Mid-Day Market Update: FMC Slips On Weak Outlook; Integrys Energy Shares Surge

Related AKS Mid-Afternoon Market Update: FMC Slips On Weak Outlook; Integrys Energy Shares Surge AK Steel Unveils Q2 Outlook - Analyst Blog

Midway through trading Monday, the Dow traded down 0.19 percent to 16,915.55 while the NASDAQ declined 0.01 percent to 4,367.74. The S&P also fell, dropping 0.08 percent to 1,961.27.

Leading and Lagging Sectors

Monday morning, the basic materials sector proved to be a source of strength for the market. Leading the sector was strength from AK Steel Holding (NYSE: AKS) and Thompson Creek Metals Company (NYSE: TC).

Telecommunications services shares fell around 0.65 percent in trading on Monday. Top losers in the sector included NQ Mobile (NYSE: NQ), down 4 percent, and ORBCOMM (NASDAQ: ORBC), off 5 percent.

Top Headline

Oracle (NYSE: ORCL) announced its plans to buy Micros Systems (NASDAQ: MCRS) in a $5.3 billion deal.

The offer price of $68 per share represents a 3.4% premium over Micros' closing price on Friday.

Equities Trading UP

Integrys Energy Group (NYSE: TEG) shares shot up 12.90 percent to $68.81 after Wisconsin Energy (NYSE: WEC) announced its plans to acquire Integrys Energy Group in a deal valued at $9.1 billion.

Shares of Central Garden & Pet Company (NASDAQ: CENT) got a boost, shooting up 9.22 percent to $9.83 after Harbinger Group offered to buy Central Garden & Pet Co for $10 per share.

MICROS Systems (NASDAQ: MCRS) shares were also up, gaining 3.36 percent to $67.98 after Oracle (NYSE: ORCL) announced its plans to buy MICROS for $68 per share.

Equities Trading DOWN

Shares of Meritor (NYSE: MTOR) were 12.47 percent to $12.77 after the company reached a $500 million settlement with Eaton (NYSE: ETN) related to an anti-trust suit filed in 2006. The company’s board also authorized a repurchase of up to $210 million.

Ixia (NASDAQ: XXIA) shares tumbled 1.68 percent to $11.67 after the company reported its Q4 earnings of $0.15 per share on revenue of $120.60 million. Ixia now expected Q1 sales of $109.0 million to $113.0 million.

FMC (NYSE: FMC) was down, falling 3.65 percent to $72.02 after the company lowered its FY14 earnings forecast and issued a weak Q2 outlook.

Commodities

In commodity news, oil traded down 0.77 percent to $106.01, while gold traded up 0.02 percent to $1,316.90.

Silver traded down 0.26 percent Monday to $20.94, while copper rose 0.90 percent to $3.14.

Eurozone

European shares were lower today.

The eurozone’s STOXX 600 declined 0.51 percent, the Spanish Ibex Index dropped 0.33 percent, while Italy’s FTSE MIB Index fell 1.33 percent.

Meanwhile, the German DAX declined 0.66 percent and the French CAC 40 dropped 0.57 percent while UK shares slipped 0.36 percent.

Economics

The Chicago Fed National Activity Index rose to 0.21 in May, versus economists’ expectations for a reading of 0.20.

The flash reading of Markit PMI manufacturing index rose to a reading of 57.5 in June versus a reading of 56.4 in May. However, economists were expecting a reading of 56.0.

Sales of existing homes rose 4.9% to an annual rate of 4.89 million in May. However, economists were estimating a sales rate of 4.74 million.

Posted-In: Earnings News Eurozone Futures Commodities Economics Intraday Update Markets

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Most Popular Micron Technology Earnings Preview: Can Momentum Continue? Earnings Expectations For The Week Of June 23: Nike, Walgreen And More Stocks To Watch For June 23, 2014 Morgan Stanley Reiterates On General Electric Following Alstom Board Recommendation #PreMarket Primer: Monday, June 23: BNP Expected To Pay $9 Billion For Sanctions Violations Barron's Recap: 50 Best Annuities Related Articles (CENT + AKS) Mid-Afternoon Market Update: FMC Slips On Weak Outlook; Integrys Energy Shares Surge 'Merger Monday' Deals, Offers And Rejections Mid-Day Market Update: FMC Slips On Weak Outlook; Integrys Energy Shares Surge Mid-Morning Market Update: Markets Edge Lower; Oracle To Acquire Micros For $68/Share Stocks Hitting 52-Week Highs Morning Market Movers

Yellen: Economy will grow faster in 2014

Federal Reserve Chair Janet Yellen told Congress Wednesday that she expects economic growth to accelerate this year despite the anemic first quarter but the recent housing market slowdown "could prove more protracted than currently expected."

She also repeatedly refused to provide even a broad time frame for the Fed's first increase in its benchmark short-term interest rate after her comments in March roiled financial markets.

The economy barely grew at all in the first quarter, expanding at a 0.1% annual rate, but Yellen at least partly blamed bad weather.

"Although real GDP growth is currently estimated to have paused in the first quarter of this year, I see that pause as mostly reflecting transitory factors, including the effects of the unusually cold and snowy winter weather," Yellen told the Joint Economic Committee.

Still, Yellen said: "Looking ahead, I expect that economic activity will expand at a somewhat faster pace this year than it did last year." The economy grew 2.6% in 2013.

But Yellen said housing activity has "remained disappointing so far this year and will bear watching." She added, "The recent flattening out in housing activity could prove more protracted than currently expected rather than resuming its earlier pace of recovery."

Her somewhat ominous cautionary note on the housing market could be significant because the sector's recovery was expected to strengthen this year and help fuel a more rapid economic recovery. Instead, housing sales and new home construction have slowed dramatically and economists say weather is only partly to blame. They cite rising prices and mortgage rates that have made homes less affordable, still-tight lending standards and low housing inventories.

Yellen identified housing as one of the two main risks to the Fed's generally positive outlook, along with "adverse developments abroad, such as geopolitical tensions or an intensification of financial stresses in emerging market economies." Such developments, she sai! d, "could undermine confidence in the global economic recovery."

Yellen declined to be specific about when the Fed will begin to raise its benchmark short-term interest rate, now near zero, despite being pressed repeatedly by JEC Chairman Kevin Brady, R-Texas.

"There is no mechanical function or timetable for when that will occur," she said. "There is no specific timetable for doing that."

Most Fed policymakers project the Fed's first rate hike will occur sometime next year. Stocks dove after Yellen suggested at a March news conference that the first rate increase could come in early 2015, and she appeared determined Wednesday to avoid hemming herself in to even a broad time frame. She said Fed policymakers project that the Fed will begin to raise the rate in 2015 or 2016.

A frustrated Brady assailed Yellen for refusing to be specific, recalling that Fed officials incorrectly assured lawmakers in the mid-2000s that the housing market was not poised for collapse and interest rates were at proper levels. "It just strikes me that this don't-worry-be-happy monetary policy is not working," he said.

Yellen also noted that the Fed is gradually reducing its government bond-buying as the economy and labor market have strengthened. The monthly bond purchases, aimed at lowering long-term interest rates and stimulating the economy, have been pared to $45 billion from $85 billion in December. Yellen said the purchases will likely be halted sometime in the fall, barring a "notable" change in the economic outlook.

