Millennials: Beware of Financial Advice From Your Parents

Getty Images From birth, we're raised thinking mommy and daddy know best. They have our best interests in mind when they scare away tattooed teenage boys, keep the liquor under lock and key, and set our curfews earlier than those of all our other friends. Unfortunately, when it comes to money, mommy and daddy might be leading you astray. Financial literacy rates in the Millennial generation are abysmal. This year the Treasury Department and Department of Education tested the financial literacy of 84,000 high schoolers, who scored an average of 69 percent. With little to no financial literacy taught in our education system, children have no choice but to learn from dear old Mom and Dad. But if Mom and Dad were never taught -- or never bothered to learn -- how to appropriately handle money, they sure aren't the ones who should be giving financial advice. If you've ever heard your parents say, "Don't get a credit card," they were wrong. Credit cards are one of the easiest ways to build your credit score. Granted, establishing new credit only makes up 10 percent of your score, but if you aren't paying off loans yet, it might be the only way for you to establish a line of credit. Length of credit history makes up 15 percent of your score, so the longer you've had a "healthy" history, the higher your score will typically be. Parents are often reluctant to give their college-age children access to plastic, but if you know how to treat your card right, it'll pay off. When you graduate and start looking for an apartment, a respectable credit score is important to your landlord, while a lack of one can prevent you from signing a lease. If you've ever heard your parents say, "Keep a monthly balance on your credit card," they were wrong. Somehow, parents heard a rumor that keeping a monthly balance on your credit card will help your credit score. They spout some nonsense about how paying the minimum shows responsibility and increases your score. False. Carrying a balance does nothing to improve your score and instead costs you more money because you're accumulating interest on the balance. Instead, pay off your credit card in full each month (which means not charging more to the card than you know you can afford). If you've ever heard your parents say, "X,Y or Z college is worth the student loan debt," they were wrong. Millennials are drowning in student loan debt. As a generation, our debt is so horrific it's predicted to delay our retirement age until 73. For many millennials, it's too late to turn back now; the debt has already been accumulated. The only hope is to diligently, or quickly, pay down debt, and simultaneously start figuring out how to save for retirement from the moment you get your first paycheck. The other option is to start a side hustle and increase your influx of cash. For the younger millennials and Generation Z, there's still hope. When considering college, apply to every scholarship you qualify for. Sometimes your GPA doesn't matter as much as your height or your ability to call ducks. It's a good idea to set your pride aside during your college-decision-making process and really evaluate whether the ROI of your major at X, Y or Z school is worth tens of thousands of dollars in debt. If not, consider state schools, smaller liberal-arts colleges, or simply choosing the college that offered you the best financial package. If you've ever heard your parents say, "Don't invest in the stock market; it's just gambling," they were wrong. Yes, 2008 was a tough year, and the market took a tumble. Boomers lost money and some saw their retirement accounts take a hit. Unfortunately, this led to the millennial generation developing a great mistrust of the stock market. While we might be reluctant to get in bed with the stock market, it's certainly still willing to love us. The greatest advantage for an investor is time, and time is exactly what 20- to 30-year-olds possess. If you're not quite ready for index funds, mutual funds or buying individual stocks, you should at least contribute to your company-matched 401(k)s or open a Roth or Traditional IRA. If you've ever heard your parents say, "Have babies," they were wrong. Starting a family is certainly a personal choice, but not one you should be making based on parental pressure. Raising a child is a tremendous financial commitment. In 2012, it cost middle-income parents $286,860 to raise a child from birth to age 17. If you're willing to pay for college in full, then you can tack on an extra $100,000 or more. For many millennials stuck in the red, starting a family could complicate an already stressful financial situation. Parents mean well, but sometimes their advice comes from a negative personal experience or a lack of knowledge. Instead of always trusting their financial advice, be sure to educate yourself and check against credible sources.

Business Sales Slump for March

Business sales slumped in March while inventories stayed steady, according to a Commerce Department report (link opens in PDF) released today.

Seasonally adjusted sales fell 1.1% to $1.27 trillion from February to March. A 1.6% drop in merchant wholesalers had the largest negative impact on March's numbers, but sales went red across the board. Manufacturers' sales decreased 1%, while retailers saw a 0.6% slide.

On the supply side, overall inventory levels remained unchanged from February. Although retailers saw a 0.5% inventory decrease, a 0.4% bump in merchant wholesalers' stocks offset hopes of an inventory squeeze.

To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales fell and inventories remained unchanged from February to March, the inventories/sales ratio increased to 1.29 compared to the previous month's 1.28 value. The March 2012 ratio was 1.26.

Source: census.gov.

In the last 12 months, inventory growth has been more than double sales growth. Total business sales are up 1.8%, while inventories have increased 4.5%. Retailers have seen the largest spread, with sales up just 2.9% compared to a 7.3% jump in inventories.

link

Why Intuitive Surgical Looks Timely

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, surgical-robot specialist Intuitive Surgical (NASDAQ: ISRG  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Intuitive and see what CAPS investors are saying about the stock right now.

Intuitive facts

Headquarters (founded)	Sunnyvale, Calif. (1995)
Market Cap	$19.5 billion
Industry	Health care equipment
Trailing-12-Month Revenue	$2.3 billion
Management	CEO Gary Guthart (since 2010) CFO Marshall Mohr (since 2006)
Return on Equity (average, past 3 years)	20.6%
Cash/Debt	$1.4 billion / $0
Competitors	Accuray Medtronic

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 95% of the 4,450 members who have rated Intuitive believe the stock will outperform the S&P 500 going forward.   

