Saturday, April 30, 2011

Top Stocks For 2011

Looking for a shopping list of new top stock ideas for 2011? Each year for 27 years, TheStockAdvisors.com has turned to the nation's most respected and well-known newsletter advisors and asked them for their single favorite stock or fund ideas for the coming 12 months.   With 80 advisors participating in this year's survey, there's something for every type of investor, from high quality blue chips to speculative home runs.    While past performance is never a guarantee of future results, we would note that the stocks chosen by the 75 advisors participating in last year's report outperformed the general market by nearly 80%.    Specifically, the 75 stocks and funds selected for our 2009 Top Picks report recorded an average year-to-date gain of 34%, versus a 19% gain by the broad market over the same period.   Gainer's Today tracks stock picks and ranks the accuracy of 120 investment research firms. As of 12/23/09, our 2009 Top Picks report was ranked #1 for the past year. Kudos to all the participating advisors.   The stocks and funds chosen for this report are the best ideas of the nation's top advisors at this current time. However, company fundamentals and market conditions change, and a stock that is considered a strong buy today can become a sell based on future events.   As always, we caution all investors to only use these ideas as a starting place for your own research and only buy stocks that meet you personal investing criteria, risk parameters, and investment time horizon.   To keep updated on the ongoing favorite stocks of the leading advisors, please visit us daily at thestockadvisors.com, a free website that brings you the very best investment ideas of the nation's very best financial experts. You can also sign up for our Daily Digest and have each day's new stock ideas sent directly to your email.   We wish you the best of success for your investing in 2011!   No.1 From Kelley Wright : (Altria ) "My definition of safe is to avoid cyclical companies that can be derailed by unexpected economic events or a sudden change in Fed policy," says dividend expert Kelley Wright.    In Investment Quality Trends, he suggests, "Additional requirements are a long history of increased earnings and dividends, broad institutional sponsorship, and ample outstanding shares for trading liquidity. One such company that fits that bill is Altria Group (NYSE: MO), my top pick for 2011.   "As attention turns toward 2011, the annual dilemma of 'what do I do now' moves front and center. With the Fed ostensibly sticking to its 'for an extended perio'" mantra, the conventional wisdom is that the recession is behind us and all will remain well as long as interest rates remain low and liquidity plentiful.   "While the recession may indeed be over, under the technical definition anyway, and it is investment suicide to try and fight the Fed, the ever-ubiquitous Wall of Worry is steep enough to approach the new investment year with caution. In that vein, my instincts and experience are to play it safe.   "My definition of safe is to avoid cyclical companies that can be derailed by unexpected economic events or a sudden change in Fed policy.   "Altria Group is a holding company whose operating companies include Philip Morris USA, U.S. Smokeless Tobacco Company, John Middleton and Ste. Michelle Wine Estates. The company's brand portfolio consists of successful and well-known brand names such as Marlboro, Copenhagen, and Skoal.   "Trailing twelve months earnings for MO are $1.53 per share, and, based on the recent price of $19.15 per share, the P/E is in the mid-12 range. The cash dividend of $1.36 per share provides an outstanding dividend-yield of 7.10%.   "With a payout ratio of about 88% ($1.36 of the $1.58 ttm earnings are paid out in dividends), some investors who have seen some dividends slashed or eliminated over the past year may balk at such a high dividend-yield.   "The key to a healthy dividend though is free cash flow and a high return-on-equity (ROE). Altria Group converts about 16% of its revenue into free cash and its ROE is well above average.   "The IQ Trends Profile of Value for Altria Group is dividend-yield extremes of 7.0% and 4.0% respectively. Accordingly, whenever the dividend-yield for Altria Group is within 10% of 7.0%, the stock represents good historic value and is appropriate to purchase.   "When the dividend-yield declines to 4.0% ($34 based on the current dividend), the top stock has reached its historically repetitive area of overvalue and profits should be harvested."   No.2 From: Melvin Pasternak : Amdocs (NYSE: DOX) "Fundamentally, Amdocs (NYSE: DOX) has a bargain basement valuation based on its price to growth," says Melvin Pasternak, in selected the stock as his top pick for 2011.   In his Trade of the Week, he adds, "Technically, on a two year weekly chart the stock has broken out to the upside. Amdocs is the talk of the town -- and well it should be. Amdocs keeps phone companies and their customers talking to each other in more than 60 countries around the world.   "Its software helps telecom giants like AT&T Mobility and Sprint-Nextel with customer relationship management (CRM), billing, and sales.   "A couple of months ago, DOX broke out of a major downtrend line drawn from mid-2007 at the $40 dollar level. When combined with an uptrend line constructed from the 2009 bottom near $15, it can be seen that DOX has broken out of a large ascending triangle.   "The upleg of the ascending triangle is the uptrend line drawn from the January 2009 low.  DOX is now in a strong uptrend, well above the 30-week moving average which is sloping steadily higher.    "Even during the recent consolidation the shares have stayed mainly above the 10 week moving average, another sign of technical strength.  The consolidation has also relieved the stock's short-term overbought condition in RSI.   "According to the 'measuring principle,' DOX should have a minimum price target of $33 -- more than 20% above current trading levels.  Often top stocks in strong uptrends exceed their minimum targets.   "In 2009, DOX earned $1.57 a share.  In 2011, the 15 analysts who follow the stock project eps. Of $2.20 a share, a 40% increase.   "The current trailing P/E of the stock is 17.  The PEG ratio takes the Price Earnings Ratio and divides it by the earnings growth rate.    "If you calculate a one-year 'PEG' ratio, the shares are a great value--the PEG ratio is .425 (17/40).  Anything below one typically represents good value and DOX is trading at less half that amount.   "Analysts who follow the stock have caught on. In December 4, Standpoint Research raised their price target from $30 to $34. A number of other analysts think DOX can trade back to the $40's by 2011. In the New Year, I believe DOX has a good chance to break above $28 resistance and move toward $34. My target is $33.95."       No.3 From J. Royden Ward: Amedysis (AMED) J. Royden Ward is the editor of Cabot Benjamin Graham Value Letter, a newsletter that -- as its name suggests -- focuses on stocks that meet the criteria of legendary value investor Ben Graham.   For his top pick for 2011, he the advisor looks to Amedisys (NASDAQ: AMED), a provider of home health care and hospice services.   "Despite government e?orts, health care costs continue to rise to unacceptable levels in the U.S. But there are alternatives that o?er dependable care at substantially less cost to patients and to taxpayers, and I believe one option, home health care, will become an important alternative to lengthy hospital and nursing home stays.    "My top stock for 2011 is the largest company in the home health care sector whose impeccable reputation for delivering reliable care is providing the company with exciting new opportunities for exceptional growth.   "Amedisys is a leading provider of home health care and hospice services. The company typically provides skilled nurses or nurse assistants who coordinate health care with the patient's family and physician.   "The company operates more than 500 Medicare-certified home health agencies and 50 hospice agencies in 37 U.S. states and Puerto Rico. "The company's home health care services provide assistance to patients recovering improving patients' quality of life through physical, speech or other therapy.   "For example, the company educates patients on how to avoid falls in the home, which are the leading causes of patients re-entering hospitals. Approximately 87% of Amedisys' home health care services are covered by Medicare.    "Amedisys also o?ers hospice home care services for terminally ill patients. Hospice services are designed to provide basic care and comfort to patients and support to family members.   "Compared to hospitals and nursing homes, Amedisys can save patients, families and the health care system huge amounts of money. Health care delivered in patients' homes is far less expensive than health services delivered in hospitals and nursing homes.   "The home health care industry is fragmented with 9,200 home health care agencies and 3,000 hospice agencies operating in the U.S. Amedisys is actively acquiring smaller home health care agencies that fit the company's acquisition plans, as well as opening their own new agencies at a rapid pace.    "The growth opportunities in the home health care industry are obvious. The growing numbers of elderly, and the need for less expensive health care including home health care, will likely create industry growth of 15 to 20% during the next several years and decades.    "Revenues climbed 39% and EPS soared 57% during the 12 months ended 9/30/09. Analysts are forecasting 14% sales growth and 11% EPS growth for the next 12 months, but we believe Amedisys will produce sales and earnings growth exceeding 20%.   "We base our growth projections on the company's aggressive acquisition program along with its ability to open new agencies e?ciently and profitably. AMED shares are clearly undervalued at 8.3 times our EPS estimate for the next 12-month period."   No.4 From Vivian Lewis: BCE (BCE) Given her concerns about overall market valuaton, global expert Vivian Lewis is selecting her top pick from among stocks she calls "dividend payers and fallen angels".   In her Global Investing newsletter, she explains, "I consider BCE (NYSE: BCE), with its 6% yield, a great buy." Here's her review of the Canada-based telecom company.   "I'm worried about the speculative coloration of the rise in stock prices globally since the bottom in March 2009. I do not think the markets will continue rising as they have since then, in a straight line to the upper right-hand corner of the page.   "I expect a serious correction because the global economy is still mired in di?culty. There will be more bad news taking share prices down in the coming year.   "To find stocks with ballast for the sell-o? I expect in 2011, I am focusing on dividend payers and fallen angels. Fallen angels have risen less sharply than companies without damaged reputations, and pay out more.   "A year after crash of BCE, the Canada telco supposed to have been taken private by Ontario Teachers Pension Plan and US partners, who pulled out, the former Bell Canada is a good buy.   "The deal collapsed in the financial crisis. BCE CEO George Cope valiantly then cut 2500 jobs; did a wireless deal with Telus and bought out the remaining half of Virgin Mobile Canada; bought electronics store chain The Source; and boosted BCE dividends.   "BCE stock has risen 30% this year in loonies (C$s) and nearly 50% in US dollars. (It trades as BCE both in Toronto and on the NYSE.) But it is still a third cheaper than the former deal price target. That reflects investors' bad memories. Most analysts rate it neutral despite their expecting it to rise to $29.50.   "Further hurting BCE was the decision on Dec. 11 by Canadian regulators to allow Globalive to o?er cellular phone service throughout Canada, reversing an earlier bar on the company part-owned by Orascom of Egypt.   "While the 2009 Xmas telephone market will not see many o?ers from Globalive, next year there will be cellphone price cuts. This could hurt BCE's gross margins, which are at an astonishing 74%.   "However, other telcos without BCE's land-line and multiple cellular options will be hurt more. I consider the stock a great buy yielding 6% with a probability the dividend will be raised."       No.5 From Leo Fasciocco: Blue Coat (BCSI) "My pick for 2011 is Blue Coat Systems (NASDAQ: BCSI), a company that provides web security," says Leo Fasciocco, a leading technical analyst known for his focus on stocks that are breaking out of basing patterns.   In his The Ticker Tape Digest, he explains, "We consider the stock an excellent intermediate-term play because of its strong profit outlook. Blue Coat, based in Sunnyvale, Ca., provides software and services for networking, with annual sales of $444 million.    "Its products enable its end user customers to secure their Internet gateways and remote computer systems by providing protection from malicious code, or malware and objectionable content.   ""The company is benefiting from an expansion of its products. In 2008, BCSI acquired Packeteer, a provider of WAN tra?c prioritization technologies. It most recently came out with an expansion of its Webpulse cloud service for Arabic web content.   "Looking out to fiscal 2011 ending in April, the Street projects a 44% jump  in net to $1.30 cents a share from the 90 cents anticipated for fiscal 2011.   "The top stock has been trending higher the past few months recovering from the bear market. The  long-term chart for BCSI shows the stock with a cyclical tendency. It is now in the up trend part of its cycle. We see that as favorable for bulls at this time with the stock now trending higher.   "In our view, BCSI is an outstanding stock poised to breakout. It is holding in its base and poised to show massive earnings gains.We are targeting BCSI for a move to 36 after a breakout. A protective stop can be placed near 24 after a breakout."     No.6 From Dow Theory: BMC Software (BMC)  Dow Theory Forecasts is one of the most respected and venerable players in the financial newsletter community; the service has been published continuously for well over 5 decades.   Editor Richard Moroney looks to BMC Software (NYSE: BMC) as his top pick for 2011. He explains, "BMC develops products that run corporate data centers, which house critical computer systems.   "BMC's long-term contracts sustained stable profits during the downturn. Over the next 12 months, results should benefit as clients resume spending on technology. "Consensus estimates project per-share profits will advance 15% in fiscal 2011 ending March - and grow 14% annually over the next five years.   "Recent acquisitions have bolstered BMC's promising segment for automating datacenter activities. Fortune 500 companies comprise more than 85% of BMC's client list, and such companies are unlikely to abandon cost-cutting initiatives once the environment improves.   "Reflecting this optimism and better-than-expected results for the September quarter, BMC in October raised profit guidance for fiscal 2011. With a trailing price/earnings ratio of 15, BMC trades at a discount to its three-year average P/E of 22 and five-year average of 27.   "If the P/E returned to the three-year average and BMC matched consensus profit estimates, the top stock would trade at $58 next year.   "While that target seems a stretch, BMC seems fully capable of reaching $45 to $50. BMC is a Focus List Buy and a Long-Term Buy."       No.7 From Nicholas Vardy: Brazil Small Cap (BRF) "The global bull market is back in Brazil," says international investing expert Nicholas Vardy.   In The Global Bull Market Alert, he explains, "Global markets recovered in the beginning of November; at that time, we looked to one of the hottest markets on the planet, Brazil, through the Market Vectors Brazil Small-Cap ETF (NYSE: BRF). The ETF remains our top pick for 2011.    "Brazil, as its place on the cover of Economist magazine recently confirmed, was the flavor of the month in emerging markets. Brazil had recently won the right to host the Olympics in 2016, raising its profile much like the Beijing Olympics did for China. Investors were pouring in.   "Its currency, the real, gained 50% against the U.S. dollar since the prior December, with the economy firing on all cylinders, posting an 8%-10% growth in Q3. My forecast has been that, overall, Brazil's economy will grow by 5% in 2011.   "In December, the Inter-American Development Bank approved a $3-billion conditional credit line with Brazilian small and mid-sized businesses on Thursday.   Around 75% of the new jobs created in Brazil this year were created by small and mid- sized businesses.   "With the market already up 76.9% in local currency terms at the time, betting on Brazil was clearly a momentum play. That's also why I recommended a small cap ETF, which had outperformed its large cap ETF counterpart this year.   "Looking ahead, Brazil's biggest enemy is likely to be its own hubris -- getting too cocky for its own good. But before it does, I'm betting the market has further to go. After all, it went up almost 6-fold in dollar terms during its last bull run starting in 2003.   "This is the reasoning behind my recommendation for Market Vectors Brazil Small- Cap ETF. For a potentially bigger upside, I recommended the April $45 call options. For full disclosure, this is a position that I hold on behalf of my clients at Global Guru Capital."   No.8 From Karim Rahemtulla: Electronics Arts (ERTS) "I've been tracking the companies I feel are best positioned to sustain the market's upward momentum into next year," says Karim Rahemtulla.   The options expert with Investment U suggests, "One such company is Electronic Arts (NASDAQ:ERTS) – a major player in the video game industry. ERTS is one of the largest creators and sellers of multi-platform content in the industry and it finally o?ered some guidance for the year ahead.    "Expectations for earnings for 2011 are 87 cents per share with revenues of $4.26 billion. EA came out and said that revenues should fall between 4.2 and $4.4 billion with earnings ranging from $0.70 to $1.    "That type of wide range never sits well with Wall Street, which likes much narrower ranges and more specific guidance.    "There are three reasons to buy EA now:    "First, share prices do not usually wait for numbers to come through before they move higher. They move higher in anticipation of better earnings ahead. This should happen after the company reports numbers for the first and second quarter of next year.   Second, if this economy and market are really recovering, one of the prime beneficiaries will be a company like EA, which is solidly in the consumer discretionary space.    "Third, EA has been the subject of many takeover rumors, specifically by the likes of Microsoft. Currently the shares are trading at $16.50 per share, down from highs of more than $50 just over a year ago. It is flush with cash, very little debt and a dominant market position.    "While a takeover would be the least likely outcome, there still is that chance and in the current climate of mergers and acquisitions, I wouldn't be surprised to see a bid made for EA.    "While shares themselves look to be a good buy, I prefer to play this one using the Electronic Arts January 2012 $20 LEAPs."     No.9 From Martin Hutchinson: Eldorado Gold (EGO) "While my primary focus is on the international financial markets, it's the glint of gold that has caught my eye for 2011," says Martin Hutchison.    The contributing editor to both Money Map Report and Money Morning, explains, "Gold – or mining companies like Eldorado Gold (NYSE: EGO) – an especially compelling investment for 2011.   "There hasn't really been a commodity bubble like the current one since the late 1970s. It will end, as these things always do – but only when the world's central banks decisively tighten monetary policy and turn o? the spigots flooding the system with cash.   "That's unlikely to happen until consumer inflation has shown itself rising sharply. In relative terms, gold's price is still far below its all-time highs – the 1980 top at $875 per ounce is equivalent to $2,400 today, roughly double the current price.   "Supply is also becoming an ever-larger factor – the total global supply of new gold in 2009 was valued at under $90 billion, with another $35 billion or so available from recycling.   "That first number is unlikely to change as mining output has been declining by about 1% per annum in volume terms, in spite of the recent surge in gold's price.   "This means that if the big boys – such as the hedge funds (global assets of $1.9 trillion) or China (o?cial reserves of $2.3 trillion) – get involved, demand is likely to quickly exceed supply by a huge margin.   "Even though all the gold ever mined is still with us, it has a value of only about $5 trillion – a lot of money, but not huge in light of global investment flows.   "So, if the money really pours into gold, the price could again take o?. After all, $2,400 an ounce is still some distance away, and there's a lot more speculative capital around today than there was in 1980.   "There's no money tightening in the works currently. The Fed has kept monetary policy extremely loose for a year now, and has said it has no intention of raising rates in the near term.   "The European Central Bank, the Bank of Japan and the Bank of England have also indicated they do not intend to tighten, while China's M2 money supply has risen by 29% in the past year.    "Given all this money supply sloshing around, it's not surprising that gold prices have zoomed upwards – and will continue doing so as long as the Fed and its central bank brothers maintain a loose-money policy.   Rather than gold itself, I'd recommend gold mining shares – first choice, Eldorado Gold – for two reasons:      1    * First, there's the leverage. A gold mining company with extraction costs of $600 per ounce doubles its profits when gold goes from $900 to $1200.     2    * Second, commodity speculation pushes up share valuations, so chances are you'll make even more money. After all, the earnings growth rate becomes pretty spectacular, which can make a very simple company look like a Google!   "As a bonus, Eldorado is not just in gold, it's in Chinese gold – both internally and through a takeover it recently executed.   "That means it benefits not only from any rise in gold prices, but directly from increases in Chinese wealth. Chinese investors, when they buy gold, will naturally turn first to domestic output.   "Eldorado plans to double current production by 2013 (even without its recent acquisition) – no decline here. What's more, it's reasonably valued – actually quite cheap – considering its earnings potential.   "The company was founded in 1992, and has come a long way in a relatively short time, building to a recent market capitalization of $5.15 billion.    "It owns the Kisladeg gold mine in Turkey, which produced 58,000 ounces of gold in the third quarter of 2009, and the Tanjanishan gold mine in western China, which produced 31,000 ounces.   "In addition, its Efemcukuru project, with projected reserves of 1.7 million ounces of gold in Turkey, is expected to begin production in the fourth quarter of 2011.   "Eldorado also has gold-development projects in Greece and Brazil and an iron-ore project in Brazil. Its current gold reserves, proved and probable, total 7.6 million ounces.   "In September 2009, Eldorado made an agreed-share-exchange o?er for Sino Gold, the largest international gold mine in China. The o?er values Sino Gold at approximately $2.2 billion and will give Sino shareholders approximately 25% of the combined group.    "Sino has two operating mines in China – Jinfeng, the country's second-largest mine with production of 151,000 ounces, and the White Mountain Gold Mine, which began production in January 2009. The Eastern Dragon project in Heilongjiang province will become Sino's third mine.   "The combined companies will have gold reserves of 12.7 million ounces, with annual production expected to reach 850,000 ounces in 2011. In the third quarter, Eldorado earned $30.2 million, or 8 cents a share – up from 5 cents a share in the third quarter of 2008.   "That's at an average gold price received of $957 per ounce, compared with a total production cost, including overhead, of $430 per ounce. Based on third-quarter earnings, EGO has a P/E ratio of about 35 times – steep, but not excessive given the growth potential.   "That should become obvious in the year-end figures, which will show the rise in gold prices we saw in recent months dropping straight to Eldorado's bottom line.    "Just estimating, if the gold price for the fourth quarter averages $1,100 an ounce, that will send an extra $150 per ounce or so in profits to shareholders, adding about 35% to EPS and reducing the P/E correspondingly.   "Yes, labor and energy costs could rise a bit, but not much – Eldorado's costs were only $402 per ounce in the third quarter of 2008, when oil was at $147 a barrel.   "Bottom line: Increasing gold production – check. Contained costs – check. In the middle of the world's fast-growing Chinese gold market – check.  Decent balance sheet and profitability – check. What's not to like?"     No.10 From Bill Matthews: Emerson Radio (MSN) "Emerson Radio (NYSE: MSN) is an atttractive, low-priced stock," says Bill Matthews, a specialist in lower-priced issues.    The advisor, who has been publishing The Cheap Investor for nearly 3 decades, suggests, "The top stock has the potential for significant appreciation in 2011."   "In this market, we wanted to recommend a quality low priced stock that is relatively safe, has good increasing revenues and outstanding earnings. We are also looking for a stock that is selling at an attractive low price, and has the potential for significant growth and top stock appreciation in 2011. Emerson Radio fits these criteria.   "Emerson Radio is a household name. Together with its subsidiaries, it engages in designing, marketing, selling, and licensing various consumer appliance, electronic and house ware products.   "It products are sold in the United States and internationally. Emerson Radio Corp. markets its products under the Emerson and HH Scott brands.   "The company distributes its products primarily through mass merchandisers, discount retailers, toy retailers, and distributors and specialty catalogers in the United States.   "Emerson has an excellent balance sheet with $29 million or $1.06 per share in cash, a book value of $2.25 per share and less than $6 million in debt. Insiders own 65% of the 27 million total shares outstanding and 22 institutions own 17% of the float.    "Emerson has excellent financials for the six-month period ended September 30. Revenues are $107 million up from $97 million a year ago. Net income is $4.3 million or $0.16 a share up from a loss of ($242,000) or (.01) a share verses a year ago.   "If you look at Emerson's top stock chart between June 2002 and June 2003, you'll see that the price soared from $1.50 to $7.50 because of excellent revenue and earnings increases.  We believe, that if Emerson continues its earnings growth, the price could skyrocket again."     No.11 From Stephen Quickel: Equinix (EQIX) "Equinix (NASDAQ: EQIX), the global data center operator, is one of the most tempting growth stock opportunities on the 2011 horizon," says Stephen Quickel.   The editor of US Investment Report explains, "Big banks, market data providers, telecoms and other technology-driven clients use the firm's data center platforms to reduce their own capital expenditures and operating costs.   "The Silicon Valley-based company, barely ten years from startup, has moved quickly to open 45 data full-service centers serving clients in 18 key regions of the U.S., Europe and Asia-Pacific areas.   "These centers provide data management services to global enterprises of all sorts, including content and financial companies and network service providers,. "With demand rising rapidly, Equinix, has been able to lift revenues from $118 million in 2003 to $705 million in 2008, and to an estimated $880 million in recessionary 2009. Analysts project $1.17 billion in 2011—a two-year rise of 67%.   "As for earnings, the rapidly expanding company showed deficits for its first eight years, but reduced them in all but one year. Now firmly in the black and established as a sector leader, its gains could be large over the next few years.   "Rapid expansion of its IBX centers (short for International Business Exchanges) has required considerable debt. The latest available debt/equity ratio is an elevated 1.27.   "But capital spending is leveling o?, and Smith and his managers have kept of tight rein on operating costs.   "Earnings have risen 26 quarters in a row. After tax margins are reportedly at a four-year high. Third quarter 2009 earnings jumped 213% year-over-year, beating analyst estimates by 57%.   "Zacks reports consensus five-year earnings growth projection of 18.4% a year going forward. First Call shows earnings up 26% in 2011 and more than 40% in 2012.   "Those eye-catching numbers have not gone unnoticed. EQIX is not cheap by conventional measures. At 105 in late December (up from 40 in March), it traded at 51 times FC's 2011 earnings projection and 34 times its 2011 estimate.   "But the top stock has impressive support. Among 26 brokers—a large following for a young $4-billion market cap stock—15 rated it a Strong Buy in December, 3 a Buy and 8 a Hold, with no Sells.   "Goldman Sachs, altogether, owns 12.5% of the outstanding shares, with Wellington Management and Shumway Capital Partners each holding 8%-plus. Wells Fargo, Barclays, Morgan Stanley and Vanguard also have large positions.   "Of course, the Big Boys bought in at lower levels and have added shares along the way—and will doubtless continue to do so.   "With its high debt and P/E, it's not the kind of play-it-safe stock that attracted investors in late 2009. But as we head into 2011, few mid-caps have emerged with more fascinating near- and long-term growth possibilities."       No.12 From Paul McWillams: EZchip (EZCH) "EZchip Semiconductor (NASDAQ: EZCH), a fabless semiconductor company that specializes in network processors," is my top pick for the coming year," says technology sector guru Paul McWilliams.    In his Next Inning newsletter, designed for sophisticated tech investors, he suggests, "I think the upside potential here in 2011 and beyond is significant.   "Its initial market target has been what's termed as CESR (Carrier Network Switching and Routing).  EZCH has since expanded its focus to include products that are broadly grouped into what's called the 'Access' market.     "Between organic demand growth in the CESR market and EZCH's expansion into the Access markets, it is estimated the company will be addressing a total available market potential of about $1.5B by 2012.   "That implies substantial upside revenue potential for a company that will report somewhat less than $40M in revenue for calendar 2009.   "In 2011, EZCH will be shipping NP2 and NP3 / NP3C network processors in volume to its CESR customer base. In addition to this, we'll also see the initial revenue generated from its next generation CESR solution, the NP4 and its debut Access product, the NPAx.     "Notable production ramps for the NPA and NP4, which sells for roughly twice the price of a NP3, will begin in 2011.  Revenue from its NP2 will likely peak in late 2011 or 2012 as Juniper winds down its demand and replaces the NP2 with an internally designed ASIC.   "However, I believe this will be much more than o?set with the ramp of the NP3 and NP3C, the latter of which is designed into various platforms at Cisco including its new ASR series edge router.   "I believe EZCH's lack of participation in the 2009 tech rally is attributable to two factors. The first is what I think will prove to be a misunderstanding as to when its business at Juniper will peak and the sharpness of the decline following the peak.   "In my view, this peak won't happen until late in 2011 at the earliest and by then it will be much more than o?set by growing business at Cisco; not to mention design wins at other leading networking companies that will ramp in 2011 and beyond.   "The second factor has been the selling of shares by some of EZCH's early venture capitalists (VC's). Due to the fact EZCH initiated a secondary o?ering to liquidate these VC shares in one fell swoop as well as complete the purchase of its a?liated EZchip Technologies operating unit, this selling pressure will soon be eliminated. In my view, with this gone and EZCH poised to post impressive growth in 2011."   No.13 From Tracey Ryniec: Jinpan Int'l (JST) "Jinpan International Limited (NYSE: JST), a manufacturer of transformers, is the top pick for 2011 from Tracey Ryniec.   The value stock strategist for Zacks.com explains, "The company is positioned to benefit from the trillions of dollars of government stimulus around the world, as much of it is going into infrastructure.   "China has been an investing hotspot for several years. Even the great recession of 2008 and 2009 did little to slow down investor interest as the Chinese government injected massive stimulus into its economy which has propelled growth.   "In 2009, the Shanghai Composite Index surged over 70%, far outperforming the stock markets of the United States and most of Europe.   "Questions abound about whether China is too hot to handle and is a bubble waiting to burst. But I believe investors should look at each company individually, whether it is in China or not.   "While macroeconomic and political issues shouldn't be ignored, some companies will be better suited to ride out any rough patches. One of those companies is Jinpan International, one of only two UL certified cast resin transformer manufacturers in the world.   "While it has its headquarters and manufacturing facilities in China and generates a majority of its business in China, Jinpan is actually an American company held by a British Virgin Islands holding company. It is also not a newbie on the Chinese stage. Jinpan has been in business since 1993.   "The company manufactures medium voltage transformers (10-25 kV.) That doesn't sound too glamorous, but the transformers are used in large infrastructure projects like factories and real estate developments as well as in municipal transportation projects like airports and subway systems.   "Jinpan is positioned to benefit from the trillions of dollars of government stimulus around the world, as much of it is going into infrastructure. International sales have been growing. In the third quarter, sales outside of China rose 40% to $8.1 million and accounted for 18.5% of net sales, up from 13% a year ago.     "International customers were ordering cast resin transformers for wind power applications, along with the more traditional orders for use in airports, subways, and data centers.   "Orders for wind applications were 18% of net sales in the third quarter. The company's recently opened Shanghai manufacturing facility now handles the growing wind energy products business.     "In October 2009, Jinpan expanded in the U.S. opening a New Jersey o?ce and warehouse. Clearly, international sales are key to Jinpan's growth in 2011 and beyond.     "Despite a big jump in the top stock in 2010 (what didn't rally in 2009?), Jinpan has attractive valuations. The company is trading at about 13 times forward earnings. It has a low PEG ratio of just 0.64. Analysts polled by Zacks project earnings growth of 42% in 2009 and, so far, just 3.19% in 2011.   "But the company has had two big earnings surprises in the second and third quarters of 2009 so there is reason to think that growth will be much hotter than current projections. Analysts are bullish on the long term outlook, expecting earnings growth to average 20% over the next 5 years.   "Jinpan has an excellent 1-year return on equity of 24.75%. The company also shows its support to shareholders by paying a dividend, unusual for a Chinese-based company, which is yielding about 0.50%."       No.14 From Brien Lundin: Keegan Resources (KGN)  "Gold will be the primary beneficiary of the massive bailout and stimulus plans enacted by not only the United States, but every industrialized nation across the globe," forecasts Brien Lundin.   The mining stock specialist and editor of The Gold Newsletter looks to a small gold exploration and development company as his top pick for 2011:  Keegan Resources (ASE: KGN).   "Because of the deflationary influences of higher productivity, moribund economic growth and cheap labor in developing nations, we won't see the kind of price inflation that characterized the 1970s.    "But we will see galloping monetary inflation — or much more currency in circulation — and the result will be higher prices for assets such as commodities and equities.   "So if gold is going to lead the pack, what's the best gold investment? In my opinion, smaller gold exploration and development companies will o?er valuable leverage to gold, and one of the best is Keegan Resources.   "Keegan controls the Esaase gold project, a major mine-in-the-making located in the investor-friendly nation of Ghana, in west Africa.    "The company has made quick work of the project, going from field exploration to drilling to resource definition and pre-feasibility studies in a span of just three years.    "Now, Keegan finds itself sitting on top of a near-surface, open-pittable deposit that contains 3.47 million ounces of gold according to the most recent resource estimate.   "As impressive as that total is, it has the potential to grow significantly larger. The outlined resource remains open both along trend and at depth, and it lies within a country that hosts some of the world's largest gold deposits.   "Whether Keegan can unearth a resource of similar size at Esaase remains to be seen, but most analysts feel the next resource estimate will show the total gold holdings to have increased to at least five million ounces.    "And with the company tying up new ground along trend, there's literally no telling how large this find could grow.   "Frankly, I don't expect Keegan to develop Esaase into a mine — that job will likely devolve to the major mining company that buys Esaase, or Keegan itself.    "The company's management team knows this as well, and they are guaranteeing the best price by advancing steadily toward production.   "Keegan was among the highest of the high flyers during gold's fall rally. Although the share price has therefore come back fairly hard during the subsequent correction, the closing of a recent financing essentially opened a door to potential take-out o?ers for the company.    "While I know of no indications that any o?ers are forthcoming, there is the possibility that a bid, or a bidding war, could emerge at any time. In light of this, and considering the dip in its share price, Keegan is one of my top gold stock recommendations."       No.15 From Daily Paycheck: Kinder Morgan (KMP) For her top pick for 2011, income specialist Amy Calistri looks to Kinder Morgan Energy Partners L.P. (NYSE: KMP).   The editor of The Daily Paycheck explains, "I always look for the gift that keeps on giving; that's how I view this master limited partnership, which produces a steady stream of income each and every quarter.   "Kinder Morgan Energy Partners is one of the largest owners and operators of energy- product pipelines and storage facilities in the United States.    "Formed in 1992, KMP is structured as a publicly-traded master limited partnership (MLP). MLPs are an important asset class for income investors because they are legally required to distribute most of their taxable income and cash flow to shareholders (known as 'unitholders').    "KMP's extensive pipeline systems carry products such as gasoline and heating oil from the Gulf Coast to the East and West Coasts.   "KMP also owns and operates a network of carbon-dioxide (CO2) pipelines, which are used in a process known as enhanced oil recovery. These pipes carry CO2 to old oil fields where it is injected into the fields to increase productivity. These enhanced recovery techniques become more popular as oil prices rise.   "And KMP is continuing to grow its pipeline revenues through expansion. This past November , the Rockies Express Pipeline became fully operational.   "KMP owns a 50% stake in the 1,679-mile project, which carries natural gas from the Rocky Mountains to the Pennsylvania/Ohio border.   "Although KMP is an energy-related company, its revenues are relatively insensitive to energy prices. The partnership earns fees based on the amount -- not the price -- of gas, oil or refined products it processes and transports.   "Many of its interstate pipelines charge rates that are regulated by the Federal Energy Regulatory Commission. These regulated rates are set to allow Kinder Morgan a steady, reliable return on invested capital.   "Further, the partnership has already locked in guaranteed capacity from a few shippers on its pipes. KMP appears to be on track to not only deliver, but also continue to grow, its distributions.   "And when it comes to distributions, KMP has a stellar track record, having made quarterly payments like clockwork since October 1992.   "KMP also has a very consistent record of dividend growth, boosting distributions nearly every year since its inception. The partnership has increased its distributions at an annualized rate of +7.5% in the last five years alone.   "KMP currently pays a quarterly dividend of $1.05 per unit, equivalent to $4.20 per year for a yield of approximately 7% at current prices. It should be noted that MLPs are best held in taxable accounts as most of their distributions are classified as 'return of capital'."     No.16 From Mark Leibovit: Legend International (LGDI) Mark Leibovit uses a proprietary technical trading system known as volume reversal analyst; over time his buy and sell signals for the market has led to one of the top rankings among market timers -- including being ranked timer of the year in 2006 by Timer Digest.   He also uses this system to highlight trades among individual top stocks to buy -- such as his top pick for 2011: Legend International Holdings (Other OTC: LGDI). Here's the latest from his VRTrader.   "Legend International Holdings, Inc. engages in the exploration and development of mineral properties. It principally focuses on the development of its phosphate deposits located in the Mt. Isa district, along the margin of the Georgina Basin of Queensland, Australia.    "The company also owns interests in diamond and base metal projects located in Northern Territory. Its exploration licenses cover 40,525 acres in Queensland and 4.7 million acres in the Northern Territory, Australia.    "Legend International Holdings has a strategic alliance agreement with Wengfu Group Co. Ltd. The company was formerly known as Sundew International, Inc. and changed its name to Legend International Holdings, Inc. in March 2003. Legend International Holdings was founded in 2001 and is based in Melbourne, Australia.  "Our technical target for the shares is a move to $2.25-$2.50."       No.17 From Gene Inger: Level 3 Communications (LVLT) "Our bias has again shifted temporarily to the bearish side, which makes me cautious about picking stocks in early 2011," says Gene Inger. With that caveat in mind, the editor of The Inger Letter looks to the Level 3 Communications(NASDAQ: LVLT), s speculative, low-priced issue.    "We owned this top stock years ago and when Level 3 bought Broadwing we got stock and cash; thus solid profits years ago or zero-cost basis on Level 3 shares.  "After pundits hyped it (at triple current prices)  the top stock has dropped to an area of attractiveness. One caution: from sub-$1 levels during our forecast market panic a year ago, the shares have doubled; thus it's not impossible that 'capital gains taking' could suppress the top stock somewhat early-on in the new year.   "Thus our buy-zone will be particularly wide; such as between 90 cents and $1.30 or so. One may elect to pay more and scale-in; though we'd prefer to buy in on pullbacks.   "Meanwhile, we note that their ability to service their debt should not be an issue presently; so we are interested to see what they do over the next year or two; not past 2012.    "Our original interest in Broadwing -- now absorbed by Level 3 -- was the all-digital-optical as well as transcontinental (now to Europe as well) fiber system.   "This system has no latency as still is common with satellite and many other systems (including most fiber networks).    "On top of that mobile carriers are increasingly looking to 'backhaul alternatives' to meet their increasing bandwidth needs, which should increasingly result in o?oading to fiber backhaul systems.   "The low latency is a reason why most sports and news networks are using Level 3 (two-way conversation reveals latency, whereas one-way conventional transmission doesn't) for their HDTV broadcasts, and we believe that will increase in importance as 3D arrives eventually.   "Additional pluses in the fullness of time include bandwidth requirements in the Cloud Computing area; digitized medical record keeping; military uses (they have certain key Federal accounts) and certainly the growth of telecommunications in-lieu of physical travel.   "In the sense that reduced physical, and increased optical transport, is e?cient; that's actually a bit of a green' story as well."   No.18 From Jim Stack: PepsiCo (PEP) "PepsiCo (NYSE: PEP), my top pick for 2011, remains underrated by the  market," says Jim Stack.    The money manager and editor of InvesTech Market Analyst suggests,  "All too often,  it's viewed as a stodgy soft drink company, fully reliant on its namesake soda line. That's a misconception." Here, the sets the record straight.   "In reality, PepsiCo owns some of the most sought after brands in the world, including Gatorade, Tropicana, Frito-Lay, and Doritos.  It does business in more than 200 countries worldwide, including key emerging market economies like China and India.   "Perhaps most important of all, it's a growth company with analysts expecting long-term future earnings growth of 10-12% per year.   "In recent months, PepsiCo has taken another major step forward with the pending acquisition of its two primary bottlers – Pepsi Bottling Group and PepsiAmericas.    "The acquisition provides the potential to eliminate an estimated $500 million to $1 billion in redundant costs.  If those cost savings are transferred directly to the bottom line, shareholders could see a significant increase in net income of 10% to 20%.    "Of perhaps even greater benefit, the purchase brings 80% of North American beverage distribution 'in-house.' This move will bring management one step closer to its final customers – injecting a level of flexibility into operations not often seen with a company of PepsiCo's size.    "The acquisition further ties together the Pepsi story – a well run company with market leading growth positions and an attractive valuation.    "The executive suite neatly combines the beverage 'megabrands' such as Pepsi, Gatorade, Tropicana, and Mountain Dew with the world's largest snack food company, Frito-Lay.    "Management then leverages these brands into international growth markets such as Latin America and Asia where sales volume increased more than 20% in 2008, and despite the most challenging world economy in decades, has seen high single-digit growth so far in 2009.   " On top of all this, Pepsi is currently trading at valuation levels not seen in 15 years.  And although it's a growth company, Pepsi still o?ers the dividend yield (3.0%) of a stalwart.    "Bottom line, Pepsi remains underrated by the market in general, and the bottler acquisition only enhances the company's outlook."   No.19 From Alex Kolb: Perfect World (PWRD)  "Perfect World Company Ltd. (NASDAQ: PWRD), an online game  developer and operator, is my top investment idea for 2011," says Alex Kolb.   The growth & income analyst for Zacks.com explains, "Chinese stocks have been on fire lately and Perfect World Co., Ltd. is no exception. And the company's fundamentals point to even stronger momentum in 2011.   "The company develops online games based on its game engines and game development platforms. Perfect World's games include massively multiplayer online role playing games ('MMORPGs') such asPerfect World, Legend of Martial Arts, Perfect World II, Battle of the Immortals and Fantasy Zhu Xian to name a few.   "Perfect World says that a substantial portion of the revenues are generated in China. However, its games have been licensed to leading game operators in a number of countries and regions in Asia, Europe and South America.   "The company also generates revenues from game operation in North America and plans to continue to explore new and innovative business models.   "Competitors like Shanda are also performing extremely well, an indicator that online role playing games are very popular and should continue attracting more players in 2011.   "PWRD shares have soared by more than 120% so far in 2009, surpassing the major averages by more than 100%. Despite the significant surge, the top stock is attractively price with a forward P/E of 14.    "Perfect World's fundamentals point to even stronger momentum in 2011. Analysts polled by Zacks currently have 2011 earnings pegged at $3.66 per share. The forecast is up from $3.45 over the past 2 months and compares favorably to the current 2009 Zacks Consensus estimate of $2.90.   "If history is any indication, earnings will exceed forecasts. Since 2007, Perfect World has consistently topped earnings expectations. Earnings surpassed estimates by an average of 31% over the past 4 consecutive quarters.   "The company is expected to see 33% earnings growth over the next 3 – 5 years, well above the industry's expectation of 18% growth. Other strong industry comparisons include Perfect World's return on equity (ROE) of 55.5%, versus the industry average of 2.5%.   "The company boasts a net profit margin of 47%, while the industry average is in the negative. It is also worth noting that Perfect World sports a solid balance sheet, showing no debt.   "The company saw robust results in the third quarter. Earnings per share of 81 cents came in 8% ahead of the Zacks Consensus Estimate. Total revenues jumped 13% year-over-year.   "Management mentioned that third-quarter results exceeded the company's expectations, adding that Perfect World continues to strengthen its competitive advantages in the industry by strategically crafting a highly diversified portfolio of truly di?erentiated games.   "Recently, the company introduced a new 3D fantasy MMORPG, Forsaken World. Management explained that this game breaks new ground in terms of overall planning, programming and graphical designs."   No.20 From Marcie Wilmot: PMC Sierra (PMCS)  "PMC Sierra (NASDAQ: PMCS), my top pick for 2011, was a high-flying star during the telecom boom of 1999-2000, but crashed as the bubble of demand burst in 2001," notes Marcie Wilmot.   The contributing editor to Next Inning, a tech-savvy newsletter, suggests, "While it was rough sailing for PMCS after this crash, the company recast its business and operating models and is now successfully focusing on high-growth markets where it could leverage its core di?erentiation.   "The net result has been very impressive revenue growth and strategic penetration into markets such as FTTx, Wireless back-haul, Networking, Storage and High-end Printing.   "While PMCS fell 6% short of reporting a post-crash revenue record for calendar Q3, it set a new post-crash non-GAAP operating profit margin record at 27.3%. This tells us that during the last year PMCS has taken steps to notably improve the leverage provided by its operating model.   "I believe it also supports my contention that PMCS is well poised to continue topping the earnings consensus of the covering analysts as it has during each of the last three quarters.   "In looking to 2011, I believe we'll continue to see strong growth from the market sectors noted above with very notable upsides generated by both PMCS' RISC processor business with Hewlett-Packard (high-end printers) as well as from its storage business where it sells products to virtually all the major tier one players.   "Based on this view, even in my most conservative model, this leads me to believe PMCS will report non-GAAP earnings in 2011 of $0.60, slightly above the current $0.57 consensus and aligned with the highest estimate provided by the 10 analysts covering the top stock.   "In my estimation, when coupled with the net cash value listed on PMCS' balance sheet of $0.94 per fully diluted share, this justifies a current fair value price in the range of $10.62 to $11.42.   "While that is only a modest upside from its current price in the mid-$8 range, a year from now when we're looking at what I believe will be a notably higher estimate for PMCS forward earnings in 2011, I think PMCS will merit a fair value price that is somewhere in the mid-teens." 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Gates' Next Billion-Dollar Power Play

