Monday, December 30, 2013

TVA to close 8 coal-powered units in Ala., Ky.

The nation's largest public utility voted Thursday to close six coal-powered units in Alabama and replace two more in Kentucky with a new natural gas plant.

At the board meeting in Oxford, Miss., Tennessee Valley Authority CEO Bill Johnson said increasingly stringent environmental regulations and flat power demand have made it necessary to rethink how the utility generates electricity.

"This is a personal nightmare for me," said Peter Mahurin, a board member from Bowling Green, Ky., said of the decision. "But I must support what I believe to be in the best interest of TVA's customers."

In fiscal year 2013, coal accounted for 38 percent of TVA's portfolio while natural gas made up 8 percent. Johnson said he would like to see those numbers closer to 20 percent each over the next decade.

Senate Republican Leader Mitch McConnell met with Johnson last month to seek continued operation of all three coal-burning units at Paradise Fossil Plant in Drakesboro, Ky. The board had previously approved upgrading the two oldest units with environmental controls. But on Thursday, Chief Operating Officer Chip Pardee recommended building a gas plant there instead.

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He said the third unit at Paradise is newer and has sufficient environmental controls to continue operating on coal.

The board also voted to close all five units at the Colbert plant in northwest Alabama and one of two remaining units that had not been marked for closure at the Widow's Creek plant in northeast Alabama.

Board member Joe Ritch, of Huntsville, Ala., echoed Mahurin's comments on the closures, saying, "As painful as it is, it's the right thing to do."

He said that saving a few jobs now would reduce TVA's competitiveness for years to come.

Sunday, December 29, 2013

Burger King shares jump as earnings hum

Burger King's third-quarter income soared and the fast food chain raised its dividend as the company reported an 111% net restaurant growth Monday.

Company shares rose nearly 5.5% to $20.84 shortly after U.S. financial markets opened.

The Miami-based hamburger giant reported earnings of $68.2 million for the three months ending at Sept. 30. That was up sharply from the $6.6 million the company reported for the same period last year.

MERCK: Reports profit drop

Adjusted diluted earnings per share were 23 cents. That topped the 21 cents per share forecast by analysts reported by Thomson
Financial Network.

The company reported net restaurant growth of 133 locations, up sharply from the same period last year.

System-wide comparable sales growth rose 0.9% for company-owned and franchise locations open at least one year. The measure is viewed as a key indicator of a restaurant business' financial health.

Burger King raised its dividend to 7 cents per share, a one-cent increase.

"We grew comparable sales across all three international regions and opened 133 net new restaurants globally," said Burger King CEO Daniel Schwartz in a statement issued with the earnings report. Citing the company's recent U.S. and Canada launch of Satisfries, a "better-for-you French fry," he said "we believe that new products like this, combined with our focus on improving operations will enhance the guest experience and drive increased restaurant profitability."

Since its 2010 acquisition by global private investment firm 3G Capital, Burger King has been trying to cut overhead expenses by selling more of its restaurants to franchisees. Founded in 1954, the company has more than 13,000 restaurants in 91 countries worldwide.

Thursday, December 26, 2013

Top 5 Cheap Companies To Watch For 2014

I wouldn't say that the market's love affair with all things ��loud��or collaborative is over, but having the right buzzwords is no longer an express ticket to a high multiple. Due in part to self-inflicted wounds that management blames on execution and investor/analyst worries about competition, Jive Software (Nasdaq:JIVE) has dropped more than 10% over the past year and significantly underperformed its peer group.

It may be early to throw in the towel, though. The company's new sales approach, one based on establishing real-world value for clients, is still fresh and the company continues to have the opportunity to show that it can offer a better collaborative platform than less focused rivals like IBM (NYSE: IBM), Microsoft (Nasdaq:MSFT), and Salesforce.com (NYSE:CRM). Although Jive's shares don't look very cheap on a discounted cash flow basis, that's nothing new in the world of growing software companies and other methodologies suggest more upside.

SEE: Earnings: Quality Means Everything

Top 5 Cheap Companies To Watch For 2014: Kohl's Corporation(KSS)

Kohl?s Corporation operates department stores in the United States. The company?s stores offer private and exclusive, as well as national branded apparel, footwear, and accessories for women, men, and children; soft home products, such as sheets and pillows; and housewares primarily to middle-income customers. As of January 29, 2011, it operated 1,089 stores in 49 states. The company also offers on-line shopping on its Web site at Kohls.com. Kohl?s Corporation was founded in 1962 and is headquartered in Menomonee Falls, Wisconsin.

Advisors' Opinion:
  • [By Tom Taulli]

    Competition: While TJX attempts to undercut more traditional retailers, it has plenty of competition in the deep-discount game, Ross Stores (ROST), Kohl’s (KSS) and Burlington Stores (BURL). TJX also must contend with big-box operators like Target (TGT). So far, TJX has been able to dig itself a niche and remain fairly differentiated, but it’s fair to point out the danger in slipping — in retail, customers always have plenty of alternatives.

  • [By Rich Smith]

    J.C. Penney (NYSE: JCP  ) stock skyrocketed last week after news leaked that�Soros Fund Management had taken a big stake in the struggling retailer. And yes, with Penney selling today for close to book value, and a price-to-sales ratio less than half what rivals Kohl's (NYSE: KSS  ) and Macy's (NYSE: M  ) charge, you can see what might have attracted George Soros' attention.

  • [By Traders Reserve]

    These customers are going to spend less at Kohl�� (KSS) and Target (TGT) and low-income customers are going to break Wal-Mart�� (WMT) heart�(Well, given how they pay their employees, it�� won�� be a broken heart, it will be a broken holiday season).

Top 5 Cheap Companies To Watch For 2014: Sprott Resource Lending Corp.(SILU)

Sprott Resource Lending Corp., a natural resource lender, provides bridge and mezzanine financing to precious and base metal mining, exploration, and development companies, as well as energy companies worldwide. The company was formerly known as Quest Capital Corp. and changed its name to Sprott Resource Lending Corp. in September 2010. Sprott Resource Lending Corp. was incorporated in 1980 and is based in Toronto, Canada.

Top 5 Dividend Stocks To Buy Right Now: MEDIWARE Information Systems Inc.(MEDW)

Mediware Information Systems, Inc., together with its subsidiaries, engages in the design, development, and marketing of software solutions targeting specific processes within healthcare institutions. The company offers software systems consisting of company's proprietary application software, and third-party licensed software and hardware. It licenses, implements, and supports clinical and performance management, blood donor, and blood and biologic management products in the United States; and medication management solutions in the United States, the United Kingdom, Ireland, and South Africa. The company?s blood and biologics management solutions include HCLL Transfusion and HCLL Donor, which address blood donor recruitment, blood processing, and transfusion activities for hospitals and medical centers; BloodSafe suite of hardware and software that enable healthcare facilities to store, monitor, distribute, and track blood products; LifeTrak software for blood centers; a nd BiologiCare, a bone, tissue, and cellular product tracking software. Its medication management products comprise WORx, a pharmacy information system to manage inpatient and outpatient pharmacy operations; MediCOE, a physician order entry module; MediMAR, a nurse point-of-care administration and bedside documentation module; MediREC, which assists in achieving compliance with a Joint Commission mandate; and pharmacy management and electronic prescribing systems. The company?s performance management products include InSight software that tracks performance metrics to assist healthcare managers to manage performance. It also provides software installation and maintenance services, as well as billing and collection services to home infusion and home/durable medical equipment markets. The company markets its products primarily through its direct sales force. Mediware Information Systems, Inc. was founded in 1970 and is headquartered in Lenexa, Kansas.

Advisors' Opinion:
  • [By CRWE]

    Mediware Information Systems, Inc. (Nasdaq:MEDW) plans to acquire the assets of Indianapolis-based Strategic Healthcare Group LLC (SHG), a leading provider of blood management consulting, education and informatics solutions.

Top 5 Cheap Companies To Watch For 2014: TII Network Technologies Inc.(TIII)

Tii Network Technologies, Inc., together with its subsidiaries, designs, manufactures, and sells products for use in the networks to service providers in the communications industry in the United States. It provides network interface devices (NID), including overvoltage surge protectors, digital subscriber line (DSL) service splitters, and customer bridge modules; building entrance terminals; and accessories comprising station protectors, customer wiring modules, electro-magnetic interference filters, and line test modules. The company also offers broadband products, such as DSL electronic products that include xDSL plain old telephone service splitters to isolate voice and data signals; Outrigger, an outdoor intelligent residential gateway; HomePlug technology that enables networking of voice, data, and audio devices through the consumers? AC power lines. In addition, it provides connectivity products consisting of connector block and terminal block products; voice over I nternet protocol products; switchable voice NID products; voice intercom systems for use in multi-dwelling units; and wire terminals and other connectivity products. Further, the company offers fiber optic products which comprise wall mount enclosures, rack mount enclosures, OSP fiber enclosures, cable assemblies, miscellaneous fiber accessories, and optic network terminals installation accessories. Additionally, it offers overvoltage surge protection products, including two and three electrode gas tubes; station overvoltage surge protectors; protector modules; and protector packs and cat 5 cat 6 protection products, as well as other surge protection products comprising a 75 ohm coaxial protector for cable networks; a 50-ohm coaxial protector for wireless service providers? cell sites; a gel-sealed Ethernet data protector; and power line/data line protectors for personal computers and home entertainment systems. The company was founded in 1964 and is headquartered in Edgewoo d, New York.

