Monday, December 31, 2012

ReneSola Says Q2 Revenues, Shipments Top Previous Guidance

ReneSola (SOL) shares are trading higher this morning after the solar wafer company said Q2 results topped previous expectations.

For the quarter, the company now sees shipments of 250-260 MW, ahead of its previous guidance of 230-250 MW. Revenue is now expected to be $245 million to $255 million, ahead of guidance of $230 million to $250 million. Gross margin is now expected to be 28%-30%, above the previous forecast of 21%-23%.

CEO Li Xianshou said in a statement that “The strong demand for high-quality wafer products witnessed during the first quarter of 2010 continued through the second quarter as a result of ongoing tightness in the wafer supply chain.”

For the second half, the company expects total solar product shipments of 600-650 MW, with revenues of $550 million to $570 million and gross margin of 28%-30%.

SOL today is up 18 cents, or 3%, to $6.15.

How Is Apple So Cheap?

We Apple (Nasdaq: AAPL  ) bulls were sure enjoying our time in the sun in the first quarter. Despite seeing the broader market put up the best first-quarter performance since 1998, shares of the Mac maker still handily trounced both the S&P 500 and the Nasdaq Composite by rallying a jaw-dropping 45.8%. I'm leaving out the Dow because -- well, frankly, because it's stupid.

It was the best of times
Apple outperformed the S&P by 35.5% and the Nasdaq by 29.1%. The first-quarter earnings report was the stuff that investors dream of: Sales soared 73%, gross margin expanded by more than 6%, and net income more than doubled. Apple launched its third-generation iPad with 3 million unit sales and announced the initiation of a dividend. Times were good.

AAPL data by YCharts

It was the worst of times
Even as the second quarter kicked off, shares proceeded to reach an all-time high of $644 in early April. Then the Apple bears took over the driver's seat. We're now about halfway through the second quarter.

AAPL data by YCharts

So far this quarter, shares have underperformed the broader market and given up some of the prior quarter's gains. After topping out at $644, there was a prevailing sentiment that Apple might miss on iPhone unit sales, largely spawned from data coming out of domestic carriers AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) , which put up ominous sequential drops in iPhone activations.

There was also concern that Qualcomm's (Nasdaq: QCOM  ) 28-nanometer supply constraints could hold back the next-generation iPhone because of Apple's use of Qualcomm basebands. There wouldn't be any immediate effect, though, since Apple doesn't currently use 28-nanometer parts.

Sorry, Apple bears. Wrong again.
The second-quarter earnings release largely allayed those fears, with Apple again smashing estimates. Shares popped 9% the following day to reach $610. Fellow Fool Rick Munarriz astutely pointed out that despite the jump, Apple got cheaper thanks to its tremendous earnings growth.

Metric

Right Before Earnings

Right After Earnings

Price $560.28 $610
Trailing-12-month EPS $35.11 $41.01
P/E 15.96 14.87

Source: SEC filings.

Yup, looks cheaper to me. Since then, shares have now given back all of those gains and then some, making Apple even cheaper.

Fact: Apple is cheap
The low on Friday was $528.66 (which is actually pretty darn close to the $527 that one technical analyst predicted), or more than $115 below the high. That's an 18% pullback, which turns into about $107 billion in market cap lost.

It also translates into a P/E of 12.9. Apple's $110.2 billion cash hoard turns out to about $117.84 per share. Backing that out of that low gets you to $410.82, or 10 times earnings ex-cash.

Analysts expect next year's earnings to come in at $53.90 per share (and how often does Apple smash their collective best guesses?). So Apple is now trading around 7.6 times fiscal 2013's projected earnings ex-cash.

In comparison, the broader S&P 500 is trading at about 20.8 times earnings, and remember that Apple is the one driving a disproportionate amount of that earnings growth in the first place. Multiple analysts were out last month with gloomy calculations of what the S&P 500's earnings growth would look like if Apple didn't exist. For example, Ned Davis Research's Dan Sanborn's figures showed the market's earnings growth shrinks from 7.8% to just 2.7% without iEarnings.

That means that one of the biggest drivers of earnings growth in the market is currently cheaper than the market itself.

Sticks and stones may break my bones, but words can cost shareholders billions of dollars
The only explanation is that the bears don't think Apple's growth is sustainable. Some of the recent negative sentiment may be related to comments from bond fund guru Jeffrey Gundlach, who had some bearish comments at the Ira Sohn Conference in New York last week. Gundlach recommends shorting Apple and going long natural gas, saying that trade has "monster legs."

He doubts that people will line up around the block for the "iPad 87." Fortunately, that's 84 iPads away, and at one iPad update per year, Apple has plenty of time before it needs to cross that bridge.

In the Greenlight corner of this match we had equity hedge fund master David Einhorn, who backed Cupertino by saying:�

I can't find any prohibitions on $1 trillion market caps. I think the concern shows a fundamental misunderstanding of Apple because it assumes it is a hardware company. It's a software company. A consumer with one Apple product tends to want more Apple products. Once that happens, Apple has captured the customer.�

Meanwhile, Einhorn's Greenlight Capital stood pat on its Apple stake of 1.5 million shares last quarter.

Looks like Gundlach is having his way as shares remain weak. I'd trust an equities guy over a bond guy when I'm looking at equities, but I guess that's just me.

Fill in the blank: Apple is cheaper than _______
As it stands, Apple is absurdly cheap. Cheaper than mobile rival Google (Nasdaq: GOOG  ) , which trades at 18.9 times earnings with earnings growth of just 28.1%, while Apple trades at 12.9 times earnings with earnings growth of 95.5%. Beyond earnings, it trades at 11.1 times free cash flow compared with Google's 15.9 multiple. It's cheaper than the S&P 500. It's cheaper than the Nasdaq Composite.

It's just downright cheap. Here's where the whole "buy low" bit comes into play.

Some people think investors were rotating dollars out of Apple and into the Facebook IPO. However, our senior technology analyst explains more of why Apple's so attractive in our new premium research report. Past that, Forget Facebook -- Here's the Tech IPO You Should Be Buying in social media. We're talking about a company that has much more stable monetization in social networking. Grab a free copy of the report to read more.

Pizza news highlights ways to make dough

Earnings news from two pizza chains vividly shows how to consistently make money in the stock market.

Papa John's International Inc. PZZA reported earnings and shares spiked about 20%. Domino's Pizza Inc. DPZ reported earnings and shares promptly fell about 9%.

Metrics

The two companies are similar. Both companies trade at a PE of about 21. Sales of both companies are growing at about 6.1%. Domino's net margin is 5.4% compared to 5% of Papa John's. Revenue of Domino's is $384.6 million compared to Papa John's $331.3 million.

Earnings

Papa John's reported earnings of 69 cents a share compared to consensus of 55 cents. Domino's adjusted earnings were 47 cents a share compared to consensus of 49 cents.

Strategies that lost money

Trend following technical strategies lost money.

Momentum strategies lost money.

Strategies that linearly extrapolate EPS growth lost money.

Strategies that made money

Strategies based on using sentiment as a contrary indicator made money. Going into earnings, the sentiment on Domino's was extremely positive. As a contrary indicator this was flashing a red signal.

On the other hand, going into the earnings sentiment was negative on Papa John's. This is the reason for an oversize reaction on the upside to the earnings surprise.

The old-fashioned tape reading strategies were successful. Of course, the tape reading strategies of yesterday have now been replaced by computer algorithms.

At The Arora Report we slice and dice every tick to figure out what smart money is doing. Smart money in our parlance means actions of ultra-sophisticated investors who know more, who know early, and who analyze better. Our smart money flow indicator was showing consistent selling buy the smart money going into earnings. In contrast, Papa John's saw consistent buying by the smart money over the last week.

Back testing

I like pizza, but that is not the reason I chose to write this article. The point of writing this article is to help investors consistently make money in the stock market especially around earnings.

Since Domino's and Papa John's are very similar companies and they reported on two consecutive days, the reaction of these two stocks to earnings simply forms a good illustration to show case the point.

At The Arora Report, we have extensively tested various strategies to make money from earnings events. The results of extensive back testing are consistent with what has been described above for these two pizza companies.

The most successful strategy is using smart money flow or equivalent analysis of volume data. The second most successful strategy is to take positions contrary to the prevailing sentiment provided the sentiment is near extreme levels for that particular stock.

The worst strategies are momentum-based technical analysis strategies. The second worse performing group of strategies is the one that linearly extrapolate past EPS into the future.

By simply judiciously picking the right strategies going into earnings, investors can make a big difference in their performance.

Brazil Company Sells Cell Phones With iPhone Brand

SAO PAULO (AP) -- It's not your Apple's (NASDAQ: AAPL  ) iPhone.

A Brazilian company has begun selling smartphones with the iPhone brand after winning the legal right to use the name in Latin America's biggest country. Adding insult to Apple's injury, the phone runs on the archrival Android operating system.

Gradiente SA says in a statement that in 2008 the government gave it the right to use the brand on its cell phones.

Brazilian trademark office spokeswoman Maratan Marques says Gradiente requested permission to use the brand before Apple did and can use it through 2018.

Brazil Apple spokeswoman Maria Parra Rodriguez says the company has no immediate comment.

Gradiente says on its website it started selling its Android 2.3 phone on Tuesday for 600 reals ($300).

