What Will Put the Brakes on Housing

A friend of mine recently tried to purchase a home in Northern California. He gave up after a year of trying. Few homes were available for sale, and those on the market were quickly snatched up by investors paying all cash.

This is becoming more common. In June, nearly 70% of for-sale homes received multiple offers, up from 50% two years ago, according to Redfin.

Nationwide home prices are up 12% from a year ago. Some regions have enjoyed 20% growth. This is way above what anyone should expect real estate to gain in the long run. And it's a product of one simple fact: The supply of homes for sale was recently at the lowest level since the housing bubble last decade.

In a healthy real estate market, enough homes will be on the market to supply about six months of sales activity. Earlier this year, supply dropped all the way to 3.9 months, or the lowest since 2004.

But things are changing. Supply is ramping up again, now running at 5.2 months' of sales:

Keep an eye on this. Rising supply almost certainly means growth in home prices will cool off. This should come as no surprise -- no one should have expected prices to keep growing at more than 10% per year.

The question is how high supply might go. Three forces will guide its direction.

1. Owners gaining positive equity. 2.5 million homeowners regained positive equity -- meaning their home is worth more than they owe on the mortgage -- in the second quarter, according to CoreLogic. Some of these homeowners have been itching to sell for years and just now have the opportunity.

But judging how many will do so is difficult. Even homeowners who once wanted to sell and move might opt to stay put even with positive equity. It's a wild card. 

2. Homebuilders adding to supply. Homebuilders recently discovered something that's been elusive for years: the ability to raise prices. The balance they now need to strike is how much to ramp up supply versus holding back supply to maximize prices. PulteGroup (NYSE: PHM  ) CEO Richard Dugas said earlier this year: "In a number of communities across the country, demand has been so strong that we have taken action to slow the overall pace of sales."

But some may have a hard time ramping up supply even if they want to. As The Wall Street Journal noted last week:

Most builders responding to a recent survey released Wednesday by the National Association of Home Builders noted that lots ready for construction remain in short supply, and that scarcity is among the chief factors hindering the housing recovery.

10 Best Undervalued Stocks To Buy Right Now

Homebuilding CEOs have been clear in recent conference calls: There are far too few homes given demographic demand. As Lennar (NYSE: LEN  ) CEO Stuart Miller put it, "The bottom line is that there are too few dwellings for a growing population and for normalized household formation."

3. Pent-up household formation demand
21.6 million Americans age 18-31 live with their parents, according to Pew Research Center. That's a record, and up from 18.5 million in 2007.

There are two ways to look at this: Either it's a new normal that reduces long-term demand for housing, or it's a short-term function of the Great Recession that will return to normal once the economy picks up. I'd bet on the latter. And when jobs growth returns and household formation picks up -- it's still below its long-term trend -- demand for homes will rise as well. Like so many other statistics, the glut of young people living in their parents' basements is both depressing and a reminder of how far things have to go before we're back to normal.

From more on what to expect from the housing market in the long run, see here. 

Southern Company: The Wait for Fair Valuation Is Over

Thesis for Growth

To be perfectly blunt, there really isn't much of a growth thesis for the Southern Company (SO). Founded in 1945, Southern Company is an electric utility company that serves over 4.4 million customers in Alabama, Georgia, Florida and Mississippi. As a regulated utility, the company is better known for its high payout ratio rather than exceptional growth.

Yet that doesn't mean an investment in this slow-grower can't still be worthwhile. For one thing — like most utilities— Southern Company is effectively a monopoly that is allowed to give its shareholders "reasonable" returns. So immediately an investor is less worried about whether or not the company will remain in business – after-all, you can't just shut off the lights for millions of people overnight. Instead, an investor is probably more concerned with whether or not the current market price allows for a reasonable chance at tracking the company's business results.

In our view, considering today's low interest-rate environment, we believe that it would be prudent to consider Southern Company as a bond alternative rather than an equity replacement. In this way, the prospective risks and opportunities of the company are important, but they are likely to be less extreme than their equity counterpart as well.

Aside from the monopoly-like benefits of the business, Southern Company has also received awards such as being named the "No. 1 Electric Utility in North America," the "2012 Energy Company of the Year" and was recently named as one of the "World's Most Admired Electric and Gas Utilities." As we will see in the return results below, the company has been nothing if not consistent.

Moving to the risk side of the table, Southern Company faces anything from regulation and ligation concerns to economic risks and unexpected construction delays. In turn, many of t! hese factors – much like any other company – are out of management's hands. For example, Morningstar analyst Mark Barnett lists nuclear cost overruns and emissions legislation as two uncertain cost areas, while further indicating that the deterioration of Southern Company's positive regulatory relationships would be the most devastating risk factor. However, it should again be noted that while these risks exist, they are likely to be "watered down" in a regulated and essential utility business.

Finally, while we have thus far been describing Southern Company as a slow but steady monopoly, the company also likes to tout the fact that shareholders received greater total returns than the S&P 500 index for the last 5, 10 and 30 years. F.A.S.T. Graphs™ wrote about Southern Company a little over a year ago, indicating that it was "A Solid Dividend Choice Worth Waiting For." At the time, Southern Company had a P/E ratio around 17.6 and a current dividend yield of 4.3%. Today, the P/E is closer to 15 and the current yield is just shy of 5%; in other words, we believe the wait might be over.

15 Years of Results

The Southern Company has grown earnings (orange line) at a compound rate of 3.2% since 1999, resulting in a $35-plus billion dollar market cap. In addition, the Southern Company's earnings have risen from $1.90 per share in 1999, to today's forecasted earnings per share of approximately $2.74 for 2013. Further, Southern Company has paid a dividend for 263 consecutive quarters and has been able to increase this payout for the last 12 years. For a look at how the market has historically valued Southern, see the relationship between the price (black line) and earnings of the company as depicted on the Earnings and Price Correlated F.A.S.T. Graph below.

[ Enlarge Image ]

Here we see that the Southern Company's market price has mostly paralleled its justified earni! ngs growt! h, with the exception of starting to become undervalued during the most recent recession and being slightly overvalued in the last year or two. Today, Southern Company appears fairly valued in relation to both its historical earnings and relative valuation.

In tandem with the consistent earnings growth, Southern Company's shareholders have enjoyed a compound annual return of 5.5% which correlates closely with the 3.2% growth rate in earnings per share. A hypothetical $10,000 investment in Southern on Dec. 31, 1998, would have grown to a total value of $21,866.87, without reinvesting dividends. Said differently, Southern Company's shareholders have enjoyed total returns that were roughly 1.5 times the value that would have been achieved by investing in the S&P 500 over the same time period. It's also interesting to note that an investor would have received about 3.5 times the amount of dividend income compared to the index as well.

[ Enlarge Image ]

Looking to the Future

But of course – as the saying goes – past performance does not guarantee future results. Thus while a strong operating history provides a fundamental platform for evaluating a company, it does not by itself indicate a buy or sell decision. Instead an investor must have an understanding of the past while simultaneously thinking the investment through to its logical, if not understated, conclusion.

In the opening paragraphs a variety of potential risks were described. It follows that the probabilities of these outcomes should be the guide for one's investment focus. Yet it is still useful to determine whether or not your predictions seem reasonable.

Twenty-two leading analysts reporting to Standard & Poor's Capital IQ come to a consensus five-year annual estimated return growth rate for Southern Company of 4.7%. In addition, Southern is currently trading at a P/E of 15, which is inside the "value ! corridor�! �� (defined by the orange lines) of a maximum P/E of 18. If the earnings materialize as forecast, Southern's valuation would be $51.37 at the end of 2018, which would be a 9.2% annualized rate of return including dividends. A graphical representation of this calculation can be seen in the Estimated Earnings and Return Calculator below.

[ Enlarge Image ]

Now, it's paramount to remember that this is simply a calculator. Specifically, the estimated total return is a default based on the consensus of the analysts following the stock. The consensus includes the long-term growth rate along with specific earnings estimates for the two upcoming years. Further, the dividend payout ratio is presumed to stay the same and grow with earnings. Taken collectively, this graph provides a very strong baseline for how analysts are presently viewing this company. However, a F.A.S.T. Graphs' subscriber is also able to change these estimates to fit their own thesis or scenario analysis.

Since all investments potentially compete with all other investments, it is useful to compare investing in any prospective company to that of a comparable investment in low-risk Treasury bonds. Comparing an investment in the Southern Company to an equal investment in a 10-year Treasury bond, illustrates that Southern Company's expected earnings would be 2.8 times that of the 10-year T-Bond Interest. This comparison can be seen in the 10-year earnings yield estimate table below.

[ Enlarge Image ]

Finally, it's important to underscore the idea that all companies derive their underlying value from the cash flows (earnings) that they are capable of generating for their owners. Therefore, it should be the expectation of a prudent investor that – in the long run – the likely future earnings of a company justify the price you ! pay. Fund! amentally, this means appropriately addressing these two questions: "In what should I invest?" and "At what time?"

In viewing the past history and future prospects of Southern Company we have learned that Southern Company appears to be a consistent company with reasonable upcoming opportunities. However, as always, we recommend that the reader conduct his or her own thorough due diligence.

Disclosure: No position at the time of writing.

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.

Does This Company Still Have the Secret Sauce?

AFC Enterprises (NASDAQ: AFCE  ) , which owns the Popeye's Louisiana Kitchen quick- serve chain, once an undiscovered gem, has now soared 66% over the last year.

Love that chicken!
It's not surprising, as the National Chicken Council reports Americans are the most chicken-loving in the world, eating 83.6 pounds per capita annually -- and we love it best fried. 

AFC Enterprises has grown its Popeye's and Popeye's Louisiana Kitchen restaurants so now competes with the big boys like Yum! Brands (NYSE: YUM  ) . Yum! Brands as a global chicken restaurant.