Top 5 Cheap Companies To Watch For 2014: S&P Smallcap 600(PH)

Parker Hannifin Corporation manufactures fluid power systems, electromechanical controls, and related components worldwide. Its Industrial segment offers pneumatic and electromechanical components, and systems; filters, systems, and instruments to monitor and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors that control, transmit, and contain fluid; hydraulic components and systems for builders and users of industrial and mobile machinery and equipment; critical flow components for process instrumentation, healthcare, and ultra-high-purity applications; and static and dynamic sealing devices. This segment sells its products to original equipment manufacturers (OEMs) and their replacement markets in the manufacturing, transportation, and processing industries. The company?s Aerospace segment provides flight control systems and components, including hydraulic, electrohydraulic, electric backup hydraulic, electrohydrostatic, and electro -mechanical components for precise control of aircraft rudders, elevators, ailerons, and other aerodynamic control surfaces. It also provides electronics thermal management heat rejection systems, and single-phase and two-phase heat collection systems for radar, ISAR, and power electronics. This segment markets its products primarily to OEMs in the commercial, military, and general aviation markets, as well as to end users. Its Climate and Industrial Controls segment offers systems and components primarily for use in the mobile and stationary refrigeration, and air conditioning industry; and in fluid control applications in various industries, such as processing, fuel dispensing, beverage dispensing, and mobile emissions. This segment serves OEMs and their replacement markets. Parker-Hannifin Corporation markets its products through direct-sales employees, independent distributors, wholesalers, and sales representatives. The company was founded in 1918 and is headquartered i n Cleveland, Ohio.

Advisors' Opinion:
  • [By Monica Gerson]

    Parker-Hannifin (NYSE: PH) is expected to report its Q1 earnings at $1.48 per share on revenue of $3.26 billion.

    Textron (NYSE: TXT) is estimated to report its Q3 earnings at $0.47 per share on revenue of $2.97 billion.

  • [By Stephen Rosenman]

    Can you really take a company's yearly guidance seriously? Who can predict future events a year from now? It's so hard most companies skip the ordeal. Who can blame them? So many unforeseen events can derail a company's guidance. Yet, a few daredevil companies continue giving their yearly outlook. As far as I'm concerned, that's akin to writing the front page of next year's Wall Street Journal. I've already highlighted how Caterpillar (CAT) and Parker Hannifin (PH) - two excellent companies - almost never get their yearly guidance right.

  • [By Mani]

    Parker-Hannifin Corporation (NYSE:PH) has significant opportunities to expand its operating margins, especially within the Aerospace segment where significant longer term business has already been won, and aftermarket opportunities should increase.

  • [By Ben Levisohn]

    The market in aggregate might have gone nowhere, but that wasn’t for lack of big moves from individual stocks. Parker-Hannifin (PH) gained 2.4% to $115.06 after it was upgraded to Outperform from Neutral at Baird, while Newmont Mining (NEM) gained 2.2% as gold miners headed higher today.

Wednesday, December 25, 2013

Macy's Faults Consumer Wariness for Earnings Shortfall

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macy's earnings retail stocksFrank Franklin II/AP NEW YORK -- Macy's reported a disappointing profit for its second quarter and cut its outlook for the year Wednesday, with the department store operator citing shoppers' reluctance to spend for a slip in sales. Its shares fell 3.4 percent to $46.85 in premarket trading. During the past year, its stock is up almost 27 percent. Macy's (M), which operates its namesake stores and Bloomingdales, is grappling with a yo-yo economic recovery that's making people more careful about their purchases heading into the heart of the key back-to-school selling period. Like other retailers, the Cincinnati-based company is grappling with a yo-yo economic recovery that's making people more careful about their purchases heading into the heart of the key back-to-school selling period. "To see Macy's miss by a wide margin is troublesome, speaking volumes about the health, or lack thereof, of middle America," wrote Brian Sozzi, chief equities strategist for Belus Capital Advisors. For the period ended Aug. 3, Macy's says it earned $281 million, or 72 cents a share. That's short of the 78 cents a share analysts expected. A year ago, the company earned $279 million, or 67 cents a share. Revenue slipped to $6.07 billion, also short of the $6.26 billion analysts expected, according to FactSet. Revenue at stores open a year, a key metric because it strips out the impact of newly opened and closed locations, slid 0.8 percent. Macy's now expects sales at stores open at least a year to climb between 2 percent and 2.9 percent, down from its previous guidance of a 3.5 percent increase. While jobs are easier to get and the turnaround in the housing market is showing promise, the improvements haven't been enough to get most Americans to spend more. Most are juggling tepid wage gains with higher costs of living. On Wednesday, Macy's nevertheless said it was encouraged by its early read on the back-to-school season heading into the third quarter. But other retailers such as teen clothing sellers American Eagle Outfitters (AEO) and Aeropostale (ARO) have cited lots of discounting and warned of a slow start to the period. Macy's also said that it has been marking down prices after a cool spring and that shoppers are responding positively. Macy's also lowered its earnings forecast to $3.80 to $3.90 a share, down from the previous outlook of $3.90 to $3.95 a share. The disappointing results from Macy's don't bode well for J.C. Penney (JCP), which reports next week, Sozzi said.

Tuesday, December 24, 2013

Is IBM a Buy Now?

With shares of International Business Machines (NYSE:IBM) trading around $194 after IBM’s earnings, is the stock an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

International Business Machines (NYSE:IBM) is an information technology company that operates in five segments: Global Technology Services, Global Business Services, Software, Systems and Technology, and Global Financing. Global Technology Services provides information technology infrastructure services and business process services. Global Business Services provides professional services and application management services. Software consists of middleware and operating systems software. Systems and Technology provides clients with business solutions requiring advanced computing power and storage capabilities. Global Financing invests in financing assets, leverages with debt and manages the associated risks. Through its segments, IBM is able to provide information technology products and services to a wide variety of companies participating in diversified sectors, worldwide.

For the most part, information technology is an industry with strong growth trends. However, IBM is having some challenges in the hot cloud computing sector.

T = Technicals on the Stock Chart are Weak

IBM stock has seen a consistent uptrend since establishing lows during the Financial Crisis. The stock has been range-bound for most of the last year and is currently trading at the low end of its range. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, IBM is trading below its key averages which signal neutral to bearish price action in the near-term.

IBM

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

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

IBM Options

16%

0%

0%

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

Put IV Skew

Call IV Skew

May Options

Steep

Average

June Options

Steep

Average

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

E = Earnings Are Mixed Quarter-Over-Quarter

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

2013 Q1

2012 Q4

2012 Q3

2012 Q2

Earnings Growth (Y-O-Y)

3.45%

11.15%

4.39%

11.33%

Revenue Growth (Y-O-Y)

-5.11%

-0.64%

-5.39%

-3.34%

Earnings Reaction

-8.27%

4.4%

-4.91%

3.76%

IBM has seen increasing earnings but declining revenue figures over the last four quarters. From these figures, the markets have had mixed feelings about IBM’s recent earnings announcements.

P = Poor Relative Performance Versus Peers and Sector

How has IBM stock done relative to its peers, Accenture (NYSE:ACN), Hewlett-Packard (NYSE:HPQ), Microsoft (NYSE:MSFT), and sector?

IBM

Accenture

Hewlett-Packard

Microsoft

Sector

Year-to-Date Return

1.32%

18.83%

39.26%

22.17%

4.58%

IBM has been a relative underperformer, year-to-date.

Conclusion

IBM provides key information technology products to companies participating in a multitude of industries around the world. The stock has done well in recent years and is now consolidating in a range extending back a year. A recent disappointing earnings release sent the stock to the bottom end of its recent range. Earnings, revenue figures, and institutional shareholders have sent mixed signals to investors. Relative to its peers and sector, IBM has underperformed year-to-date. WAIT AND SEE what IBM does this quarter.

Monday, December 23, 2013

A Bad Earnings Report Could Slam the Brakes on This Stock's Rally

Investors who follow the industrial sector closely should be ready for a busy week ahead, as some of the top names turn up with their quarterly earnings reports. One company to pay attention to is PACCAR (NASDAQ: PCAR  ) .

PACCAR's earnings release is important for two reasons. One, it tells a good deal about the shape of things in the trucking industry. Two, as Cummins' (NYSE: CMI  ) largest customer, PACCAR can also give investors an idea of what to expect from Cummins' quarterly numbers, which will be up about a week later.

More importantly, what PACCAR delivers Tuesday will determine whether its stock can maintain its new-found momentum. The stock is holding up strong, having gained a solid 20% over the past three months riding on encouraging industry news, such as record highs for truck tonnage in May.

Image from www.fleetowner.com.

Yet the excitement might fizzle out next week, if analyst estimates of a 10% drop in PACCAR's second-quarter earnings per share on 7% lower revenue come true. Industry sales figures for big trucks were mixed in the past quarter, with two months of gains interspersed with one month of decline. Moreover, peer Navistar International (NYSE: NAV  ) reported a sharp 23% dip in revenue for the second quarter, driven largely by lower truck and engine volumes.

But investors should also remember that Navistar has its own set of problems. The spill-over effect of its failed engine technology, and the soaring warranty claims that hit the company hard last year, still exist, which could explain the sharp fall in its sales. So PACCAR's second quarter should at least be better than Navistar's.