To Rein In Inflation, China Tightens Reserve Requirements

In a continuing effort to reduce inflation and keep market bubbles from forming, China’s central bank on Friday raised required reserves for lenders for the fourth time in a bit over two months. The move was not without consequences on the world markets, as stocks fell, taking gold and other commodities with them. The euro fell, too, after first continuing Thursday’s gains against the dollar.

Chinese lenders must now maintain reserves of 19.5% on hand, an increase of 50 basis points, and while this is already a record high, a poll of economists in December by Reuters showed expectations that reserves will hit 20% by June.

Reuters reported that the action came as Beijing tried to stem the flow of rising prices and ward off social unrest. With the inflation rate at a 28-month high of 5.1% as of November, the costs of food and property are skyrocketing; China had repeatedly expressed concern over the possibility of a real estate bubble.

Beijing changed its monetary policy in December from “appropriately loose” to “prudent,” signaling more intensive efforts to control the effects of available cash. By compelling its lenders to lock up money in reserves, the nation hopes to ward off both inflation and asset bubbles, not just in real estate but elsewhere as well. Its efforts are expected to extend beyond reserve increases to interest rates, loan targets, and the yuan itself as the country tries to slow its raging economy.

World markets showed their concerns about a potential slowdown in growth fueled by China’s expanding consumer economy by the retreat of both stocks and commodities from steep Thursday gains. Investors have expected such actions from China, and indeed those actions display confidence on Beijing’s part in its own economy. However, the news was unsettling to those already displaying euphoria over the strong showing of euro zone bond auctions earlier in the week.

How Fast Is the Cash at Journal Communications?

It takes money to make money. Most investors know that, but with business media so focused on the "how much," very few investors bother to ask, "How fast?"

When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to Journal Communications (NYSE: JRN  ) .

Let's break this down
In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.

Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.

To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better. The CCC figure for Journal Communications for the trailing 12 months is 20.4.

For younger, fast-growth companies, the CCC can give you valuable insight into the sustainability of that growth. A company that's taking longer to make cash may need to tap financing to keep its momentum. For older, mature companies, the CCC can tell you how well the company is managed. Firms that begin to lose control of the CCC may be losing their clout with their suppliers (who might be demanding stricter payment terms) and customers (who might be demanding more generous terms). This can sometimes be an important signal of future distress -- one most investors are likely to miss.

In this series, I'm most interested in comparing a company's CCC to its prior performance. Here's where I believe all investors need to become trend-watchers. Sure, there may be legitimate reasons for an increase in the CCC, but all things being equal, I want to see this number stay steady or move downward over time.

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Because of the seasonality in some businesses, the CCC for the TTM period may not be strictly comparable to the fiscal-year periods shown in the chart. Even the steadiest-looking businesses on an annual basis will experience some quarterly fluctuations in the CCC. To get an understanding of the usual ebb and flow at Journal Communications, consult the quarterly-period chart below.

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

On a 12-month basis, the trend at Journal Communications looks very good. At 20.4 days, it is 9.5 days better than the five-year average of 29.9 days. The biggest contributor to that improvement was DIO, which improved 3.8 days compared to the five-year average.

Considering the numbers on a quarterly basis, the CCC trend at Journal Communications looks OK. At 19.4 days, it is 1.5 days worse than the average of the past eight quarters. Investors will want to keep an eye on this for the future to make sure it doesn't stray too far in the wrong direction. With quarterly CCC doing worse than average and the latest 12-month CCC coming in better, Journal Communications gets a mixed review in this cash-conversion checkup.

Though the CCC can take a little work to calculate, it's definitely worth watching every quarter. You'll be better informed about potential problems, and you'll improve your odds of finding the underappreciated home run stocks that provide the market's best returns.

  • Add Journal Communications to My Watchlist.

Family Dollar Is Worth Your Money — Costco, Target Are Bad Bargains

Costco (NASDAQ:COST) is on a roll and Wednesday it reported a strong quarter — but not as strong as expected.�Would you be better off buying stock in Family Dollar (NYSE:FDO) or Target (NYSE:TGT)?

Costco missed the target Wall Street expected it to hit. Instead of posting Wall Street’s expected�13% increase in fourth-quarter profit on $27.6 billion in revenue, Costco fell short in reporting $1.08 per share, which was two cents less than expected.

That’s still a strong 11% increase, and it happened because, with the economy weak, people are willing to pay its membership fee to get access to the bargains in its stores. And its growth has been helped by opening stores in the U.S. and internationally.

And Costco is not sitting still. It announced Wednesday that it would raise the fees it charges its members — by $5 for U.S. individual and business members and Canadian business members beginning Nov. 1. This move is likely to boost its revenues unless people decide that the increase is too high, leading to a drop in Costco’s membership count.

Family Dollar reported an 8% increase in its fourth-quarter profit reported Sept. 28. Because consumers are looking for bargains, Family Dollar plans to open more stores than it closes in the next year. It will add between 450 and 500 new stores in its current fiscal year while closing up to 100�poorly performing�locations. In the year ahead, it’s looking for an 8% to 10% sales increase.

The key to Family Dollar’s growth is that its selection appeals to people who are being stung by the weak economy. Its merchandise falls into four categories: consumables, home products, apparel and accessories, and seasonal and electronics. And it sells those products at prices ranging from under $1 to $10.

But it’s not just the lowest-priced retailers that are doing well. Target had a strong second-quarter report in August. Its profit of $704 million was 3.6% higher than the previous year whiles its sales rose 5.1%. And Target beat analysts’ expectations of 97 cents per share by six cents.

So should you shun Costco for missing its numbers and buy Family Dollar and Target instead? Not exactly. Consider Family Dollar, but forget about the others. Here’s why:

  • Costco: Growing, barely profitable company;�overpriced stock. Costco revenues were up 8.1% to $85 billion in the last year, and its net income popped 20% to $1.4 billion — yielding a slim 1.6% profit margin.�And its price/earnings-to-growth ratio is an overvalued 1.68 (where 1.0 is fairly valued) with a P/E of�25.6 on earnings forecast to grow 15.2% to $3.82 in 2012.
  • Family Dollar: Growing, profitable company; fairly priced stock. Family Dollar’s revenues are up 8.7% in the last year to $8.6 billion, and its net income�rose 8.5% to $388 million — yielding a decent 4.5% net profit margin. And its PEG is a reasonable 1.08 on a P/E of�16.5 with earnings forecast to grow 15.3% to $4.19 in 2012.
  • Target: Slowly growing, profitable company; greatly overpriced�priced stock. Target’s revenues are up 3.1% in the last year to $68 billion, and its net income exploded 17.4% to $3 billion — yielding a solid 4.4% net profit margin. But its PEG is a grossly overvalued 8.65 on a P/E of�22.5 with earnings forecast to grow 2.6% to $4.32 in fiscal 2013.

Family Dollar looks cheap and well-positioned to capitalize on continued economic weakness.

As of this writing, Peter Cohan owned no positions in any of the aforementioned stocks.

Sunday, December 30, 2012

Bureaucratic Fat Cats Living Large as Europe Burns


While individual nations and their citizens are forced to cope with austerity measures and are facing another recession, the EU's bureaucracy is giving itself a massive pension increase.

Currently, the EU’s retirement plan for bureaucrats is 60% of a person's final salary, which evens out to an annual pension of $91,000. The total cost to European national governments comes out to about $1.6 billion per year.

Now, the European Commission is requesting a 26% increase to cover the growing costs of the civil service in the proposed 2014-2020 budgets, bringing the cost from $72 billion to $91 billion.

UK taxpayers alone will reportedly have to pay an extra $2.2 billion annually for the next seven years to double the total pensions for Brussels’ officials.

The UK is already forking out a hefty $104 billion a year in direct and indirect costs to maintain membership in the EU. The new increase in pensions tacks on an extra $15.7 billion for the next seven years.

Criticism of high and burdensome pensions for EU staff forced the European Commission to respond to the issue this year. Even then, the latest pension bill in the 2012 Brussels budget still demands a 4.9% increase.

A confidential letter leaked to The Telegraph also reveals that EU pensions are set to double to more than $3.2 billion a year by 2045.

"Most member states are responding to current economic and fiscal circumstances with efficiency measures or other reforms affecting the terms and conditions of their national civil servants. The staff of the European Institutions should share the burden," stated the letter.

The EU Commission has dismissed the letter, arguing that it will only consider requests signed by all 27 states.

As a result, some EU diplomats are encouraging all member states to unite on the issue and demand cutbacks in EU’s staffing costs.

Let's hope they are successful in forcing the EU bureaucrats to share the burden they have imposed on their members and citizens.

 

Top Stocks To Buy For 12/15/2012-5

Hormel Foods Corporation (NYSE:HRL) witnessed volume of 3.07 million shares during last trade however it holds an average trading capacity of 1.34 million shares. HRL last trade opened at $28.32 reached intraday low of $26.11 and went -7.31% down to close at $26.36.

HRL has a market capitalization $7.04 billion and an enterprise value at $6.68 billion. Trailing twelve months price to sales ratio of the stock was 0.92 while price to book ratio in most recent quarter was 2.67. In profitability ratios, net profit margin in past twelve months appeared at 6.06% whereas operating profit margin for the same period at 9.41%.

The company made a return on asset of 10.96% in past twelve months and return on equity of 19.14% for similar period. In the period of trailing 12 months it generated revenue amounted to $7.67 billion gaining $28.79 revenue per share. Its year over year, quarterly growth of revenue was 15.30% holding 40.70% quarterly earnings growth.