It doesn't hurt that CEO Cheryl Bachelder learned the trade as a former Yum! Brands executive. The company is mostly franchisee-run and utilizes many of the same tricks as Yum! Brands like special menu items. So far it's paid off as revenues have grown by 16.3% this last year.

The company's secret sauce is Cajun cooking and fried chicken and it has served AFC Enterprises well, returning 326.9% in share price appreciation since 2008.

On August 20, the company reported strong second-quarter results with an increase of 30% to diluted EPS from $0.27 to $0.35. It also grew free cash flow from $18.2 million in the year-ago period to $21.8 million and now boasts 13 straight quarters of positive comparable-same-store sales. The company also raised guidance to between 3.5% and 4.5% global same-store sales growth.

How high is up
This strength has also led the company to announce more store openings than previously planned. It now expects to debut between 170 and 195 locations in fiscal 2013 with 60 of them international, adding onto the current total of 2,153 restaurants.

The company has been remodeling its stores from Popeye's to Popeye's Louisiana Kitchen with close to 80% to be finished in 2014. In an interview on CNBC for Mad Money, CEO Cheryl Bachelder added those remodeled stores get an almost immediate 3%-to-4% rise in comps.

When asked about international growth, Bachelder answered,"How high is up?,"  speaking of the limitless possibilities overseas; Popeye's is located in 26 countries and 44 US states.

A chicken-wing upstart
But with success comes competition. McDonald's (NYSE: MCD  ) is debuting its own Mighty Wings nationally, chicken wings seasoned similarly to Popeye's New Orleans style with cayenne and chili pepper. The huge quantity of wings that McDonald's will need likely driving up prices from $1.44 a pound most recently will of course, affect the entire space including Yum! Brands, AFCE, and chicken focused Buffalo Wild Wings (NASDAQ: BWLD  )   

Burger Business, a trade publication, noted that McDonald's previous test of the wings in Atlanta (AFC Enterprises headquarters) was very popular with consumers and could provide stiff competition. Could McDonald's have AFCE in its sights with these New Orleans style offerings at its 14,000 US restaurants?

Sterne Agee analyst Lynn Collier told The Huffington Post keeping Mighty Wings on the menu beyond November would depend upon  chicken wings staying cheap as the company moves away from higher-priced beef  offerings.

McDonald's certainly needs something to bring up same-store sales. US same- store sales in July were up 1.6%, credited to its Monopoly promotion and breakfast menu. Last January, Jack Russo, analyst for Edward Jones, speculated the new wings could bring in dinner business for McDonald's,typically a weaker time of day accounting for 20% of sales, according to Bloomberg Business Week.

A food blogger for Serious Eats was seriously in love with the Mighty Wings and said they were "perhaps on par with what the big chicken shacks are cranking out." He noted it took 10 minutes for an order of 18 wings.

Many McDonald's orders are drive through, so there is merit when he wrote, "They need to speed up the process so I can be back home with the grub before kickoff." The nationwide roll-out on September 9 better show McDonald's more prepared than in test-market Atlanta.

Flour plus batter = profits
AFC Enterprises has a sweet operating margin of 28.7% and quarterly EPS growth (year-over-year) of 28.8%. But the run in share price is making it a little rich, with a price to sales of 5.1 and a trailing earnings multiple of 34x.

Meanwhile at McDonald's  the stock is virtually flat, up only 5% over the last year. Unsurprising when quarterly earnings growth is an anemic 3.7%. To be fair, McDonald's operating margin at 30.8% is higher than AFC Enterprises and the trailing earnings multiple lower at 17.3.

What must Yum! Brands think of these wings on its own turf? Yum! Brands offers wings not only at its KFC locations but also at Pizza Hut. Yum! Brands has 39,000 locations globally in 125 countries and over 80% of Yum! restaurants, including  Taco Bells, are franchised.

Yum! Brands reported a similar lackluster US sales rise of 1% in its July 10 earnings release. Yum! has now reported three consecutive disappointing quarters, taking the quarterly EPS growth rate down to -15.1% year-over-year.

Hoping to boost US sales, the company debuted a new menu item at Taco Bell, the fiery Doritos loco taco, and boneless wings at KFC.

Yum! Brands has a lower operating margin than these other two at 15.7% and a lower yield than McDonald's at 1.8%. 

Gentleman, to your fryers!
Will the Mighty Wings take share from both AFC Enterprises and Yum!? It just may but Popeye's customers are quite loyal and the restaurants offer Cajun style sides unavailable at these fast-food giants. AFC Enterprises has better growth prospects but a lot of that potential has been reflected in the share price. 

McDonald's may see rising comps from Mighty Wings and improve its dinner sales. For the income focused, it's dividend aristocrat title is attractive as well, and it is more conservatively valued that AFC Enterprises. 

As for Yum! Brands, it could see the most market share taken away. I would be careful with any position in Yum!, especially if McDonald's drives up the wings' commodity costs and causes domestic weakness

But of course if you really want to get rich you need to think international, and that's where McDonald's and Yum! Brands have a leg up. That's one reason we named them as winners in The Motley Fool's free report "3 American Companies Set to Dominate the World". Click here to get your free copy and uncover the third company before it's gone.

 

Top Casino Stocks To Invest In 2014

WikiMedia Commons.

The 2002 book Bringing Down the House told the true story of how six MIT math geniuses mastered blackjack card counting and took Las Vegas for millions. It had money, sex, drugs, and power. People loved it.

But part of the story often went misunderstood. The card-counters didn't win every hand of blackjack, or anything close to it. The casino normally has a slight edge over players. The MIT crew's strategy tipped those odds just barely in their favor. That meant they still lost a lot of bets. "Even the most complex systems seemed to aim at an overall edge of around 2 percent," author Ben Mezrich wrote.

But that tiny edge was all the crew needed to succeed, provided they played long enough.�When the odds are even slightly in your favor, you will win over time,�even if you lose often in between.�

Top Casino Stocks To Invest In 2014: Pinnacle Entertainment Inc.(PNK)

Pinnacle Entertainment, Inc. owns, develops, and operates casinos, and related hospitality and entertainment facilities in the United States. It operates casinos, such as L'Auberge du Lac in Lake Charles, Louisiana; River City Casino and Lumiere Place in St. Louis, Missouri; Boomtown New Orleans in New Orleans, Louisiana; Belterra Casino Resort in Vevay, Indiana; Boomtown Bossier City in Bossier City, Louisiana; and Boomtown Reno in Reno, Nevada. The company also operates River Downs racetrack in southeast Cincinnati, Ohio. As of May 26, 2011, it operated seven casinos and one racetrack. The company was formerly known as Hollywood Park, Inc. and changed its name to Pinnacle Entertainment, Inc. in February 2000. Pinnacle Entertainment, Inc. was founded in 1935 and is based in Las Vegas, Nevada.

Advisors' Opinion:

• [By Ben Levisohn]

  Pinnacle Entertainment (PNK) has gained 56% this year; Las Vegas Sands (LVS) has climbed 38%. And Deutsche Bank has nice things to say about both today.

  Bloomberg

  First Pinnacle. Deutsche Bank’s Carlo Santarelli ponders the stock’s big move and comes away still seeing value in its shares. He writes:

  When we upgraded PNK in April, our thesis centered on the FCF strength of the combined entities [Pinnacle completed its acquisition of Ameristar Casinos on Aug. 14], a handful of favorable catalysts, easing regional gaming comps, & an inexpensive relative valuation. Given the shares’ sizeable move since then, we believe it is worth revisiting the investment case. Post the announcement of several asset sales and the closing of the transaction, we are adjusting our estimates, raising our PT to $30 from $24, and maintaining our bullish view at current levels given what we still believe to be an attractive free cash flow valuation, meaningful potential synergy realization beyond the $40 mm of announced benefits, and a free option on a lagging regional recovery.

  Santarelli also revisited Las Vegas Sands and there too, he likes what he sees. He writes:

  With…LVS at [a share price level] that have been challenging to break from over the last year plus, we believe this time is different and hence we see continued upward momentum…In the case of LVS, we see; 1) meaningful mass market strength continuing through year end, setting the stage for upward company and market estimate revisions for 2014, 2) continued cash flow appreciation and capital returns serving as downside protection and positive catalysts, and 3) continued shared gains, largely driven by table optimization and mass market strength, driving both estimates and sentiment.

  He also likes Wynn Resorts (WYNN), despite its 34% gain.�Santarelli writes:

  As for WYNN, we believe near-term estimates continue to take a back seat to capital return

Top Casino Stocks To Invest In 2014: Wynn Resorts Limited(WYNN)

Wynn Resorts, Limited, together with its subsidiaries, engages in the development, ownership, and operation of destination casino resorts. The company owns and operates Wynn Las Vegas casino resort in Las Vegas, which includes approximately 22 food and beverage outlets comprising 5 dining restaurants; 2 nightclubs; 1 spa and salon; 1 Ferrari and Maserati automobile dealership; wedding chapels; an 18-hole golf course; meeting space; and foot retail promenade featuring boutiques. Wynn Las Vegas casino resort also features approximately 147 table games, 1 baccarat salon, private VIP gaming rooms, 1 poker room, 1,842 slot machines, and 1 race and sports book. It also owns and operates an Encore at Wynn Las Vegas resort, a destination casino resort located adjacent to Wynn Las Vegas that features a 2,034 all-suite hotel, as well as a casino with 95 table games, 1 sky casino, 1 baccarat salon, private VIP gaming rooms, and 778 slot machines. In addition, the company operates Wyn n Macau casino resort located in the Macau Special Administrative Region of the People?s Republic of China. Wynn Macau casino resort features approximately 595 hotel rooms and suites, 410 table games, 935 slot machines, 1 poker room, 1 sky casino, 6 restaurants, 1 spa and salon, lounges, meeting facilities, and retail space featuring boutiques. Further, it operates Encore at Wynn Macau resort located adjacent to Wynn Macau. Encore at Wynn Macau resort features approximately 410 luxury suites and 4 villas, as well as casino gaming space, including a sky casino consisting of 60 table games and 80 slot machines, 2 restaurants, 1 luxury spa, and retail space. The company was founded in 2002 and is based in Las Vegas, Nevada.