Nevertheless, Navistar is working overtime to get back into the business. After having recently won the EPA's approval for its own 13-liter engine, Navistar is swiftly transitioning its heavy-duty trucks to the upgraded technology. With competition heating up, it will be interesting to see how PACCAR plans to maintain the lead in the truck market. Look for clues in PACCAR's upcoming earnings call, and pay special attention to the company's efforts to push further into the natural-gas fuel market, because that's one area where PACCAR easily beats Navistar. It could also hold the key to PACCAR's fortunes in the future.

Natural gas and international markets
PACCAR already dominates the natural-gas-powered heavy-duty truck market in the U.S. with a 40% share, thanks to its long-standing relationship with Cummins and Westport Innovations (NASDAQ: WPRT  ) . As one of Cummins' prominent customers, PACCAR is one of the first to adopt Cummins-Westport engines for its truck models. So any rise in Westport's engine shipments means increasing demand for natural-gas vehicles, which bodes well for PACCAR.

The last quarter, though, was a soft one, with Westport reporting a 32% dip year over year in shipments of Cummins-Westport engines, as demand from international markets slowed down. But PACCAR investors should focus on the long-term prospects of natural-gas trucks, which look promising.

In PACCAR's upcoming earnings call, investors should also look for the company's plans, if any, to expand into China. With Westport's last-quarter engine sales to China more than tripling year over year, the world's most populous country could well be the next hot spot for natural-gas vehicles. PACCAR has already made its way into Brazil, with production at its new DAF trucks plant scheduled to begin later this year. The company should update the progress of the project next week.

DAF trucks are otherwise doing well in Europe, with orders rising 29% year over year during PACCAR's first quarter. If the order book continues to grow during the second quarter, it could help PACCAR offset weakness in some of the other markets.

Foolish takeaway
PACCAR's strength lies in its regular launches of advanced trucks and engines, which keeps it ahead of the competition. The upcoming earnings call should give investors a good idea of what lies ahead for PACCAR, and management is likely to talk about the new products in the pipeline. The company is well poised to ride the recovery in the trucking industry, and its second-quarter earnings report should tell you whether the turnaround is already here. To make sure you don't miss the detailed analysis of PACCAR's earnings report, click here to add the stock to your watchlist.

While you wait for PACCAR's earnings release, check out the stock that The Motley Fool's chief investment officer has selected his No. 1 stock for this year. The special free report: "The Motley Fool's Top Stock for 2013" will reveal the name, and more, of this under-the-radar company. Just click here to access the report today. 

Saturday, December 21, 2013

1 Reason Corning Stock Doesn't Look So Hot

Corning (NYSE: GLW  ) recently released its first-quarter results and although earnings were higher than expected, revenues fell short. The company is in a solid position in the display technology field and enjoys some hefty margins in the sector, but the glaring problem for Corning is its lack of materialized potential and its overdependence on display technologies.

It's not bad, but it's not great
All right, so knocking a company that's been around since 1851, built the glass for Edison's light bulb, and invented the first commercially viable optical fiber may seem a little brash. But the fact is that the company has recently failed to deliver investor gains on great technologies like Gorilla Glass. The glass is used in about 1.5 billion devices in more than 33 brands around the world, and it's the glass that's unofficially used in Apple's (NASDAQ: AAPL  ) iPhone and iPads. According to Steve Jobs' biographer, Walter Isaacson, Corning began mass-producing Gorilla Glass at the suggestion of Jobs for the first iPhone.

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Willow Glass. Source: Corning. 

Gorilla Glass is part of Corning's specialty materials unit, but its display technology division is the one that makes up the vast majority of net profits. Being so dependent on one segment isn't reassuring for investors. Revenue has been mostly flat since 2012, although profits have been stable, but its wholly owned display division saw an 8% revenue decline this past quarter year over year.

Even its joint display venture with Samsung, called Samsung Corning Precision, is expected to have flat production through the coming year, despite the partnership making up more than half of the glass panel market. TVs simply don't excite consumers like smartphones do. No one is waiting in long lines for the newest television release, but they will for a smartphone.

That's why Willows Glass could be the company's night in shining armor, when it becomes available for consumer electronics in 2016. Willow has the potential to usher in a new breed of consumer products like wearable computing, and some have speculated that a possible Apple iWatch would be a prime candidate for the new glass.

But it's hard to make a bet on Corning at this point just on Willow Glass' potential. Many investors made the same bet when Gorilla Glass was first introduced and although it's become widely used in the mobile industry, Corning still relies too heavily on its television and computer screen display segment. At this point, investors may want to wait and see if Willow Glass will revolutionize the consumer electronics industry like some think it will. Buying Corning's stock right now and waiting for Willow to bring big gains seems too much like a repeat of Gorilla's path.

With the explosive growth of smartphones worldwide, many investors thought they would ride Corning's dominant cover glass to massive investment returns. That hasn't played out yet, as mobile growth has failed to offset declines in the company's core business. In this brand-new premium research report on Corning, our analyst walks through the business as well as the key opportunities and risks facing it today. Click here to claim your copy.

 

Thursday, December 19, 2013

Two Winners Take $636 Million Mega Millions Jackpot

Mega Millions JackpotDavid Tulis/APYoung Soolee, owner of the newsstand in the Alliance Center office building in Atlanta, where one of two winning Mega Millions lottery tickets were purchased in Tuesday's $636 million drawing. ATLANTA -- Two lucky winning tickets were sold in Tuesday's near-record $636 million Mega Millions drawing: one at a tiny newsstand in Atlanta, and the other more than 2,000 miles away in California. The lucky Georgia ticket was sold at a Gateway Newsstand in Atlanta's affluent Buckhead area, Mega Millions Executive Director Paula Otto said. Newsstand owner Young Soolee grinned as she arrived Wednesday morning at the shop off the lobby of the Alliance Center office building. The newsstand -- a small, long shop with one register that can hold perhaps 10 people at a time -- is frequented by workers at the office building, which sits across the street from an upscale mall. "I'm so excited and so happy now," Soolee said. "I love my store and the customer now." Some media outlets reported that Soolee would receive money as the owner of the store that sold a winning ticket. But Georgia Lottery spokeswoman Tandi Reddick said Wednesday that's not the case. She said Soolee won't get any bonus beyond the 6 percent commission all retail outlets received based on lottery sales. "They do have the distinction of being known as the lucky store now, and that's always great news for them," Reddick said. The winner has 180 days to claim the prize, Reddick said. The clock began ticking Tuesday. Lottery officials in Georgia will release basic information about the winner, including name and city of residence. Like the policies for store owners receiving bonus money, the number of days and anonymity for the winner varies by state, Paula Otto, Mega Millions lead director, said in an email. Buckhead is a financial center of Atlanta and one of its largest neighborhoods, a vast northern area known for upscale shopping centers such as Lenox Square and Phipps Plaza, both a short walk from the store that sold the winning ticket. The Alliance Center is home to a variety of offices -- lawyers and financial services professionals, even the Brazilian Consulate General. The California ticket was sold at Jennifer's Gift Shop, which sits along San Jose's tree-lined Tully Road, amid a cluster of Asian restaurants. The store's owner, Thuy Nguyen, told KNTV he doesn't know who the bought the winning ticket, but it's likely someone he knows -- most of his customers are his friends. "I feel good! I don't even know, I can't sleep tonight," Nguyen told the station. The winning numbers in the drawing were: 8, 14, 17, 20, 39; Mega Ball: 7. The jackpot was the second-largest lottery prize in U.S. history. It started its ascent Oct. 4. Twenty-two draws came and went without winners, Otto said. Otto said $336 million in tickets were sold for Tuesday's drawing -- they had projected $319 million. "Sales were a little better than we'd anticipated," Otto said. "It was a fun run; it was our first holiday run for either of the big jackpot games." The winners can choose to be paid over time or in a cash lump sum, Otto said. Based on the $636 million figure, the winners would receive $318 million each over time or $170 million each in cash. Mega Millions changed its rules in October to help increase the jackpots by lowering the odds of winning the top prize. That means the chances of winning the jackpot are now about 1 in 259 million. It used to be about 1 in 176 million, nearly the same odds of winning a Powerball jackpot. -.

Tuesday, December 17, 2013

One More Nudge for Prosensa Holding Should do the Trick (RNA)

Anybody who knows at least something about Prosensa Holding NV (NASDAQ:RNA) will at least know the stock turned into a disaster a few weeks ago, plunging from a close of $24.00 on September 19th to a close of $7.14 on September 20th, thanks to the failure of its MS drug drisapersen, which was jointly developed with GlaxoSmithKline plc (NYSE:GSK). Such is the life of a company with only one drug anywhere close to being approved; drisapersen was in Phase 3 trials - RNA shares could have just as easily gained 70% rather than lost 70% had the drug worked.

Yet, now that the dust has settled and the shock has worn off, it may be time to start poking around RNA again. See, the company still has six other programs in the pipeline. Although multiple sclerosis was the biggie, bear in mind that after a 70% beat-down, the new price of Prosensa Holding NV shares may fairly reflect the risk/reward-adjusted value of pipeline as it stands right now, following the failure (and unlikely future) of drisapersen.

In fact, it's the stock more so than the company that's the important part of the Prosensa Holding NV story right now. See, whether they're "supposed to" be doing it now or not, RNA shares are saying the market's testing the bullish waters here, and looking for a reason to get this stock rolling again. More than that, one more nudge could light that fire.... if it hasn't already.

Hot Penny Companies To Invest In 2014

The nearby chart tells the tale. The $4.92 level was a problem in late October, again in late November (though the stock did trade above that level briefly around that time), and it was a resistance line late last week. The bulls aren't giving up, however, and if you look real closely, you'll see that RNA shares traded above the $4.92 ceiling for a while this afternoon. Though they're back under $4.92 now, Prosensa Holding NV shares are well within striking distance of a breakout. Any daily CLOSE above the $4.92 mark should do the trick.