According to preceding quarter balance sheet results, the company had $964.71 million cash in hand making cash per share at 3.61. The total of $600.00 million debt was there putting a total debt to equity ratio 22.70. Moreover its current ratio according to same quarter results was 2.27 and book value per share was 9.86.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 10.70% where the stock current price exhibited down beat from its 50 day moving average price of $28.71 and remained below from its 200 Day Moving Average price of $28.39.

HRL holds 267.21 million outstanding shares with 137.76 million floating shares where insider possessed 48.13% and institutions kept 32.00%.

Opinion: Stephen Moore: A Fairness Quiz for the President

President Obama has frequently justified his policies—and judged their outcomes—in terms of equity, justice and fairness. That raises an obvious question: How does our existing system—and his own policy record—stack up according to those criteria?

Is it fair that the richest 1% of Americans pay nearly 40% of all federal income taxes, and the richest 10% pay two-thirds of the tax?

Is it fair that the richest 10% of Americans shoulder a higher share of their country's income-tax burden than do the richest 10% in every other industrialized nation, including socialist Sweden?

Is it fair that American corporations pay the highest statutory corporate tax rate of all other industrialized nations but Japan, which cuts its rate on April 1?

Is it fair that President Obama sends his two daughters to elite private schools that are safer, better-run, and produce higher test scores than public schools in Washington, D.C.—but millions of other families across America are denied that free choice and forced to send their kids to rotten schools?

Is it fair that Americans who build a family business, hire workers, reinvest and save their money—paying a lifetime of federal, state and local taxes often climbing into the millions of dollars—must then pay an additional estate tax of 35% (and as much as 55% when the law changes next year) when they die, rather than passing that money onto their loved ones?

Enlarge Image

Close Associated Press

Is it fair that Treasury Secretary Tim Geithner, former Democratic Senate Majority Leader Tom Daschle, former Ways and Means Chairman Charlie Rangel and other leading Democrats who preach tax fairness underpaid their own taxes?

Is it fair that after the first three years of Obamanomics, the poor are poorer, the poverty rate is rising, the middle class is losing income, and some 5.5 million fewer Americans have jobs today than in 2007?

Is it fair that roughly 88% of political contributions from supposedly impartial network television reporters, producers and other employees in 2008 went to Democrats?

Is it fair that the three counties with America's highest median family income just happen to be located in the Washington, D.C., metro area?

Is it fair that wind, solar and ethanol producers get billions of dollars of subsidies each year and pay virtually no taxes, while the oil and gas industry—which provides at least 10 times as much energy—pays tens of billions of dollars of taxes while the president complains that it is "subsidized"?

Is it fair that those who work full-time jobs (and sometimes more) to make ends meet have to pay taxes to support up to 99 weeks of unemployment benefits for those who don't work?

Is it fair that those who took out responsible mortgages and pay them each month have to see their tax dollars used to subsidize those who acted recklessly, greedily and sometimes deceitfully in taking out mortgages they now can't afford to repay?

Is it fair that thousands of workers won't have jobs because the president sided with environmentalists and blocked the shovel-ready Keystone XL oil pipeline?

Is it fair that some of Mr. Obama's largest campaign contributors received federal loan guarantees on their investments in renewable energy projects that went bust?

Is it fair that federal employees receive benefits that are nearly 50% higher than those of private-sector workers whose taxes pay their salaries, according to the Congressional Budget Office?

Is it fair that soon almost half the federal budget will take income from young working people and redistribute it to old non-working people, even though those over age 65 are already among the wealthiest Americans?

Is it fair that in 27 states workers can be compelled to join a union in order to keep their jobs?

Is it fair that nearly four out of 10 American households now pay no federal income tax at all—a number that has risen every year under Mr. Obama?

Is it fair that Boeing, a private company, was threatened by a federal agency when it sought to add jobs in a right-to-work state rather than in a forced-union state?

Is it fair that our kids and grandkids and great-grandkids—who never voted for Mr. Obama—will have to pay off the $5 trillion of debt accumulated over the past four years, without any benefits to them?

Mr. Moore is a member of the Journal's editorial board.

Fidelity Separates Asset Management from Distribution

Fidelity's Chairman and CEO, Edward C. Johnson 3d, according to a May 10 announcement.

Fidelity will fold all of the firm's "customer and client-focused businesses" into a new entity called Fidelity Personal, Workplace and Institutional Services. This includes Fidelity Institutional and Fidelity Investments Institutional Services, as well as the Personal Investing and Workplace Investing units that Ms. Johnson has led for five years. She will be president of the new entity, in addition to her current role as vice chairman and director of the holding company for Fidelity Investments, FMR LLC. Ms. Johnson is currently also "a member of the Fidelity Executive Committee; and chairman of the Fixed-Income/Asset Allocation Board of Trustees," the firm said in the announcement.

"This new structure will position Fidelity strategically for the future by bringing all of the firm's distribution resources together," Mr. Johnson--who is Ms. Johnson's father--said in the release.

O'Hanley's new role will begin when he joins Fidelity in "mid-summer," the release stated. He will run "Fidelity Management & Research Company (FMRCo), Pyramis Global Advisors and Fidelity's Asset Allocation Division, comprising Strategic Advisers, Inc., and Global Asset Allocation, as well as all corporate functions." O'Hanley joins Fidelity from BNY Mellon Asset Management, which has more than $1 trillion in assets under management, and where he was president and CEO. He was vice chairman and a member of the executive committee of Bank of New York Mellon Corporation.

"Ron O'Hanley will bring valuable asset management and executive experience to our investing and corporate functions as well as a strong leadership track record, Mr. Johnson stated in the announcement.

Fidelity Investments has, as of March 31, more that $3.3 trillion in assets under administration, including $1.5 trillion in AUM.

Comments? Please send them to kmcbride@wealthmanagerweb.com. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.

Friday Options Brief: IBB, LVS, IYR, ELX, EWZ, JEC, HOG

iShares Nasdaq Biotechnology Index Fund (IBB) – A three-legged bearish options combination play on the IBB, an exchange-traded fund that mirrors the price and yield performance of the NASDAQ Biotechnology Index, suggests one investor expects shares of the underlying fund to erode ahead of May expiration. Shares are currently down 0.15% on the day to stand at $91.90. The pessimistic options player sold 3,500 call options at the May $95 strike for a premium of $0.60 per contract in order to partially offset the cost of buying a debit put spread. The trader purchased 3,500 puts at the May $90 strike for an average premium of $1.49 each, spread against the sale of 3,500 puts at the lower May $85 strike for $0.50 apiece. Net premium paid for the bearish stance amounts to $0.39 per contract. Thus, the investor is prepared to accrue maximum potential profits of $4.61 per contract if the fund’s share price slides 7.5% lower to trade at or beneath $85.00 at expiration day. The short position in call options, while beneficial as a financing tool, poses significant risk of potentially devastating losses to the trader should the IBB’s shares suddenly rally above $95.00 in the next month to expiration.

Las Vegas Sands Corp. (LVS) – Shares of the owner and operator of the Venetian Resort Hotel and Casino, as well as other resort casino locations, are trading 0.60% lower as of 12:20 pm (ET) to stand at $24.08. Despite the slightly lower share price, investors initiated bullish stances on the stock to prepare for continued share price appreciation going forward. Las Vegas Sands’ shares have experienced a terrific run up recently, rallying a whopping 65% from an intraday low of $14.88 on February 5, 2010, up to yesterday’s new 52-week high of $24.66. The casino operator’s shares are up 490% since touching down to a 52-week low of $4.18 back on April 21, 2009. Bullish players hoping to see shares continue higher picked up 4,100 calls at the May $30 strike for an average premium of $0.40 apiece today. Investors holding the call options make money only if LVS shares surge another 23% from the stock’s 52-week high of $24.66 to exceed the average breakeven point to the upside at $30.40 by May expiration day. We note that shares of Las Vegas Sands Corp. last traded above $30.40 back on October 1, 2008, when shares traded up to an intraday high of $37.00.

iShares Dow Jones U.S. Real Estate Index ETF (IYR) – A short strangle enacted on the IYR, an exchange-traded fund that tracks the price and yield performance of the Dow Jones U.S. Real Estate Index, indicates one options player expects shares of the underlying fund to trade within a specified range through expiration in May. Shares of the ETF are up 1.3% to $51.65 as of 12:05 pm (ET). The strangle-player sold 5,000 puts at the May $51 strike for a premium of $1.57 apiece in combination with the sale of 5,000 calls at the higher May $52 strike for a premium of $1.25 each. Gross premium pocketed by the investor amounts to $2.82 per contract. The options trader keeps the full premium received on the strangle as long as shares traded within the boundaries of the strike prices described through expiration day. The short position in both calls and puts exposes the investor to losses should shares of the underlying fund rally above the upper breakeven point at $54.82, or if shares slip beneath the lower breakeven price of $48.18, before expiration.