More than 3,100 refund checks mailed to alleged victims of mortgage discrimination by Bakersfield company

 10:15am

More than 3,100 refund checks totaling $1.5 million have been sent to Latinos who were allegedly charged higher prices for home loans by a Bakersfield mortgage company, the Federal Trade Commission said.

The checks were part of a settlement announced last year between the agency, Golden Empire Mortgage Inc., and its owner, Howard D. Kootstra, of charges that the company illegally charged Latino customers more for mortgages than non-Latino borrowers. The practice violated the Equal Credit Opportunity Act, which bars creditors from discriminating against loan applicants on the basis of race, color, national origin or other factors.

Golden Empire Mortgage operates in California and six other Western states.

The FTC filed suit against the company in 2009, alleging it charged Latinos "substantially, statistically significant" higher prices for mortgages that "cannot be explained by factors related to underwriting risk or credit characteristics of the applicants.

Friday, April 29, 2011

Consumer Confidential: Baggage fees rise, Wal-Mart delivers, Nissan recalls SUVs

Here's your my-boy-lollipop Monday roundup of consumer news from around the Web:

--It used to be that you could at least duck some baggage fees charged by airlines if you prepaid online. But apparently that's a perk that's going away. United Continental has done away with the $2 to $3 discount that passengers used to get if they paid for their luggage on the Net instead of at the ticket counter. The charge for domestic flights is now $25 for the first bag and $35 for the second, no matter how or when you pay. United and Continental used to offer a $2 discount on the first bag and $3 off the second to encourage passengers to pay up before arriving at the airport. Delta Air Lines Inc. still offers a similar discount. Other carriers, including AMR Corp.'s American Airlines, never offered different prices. Southwest Airlines Co. continues to allow passengers to check two bags for free.