Some Fed policymakers have voiced concerns that the benefits of the program have diminished since it began in September 2012, while the risks, such as creating bubbles that could burst in some markets, have grown. The purchases have driven many investors to high-risk assets, such as junk bonds and certain real estate investments.

Yellen said: "Some reach-for-yield behavior may be evident, for example, in the lower-rated corporate debt markets," suggesting that Fed of! ficials a! re carefully monitoring the developments. She added that leveraged loans and high-yield bonds have "expanded briskly, spreads have continued to narrow, and underwriting standards have loosened further."

Yellen said the increased risk investors are taking "appear modest to date — particularly at the largest banks and life insurers."

She added: "More generally, valuations for the equity market as a whole and other broad categories of assets, such as residential real estate, remain within historical norms."

Yellen also addressed concerns that several rounds of Fed bond-buying since the 2008 financial crisis have infused more than $3 trillion into the economy, possibly stoking eventual inflation that the Fed will be hard-pressed to tame.

"I do believe that we have the tools, as well as the the willingness and determination, to remove monetary accommodation at the appropriate time to avoid overshooting our (annual 2%) inflation objective," she said.

Yellen cited long-term unemployment as a lingering burden on the economy despite the rapid fall in the overall jobless rate to 6.3% from 8.1% in August 2012. About 35% of the unemployed have been out of work at least six months. While some economists fear many of those Americans will never work full-time again, Yellen said most should get jobs as the economy improves.

"I have no doubt that if growth in the economy picks up … then long-term unemployment will come down too," she said.

6 Things That New Mothers and Infants Can Live Without

Getty Images When our son was born healthy but early, I wasn't prepared. So my cousin Karen, mother of two, welcomed us home from the hospital with three huge bags of bottles, diapers, wipes and a rainbow of terrycloth onesies, which were Ben's fashion trademark during his first three months on earth. Within a few weeks, however, my house became crowded with baby stuff -– bottle warmers, bouncies, jungle gym mats and baby swings that crowded our already crowded house. I figure the shelf life for each item was two to three months before Ben outgrew the need or desire to use it. Some, I used twice before deciding they weren't worth the space they took up. Consider these unnecessary items: Wipe warmer ($20-$25): A wipe warmer is a heated, plastic container that keeps diaper wipes toasty. It appeals to our desire to give baby every comfort but really is an over-the-top luxury that no one needs. Some wipes tear when you pull them through the dispensing hole. And if your baby gets used to a warm wipe on his bottom at home, good luck changing a diaper when you're away from the house and he has to endure the horror of a room-temp wipe. Baby detergent: You don't need an expensive baby detergent (77 cents per fluid ounce) to protect baby's delicate skin. Instead, buy any brand-name detergent marked "free and clear," (23 cents per ounce) meaning it lacks perfumes and dyes that can irritate new skin. Bassinet ($35 to $300): It's a frilly and a pretty place to keep a newborn when showing him off to relatives or keeping him near you at night during his first month. But, a bassinet won't hold a growing baby for long. So, don't shell out big bucks on this short-time sleeping solution. Instead, invest in a great crib, which will be your baby's sleeping place for years. Baby food processor ($100 to $150): You can prepare baby food in any blender or mini-processor on your counter. Some baby food processors contain a heating mechanism that steams or warms baby food, which you can easily do on your range or in your microwave, so long as you check the temp before feeding it to junior. Expensive bedding ($79 to $250): Don't waste money on fancy crib bedding for a newborn. Bumpers and quilts are hazards to newborns who can easily get tangled or trapped in them. Whatever bedding you chose will likely become soiled with spit up and other bodily excretions that come from infants. The only thing you need is a fitted sheet and snug, terrycloth sleepers that keep baby warm and safe at night. Baby bathtub ($20 to $50): You're washing and wiping your baby all day long, so you don't need to bathe your baby every day. In fact, most experts say washing baby more than three times a week can dry out their sensitive skin. Sponge baths are recommended until the umbilical cord falls off. After that, you can bathe baby in a sink just as well as a baby tub. Warning: Never leave baby alone -– even for a second -– during bath time. More from Lisa Kaplan Gordon
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How to Lower Your Property Tax Bill

By Hal M. Bundrick

NEW YORK (MainStreet) The U.S. real estate market may be enjoying a bit of a recovery, but the fact remains that a lot of homeowners still have quite a bit of ground to cover before regaining their home's value lost during the recession.

And that may mean you're paying too much in property taxes. Your annual property tax bill may not truly reflect current and perhaps lower local home values.

Ilyce Glink, a personal finance expert and managing editor of the Equifax finance blog, says homeowners should be proactive and make a compelling case to their tax assessor's office if they believe, and have proof, that their property taxes should be lower. "If your home has lost value during the last six or seven years, you should be able to get your property taxes reduced," says Glink. "You can do this by creating a market analysis of other homes in the neighborhood that are in the same tax category as yours." Most homeowners receive their local property tax bills just after the New Year and have a short window of only 30 to 45 days in which to file an appeal after receiving the notice. Glink says that with limited time, you will have to get right to work, researching the recent sale prices for similar homes in your area and comparing each home's tax bill with yours. Taking an exterior snapshot of each "comp" can help you make your case to the tax assessor's office. "Each real estate parcel is given a PIN, and this PIN is used when levying property taxes," adds Glink. "You'll need your PIN to assess the value of your home. You can look it up online or through your local tax assessor's office. You should also obtain the PINs of homes in the area that are comparable to yours." She says you will also want to check with the local assessor's office to determine your county's specific property tax appeal rules before pitching the reassessment. "It only takes one foreclosure in a neighborhood to drop property prices by 20%, 30%, or even 50%," says Glink. "If you have distressed homes in your area, it's certainly possible that your own home's value has also gone down and that your tax bill should be lower." --Written by Hal M. Bundrick for MainStreet

Top Performing Industries For September 17, 2013

At 10:15 am, the Dow surged 0.32% to 15,544.88, the broader Standard & Poor's 500 index moved up 0.36% to 1,703.68 and the NASDAQ composite index gained 0.44% to 3,734.21.

The industries that are driving the market today are:

Medical Practitioners: This industry jumped 2.82% by 10:15 am. The top performer in this industry was LCA-Vision (NASDAQ: LCAV), which rose 2.9%. LCA-Vision's trailing-twelve-month revenue is $91.12 million.

Computer Peripherals: This industry rose 2.21% by 10:15 am ET. The top performer in this industry was Key Tronic (NASDAQ: KTCC), which gained 0.3%. Key Tronic's trailing-twelve-month ROE is 14.57%.

Electronics Stores: This industry moved up 1.16% by 10:15 am. The top performer in this industry was Conns (NASDAQ: CONN), which gained 1.3%. Conns' PEG ratio is 0.87.

Catalog & Mail Order Houses: The industry gained 1.13% by 10:15 am. The top performer in this industry was Mojo Organics (OTC: MOJO), which gained 6.6%. Mojo Organics shares have jumped 361.54% over the past 52 weeks, while the S&P 500 index has gained 16.18% in the same period.

5 Stocks Set to Soar on Bullish Earnings

DELAFIELD, Wis. (Stockpickr) -- Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.

>>5 Stocks Poised for Breakouts

This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns -- the gains become so outsized in such a short time frame that your profits add up quickly.