The interesting and encouraging aspect of this brewing breakout is the fact that the media's rhetoric has also changed ... in favor of RNA. That, ironically, is the best thing the stock has going for it - the higher it goes, the more the media and traders talk about it, driving the price even higher, causing more news sources to talk it up. Such is the self-supporting nature of story stocks. Prosensa Holding NV could be one of those stocks, and a close above $4.92 could put the bidding/chatter cycle all the way into self-sustaining mode.

For more trading ideas and insights like these, be sure to sign up for the free SmallCap Network newsletter.

Sunday, December 15, 2013

Rite Aid's Earnings: A Bandage, Not a Cure

Drug store chain Rite Aid (NYSE: RAD  ) sailed to new highs this week as the company reported in its earnings release a return to annual profitability. The $2 billion company is trading up over 40% in the last year, and 60% since the beginning of 2013. The thing is, earnings did not show much to celebrate in the operating business, and its black bottom line was more the result of cost-cutting efforts and margin enhancement. At more than 20 times forward earnings, the market clearly is expecting some degree of sales growth down the line. Is this an accurate assumption, or should investors exercise caution?

Headline numbers
The Street was expecting a loss for the fourth quarter of 2012, even though the company had achieved profitability in the prior quarter -- against analyst estimates. Instead, Rite Aid posted earnings per share of $0.13. This helped lead the company into its first profitable year since 2008, to the delight analysts. In the prior year's quarter, the company posted a loss of $0.18 per share.

While the headline numbers look appealing, investors need to read between the lines. Fourth-quarter revenues were actually down by $600 million, though partially due to the prior year's fifty-third week. More importantly, same-store sales sank 2% year over year, due, in part, by more generic drugs at the pharmacy. Management was eager to point out that generic drugs tend to drag down sales, but prove helpful to gross profit.

For the year, the company earned $0.12 per share, with an adjusted EBITDA of $1.13 billion. Same-store sales dropped a negligible 0.3%. The company closed 44 underperforming stores, and remodeled over 500. It did not open any new stores.

What investors need to focus on
I'm a sucker for turnaround stories, but this one has yet to ring a positive tone for me. The return to profitability is commendable, and clearly, management has taken action to get the company on a growth track -- like its peers Walgreens and CVS. But remember that these seemingly positive figures are not indicative of sales growth or any other organic factor. In the coming quarters, investors need to keep an eye on two crucial metrics: same-store sales and sales per square foot. With the massive remodeling (and closure of unsalvageable stores), we need to see these numbers swing up in a material way. Store remodelings are great, but only if they result in more customers and more sales. At this point, we just don't know if that's the case.

For 2014, EBITDA is projected to come in at just over $1 billion, with net income between $0.04 and $0.20 per share. This guidance is likely hinged upon the efficacy of continued cost-saving measures, and the upward performance of newly remodeled stores.

Investors intrigued by Rite Aid's recent rise may want to wait until more data is available regarding the remodeled stores. The company's cost cutting and reorganization has been effective, but at some point, sales growth must take the front seat.

More from The Motley Fool 

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Saturday, December 14, 2013

Best Stock Investments For 2014

In an on-going effort to oust the board of directors of Commonwealth REIT (NYSE: CWH  ) , its second largest shareholder, Corvex Management, recently forwarded a record request date to Commonwealth management. The latest request by Corvex follows an earlier consent solicitation proposal in late March. Corvex's ultimate objective of the shareholder meeting is to "remove all of CWH's Trustees without cause," according to a Commonwealth press release issued today.

One point of contention mentioned by Commonwealth in its release is the April 22 consent solicitation date proposed in the latest Corvex request. According to Commonwealth, the REIT's declarations of trust and company bylaws give its board the authority to set a date with shareholders, and they have 30 days from the receipt of a "valid request" in which to do so.

Commonwealth's release also claims the inquiry from Corvex is missing corroborative evidence that the shareholders included in the request have owned at least 3% of Commonwealth stock, and have held their shares at least three years. Nor does the consent solicitation include "any cause for the removal of CWH's Trustees," according to Commonwealth.

Best Stock Investments For 2014: Sarin Technologies Ltd (U77.SI)

Sarin Technologies Ltd. develops, manufactures, markets, and sells precision technology products for the planning, processing, evaluation, and measurement of diamonds and gems. Its products include Advisor software, a computerized rough diamonds mapping and analysis system; Colibri, a diamond color grading product for polished diamonds; AGS cut grading, re-cutting, and rough planning software; DiaExpert, a rough diamond software and hardware package for rough diamond planning; DiaExpert XL, a diamond measurement, planning, and marking system; DiaMension, a diamond cut grading product; DiaMark-Z, a rough planning package; DiaMark-Z Eye, which helps in detecting and charting inclusions; and DiaExpert Eye, which enables users to view the interior of a rough diamond and chart inclusions. The company�s products also comprise DiaScribe, a laser inscription software package; DiaVision, a diamond cut grading software; DiaMobile XL, a mobile system for evaluating and planning roug h diamonds; GIA Facetware, a diamond cut grading system; OrchiDia, a rough diamond color predictor; Quazer, a diamond processing laser; TruScan, a diamond laser mapping solution; Instructor, a software package that runs on polished diamond measuring equipment; DiaMension HD, which offers highfidelity 3D-modeling for the measurement of polished and semi-polished diamonds; Galaxy 1000 that enables diamond manufacturers to detect and map inclusions in a rough diamond; and Solaris 100, which enables diamond manufacturers to detect and map inclusions in a small rough diamond. It also offers support services. The company serves diamond manufacturers, diamond dealers, retailers, and gem labs. It operates primarily in India, Africa, Europe, and North America. The company was formerly known as Sarin Research, Development and Manufacture (1988) Limited and changed its name to Sarin Technologies Ltd. in 1994. Sarin Technologies Ltd. was founded in 1988 and is headquartered in Kfar Saba , Israel.

Best Stock Investments For 2014: John Bean Technologies Corporation (JBT)

John Bean Technologies Corporation provides technology solutions for the food processing and air transportation industries in the United States and internationally. It operates in two segments, JBT FoodTech and JBT AeroTech. The JBT FoodTech segment offers industrial food processing solutions and services used in the food processing industry. Its product offerings include freezer solutions for the freezing and chilling of meat, seafood, poultry, ready-to-eat meals, fruits, vegetables, and bakery products; protein processing solutions that portion, coat, and cook poultry, meat, seafood, vegetable, and bakery products; in-container processing solutions for fruits, vegetables, soups, sauces, dairy, and pet food products, as well as ready-to-eat meals in various packages; and fruit processing solutions that extract, concentrate, and aseptically process citrus, tomato, and other fruits. This segment markets its solutions and services to multi-national and regional industrial fo od processing companies. The JBT AeroTech segment provides ground support equipment for cargo loading, aircraft deicing, and aircraft towing; gate equipment for passenger boarding, and on the ground aircraft power and cooling; airport services for the maintenance of airport equipment, systems, and facilities; military equipment for cargo loading, aircraft towing, and on the ground aircraft cooling; and automatic guided vehicles for material handling in the automotive, printing, warehouse, and hospital industries. This segment markets its solutions and services to airport authorities, passenger airlines, airfreight and ground handling companies, and military forces. John Bean Technologies Corporation sells and markets its products and services through direct sales force, independent distributors, and sales representatives. The company is based in Chicago, Illinois. John Bean Technologies Corporation operates independently of FMC Technologies, Inc. as of July 31, 2008.

Top 5 Small Cap Stocks To Invest In Right Now: International Montoro Resources(IMT.V)

International Montoro Resources Inc. engages in the acquisition, exploration, and development of uranium mineral properties in Canada. It holds interests in various uranium properties located in Saskatchewan, Ontario, British Columbia, and Labrador, as well as other resource properties located in New Brunswick and Ontario. The company was formerly known as Montoro Resources Inc. and changed its name to International Montoro Resources Inc. in October 2005. International Montoro Resources is based in Vancouver, Canada.

Best Stock Investments For 2014: Pacific Safety Products Inc.(PSP.V)

Pacific Safety Products Inc. engages in the design, production, sale, and distribution of protective and duty products for law enforcement, security, and defense markets in North America. The company offers various armour solutions, which include body armour designed for protection against ballistic, stab, and fragmentation threats; ballistic blankets to reduce blast effects; and fragmentation protective vests, fragmentation brassards, throat and nape protectors, and chemical warfare protective coveralls. Its armor products comprise breach blankets for use in areas where hard shields are not appropriate; EXPLOSAFE blankets for workers in the event of an electrical explosion or blast; unloading stations to provide safe and easy unloading of service weapons; and armour accessories, such as trauma packs, hard armor plates, and plate harness. The company also provides various body armour products, tactical body armor systems, and patrol carriers for male and female. Its produc ts are worn or included in equipment used by officers, agents, guards, and military personnel. The company supplies its products to the Canadian Department of National Defence, federal government agencies, law enforcement organizations, the U.S. Department of Defense, and the U.S. law enforcement and private security firms under the GH Armor Systems brand through a network of third party distributors. Pacific Safety Products Inc. was founded in 1984 and is headquartered in Arnprior, Canada.