Advisors' Opinion:

• [By Ben Levisohn]

  He also likes Wynn Resorts (WYNN), despite its 34% gain.�Santarelli writes:

  As for WYNN, we believe near-term estimates continue to take a back seat to capital returns and the discounting of Cotai, though we do find near term numbers to be beatable in Macau given QTD trends, most notably on the VIP side. Net-net, we find WYNN to be the most compelling longer-term story in our coverage universe and given the scope of the Cotai development and its impact on valuation, we anticipate value attribution for the project will come well in advance of the historical rule of thumb for new openings in the space, which has generally been about one year.

10 Best High Tech Stocks To Own Right Now: (XTRN)

Las Vegas Railway Express Inc. focuses to re-establish a conventional passenger train service between the Las Vegas and Los Angeles metropolitan areas. It plans to establish a ?Vegas-style? passenger train service. The company is based in Las Vegas, Nevada.

Top Casino Stocks To Invest In 2014: MGM Resorts International(MGM)

MGM Resorts International, through its subsidiaries, primarily owns and operates casino resorts in the United States. The company?s resorts offer gaming, hotel, dining, entertainment, retail, and other resort amenities. It also owns and operates golf courses and a golf club. As of December 31, 2010, the company owned and operated 15 properties located in Nevada, Mississippi, and Michigan; and has 50% investments in 4 other casino resorts in Nevada, Illinois, and Macau. In addition, MGM Resorts International has an agreement with the Mashantucket Pequot Tribal Nation, which owns and operates a casino resort in Connecticut, to carry the ?MGM Grand? brand name. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was founded in 1986 and is based in Las Vegas, Nevada.

Advisors' Opinion:

• [By Paul Ausick]

  U.S.-based casino operators Las Vegas Sands Inc. (NYSE: LVS), Wynn Resorts Ltd. (NASDAQ: WYNN), and MGM Resorts International (NYSE: MGM) already operate resorts and casinos in Macau and these companies would be much smaller without them.

• [By Lisa Abramowicz]

  ��t�� allowed companies such as ourselves to continue to access the capital markets,��Dan D��rrigo, the executive vice president and chief financial officer of Las Vegas-based casino company MGM Resorts International (MGM), said in a Sept. 17 telephone interview. During the crisis, ��e still had access but at much more costly rates to our company,��he said.

Top Casino Stocks To Invest In 2014: Penn National Gaming Inc.(PENN)

Penn National Gaming, Inc. and its subsidiaries own and manage gaming and pari-mutuel properties in the United States. It operates approximately 27,000 gaming machines; 500 table games; and 2,000 hotel rooms in 23 facilities in 16 jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. The company was formerly known as PNRC Corp. and changed its name to Penn National Gaming, Inc. in 1994. Penn National Gaming, Inc. was founded in 1982 and is based in Wyomissing, Pennsylvania.

Record Revenues and Strong US Job Growth both Bullish for Labor SMART (LTNC, PAYX, RHI, TBI)

Labor SMART (OTCBB: LTNC) is proving my pick right as it booked record revenues for August.

The entire demand labor industry should do well as the US Department of Labor just reported that 169,000 more jobs were added to the American economy. The more work there is, the more demand there is for the services of staffing solutions firms such as Labor SMART, Paychex (NASDAQ: PAYX), TrueBlue (NYSE: TBI), and Robert Half International (NYSE: RHI).

I made Labor SMART as a pick as I like growth stocks (who doesn't?)

It has not disappointed. Revenues for August were up 175% from those for August 2012. In addition, Labor SMART added more than 100 clients in August. The client base for Labor SMART ranges from small businesses to Fortune 100 corporations. That is a diverse client base that will serve investors well for the long term.

The long term is certainly bullish for Labor SMART and others in the demand labor industry.

It is a $29 billion sector that is growing. The stock prices for TrueBlue, Robert Half International, Paychex and others are proof. The percentage of the American workforce comprised of part-time staff has increased due to the effects of The Great Recession. It should grow even higher due to the added employee costs of Obamacare.

This should prove to be a record year for Labor SMART. August was the first month it ever went over $2 million in revenues. For the year, revenues are already higher than the market capitalization for the company. As the revenues continue to increase for Labor SMART, so should the share price!

Top 5 Biotech Stocks To Watch Right Now

Rigel Pharmaceuticals (NASDAQ: RIGL  ) was kicked in the stomach earlier this month, when AstraZeneca (NYSE: AZN  ) returned full rights for fostamatinib. The Big Pharma member decided to write off $140 million of assets attributed to the partnership rather than take the next steps in commercializing the drug for rheumatoid arthritis. Ouch. While it's a smart idea for AstraZeneca to walk away now, Rigel is in a tough spot with its top drug candidate receiving a vote of no confidence. There is a handful of companies that stand to benefit from fostamatinib's failure. In the following video, Fool contributor Maxx Chatsko explains what it means for investors and what the future could hold for the development-stage company. �

While you can certainly make huge gains in biotech and pharmaceuticals, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of.�Click here now�to keep reading.

Top 5 Biotech Stocks To Watch Right Now: Telik Inc (TELK.PH)

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

Clinical Product Development

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

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

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

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

Preclinical Drug Product Development

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

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

Top 5 Biotech Stocks To Watch Right Now: Dendreon Corporation(DNDN)

Dendreon Corporation, a biotechnology company, engages in the discovery, development, and commercialization of therapeutics to enhance cancer treatment options for patients. The company offers active cellular immunotherapy and small molecule product candidates to treat various cancers. Its product candidates comprise Provenge (sipuleucel-T), an active cellular immunotherapy for the treatment of metastatic, castrate-resistant prostate cancer; DN24-02, an investigational active immunotherapy for the treatment of patients with bladder, breast, ovarian, and other solid tumors expressing HER2/neu; and TRPM8, a small molecule agonist to transient receptor potential ion channel, for multiple cancers. The company also has a range of products in preclinical studies, which include Carcinoembryonic antigen for the treatment of lung, colon, and breast cancer; and Carbonic AnhydraseIX for the treatment of kidney cancer. Dendreon Corporation was founded in 1992 and is headquartered in S eattle, Washington.

Advisors' Opinion:

• [By Dimitra DeFotis]

  There are two cancer vaccines on the market: Provenge, a prostate-cancer treatment from Seattle-based Dendreon�(DNDN), and Yervoy, a melanoma treatment from Bristol-Myers Squibb�(BMY), according to Dow Jones Newswires. In May, Roche�Holding (RHHBY) said its experimental cancer vaccine, called MPDL3280A, shrank tumors in 21% of 140 patients participating in a trial. It is now performing tests in lung cancer patients.

• [By Jon C. Ogg]

  Dendreon Corp. (NASDAQ: DNDN) is hitting 52-week lows as Deutsche Bank has downgraded the maker of Provenge to Sell from Hold. Shares are down 5% at $3.03, against a prior 52-week range of $3.10 to $7.22.

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

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

Advisors' Opinion:

• [By Lee Jackson]

  Medivation Inc. (NASDAQ: MDVN) is a top stock to buy and makes the UBS Key Call list as well. The company expects to present top line phase 3 data from the crucial PREVAIL trial of Xtandi in castration-resistant metastatic prostate cancer. UBS is highly confident the trials will prove successful. Its price target for the stock is $74, and the consensus target is $69.50.

Top 5 Biotech Stocks To Watch Right Now: Applied Nanotech Holdings Inc (APNT)

Applied Nanotech Holdings, Inc., incorporated on May 22, 1989, is engaged in nanotechnology research and development business. The Company's nanotechnology research involves performing contract research and development services for others to develop products and materials for new applications, and then leveraging this research by applying it to other similar applications in other industries. The Company also develops intellectual property (IP) around its products and technologies. The Company develops five technology platforms: nanosensor technology; nanocomposites, based on carbon nanotube composites; thermal management materials; nanoelectronics applications, and electron emission activities, primarily in the display area. The Company's electron emission IP is divided into display activities and non-display activities. Applied Nanotech Holdings, Inc. is the parent company. Applied Nanotech, Inc. (ANI) is a subsidiary of ANHI. During the year ended December 31, 2012, the Company formed EZDiagnostix, Inc., (EZDX).

Sensors

The Company develops sensors based on ion mobility sensor technology and differential mobility spectroscopy. The Company is involved in projects to develop Mercaptan and Methane sensors for uses in the natural gas industry. The Company is also applying this technology to other applications, including agricultural pathology, wound care, and breath analysis. The Company develops hydrogen sensor for use in the measurement of hydrogen in power transformer products. The Company develops carbon monoxide sensor that can last for 10,000 hours on a single battery. The Company's carbon nanotube technology is for use in biosensors. Sensors based on carbon nanotubes or other nanomaterials can be used to detect chemical, organic, or biological warfare agents, as well as explosives, hydrogen, ammonia and numerous other chemicals.