Just last week, one of those Fools, TMFInnovator, tapped Intuitive's recent earnings miss as an attractive bargain opportunity:   

- Huge switching costs. Surgeons that have already installed the da Vinci systems are familiar with the equipment and are more efficient in the procedures.
-Improved recovery time and less complications for the PATIENT.

I feel that robotic surgery is a better mousetrap. The early adoptors have been promoters and the results have (thus far) looked very good. Could it be a matter of time before robotics become the de facto standard for surgeons?

[Intuitive Surgical] reported earnings that grew 30% year-over-year and is selling at a P/E ratio (TTM) of 26.6.

Recently, some investors have questioned Intuitive Surgical's future. However, Intuitive Surgical expert Karl Thiel believes a visible path to long-term growth persists. Will Intuitive capitalize, or be crushed by unforeseen pitfalls? His report highlights all of the key opportunities and risks facing the company -- and includes a full year of ongoing updates as key new hits -- so be sure to claim your copy by clicking here now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

Solera Expands in Australia

Westlake, Texas-based Solera Holdings (NYSE: SLH  ) describes its business strategy as "Leverage, Diversify, and Disrupt." That sounds like a noisy strategy, but so far, the maker of software for the automotive insurance industry is keeping quiet as a mouse about the details.

In February, Solera bought Web-based subrogation software maker HyperQuest for an undisclosed sum. This morning, the company announced yet another acquisition -- but once again, it declined to disclose how much it cost. Solera confirmed Wednesday that it has just bought Australian body-shop management-software maker Eziworks, which operates under the "Car Quote" brand name.

Solera describes Car Quote as "a critical communication link between insurers and body shops that allows them to exchange collision data," and it says its acquisition will "accelerate our delivery of an end-to-end claims management platform in Australia."

But it still won't say how much the acquisition cost it.

Ford - The Time Tested Business House

For quite a long time Ford Motor Co. (F) has been sailing through the rough waters which is evident from the fact that two of its main competitors essentially went out of business and then saved by government bailout.

Let us run through a precise health checkup of Ford business. Let us look at Ford's margins as a way of assessing the health of the current business and any risks or upside to those margins and what it could mean for shareholders.

Margin Talks

First, let us take into consideration Ford's gross margins. Success for any company can be recognized at the first instance from its gross margins as this tells you how much it costs for a company to make whatever it's selling. This is a reflection of the business' capability to show pricing power with its suppliers and demand from its customers in the face of intense competition.

It is evident that Ford's gross margin has been into the rough waters for the past ten years. Ford was a blockbuster brand in the early part of the 2000s but its growth got jilted by rising gas prices trimming the demand for its highest selling models in early 2006 and Ford had to take the hit. Margins are razor thin in the auto industry in the first place but given Ford's macro conditions, an already poor environment for margin got highly aggravated. However the agility of Ford's management team saw to it that Ford quickly responded back to the depleting business and margins scaled back up gradually to close to 20% before beginning a second round of down slide in the past three years. Margins are set to come approximately in line with 2013 this year so the trend continues.

Falling margins are never a favorable symptom for any business progress since everything a company pays for – from A to Z - comes out of gross margins. When gross margins fall the number of dollars available to pay employees, invest in the business, buy things, etc. is diminished to the equal proportion of the margin fall. But most of all, the worst hit area due to falling margins is profit, the bottom-line of any business and that is why it is so important to keep a close watch and control on margin movements of a business.

Dissecting the Margins

Now let's explore further into the margins and get into operating margins, though here the story is not repetitive but it is in sync with the gross margin movement.

Operating margins gives the best insight of how a business' Health. It is simply the measure of a company's profits before taxes, interest and other expenses that are not directly related to making and selling things. In this way we get a clearer understanding of how well the business is performing without the clamoring of GAAP accounting policies.

Ford's operating margins have actually dropped below zero thrice in the past ten years, a figure which triggered the panic button amongst investors to such an extent that Ford shares have traded at two bucks near the lowest lows of its downturn. Investors often carry the notion that margin can be no less than zero which means the company earns back what it spends but this is not entirely true especially in a business like the auto sector where the margins are so less, that a couple of adversities can push the margins to sub-zero levels. Hence the moment margins get southbound, they can go way south in a hurry triggering panic in the market.

So what does this mean for the shares and shareholders? The picture isn't exactly rosy and rather quite gloomy. However, the stocks look attractive from the valuation point of view. The shares are not just cheap but there is also the cyclicality of Ford's business. Every auto maker goes through cycles of undulations owing to the nature of the business domain and currently Ford is near the bottom of its downside. Revenue and margins have been flagging recently but with an array of new models about to hit the roads in the next couple of years I think Ford's drive looks to be brighter in the uphill direction.

Ford management has also evolved with time and has developed the smartness of controlling operating expenses more efficiently than their predecessors. Analysts have noted that the spread between operating profit and gross margins has flattened out over time. The following chart shows the difference between gross margins and operating margins; in other words, it shows the percentage of revenue Ford spends on operating expenses each year, or the difference between the first two graphs.