Best Stock Investments For 2014: Nanosphere Inc.(NSPH)

Nanosphere, Inc. develops, manufactures, and markets molecular diagnostics platform, the Verigene System that enables genomic and protein testing on a single platform. Its Verigene System includes a bench-top molecular diagnostics workstation with nanoparticle technology that provides the ability to run multiple tests simultaneously on the same sample. The Verigene System is used for testing infectious disease assays, human and pharmacogenetic assays, and ultra-sensitive protein assays. The company serves hospital-based laboratories and academic research institutions in the United States. Nanosphere, Inc. was founded in 1998 and is headquartered in Northbrook, Illinois.

Advisors' Opinion:
  • [By Roberto Pedone]


    One under-$10 medical equipment player that's quickly moving within range of triggering a major breakout trade is Nanosphere (NSPH), which develops, manufactures and markets an advanced molecular diagnostics platform, the Verigene System, which enables simple, low-cost and highly sensitive genomic and protein testing on a single platform. This stock has been hit hard by the bears so far in 2013, with shares off by 27%.

    If you take a look at the chart for Nanosphere, you'll notice that this stock is just starting to spike sharply higher today back above its 50-day moving average of $2 a share. This spike is quickly pushing shares of NSPH within range of triggering a major breakout trade. That breakout will trigger once NSPH manages to take out the upper-end of its recent sideways trading chart pattern.

    Traders should now look for long-biased trades in NSPH if it manages to break out above some near-term overhead resistance levels at $2.17 to $2.20 a share and then once it takes out its gap down day high from August at $2.29 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 652,718 shares. If that breakout hits soon, then NSPH will set up to re-fill some of its previous gap down zone from August that stated just above $3 a share. If that gap gets filled with volume, then NSPH could easily tag $3.50 to $4 a share.

    Traders can look to buy NSPH off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $1.81 to $1.77 a share. One can also buy NSPH off strength once it clears those resistance levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

  • [By Jon C. Ogg]

    Nanosphere Inc. (NASDAQ: NSPH) is not exactly a household name in molecular diagnostics, and apparently it needs better name recognition for boosting sales. Its sales were disappointing and the stock was down almost 18% at $2.40, and now we have indications down around $2.35 in Wednesday trading indications.

Friday, December 13, 2013

Does Amazon Belong in Your Portfolio?

With shares of Amazon (NASDAQ:AMZN) trading around $381, is AMZN an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Amazon serves its customers through its retail websites and focus on selection, price, and convenience. The company also manufactures and sells Kindle devices. Amazon offers programs that enable sellers to sell their products on the company's websites, including the sellers' own branded websites, and fulfill orders through them. Amazon also provides platforms that allow authors, musicians, filmmakers, app developers, and others to publish and sell content. Online commerce has been on the rise because of the convenience, efficiency, and relatively low prices offered.

Amazon launched its AmazonFresh grocery delivery service in San Francisco on Wednesday, and if the service proves successful in its third location, AmazonFresh could become available in more urban markets throughout the United States next year. Amazon has challenged retailers in almost every other sector with its super cheap prices, so the question now is could its introduction into the grocery business hurt traditional stores like Wal-Mart (NYSE:WMT) or Kroger (NYSE:KR)?

T = Technicals on the Stock Chart Are Strong

Amazon stock has been exploding to the upside in the last several years. The stock is currently trading sideways and may need time to consolidate before heading higher. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Amazon is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

AMZN

(Source: Thinkorswim)

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

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Amazon options

28.34%

63%

60%

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

Put IV Skew

Call IV Skew

December Options

Flat

Average

January Options

Flat

Average

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

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

E = Earnings Are Mixed Quarter-Over-Quarter

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

2013 Q3

2013 Q2

2013 Q1

2012 Q4

Earnings Growth (Y-O-Y)

-85.00%

-150.00%

-35.71%

-43.66%

Revenue Growth (Y-O-Y)

19.23%

22.36%

21.88%

22.01%

Earnings Reaction

9.38%

2.83%

-7.24%

4.76%

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

P = Excellent Relative Performance Versus Peers and Sector

How has Amazon stock done relative to its peers, eBay (NASDAQ:EBAY), Barnes & Noble (NYSE:BKS), Overstock (NASDAQ:OSTK), and sector?

Amazon

eBay

Barnes & Noble

Overstock

Sector

Year-to-Date Return

52.42%

Hot Low Price Companies To Own In Right Now

-0.65%

-12.90%

96.35%

13.95%

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

Conclusion

Amazon is one of the largest Internet commerce companies in the world, and it aims to serve the needs of consumers, companies, and entrepreneurs around the globe. The company launched its AmazonFresh grocery delivery service in San Francisco on Wednesday. The stock has been flying higher in recent years, but is now trading sideways. Over the last four quarters, earnings have been decreasing while revenues have been increasing, which has generally pleased investors in the company. Relative to its peers and sector, Amazon has been a relative performance leader year-to-date performer. Look for Amazon to OUTPERFORM.

Tuesday, December 10, 2013

Here's How One Mega-Bank Is Trying To Crush Bitcoin

The success of Bitcoin during 2013 has lead to interest in the crypto-currency spreading like wildfire. And though there are still plenty of concerns about the anonymous digital currency, more than just investors have taken notice.

Source: Flickr/BTC Keychain.

A patent application for a new anonymous electronic payment system has just been made public, with many citing the similarities between the proposed currency and Bitcoin. And the applicant behind the new Bitcoin rival? JPMorgan Chase (NYSE: JPM  ) .

Cashing in on currency

The meteoric rise of Bitcoin's value over the past few months obviously drew the attention of other companies that provide means for payment of online transactions. With an estimated $1 trillion in online payments expected by 2017, the market size is nothing to be laughed at. As most banks have begun to realize, a larger and larger segment of the population prefers to do their banking online -- and the same is true of shopping.

JPMorgan Chase's patent states the company's intentions to develop a virtual wallet for consumers with a virtual currency that allows for anonymous, free payments online. The currency would be developed in order to compete with both debit and credit cards, which dominate the online payment market.

If you can't beat 'em, join 'em

Since JPMorgan Chase is one of the nation's largest credit card providers, any sort of competition online would result in the decline of its own business. So the company is joining the growing ranks of online payment systems in order to stanch the flow of revenue headed out the door.

But banks aren't the only ones threatened by the development (and wild success) of digital currencies. eBay's (NASDAQ: EBAY  ) PayPal is the current leader of digital wallets, with 137 million active accounts in markets spread across 26 currencies. But the payment processor has been losing ground to newer, easier systems that have popped up across the Internet -- including Braintree, which eBay just acquired.

Google (NASDAQ: GOOG  ) and Amazon (NASDAQ: AMZN  ) have also both gotten into the online payment melee, with Google Wallet and Amazon Payments. Both methods are widely accepted by merchants across the Internet, but still lag behind PayPal and credit/debit card payments. But the issue for consumers remains that each system still requires access to a bank account or credit card, plus the wallets or payment systems are not accepted everywhere. That leads to multiple accounts, which spreads out their money. Hence the attraction of a digital currency.

Challenges ahead

As we've seen with Bitcoin, there is a huge demand for digital currency. But there are a few roadblocks that still exist for any company or developer trying to get into the game. Despite its incredible popularity, Bitcoin is not accepted as payment everywhere online. Until merchants are assured that Bitcoin is recognized as a legitimate currency, there will be a large number of online sellers that won't allow its use for payment. The same will happen for the proposed currency from JPMorgan Chase, though the bank 's involvement may settle some seller's concerns -- an option unavailable to the open-sourced Bitcoin.

With the undeniable trend towards more and more mobile and online transactions, consumers will be deciding which payment method ultimately wins. But if JPMorgan Chase and the other established payment processors have anything to say about it, Bitcoin's appeal will fizzle out and consumers will rely on their newer payment options.

Online trends continue to hobble the biggest banks

It's not just Bitcoin that's posing a threat to JPMorgan Chase and its peers. The entire digital revolution has created a client base that's more interested in mobile and Internet banking options. The traditional bricks-and-mortar bank will soon go the way of the dodo bird -- into extinction, that is. This sounds crazy, but it's true. Every single one of the nation's biggest banks are dramatically reducing branch counts and overhauling the ones left behind. But despite these efforts, they're still far behind a single and comparatively tiny lender that's already leapt into the future. Since the beginning of 2012 alone, this company's shares are already up more than 250%. And they're bound to go higher. To download our free report revealing the identity of this stock, all you have to do is click here now.

Top Cheap Companies To Buy Right Now

I talk a lot here about how I think the market is overly complacent, implied volatility is too low, options are relatively cheap and I believe all that to be true. But.... the reality is that the Great Rally of 2013 really hasn't been very volatile.

Of 2013's 222 trading days,the S&P 500 has closed 130 days less than 0.5% higher or lower.� 5 have been +/- >1.5%; and just 1 day +/- >2% (thanks to www.ntmarkets.com for that arresting statistic).

Apart from a few (very few) downdrafts the stock market has basically just moved steadily higher. It's been an absolute Bear Killer of a market and also death to buyers of option premium.

But, what I want to talk about today is trading option volatility in the form of spreads. Being volatility neutral, in other words. The measure for an option position's volatility exposure is called Vega.

The Vega of an option is the measure of the impact of changes in the underlying volatility on the option price. Specifically, the Vega of an option expresses the change in the price of the option for every 1% change in underlying volatility.

Foe example, let's take stock XYZ trading 46 and the 3 month 50 call is trading at 2. We'll assume that the Vega of the option is 0.15 and that the underlying volatility of XYZ is 25%.