That said, let's not forget that stocks are heavily shorted for a reason, so you have to use trading discipline and sound money management when playing earnings short-squeeze candidates. It's important that you don't go betting the farm on these plays and that you manage your risk accordingly. Sometimes the best play is to wait for the stock to break out following the report before you jump in to profit off a short squeeze. This way, you're letting the trend emerge after the market has digested all of the news.

Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move by waiting. That's why it can be worth betting prior to the report -- but only if the stock is acting technically very bullish and you have a very strong conviction that it is going to rip higher. Just remember that even when you have that conviction and have done your due diligence, the stock can still get hammered if The Street doesn't like the numbers or guidance.

>>5 Rocket Stocks Ready for Blastoff

If you do decide to bet ahead of a quarter, then you might want to use options to limit your capital exposure. Heavily shorted stocks are usually the names that make the biggest post-earnings moves and have the most volatility. I personally prefer to wait until all the earnings-related news is out for a heavily shorted stock and then jump in and trade the prevailing trend.

With that in mind, here's a look at several stocks that could experience big short squeezes when they report earnings this week.

Lindsay

My first earnings short-squeeze trade idea is water management and road infrastructure products and services provider Lindsay (LNN), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Lindsay to report revenue of $155.68 million on earnings of 91 cents per share.

The current short interest as a percentage of the float Lindsay is extremely high at 21.3%. That means that out of the 12.56 million shares in the tradable float, 2.67 million shares are sold short by the bears. This is a huge short interest on a stock with a low tradable float. Any bullish earnings news could easily set off a monster short-squeeze for shares of LNN post-earnings.

>>5 Stocks Spiking on Big Volume

From a technical perspective, LNN is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been downtrending badly for the last month, with shares plunging lower from its high of $90 to its recent low of $78.75 a share. During that move, shares of LNN have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of LNN have started to bounce off that $78.75 low and it's starting to move within range of triggering a near-term breakout trade post-earnings.

If you're bullish on LNN, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 200-day moving average at $81.71 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 133,886 shares. If that breakout hits, then LNN will set up to re-test or possibly take out is next major overhead resistance levels at $84 to $87 a share. Any high-volume move above $87 will then give LNN a chance to tag $90 a share.

I would simply avoid LNN or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day at $78.89 a share and below some near-term support at $78.75 a share with high volume. If we get that move, then LNN will set up to re-test or possibly take out its next major support levels at $73 to $70 a share.

Safeway

Another potential earnings short-squeeze play is food and drug retailer Safeway (SWY), which is set to release its numbers on Thursday before the market open. Wall Street analysts, on average, expect Safeway to report revenue of $8.52 billion on earnings of 16 cents per share.

Just recently, Jefferies initiated shares of Safeway with a hold rating and a price target of $32 per share.

>>3 Huge Stocks on Traders' Radars

The current short interest as a percentage of the float for Safeway is very high at 19.8%. That means that out of the 236.01 million shares in the tradable float, 47.13 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 2.8%, or by about 1.27 million shares. If the bears are caught pressing their bets into a bullish quarter, then shares of SWY could soar sharply higher post-earnings as the bears rush to cover some of their bets.

From a technical perspective, SWY is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last three months, with shares pushing higher from its low of $22.19 to its recent high of $32.72 a share. During that move, shares of SWY have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SWY within range of triggering a near-term breakout trade post-earnings.

If you're in the bull camp on SWY, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance at $32 a share and then once it takes out its 52-week high at $32.72 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 5.11 million shares. If that breakout triggers, then SWY will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $40 to $42 a share.

I would simply avoid SWY or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some key near-term support at $30 a share with high volume. If we get that move, then SWY will set up to re-fill some or its entire previous gap up zone from September that started at $28 a share. If that gap gets filled to the downside, then SWY could easily tag its 50-day at $27.75 a share.

Bank of the Ozarks

One potential earnings short-squeeze candidate is banking player Bank of the Ozarks (OZRK), which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect Bank of the Ozarks to report revenue of $69.57 million on earnings of 60 cents per share.

>>5 Cash-Hoarders to Triple Your Gains

The current short interest as a percentage of the float for Bank of the Ozarks is pretty high at 9.7%. That means that out of the 31.18 million shares in the tradable float, 3.16 million shares are sold short by the bears. This is a decent short interest on a stock with a relatively low float. Any bullish earnings news could easily spark a sharp short-covering rally for shares of OZRK post-earnings.

From a technical perspective, OZRK is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been trending sideways for the last two months, with shares moving between $45.05 on the downside and $48.94 on the upside. Any high-volume move above the upper-end of that range could trigger a solid breakout trade for shares of OZRK post-earnings.

If you're bullish on OZRK, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 50-day moving average of $47.38 a share and then once it takes out its 52-week high at $48.94 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 125,254 shares. If that breakout triggers, then OZRK will set up enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $55 to $60 a share.

I would avoid OZRK or look for short-biased trades if after earnings it fails to trigger that move and then drops back below some key near-term support levels at $46 to $45.05 a share with high volume. If we get that move, then OZRK will set up to re-test or possibly take out its next major support levels at $43 to its 200-day at $42.44 a share.

Micron Technology

Another earnings short-squeeze prospect is global manufacturer and marketer of semiconductor devices Micron Technology (MU), which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect Micron Technology to report revenue of $2.70 billion on earnings of 24 cents per share.

Just recently, Citigroup raised its price target on shares of Micron to $30 per share from $19 per share, citing higher DRAM price assumptions, and reiterated its buy rating on the stock.

>>4 Tech Stocks Rising on Unusual Volume

The current short interest as a percentage of the float for Micron Technology is pretty high at 10.9%. That means that out of the 1.03 billion shares in the tradable float, 111.99 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 4.5%, or by about 4.86 million shares. If the bears are caught pressing their bets into a strong quarter, then shares of MU could explode higher post-earnings as the bears jump to cover some of their short positions.

From a technical perspective, MU is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $9.07 to its recent high of $18.85 a share. During that uptrend, shares of MU have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of MU within range of triggering a near-term breakout trade post-earnings.

If you're bullish on MU, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 52-week high at $18.85 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 43.01 million shares. If that breakout triggers, then MU will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $23 to $25 a share.

I would simply avoid MU or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support at $17 a share with high volume. If we get that move, then MU will set up to re-test or possibly take out its next major support levels at its 50-day moving average of $15.36 a share to $13 a share.

E2open

My final earnings short-squeeze idea is cloud-based, on-demand software solutions provider E2open (EOPN), which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect E2open to report revenue of $17.23 million on a loss of 15 cents per share.

>>4 Tech Stocks Under $10 to Watch

The current short interest as a percentage of the float for E2open is very high at 14.6%. That means that out of the 10.50 million shares in the tradable float, 1.91 million shares are sold short by the bears. This is a large short interest on a stock with a very low tradable float. If the bulls get the earnings news they're looking for, then shares of EOPN could skyrocket higher post-earnings as the bears rush to cover some of their short positions.

From a technical perspective, EOPN is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last five months, with shares moving higher from its low of $12.27 to its recent high of $25.86 a share. During that move, shares of EOPN have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of EOPN within range of triggering a near-term breakout trade post-earnings.

If you're in the bull camp on EOPN, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance at $22.62 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 112,043 shares. If that breakout triggers, then EOPN will set up to re-test or possibly take out its all-time high at $25.86 a share. If that level gets taken out with volume, then EOPN could hit $30 or higher post-earnings.