Emulex Corp. (ELX) – Shares of the provider of network convergence solutions are down 1.40% to $12.72 today following a downgrade to ‘hold’ from ‘buy’ at Canaccord Adams yesterday, where analysts have a 12-month target share price of $14.00 for the telecommunications equipment firm. Bearish investor anticipating continued share price erosion ahead of expiration day next month purchased approximately 3,800 puts at the May $12.5 strike for an average premium of $0.70 apiece. Pessimistic players long the put contracts make money if Emulex’s shares slip another 7.25% from the current price to breach the effective breakeven point on the put at $11.80 ahead of expiration day in May. Options implied volatility is slightly up by 3.5% on the stock to 45.81% as of 12:00 pm (ET).

iShares MSCI Brazil Index Fund (EWZ) – A massive bearish put butterfly spread utilizing 80,000 option contracts was established in the first hour of the trading session this morning on the EWZ, an exchange-traded fund that tracks the price and yield performance of publicly traded securities in aggregate in the Brazilian market, as measured by the MSCI Brazil Index. Shares of the underlying fund commenced the trading session slightly higher, but parsed gains during the morning to trade flat at $75.31 as of 10:45 am (ET). The bearish investor enacted the butterfly spread by purchasing 20,000 puts at the June $73 strike for a premium of $2.99 each [wing 1], and by picking up another 20,000 put contracts at the lower June $53 strike for $0.24 apiece [wing 2]. The body of the butterfly was constructed through the sale of 40,000 puts at the central June $63 strike for a premium of $0.84 a pop. The net cost of the pessimistic play amounts to $1.55 per contract. Therefore, the trader responsible for the transaction starts to make money if EWZ shares decline beneath the upper breakeven price of $71.45 ahead of June expiration. Maximum potential profits of $8.45 per contract accumulate for the investor should shares of the underlying fund plummet 16.33% from the current price to settle at $63.00 at expiration. The trader only ever risks losing $1.55 per contract, or the net premium paid for the spread, but stands ready to make more than five times that amount if shares erode down to $63.00.

Jacobs Engineering Group Inc. (JEC) – Shares of the provider of technical, professional and construction services to industrial, commercial and governmental clients around the globe rallied as much as 9% in morning trading to $48.28 perhaps on optimism regarding the $5.4 million two-year contract the firm secured from the Force Protection Products Division of the Air Force Cryptologic Systems Group yesterday. The surge in Jacobs’ share price inspired bullish options trading activity on the stock in the near-term April contract. Investors picked up at least 2,200 in-the-money calls at the April $46 strike for an average premium of $0.55 apiece in early trading. Premium on the same April $46 strike call contracts, as of 11:10 am (ET), is up 900% since this morning and the call options now tote a substantially higher asking price of $1.90 apiece. Buying interest continued at the higher April $47 strike where a minimum of 1,000 calls were purchased for an average premium of $0.27 each. Premium on these calls has skyrocketed 2,000% during early trading, and now cost investors $1.10 apiece as of 11:15 am (ET). Jacobs’ overall reading of options implied volatility is up sharply on the increase in demand for option contracts, and currently stands 18.7% higher to 35.61%.

Harley-Davidson, Inc. (HOG) – One Harley-Davidson optimist celebrated the 3.05% rally in the price of the motorcycle maker’s shares to a new 52-week high of $32.80 this morning by banking gains on a previously established long call position. Additionally, the same investor is perhaps expecting continued bullish movement in the price of the underlying shares through May expiration because he initiated a new bullish stance on the stock at a higher strike price. It looks like the trader originally purchased approximately 6,000 calls at the now in-the-money May $31 strike for an average premium of $1.61 apiece back on April 5, 2010, when shares traded at an intraday high of $31.66. The investor sold the contracts today for an average premium of $2.42 each, thus enjoying net profits of $0.81 per contract. Finally, the HOG-bull extended bullish sentiment on the stock by purchased 6,000 fresh calls at the higher May $33 strike for an average premium of $1.41 per contract. The new call position prepares the investor to make money should HOG’s shares rally another 4.9% from the current price to surpass the effective breakeven point at $34.41 by May expiration day.

BRICs Report: Is the Samba Over for Brazil?

This is part of a four-article series discussing the outlook for and ways to invest in the BRICs countries.

Brazil is world renowned for its beaches, its potent caipirinhas and, of course, the Rio de Janeiro Carnival. Onto more serious topics, it also is a world leader in alternative energy production and happens to be sitting on one of the world�s largest supplies of traditional energy. Brazil�s deep-water Atlantic fields will make the country a force to be reckoned with in the oil market for the foreseeable future.

But with Brazilian stocks drifting downward for the past two years — and showing significant weakness since March of this year — it is fair to ask: Is the party over?

The short answer is �no,� though investors might want to consider sitting out a song or two.

The Country of the Future

Brazilians have said for decades, tongue in cheek, that Brazil is the country of the future — and that it always will be. It seems that every time Brazil started to make real development progress, the familiar hurdles of hyperinflation, class warfare and government instability would get in the way. Brazil, for all of its potential, had never quite been able to reach that tipping point of middle-income, democratic stability — but there is real reason to believe that this finally might be changing.

Brazil�s domestic economy is healthy, and the country�s living standards continue to rise at a clip not seen in a generation. According to Morningstar, Brazilians classified as �middle class� grew from 38% of the population in 2001 to 55% last year. For a country of Brazil�s size, that amounts to more than 32 million people.

To give a little perspective, if the 32 million Brazilians that became middle class over the past decade were an American state, they would be more populous than Texas and only slightly smaller than California.

Why the Middle Class Matters

Revolutions are rarely born in the tree-lined streets of suburbia. Once you take on the trappings of middle-class life — a job to keep, a home to maintain, neighbors to keep up with — you have a stake in the system. Those with a stake in the system have an interest in stability, and stability breeds prosperity.

Furthermore, a consumer-based economy is far less volatile than one dominated by commodities and exports. Brazil still depends far too heavily on both — and I will address that shortly — but its middle-class consumer market is making its presence felt.

Before I go any further, I should note that �middle class� means something very different in Brazil than it does in the United States. Someone earning $10,000 per year and living in a 500-square-foot home (which they might or might not have proper title to) would be considered middle class in Brazil. It might not be life in a 1950s-themed Norman Rockwell painting, but it is enough to provide for basic needs and to allow a reasonable budget for discretionary purchases such as contemporary clothes, mobile phones and the occasional meal in a restaurant.

Collectively, Brazil�s retail market is worth about $230 billion, and I only see this growing in the years ahead.

China: The Elephant in the Room

If Brazil�s outlook is so rosy, why have its stocks underperformed both the S&P 500 and the iShares MSCI Emerging Markets ETF (NYSE:EEM)?

To be sure, some of the weakness is because of the strength of the Brazilian currency, the real, and fears that it might be due for a correction. Already, Brazil�s industrial firms have suffered from the same �hollowing out� that ravaged American manufacturers in the 1980s and 1990s during the years of the strong dollar. Brazil�s government has vowed that it will not lose a �currency war� with other emerging markets, and investors take those claims seriously.

But the biggest worry has little to do with Brazil and everything to do with China. China might or might not be heading for a �hard landing� (it is my view that China�s slowdown will be relatively mild), but Chinese commodity consumption should moderate in the months and years ahead as its pace of urbanization slows. And given that Europe looks to be mired in recession and crisis for a while, the West is not likely to support higher prices, either. This presents a major risk to Brazil and other commodity-exporting nations like Australia and South Africa.

So, even while Brazilian stocks are cheap — the stocks making up EEM collectively trade for just 10 times earnings — the fear is that the earnings might come under pressure as commodity demand inevitably falls.

Though I tend to take a contrarian position when �everyone� agrees on the direction of commodity prices, this time I am tempted to agree. I cannot see commodities enjoying a sustained uptrend when final demand is weak and prices already are artificially inflated by new ETFs, mutual funds and other �investment� products that track commodities. (Yes, �investment� should be in quotation marks. An ETF or mutual fund that rolls over commodities futures contracts is not an investment. It is a speculation, and given that many popular commodities are trading in contango, a rather poor one.)

Still, I would not want to bet against the Brazilian consumer. The growth of the middle class is real, and I believe the change is durable this time.

Investors probably will want to shy away from the popular iShares MSCI Brazil ETF (NYSE:EWZ) because of its high concentration in materials and energy. But investors with a longtime horizon might find value in some of Brazil�s world-class consumer-oriented stocks. I have written favorably about mega-brewer AmBev (NYSE:ABV), and I would reiterate that view today. AmBev is a fantastic way to benefit from rising incomes among Brazil�s newly minted middle-class consumers, and it pays a great dividend of 3.7%.

Another good option would be Arcos Dorados (NYSE:ARCO), which was one of the stocks selected in InvestorPlace�s Ten Best Stocks for 2012 contest. Arcos Dorados is the largest McDonald’s (NYSE:MCD) franchise operator in Latin America, and about a third of the company�s revenues come from Brazil. Arcos has had a rough start to the year, but the stock should be a fantastic long-term vehicle to play rising living standards in the region.

Other BRICs reports:

  • From Russia With Oil
  • Grow, China, Grow!
  • India: Vetting the Vowel

Charles Lewis Sizemore, CFA, is the editor of the Sizemore Investment Letter, and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he did not hold a position in any of the aforementioned securities. Sign up for a FREE copy of his new special report: �Top 3 ETFs for Dividend-Hungry Investors.�

3 Ways to Sell Short

Investors can short three things: an individual company, a market segment, or the market itself.

  • A Company: Most people associate shorting with companies, and there is a tremendous and growing volume in short positions in many firms. To be successful, an investor must look at the liquidity of the stock or the put contracts associated with that stock, not just the fundamentals of a company. If a mid-cap stock has a small float (shares outstanding and available) and very few put contracts are traded every day, it will be difficult, perhaps impossible, to short the stock. And when you want to exit, it may not be possible at a fair price if there is too little liquidity in the stock.