Cutting the Cost according to the Cloth

Ford has managed to effectively trim its operating expenses to half as a percentage of revenue since 2009 and while the number has crept up since 2011 it is still at the lower si

America's Richest Families: 185 Clans With Billion Dollar Fortunes

Edited By Kerry A. Dolan and Luisa Kroll

The Mellons. The Kennedys. The Rockefellers. You know the names already. Now Forbes has compiled the first comprehensive ranking of the richest families in America: 185 dynasties with fortunes of at least $1 billion. They're collectively worth $1.2 trillion. Many are working at increasing their fortunes. Others are merely sleepy heirs, several generations removed from their families' heydays. Nearly all have ties to some of the most storied businesses and brands in American history, including Jack Daniel's, L.L. Bean, Getty Oil, Hallmark and Budweiser Budweiser.

The wealthiest family in America, and also the world, is the Walton family, which includes the three living children of Wal-Mart Stores Wal-Mart Stores founder Sam Walton; the wife of his son John, who died in 2005 in a plane crash; and the two daughters of his brother James "Bud" Walton, who helped found the Arkansas retailer in 1962. They are worth $152 billion, $63 billion more than the second richest family, headed by the politically active and often controversial Koch brothers. The three richest families are worth $301 billion, one fourth of cumulative net worth of all the wealthiest families.

This portrait of Sam Walton, his wife and children, decades before his heirs became the wealthiest dynasty in American history, hung in the Wal-Mart Museum in Bentonville, Arkansas. (Photo: Gilles Mingasson/Getty Images)

BBRY Earnings: Not Horrific, But Nowhere Near Good

Popular Posts: 4 U.S. Stocks Getting Boosted by the Eurozone StimulusBuy Honeywell for a Stealth Play on Smart HomesA 99% Dividend Yield? Yes, It Really IS Too Good to Be True Recent Posts: BBRY Earnings: Not Horrific, But Nowhere Near Good Will Abe’s ‘Third Arrow’ Revive Japan? Invest in Belize: Retirement Paradise or Real Estate Scam? View All Posts BBRY Earnings: Not Horrific, But Nowhere Near Good

BlackBerry (BBRY) released its results for the three months ended May 31 this morning, and for a moment there you might have actually forgotten that the company has been struggling to stay afloat for the past few years.

Its cash balance actually rose to $3.1 billion from $2.7 billion, and adjusted gross margins rose to 48% from 43% last quarter.  Very significantly, last year's announced layoffs and other cost-cutting moves are bearing fruit, as operating expenses were down 57% year-over-year and down 13% from the previous quarter.

BlackBerry beat Wall Street's earnings estimates as well: BBRY earnings came in at a loss of 11 cents per share vs. the consensus estimates of a 25-cent loss per share. BlackBerry generated $966 million in revenue, beating the higher end analysts’ expectations at $963 million.

And of course, today's BBRY earnings release follows yesterday's announcement that Amazon (AMZN) would be making over 240,000 Android apps available to BlackBerry 10 customers via the Amazon app store, including a couple heavy-hitters like Netflix (NFLX). BB10 devices have the ability to run apps designed for Google's (GOOG) Android, though implementation was a little tricky prior to the deal with Amazon. While this development doesn’t begin to to close the "app gap" between BlackBerry and its rival smartphone platforms (Google and Apple both have well more than 1 million apps in their respective stores), it's definitely a welcome development.

All of that is great news. Now for a dose of reality.

BlackBerry's improvements were due entirely to cost cutting, and after being cut to the bone, there is not much fat left to trim. BlackBerry's strong cash position was due mostly to assets sales and a tax refund; excluding these, BBRY would have bled $255 million. BlackBerry is also running out of assets to sell. It has $626 million in property, plant and equipment, down from $2.2 billion last year. The value of its patent portfolio, included in its $1.4 billion in intangible assets, may be understated, but it is impossible to say by how much.

And the company hasn't finished shrinking. Revenues for quarter, at $966 million, are less than a third of the $3.1 billion in revenues in the same quarter the year before. Customers never embraced the BB10 handsets, and the collapse of hardware sales has severely eroded software and services sales as well, as BlackBerry receives subscription fees from devices that use its network.

None of this is news, of course. CEO John Chen saw the handwriting on the wall and effectively abandoned the handset business by handing production to Foxconn last year. Chen's vision since assuming the job of CEO has been to transform BlackBerry into an enterprise services and security company, a move I support. I would even go so far as to say that Chen is doing a fantastic job, given the truly awful cards he was dealt. The fact that BlackBerry is still in business at all is a noteworthy accomplishment and testament of Chen's skill as a leader.

Last month, Chen said that he put the odds of BlackBerry surviving at 80/20. Previously, he had put the odds no better than 50/50, which is remarkable candor for a corporate CEO.

But should you consider BBRY stock?

No. Chen's 80/20 odds are very optimistic ones given that BlackBerry's revenues continue to fall with no clear end in sight. BlackBerry's device management systems are generally well-respected, but they are one of many competitors in this space.

I might consider BBRY stock if its shares were trading significantly below book value. It would still be a risky bet, but there would be a modest margin of safety. Today, BlackBerry trades at about 20% above book value.

I wish Mr. Chen the best of luck. The man certainly likes a good challenge. But I would put the odds of survival closer to his original 50/50, and that is not a bet I'm willing to take at current prices.

Charles Lewis Sizemore, CFA, is the editor of Macro Trend Investor and chief investment officer of the investment firm Sizemore Capital Management. As of this writing, he did not hold a position in any of the aforementioned securities. Click here to receive his FREE weekly e-letter covering top market insights, trends, and the best stocks and ETFs to profit from today's best global value plays.

Where Securities Trade Dictates Tax Treatment

Section 1256 of the Internal Revenue Code offers up to 12% lower capital gains tax rates on short-term trading with its attractive 60/40 tax rates. It includes regulated futures contracts (RFCs), broad-based stock indices, options on those indices, options on futures, nonequity options, certain off-exchange foreign currency contracts and a few other items.