I would avoid EOPN or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support at $21.17 a share with high volume. If we get that move, then EOPN will set up to re-test or possibly take out its next major support levels at $19 to its 200-day at $18.43 a share. Any high-volume move below its 200-day could then out $17 to $16 into range for shares of EOPN.

To see more potential earnings short squeeze plays, check out the Earnings Short Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Stocks Under $10 Set to Soar

>>4 Hot Stocks to Trade (or Not)

>>5 Big Trades to Take Now

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.

Is Nuance Communications Dead Money?

Nuance Communications (NASDAQ: NUAN  ) just can't catch a break.

After running up in anticipation that Carl Icahn's investment stake will improve the company's prospects, shares made an about-face following its fiscal second quarter earnings results. To make matters worse, the speech recognition company lowered guidance for the upcoming quarter, pushing shares below pre-Icahn levels. Naturally, these developments haven't eased investor concerns that there could be structural issues with Nuance's business model.

Breaking down the disappointment
For the quarter, Nuance reported non-GAAP revenue of $484 million, which represented an increase of 15.9% year over year, but was sharply below expectations. Analysts were expecting Nuance's revenue would come in around $516 million. Here's how Nuance's business breaks down:

Segment

Revenue

YOY Change

QOQ Change

Percent of Total

Health care	$229.3	53%	5%	47%
Mobile/consumer	$116.2	1%	(12%)	24%
Enterprise	$74.5	(19%)	(11%)	15%
Imaging	$64	5%	7%	13%

Source: Nuance FQ2 Results. Dollars are in millions. YOY = year-over-over. QOQ = quarter-over-quarter.

Nuance blamed poor sales execution and the challenging macro environment in Europe for why the company didn't meet expectations. Still, it wasn't enough to deter the company from announcing a $500 million share repurchase program, which, as the CEO put it, "underscores our confidence in the business and our focus on shareholder value as we expect growth to accelerate in fiscal 2014."

Between all of its business segments, Nuance estimates its total addressable market to be somewhere in the neighborhood of $48 billion. Surprisingly, Nuance's enterprise segment remains its biggest long-term opportunity, which it pegs as a $26 billion opportunity.

Something's not adding up
For a company that's only expected to tap only about 4% of its $48 billion addressable market this year, there seems to be a disconnect between reality and potential. Investors could argue that the company is only getting started and market share will increase in the coming years. This is entirely possible, but some of the numbers to support this belief suggest otherwise.

In the first quarter, which was the same time frame as Nuance's fiscal second quarter, IDC reported a 42% increase in worldwide smartphone shipments year over year. However, Nuance's mobile and consumer business segment, largely driven by smartphone and automotive adoption, only realized a 1% increase in revenue. Nuance CEO Paul Ricci even highlighted that automotive performed quite well. What gives?

Although Nuance has admitted that Apple (NASDAQ: AAPL  ) is a customer, it won't talk specifics about the nature of their agreement. However, it's widely believed that Nuance helps power Siri, Apple's voice-activated personal assistant. During the quarter, Apple sold 37.4 million iPhones, the majority of which support Apple Siri. Samsung, which is also pegged as a Nuance customer, experienced a 61% growth in shipments and shipped over 70 million smartphones. Combined, over 100 million devices were sold during the quarter -- and yet Nuance didn't materially benefit.

The million-dollar answer
During the conference call, Nuance acknowledged that the company is continuing to experience a negative shift in the way that it's compensated. Customers are changing their billing agreements toward usage-based terms, pressuring revenue across the board, indicating that its products are not in as high demand as once believed. The company claims this revenue shift will ultimately build stronger, more predicable revenue streams over the long term, but I beg to differ.

This new approach assumes that end users will want to increase their usage of speech recognition technology. The fact that Nuance could only squeeze out 1% growth on 42% smartphone growth isn't convincing me that this will be the case. After all, taking a horse to water is one thing, but getting it to drink is entirely different. In hindsight, I probably shouldn't have purchased Nuance in the first place.

Nuance's growth story doesn't come without risks, too. The Motley Fool recently published a premium research report to break down what investors interested in Nuance absolutely have to understand before investing. Click here now to grab your copy today.

'Mad Money' Lightning Round: You Have a Winner With Lithia Motors

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

NEW YORK (TheStreet) -- Here's what Jim Cramer had to say about some of the stocks callers offered up during the Mad Money Lightning Round Friday evening:

Exxon Mobil (XOM) : "I'd sell half on Monday and let the rest run."

KeyCorp (KEY) : "I thought the last quarter was just OK. The bank stocks are going up but they didn't have the best quarter." Atlas Pipeline Partners (APL) : "The yield is too high. If you get a bounce next week, trim your position. I like Kinder Morgan (KMI) ." Lithia Motors (LAD) : "This is the best-performing stock in this group. I think you have a winner there." Diebold (DBD) : "They have a lot of good technology in the pipeline, I'd be a buyer." PriceSmart (PSMT) : "I'd rather be in Costco (COST) ." Henry Schein (HSIC) : "That stock is going higher." To read a full recap of "Mad Money" on CNBC, click here. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here. -- Written by Scott Rutt in Washington, D.C. To email Scott about this article, click here: Scott Rutt Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

The Dow Does it Again: A New Record Close as Stocks Inch Higher

The Dow Industrials can thank Wal-Mart Stores (WMT) for helping it reach its 25th record close this year. The index rose more than 40 points or 0.2% to end the day at 17,652.79.

The S&P 500, meanwhile, climbed one point, or 0.05% to end at 2,039.33 and the Nasdaq climbed 5 points, or 0.11% to close at 4,680.14.

Energy stocks suffered a sharp decline, despite a last minute surge by Halliburton (HAL) and Baker Hughes (BHI) amid merger chatter. Oil prices continue to fall, dropping below $75 a barrel today, pressuring the sector.

The yield on the 10-year Treasury note inched down to 2.342% from 2.359% on Wednesday. Yields fall as prices rise. Gold futures added 0.14% to $1,160.70 an ounce.

In corporate news, lower gasoline prices helped Wal-Mart report its first sales increase since 2012. But the retailer gave a less optimistic outlook for the year. Still, Wal-Mart shares rose 4.7% to close at $82.94.

J.C. Penney (JCP) fell 8.5% after it reported a narrower third-quarter loss.

Berkshire Hathaway (BRK.A) rose 0.55% after it agreed to acquire the Duracell battery business from Procter & Gamble (PG). P&G fell almost 1%.

And finally, reports of deal talks between Hasbro (HAS) and DreamWorks Animation (DWA) sent the movie studio soaring more than 14% to close at $25.52. Hasbro fell 4.3%.

MarketAxess Holdings Inc.: Wall Street Has Fourth-Quarter Results Wrong

MarketAxess (NASDAQ: MKTX  ) published its third-quarter results (link opens a PDF) this morning, and as the following table shows, the numbers were disappointing -- by Wall Street's standards. The fixed-income trading platform missed on both revenues and earnings per share. Those misses have short-term investors spooked today, and shares are down around 5.5%. Long-term investors, on the other hand, ought to be a little more sanguine. I don't see any signs that the business franchise is impaired, and, although investors will need to continue monitoring potential competitors and, particularly, structural developments in the bond markets, the latest set of results are well within the bounds of normal business fluctuations.