Top Cheap Companies To Buy Right Now: Advance Auto Parts Inc(AAP)

Advance Auto Parts, Inc., through its subsidiaries, operates as a retailer of automotive aftermarket parts, accessories, batteries, and maintenance items. It operates in two segments, Advance Auto Parts (AAP) and Autopart International (AI). The AAP segment operates stores, which primarily offer auto parts, including alternators, batteries, chassis parts, clutches, engines and engine parts, radiators, starters, transmissions, and water pumps; accessories comprising floor mats, mirrors, vent shades, MP3 and cell phone accessories, and seat and steering wheel covers; chemicals consisting of antifreeze, freon, fuel additives, and car washes and waxes; and oil and other automotive petroleum products. This segment also provides battery and wiper installation, battery charging, check engine light reading, electrical system testing, video clinics and project brochures, loaner tool programs, and oil and battery recycling services; and sells its products through online. The AI segm ent operates stores that offer replacement parts for domestic and imported cars, and light trucks to customers in northeast and mid-Atlantic regions, as well as to warehouse distributors and jobbers in North America. As of January 1, 2011, the company operated 3,369 AAP stores, including 3,343 stores located in the northeastern, southeastern, and Midwestern regions of the United States under the Advance Auto Parts and Advance Discount Auto Parts trade names; 26 stores situated in Puerto Rico and the Virgin Islands under the Advance Auto Parts and Western Auto trade names; and 194 stores under the Autopart International trade name in the United States. It serves do-it-yourself, do-it-for-me, or commercial customers. The company was founded in 1929 and is based in Roanoke, Virginia.

Advisors' Opinion:
  • [By P.I.A.]

    č·Ż AutoZone is the largest company of its kind with 5,201 stores, and its plan is to continue growing square footage. It currently has 362 stores in Mexico, with 21 opened during the recently concluded quarter four. Of its foremost competitors, O'Reilly and Advance Auto Parts (AAP), it is the only one with an expanding international presence in Mexico.

  • [By Dan Caplinger]

    What's interesting, though, is that historically, auto-parts makers are seen as relying on the lack of success among automakers. After all, new cars don't need parts nearly as often as older cars do, and when Ford and GM perform well, their customers don't have to rely as much on Genuine Parts or competitors AutoZone (NYSE: AZO  ) and Advance Auto Parts (NYSE: AAP  ) for replacements. Yet, even though Advance's 15% gain, and AutoZone's 20% rise year to date, aren't quite as substantial as Genuine Parts, they still signal a paradigm shift in the way investors look at the industry, perhaps recognizing that for every new car sold, there's usually a used car that gets traded in, and so good news for Ford and GM sales might actually translate into more business for the parts industry.

Top Cheap Companies To Buy Right Now: Bank of America Corporation(BAC)

Bank of America Corporation, a financial holding company, provides banking and nonbanking financial services and products to individuals, small- and middle-market businesses, large corporations, and governments in the United States and internationally. The company?s Deposits segment generates savings accounts, money market savings accounts, certificate of deposits, and checking accounts; and Global Card Services segment provides the U.S. consumer and business card, consumer lending, international card and debit card services. Its Home Loans & Insurance segment offers consumer real estate products and services, including mortgage loans, reverse mortgages, home equity lines of credit, and home equity loans. It also provides property, disability, and credit insurance. The company?s Global Commercial Banking segment offers lending products, including commercial loans and commitment facilities, real estate lending, leasing, trade finance, short-term credit, asset-based lending, and indirect consumer loans; and capital management and treasury solutions, such as treasury management, foreign exchange, and short-term investing options. Its Global Banking & Markets segment provides financial products, advisory services, settlement, and custody services; debt and equity underwriting and distribution, merger-related advisory services, and risk management products; and integrated working capital management and treasury solutions. The company?s Global Wealth & Investment Management segment offers investment and brokerage services, estate management, financial planning services, fiduciary management, credit and banking expertise, and asset management products. Bank of America Corporation serves customers through a network of approximately 5,900 banking centers and 18,000 automated teller machines. It was formerly known as NationsBank Corporation and changed its name on October 1, 1998. Bank of America Corporation was founded in 1874 and is based in Charlott e, North Carolina.

Advisors' Opinion:
  • [By Lee Jackson]

    Bank of America Corp. (NYSE: BAC) is one of the banks that has scaled back mortgage refinancing operations significantly. While the acquisition of Merrill Lynch has been a tremendous boost to the top and bottom line, the company still faces litigation over mortgages and practices. They recently settled with the New York Attorney General over alleged compliance problems. The Thomson/First Call price target for the stock is $15.50. Investors are paid a small 0.3% dividend. Bank of America closed Wednesday at $14.06.

  • [By Jessica Alling]

    We all saw the share prices tank after JPMorgan (NYSE: JPM  ) , Wells Fargo (NYSE: WFC  ) , and Bank of America (NYSE: BAC  ) reported earnings. But did the banks' earnings really justify the negative reactions they received? In the video below, Motley Fool contributor Jessica Alling discusses the reason for the drops and why Foolish investors should see past the initial reactions.�

  • [By Bryan Perry]

    In the most recently published report of bank stress testing, Lloyds came out with the best ratios among its peers, this following last quarter�� better-than-expected earnings report that fueled a 10% jump in the common shares. I can�� help but to look at Bank of America�� (BAC) stock when it was trading at $5 just two years ago — it now sits above $14 after touching $15 before the budget battle ensued.

Hot Undervalued Stocks For 2014: USG Corporation(USG)

USG Corporation, through its subsidiaries, engages in the manufacture and distribution of building materials worldwide. The company offers gypsum and related products, including gypsum wallboard, joint compounds used for finishing wallboard joints, cement boards, glass mat sheathing, gypsum fiber panels, poured gypsum underlayments, ultra light panels, and various construction plaster products. Its gypsum products are used in various building applications to finish the interior walls, ceilings, and floors in residential, commercial, and institutional constructions, and repair and remodel constructions. The company also produces gypsum-based products for agricultural and industrial customers to use in various applications, including soil conditioning, road repair, fireproofing, and ceramics. In addition, it manufactures ceiling grid and acoustical ceiling tile for electrical and mechanical systems, and air distribution and maintenance applications. USG Corporation distribut es its gypsum products through specialty wallboard distributors, building materials dealers, home improvement centers and other retailers, contractors, and a network of distributors. Further, it distributes other manufacturers? gypsum wallboard, joint compound and other gypsum products, as well as drywall metal, insulation, and roofing products and accessories. The company sells its products under SHEETROCK, DUROCK, FIBEROCK, SECUROCK, LEVELROCK, RED TOP, IMPERIAL, DIAMOND, SUPREMO, AURATONE, ACOUSTONE, DONN, DX, FINELINE, CENTRICITEE, CURVATURA, and COMPASSO brands. The company was founded in 1901 and is based in Chicago, Illinois.

Advisors' Opinion:
  • [By Eric Volkman]

    She also serves as chairman of the United States Steel and Carnegie Pension Fund, and on that organization's investment committee. Outside of U.S. Steel, she sits on the board of directors of USG (NYSE: USG  ) and the Pennsylvania Business Council, among other entities.

  • [By Seth Jayson]

    USG (NYSE: USG  ) reported earnings on April 24. Here are the numbers you need to know.

    The 10-second takeaway
    For the quarter ended March 31 (Q1), USG missed estimates on revenues and missed estimates on earnings per share.

Top Cheap Companies To Buy Right Now: Global Payments Inc.(GPN)

Global Payments Inc. provides electronic transaction processing services for merchants, independent sales organizations (ISO), financial institutions, government agencies, and multi-national corporations located in the United States, Canada, Europe, and the Asia-Pacific region. It offers a comprehensive line of processing solutions for credit and debit cards; business-to-business purchasing cards; gift cards; and electronic check conversion and check guarantee, verification, and recovery, including electronic check services, as well as terminal management. The company also offers proprietary software products to establish revolving check cashing limits for the casinos? customers in the gaming industry. In addition, it sells, installs, and services automated teller machine and point of sale terminals; and provides card issuing services, including card management and card personalization. The company markets its products directly, as well as through ISOs, retail outlets, tra de associations, alliance bank relationships, and financial institutions. Global Payments Inc. has a joint venture with La Caixa Group to provide merchant acquiring services to merchants in Spain. Global Payments Inc. was founded in 2001 and is headquartered in Atlanta, Georgia.

Advisors' Opinion:
  • [By Monica Gerson]

    Global Payments (NYSE: GPN) is expected to post its Q1 earnings at $0.95 per share on revenue of $623.79 million.

    Synergetics USA (NASDAQ: SURG) is projected to post its Q4 earnings at $0.06 per share on revenue of $17.01 million.

Top Cheap Companies To Buy Right Now: DRDGOLD Limited(DROOY)

DRDGOLD Limited engages in the exploration, extraction, processing, and smelting of gold in South Africa. It holds interests in the Blyvoor mine; and the Crown gold surface tailings retreatment facility that reprocesses sand and slimes dumps, as well as involves in the surface retreatment operations. The company was incorporated in 1895 and is based in Roodepoort, South Africa.

Top Cheap Companies To Buy Right Now: Kohl's Corporation(KSS)

Kohl?s Corporation operates department stores in the United States. The company?s stores offer private and exclusive, as well as national branded apparel, footwear, and accessories for women, men, and children; soft home products, such as sheets and pillows; and housewares primarily to middle-income customers. As of January 29, 2011, it operated 1,089 stores in 49 states. The company also offers on-line shopping on its Web site at Kohls.com. Kohl?s Corporation was founded in 1962 and is headquartered in Menomonee Falls, Wisconsin.