Nanocomposites

The Company is in the advanced stages of development of nanomaterials using carbon nanotube (CNT) and! other composites. Epoxies are used in industries with worldwide markets, with applications, including adhesives, paints, coatings, and composites. In addition to epoxy resins, the Company develops other types of resins, including polyesters and vinyl esters. Vinyl esters are used in a variety of industrial applications, including storage tanks, piping, and construction. The Company develops a process for coating nylon pellets with CNTs to improves electrical conductivity. Nylon 6 with improved electrical conductivity can be used for its anti-static qualities, electrostatic discharge, and electromagnetic/RF shielding.

Thermal Management

The Company markets thermal management material called CarbAl. CarbAl provides a passive thermal management solution for temperature control issues that plague electronics manufacturers. CarbAl is a carbon based metal nanocomposite comprised of 80% carbonaceous matrix and a dispersed metal component of 20% aluminum. The Company also develops a simplified version of CarbAl based on graphite.

Conductive Inks

The Company develops aluminum and silver inks and pastes that is ideal for use in the production of solar cells. The Company also develops aluminum paste that can be used in current solar cell production.

The Company competes with Zyvex Performance Materials, GSI Creos, Amroy Europe, Ltd., DuPont and Ferro

Top 5 Biotech Stocks To Watch Right Now: Cannabis Science Inc (CBIS)

Cannabis Science, Inc., incorporated on May 4, 2007, is a development-stage company. The Company is engaged in the creation of cannabis-based medicines, both with and without psychoactive properties, to treats disease and the symptoms of disease, as well as for general health maintenance. On February 9, 2012, the Company acquired GGECO University, Inc. (GGECO). On March 21, 2012, the Company acquired Cannabis Consulting Inc. (CCI Group).

The Company is engaged in medical marijuana research and development. The Company works with world authorities on phytocannabinoid science targeting critical illnesses, and adheres to scientific methodologies to develop, produce, and commercialize phytocannabinoid-based pharmaceutical products.

Police nab U.K. cybercrime's "Mr Big" after bank heist

Fraudsters drained £1.3 million from Barclays accounts by remotely accessing a branch computer system.

LONDON (CNNMoney) Police have arrested eight men, including the alleged "Mr. Big" of British cybercrime, after robbers took remote control of a bank's computers to siphon off £1.3 million ($2 million).

The police linked the theft at Barclays (BCS) to another attempt to steal money from a Santander (SAN) branch in London, which led to the arrest of 12 men last week.

"The size and sophistication of the operation has shocked us and we're actually having to draft in more resources to deal with the amount of evidence that we've recovered," said detective superintendent Terry Wilson.

"This was a highly-organized criminal network," said Wilson. "All criminal networks have a head and we very much believe we have now apprehended our 'Mr Big' as part of this operation."

The story dates back at least to early April when a man pretending to be an IT engineer gained access to computers at a Barclays branch in London after convincing staff he was there to fix a fault.

Top 5 Oil Companies To Buy Right Now

Police say he installed a keyboard, video and mouse (KVM) switch that allowed him to gain remote access to the bank's computer system.

The next day, Barclays spotted a £1.3 million theft from its accounts and the investigation began. This incident was a carbon copy of the Santander plot, though that attempted theft failed.

Police made the arrests linked to the Barclays plot on Thursday and Friday, and traced the fraudsters' "control center" to a home in central London.

They are still in the process of seizing property, cash, jewelry, drugs, thousands of credit cards and personal data in relation to the case. The eight men were arrested on suspicion of stealing and defrauding banks.

  High-tech sex workers in Silicon Valley

Of the 12 men arrested last week, four were charged with conspiracy to steal, while the others were bailed but face further investigation.

Alex Grant from Barclays' fraud prevention unit said the bank was able to recover the money on the same day th! e theft was detected, meaning no customers suffered losses.

Big Banks Show Strength as Fed Doesn't Taper: Financial Winners

NEW YORK (TheStreet) -- Citigroup (C) was the winner among stocks of large U.S banks on Wednesday, with shares rising over 2% to close at $52.25.

The broad indices quickly reversed early losses and ended with 1% gains, after the Federal Open Market Committee released its statement at 2:00 p.m. ET, saying the Federal Reserve would not taper its monthly bond purchases until at least the next FOMC meeting on Oct. 29-30. The Committee "decided to await more evidence that progress will be sustained before adjusting the pace of its purchases," according to the statement.

The committee also said "these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee's dual mandate" of working to reduce unemployment and foster economic growth while keeping inflation in check.

Most economists had expected the Fed at least to make a slight reduction in its "QE3" balance sheet expansion. The central bank has been making monthly net purchases of $40 billion in long-term mortgage-backed securities and $45 billion in long-term U.S. Treasury bonds since last September. But the attempt to hold-down long-term rates for the most part has stopped working, as investors have been anticipating a reduction in bond purchases for quite some time, sending the yield on 10-year Treasury bonds up 100 basis points since the end of April. Mortgage refinance applications and total mortgage volume have been reduced considerably as a result. The FOMC also released revised economic projections, lowering their estimate of 2013 GDP growth to a range of 2.0% to 2.3% from the previous range of 2.3% to 2.6%. For 2014, the committee estimates GDP growth of 2.9%, down from its previous estimate of 3.1%. Federal Reserve Chairman Ben Bernanke during a press conference following the release of the FOMC statement said "We could move later this year," to reduce Federal Reserve bond purchases, but added that "subsequent steps will be data dependent."

"This FOMC edition feels less dovish than it does outright scared," wrote TD Securities global head of rates and commodity research Eric Green, in a note following the statement release. "The market now has to adjust to a new probability, that tapering is delayed into the new year," he added.

Investors made quite an adjustment to that "new probability," pouring money into 10-year Treasury bonds following the FOMC statement release, sending the yield on the 10-year way down by 15 basis points to 2.70%.

For bank stock investors, the endless "taper talk" misses a very important point: What most banks need for a significant boost to their net interest margins and net interest income is a parallel rise in interest rates. The FOMC has kept the federal funds rate -- its main policy tool -- in a range of zero to 0.25% since the end of 2008. The language in the statement on Wednesday provided a bit more direction on future policy for the federal funds rate from previous statements.

The FOMC made a slightly change in its language from the previous statement, saying its "highly accommodative" policy for short-term rates would "remain appropriate" at least until the national unemployment rate drops below 6.5%, assuming inflation projections remain in check, but added that it was likely to keep the federal funds rate in its current range "for a considerable time after the asset purchase program ends and the economic recovery strengthens." Considering that the tapering hasn't even started, this is bad news for bankers hoping for a parallel rise in rates. Illustrating just how important an eventual rise in short-term rates will be for bank profits, Deutsche Bank analyst Ryan Nash on Tuesday estimated that a gradual parallel rise in interest rates of 200 basis points -- which he acknowledged "rarely (if ever) happens -- would lead to a $1.178 billion increase in Citigroup's annual net interest income. Nash went further, estimating that $1.090 of the increase in Citi's net interest income would come from a rise in short-term rates. The KBW Bank Index (I:BKX) was up just 0.2% to close at 64.72, with 14 of the 24 index components ending the trading session with declines. The subdued overall reaction among bank-stock investors may have reflected concern over the industry's profitability as short-term rates remain near zero. Big banks ending with stock gains of over 1% included Bank of America (BAC), which closed at $14.71, and Wells Fargo (WFC), which closed at $43.31. RELATED STORIES: JPM Faces 'Months' of Regulatory Pain: Dimon Citigroup 'Faces Pressure' for Q3 Revenue: JPMorgan 'Grandpa' Goldman Trots Out History to Justify Commodities Business Has Dodd-Frank Lived Up to the Hype? Single-Family Housing Starts Rise 7% in August Next Banking Crisis an 'Easy Call': Mayo -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

Why There's Trouble Ahead for the Housing Market

By Moe Zulfiqar

The housing market is one of the biggest challenges currently faced by the U.S. economy. When it improves, or when we see an increase in activity, then it can be assumed that there will be some economic growth.

For example, if there’s activity in the housing market, meaning that home buyers are buying homes, those home buyers are going to need things that are necessary to run households. This phenomenon has long-lasting effects: it increases consumer spending in the U.S. economy and creates jobs.

When the housing market in the U.S. economy improved in 2012, we saw the gains; but going forward, we are seeing a significant amount of trouble.

First of all, the U.S. economy is in jeopardy, on the brink of a monetary policy shift—the primary concern being quantitative easing. We are hearing the Federal Reserve will start to slow its asset purchases in September and end the quantitative easing by next year. This monetary policy by the Federal Reserve kept the mortgage rates in the U.S. economy low. This was great, as it gave Americans incentive to buy homes; as a result, we saw the housing market improve. Now, with the speculations on quantitative easing ending, the mortgage rates in the U.S. economy are increasing.

Consider the 30-year conventional mortgage rate tracked by Freddie Mac. In August, this rate stood at 4.46%; in the same period a year ago, it was at 3.60%, meaning it has increased almost 24% in the matter of a year. (Source: “30-Year Fixed-Rate Mortgages Since 1971,” Freddie Mac web site, last accessed September 11, 2013.)

While some will argue that these mortgage rates are nowhere close to what we saw in the 1980s—and I completely agree with them—this increase in mortgage rates makes homes in the U.S. economy less affordable due to higher mortgage rates and less incentive to buy.

Unfortunately, we have already started to see this problem emerge in the U.S. economy. Home buyers are hesitant to buy, which is certainly not a good trend when we are hoping for economic growth and prosperity.

For the week ended September 6, the Mortgage Bankers Association reported that the mortgage activity in the U.S. economy, including refinancing and home purchases, declined to the lowest level since November 2008—the time when the U.S. economy was going through the financial crisis. (Source: “Mortgage applications slide as rates match 2013 high – MBA,” Reuters, September 11, 2013.)