 

Actual Results and Year-on-Year % Growth

Analysts' Consensus Estimate

Revenues	$64.2 million 5%	$64.9 million
Adjusted EPS	$0.46 7%	$0.47

Source: Company documents, Thomson Reuters I/B/E/S

Putting the revenue slowdown in perspective
Yes, year-over-year revenue growth decelerated in the third quarter, to 5.1%, but that's to be expected in light of what CEO Rick McVey referred to as a "summer seasonal slowdown... and heavy new issue calendar" (MarketAxess facilitates secondary market trading, rather than new issues). Keep in mind the context: Transaction fees in U.S. High Grade bonds -- MarketAxess' largest segment -- were down 11.2% year over year in the third quarter on lower volume and unit fees (crucially, market share was relatively stable at 14.6% versus 14.9%.) However, "Other Credit" (junk bonds, emerging markets, and eurobonds, etc) made up the shortfall, with transaction fees surging 32.6%, which contributed to record commission revenues of $54.5 million (up 5.1%).

Note that over the nine-month period ending on Sept. 30, revenues rose 8%, which is consistent with the 8.5% long-term growth assumption that Hidden Gems co-advisor Andy Cross made when he re-recommended MarketAxess last July.

Below revenues, costs were broadly in line with the company's long-term goals, yielding a very healthy operating profit margin of 44%, up from 43.2% (adjusted) in the prior year period. Even though MarketAxess is a growth company, it has the profitability and the financial flexibility (no debt!) to return some of those profits to its shareholders, repurchasing over 200,000 shares in the quarter at an average price of approximately $55.35 (not to mention the $0.16 per share quarterly dividend).

Don't overreact to volatility
While investors aren't reacting well to these results, it looks to me like they're overreacting to the natural course of a business that contains some inherent volatility -- volatility that can swing to produce positive effects, too. As McVey mentioned on the conference call Wednesday morning: "The first few weeks [of the fourth quarter] represent a meaningful pickup in secondary [trading] activity... This is another environment in which we're getting greater volatility and greater interest in electronic trading." He also went to note that "based on the trends we're seeing so far this month, we would expect a modest increase in market share over the third quarter average."

I see no reason for long-term investors to alter their stance on MarketAxess -- it's a solid franchise, led by competent managers that are focused on opportunities for long-term growth.

Top dividend stocks for the long-term growth of your portfolio
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here.

Should You Stay Away From Avon?

In this article, let's take a look at Avon Products Inc. (AVP), a $5.47 billion market cap company, which is the world's leading direct marketer of cosmetics, toiletries, fashion jewelry and fragrances, with about 6 million sales representatives worldwide.

New Management

The company failed to turnaround the business and had regulatory problems, including some allegations of bribery in China. As a result, it had replaced the principal executives of the firm. Then, it planned a $400 million cost savings program in order to become profitable. The plan includes personal reductions exiting some markets such as South Korea and Vietnam, cutting losses in regions and businesses in order to achieve highest returns. Apart from exiting South Korea and Vietnam, the firm is cutting ties with Silpada, which we think is the right decision. Silpada was acquired for $650 million in 2010, so the company will have written off about 90% of the purchase price.

Amid all the efforts made, some things are still needed, like investments in technology, infrastructure, while developing its portfolio. We say this because the firm had underinvested in technology for years. As a matter of fact, the management plans to spend $150-200 million over three years.

Talented People

The company hired a top manager from the outside to lead operations. Pablo Munoz, who had a vast experience in Tupperware's domestic operations, should contribute to revert the situation.

Return Reduction

Avon didn´t generate consistent improvement, so returns on invested capital were reduced. For example, between 2005 and 2012, returns declined 24% on average. The part most important is that we believe this can continue in the next decade.

Revenues, Margins and Profitability

Looking at profitability, revenues decreased by 12.77% and earnings per share decreased in the most recent quarter compared to the same quarter a year ago ($0.04 vs $0.19). The net income has decreased by 41.2% year over year, falling from $32.3 million to $19 million. 

Finally, let´s compare the best measure of performance for a firm's management: the return on equity. The ROE is useful for comparing the profitability of a company to that of other firms in the same industry.

Ticker	Company	ROE (%)
AVP	Avon Products	-21.54
USNA	Usana Health Sciences Inc	29.22
IPAR	Inter Parfums Inc	4.54
RDEN	Elizabeth Arden Inc	-29.49
MED	Medifast Inc.	21.91
	Industry Median	8.35

The company has a current ROE of -21.54% which is lower than the industry median and the one exhibited by Inter Parfums Inc. (IPAR). In general, analysts consider ROE ratios in the 15-20% range as representing attractive levels for investment. So for investors looking those levels or more, Usana Health Sciences (USNA) and Medifast (MED) could be options. It is very important to understand this metric before investing and it is important to look at the trend in ROE over time.

Relative Valuation

In terms of valuation, the stock sells at a price-to-book ratio of 5.76x, indicating a premium versus the industry average of 1.93x while the price-to-sales ratio of 0.58x is below the industry average of 1.09x.

Final Comment

Despite its weaknesses, we think the company has a well-known brand, a global geographic reach and an attractive business model.

Investors would be making a short-sighted error not viewing Avon for what it is, which has a bright long-term future.

Hedge fund gurus like Ray Dalio (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and Murray Stahl (Trades, Portfolio) sold out this stock in the second quarter of 2014, while Joel Greenblatt (Trades, Portfolio), Jeff Auxier (Trades, Portfolio) and Jim Simons (Trades, Portfolio) have reduced their positions.

Disclosure: Omar Venerio holds no position in any stocks mentioned

Also check out: Jeff Auxier Undervalued Stocks Jeff Auxier Top Growth Companies Jeff Auxier High Yield stocks, and Stocks that Jeff Auxier keeps buying Jim Simons Undervalued Stocks Jim Simons Top Growth Companies Jim Simons High Yield stocks, and Stocks that Jim Simons keeps buyingAbout the author:Omar VenerioWe provide independent fundamental research and hedge fund and insider trading focused investigation.