Among Section 1256 contracts, regulated futures contracts, nonequity options and securities futures contracts must be traded on or subject to the rules of a "qualified board or exchange" (QBE). U.S. exchanges make the list pretty easily, but foreign exchanges don't. Let's look at the QBE requirement in more detail.

QBE
Section 1256 includes a list of those exchanges that are considered QBEs. QBEs include national securities exchanges registered with the SEC (category 1), domestic boards of trade designated as a "contract market" by the CFTC (category 2) or any other exchange or board of trade or other market (worldwide) that the CFTC and Treasury determines has rules adequate to carry out the purposes of Section 1256 (category 3).

According to Section 1256, contracts on category 1 and 2 exchanges are deemed RFCs if the contract "(A) with respect to which the amount required to be deposited and the amount which may be withdrawn depends on a system of marking to market, and (B) is traded on or subject to the rules of a qualified board or exchange." (This doesn't include securities futures contracts.)

The first step in finding out if a product qualifies for Section 1256 is to see if its exchange is on the QBE list. Don't jump to that conclusion just because you received a 1099B reporting Section 1256 treatment. E&Y's "Updated 2013 US IRC Section 1256 qualified board or exchange list" is a handy reference.

Foreign exchanges with QBE status
These category 3 foreign QBEs received a CFTC exemption ("no action letter") and Treasury/IRS determination granting them QBE status published in a required revenue ruling:

• International Futures Exchanges (Bermuda) Ltd.(inactive)

• Mercantile Division of the Montreal Exchange (inactive)

• Mutual Offset System (Rev. Rul. 87-43). A partnership between Chicago Mercantile Exchange and Singapore International Monetary Exchange Limited

• ICE Futures Rev Rul 2007-26

o Per RIA, "a United Kingdom Recognized Investment Exchange that was (1) a wholly-owned subsidiary of a U.S. parent corporation, and (2) overseen by the U.K.'s Financial Services Authority, provided that the exchange continued to comply with all CFTC conditions necessary to retain its no-action relief permitting it to make its electronic trading and matching system available in the U.S."

• Dubai Mercantile Rev. Rul. 2009-4

• ICE Futures Canada Rev. Rul. 2009-24

• London International Financial Futures and Options Exchange (LIFFE) Rev. Rul. 2010-3

o Per RIA, "Is a regulated exchange of the United Kingdom … Exchange offered electronic trading of commodity futures contracts and other futures and options contracts. Contracts were cleared and settled by Clearing House, a CFTC-regulated Derivatives Clearing Organization. The CFTC had granted Exchange no-action relief permitting it to make its electronic trading and matching system available in the U.S."

• Eurex Deutschland Rev. Rul. 2013-5

Shorts Are Piling Into These Stocks. Should You Be Worried?

The best thing about the stock market is that you can make money in either direction. Historically, stock indexes tend to trend upward over the long term. But when you look at individual stocks, you'll find plenty that lose money over the long haul. According to hedge-fund institution Blackstar Funds, between 1983 and 2006, even with dividends included, 64% of stocks underperformed the Russell 3000, a broad-scope market index.

A large influx of short-sellers isn't a condemning factor for any company, but it could be a red flag indicating that something is off. Let's look at three companies that have seen rapid increases in the number of shares sold short and see whether traders are blowing smoke or their worries have merit.

Company

Short Increase April 30 to May 15

Short Shares as a % of Float

Hillshire Brands (NYSE: HSH  )	209.1%	3.8%
Trex (NYSE: TREX  )	187.9%	19.7%
Pfizer (NYSE: PFE  )	14%	0.9%

Source: The Wall Street Journal.

Where's the beef?
No, this isn't an episode of The Jerry Springer Show, but it sure seems that way: Hillshire Brands -- the company behind such beef names as Jimmy Dean breakfasts, Ball Park franks, and Hillshire Farms -- is involved in something that resembles a bidding triangle.

Source: Nakeva Corothers, Flickr.

Hillshire made waves just weeks ago when it announced its intention to purchase frozen-vegetables giant Pinnacle Foods for $4.2 billion. While some Wall Street pundits applauded the deal, others thought it could take Hillshire too far outside of its usual stomping ground (i.e., meat products). That's when things got really interesting.

Last week, the No. 2 poultry producer in the U.S., Pilgrim's Pride, made an offer to acquire Hillshire Brands for $45 per share and assume its debt, with the contingency that it drop its takeover bid for Pinnacle Foods. Not to be outdone, Tyson Foods (NYSE: TSN  ) responded just days later with a bid of its own. Tyson's offer for Hillshire equates to $50 per share and would also be contingent on Hillshire walking away from its Pinnacle Foods purchase. At the moment Hillshire is trading more than 6% above Tyson's offer price on the expectation that Pilgrim's Pride may come back with a higher offer (or that someone else may enter the bidding war).

Short-sellers who dove into Hillshire Brands over the aforementioned two-week period have been burnt to a crisp. While I do eventually expect Hillshire's board to choose one of these competing bids and to walk away from its Pinnacle Foods deal, I also don't expect the offer for Hillshire Brands to head any higher.