  • A Market Segment: You may know that you can use indexes, Exchange-Traded Funds and other instruments to go long a sector, such as buying the Energy Select Sector SPDR (XLF) if you want to go long oil. The opposite is also true — if you think oil, semiconductors, biotech or whatever is about to swoon, you can buy puts on these sectors. For example, if you think corporate software purchasing is going to slow down and want to short the software industry, you can buy puts on the SWH, the Software HOLDRs Trust.

  • The Market: Many indices and tradable instruments can be shorted if you see the market going down, with puts on the S&P 500 and the Nasdaq arguably the most-popular instruments for individual investors. This is a simple process — you simply buy a put on any one of a number of indices with an expiration date that fits your view of the market. A good example of this are SPDR calls and puts — contracts on baskets of stocks mirroring the S&P 500.

  • Top Stocks For 4/9/2012-12

    Power 3 Medical Products Inc. (PWRM)

    Breast cancer (malignant breast neoplasm) is cancer originating from breast tissue, most commonly from the inner lining of milk ducts or the lobules that supply the ducts with milk. Cancers originating from ducts are known as ductal carcinomas; those originating from lobules are known as lobular carcinomas.

    In 2010, an estimated 207,090 new cases of invasive breast cancer were expected to be diagnosed in women in the U.S., along with 54,010 new cases of non-invasive (in situ) breast cancer.

    Power 3 Medical Products Inc’s product BC-SeraPro is a proteomic test for the diagnosis of breast cancer. This test is designed to measure the quantitative expression level of 22 protein biomarkers in the serum that differentiate between breast cancer patients and control subjects. The level of the biomarkers from the patient’s serum sample is compared to the Power3 Medical Products’ patient database.

    Power3 Medical Products, Inc. is a leading bio-technology company focused on the development of innovative diagnostic tests in the fields of cancer and neurodegenerative diseases such as Alzheimer’s disease, Parkinson’s disease and amyotrophic lateral sclerosis (commonly known as ALS or Lou Gehrig’s disease). Power3 Medical Products, Inc. applies proprietary methodologies to discover and identify protein biomarkers associated with diseases.

    For more information please visit official website of PWRM: http://www.power3medical.com

    National Health Partners, Inc. (NHPR)

    Vitamins help our bodies perform their metabolic functions. Water-soluble vitamins, including the B vitamins and vitamin C, are excreted quickly, but fat-soluble vitamins, including A, D, E, and K, are stored in the body. Vitamin deficiencies can cause certain diseases, but excessive amounts of fat-soluble vitamins can also lead to health problems. Nutrition involves the intake and utilization of food substances by our bodies. Proteins, fats, and carbohydrates (sugars and starches) supply us with the calories we need for energy. Vitamins, minerals, and dietary fiber supply our bodies with other important nutrients. In addition to these nutrients, water is an essential element to a healthy diet.

    National Health Partners, Inc. is a national healthcare savings organization that provides discount healthcare membership programs to uninsured and underinsured people through a national healthcare savings network called “CARExpress.” CARExpress is one of the largest networks of hospitals, doctors, dentists, pharmacists and other healthcare providers in the country and is comprised of over 1,000,000 medical professionals that belong to such PPOs as CareMark and Aetna. The company’s primary target customer group is the 47 million Americans who have no health insurance of any kind.

    According to the company they are providing top quality vitamins, supplements and other health products at savings of 25-35% off retail prices to meet your needs. General product categories include: Personal Care, Diet & Weight Control, Natural Remedies, Cleansing & Detoxification, Sports Nutrition, Sexual Wellness, Mental & Physical Energy, Anti-Aging and Supplements.

    For more information about NATIONAL HEALTH PARTNERS, INC. visit its website at www.nationalhealthpartners.com

    Wal-Mart Stores Inc. (NYSE:WMT) announced an initial commitment of $5 million (USD) in cash and in-kind donations for emergency relief efforts in response to the tragic 9.0 magnitude earthquake and resulting tsunami that have left thousands dead and tens of thousands homeless in Japan. Also, Walmart operations around the world are planning or have implemented fundraising drives among associates and customers to provide additional relief funds for the victims. Within the first three days following the earthquake and tsunami, Walmart associates, working across Japan, quickly took action to help by setting up distribution points for relief items in their store parking lots when the stores themselves were too damaged to open. In the immediate aftermath, their stores and distribution centers provided in-kind donations to the victims including water, food and sanitary items.

    Wal-Mart Stores, Inc. operates retail stores in various formats worldwide. The company�s Walmart U.S. segment offers meat, produce, deli, bakery, dairy, frozen foods, floral, and dry grocery; health and beauty aids and small appliances through discount stores, supercenters, and neighborhood markets, as well as through walmart.com.

    Apache Corp. (NYSE:APA) announced that Dave Gilbronson and Mark Bright will lead Apache’s oil and gas marketing organization, which will be divided along geographic lines. Gilbronson has been appointed to vice president of international marketing and Bright to vice president of North America marketing. Gilbronson, director of risk management since 2009, joined Apache in 1988. Earlier, he was vice president of commercial and governmental affairs in Argentina, operations general manager for Apache Egypt Companies, managing director of Apache Poland, and director of international technical services based in Houston. He was Apache’s first employee to arrive in Cairo in 1996 and served as general manager of Qarun Petroleum Co.

    Apache Corporation, together with its subsidiaries, engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids.

    Alamo Group Inc. (NYSE:ALG) announced that its Founder and Chairman of the Board, Donald J. Douglass will not stand for re-election and will retire from the Board after the Annual Meeting of Shareholders on May 5, 2011.

    Alamo Group Inc. provides equipment and related replacement parts for maintenance and agriculture. It offers industrial equipment, such as boom-mounted mowers and other types of cutters for heavy-duty, and pothole patchers; and products for excavation, grading, shaping, and other tasks involved in land clearing, road building, or maintenance.

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    Saturday, December 29, 2012

    This Just In: More Upgrades and Downgrades

    At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." While the pinstripe-and-wingtip crowd is entitled to its opinions, we've got some pretty sharp stock pickers down here on Main Street, too. (And we're not always impressed with how Wall Street does its job.)

    Given this, perhaps we shouldn't be giving virtual ink to "news" of analyst upgrades and downgrades. And we wouldn't -- if that were all we were doing. Fortunately, in "This Just In," we don't simply tell you what the analysts said. We also show you whether they know what they're talking about.

    Today, we're going to take a look at three high-profile ratings moves on Wall Street: A suggestion to sell Sirius XM Radio (Nasdaq: SIRI  ) , balanced by a massive rise in price target on solar operator First Solar (Nasdaq: FSLR  ) , and a bona fide upgrade for Advanced Micro Devices (NYSE: AMD  ) . Let's dive right in.

    Barclays bashes Sirius
    We'll get the bad news out of the way first. This morning, Barclays Capital took (ahem) serious issue with my suggestion last week that Sirius XM was undervalued. Initiating coverage with an underweight rating (for stock novices, that's Wall Street-speak for "sell"), Barclays warned that after running up 21% over the past year -- and 1,650% from its 2008 lows (!) -- Sirius' share price now prices in all of the company's "healthy ... material�growth in EBITDA," and more.

    The analyst warns investors not to discount the danger from upstart rivals such as Pandora (NYSE: P  ) , which Barclays calls a "real" threat in, among other things, the market for car audio entertainment. Barclays' biggest concern about Sirius, though, seems to be that investors are counting on more growth than the company can deliver. Rather than the 30% long-term growth projection that I cited last week, Barclays thinks 19% annualized is a more realistic target. And given that Sirius costs 21 times free cash flow today, this makes the stock look a bit pricey.

    Barclays still likes the company, mind you. The banker simply suggests that if you want to own Sirius stock, you should take a more roundabout route, and instead buy major shareholder Liberty Media (Nasdaq: LMCA  ) , which Barclays asserts gives investors exposure to Sirius at roughly a 25% discount to shares of Sirius proper, even if you discount Liberty's other assets by 20%.

    Can't argue with that. I like Sirius myself, and have publicly recommended it in my CAPS account. But if you can get the same shares at a discount, and are willing to wait for a liquidity event to unlock the value of Liberty's holdings, then more power to you.

    Reaching for the stars at First Solar
    Next up, First Solar got a big thumbs-up from Auriga U.S.A. this morning, when the analyst crunched some numbers on the stock and came to an astounding conclusion: First Solar isn't worth the $41 Auriga used to think it should cost, or even the $47 that investors are paying for it now. In fact, First Solar is worth an astounding $53 a share (!), or nearly 30% more than previously estimated. Gee, who'dathunkit?

    There are a couple interesting things about this ratings move. First, there's almost nothing behind it. Auriga itself admits that "our revenue and EPS estimates have not changed." Only "our stance on First Solar's valuation has." According to the folks at streetinsider.com, Auriga has decided that "solar PV valuations are for now anchored to tangible book value." But in fact, First Solar's TBV was most recently pegged at... $41.30 per share. (You read that right. The same price Auriga had First Solar pegged at before the price target hike.)