Currently 3.00/51 Saturday, December 20, 2014 Ho-Hum, Another Boring Day of Little Volume in the Markets NEW YORK (TheStreet) -- Another boring trading day in the stock market on Thursday. The S&P 500 Trust Series ETF (SPY) volume did not even trade 60 million shares. The volume came in at 56 million shares. After being up for most of the day, the DJIA closed lower by 2.83 points at 17083.80 and the Standard & Poor's 500 was up 0.97 at 1987.98. The Nasdaq was lower by 1.59 points at 4472.11 and the Russell 2000 was down 1.85 at 1156.26. All in all, a nothing day. Read More: Cramer: Every Which Way But Short Gold, which is up 7% for the year to date, had its fifth consecutive down day. On a down open Friday it will be in oversold territory within a "Trend Bullish" condition. So do not get to excited that Wall Street pundits are starting to become bearish on Gold. It is only a correction. Gold is within a day or two of a move higher. The Select Sector Utilities ETF (XLU) continues its bullish performance, up 12.5% YTD. Again, it continues to signal a growth slowing economy, along with the Barclays 7-10 Year Treasury Bond Fund (IEF), which is up 4.3% YTD. An interesting sector that has been bullish in 2014, the semiconductor sector, may be signaling something negative on the horizon. Broadcom (BRCM), Intel (INTC)  and Maxim Integrated Products (MXIM) have not been able to hold their post earnings gains. MXIM is getting clobbered in after-hours trading Thursday. As we continue to navigate this stock market in the second half of 2014, traders must continue to be cautious. This volatile market is not for anyone who does not have a risk management process. The lack of liquidity will eventually become a major problem for the markets. At this moment in time, the hedge funds are comfortable with shorting at the lows and covering at the highs. That will change. My S&P 500 daily trading range on Thursday was Buy Trade-1962 and Sell Trade-1994. The S&P high for the day was 1991.39. So we are at the top end of the trading range. Traders should not buy up here. That's how the process works. Buy low and sell high.      Read More: Pandora Will Be a Penny Stock Someday Soon as Spotify, iTunes Thrive On Thursday, we sold our long position in Arcos Dorados Holdings (ARCO) for nearly a 2% gain and covered our Microsoft (MSFT) short for a nice gain. We continue to hold Inovio Pharmaceuticals (INO) long. We started a short position in Glu Mobile (GLUU) on an inside upper channel break to the downside and started Under Armour (UA) long on an upper channel break to the upside.  These positions can be found at www.strategicstocktrade.com.   At the time of publication the author was long INO and UA and short GLUU. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff. Thursday, December 18, 2014 Disney: Anything But Frozen? Morgan Stanley’s Benjamin Swinburne and team lowered their 3rd quarter earnings estimate on Walt Disney (DIS)–despite the big boost provided by Frozen’s continued success: Yoshikazu Tsuno/Agence France-Presse/Getty Images While F3Q14 faces tough theatrical comps vs. last year (Iron Man 3, Monsters University), robust box to date aided by Captain America and Maleficent should help minimize downside. Frozen will likely be a source of continued upside to Home Video, as well as a key driver of sustained Consumer Products strength. At CP, we forecast double-digit growth to continue for both licensing and retail revs in F3Q, particularly as supply constraints further ease on Frozen merchandise… On a consolidated basis, we raise our Studio, CP and Interactive estimates, partly offset by a reduction in ESPN and ABC ad sales. However, lower deferred revenue recognition at ESPN results in our F3Q14 EPS estimate of $1.13 ($1.16 prior). We bump up our PT to $85 (mid-CY15), or 17x forward EPS. Shares of Walt Disney have gained 0.4% to $83.09 at 2:12 p.m. today. Friday, November 21, 2014 3 Value Stocks Near 52-Week Lows Worth Buying Much like companies that are rising past their fair values, we can often find companies trading at what may be bargain prices. While many investors would rather have nothing to do with stocks wallowing at 52-week lows, I think it makes a lot of sense to see whether the market has overreacted to a company's bad news. Here's a look at three fallen angels trading near their 52-week lows that could be worth buying. Chips and dips It's been far from a November to remember for chipmaker Qualcomm (NASDAQ: QCOM  ) , which saw its stock nosedive by nearly 9% after reporting weaker-than-expected fourth-quarter earnings results two weeks ago. Source: Flickr user Doug Kline. For the quarter, Qualcomm saw its revenue rise 3% year over year but dip 2% from the sequential third quarter. The story was similar for its net income, which jumped 25% year over year but fell 15% from the sequential quarter. The problem for Qualcomm is that it's facing a growing number of legal battles in China, the U.S., and Europe that have halted some lucrative licensing payments to the company and threaten to slow its steady growth rate. Specifically, China's National Development and Reform Commission is examining whether or not Qualcomm's licensing business, along with its chipmaking business (Qualcomm is currently the leading baseband provider in the world), would create a monopoly within the country. If the NDRC's decision goes against Qualcomm, it could significantly inhibit Qualcomm's growth potential in what is becoming the world's most important wireless market. Additionally, U.S. regulators are looking into the "fair and reasonable commitments" of Qualcomm's licensing division, while the EU is investigating various types of financial incentives related to its baseband business. All told, Qualcomm's sales and profits are forecast to come up short until these probes are put in the rearview mirror. Despite this, I view Qualcomm as an intriguing value stock after its latest tumble and would highly encourage value investors to give the company a closer look. To begin with, Qualcomm's bread-and-butter chipmaking business continues to grow despite its licensing issues. The latest quarter saw its chip business expand 9% to $4.85 billion, and I anticipate this is a trend that's unlikely to slow down anytime soon. As the world's leading provider of wireless chipset technology, Qualcomm is certain to benefit from rising global handset sales. Source: Flickr user Maurizio Pesce. Secondly, the rise of the Internet of Things -- in English, the interconnectivity of various devices in our lives, such as home electronics and our automobiles -- will mesh perfectly with Qualcomm's dominance in wireless technologies. Most companies haven't even begun to scratch the surface of the Internet of Things, so this could be a multidecade growth opportunity for Qualcomm. Finally, don't forget that Qualcomm is fortifying its investors against downside with a fast-growing dividend. Over the past decade Qualcomm's dividend has grown sixfold to $0.42 per quarter and is just shy of having doubled over the past three years. Compounded with the stock's recent swoon, that quarterly payout is netting shareholders a delectable 2.4% yield. Imagine how quickly your money could grow if that dividend were reinvested back into Qualcomm stock! A newly refined value stock In general, it's been a rough couple of months for any company associated with the energy industry. With oil prices sinking to four-year lows, fears are spreading that we could see integrated oil and gas operators cutting back on production. Any cutback could eventually trickle its way down to midstream and downstream operators, and in a worst-case scenario, it may be a predictor that something is amiss with the U.S. or global economy. One company that has really taken it on the chin since the beginning of September is oil refiner and marketer Phillips 66 (NYSE: PSX  ) . Shares have lost 20% since hitting a 52-week high, and they've continued to head lower despite a stronger-than-expected third-quarter earnings report. Investors are worried that weaker oil prices will result in lower production, which can have an adverse effect on Phillips 66's top and bottom lines. Source: Phillips 66. However, what Phillips 66's third-quarter earnings results showed is that there's more to this company than meets the eye. The company's refining business in particular could be poised to see incredible strength in the coming quarters thanks to rapidly falling oil prices that have caused crack spreads to move noticeably higher. What this means for Phillips 66, which gets close to 30% of its revenue from its refining operations, is significantly better margins and profitability even if its revenue misses the mark. By a similar token, Phillips 66's marketing and specialties business, as well as its petrochemicals division, should continue to benefit from weaker oil prices as input costs fall. Like Qualcomm, Phillips 66 is also a cash flow cow that's poised to deliver