At Hillshire's current value, Tyson and Pilgrim would be ponying up 26 times forward earnings and greater than 12 times EBITDA to get their hands on a business that's capable of 2%-3% organic growth. I understand there's value in Hillshire's brand-name product lines, as well as cost synergies that could be realized from combining its channel distribution with either Tyson or Pilgrim's Pride. But there also comes a point where the valuation simply becomes too frothy, and I believe we've hit it with Hillshire Brands. While I may not have the guts to suggest short-sellers place their bets here, I really don't see any additional upside potential to Hillshire Brands' share price from here on out.

Doom or boom?
The battle continues to rage on within the housing industry to decipher whether or not the sector can continue to grow or if it's merely biding its time before another major downturn.

On one hand, housing inventories are being held down in order to keep demand up and boost pricing. Higher prices tend to be a major motivator for home buyers since many (wrongly) view as a home as an investment than a place to live.

On the other hand, the wind down of QE3 could bring about higher lending rates since fewer long-term U.S. Treasuries are being purchased. Since bond prices and yields move in opposite directions I would expect that interest rates would rise over time. Given how fickle consumers have been toward the home-buying process when rates move even 25 basis points higher, I can only assume what the long-term outlook for the housing industry looks like when rates do begin to normalize.

Source: Trex.

That brings us to Trex, a leader in alternative decking and railing products. Trex has seen a nice rebound in its business thanks to a stabilization in U.S. home sales as well as remodels. But its past quarter certainly wasn't anything to write home about with net sales dipping to $100.6 million from $107.9 million in the prior year period as the inclement weather across much of the nation took its toll. The real question is can Trex continue its momentum beyond just the next couple of quarters?

To be honest, I'm not sure it can. One of the biggest concerns I've had with Trex for the longest time is that it's a highly capital-intensive business with single-digit operating margins. Weather-related impacts and consumer sensitivity to interest-rate hikes will make it extremely difficult for Trex to grow with any consistency over the long run, making its forward P/E of 19 already a bit risky. While it's certainly my possible my doom and gloom forecast could be wrong, the minimal upside potential in Trex would appear to favor short-sellers in the immediate future.

These boots were made for walkin'
The war may still be fought, but the battle is over for now after pharmaceutical rival AstraZeneca (NYSE: AZN  ) spurned three successively higher bids from Pfizer.

The last of Pfizer's bids reached as high as $119 billion (up notably from its first bid which didn't even reach $100 billion) and was aimed at combining AstraZeneca's premium diabetes and respiratory line with Pfizer's burgeoning cancer pipeline. On paper the deal would have made sense with the two possessing what the other needs. Further, the cost synergies of combining their two pipelines into one unit over many years could have generated billions in extra cash flow. Not to mention, had this deal gone through Pfizer would likely have moved its headquarters to the U.K. to take advantage of lower corporate tax rates in the country.

Source: AstraZeneca

Ultimately, at least for the next six months according to U.K. takeover rules, this deal is as good as dead. While that's bad news for AstraZeneca shareholders who should be ticked that management turned down such a lucrative offer, it's good news for Pfizer as it clears the way for the company to once again focus on its pipeline.

There is, perhaps, nothing more exciting going on with Pfizer than its breakthrough designated breast cancer drug hopeful palbociclib. Administered in combination with Femara in the phase 2 PALOMA-1 study, the combination delivered median progression-free survival of 20.2 months in estrogen receptor-positive, HER2-negative breast cancer patients compared to just 10.2 months for the control arm. With Pfizer using this study as the basis for its new drug application it could be experiencing the financial benefits of its breakthrough therapy shortly. Not to mention, it's a notable step in the right direction with regard to improving breast cancer patients' quality of life.

Despite this possible blockbuster on the horizon, patent woes are still likely to push Pfizer's top line lower for what looks to be at least the next two years. In that time the company has tightened its belt and repurchased shares in an effort to boost EPS, but its lack of growth really isn't fooling anyone. This leaves short-sellers with what looks like an easy bet against Pfizer.

But pessimists also won't want to forget that Pfizer pays out a premium 3.5% yield that'll make any short-seller think twice. As for me, I suspect Pfizer is likely range-bound until we get a better bead on palbociclib's future, which makes the company a below-average short-sale opportunity for pessimists.

Here's one top stock short-sellers would be wise not to bet against
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

3 Stocks Under $10 to Watch

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Stocks Set to Soar on Bullish Earnings

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Rocket Stocks to Buy for Short-Week Gains

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside.

Raptor Pharmaceuticals

Raptor Pharmaceuticals (RPTP), a biopharmaceutical company, focuses on developing and commercializing life-altering therapeutics that treat debilitating and often fatal diseases. This stock closed up 4.1% to $8.84 a share in Tuesday's trading session.

Tuesday's Range: $8.46-$8.85

52-Week Range: $6.69-$17.72

Tuesday's Volume: 723,000

Three-Month Average Volume: 1.05 million

From a technical perspective, RPTP spiked notably higher here back above its 50-day moving average of $8.80 with lighter-than-average volume. This spike higher on Tuesday is quickly pushing shares of RPTP within range of triggering a big breakout trade. That trade will hit if RPTP manages to take out Tuesday's intraday high of $8.85 to some more key overhead resistance levels at $9 to $9.09 with high volume.

Traders should now look for long-biased trades in RPTP as long as it's trending above Tuesday's low of $8.46 or above more near-term support at $8.30 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.05 million shares. If that breakout triggers soon, then RPTP will set up to re-test or possibly take out its next major overhead resistance levels at $10.50 to $11.50.

Onconova Therapeutics

Onconova Therapeutics (ONTX), a clinical-stage biopharmaceutical company, focuses on discovering and developing small molecule drug candidates to treat cancer. This stock closed up 6.5% to $4.87 a share in Tuesday's trading session.