Top Performing Stocks To Own For 2014

Rising mortgage rates and home buyers not being interested in buying is nothing but bad news for the housing market in the U.S. economy. Unfortunately, this is even worse news for the companies who are close to it. Take companies that are involved in the construction of homes in the U.S. economy, or in the development of new projects; would they be able to sell their projects well or get more construction deals when the housing market is slowing? I highly doubt it.

As the housing market shows signs of trouble ahead, companies such as home builders are becoming vulnerable. We have seen them decline and give away a significant amount of gains already, and more could certainly follow.

This article Why There’s Trouble Ahead for the Housing Market was originally published at Daily Gains Letter

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Keep Your Eye on Rates

For the week ahead, MoneyShow's Jim Jubak suggests you keep an eye on one key measure of interest rates to see if an important level is overcome.

For the week ahead, I think you ought to watch yield on the 10-year US treasury. It's been creeping higher, but people aren't really paying much attention to it. It's higher because of Syria, or problems in emerging markets, or general turmoil, but what we're looking at is the yield closing in at 3%, and I think what happens at 3% is everybody goes "Oh, my God!" and they finally notice, and I think that makes 3% kind of an important benchmark, at least in terms of market sentiment.

I don't think it's actually very important in the real world, whatever that is, but I think it's going to create a fair amount of turmoil, because people suddenly start to pay attention to it, it's going to seem important, and you're going to wind up with a lot of stories and commentary from Wall Street, et cetera, talking about, "Well, now that we're 3%, where do we go from here?"

Right now the yield on the 10-year treasury is somewhere around 2.89, a year ago it was a whole 100 basis points lower. A month ago it was at 2.6, so you're seeing a pretty decent move up, in even, the last month, so there's clearly momentum for this, and the driver on this is worry about the fed starting to taper off its buying of treasuries and mortgage backed securities, somewhere around its meeting on September 18. That's why you're seeing yields rise and that's why I think you've got a good chance of seeing them get to 3%.

When that happens, I think you're going to get a massive overreaction, panic in the bond market because bond prices go down as yields go up, so people who have already taken big losses are likely to pull money out, or you're going to see selling. You're going to see more turmoil in emerging markets because with a 3% yield, the 10-year US treasury starts to look really, really good in comparison to the bonds of other countries and other assets. I think this will take a bite out of the US stock market. All these things suggest that 3% is going to be a major market event. If it is, and because it is more a market event because of sentiment, I think you might get a decent trade. So if you get to 3% and the market panics for a few weeks, there might be a temporary bottom that you can then trade, buy stuff when it's low, and then trade off when it gets to December, or so.

That's how I would play this. I don't think 3% is going to last for very long, I think it will go down again, because the reason for a 3% yield, fundamentally, long term, is the US economy doing better than expected. I don't think we're going to see growth strong enough to keep the yields at 3%. It's likely to be a short term top, so I'd use it as a trading opportunity.

This is Jim Jubak for the MoneyShow.com video network.

The 7 Indicators You Need to Check Every Day

Everyone has a different opinion on how best to take the measure of the markets and the economy at large.

Hairs standing up on end, a knee that aches with the weather, tea leaves, earnings estimates, the Hindenburg Omen - it seems like all of these are significant in some way at one time or another.

Here at Money Morning, it's no different. We have an editorial meeting each and every morning - rain or shine - where the editors and writers huddle to pitch the stories and reporting we bring you every day. The meeting covers a huge range of financial and policy topics, and ideas of all stripes are kicked around and discussed until a solid story emerges.

A few days ago, we talked about important financial and economic indicators, where each of us turn to get some idea of the health of the markets and economy. Someone asked, "What's the number you look at first ever day?" We all answered in turn, and a really interesting collection of ideas began to emerge - as it always does.

Here are the numbers we think you should be looking at every day - before breakfast, after coffee - if you want to get an idea of the big picture.

U6 or, the "real" unemployment rate: The U. S. Bureau of Labor Statistics keeps all sorts of unemployment data. Although all the data is freely available to those who look, only one figure is hyped. When "unemployment" is discussed in the media or by the White House, the number usually refers to U3. U3 is a rather vanilla figure, and it refers to people who have been unemployed for 15 weeks or more, and still collecting unemployment benefits.

U6, however, is the gut-puncher. It accounts for just about everything: people who have long since lost their benefits, who work only occasionally if at all, and those who are labeled "disaffected workers." It's the U6 number where you'll find the real picture. It's currently stands at a very sobering 13.9%. Contrast this with the "official" U3 rate of 7.5% The American Institute for Economic Research "Everyday Price Index": Does it ever seem weird to you that you keep hearing about how low inflation is? There's a good reason for that. It's not true. The current "official" inflation rate was reported as 1.06% in April. Dry that figure out, and you can have the greenest lawn in the neighborhood.

The Everyday Price Index tracks higher than that. A lot higher. The reason. EPI is not seasonally adjusted. After all,are you? This means it tracks much more closely with the way prices really feel to consumers, how big of a hit your wallet is really taking. The EPI usually runs between 1 % to 3% higher than the Consumer Price Index, although sometimes they do run in tandem in certain categories. The Baltic Dry Index: The Baltic Dry gives a good at-a-glance idea of the health and volume of global growth. It directly measures the demand for shipping capacity against the supply. Despite its moniker, it's not from the Baltics, rather from the Baltic Exchange in London. It measures the price of moving most major raw materials like coal, iron ore, and grain by sea.

It factors in 23 shipping routes on a time-charter basis. These 23 routes are said to be representative of the entire dry shipping market. The Baltic Dry index hit a stupendous 11,793 points in 2008, and then crashed - along with just about everything else - to 663 points later the same year. It has since recovered somewhat, and sits at 806. This obscure little index is your ticket to understanding the global growth picture in three or four digits. The Chicago Board Options Exchange Market Volatility Index: Called the Fear Index, it gives you a picture of volatility on the S&P 500 options market. It's a measure of the expected volatility over the next 30 days, annualized. The lower the VIX number, the lower the expected volatility on the S&P 500.

There is a famous VIX derivative, an exchange traded note traded (VXX). VXX is the hedge of smart cookies the world over. The more volatility on the markets, or the more likely the S&P is to take a dive, the more valuable VXX will be. The VIX is a great gauge of market sentiment and predictability. Corn Futures (CBOT): Corn futures are traded on the hallowed old Chicago Mercantile Exchange. Simply put, corn is the world's most important grain. These humble kernels feed millions, are used in a myriad of industrial applications, and form the basis for huge markets worldwide. The importance of tracking corn futures prices cannot be overstated. The U.S. Dollar Index (USDX): This tracks the performance of the dollar relative to a basket of major currencies. The currencies and their "weights," or statistical importance to the index, are as follows:

Euro: 56.7%
Japanese yen: 13.6%
Pound sterling: 11.9%
Canadian dollar: 9.1%
Swedish krona: 4.2%
Swiss franc: 3.6%


The USDX goes up when the dollar is stronger relative to the other currencies, and down on dollar weakness. It's a good way to get your head around the import/export picture, and obviously foreign exchange. 10-year U.S. Treasury yields: The bond yield curve can be insanely complicated to figure out. But don't worry. If you only focus on the importance of 10-year Treasury note yields, you'll know what you need to know. The 10-year yield gives you insight into the prevailing market mood, the risk picture and the health of the economy at large. If the economy heats up the 10-year yield should rise with the growth. Conversely If the economy slows down, the yield would likely fall. A caveat: the Fed's easy money policies have mucked up this indicator a bit, but the recent upward spike in the 10-year might be telling us the economy is slightly improving.

If you have anything you'd like to add, we'd love to hear from you. What #economicindicators concern you the most? Sound off on our Twitter page, or drop us a line on Facebook.

Related Articles:

Portal Seven:
Unemployment Data American Institute for Economic Research:
Everyday Price Index Dry Ships Inc.:
The Baltic Dry Index Chicago Board Options Exchange:
Introduction to VIX Options and Futures CME Group:
Corn Futures FX Trademaker:
The U.S. Dollar Index U.S. Department of the Treasury:
Daily Treasury Yield Curve Rates

Apache’s Deal in Egypt Another Brick in the Wall

Independent oil and gas exploration and production company Apache Corp. (NYSE: APA) announced after markets closed on Thursday that it had launched a global strategic partnership with a subsidiary of Chinese oil giant Sinopec in order to "pursue joint upstream oil and gas projects." The first deal in this new joint venture will be a payment of $3.1 billion in cash from Sinopec to Apache in exchange for one-third of Apache's Egyptian oil and gas business.

Apache has been trying to rationalize its portfolio for a couple of years now. The company acquired more than $16 billion in assets over the past three years and said in May that it plans to sell off $4 billion in assets by the end of this year. The oil and gas company plans to use half the receipts from the projected $4 billion in asset sales to pay down debt and the other half to repurchase stock.

In the company's second quarter, Apache's Egyptian production accounted for 19% of its total 790,000 barrels of oil equivalent daily global production. Egyptian production is about 56% oil, and the company reported that oil production was down by about 2,500 barrels a day in the second quarter due to increasing water cuts in some areas. Having a deep-pocketed partner can help Apache make new discoveries that will take up the slack from slower production at existing wells. All in all, Apache did a smart thing.

Shares trading up about 7.5% in Friday's premarket at $84.50 in a 52-week range of $67.91 to $94.87.

Can GlaxoSmithKline Break Higher?

With shares of GlaxoSmithKline (NYSE:GSK) trading around $52, is GSK an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

GlaxoSmithKline is global health care group engaged in the discovery, development, manufacturing, and marketing of pharmaceutical products. These products include vaccines, over-the-counter medicines, and health-related consumer products. GlaxoSmithKline's principal pharmaceutical products include medicines in these areas: respiratory, antivirals, central nervous system, cardiovascular and urogenital, metabolic, antibacterials, oncology and emesis, dermatology, rare diseases, immuno-inflammation, vaccines, and HIV.