a top-quality dividend to shareholders. Since being spun-off in 2012 its dividend payout has increased four separate times and by 150% overall to $0.50 per quarter. Currently paying a projected yield of 2.8%, Phillips 66 is divvying out a nice premium to the S&P 500's yield of around 2%. Lastly, considering the probability that Phillips 66 continues to trounce Wall Street's estimates as oil prices remain depressed, the company's valuation -- less than 10 times forward earnings and a PEG ratio of just 0.8 -- adds more fuel to the value stock fire. For reference, most refiners have P/Es in the mid-teens. If you're looking for a way to play this recent dip in oil, Phillips 66 could be your stock. Let there be light! Lastly, I'm going to prove that you can't let your emotions get in the way of finding high-quality value stocks and suggest you dig deeper into a company that I've been waving the caution flag on for years: First Solar (NASDAQ: FSLR  ) . Source: First Solar. The maker of solar systems has been hammered over the past two months, losing about a third of its value as reduced production guidance from some of its peers, as well as expected delays in overseas and domestic solar projects, has weighed on the company. Furthermore, while weaker oil prices are a boon for refiners like Phillips 66, they're bad news for First Solar, which is relying on high fossil fuel prices to encourage businesses to make the switch to solar. If fossil fuels keep losing value, First Solar's pricing may have to drop to entice customers to make the switch. Despite this recent weakness, I see plenty of light at the end of the tunnel for this solar value stock. Topping the list is First Solar's third-quarter earnings results, released two weeks ago. First Solar kept its production guidance, operating cash flow, and EPS guidance unchanged, while actually upping its gross margin forecast and its operating income guidance. The only negative was that First Solar reduced the top and bottom of its sales forecast by $100 million each to $3.6 billion-$3.9 billion, which it mostly blamed on temporary project delays. In other words, while its peers are cutting guidance, First Solar is powering through with stronger margins and holding to its profitability forecast. Source: Flickr user Steve Jurvetson. Another key point is that First Solar's balance sheet and valuation are gems compared to those of its overseas peers. First Solar is sporting about $900 million in net cash (nearly 19% of its current market value), trading right around its book value, and being priced at less than 11 times forward earnings. Even considering a lack of near-term order visibility throughout much of the sector (even though that has not been a problem for First Solar), a forward P/E of less than 11 is pretty inexpensive! Finally, long-term trends favor the growing use of alternative energies and a push away from fossil fuels. As fossil fuels become more finite, their price is likely to head higher, placing even more importance on renewable energies like solar. Simply put, few companies have anywhere near the production and efficiency capabilities of First Solar. If you want exceptional values, look no further than these top-notch, high-yield dividend stocks!  The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here. Friday, November 14, 2014 The Dow Does it Again: A New Record Close as Stocks Inch Higher The Dow Industrials can thank Wal-Mart Stores (WMT) for helping it reach its 25th record close this year. The index rose more than 40 points or 0.2% to end the day at 17,652.79. The S&P 500, meanwhile, climbed one point, or 0.05% to end at 2,039.33 and the Nasdaq climbed 5 points, or 0.11% to close at 4,680.14. Energy stocks suffered a sharp decline, despite a last minute surge by Halliburton (HAL) and Baker Hughes (BHI) amid merger chatter. Oil prices continue to fall, dropping below $75 a barrel today, pressuring the sector. The yield on the 10-year Treasury note inched down to 2.342% from 2.359% on Wednesday. Yields fall as prices rise. Gold futures added 0.14% to $1,160.70 an ounce. In corporate news, lower gasoline prices helped Wal-Mart report its first sales increase since 2012. But the retailer gave a less optimistic outlook for the year. Still, Wal-Mart shares rose 4.7% to close at $82.94. J.C. Penney (JCP) fell 8.5% after it reported a narrower third-quarter loss. Berkshire Hathaway (BRK.A) rose 0.55% after it agreed to acquire the Duracell battery business from Procter & Gamble (PG). P&G fell almost 1%. And finally, reports of deal talks between Hasbro (HAS) and DreamWorks Animation (DWA) sent the movie studio soaring more than 14% to close at $25.52. Hasbro fell 4.3%. Thursday, November 6, 2014 A Day In The Life Of A High-Frequency Trader Ezra Rapoport doesn’t sleep much during the week. He's a high-frequency trader in futures markets, which are only closed for 45 minutes every day. His systems are running 23 hours a day, and Rapoport, himself, is up and running for most of that time as well. Rapoport is the head of automated strategy and development for Flammarion Capital Partners and recently joined Benzinga’s #PreMarket Prep to talk about the average day in the life of a high-frequency traders. Related Link: Jeff deGraaf On What Happens When Quantitative Easing Ends The Life Of An Early Riser “I drag myself out of bed as early as I can possibly manage after staying up as late as I can manage,” Rapoport said. “So basically, I stay up until about midnight, and I wake up at about four to get myself to the office.” By the time he’s reached the office, Rapoport has already been checking his trades for hours. He fires up his Bloomberg, checks his news sources and numbers, and gets prepared for the day. Completely Automated Trading Volume As a high-frequency trader, essentially all of his trading volume is completely automated. He monitors the trading activity all day, but none of the orders are placed by hand. In addition to constantly observing trading, Rapoport also works on development and maintenance. During the 45 minutes that futures markets are closed, he and his team go into their server and make any necessary updates or configurations to files. “So we have a 45-minute maintenance period every night before the market reopens, but other than that, we are absolutely up 23 hours a day for five sessions,” he said. For those who don't know what ebola looks like... pic.twitter.com/8sXAsIIIWG — Ezra Rapoport (@HFBondsTrader) October 24, 2014 Sky High Number Of Trades In addition trading for long hours, Rapoport’s systems trade very large volumes. On a normal day, they’re doing trades in the thousands to tens of thousands. "When we get to quarterly expirations or other events where there’s volume driven up in the futures -- which is where we like to be -- on those high volume days, things can get into the hundreds of thousands of transactions." He also talked about his average holding times and how he was trained by floor traders. Check out his full interview here: Don’t forget to tune in to Benzinga’s #PreMarket Prep Monday-Friday 8-9:45 a.m. ET all of the premarket info, news and data needed to start the trading day. Posted-In: Benzinga #PreMarket Prep Ezra Raporport HFT high frequency tradingFutures Markets Interview Best of Benzinga © 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.   Related Articles This Biotech's Earnings Are Sending It Toward New Highs Wunderlich Sees Progress With Regal Beloit Miller Tabak & Co., Takeaways on EOG Resources. Chrysler Group LLC Posts 18% Revenue Growth For Q3 Jana Partners Top 5 Positions: Charter Communications, eBay, PetSmart, Walgreen, Valeant Apparel Retailers In Holiday Struggle With Lack Of Fashion Trends Partner Network 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 Monday, November 3, 2014 PLUG – Plug Power Stock a Sell Even on Good Earnings Popular Posts: The Top 10 S&P 500 Dividend Stocks for May5 Stocks to Buy in MayTwitter Stock Gets Third Upgrade in Three Days … And Still Isn’t a Good Buy Recent Posts: PLUG – Plug Power Stock a Sell Even on Good Earnings Weak Retail Sales Hurt Everything from Home Depot to Nike The Top 10 S&P 500 Dividend Stocks for May View All Posts Anyone who follows Plug Power (PLUG) won’t be surprised that PLUG stock managed to fall nearly 10% right after Wednesday’s opening bell. Wild swings are what Plug Power is known for, and there are sure to be many more — probably to the downside — ahead. There are always a few stocks that a portion of the market falls head-over-heels in love with, despite investors’ better judgment. Take look at what PLUG stock has done over the last 12 months, and it’s abundantly clear some players are blinded by their ardor. True, Plug Power is one of the few ways for investors to bet on the exciting and revolutionary technology of electricity-generating fuel cells. But since when does it make sense for shares in a company that helps power fork lifts to rise more than 1,400% in