--Need some food? Wal-Mart's website wants to be your first stop. The world's biggest retailer has started testing an online grocery delivery service, called Wal-Mart to Go, in the San Jose area. Other grocers, including Safeway and Peapod, offer similar services, though it's unclear how profitable these services are. Delivery charges for Wal-Mart to Go start at $5. For the test, Wal-Mart is shipping groceries from a San Jose store, packing them in tote bags and delivering them in temperature-controlled trucks that the company owns. Deliveries can be scheduled for the next day. The company is still working out deliveries of perishables such as meat and produce, but seems to be coming along quickly. On the other hand, it's hard not to recall the experience of Webvan.com and how that company crashed and burned with such a service.

--Heads up: Nissan is recalling nearly 200,000 sport utility vehicles to fix a defective steering column that can crack when exposed to road salt. An assembly hole can allow road salt and snow to collect in the steering assembly and cause corrosion, Nissan says. "The strut housing may crack and pull away from the inner hood ledge assembly," the carmaker warns. "This may lead to grinding noises, increased steering effort and possibly the steering column to break, resulting in the loss of steering control, which could result in a crash." The recall affects model years 1997 through 2003 of the Infiniti QX4 and model years 1996 through 2004 of the Nissan Pathfinder. Inspection and repairs will be conducted free of charge.

-- David Lazarus

Photo: Prepaying online won't always get a discount on checked bags. Credit: Tim Boyle / Getty Images

 

Bloomingdale's expands outlet concept, announces three new stores

 10:28am

Bloomingdale's, which launched an outlet concept last year, announced that it will open three new outlet stores in the fall.

The upscale department store owned by Macy's Inc. will open the new locations in Estero, Fla.; Wrentham, Mass.; and Schaumburg, Ill. The stores will be 24,000 to 25,000 square feet.

The company said that based on customer response, it is considering additional outlet stores "for 2012 and beyond."

"Our first four outlet stores have helped us to learn this business and refine our merchandising and in-store presentation," said Michael Gould, chief executive of Bloomingdale's. "We continue to see opportunity for growth."

The outlet stores offer apparel, accessories, jewelry, handbags and intimate apparel.

The first four Bloomingdale's Outlet stores opened last fall in Paramus, N.J.; Miami; Sunrise, Fla.; and Woodbridge, Va.

-- Andrea Chang

CIM Group breaks ground for Hollywood apartments

 11:44am

Hollywood's largest landlord broke ground Monday on a $20-million luxury apartment building just north of Hollywood Boulevard.

The developer is CIM Group, which owns the Hollywood & Highland entertainment center and the Sunset & Vine apartment tower along with several other large properties.

Thursday, April 28, 2011

Gas prices could reach $4.25 nationally by Memorial Day

 12:17pm

Crude oil fell from 31-month highs Monday, but analysts were predicting that the reprieve wouldn’t reach motorists. Pump prices were expected to continue their rise, with some predicting $4.25 gasoline by Memorial Day.

UCLA Anderson School of Management receives $25 million

 12:44pm

The UCLA Anderson School of Management will receive a $25-million gift from alumnus John Anderson, a Los Angeles entrepreneur, and his wife, Marion -- the largest donation in the business school's history.

The school already bears Anderson's name after a 1987 donation from him of $15 million, then the largest gift by an individual to that institution. Over more than two decades, the Andersons have donated almost $42 million to the school.

"This remarkable gift will enable us to chart the future by investing in a broad range of strategic initiatives, including research that advances management thinking and practice, curriculum initiatives that prepare our students to become global leaders, and student support that attracts the most talented candidates from around the world," UCLA Anderson Dean Judy Olian said in a statement.

Anderson graduated with a bachelor's degree from UCLA in 1940. He later earned a MBA from Harvard University and a law degree from Loyola University in Los Angeles.

He co-founded a law firm with another UCLA alumnus that has since closed its doors, and in 1956 he started Ace Beverage with exclusive rights to distribute Budweiser in Los Angeles. He is the longtime owner of Topa Equities, a privately held company based in Los Angeles with dealings that include real estate and beer distribution.

Anderson was ranked No. 189 in Forbes Magazine's 2006 list of the 400 richest Americans, with an estimated net worth of more than $1.9 billion.

"I was very lucky to come to UCLA on a scholarship, and I've never forgotten that," Anderson said in the statement. "The lessons and values I learned while attending UCLA shaped my thinking ... and helped build my business reputation."

The Andersons' previous donations have established two professorships in their name and helped fund a building for the graduate business school.

RELATED:

Chinese businessman donates $10 million to UC Riverside

In paying for college, better to be lucky than smart

Harbor City truck maker announces deal to export green drive systems to China

-- Shan Li

Silver rallies closer to $50, gold gains as buyers keep coming

  1:01pm

The price of silver made a run for the $50 mark on Monday, the previous nominal peak reached 31 years ago, as the wild bull market in precious metals rolls on.

April silver futures in New York traded as high as $49.10 an ounce but fell back to close at $47.15, up $1.09 for the session, or 2.4%.

The more active May silver contract made it closer to $50, trading as high as $49.82 before retreating.

Wednesday, April 27, 2011

American Apparel shares soar 27% after it secures financial lifeline

  1:38pm

American Apparel stock jumped 27% on Monday following news that a group of Canadian investors had agreed to inject up to $45 million to help the Los Angeles clothing company.

Shares increased 34 cents to $1.58.

Now that it has secured a financial lifeline, American Apparel will focus on optimizing efficiency at its downtown L.A. factory and increasing sales productivity at its stores, Chief Executive Dov Charney said in an interview Monday.

"Maybe once we optimize the factory and the top line of each average store, we might look at increasing store count," Charney said. "We still think it's a business in its early stages, and we'll continue to work to grow the company. ... We really think we can take the company to another level."

The deal, announced last week, helped the company stave off a potential bankruptcy filing. The investors agreed to pump in $15 million in equity at 90 cents a share, a 27% discount to the company's $1.24 closing price Thursday. The stock market was closed Friday in observance of Good Friday.

The investors also are getting warrants to buy an additional $30 million worth of shares over the next six months, also at 90 cents a share.

Charney agreed to contribute $700,000 of his own money. However, unlike other existing investors whose ownership stakes will be diluted by the issuance of shares to the new investors, Charney said his prior ownership stake can be restored if the stock price rises in coming years.

The investment group is headed by Michael Serruya, a prominent Canadian financier.

Just a few weeks ago, American Apparel -- which in recent months had faced a slumping stock price, sales declines and two sexual-harassment lawsuits brought by five former employees -- had warned that it had doubts about its ability to continue as a going concern.

-- Andrea Chang

SEC shuts down Beverly Hills hedge fund and wealth management business

  3:45pm

In an unusual move, the Securities and Exchange Commission has temporarily shut down a Beverly Hills hedge fund and wealth management business -- which allegedly sought to defraud investors -- before anyone actually invested.

Elijah Bang and Daniel Lee, who operated IU Group Inc., allegedly targeted retirees, professors and Christians by misrepresenting the business and its financial performance, soliciting clients using a variety of company names and claiming that the fund managed over $800 million, according to an SEC statement on Monday.

Some websites stated that the company was founded by "devoted Christians who believe in God, Jesus Christ and the Holy Spirit," the SEC said. Lee sent email solicitations to college professors. Both men told potential clients that they handled money for professional athletes, actors, executives and politicians. 

The SEC obtained a temporary restraining order to halt business activities and filed a complaint in the U.S. District Court in central California accusing Bang and Lee of fraud and seeking financial penalties.