Tuesday's Range: $4.58-$4.94

52-Week Range: $4.49-$31.13

Tuesday's Volume: 118,000

Three-Month Average Volume: 266,502

From a technical perspective, ONTX ripped sharply higher here right above its 52-week low of $4.49 with lighter-than-average volume. This stock has been downtrending badly for the last three months and change, with shares moving lower from hits high of $9.34 to its 52-week low of $4.49. During that downtrend, shares of ONTX have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of ONTX are now starting to bounce off its 52-week low and it's quickly moving within range of triggering a near-term breakout trade. That trade will hit if ONTX manages to take out some near-term overhead resistance levels at $5 to $5.16 with high volume.

Traders should now look for long-biased trades in ONTX as long as it's trending above its 52-week low of $4.49 and then once it sustains a move or close above those breakout levels with volume that hits near or above 266,502 shares. If that breakout starts soon, then ONTX will set up to re-test or possibly take out its next major overhead resistance levels at $5.83 to $6.27. Any high-volume move above those levels will then give ONTX a chance to tag $7.

Halcon Resources

Halcon Resources (HK), an independent energy company, is engaged in the acquisition, production, exploration, and development of onshore oil and natural gas properties in the U.S. This stock closed up 4.6% to $5.83 a share in Tuesday's trading session.

Tuesday's Range: $5.51-$5.87

52-Week Range: $3.16-$6.44

Tuesday's Volume: 4.87 million

Three-Month Average Volume: 5.63 million

From a technical perspective, HK bounced sharply higher here right off some near-term support at $5.50 with lighter-than-average volume. This bounce higher on Tuesday is quickly pushing shares of HK within range of triggering a near-term breakout trade. That trade will hit if HK manages to take out Tuesday's intraday high of $5.87 to some more near-term overhead resistance levels at $6 to $6.04 with high volume.

Traders should now look for long-biased trades in HK as long as it's trending above Tuesday's low of $5.51 or above more near-term support levels at $5.23 to $5 and then once it sustains a move or close above those breakout levels with volume that hits near or above 5.63 million shares. If that breakout starts soon, then HK will set up to re-test or possibly take out its 52-week high of $6.44 to some more past resistance at $6.75 to $7.

To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>4 Big Stocks to Trade (or Not)

>>5 Stocks Poised for Breakouts

>>5 Stocks Under $10 Set to Soar

Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

CNBC.com and Forbes.com.

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

Top 10 Best-Paid Fundraisers at Nonprofit Organizations

Competition to attract top fundraisers is costing U.S. charities a lot of money, according to the latest compensation data available analyzed by The Chronicle of Philanthropy.

In 2011, upward of two dozen fundraisers at nonprofits earned more than $500,000, and two earned more than $1 million.

The Chronicle analyzed pay for fundraisers at 280 nonprofits that raise at least $35 million from private sources. Data were culled from IRS Forms 990 that charities filed in 2012.

Colleges and hospitals tended to pay the most, The Chronicle reported, in part because they were more likely to run ambitious drives for private support.

At a time when nonprofits are under financial pressure because of tight government budgets and a tough economy, demands on top fundraisers are stronger than ever, and very few people have the right skills to meet expectations, according to experts consulted on the report.

Competition for talent is so intense that an “arms race” has broken out among nonprofits to lure talented fundraisers with hefty salaries, Steven Rum, vice president for development at Johns Hopkins Medicine, told The Chronicle.

“I lost five people to an institution a mile away, predicated on one thing: money,” Rum said.

Not everyone in the nonprofit sector was pleased to hear about the size of the salaries at the top level.

Ken Berger, head of Charity Navigator, told The Chronicle that “if you’re working for a charity, the idea of fundraisers becoming millionaires is problematic. I don’t care how much money you raise.”

Following are the top 10 earners at U.S. nonprofits, based on 2011 compensation data.

 

10. Armando Chardiet

Cleveland Clinic Foundation

 

Base pay in 2011: $611,579

Bonus pay in 2011: $0

Total compensation in 2011: $677,906

 

9. Albert Checcio

University of Southern California

 

Base pay in 2011: $452,555

Bonus pay in 2011: $92,000

Total compensation in 2011: $722,317

 

8. Stuart Sullivan

Children’s Hospital of Philadelphia

Base pay in 2011: $389,744

Bonus pay in 2011: $293,550

Total compensation in 2011: $752,291

 

The Johns Hopkins University

 

Base pay in 2011: $454,808

Bonus pay in 2011: $69,366

Total compensation in 2011: $829,652

 

6. Kathleen Kane

City of Hope

 

Base pay in 2011: $500,582

Bonus pay in 2011: $257,080

Total compensation in 2011: $844,491

5. Mark Kostegan

Icahn School of Medicine at Mount Sinai

 

Base pay in 2011: $500,000

Bonus pay in 2011: $210,019

Total compensation in 2011: $870,866

 

4. Richard Naum

Memorial Sloan Kettering Cancer Center

 

Base pay in 2011: $381,565

Bonus pay in 2011: $441,592

Total compensation in 2011: $872,964

 

3. Daniel Forman

Yeshiva University

 

Base pay in 2011: $585,410

Bonus pay in 2011: $0

Total compensation in 2011: $922,542

 

2. Susan Feagin (former executive vice president, university development and alumni relations)

Columbia University

 

Base pay in 2011: $512,760

Bonus pay in 2011: $520,200

Total compensation in 2011: $1,066,951

 

1. Anne McSweeney

Memorial Sloan Kettering Cancer Center

 

Base pay in 2011: $415,701

Bonus pay in 2011: $748,227

Total compensation in 2011: $1,212,309

---

Related on ThinkAdvisor:

Apple and Samsung head to court again

SAN JOSE, Calif. (AP) — The fiercest rivalry in the world of smartphones is heading back to court this week in the heart of the Silicon Valley, with Apple and Samsung accusing each other, once again, of ripping off designs and features.