    The second interesting thing here is Auriga itself. In stark contrast to Barclays, which ranks in the top 10% of investors we track here at CAPS, Auriga ranks in the bottom 20% of investors, "boasting" a record of underperforming the market by more than 6 percentage points per pick. If that's the kind of advice you want to listen to when choosing to invest in a stock, well, good luck. Personally, when I see that First Solar has burned through $520 million in negative free cash flow over the past 12 months, let's just say that "buy" is not exactly the first reaction that comes to mind.

    Advanced Micro Devices inside?
    Last but not least: AMD. Citing predictions of 50% growth in production capacity in 2012, and "improved execution at the Intel-alternative," ace tech investor Longbow Research upped its rating on AMD to "buy," and slapped a $10 price target on this $7 stock.

    Longbow's projecting $7 billion in sales at AMD this year, and $0.82 per share in pro forma earnings (followed by $7.7 billion revs for 2013, and $0.89 per share). The multiples implied by these estimates -- nine times current year earnings and eight times forward -- don't look out of line for the 10% long-term growth Wall Street expects to see at AMD or even the 8.5% near-term growth Longbow foresees.

    And what can I say? Longbow may be right about this one. Several months ago, I highlighted AMD's progress in transitioning from burning cash to churning it out. Last year, the company proved me right by ending 2011 with $132 million in free cash flow to its credit. That's still not enough to get me enthused about the stock, but it's enough that I'll say this: AMD is no longer an obvious short. In fact, it just might be as big of a bargain as Longbow suggests.

    Whose advice should you take -- mine, or that of "professional" analysts like Barclays, Auriga, and Longbow? Check out my track record on Motley Fool CAPS, and compare it to theirs. Decide for yourself whom to believe.

    And if you're looking for more profitable investing ideas in the world of tech, read the Fool's new -- and free -- report on the industry: "The Next Trillion Dollar Revolution."

    Gold, copper slip further on dollar strength

    SAN FRANCISCO (MarketWatch) � Gold futures broke off a two-day losing streak on Tuesday, rising on a lower dollar after Greece reportedly neared a deal that would pave the way to more international financial aid to the embattled euro-zone country.

    Gold for April delivery �rose $23.50, or 1.4%, to settle at $1,748.40 an ounce on the Comex division of New York Mercantile Exchange.

    It overcame a weak start, picking up momentum as the dollar turned lower on the Greek reports. Investors also parsed U.S. Federal Reserve Chairman Ben Bernanke�s hearing in Congress.

    �We are showing a quite strong rally in the gold market� as Bernanke�s statements continued to indicate more monetary easing �and also on hopes for Greece,� said Jim Steel, a precious metals analyst with HSBC in New York.

    Investors hoped the situation in Greece would soon be resolved, which pushed the euro EURUSD �higher against the dollar, he added.

    Echoing comments made before Friday�s strong U.S. jobs report, Bernanke said the economic outlook remains �uncertain,� signaling the Fed chairman was not backing away from a recent Fed pledge to keep interest rates near zero until at least 2014.

    A rally for oil and gold�s technical position also helped Tuesday�s gains, Steel said. It was key that gold held above $1,700 an ounce despite the recent weakness, he added.

    Click to Play China to the rescue for the euro zone?

    China's premier indicates Beijing should help Europe with its debt crisis, but that message may be a tough sale to China's people.

    The metal ended lower Monday, pressured by a higher dollar and moving alongside stocks and other commodities, with the uncertainty surrounding the Greek situation failing as a catalyst.

    On Tuesday, Greece was reportedly close to an agreement with lawmakers on additional austerity measures seen key for a deal with bondholders and any further aid from the international community. Read story on Greece.

    Hopes of a Greek deal pushed the euro to a two-month high. The dollar index DXY , which compares the U.S. unit to a basket of six currencies, reversed course mid session and traded lower, at 78.627, compared with 79.064 late Monday. Read more on currencies.

    Risks about Greece and the euro zone remain, however, analysts at Commerzbank said in a note to clients. But they would still be beneficial for gold, as the �debt-ridden country (would not) receive any further bail-out package which would inevitably lead to Greece�s bankruptcy. Gold should therefore remain well supported,� they said.

    Other metals tracked gold higher, with copper turning positive towards the end of the session.

    March copper �rose 1 cent, or 0.3%, to $3.88 a pound.

    March silver �added 44 cents, or 1.3%, to $34.19 an ounce.

    Platinum for delivery in April �advanced $25, or 1.5%, to $1,654.80 an ounce.

    Palladium for March �veered between small gains and losses, but ended $3.20 higher, or 0.5%, at $709.15 an ounce.

    Friday, December 28, 2012

    Why Apple Stock Is Headed for $500 – And Beyond

    Even with the product lineup it has now, Apple Inc. (Nasdaq: AAPL) stock has enough fuel in the tank to propel it to at least $500 a share.

    But it's about to add a booster rocket.

    According to several analysts, Apple is working on a TV-set device that could disrupt the TV set industry much as its other devices have done in their industries.

    This new device - to simplify, let's call it the "iTV" - is not to be confused with the existing Apple TV, a set-top box that allows users to access digital content from the Internet on their televisions.

    We're talking about a full-fledged television, albeit one with Apple's special touch. And that is what will push Apple stock even further skyward.

    In a note to clients last week, Piper Jaffray analyst Gene Munster made a case that Apple is already building the iTV, which he expects could add billions of dollars to the Cupertino, CA company's top line.

    "We believe that of the estimated 220 million flat panel TVs sold in 2012, 48% or 106 million units will be internet-connected, of which Apple could sell 1.4 million units," Munster wrote. "We believe an Apple Television could add $2.5 billion or 2% to revenue in 2012, $4.0 billion or 3% in 2013 and $6.0 billion in 2014."

    Munster said he had met with Asian component suppliers that said they knew of prototypes of the new Apple device, and that the company had filed several patents for television interfaces.

    But the definitive piece of evidence is a quote from Steve Jobs biographer Walter Isaacson's just-released book in which Jobs makes it clear that an iTV was the company's next major project.

    "I'd like to create an integrated television set that is completely easy to use," Jobs said. "It would be seamlessly synced with all of your devices and with iCloud. It will have the simplest user interface you could imagine. I finally cracked it."

    That "simplest user interface" is the key to why an iTV would be such a game-changer.

    Tomorrow's TVThe iTV will not use a remote of any kind. It will be voice-controlled, using the same Siri technology Apple introduced earlier this month with the iPhone 4S.

    "It's the stuff of science fiction," writes Nick Bilton in The New York Times. "You sit on your couch and rather than fumble with several remotes or use hand gestures, you simply talk: "Put on the last episode of Gossip Girl.' "Play the local news headlines.' "Play some Coldplay musicvideos.' Siri does the rest."

    The iTV was waiting for Siri - technology that allows people to simply tell their television what they want to watch, whether it comes from the Internet or from a programming provider like Comcast Corp. (Nasdaq: CMCSA) or DIRECTV (Nasdaq: DTV).

    "As the line between television programming and Web content continues to erode, a Siri-powered television would become more necessary," Bilton writes. "You aren't going to want to flip through file folders or baskets of content, checking off what you want. Telling Siri to "play videos of cute cats falling asleep' would return an endless YouTube stream of adorable napping fur balls."

    Bilton said that Apple has been working on an iTV for years. About a year ago, an Apple employee even told him "it was a guaranteed product for Apple," explaining, "Steve thinks the industry is totally broken."

    Apple has a long track record of developing groundbreaking products over an extended period of time, rather than rushing a flawed product to market. If the technology isn't ready to support its concepts, Apple will sit on an idea until it is.

    That was true of the original iPod, which required the invention of a miniature hard drive. It was also true of the iPhone, which required the development of touch-sensitive screens. (And even then, Steve Jobs rejected the first two prototypes.)

    A New Slice of AppleThe best part of iTV is that it's yet another totally new business for Apple to add to revenue. Apple's other "new" businesses - the iPhone and the iPad - together accounted for 63% of the company's revenue in the September quarter.

    What makes Apple so compelling, in fact, is that all of its core businesses are growing save for the iPod, which is getting cannibalized by the more profitable iPhone and iPad.

    The almost forgotten Mac business was up 26% year-over-year in the September quarter and outpaced Windows PC sales by a six-to-one margin. According to data from research firms Gartner Inc. (NYSE: IT) and IDC, Mac sales have grown faster than Windows PC sales for 22 straight quarters.

    Sales of Apple's iPad were up 166% year over year, with Apple's market share in tablets still at 73.4% despite increasing competition from Samsung Electronics, Motorola Mobility Holdings Inc. (Nasdaq: MMI) Sony Corp. (NYSE: SNE) and Research in Motion Limited (Nasadq: RIMM).

    While growing competition from mobile devices running Google Inc.'s (Nasdaq: GOOG) Android operating system as well as Microsoft Corp's (Nasdaq: MSFT) Windows 8 due out next year is among Apple's chief challenges going forward, the company has proven its ability to win customers in the marketplace.

    iPhone DisconnectApple's competition has made headway against the iPhone lately, but that's probably owing more to the delay of the debut of the iPhone 4S.

    Last week U.K.-based Strategy Analytics said that Samsung had overtaken Apple in the third quarter as the world's top seller of smartphones, and that Apple's market share had slipped to 14.6% from 17.4% a year ago.

    While the iPhone disappointed in the September quarter by selling just 17 million units versus 20.3 million units in the June quarter, the device nevertheless has strong growth prospects.