The company operates in three primary areas of business: pharmaceuticals, vaccines, and consumer health care. Through its areas of business, GlaxoSmithKline is able to positively affect the lives of many consumers around the world that require their medications.

T = Technicals on the Stock Chart are Strong

GlaxoSmithKline stock been on a strong run in recent years. The stock has whipsawed a bit but looks to be getting ready to test 52-week highs. Analyzing the price trend and its strength can be done by using key simple moving averages.

What are the key moving averages? They are the 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, GlaxoSmithKline is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
GlaxoSmithKline Options	17.35%	3%	0%

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

	Put IV Skew	Call IV Skew
August Options	Flat	Average
September Options	Flat	Average

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

On the next page, let’s take a look at earnings and revenue growth rates, and what that means for Glaxo’s stock.

E = Earnings Are Decreasing Quarter-Over-Quarter

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

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	-28.21%	-26.92%	-15.12%	12.86%
Revenue Growth (Y-O-Y)	-7.20%	-1.91%	-6.99%	-6.76%
Earnings Reaction	0.01%	0.73%	-0.99%	-1.21%

GlaxoSmithKline has seen decreasing earnings and revenue figures over most of the last four quarters. From these numbers, it seems the markets have had mixed feelings about GlaxoSmithKline’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has GlaxoSmithKline stock done relative to its peers, Pfizer (NYSE:PFE), Merck (NYSE:MRK), Novartis (NYSE:NVS), and the overall sector?

	GlaxoSmithKline	Pfizer	Merck	Novartis	Sector
Year-to-Date Return	21.56%	14.36%	18.32%	15.97%	16.73%

GlaxoSmithKline has been a relative performance leader, year-to-date.

Conclusion

GlaxoSmithKline is a health care group that engages in many aspects of pharmaceutical business around the world. The stock has been trending higher over the last few years, and is now trading near 52-week highs. Over the last four quarters, earnings and revenue figures have been declining, which has produced mixed feelings among investors. Relative to its peers and sector, GlaxoSmithKline has been a year-to-date performance leader. Look for GlaxoSmithKline to OUTPERFORM.

Is BP Undervalued?

With shares of BP (NYSE:BP) trading around $42, is BP an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

BP is an integrated oil and gas company. The company provides its customers with fuel for transportation, energy for heat and light, lubricants and the petrochemicals products used to make everyday items as diverse as paints, clothes and packaging. It operates in two business segments: Exploration and Production, and Refining and Marketing. The company has been the subject of negative press in recent years due to an oil leak that had significant negative effects. Since then, BP has been repairing its image and looks to be doing it well. Through its segments, BP provides valuable energy products and services that are a requirement for the operation of most businesses and growing populations.

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T = Technicals on the Stock Chart are Mixed

BP stock has taken a lot of heat in recent years but looks to be regaining its footing in the long-term. Currently, the stock is in the middle of a multi-year trading range where a positive break above it may be fairly significant for the stock. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, BP is trading around its tangled key averages which signal neutral price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
BP Options	19.77%	6%	5%

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

	Put IV Skew	Call IV Skew
May Options	Steep	Average
June Options	Steep	Average

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

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

E = Earnings Are Mixed Quarter-Over-Quarter

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

	2012 Q4	2012 Q3	2012 Q2	2012 Q1
Earnings Growth (Y-O-Y)	-78.98%	7.99%	-124.38%	-19.34%
Revenue Growth (Y-O-Y)	7.51%	-4.72%	-8.71%	9.33%
Earnings Reaction	1.35%	2.78%	-4.59%	-1.64%

BP has seen mixed earnings and revenue figures over the last four quarters. From these figures, the markets have been pleased with BP’s recent earnings announcements.

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P = Average Relative Performance Versus Peers and Sector

How has BP stock done relative to its peers, Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM), Royal Dutch Shell (NYSE:RDSA), and sector?

	Best Safest Stocks To Invest In Right Now BP	Chevron	Exxon Mobil	Royal Dutch Shell	Sector
Year-to-Date Return	2.57%	12.23%	2.38%	-1.90%	9.16%

BP has been an average performer, year-to-date.

Conclusion

BP provides essential energy products to consumers and a wide array of companies that operate in different industries around the world. The stock has suffered in recent times due to the negative press it has experienced from the oil leak incident. However, it is now trying to establish a value range. The two most recent earnings and revenue figures have pleased investors. Relative to its peers and sector, BP has been an average year-to-date performer. WAIT AND SEE what BP does this coming earnings report.

10 Best Energy Stocks To Buy For 2014

On Jul 9, 2013, we downgraded our recommendation on energy company CONSOL Energy Inc. (CNX) to Underperform from Neutral. CONSOL Energy currently has a Zacks Rank #5 (Strong Sell).

Why the Downgrade?

A number of negative factors, including over-reliance on a limited group of customers for bulk sales, an unexpected incident at the Blacksville No. 2 Mine and slow progress in the coal market have led us to downgrade our recommendation on the stock.

These factors also affected the Zacks Consensus Estimate. Over the past 90 days, the consensus estimate for second-quarter 2013 has decreased by 3 cents to 18 cents reflecting an estimated decline of 40.7% year over year.

Cause for Concern

CONSOL Energy depends on a limited group of customers for selling coal in bulk amounts. If the company fails to ink new deals or/and retain existing customers, its future performance will be affected.

10 Best Energy Stocks To Buy For 2014: Alterra Power Corp (MGMXF)

Alterra Power Corp., formerly Magma Energy Corp., is a global renewable power company. It operates six power plants totaling 570 megawatt of capacity, including two geothermal facilities in Iceland, a geothermal plant in Nevada, British Columbia�� run of river hydro facilities and the province�� wind farm. As of June 30, 2011, its share of this production capacity was 315 megawatt. The Company also has a portfolio of exploration and development projects. The Company owns two geothermal power generation plants (the Svartsengi and Reykjanes Plants) and two geothermal exploration projects in Iceland (Eldvorp and Krysuvik) through its interest in HS Orka. In addition, it owns one geothermal power generation plant in Nevada (the Soda Lake Operation). In May 2011, it acquired Plutonic Power Corp. During the fiscal year ended June 30, 2011 (fiscal 2011), it sold a 25% interest in HS Orka to Jardvarmi slhf (Jardvarmi), which is a company-owned by a group of Icelandic pension funds. Advisors' Opinion:

• [By Tom Konrad]

  Alterra is another hold-over from 2012, which I also expected to remove from the list until the stock unexpectedly declined over the last few weeks.  Alterra owns a portfolio of run-of-river hydroelectric and Wind projects in Western Canada, as well as geothermal projects in the Western US, Iceland, and Chile.  With its diverse and growing portfolio of operating renewable energy projects, Alterra is one of the most stable of the small renewable energy developers, but not yet so big that its assets are fully valued.  

  A recent agreement with Philippine utility EDC could easily lead to significant price appreciation if the companies jointly develop Alterra's projects in Peru and Chile as envisioned in the agreement.

10 Best Energy Stocks To Buy For 2014: ATP Oil & Gas Corporation(ATPG)

ATP Oil & Gas Corporation engages in the acquisition, development, and production of oil and natural gas properties primarily in the Gulf of Mexico and the United Kingdom sector of the North Sea. The company also has interests in three deepwater licenses in the Mediterranean Sea off the coast of Israel. As of December 31, 2011, it had estimated net proved reserves of 118.9 million barrels of crude oil equivalent (MMBoe), of which approximately 75.9 MMBoe were in the Gulf of Mexico and 42.9 MMBoe were in the North Sea. The company?s reserves comprised approximately 78.6 million barrels of crude oil or other liquid hydrocarbons and 241.5 billion cubic feet of natural gas. It also owned leasehold and other interests in 38 offshore blocks and 49 wells comprising 23 subsea wells in the Gulf of Mexico, as well as had interests in 13 blocks and 2 company-operated subsea wells in the North Sea. ATP Oil & Gas Corporation was founded in 1991 and is headquartered in Houston, Texas.< /p> Advisors' Opinion:

• [By Putnam]

  ATP Oil and Gas Corp. (ATPG) is trading at $9.17. ATPG is an independent oil and gas company, based in Texas. These shares have traded in a range between $5.71 to $21.40 in the last 52 weeks. The 50-day movi ng average is $10.51 and the 200-day moving is $15.40. Earnings estimates for ATPG are expected to go from a loss in 2011 to a profit of $1.49 per share in 2012. The higher revenues and profits for 2012 are due to higher production coming from oil wells in the Gulf of Mexico. Rodman & Renshaw has set a $22 price target for ATPG shares.

Best Financial Companies To Watch For 2014: S&P 500/Barra Value(SU)

Suncor Energy Inc., together with its subsidiaries, operates as an integrated energy company. The company involves in the development of petroleum resource basins in Canada's Athabasca oil sands; acquisition, exploration, development, production, and marketing of crude oil and natural gas in Canada and internationally; transportation and refining of crude oil; and marketing of petroleum and petrochemical products primarily in Canada. Its Oil Sands segment produces bitumen recovered from oil sands through mining and in-situ technology, and upgrades it into refinery feedstock, diesel fuel, and by-products. This segment?s products include gasoline and distillates. The company?s Natural Gas segment acquires, explores, develops, and produces natural gas, natural gas liquids, oil, and by-products from reserves located primarily in western Canada, the Northwest Territories, Alaska, and the Arctic Islands. Its International and Offshore segment engages in the exploration and pro duction of oil and gas in offshore Newfoundland and Labrador, in the North Sea, and in Libya and Syria. The company?s Refining and Marketing segment refines crude oil at Suncor's refineries in Edmonton, Alberta; Montreal, Quebec; and Sarnia, Ontario in Canada, as well as in Commerce City, Colorado into a range of petroleum and petrochemical products for sale to retail, commercial, and industrial customers. It also transports crude oil through pipelines in eastern and western Canada, as well as through wholly-owned pipelines in Wyoming and Colorado; and produces specialty lubricants and waxes. In addition, this segment operates retail sites in Canada under the Petro-Canada brand; and in Colorado under Phillips 66 and Shell brands. Suncor Energy Inc. also engages in third-party energy trading activities. The company was formerly known as Suncor Inc. and changed its name to Suncor Energy Inc. in April 1997. Suncor Energy Inc. was founded in 1953 and is headquartered in Calgary , Canada.