The trial will mark the latest round in a long-running series of lawsuits between the two tech giants that underscore a much larger concern about what is allowed to be patented.

"There's a widespread suspicion that lots of the kinds of software patents at issue are written in ways that cover more ground than what Apple or any other tech firm actually invented," Notre Dame law professor Mark McKenna said. "Overly broad patents allow companies to block competition."

The latest Apple-Samsung case will be tried less than two years after a federal jury found Samsung was infringing on Apple patents. Samsung was ordered to pay about $900 million but is appealing and has been allowed to continue selling products using the technology.

Now, jury selection is scheduled to begin Monday in another round of litigation, with Apple accusing Samsung of infringing on five patents on newer devices, including Galaxy smartphones and tablets. In a counterclaim, Samsung says Apple stole two of its ideas to use on iPhones and iPads.

"Apple revolutionized the market in personal computing devices," Apple attorneys wrote in court filings. "Samsung, in contrast, has systematically copied Apple's innovative technology and products, features and designs, and has deluged markets with infringing devices."

Samsung countered that it has broken technological barriers with its own ultra-slim, lightweight phones.

"Samsung has been a pioneer in the mobile device business sector since the inception of the mobile device industry," Samsung attorneys wrote. "Apple has copied many of Samsung's innovations in its Apple iPhone, iPod, and iPad products."

In the upcoming case, Apple claims Samsung stole a tap-from-search technology that allows someone searching for a t! elephone number or address on the web to tap on the results to call the number or put the address into a map. In addition, Apple says Samsung copied "Slide to Unlock," which allows users to swipe the face of their smartphone to use it.

Samsung countered that Apple is stealing a wireless technology system that speeds up sending and receiving data.

The most attention grabbing claim in the case is Apple's demand that Samsung pay a $40 royalty for each Samsung device running software allegedly conceived by Apple, more than five times more than the amount sought in the previous trial and well above other precedents between smartphone companies. If Apple prevails, the costs to Samsung could reach $2 billion. Apple's costs, if it lost, are expected to be about $6 million.

"You rarely get from the jury what you ask for, so companies aim high," said German patent analyst Florian Mueller. "But in my opinion this is so far above a reasonable level the judge should not have allowed it."

The problem, he said, is that each smartphone has thousands of patented ideas in it; Apple is challenging just five.

Throughout the three years of litigation, Samsung's market share has grown. One of every three smartphones sold last year was a Samsung, now the market leader. Apple, with a typically higher price, was second, with about 15% of the global market.

Apple claims the following Samsung products now infringe on Apple patents: Admire, Galaxy Nexus, Galaxy Note, Galaxy Note II, Galaxy SII, Galaxy SII Epic 4G Touch, Galaxy SII Skyrocket, Galaxy SIII, Galaxy Tab II 10.1 and Stratosphere.

Samsung claims the following Apple products infringe on Samsung patents: iPhone 4, iPhone 4S, iPhone 5, iPad 2, iPad 3, iPad 4, iPad mini, iPod touch (5th generation), iPod touch (4th generation) and MacBook Pro.

With the San Jose federal courtroom just a 15-minute drive from Apple's Cupertino headquarters, even jury selection can be difficult. In the previous case, several prospective jurors were! dismisse! d because of their ties to the company.

Follow Martha Mendoza on Twitter @mendozamartha

Investing: New index funds aren't always great

When you're investing, one of the easiest things to do is to run with your gut instinct. You smell money in Macy's? Buy! Your gut tells you the Federal Reserve is going to raise interest rates? Sell! Worried that Vladimir Putin will kill Italy just by staring at it? Sell!

Reams of academic studies, however, have shown that listening to those little voices in your head is about as helpful as giving in to your urge to burn things. In fact, the most sensible approach for most investors is the simplest: Buy a diversified selection of low-cost index funds, add to them regularly, and rebalance them from time to time.

Lately, though, the fund industry has been rolling out a number of index-fund variants — some of which may make sense, and others of which may not. Do you need them? In most cases, no. But it's worth looking at them before you get the urge to do something you shouldn't.

Your basic index fund boots the manager and selects its stocks (or bonds, or other securities) according to an index, such as the Standard and Poor's 500. Until recently, most stock indexes weighted their holdings according to the market value of the stock.

For example, the largest holding in the Vanguard 500 index fund (ticker: VFINX) is Apple, followed by ExxonMobil, and that's because the computer maker's current market value is $472.4 billion, vs. $409.2 billion for the multinational oil company. As each stock in the fund increases or decreases in value, it gets a bigger weighting in the fund. Among the cognisi, this is called a "cap-weighted" approach, short for "capitalization weighted," short for "ranked by the market value of the stock."

The problem with cap weighting is that as a stock gets more popular — and hence pricier — it becomes a larger percentage of an index fund's holdings. For example, the three largest holdings in the S&P 500 in 1999 were Microsoft, General Electric and Cisco Systems. Those stocks all remain below their Dec. 31, 1999, levels.