    Apple said it expects record iPhone sales this quarter, boosted not just by the new iPhone 4S but also by rapid sales growth in emerging markets like China, which is proving a boon for the company. Apple sales to China accounted for 16% of company revenue in its 2011 fiscal year - up from 12% in 2010 and just 2% in 2009.

    "Apple's ongoing penetration ofChinaand other emerging markets likely can be measured in years and stands to have a significant, positive impact on the growth profile," JPMorgan Chase & Co. (NYSE: JPM) said in a research note.

    It all adds up to a higher valuation for Apple stock over the next year. A rise to the $500 level represents a nice 25% increase, and it's almost certain to go much higher.

    "I think they're crazy on track," Ezra Gottheil, an analyst with Technology Business Research, told Computerworld, "and still a rocket, even with this decline of the iPhone."

    News and Related Story Links:

    • Money Morning:
      How the Legacy of Steve Jobs Could Haunt Apple
    • Money Morning: Apple Inc. Surges Ahead of ExxonMobil to Become World's Most Valuable Company
    • Money Morning: Apple Inc. (Nasdaq: AAPL) to Unveil New iCloud Service With Special Appearance by CEO Steve Jobs
    • Money Morning:
      Post-PC Era Poses Challenge to Techs: Adapt or Face the Consequences
    • Forbes: Siri Is Apple's Post-Jobs Ticket To $1000
    • Bloomberg News: Apple Effort to Develop TV Is Said to Be Led by ITunes Creator Jeff Robbin
    • Minyanville:
      Four Reasons ITV Will Be The Easiest Money Apple's Ever Made
    • The Financial Times:
      Samsung overtakes Apple as top smartphone seller

    The Top-Growing Insurance Broker Stocks

    Why are investors willing to pay only 10 times earnings for some stocks, but 20, 50, even 100 times earnings for others?

    The short answer: growth. Companies that can grow their earnings meaningfully could make lofty current P/E ratios look cheap in hindsight.

    Of course, any company can promise a rosy, growth-rich future. Figuring out which companies can actually deliver is far trickier. In this series, I take the first step by identifying companies that have put up the best growth track records in their respective sectors.

    Below, I've listed the top publicly traded sales growers in the insurance broker industry over the last five years. Here's how to interpret each data column.

    • Five-year sales growth: I rank each company's sales growth, to capture its pure trailing expansion without regard to the vagaries of earnings.
    • Five-year EPS growth: Since sales growth means nothing if it doesn't ultimately fall to the bottom line, I've also included each company's five-year trailing EPS growth rate.
    • Five-year analyst estimates: This column shows us how much EPS growth analysts expect over the next five years. Just keep in mind that analysts tend to grossly overestimate a company's prospects.
    • Five-year ROIC range: Return on invested capital basically shows you how efficiently a company is converting its debt and equity into profits. We want companies that can do a lot with a little. By looking at the five-year range, we can start to gauge both the power and the consistency of a company's profit engine.

    Company

    5-Year Sales Growth

    5-Year EPS Growth

    5-Year Analyst Estimates

    5-Year ROIC Range

    eHealth (Nasdaq: EHTH  ) 23.4% 17.6% 13.3% 9.5% / 14.4%
    Willis Group Holdings (NYSE: WSH  ) 7.9% (6.6%) 11.1% 9.1% / 16.2%
    Crawford & Co. (NYSE: CRD-B  ) 6.8% 22.6% 12.5% 4.7% / 18.4%
    Arthur J. Gallagher & Co. (NYSE: AJG  ) 6.1% 3.6% 9.3% 8.4% / 11.9%
    Aon (NYSE: AON  ) 5.0% 11.4% 9.3% 6.9% / 9.5%
    Brown & Brown (NYSE: BRO  ) 3.0% (2.0%) 13.0% 9.5% / 16.2%
    Marsh & McLennan (NYSE: MMC  ) 0.5% 17.8% 9.0% 3.6% / 9.6%

    Source: S&P Capital IQ.

    Use the table above as a first step to help you generate ideas for your own further research. Once you identify stocks worth a closer look, the following three steps will help you further assess their growth prospects:

    • Carefully study the table for possible danger signs, such as high sales growth but low EPS growth, analyst growth expectations significantly trailing past growth, and low ROIC figures. Then follow the trail. For example, we'd want to delve into why Willis has negative EPS growth despite its moderate sales growth. On the positive side, Marsh & McLennan has strong EPS growth despite flattish sales growth.
    • Find out how the company achieved its prior growth: organically, or via acquisition? Can it sustain that previous growth? To further our Marsh & McLennan example, we'd want to note it has made a number of acquisitions. We'd further want to delve into its low-for-the-group ROIC range.
    • Pay attention to how management plans to implement its growth plans. Does its strategy seem prudent and plausible to you?

    Remember: The more profitable, efficient, and predictable growth a company can achieve, the more we investors should be willing to pay.

    Learn more about any of the stocks that interest you by adding them to our My Watchlist tool. You'll get access to all the latest Motley Fool analysis, organized by company.

    Older workers capture more new jobs

    Older workers are snaring an outsized share of job gains in the economic recovery as they put off retirement amid shrinking nest eggs, changes in Social Security benefits and improved health.

    They're not necessarily limiting the pool of jobs for younger workers, says Dean Maki, chief U.S. economist for Barclays Capital. More-experienced employees are often more productive and earn higher salaries, generating economic growth that itself yields additional jobs, he says.

    In February, employment for workers 55 and older rose by 277,000 from January, or 65% of the total 428,000 gains, according to the Labor Department's household survey, which is used to calculate the unemployment rate.

    The more widely reported 227,000 total job additions in February is based on Labor's survey of employers, which doesn't include farm workers and the self-employed and often undercounts start-up firms. The government's March jobs report is due Friday.

    Since the start of the recession in December 2007, employment for those 55 and older is up by 3.9 million, even as total payrolls have fallen by 4.2 million.

    It's not that the recession has been easy on graying workers. Many older Americans laid off in the downturn won't work again, says Sara Rix, senior adviser for the AARP Public Policy Institute. In Februrary, they were unemployed an average 54.1 weeks, vs. 39.1 weeks for all workers, Labor figures show.

    Rather, their ranks are swelling as Baby Boomers age, and they're working later in life, Rix says. The portion employed or looking for work jumped to 40.4% in February from 40.1% in January. It's up from 38.3% in February 2007.

    "What you are seeing is more people pushing back" retirement, Rix says.

    Among the reasons is a shift from traditional pensions to less-secure 401(k) plans that were hammered in the recession, says Steven Sass of the Center for Retirement Research at Boston College. About a third of 5,000 50-plus Americans surveyed by AARP last year said they planned to delay retirement.

    Also, the age at which Americans can get full Social Security benefits is gradually rising, and life expectancy for 65-year-old men is up by 3.5 years since 1980. Meanwhile, the U.S. economy's long-term shift from manufacturing means jobs are less physically demanding, Sass says.

    Financial adviser Peter White, 87, of Williamstown, Mass., retired in 1987 but returned to work in the late 1990s to keep busy and help support two of his children, who are in their 20s. "You can't sit around looking at the wall all day."

    Yo: In Russia, Two Dots Can Mean a Lot

    MOSCOW—When Alexander Shevelyov tried to register his son's birth earlier this year, two small dots gave him one big problem.

    While his wife's passport has the dots over the letter ë in the final syllable of her surname, Mr. Shevelyov's doesn't. "I couldn't register as my son's father," he says, because the spellings didn't match.

    In Russian, the two dots show that the letter should be pronounced "yo" rather than "ye."

    Enlarge Image

    Close James Marson/The Wall Street Journal

    Viktor Chumakov, an 80-year-old former engineer, has waged a campaign for two decades against what he calls the laziness of leaving out the two dots on the letter. His sweater vest reads, "Yo is yours."

    Though technically ë qualifies as a separate letter, it has never quite gotten the same respect as other members of the Cyrillic alphabet. Often writers leave out the dots, as it is usually clear to most Russian speakers when what looks like a "ye" is really a "yo." That is why Russians know Stalin's successor as Nikita KhrushchYOv, while the rest of the world thinks he is KhrushchYEv.

    The distinction has bedeviled bureaucrats and stymied students of the language for decades, but a solution may be at hand after Mr. Shevelyov wrote to Education Minister Dmitry Livanov in July to complain.

    Unexpectedly, Mr. Livanov, who spends most of his time on major overhauls of the university and school systems, took up his cause.

    "We absolutely have to fix this problem. Millions are suffering," Mr. Livanov said in September, promising to look into legal changes to, as it were, dot all the e's, where necessary.

    The ministry won't say just how it plans to do this, but Mr. Livanov's pledge has rekindled the centuries-old debate over the letter, one that for a small group of enthusiasts goes far beyond the tiny drops of ink.

    Russia isn't the only country to debate peculiar letters: In Germany, some leading writers and newspapers called for a boycott of new spelling rules introduced in 1996 that included the partial replacement of the sharp "s," which looks somewhat like a capital B.

    But here, the letter ë incites passions and debate that transcend orthography, touching on history, defense of the motherland and amusement at the letter's hint of vulgarity.

    Frowned on for decades by some purists after it was invented at the end of the 18th century to reflect colloquial pronunciation, the letter was promoted under Stalin, becoming obligatory in schools and popularized by the Communist Party newspaper.

    One often-recounted version tells how the Soviet dictator grew angry after he read a decree where generals' names were written with e, not ë. (Historians say there is no documentary evidence he ordered the letter's use.)

