5 Top Bond Funds & ETF Bond Investments in 2013

Investing in bond funds is usually not exciting.  But then again, in today’s volatile world, investment in a bond ETF with reliable returns can be a comfort.
Bond investment can be a excellent way to stabilize your portfolio. Bond funds and ETFs during the 2008 financial crisis performed well.  Keep in mind that during that tough year the Barclays Capital U.S. Aggregate Bond Index returned 5.24% to investors.  During this time, the S&P 500 fell a staggering 37%.
However, the bond market has many flavors – and also risk levels.  So here’s a look at some of the top:

Vanguard GNMA Bond Fund

The word “mortgage” can be scary to many investors.  But the fact is that a mortgage can be good a investment – especially if the mortgage bond funds focus on good credit quality.
This is certainly the case with the Vanguard GNMA (MUTF: VFIIX) bond funds, which has $35.3 billion in assets.  Much of the portfolio is in Ginnie Maes.  And yes, these are backed by the U.S. government.  There are also investments in Treasuries as well as positions in some Fannie Mae and Freddie Mac issues.
But there are still some risks.  Perhaps the most significant is prepayments from the mortgages.  This generally happens when rates fall.  In other words, there will be a lower return on the portfolio.
The good news is that the Vanguard GNMA has been skillful in dealing with prepayment risk.  At the same time, the fund’s low expense ratio – at 0.23% — gives returns a boost for this bond investment.

PIMCO Real Return (PRTNX)

A terrible enemy of bonds is inflation.  Because bonds, bond funds and bond ETF investments generally provide a fixed amount of income, there will be less purchasing power from these cash flows when the value of the dollar falls.  In light of the budget deficits and commodity surges, it is reasonable that there will be higher inflation over the long haul.
But there are various bond investments that adjust their value for inflation, such as Treasury Inflation Protected Securities.  And one of the top mutual funds in the sector is the PIMCO Real Return (MUTF: PRTNX) fund, which has $18.9 billion in assets.
Interestingly enough, the fund has much flexibility.  For example, it will use exotic investments like futures and forward contracts.  There are even positions in other countries, with a big position in Brazil.
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Best Vanguard Mutual Funds for Your 401k

When it comes to 401k investing, investors have a lot of options for retirement. But with 20 new funds on the table in 2010 (most have already launched, but a few have been temporarily delayed), free trading in Vanguard ETFs, and drastically reduced minimums for its lower-cost Admiral shares, Vanguard’s in the business to win over investors. And they’re going to keep picking off the competition, one-by-one, using their heft and low costs.
Yet, while all this will help Vanguard gather assets and reduce costs for you and me, the longer the list of funds gets, the more confusing it can be to pick the winners from the losers.
To make matters worse, the major drawback of investing for retirement in a 401(k) is that your options are limited to the funds your plan administrators make available. Typically, they choose middle-of-the-road funds deemed safe enough to keep employees from losing their shirts — and the administrators from losing their jobs.
  • Related Article: 7 deadly sins of 401k investing
So unless you use your 401k plan’s brokerage option, you aren’t likely to be able to invest in any Vanguard fund you like (and even the brokerage service may not have access to all Vanguard funds). In the case of Vanguard Precious Metals & Mining Fund (VGPMX), that’s a good thing. The fund is incredibly volatile, with a maximum cumulative loss of 69.8% in the most recent bear market versus 50.9% for Vanguard Total Stock Market (VTSMX) and 51.0% for Vanguard 500 Index (VFINX). So much for gold funds being a safe haven.
On the other hand, you also aren’t likely to have access to some funds that you probably should have an allocation to, such as the Vanguard Emerging Markets Index Fund (VEIEX), which I highly recommend for 401(k) investors (not for all of your money, of course, but a 5% portion).
In fact, I believe that as the global economy continues healing, having an allocation to emerging markets will become a virtual requirement for investors with long-range objectives, like retirement. That’s why I’d suggest you ask your plan administrator to add this fund to the mix of choices your company includes in its 401k plan. (I’m also doubtful your 401(k) gives you access to Vanguard’s terrific Health Care fund, which in itself offers access to the growing demand for medical products and services in the emerging world.)
Here are several other Vanguard funds I’d like to see in your 401k portfolio. Use them if they’re available to you. But if they’re not, try requesting them. You might need to enlist your colleagues to convince your benefits department to add them. But remember, it’s your retirement that’s at stake. Your 401k plan should be serving you, not covering them.
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PRIMECAP is #1

As a retirement savings vehicle, a 401(k) is inherently geared toward the long term. But when planning for retirement, you don’t just want to save your money, you want it to grow. Consider that even at a retirement age of 60 to 65, you could live another 30 years or more. Invest too conservatively, and you could outlive your money. To prevent this, my first choice for your 401(k) is a trio of Vanguard funds run by the redoubtable team at PRIMECAP Management: PRIMECAP (VPMCX), PRIMECAP Core (VPCCX) and Capital Opportunity (VHCOX).
Unfortunately, there’s a hitch: All three funds are now closed to new investors outside of established 401(k) plans. However, they may be available to you. If so, consider yourself lucky, and don’t hesitate to give a big slug of money to this group of managers who take a value-oriented eye to buying growth stocks. Their funds are the largest single component of my retirement and nonretirement accounts, as well as those of my wife and kids.