Advisors' Opinion:
  • [By Traders Reserve]

    These customers are going to spend less at Kohl�� (KSS) and Target (TGT) and low-income customers are going to break Wal-Mart�� (WMT) heart�(Well, given how they pay their employees, it�� won�� be a broken heart, it will be a broken holiday season).

  • [By Ben Levisohn]

    On a relatively quiet day for retailer, shares of J.C. Penney have fallen 3.8% to $6.77, but are still above their recent lows. Kohl���(KSS), meanwhile, has edged up 0.1% to $54.93,�Macy���(M) has risen 0.4% to $44.72 and�Sears Holdings�(SHLD) has gained 0.6% to $55.97.

  • [By Ben Levisohn]

    Shares of J.C. Penney have dropped 4.4% to $8.65 today at 9:33 a.m., while Macy’s (M) has fallen 1.2% to $42.99, Kohl’s (KSS) has dipped 0.9% to $51.56, Nordstrom (JWN) is off 0.8% to $55.99 and Dillard’s (DDS) has dropped 0.8% to $78.50.

  • [By Sam Mattera]

    AFP/Getty Images TVs stand out as one of the premiere, big-ticket items of Black Friday. Even Kohl's (KSS), a store known for its clothing (not electronics), will have a few in stock that day, in an attempt to lure in a few extra bargain hunters. With so many different stores running specials, and all the different models on sale, there are literally dozens of different Black Friday TVs to choose from. While there are plenty of great deals available, a few stand out as being particularly noteworthy. Head to Walmart for the All-Around Cheapest Flat-Screen TV Walmart (WMT) will be selling a 32-inch LED Funai for just $98, making it one of the very cheapest TVs on sale this year. Discriminating buyers, however, should likely stay away -- Funai isn't in the same league as Sony (SNE) or Panasonic (PCRFY) when it comes to picture quality, and this particular set is just 720p (in contrast to full-HD 1080p). If you've never heard of Funai, the company generally sells its TVs under the Sylvania and Magnavox brands, two budget names not exactly known for their quality. Nevertheless, $98 for a 32-inch LED is hard (perhaps impossible) to beat. Shoppers looking for the cheapest flat-screen they can get their hands on should plan to be at Walmart Thanksgiving night. For a Great Deal on a Quality Samsung, Hit h.h. gregg At h.h. gregg (HGG), they'll also be offering a 32-inch LED, but unlike Walmart's Funai deal, this is on a model known for its quality. The set, Samsung's UN32EH5300, was declared one of the best 32-inch LCD TVs you can buy by LCD TV Buying Guide for 2012. It sports full-HD 1080p, and comes equipped with Samsung's smart TV suite -- owners can access digital content from sites like Netflix (NFLX) and Youtube. h.h. gregg will sell the TV for $299.99, what it claims is a 33 percent discount. Right now, Amazon (AMZN) is charging about $330 for the TV as part of its "Countdown to Black Friday" sale, making the h.h. gregg discount closer to 10 percent. (O

Top Cheap Companies To Buy Right Now: Horace Mann Educators Corporation(HMN)

Horace Mann Educators Corporation, through its subsidiaries, operates as a multiline insurance company in the United States. The company underwrites and markets personal lines of property and casualty insurance, retirement annuity, and life insurance products. Its products include private passenger automobile and homeowner?s insurance coverage; tax-qualified individual and group annuities in fixed account and combination contracts; and individual and joint whole and term life insurance products. The company offers its products primarily to K-12 teachers, school administrators, education support personnel, and other employees of public schools and their families. It markets its products through its sales force, as well as through independent agents. Horace Mann Educators Corporation was founded in 1945 and is based in Springfield, Illinois.

Top Cheap Companies To Buy Right Now: Horizon Lines Inc.(HRZ)

Horizon Lines, Inc., through its subsidiaries, provides container shipping and integrated logistics services. It ships a range of consumer and industrial items, such as refrigerated and non-refrigerated foodstuffs, household goods, auto parts, building materials, and other materials used in manufacturing. The company offers container shipping services to ports within the continental United States, Puerto Rico, Alaska, Hawaii, Guam, the U.S. Virgin Islands, and Micronesia. Its integrated logistics services comprise rail, truck brokerage, warehousing, distribution, expedited logistics, and non-vessel operating common carrier operations. Horizon Lines, Inc. also offers terminal services. The company operates terminals in Alaska, Hawaii, and Puerto Rico; contracts for terminal services in seven ports in the continental United States; and the ports in Guam, Yantian, and Xiamen, China, as well as Kaohsiung, Taiwan. In addition, it offers inland transportation services. As of Dec ember 20, 2009, the company owned or leased approximately 20 vessels and 18,500 cargo containers. Horizon Lines, Inc. serves consumer and industrial products companies, as well as various agencies of the U.S. government, including the Department of Defense and the U.S. Postal Service. The company was founded in 1956 and is based in Charlotte, North Carolina.

Sunday, December 8, 2013

Retirement Q&A: Utility funds useful for income?

Utilities funds have been a haven for income investors pretty much since there have been utilities. But are they a good investment for retirees?

The answer is yes — if you're comfortable with the risk from stocks, even mild-mannered ones such as utilities.

Utilities are a group that includes not only electric utilities such as Duke Energy (ticker: DUK) and Southern Company (SO), but telephone utilities such as AT&T (T) and Verizon (VZ), as well. Because utilities often have limited growth potential, they tend to pay generous dividends. And because people usually don't go without telephone or power in tough times, they tend to be more stable than most other types of stocks.

Compared to what you can get from bank CDs and money market funds — which is to say, almost nothing — dividend payouts from utilities look pretty generous. Duke, for example, has a 4.42% yield, which is the payout over the past 12 months divided by the current stock price. Southern's dividend yield: 4.95%. AT&T and Verizon pay 5.1% and 4.2%, respectively.

Utility companies also have the ability to raise dividends, which helps investors keep up with inflation. Duke, for example, paid out a quarterly dividend of 0.245 cents per share on Dec. 16, 2010. It will pay out 0.78 cents a share the same day in 2013.

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The drawback: They're still stocks, and they often lag when investors think rates will rise. That has been the case this year: Utility stocks have gained 13.2%, including dividends, vs. 29.1% for the Standard & Poor's 500 stock index.

And being stocks, they can lose money. The worst 12-month period for utility stocks, according to Morningstar, was in inflation-wracked 1974, when the average utility fund lost 41.2%.

A good way to start investing in utilities is through a low-cost mutual fund, such as Utilities Select Sector SPDR (XLU), which has a 1! 2-month yield of 3.84% and charges 0.18% in annual expenses. Two other low-cost utility funds:

• Vanguard Utilities ETF (VPU), 3.66%

• iShares U.S. Utilities (IDU), 3.21%.

Have a retirement question? Send it to jwaggoner@usatoday.com for consideration in a future column.

Follow John Waggoner on Twitter: @johnwaggoner.

Thursday, December 5, 2013

Are Ingles Markets Earnings Threatened by the Kroger-Harris Teeter Deal?

Ingles Markets (NASDAQ: IMKTA  ) will release its quarterly report on Monday, and investors have been pleased to see shares of the regional grocery-store chain rise to levels not seen since before the financial crisis. Yet from its vantage in the Southeastern U.S., Ingles Markets has to be concerned about the impact that Kroger's (NYSE: KR  ) proposed buyout of Harris Teeter (NYSE: HTSI  ) might have on the competitive landscape in the region, with a potential threat to Ingles' future prospects looming over the company's stock.

Ingles Markets is a small regional chain with about 200 stores scattered across the Carolinas, Georgia, Tennessee, Virginia, and Alabama. In addition to its grocery operations, Ingles also maintains an affiliated real estate rental business, essentially taking advantage of its status as an anchor tenant to lure other retailers to its shopping centers. But with Kroger already having had a presence in its territory and with the Harris Teeter acquisition only strengthening Kroger's footprint in the region, will Ingles be able to sustain its competitive position? Let's take an early look at what's been happening with Ingles Markets over the past quarter and what we're likely to see in its report.

Stats on Ingles Markets

Analyst EPS Estimate

$0.62

Change From Year-Ago EPS

12.7%

Revenue Estimate

$1.02 billion

Change From Year-Ago Revenue

2.4%

Earnings Beats in Past 4 Quarters

3

Source: Yahoo! Finance.

What does the future hold for Ingles Markets earnings?
In recent months, analysts have kept steady on their projections on Ingles Markets earnings, leaving both short-term quarterly estimates and longer-range future projections unchanged. The stock has lost its upward momentum, though, falling 9% since early September.

Part of the reason for the Ingles' share-price declines came from the company's second-quarter earnings release back in August. Revenue gained 1.5%, but Ingles reported a net loss for the quarter, reversing a year-ago loss. Yet the earnings hit that Ingles took during the quarter was largely the result of a refinancing transaction that reduced the company's interest expenses substantially, replacing debt paying 9.5% with later-maturing debt carrying a 5.75% rate.

But the bigger news affecting Ingles was Kroger's purchase of Harris Teeter back in July for $2.44 billion. The deal still hasn't closed, pending regulatory approval of the merger. But given Harris Teeter's reputation for high-quality products and Kroger's size, the combination could prove formidable for Ingles, making it potentially difficult for it to respond effectively.