Over the years, and esp! ecially recently, fund companies have rolled out variants of index funds, all aimed at correcting the problems with cap-weighted funds. (Among the cognisi, these are called "smart beta" funds.) Among them:

• Equal-weighted funds. These funds simply give each stock in the index equal weighting, an approach that works best in a broad-based market rally, especially where small-company stocks outperform. The Guggenheim S&P 500 Equal Weight ETF (RSP) has gained an average 9.31% a year the past 10 years, vs. 7.39% for the Vanguard 500 Index fund.

• Rules-based funds. These indexes would give greater weight to stocks according to fundamentals, such as the amount of dividends paid out. WisdomTree LargeCap Dividend fund (DLN) has gained an average 20.92% a year the past five years, vs. 21.28% for the Vanguard 500 Index fund. (These are bull-market returns: Don't expect them the next five years.)

In short, the new index funds seek to beat the broad-based, cap-weighted indexes by doing something differently than the index: Emphasizing smaller-company stocks, for example, or a history of dividend payouts. That's no different than what active managers try to do, says Vanguard's senior investment strategist Joel Dickson. "We don't see these funds as an alternative to indexing, but rather a low-cost alternative to active management," he says.

And, as such, there's no harm in that. But you have to bear in mind that you're attempting to beat the index, something that stymied great minds for a long time. And, while certain strategies have had great success over many years, there's no Northwest Passage to superior stock returns.

For example, value investing is generally viewed as a way to get above-average returns. Value investors, such as Warren Buffett, look for cheap stocks, relative to earnings and hold them for the long term. And the Vanguard Value ETF (VTV) has indeed gained 7.47% a year the past decade, a hair more than the Vanguard 500 Index fund. But the Vanguard Growth Index! , which i! nvests in stocks with growing earnings, has beaten both, gaining an average 8.24%.

What's the harm in new index strategies? "The question should be turned on itself: What's the harm in cap-weighted indices," Dickson says. A company's market value represents the market's consensus on what the price of a stock should be. "If you believe that a sector of the market is mispriced, that's by definition active management."

The counterargument, of course, is that the components of the S&P 500 are chosen by Standard & Poor's, and that is, to some extent, active management. "There is a true statement there," Dickson says. "It's a committee-driven approach." But the index covers nearly all large-company stocks, and other large-company stock indexes track the S&P 500 fairly closely. And if you really want, you can choose a fund that chooses an even broader index — as the Vanguard Total stock Market fund (VTSMX) does.

For someone simply wanting exposure to the stock market at a very low price, then a broad-based index fund is a clear winner. In fact, if you want exposure to all the world's stocks, you could simply buy the Vanguard total World Stock index (VT) and knock off for the afternoon. Or you could mix and match a selection of diversified U.S. and international index funds, depending on your risk tolerance.

What if you hear a little voice urging you to try one of the new index funds? If that voice is telling you that it's way cheaper than a red-hot actively managed fund that charges 1.5% a year in expenses, well, that little voice probably has a pretty good idea. And if you're thinking that you'd like a fund that pays out above-average dividends because you need the income, then an index fund that focuses on rising dividends, such as the iShares S&P Dividend ETF (SDY), is a pretty good idea, too. Just don't listen to that little voice tell you to get into a staring match with Vladimir Putin.

Foreclosure Starts Reach 95-Month Low

If foreclosure rates are among the hearts of the real estate industry, then housing has gotten much stronger. Foreclosure starts hit a 95-month low in November. Overall foreclosure filings dropped 15% from October, the largest month-over-month decrease since November 2010. According to research firm RealtyTrac, foreclosure filings “were reported on 113,454 U.S. properties in November,” another extraordinarily low number by recent measures.

The good news was not uniform across the United States, just as the disintegration of the housing market that began with the recession was not.

RealtyTrac reports:

November foreclosure starts increased from a year ago in 15 states, including Pennsylvania (up 233 percent), Delaware (up 104 percent), Maryland (up 74 percent), Oregon (up 38 percent), and Connecticut (up 37 percent).

The states and cities that were most badly hammered by the downturn have mostly lagged as part of the recovery:

The overall decrease in Florida foreclosure activity was driven by a 46 percent annual decrease in foreclosure starts and a 16 percent annual decrease in in bank repossessions, but scheduled auctions in Florida increased 2 percent from a year ago — the 11th consecutive month where scheduled foreclosure auctions increased on a year-over-year basis in Florida.

Along with California and Nevada, Florida and the rust belt bore the brunt of home price attrition.

The hardest hit cities also remain among the slowest to recover, with the majority of these in Florida as well:

Eight of the top 10 foreclosure rates in November among metropolitan statistical areas with a population of 200,000 or more were in Florida. Jacksonville posted the nation’s highest metro foreclosure rate for the month: one in every 288 housing units with a foreclosure filing — more than four times the national average.

Other Florida metros with foreclosure rates ranking among the nation’s 10 highest in November were Miami at No. 2 (one in every 307 housing units with a foreclosure filing); Port St. Lucie at No. 3 (one in every 341 housing units); Palm Bay-Melbourne-Titusville at No. 4 (one in every 343 housing units); Orlando at No. 6 (one in every 384 housing units); Tampa at No. 8 (one in every 410 housing units); Sarasota at No. 9 (one in every 432 housing units); and Ocala at No. 10 (one in every 454 housing units).

While it may take many years for Florida markets to recover, along with some in Nevada and rust belt states led by Illinois, it is hard to make a case that any one factor has hurt real estate values more than foreclosures, and by that measure the housing market has continued to heal rapidly.