    Now, the letter has a cultlike following that has honored it with monuments in two provincial towns, written books about its use and computer programs to make sure the dots are never left out.

    It also has a mischievous side, bringing to mind a Russian swear word meaning "copulate," some forms of which start with ë.

    Fans of the letter call themselves yofikators—or champions of the letter ë—and insist that the dots be used in all cases when the letter is pronounced "yo." Their opponents say the dots are optional and dismiss the yofikators as amateurs and sticklers for artificial rules.

    Viktor Chumakov, the self-styled Chief Yofikator of Russia, has waged a quixotic campaign for nearly two decades from his Moscow apartment against what he calls the laziness of leaving out the two dots.

    The 80-year-old former engineer says this lies at the heart of what has been wrong with Russia since the death of Stalin.

    "There was an erosion of discipline after Stalin died. Russian slovenliness and slackness took over," he says.

    He has penned complaints to newspaper editors and label writers, pestered the Kremlin to change the sign to a presidential office and taken a marker pen to a supermarket sign. With a broad grin, he leafs through a book crammed with packaging and labels for nuts, fish, beer and other foodstuffs that he says were altered after he wrote to the companies.

    But it is the academics from the Russian Language Institute that he sees as his greatest opponents.

    Enlarge Image

    Close

    The state-run institute says the dots, known to linguists as a diacritic, are optional and need only be used in proper names or where a word's meaning would otherwise be unclear.

    Mr. Chumakov sees a more sinister motivation. He alleges the institute is at the heart of a plot by the Central Intelligence Agency to weaken Russia.

    "In any country, the alphabet is an instrument to bring order," he says, carefully brushing a loose wisp of white hair behind his ear. "If it isn't respected, everything falls to pieces."

    Academics at the institute find his passion for ë hard to fathom.

    "We are well aware of Mr. Chumakov and his statements," says its deputy director, Maria Kalenchuk. "The yofikators are artificially drawing attention to the letter. It's a kind of parody. Some people collect stamps; others like the letter ë."

    "There is absolutely no truth to this allegation," a CIA spokesman said in an email. "The Agency supports the practice of good grammar and pronunciation in any language."

    The letter ë is popular for brands, perhaps because its overtones create buzz.

    Russian leader Vladimir Putin hinted at a government meeting last year that sales of the hybrid electric car Yo-mobile—produced by one of Russia's richest men, Mikhail Prokhorov—may be helped by its name.

    "What have you called it, the Yo-mobile?" Mr. Putin asked, breaking into a smile as officials and businessmen tittered.

    The company says it is tapping into the letter's status as a symbol of Russia's cultural heritage.

    U.S. Ambassador to Russia Michael McFaul was tripped up by the letter in July when he tweeted he was heading to "Yoburg," a vulgar-sounding abbreviation for Yekaterinburg.

    After another Twitter user pointed out the "horny overtones," Mr. McFaul apologized. "The richness of the Russian language on Twitter continues to amaze me," he wrote.

    Mr. Chumakov waves aside talk of swear words and says he prefers to think of the sound as the pop of a cork from a bottle. Asked whether his quirky love of the letter is an ironic joke, he flashes an affable smile, before protesting the seriousness of his endeavors.

    For Mr. Shevelyov, whose complaint to the education minister reignited debates overёthe letter, it is neither a joke nor a source of fascination.

    "I can understand love for one's country and language. But a letter?" he says. "I just wish they'd fix the problem with documents."

    Financial stocks rise on economic data

    SAN FRANCISCO (MarketWatch) � Financial stocks led the broader market to close higher Thursday as U.S. jobless claims remained steady and housing prices rose slightly.

    Leading the rise in the sector were shares of Federated Investors Inc. FII with closing up 5.9%. Shares of Principal Financial Group PFG �and Hartford Financial Services HIG �also rose, closing up 3.3% and 2.4%, respectively.

    Click to Play MF Global's rush to move cash eyed

    Investigators probing the collapse of MF Global are scrutinizing two money transfers made during the securities firm's final days.

    Analysts at Sterne Agee raised their rating on Principal Financial to buy from neutral. Meanwhile, Macquarie Securities initiated coverage with an outperform rating.

    Earlier, the Federal Housing Finance Agency said U.S. home prices rose 0.7% in December. Read more on housing prices.

    Also, U.S. jobless claims remained steady at 351,000 with the four-week average falling to its lowest in four years. Read more on jobless claims.

    The Financial Select Sector SPDR ETF XLF , which tracks financial stocks in the S&P 500 Index SPX , rose 0.9%, and the SPDR S&P Bank ETF KBE �advanced 1.1%.

    Shares of Citigroup Inc. C rose 1.1% following a report that the bank intends to sell its roughly 10% stake in Indian mortgage group Housing Development Finance Corp. on Friday, a transaction that could garner up to $2.07 billion.

    On the Dow Jones Industrial Index DJIA , Bank of America Corp. BAC shares rose 0.9%, J.P. Morgan Chase & Co. JPM �shares advanced 1.1%, Travelers Cos. TRV �shares closed up less than 0.1% and American Express Co. AXP �shares declined 0.2%.

    Other notable gainers included Charles Schwab Corp. SCHW , State Street Corp. STT , IntercontinentalExchange Inc. ICE , and Leucadia National Corp. LUK , all of which closed up 3% or more.

    Goodrich Petroleum Shares Popped: What You Need to Know

    Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

    What: Shares of oil and gas producer Goodrich Petroleum (NYSE: GDP  ) climbed as high as 10% on Wednesday after the company announced its production guidance for 2012.

    So what: Goodrich expects oil production to grow by an impressive 130% to 160% in 2012, so it's no surprise that investors are looking to get in ahead of the big increase. When you couple that production boost with the fact that management also expects to cut its spending by about 25%, the company should be able to deliver some strong cash flow growth in 2012.

    Now what: I wouldn't be so quick to ride this rally just yet. While things are certainly looking better for Goodrich, its heavy debt load and above-average beta continue to make it a speculative opportunity. Unless you're willing to stomach the usual risks and volatility associated with highly levered small-cap energy stocks, it's probably best to take a pass.

    Top Stocks For 12/15/2012-8

    Calpine Corporation (NYSE:CPN) no change for the day to close at $13.98. CPN traded 3.12 million shares for the day and its earnings per share remained $0.03. Calpine Corporation, an independent wholesale power generation company, engages in the ownership and operation of natural gas-fired and geothermal power plants in North America. It generates electricity and produces steam from natural gas-fired combustion and renewable geothermal facilities. The company sells wholesale power, steam, capacity, renewable energy credits, and ancillary services to utilities, independent electric system operators, industrial and agricultural companies.

    PPL Corporation (NYSE:PPL) decreased 0.71% to close at $26.64. PPL traded 2.99 million shares for the day and its earnings per share remained $1.91. PPL Corporation, through its subsidiaries, generates and markets electricity to approximately 4 million retail, commercial, and industrial customers in the northeastern and western United States and the United Kingdom. It generates energy from various fuel sources, including uranium, coal, natural gas, oil, and water.

    Constellation Energy Group, Inc. (NYSE:CEG) increased 0.62% to close at $31.01. CEG traded 2.99 million shares for the day and its earnings per share remained $16.32. Constellation Energy Group, Inc., through its subsidiaries, supplies energy products and services in North America. The company operates in three segments: Merchant Energy, Regulated Electric, and Regulated Gas. The Merchant Energy segment owns, operates, and maintains fossil, nuclear, and renewable generating facilities, and holds interests in nuclear generating facilities, qualifying facilities, and power projects.

    Barney Frank Introduces Bill to Merge SEC and CFTC

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    Just a few weeks before his retirement, Rep. Barney Frank, D-Mass. (left), introduced a bill late Thursday that would merge the Securities and Exchange Commission and the Commodity Futures Trading Commission.

    Frank, ranking member of the House Financial Services Committee, who introduced the legislation with Rep. Mike Capuano, D-Mass., said “the existence of a separate SEC and CFTC is the single largest structural defect in our regulatory system.” Unfortunately, he added in a press release, “this is deeply rooted in major cultural, economic and political factors in America.”

    Had Congress sought to merge the SEC and CFTC in the Dodd-Frank Act, Frank continued, “it would almost certainly have caused the defeat of that legislation. Now that the basic policies have been adopted to cover securities and derivatives regulation, we can focus on the structural issue. I file this bill now, because I believe it is time for this to be on the agenda of the next Congress.”

    Capuano noted in the release that the “common sense step” in merging the two agencies will “continue to advance financial regulatory reform” and “eliminate gaps that have put our financial system at risk.” Capuano is the ranking member of the Subcommittee on Oversight and Investigations of the House Financial Services Committee.

    The Subcommittee on Oversight and Investigations also recommended in its November report on the collapse of MF Global, that both agencies be merged due to “the apparent inability of these agencies to coordinate their regulatory oversight efforts or to share vital information with one another” regarding MF Global.

    Frank announced last November that he would not seek re-election in 2012 and that he plans to retire from Congress at year end.

    Frank, 71, who serves the 4th district of Massachusetts, said at the time that congressional redistricting was the primary reason he chose not to seek re-election. Frank’s new district would include 325,000 people that he had not previously represented, he said, which would require him to “learn about new areas and introduce myself to new people.” Frank admitted that re-election would be “tough,” and said he found it hard to “justify” asking new constituents “to trust me and be their advocate.”