Advisors' Opinion:

• [By Lowell]

  Suncor produces conventional and unconventional oil and owns the PetroCanada and Sunoco brands in Canada.  It recently successfully completed the acquisition and integration of the old Petro Canada – and now manages all of Petro Canada’s assets.  It took some time for the markets to react favorably to the integration, but Suncor is finally back in the game.  The shares have already run up a good 20% over the past six months.  Expect them to continue to do so if oil prices climb into the high nineties.  Trust me, you don’t want to be caught in the cold when this train takes off again.

10 Best Energy Stocks To Buy For 2014: Solazyme Inc (SZYM)

Solazyme, Inc. (Solazyme), incorporated on March 31, 2003, makes oil. The Company�� technology transforms a range of plant-based sugars into oils. Its renewable products can replace or enhance oils derived from the world�� three existing sources-petroleum, plants and animal fats. The Company is focused on commercializing its products into three target markets: fuels and chemicals, nutrition, and skin and personal care. In 2010, the Company launched its products, the Golden Chlorella line of dietary supplements. In March 2011, the Company launched its Algenist brand for the luxury skin care market through marketing and distribution arrangements with Sephora S.A. (Sephora International), Sephora USA, Inc. (Sephora USA), and QVC, Inc. (QVC).

The Company is engaged in development activities with multiple partners, including Chevron U.S.A. Inc., through its division Chevron Technology Ventures (Chevron), The Dow Chemical Company (Dow), Ecopetrol S.A. (Ecopetrol), Qantas Airways Limited (Qantas) and Conopoco, Inc., doing business as Unilever (Unilever).

In 2010, the Company entered into a 50/50 joint venture with Roquette Freres, S.A. (Roquette). In November 2010, the Company entered into a joint venture and operating agreement for Solazyme Roquette Nutritionals with Roquette. In December 2010, the Company entered into an exclusive distribution relationship with Sephora International, and in January 2011, the Company entered into a distribution relationship with Sephora USA. Under the arrangements, each of Sephora International and Sephora USA will distribute the Algenist product line in their respective territories.

In Fuels and Chemicals market its renewable oils can be refined and sold as drop-in replacements for marine, motor vehicle and jet fuels, as well as replacements for chemicals that are traditionally derived from petroleum or other conventional oils. The Company work with its refining partner Honeywell UOP to produce Soladiesel (renewable diesel), So! ladiesel renewable diesel for United States Naval vessels, and Solajet renewable jet fuel for both military and commercial application testing. In nutrition market the Company has developed microalgae-based food ingredients, including oils and powders that enhance the nutritional profile and functionality of food products while reducing costs for consumer packaged goods (CPG) companies. In Skin and Personal Care market the Company hs developed a portfolio of branded microalgae-based products. Its ingredient is Alguronic Acid, which the Company has formulated into a range of skin care products with anti-aging benefits. The Company is also developing algal oils as replacements for the oils used in skin and personal care products.

The Company competes with BP p.l.c., Royal Dutch Shell plc, and Exxon Mobil Corporation, jatropha, camelina, SALOV North America Corporation, Archer Daniels Midland Company, Cargill, Incorporated, DSM Food Specialties and Danisco A/S

Advisors' Opinion:

• [By Roberto Pedone]

  Another under-$10 stock that's just starting to trigger a major breakout trade here is Solazyme(SZYM), which is in the business of transforming a range of low-cost plant-based sugars into high-value oils. This stock has been trending strong so far in 2013, with shares up by 21%.

  This company just reported earnings on Wednesday, posting a loss that met Wall Street's expectations but coming up short on beating revenue expectations. Revenue decreased 50.59% to $6.7 million from the year-earlier quarter.

  If you take a look at the chart for Solazyme, you'll notice that this stock has been uptrending strong for the last month, with shares soaring higher from its low of $7.15 to its intraday high of $9.86 a share. During that uptrend, shares of SZYM have been mostly making higher lows and higher highs, which is bullish technical price action. That move has started to push shares of SZYM into breakout territory and back above its 200-day moving average of $9.35 a share.

  Market players should now look for long-biased trades in SZYM if it manages to break out above some near-term overhead resistance levels at $9.50 to $9.90 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 556,451 shares. If that breakout triggers soon, then SZYM will set up to re-test or possibly take out its next major overhead resistance levels at $12 to $13 a share.

  Traders can look to buy SZYM off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $8.75 a share. One can also buy SZYM off strength once it clears those breakout levels with volume and then simply use a stop right below its 200-day moving average of $9.35 a share, or right below $9 a share.

  This stock is very popular with the short-sellers, since the current short interest as a percentage of the float for SZYM is extremely high at 21.7%. This stock has big time short-squeeze potential, so make sure to put this on your breakout trading radar.

10 Best Energy Stocks To Buy For 2014: SilverCrest Mines Inc (SVL)

SilverCrest Mines Inc. (SilverCrest) is engaged in the acquisition, exploration and development of mineral properties in Mexico and Central America. The Company�� principal focus is the development and operation of the Santa Elena Project, which property consists of seven mineral concessions totaling 2,726.54 hectares, portions of which include the producing Santa Elena gold and silver mine located northeast of Hermosillo, Sonora State, Mexico. It operates in three segments: the mine operations at Santa Elena, Mexico; mine exploration and evaluation projects at La Joya and Cruz de Mayo, Mexico, and Corporate. The Company is also focused on exploring and developing its La Joya Property located in Durango, Mexico, which contains a discovered polymetallic deposit. The Company�� other mineral properties include the Cruz de Mayo Project (Mexico), the La Joya Property (Mexico), the Silver Angel Project (Mexico) and the El Zapote Project (El Salvador).

10 Best Energy Stocks To Buy For 2014: Solazyme Inc (SZYM.O)

Solazyme, Inc. (Solazyme), incorporated on March 31, 2003, makes oil. The Company�� technology transforms a range of plant-based sugars into oils. Its renewable products can replace or enhance oils derived from the world�� three existing sources-petroleum, plants and animal fats. The Company is focused on commercializing its products into three target markets: fuels and chemicals, nutrition, and skin and personal care. In 2010, the Company launched its products, the Golden Chlorella line of dietary supplements. In March 2011, the Company launched its Algenist brand for the luxury skin care market through marketing and distribution arrangements with Sephora S.A. (Sephora International), Sephora USA, Inc. (Sephora USA), and QVC, Inc. (QVC).

The Company is engaged in development activities with multiple partners, including Chevron U.S.A. Inc., through its division Chevron Technology Ventures (Chevron), The Dow Chemical Company (Dow), Ecopetrol S.A. (Ecope trol), Qantas Airways Limited (Qantas) and Conopoco, Inc., doing business as Unilever (Unilever).

In 2010, the Company entered into a 50/50 joint venture with Roquette Freres, S.A. (Roquette). In November 2010, the Company entered into a joint venture and operating agreement for Solazyme Roquette Nutritionals with Roquette. In December 2010, the Company entered into an exclusive distribution relationship with Sephora International, and in January 2011, the Company entered into a distribution relationship with Sephora USA. Under the arrangements, each of Sephora International and Sephora USA will distribute the Algenist product line in their respective territories.

In Fuels and Chemicals market its renewable oils can be refined and sold as drop-in replacements for marine, motor vehicle and jet fuels, as well as replacements for chemicals that are traditionally derived from petroleum or other conventional oils. The Company work with its refining par tner Honeywell UOP to produce Soladiesel (renewable diesel! ),! Soladiesel renewable diesel for United States Naval vessels, and Solajet renewable jet fuel for both military and commercial application testing. In nutrition market the Company has developed microalgae-based food ingredients, including oils and powders that enhance the nutritional profile and functionality of food products while reducing costs for consumer packaged goods (CPG) companies. In Skin and Personal Care market the Company hs developed a portfolio of branded microalgae-based products. Its ingredient is Alguronic Acid, which the Company has formulated into a range of skin care products with anti-aging benefits. The Company is also developing algal oils as replacements for the oils used in skin and personal care products.

The Company competes with BP p.l.c., Royal Dutch Shell plc, and Exxon Mobil Corporation, jatropha, camelina, SALOV North America Corporation, Archer Daniels Midland Company, Cargill, Incorporated, DSM Food Specialties and Danisco A/S< /p>

10 Best Energy Stocks To Buy For 2014: Cabot Oil & Gas Corporation(COG)

Cabot Oil & Gas Corporation operates as an independent oil and gas company in the United States. The company engages in the development, exploitation, exploration, production, and marketing of natural gas, crude oil, and natural gas liquids. It holds reserves in north region comprising Appalachian and Rocky Mountains areas; and south region consisting of Anadarko basin with Texas and Louisiana areas. The company also transports, stores, gathers, and purchases natural gas for resale. As of December 31, 2010, it had proved reserves of approximately 2,761 billion cubic feet of natural gas equivalents. The company was founded in 1989 and is headquartered in Houston, Texas.