a year? Just as worrisome is the epic volatility seen in Plug Power stock. Indeed, PLUG stock has traded in a range of 22 cents to $11.72 in the last year alone. Sure, Plug Power stock still is up more than 140% for the year-to-date, but it’s also off 64% since its March 10 high. Have a look at the chart: How does anyone figure an entry and exit point in a stock like that — especially one as neurotic as Plug Power stock? Plug Power Stock Short Circuits on Earnings The latest sell0ff in PLUG was set in motion by disappointing quarterly earnings. Plug Power reported a wider net loss year-over-year, to $75.9 million, or 57 cents a share, from $8.6 million, or 18 cents, in 2013. Yes, much of that stemmed from a charge of $68.4 million for stock warrants, but even on an adjusted basis, PLUG missed analysts’ estimate. Plug Power had an adjusted loss of 6 cents when Wall Street was looking for a loss of 5 cents. Then again, missing by a penny a share is hardly a tragedy. Furthermore, although revenue declined to $5.6 million from $6.4 million, the top line comfortably exceeded Street estimates. That might be a disappointing quarter for PLUG, but it wasn’t so bad that the stock needed to be shellacked. However, PLUG took a bad beating because that’s what happens to momentum stocks with insanely high valuations when anything negative comes to light. Even after Wednesday’s selloff, Plug Power stock was luxuriously expensive, with a nosebleed forward price-to-earnings ratio (P/E) of 77. For comparison, the S&P 500 trades at 16 times forward earnings. Heck, even Netflix (NFLX) — a poster child for pricey momentum stocks — has a P/E of just 50. That’s not to say that PLUG doesn’t have a solid business or a great future. It very well may. Walmart (WMT), the world’s largest retailer, uses fuel-cell-powered forklifts aided by Plug Power’s systems. At an investor conference this week, PLUG said it will deliver more than 3,000 units this year and will end 2014 with a profit, excluding interest, taxes and depreciation. That’s nothing but good news for PLUG. It does not, however, make Plug Power stock a buy. Like fellow fuel-cell stocks Ballard Power Systems (BLDP) and FuelCell Energy (FCEL), PLUG stock trades wildly from headline to headline. The volatility alone makes Plug Power too risky because it’s far too easy to buy high. If anything, Plug Power stock is a sell if you’re sitting on gains. Momentum stocks don’t stand a chance in this market, especially if they carry a 1,400% gain over the last year. PLUG stock offers too many reasons to get out, and there looks to be plenty more selling ahead. That’s why it’s time to pull the plug. As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities. Here's Why LinkedIn Might Be a Better Investment Than Twitter LinkedIn (NYSE: LNKD  ) and Twitter (NYSE: TWTR  ) shares have sold off by huge margins this year: LinkedIn shares are down 42% year to date, while Twitter's shares are down 37% this year They are the fastest growing social media companies today. But, LinkedIn's top-line growth is showing signs of slowing down. It fell to 46% in the first quarter of fiscal 2014, from an average yearly growth of 57% in fiscal 2013. Assuming that the company grows at the top end of its guidance, then it will finish fiscal 2014 with a revenue of $2.08 billion, or a 36% growth. What's going on at LinkedIn? LinkedIn managed to make a profit in seven out of the eight last quarters between 2012-2013, before reporting a net loss of $13.4 million in the first quarter of the current fiscal year. LinkedIn is facing the bugaboo of many companies experiencing high-revenue growth: spiraling sales and marketing costs. The company spent $510 million, or 34%, of its 2013 revenue, on sales and marketing expenses. In the first quarter of fiscal 2014, growth in sales and marketing costs outpaced revenue growth: 52% vs. 46%. Product development costs, the company's second-largest expense category, grew 49% during the quarter, 3 percentage points faster than revenue growth. Oddly, LinkedIn's general and administrative expenses, its third largest category, grew 74%. LinkedIn's user base grew 36% during the quarter compared to last year, but its page views grew just 5%, indicating a rather worrying lack of user engagement. The bright spot in that rather flat report was that the company expects its sales and marketing expenses for the full year as a percentage of revenue to be below last year's figure of 34%. Although the company's stock-based compensation in fiscal 2014 is expected to grow to $305 million from $193.9 million last year, it will represent ''just'' 14.7% of its revenue. In contrast, Twitter's stock-based compensation of $640 -$690 million for the current year represents about 54% of its expected 2014 revenue. LinkedIn has more than $2 billion in cash and short-term securities, while Twitter is cash-flow negative. Twitter's Achilles' heel While most of LinkedIn's problems look like temporary ones that the company is likely to outgrow, Twitter's case is not as easy. The bad part is that some of Twitter's biggest problems are not necessarily of its own making, and there isn't much the company can do about them. Let's have a look at three of these reasons. 1. Poor monetization rates for international users Twitter's business exhibits an odd dichotomy. The company has far more international users (non-U.S.) than domestic ones (U.S.): 186.8 million vs. 54.1 million. While there is nothing unusual about this, the worrying part is that international users account for just 26% of the company's revenue. Non-U.S. users have been growing 1.5 times faster than U.S. users: 33% vs. 21%. Twitter's advertising revenue per 1,000 timeline views stands at $3.80 in the U.S. and just $0.60 for the rest of the world. Assuming that 80% of the U.S. population will eventually become Twitter users ( a very generous assumption), and growth for both local and international segments continue at the current rates, the U.S. market will be fully covered in just eight years, after which the rest of the company's growth will have to come from international markets. It's very likely that U.S. growth will max out much sooner than the eight years we have assumed here, possibly in just five years. With such poor monetization rates for international users, the company could be facing a revenue cliff in a very short period of time. Twitter's reprieve, however, might come as smartphone adoption rates in the developing economies continues to increase. Currently, a huge percentage of these users are viewing Twitter through feature phones, which are not very advertiser friendly. But assuming that smartphone adoption in these countries helps to double their revenue per 1,000 timeline views to $1.20 in about five years, it will still be far short of the U.S. average. 2. Crowded online advertising industry Twitter happens to be a tiny player in a crowded online advertising industry. The company has roughly 1% market share vs. 51% for Google (NASDAQ: GOOG  ) and 11% for Facebook (NASDAQ: FB  ) . There are a raft of other top players in this industry, too, including Yahoo, Baidu, LinkedIn, and Yelp. Facebook can sell its users' data to advertisers; LinkedIn is busy steamrolling human-resource industries with its profiles and content, while Google is busy growing its already dominant market share in online advertising. The space looks quite hostile for Twitter. Twitter shares still look quite expensive even after the big sell-off this year. 3. Stock-based compensation Twitter's stock-based compensation for its executives and employees is a major drag on its bottom line. The company reported a net loss of $645.3 million in fiscal 2013, after taking a $600.3 million hit from stock-based compensation. The situation is not expected to improve in fiscal 2014 when the company will dole out stock-based compensation amounting to $640 million-$690 million. Foolish bottom line Twitter shares seem to be priced for a lot of growth in the coming years. But with the company making so little money from its international markets, and growth in its core U.S. market likely to hit a ceiling soon, it's going to be difficult for the company to maintain good growth five years or so down the line. LinkedIn is more likely to outgrow its problems sooner than Twitter, and is therefore the better long-term investment. The biggest thing to come out of Silicon Valley in years If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report. Subscribe to: Posts (Atom) Blog Archive ►  2019 (33) ►  March (14) ►  February (19) ►  2018 (16) ►  August (2) ►  July (8) ►  June (3) ►  May (3) ►  2015 (90) ►  July (2) ►  June (10) ►  May (11) ►  April (4) ►  March (15) ►  February (15) ►  January (33) ▼  2014 (225) ▼  December (13) Mid-Day Market Update: FMC Slips On Weak Outlook; ... Yellen: Economy will grow faster in 2014 6 Things That New Mothers and Infants Can Live Wit... 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