and "7 Money-Saving Tips People Often Forget About."

Monday, January 5, 2015

T-MobileĆ¢€™s John Legere Hits AT&T and Verizon Shareholders Where It Hurts

John Legere has shaken up the wireless industry. Source: Wikimedia Commons

For those following the wireless industry closely, you probably know John Legere. For those who don't, he is the CEO of T-Mobile (NYSE: TMUS  ) who has developed a cult following through his brash demeanor and willingness to take on the industry giants. From his (at times) NSFW commentary to his consumer friendly "Un-carrier" policies, he's been a breath of fresh air for the industry.

One thing Legere appears to be familiar with is Big, Hairy, Audacious Goals -- or BHAGs. Last year, he famously declared T-Mobile would edge out rival Sprint (NYSE: S  ) to be the third largest U.S. carrier by subscribers in 2014. While the numbers are still out for the final quarter, as of September, T-Mobile was within striking distance, trailing by just 2 million with 53 million subscribers to Sprint's 55 million. For proper perspective, at the start of 2014, T-Mobile trailed by nearly 8.5 million subscribers.

It's important to note that even with this incredible subscriber growth, T-Mobile -- and low-growth Sprint -- are far behind industry heavyweights, Verizon (NYSE: VZ  ) and AT&T (NYSE: T  )  which each have more than 115 million wireless subscribers. However, Legere is not one to rest on his laurels. On a blog post outlining his 2015 predictions, Legere announces his next BHAG: to beat Verizon's legendary LTE network.

T-Mobile filling its coverage gaps could put further pricing pressure on Verizon
If there's one thing T-Mobile has been faulted for, it's network coverage. In the blog post, Legere himself even references coverage gaps. But according to the blog, Legere argues his network is the fastest when compared head-to-head in areas T-Mobile serves, and the company will cover 300 million people with its network in 2015. With Verizon boasting of an LTE network that covers nearly 97% of Americans (approximately 303 million people), the two networks will be similar in that regard if T-Mobile executes on its plan for this year.

Beyond that, T-Mobile has reoriented the wireless industry with a focus on the end consumer. And many of these customer-friendly Un-carrier policies -- unlimited data, no domestic overage penalties, and data charge carve outs for streaming music services -- force other carriers to match its moves, offer compensating discounts, or risk potentially losing subscribers.

A short-term zero sum game
For shareholders, this is essentially a zero sum game -- at least in the short term. Any discount on wireless prices is money that will no longer flow down to shareholders' pockets as new subscribers become increasingly harder to come by amid saturation and competition. The competitive landscape has quickly changed in this industry.

In late 2013, Verizon famously appeared unapologetic for its industry-leading high rates with its CEO stating, "[W]e never have and never will lead on price." CEO Lowell McAdam went on to criticize unlimited data plans on the basis they are "unsustainable."

But what a difference a year can make -- last month the company's stock tumbled when it admitted that promotions were putting a dent in its margins and EPS. The company may not be leading, but it is definitely competing as a result of Sprint and T-Mobile's low cost and unlimited data plans. AT&T also warned investors of tighter fourth-quarter margins and increased churn due to new competition.

As a long-term-oriented shareholder in both AT&T and Verizon, I'm personally willing to sit on these income-producing giants, while they fight competition and monetize video, among other opportunities. But for those following the wireless industry, one thing's for sure: John Legere's effect on the industry cannot be denied.