Advisors' Opinion:

• [By Ken Sweet]

  Natural Gas producers, such as Cabot Oil & Gas (COG), have been among this year's best performing stocks, helped by higher energy prices and heightened interest in the exploration of oil shale and other rock formations for alternative fuel sources.

  Cabot Oil owns drilling rights in the Marcellus shale, a geological formation in the Appalachians containing massive quantities of natural gas.

  While Marcellus shale has large quantities of natural gas, drilling efforts are still too early to have a meaningful impact on Cabot's business. The company recently reported an adjusted profit of $20.7 million, or 20 cents a share, giving Cabot a hefty price-to-earnings ratio of 52. That type of ratio puts Cabot shares up there with dotcom names like Netflix (NFLX).

  Many analysts remain bullish on Cabot. Bank of America analysts recently upgraded their price target on Cabot shares to $105.

10 Best Energy Stocks To Buy For 2014: Petroleo Brasileiro S.A.- Petrobras(PBR)

Petroleo Brasileiro S.A. primarily engages in oil and natural gas exploration and production, refining, trade, and transportation businesses. The company?s Exploration and Production segment involves in the exploration, production, development, and production of oil, liquefied natural gas (LNG), and natural gas in Brazil. This segment supplies its products to the refineries in Brazil, as well as sells surplus petroleum and byproducts in domestic and foreign markets. Its Supply segment engages in the refining, logistics, transportation, and trade of oil and oil products; export of ethanol; and extraction and processing of schist, as well as holds interests in companies of the petrochemical sector in Brazil. The Gas and Energy segment involves in the transportation and trade of natural gas produced in or imported into Brazil; transportation and trade of LNG; and generation and trade of electric power. In addition, the segment has interests in natural gas transportation and d istribution companies; and thermoelectric power stations in Brazil, as well engages in fertilizer business. The Distribution segment distributes oil products, ethanol, and compressed natural gas in Brazil. The International segment involves in the exploration and production of oil and gas, as well as in supplying, gas and energy, and distribution operations in the Americas, Africa, Europe, and Asia. Further, the company involves in biofuel production business. Petroleo Brasileiro was founded in 1953 and is based in Rio de Janeiro, Brazil.

Advisors' Opinion:

• [By Dave Friedman]

  Institutional investors bought 78,663,680 shares and sold 101,125,380 shares, for a net of -22,461,700 shares. This net represents 0.23% of common shares outstanding. The number of shares outstanding is 9,872,826,100. The shares recently traded at $27.61 and the company’s market capitalization is $170,178,700,000.00. About the company: Petroleo Brasileiro S.A. – Petrobras explores for and produces oil and natural gas. The Company refines, markets, and supplies oil products. Petrobras operates oil tankers, distribution pipelines, marine, river and lake terminals, thermal power plants, fertilizer plants, and petrochemical units. The Company operates in South America and elsewhere around the world.

10 Best Energy Stocks To Buy For 2014: Midstates Petroleum Company Inc (MPO)

Midstates Petroleum Company, Inc. is an independent exploration and production company. The Company�� areas of operation include Pine Prairie, South Bearhead Creek/Oretta, West Gordon and North Cowards Gully. Its Upper Gulf Coast Tertiary trend extends from south Texas to Mississippi across its operating areas in central Louisiana. As of December 31, 2011, it had accumulated approximately 77,100 net acres in the trend. As of December 31, 2011, its development operations are focused in the Wilcox interval of the trend. The Company�� business is conducted through Midstates Petroleum Company LLC, as a direct, wholly owned subsidiary. In September 2012, the Company and its subsidiary acquired all of Eagle Energy Production, LLC�� producing properties as well as their developed and undeveloped acreage primarily in the Mississippian Lime oil play in Oklahoma and Kansas.

As of December 31, 2011, it drilled 57 gross wells in the trend, approximately 93% of. During the year ended December 31, 2011, its average daily production were 7,499 barrels of oil equivalent per day. As of December 31, 2011, it had a total of 974 gross vertical drilling locations, including 115 related to acreage under option, in the trend. As of December 31, 2011, the Company�� properties included approximately 92 gross active producing wells, 95% of, which it operate, and in which it held an average working interest of approximately 99% across its 77,100 net acre leasehold. During March 31, 2012, the Company continued its drilling program, spudding 14 wells, of which nine are producing, three are being drilled and two are waiting to be completed. As of December 331, 2011, it averaged daily production is approximately 9,000 barrels of oil equivalent per day.

Pine Prairie

The Company�� properties in the Pine Prairie area represented 46% of its total proved reserves as of December 31, 2011. During 2011, the Company�� average production from these properties was 3,793 net barrels of oil equ! ivalent per day, consisting of 2,143 barrels of oil, 565 barrels of natural gas liquidations (NGLs) and 6,508 million cubic feet of natural gas per day. As of December 31, 2011, it held an average working interest and average net revenue interest of 92.2% and 68.9%, respectively, on its acreage in Pine Prairie area. The Company has an additional 194 identified drilling locations in this area based primarily on 10-acre spacing.

South Bearhead Creek/Oretta

The Company�� properties in the South Bearhead Creek/Oretta area represented 20.3% of its total proved reserves as of December 31, 2011. During 2011, the Company�� average production from these properties was 4,367 net barrels of oil equivalent per day, consisting of 2,196 barrels of oil, 438 barrels of NGLs and 10,396 million cubic feet of natural gas per day. During 2011, these wells produced at an average daily rate of 2,413 net barrels of oil equivalent per day. As of December 31, 2011, it held an average working interest and average net revenue interest of 100% and 78.5%, respectively, on its acreage in South Bearhead Creek/Oretta area. The Company has an additional 43 identified drilling locations in this area based primarily on 40-acre spacing.

West Gordon

The Company�� properties in the West Gordon area represented 21% of its total proved reserves as of December 31, 2011. During 2011, the Company�� average production from these properties was 1,002 net barrels of oil equivalent per day, consisting of 617 barrels of oil, 68 barrels of NGLs and 1,901 million cubic feet of natural gas per day. As of December 31, 2011, it held an average working interest and average net revenue interest of 95.9% and 71.2%, respectively, on its acreage in West Gordon area. The Company has an additional 74 identified drilling locations in this area based primarily on 40-acre spacing.

North Cowards Gully

The Company�� properties in the North Cowards Gully area represented 11.5% of ! its total! proved reserves as of December 31, 2011. During 2011, the Company�� average production from these properties was 149 net barrels of oil equivalent per day consisting of 103 barrels of oil, 11 barrels of NGLs, and 211 million cubic feet of natural gas per day. As of December 31, 2011, it held an average working interest and average net revenue interest of 94.3% and 71.2%, respectively, on its acreage in North Cowards Gully area. The Company has an additional 95 identified drilling locations in this area based primarily on 40-acre spacing.

10 Best Energy Stocks To Buy For 2014: Natural Gas(NG)

NovaGold Resources Inc., through its subsidiaries, engages in the exploration and development of mineral properties primarily in North America. The company primarily explores for gold, silver, copper, zinc, and lead ores. It holds interests in the Donlin Creek property covering 81,361 acres and the Ambler property comprising 90,614 acres located in Alaska; and the Galore Creek property comprising 293,838 acres located in northwestern British Columbia, Canada. The company was formerly known as NovaCan Mining Resources (1985) Limited and changed its name to NovaGold Resources Inc. in March 1987. NovaGold Resources Inc. was founded in 1984 and is based in Vancouver, Canada.

Advisors' Opinion:

• [By Holly LaFon] John Paulson bough 20, 181,818 shares of NovaGold in the first quarter of 2010 at an average of $6 per share; he added 26,200 shares in the third quarter at an average of $9 per share, and 2,746,800 in the fourth quarter at an average of $9 per share. According to GuruFocus Real Time Picks, in February he increased this holding 30.49% and now owns 29,954,818 shares or 10.8% of the company.
  
  NovaGold Resources is a gold and copper company engaged in the exploration and development of mineral properties in Alaska and Western Canada. NovaGold has a market cap of $2.26 billion; its shares were traded at around $7.68 with and P/S ratio of 5622. NovaGold had an annual average earnings growth of 31.1% over the past 10 years.
  
  It is not a surprise that Paulson would increase his gold holdings. He said in his 2011 investor letter that ��y gold fund will top all others.��He added:
  We anticipate that the divergence between gold and gold equities will narrow, given the booming earnings that a number of the major gold producers are delivering...We remain excited about the outlook for the Paulson Gold Funds over the next few years. Central banks have engaged in unprecedented amounts of quantitative easing, while investors are increasingly losing faith in paper currencies. The sovereign debt crisis in Europe continues to threaten the stability of the global financial system. In this environment, gold stands out as the most stable and credible currency alternative and we would argue that the potential upside in gold outweighs the potential downside. Gold equities are attractively priced given the strong financial performance than many of these companies are delivering... The Paulson Gold Funds, which are designed to outperform gold in a rising gold price environment, provides investors with a hedge against inflation and more.NovaGold does not have the robust earnings Paulson speaks of. But for the year ended Nov. 30, 2011, the company�� loss narrowed to $153 million, from $203.5 million, for 2010. ! Revenues declined to $111 million for 2011 from $172 for 2010. The company had $66.8 mil
• [By Vodicka]

  Novagold Resources Inc New Ord (AMEX:NG): This equity had 11,424,918 shares sold short as of Aug 31st, as compared to 11,493,664 on Aug 15th, which represents a change of -68,746 shares, or -0.6%. Days to cover for this company is 4 and average daily trading volume is 2,735,045. About the equity: NovaGold Resources Inc. is a mineral exploration company. The Company, through its subsidiaries, explores and develops mineral properties in North America. NovaGold primarily focuses on gold properties, which may include copper, silver and zinc resources.