The obvious question for Ingles is whether it itself might be an acquisition target. With an incredibly low price-to-book ratio, Ingles looks bargain-priced for any acquirer that wants to bolster its presence in the Southeast. Even with the stock having climbed in part due to exactly that sort of takeover speculation, Ingles shares still look attractively priced compared even to similarly sized small regional chains elsewhere in the country. That could make it a smart pick-up for companies like Food Lion operator Delhaize or Dutch grocery operator Royal Ahold, which owns the Northeast-centered Stop & Shop chain and could look to expand downward along the Eastern Seaboard.

In the Ingles Markets earnings report, watch to see whether the company gives any hints that it's aiming to put itself up for sale. The grocer has done a reasonably good job of supporting its own growth, but with M&A activity on the rise, Ingles needs to position itself well to take full advantage while the environment is favorable.

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New Home Sales Surge in October Despite Higher Rates

New Home SalesChuck Burton/AP WASHINGTON -- Sales of new U.S. single-family homes recorded their biggest increase in nearly 33½ years in October, suggesting the housing market recovery remains intact despite higher mortgage rates. The Commerce Department said Wednesday sales jumped 25.4 percent to a seasonally adjusted annual rate of 444,000 units. It also said new home sales fell 6.6 percent in September. The release of both the September and October reports was delayed because of a 16-day partial shutdown of the government last month. Economists polled by Reuters had expected new home sales to set a 428,000-unit pace last month. Compared with October last year, new home sales were up 21.6 percent. The strong rise in new home sales, which are measured when contracts are signed, suggested higher mortgage rate had not derailed the housing market recovery. Higher mortgage rates have slowed the pace of home sales, but demand for accommodation as household formation continues to recover from multidecade lows is keeping demand supported. Home resales fell in October for a second straight month and confidence among single-family home builders has ebbed somewhat since nearing an eight-year high in August. Strong new home sales in October saw the stock of houses on the market falling 3.7 percent after touching their highest level in nearly three years in September. Despite the tight supply of properties, the median price of a new home slipped 0.6 percent from a year-ago. At October's sales pace it would take 4.9 months to clear the houses on the market, down from 6.4 months in September. A supply of 6.0 months is normally considered as a healthy balance between supply and demand.

Wednesday, December 4, 2013

Massive Crude Inventory Drop of 12 Million Barrels: API

The American Petroleum Institute (API), a trade association for the oil & gas industry, said in its weekly inventory report after markets closed on Tuesday that the U.S. crude oil inventory has fallen by 12 million barrels in the week ending last Friday. The group also reported that gasoline stockpiles fell 119,000 barrels and distillate supplies rose 540,000 barrels.

That 12 million barrels must have evaporated. Or somehow a number was misreported. The API gets its data voluntarily from refiners, bulk terminal owners, and pipeline companies.

Analysts at Platts have estimated that last week's crude supply fell by 1.25 million barrels, that gasoline inventories are down 119,000 barrels, and that distillate supplies are up 540,000 barrels.

U.S. refinery capacity had been running at about 90% of capacity, so unless something really weird is happening to all that crude the API number has got to be the result of erroneous reporting or some other vast anomalous event. API does not offer any explanation for the massive drop in crude inventories.

In the week ending November 22nd, the U.S. produced about 8 million barrels of crude a day and U.S. inventories rose by 3 million barrels that same week. No supply reduction of sufficient magnitude has been reported, no pipeline has stopped flowing, and no refinery has experienced an unexpected shutdown.

And it has been illegal to export U.S.-produced crude oil since the mid-1970s. If the crude is leaving the country, it is being smuggled and it's really hard to hide a VLCC that holds about 2 million barrels of oil.

There is no logical explanation for a drop of 12 million barrels, so we'll just have to wait to see what the U.S. Energy Information Administration has to say when its report on crude inventories is published tomorrow.

Monday, December 2, 2013

Clergy Housing Tax Break Declared Unconstitutional - Everything You Want To Know And More

Freedom From Religion Foundation got this sign...

On November 22, 2013, Judge Barbara Crabb ruled that Internal Code Section 107(2) which exempts from income tax amounts, designated as housing allowances,  paid to "ministers of the gospel" is unconstitutional.  Whatever you might think of the decision, you have to give Judge Crabb credit for being a gutsy lady.  The decision negatively impacts tens, if not hundreds, of  thousands of clergy, some of whom have a great deal of political influence.  According to the Joint Committee on Taxation, clergy housing exclusion is a tax expenditure that costs $700,000,000 per year.  The Committee does not break that down between in-kind housing (Section 107(1)), which is unaffected by the decision and cash allowances (Section 107(2)) which the decision declares to be unconstitutional as violating the First Amendment establishment clause.  Church owned parsonages have gone out of favor in the last several decades, so I would put a fair estimate of the effect of this decision at about half a billion per year.

National media have not been paying very much attention to the controversy about the housing allowance.  I have been following it pretty closely and am offering here something of a round-up of my coverage for the last three and a half years.  The posts are broken down topically rather than chronologically and include posts from my pre-Forbes blog with the catchy title Passive Activities And Other Oxymorons.

The Controversy

There are two aspects to the controversy about the clergy housing allowance exclusion (often referred to as "parsonage") .  The two aspects frequently get confounded.  One is whether the exclusion is constitutional and the other is whether it is good tax policy.  I actually think that constitutional purists are pretty rare.  Activists and advocates tend to use the Constitution like a drunk uses a lamppost, more for support than illumination.  When you get into a discussion like this it is useful to remember that something could be a good idea, but unconstitutional or constitutional, but a bad idea.

Work, Fight or Pray – Vestige of the Medieval in Our Tax Code  January 12, 2011

When it comes to housing, it would seem that Section 119 is sufficient.  If your employer provides you with a place to live, so that you will be near at hand, the value of that place to live is excludable from your gross income.  If that place happens to be a room in a hotel for the manager, a rectory or fifteen square feet on a nuclear submarine, the principle is the same.  That's not the way it is, though.  The military and the clergy are special.  Since at least historically, housing tended to go with their jobs, monetary allowances paid in lieu of actual housing are exempt from tax.

IRS Veteran Carries Fight Against Clergy Tax Abuse Into Retirement February 18, 2012 Guest Post from Robert Baty, bane of the basketball ministers and my most constant commenter.

Southern Baptist Minister Defends Clergy Tax Benefit February 21, 2012 Guest post from Reverend William Thronton.

Should Jeremy Lin's College Coach Get A Tax Break For Being A Congregationalist? February 22, 2012

Contraception Exception And Mansions For Televangelists – Retired IRS Officer Connects The Dots March 2, 2012 More from Bob Baty.

The Unconstitutionality Of The Parsonage Exemption March 20, 2012 Guest post from Andrew Seidel of the Freedom From Religion Foundation.

Cash Parsonage Allowances – Constitutional But Bad Tax Policy – Law Professor Argues March 25, 2012

In this setting, there are no disentangling alternatives. If religious entities and actors are taxed, they are subjected to the inherently intrusive relationship between the tax collector and the taxpayer. If religious entities and actors are not taxed, there are inevitable tensions policing the boundaries of exemption. The choice between borderline entanglement and enforcement entanglement is inherent in the relationship between the modern state's tax system and contemporary religious institutions and their personnel.

Take Alarm At The First Experiment On Our Liberties March 22, 2012 Another guest post from Andrew Seidel in which he responds to my complaint that FFRF sometimes seems a bit overzealous.

Where Do Romney And Obama Stand On Special Tax Status For Ministers? September 1, 2012

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Southern Baptists Against Clergy Tax Abuse September 2, 2012 (This post is mainly selections from Reverend William Thornton's SBC Plodder)

Someone make the case that Joe Sixpack has to pay taxes on his income and doesn't get any exclusion for his singlewide complete with a deck and a mangy dog sleeping under it, while Kenneth and Gloria Copeland live in an 18,280 square-foot lakefront parsonage on 25 acres valued at $6.2 million and exclude hundreds of thousands of dollars from income taxes under the housing allowance.

In Defense Of Special Tax Treatment For Clergy September 6, 2012 Lawyer/CPA Frank Sommerville gave me a guest post where he defends the constitutionality of Code Section 107

Jill Stein Lining Up With Freedom From Religion Foundation On Parsonage Exclusion? October 9, 2012

In my interview with Green Party Presidential Candidate Jill Stein, I only asked her one tax question that was not covered in the Green Party Platform.  The question concerned the parsonage exclusion, Code Section 107.

Retired IRS Officer Launches Petition Against Clergy Tax Benefit December 26, 2012

Will Liberal Ministers Challenge Their Own Tax Loophole? January 5, 2013

Pastor Loses Parsonage Exclusion To Poor Planning - July 31, 2013

Should Humanist Groups Seek Church Status? October 1, 2013

Harvard University recognizes Greg Epstein as a chaplain.  He is ordained as a rabbi.  Yet he does not get part of his salary as tax-free housing allowance.

A Mighty Trumpet And Some Big Bucks

Phil Driscoll, formerly of Blood Sweat and Tears and for a while a beneficiary of tax-free federal housing courtesy of the Bureau of Prisons, had a ministry that looked more like a record label.  His litigation was over the question as to whether a housing allowance could be used for more than one home.  At issue was over $400,000 in exclusion for the years 1996-1999.   Driscoll won in Tax Court, but the IRS won on appeal.

Parsonage Exclusion – Shouldn't Enough be Enough? December 19, 2010

Blowing My Own Horn January 4, 2011