John McCoy III, the associate regional director for the Los Angeles office of the SEC, said it was unusual, but not unheard of, for the SEC to stop a business scam before any investors were lured in.

"Often, particularly with defrauded investors, we don't get a complaint or tip until someone actually puts in money, tries to get it out and then the person says, 'Oh well, I don't actually have any of it,' " McCoy said.

In this case, the SEC received an early tip from the public, and subsequent investigations have uncovered zero investors and no money, McCoy said. But further digging could turn up new evidence.

"Part of the problem with these cases is the lack of transparency," he said. "There's always the caveat that we don't know what we don't know."

According to the SEC, Bang and Lee are also old hands at securities fraud. In 2009, the California Department of Corporations ordered the two to desist and refrain from illegal and fraudulent sale of securities.

But last year, they began soliciting money again under UI Group, whose business license was suspended in California, and under a variety of other company names not registered with the SEC or the state.

Calls and emails to Bang and Lee were not returned. David Van Havermaat, an attorney for the SEC, said neither men had hired a lawyer yet.

McCoy added that the district attorney's office or U.S. attorney's office could also bring criminal charges against the two men.

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-- Shan Li

 

KCET sells Sunset Boulevard studio to Church of Scientology

  4:06pm

Financially strapped KCET-TV has sold its landmark Sunset Boulevard studio to the Church of Scientology for an undisclosed price, the station said Monday.

KCET will remain at 4401 W. Sunset Blvd. for as much as a year while searching for a new location. The station is in discussions with several production facilities, according to a statement by its president, Al Jerome.

Tuesday, April 26, 2011

Leaf, Volt electric vehicles get top safety marks

  6:03pm

The first of the new mass-market electric cars have won the highest safety ratings from an insurance industry trade group.

The Nissan Leaf, which is a powered only by electricity, and the Chevrolet Volt, which technically is a plug-in hybrid vehicle because it also has a small gasoline engine, were named Top Safety Picks by the Insurance Institute for Highway Safety. 

Tuesday, April 19, 2011

Best Stocks to Invest In 2011 -Top Stock Picks to Buy

Despite the market’s recent resuscitation, many stocks are still trading at fire-sale prices-no surprise given the immense decline that preceded the advance. But which stocks to invest in 2011?

Between March 9 and May 4, Standard & Poor’s 500-stock index surged 34%. Beaten-down “value” stocks and stocks of smaller companies have been the best performers during the recovery. Examples of revived value stocks are Citigroup (symbol C), which tripled from an intra-day low of 99 cents on March 9 to $3.20 at the May 4 close, and Bank of America (BAC), which skyrocketed from $3 to $10.38. Meanwhile, Morningstar’s small-company-value index rose 22% in April, and its large-company-growth index gained just 8%.

I’m not jumping on the bandwagon. Given the fragility of the markets, the financial system and the economy, I don’t think stocks of small companies or companies with huge problems are the ones to buy. Instead, I think you should put most of your money into the highest-quality blue chips (companies with little or no debt and the ability to generate a lot of cash).

If you’re looking for ideas, Morningstar StockInvestor ($119 annually) is a great resource. According to the authoritative Hulbert Financial Digest, the newsletter’s stock picks returned an annualized 2.6% from the end of 1999 through last February, a period in which the broad-based Dow Jones Wilshire 5000 stock index lost an annualized 5.0%. What’s more, the Morningstar letter is less risky than the index and tends to do little trading; on average, the letter holds stocks for about three years.

Editor Paul Larson says he looks for companies with competitive advantages over their rivals: “My strategy is fairly simple. I focus on high-quality companies, and I buy them when they’re cheap.”

Morningstar’s 100-plus stock analysts estimate “intrinsic value” for every company they cover. They compare intrinsic value to a company’s share price to arrive at a star rating. Larson then draws up two lists — a “tortoise” portfolio and a “hare” portfolio-consisting of about 25 highly rated stocks each.

Larson’s favorite is Warren Buffett’s Berkshire Hathaway (BRK.B)(best stocks to invest in 2011). At $3,114.90 a share on May 4, the stock has shed more than one-third of its value in the past year. But Larson believes that Berkshire’s collection of more than 70 businesses, dominated by insurance, is dirt-cheap. Says Larson: “For a long time, people have been pricing Berkshire as though Buffett were no longer around. But he’s still alive and kicking-and adding value. And the balance sheet is still one of the strongest around, even though the company no longer carries a triple-A debt rating.”

The world’s largest and most diverse health-care company, best stocks to invest in 2011 -Johnson & Johnson (JNJ), is another favorite. Larson says that the company is largely insulated from economic downturns. “People need to take their medicines regardless of what the economy is doing,” he says. J&J is well-managed, has little debt and generates a staggering $1 billion in free cash flow per month (free cash flow is the money left after a company makes the capital expenditures needed to maintain the business). The stock closed at $53.76 on May 4.

Defense giant best stocks to invest in 2011- General Dynamics (GD) is another company that’s built to withstand recessions. It builds ships and armored vehicles, as well as information-technology systems for the military. “The government has a vested interest in maintaining the health of this company,” Larson says. “It came through the Defense Department budget cuts relatively unscathed.” The company boasts a rock-solid balance sheet. The stock closed at $54.00.

Wal-Mart Stores (WMT), the world’s largest retailer, has increased its market share during the economic slump. Its sales of consumer staples at discount prices have been increasing as other retailers have been going out of business. The company’s managers are focusing on cutting costs and satisfying customers. Wal-Mart, one of only two stocks in the Dow industrials to climb last year, closed at $50.84.

As employee benefits grow ever more complex, The best stocks to invest in 2011-Automatic Data Processing (ADP) benefits. It provides such services as payroll processing and benefits administration. Its large scale and respected brand, and the high cost of switching to another vendor, give it a big competitive advantage. The share price: $34.86.

When competitors were spending enormous sums to build up oil-and-gas reserves during last year’s bubble in oil prices, ExxonMobil (XOM) stayed focused on increasing profit margins. Because of that, Exxon can continue to buy back shares, raise its dividend and increase capital spending (at a price of $68.20, the stock yields 2.5%). It’s the world largest integrated oil-and-gas company, and participates in almost every facet of the business.

Best Stocks To Invest

Stock market is a high risk investment venue offering high returns to the investors. The investors will always think of the best stocks to invest and call the stock market related television channels where there will be stock market experts interacting with the investors.

Most of the queries by the investors will be related to the best stocks to invest and the experts reply that a particular sector will be performing well in the next few years and ask the investors to invest their money in these sectors. Some investors roughly follow the mutual fund companies and invest their money in the stock where the fund managers of the mutual funds invest. These investors consider that the fund managers will select the best stocks to invest and just follow them as an investment strategy. Some people having no experience in the stock market or lack knowledge about the stock market prefer the mutual funds for their investments. The stocks are selected based on the fundamental and technical analysis of the company stocks.

The fundamentals are considered if the investor wants to invest for a long time period of about 2 to 3 years. The technical analysis is used by the investors to select the best stocks to invest based on the past performance and certain patterns. The investors following the technical analysis will follow a certain pattern in the stock performance and predict that the stock will move up or down and arrive at the high and low. Then the investors will try to sell the stocks at the high and buy the stocks at the low.

The entries of speculators in the form of day traders make the stock market fluctuate to a great extent. The foreign institutional investors play a pivotal role in the performance of the stock market. Since the investors consider that the American and the London stock market have matured, they have shifted investing in the Asian stock markets where the returns are more. Currently, the Asian stock markets and the stocks listed in the stock exchange in the developing countries are the best stocks to invest. The stock experts comment that banking sector is always considered to be safe and will yield a steady return after some years. The blue chip and the information technology sector stocks can yield good returns in a quick manner. Similarly, each expert will give their comments about each industry and offer their buy and sell recommendation to the investors.