Balancing risk and return since 1929

If the PRIMECAP funds are closed to you, Vanguard Wellington (VWELX) is an excellent choice for the core around which you build the rest of your 401(k) portfolio. Since its inception in July 1929, it has held out the promise of strong relative returns in good and bad markets by focusing on one very important investment discipline: Diversification.
As a balanced fund, approximately 60% to 70% of Wellington’s assets are in high-quality blue-chip stocks, and 30% to 40% are in top-notch investment-grade government and corporate bonds. You can easily get the entire bond exposure you need in your 401(k) portfolio from this fund. The fund also has the flexibility to invest as much as 20% of its equity assets in foreign securities, an important part of a diversified portfolio.
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What I like most about Wellington is its excellent management team. Wellington manager Ed Bousa took the lead management position at Wellington in 2003 with nary a change in the fund’s strong and consistent gait, and very minor changes in the portfolio, which is precisely what I had expected, as he had worked with former manager Ernst Von Metzsch for so long.
Bonus: By investing through your 401(k), you can avoid the hefty $10,000 minimum initial investment required to get into Wellington on your own. If you decide to follow this strategy, I’d suggest putting about 40% of your money in Wellington.
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Growthing Small Caps Stocks For 2012

Early-stage companies spend many years planning for the day when everything clicks. For a number of them, 2012 could be the year when all their hard work pays off. So I decided to look at companies set to see sales rise more than 200% next year.
Most of the companies in the table below each already sport market values of more than $400 million, so they're no mere wallflowers. Clearly, they already hold great promise for some investors. If they can actually deliver on the strong growth expected of them, shares may surge.

Stay away from these stocks...
Of course, you should take some of these forecasts with a grain of salt. Alimera Sciences (Nasdaq: ALIM) has a promising device (an insertable tube that delivers steroids directly into the eye for those suffering from diabetes-related blindness), but the Food and Drug Administration (FDA) has been dragging its feet on approval.

Some think the company's product, Illuvien, may never get the green light and those lofty sales forecasts will never come to fruition. Still others think Illuvien will be approved and see annual sales approach $300 million in coming years. If that happens, shares would likely double or triple from today's levels.
Growthing Small Caps Stocks For 2012: Tesla Motors (Nasdaq: TSLA)
In a similar vein, Tesla Motors (Nasdaq: TSLA) will have to sell a lot of cars in 2012 to meet expectations of scorching sales growth. Yet competition in the electric car market is getting awfully crowded. Privately-held Fisker Automotive is aiming directly for Tesla at the high end of the market with a new model to be released this month, and firms such as Porsche, BMW and Mercedes-Benz are ramping up electric offerings in coming years as well. I'm in the camp that feels Tesla will be unable to sell enough cars to become profitable.
And legal wrangling may impede sales growth in 2011 for SIGA Technologies (Nasdaq: SIGA), which as I recently noted, may be forced to share a large government contract with Pharmathene (NYSE: PIP).
Consider these stocks instead...
Yet a pair of companies in the health field clearly have the makings of robust growth in 2012 -- and beyond.
Little-known Pacific Biosciences (Nasdaq: PACB) has developed a technology platform that can rapidly sequence strands of DNA at a lower cost than rivals. That was the promise held by rival Illumina (Nasdaq: ILMN), which is now worth more than $8 billion, more than eight times the value placed on Pacific Biosciences. To be sure, Illumina spent the first half of the past decade falling short of sales forecasts before sales finally took off in recent years. So there's still a chance Pacific Biosciences struggles to meet aggressive growth expectations in the near-term.
Pacific Biosciences has secured pre-orders for $24 million worth of equipment and has a decent shot of hitting 2011 sales forecasts of $38 million. But to meet the 2012 sales forecast of $139 million, the sales force needs to start moving at a more rapid clip. Longer-term, annual sales could exceed $500 million (rival Illumina had $666 million in sales last year), at which point, per-share profits could exceed $3 or $4 and shares would be twice as high as they are now. When that happens, though, is an open question.
Growthing Small Caps Stocks For 2012: Savient Pharma (Nasdaq: SVNT)
In a similar vein, Savient Pharma (Nasdaq: SVNT) may be looking at a very large market opportunity with its gout drug, Krystexxa, which helps alleviate gout-related pain and inflammation in patients who don't respond to other forms of treatment. Savient would have preferred to be acquired. When the company announced in late October that no takers were found, shares quickly plunged from $21 to $12 and now sit around $10.
Yet it's too soon to write Savient off. The company's team of 60 sales people just started selling Krystexxa at the end of February, and investors will start to more clearly see the drug's demand in coming quarters.
The real promise for Savient lays in the nature of gout. Cases of the arthritic condition have been rising quickly, particularly among U.S. males, likely due to a corresponding increase in the current spikes in diabetes and obesity in America. Once a patient starts suffering from gout, the disease can wield painful, but short-lived episodes. However, gout attacks have a tendency to become more frequent and painful with time and it is considered to be an irreversible condition once it reaches later stages.
Savient's Krystexxa has proven more effective in treating extreme gout pain than any other drug on the market, leading analysts at Global Hunter Securities to predict annual sales may eventually exceed $500 million. (As a note of caution, there are other promising gout treatments undergoing clinical testing, and if they reach the market, Krystexxa's potential opportunity would shrink.)
Savient is unlikely to be profitable before 2013, so patience will be required. Then again, the company still may end up in the hands of a suitor long before then and deliver big share price gains in the process.

Best Nu Stock Quote 2012

Best Nu Stock Quote 2012: AgFeed Industries (FEED)

By Ian Wyatt

"With the worlds largest and a quickly growing population of 1.3 billion people, China has many mouths to feed," observes small cap specialist Ian Wyatt. In his Small Cap Investor Pro, he explains, "One of my favorite China small cap stocks is AgFeed Industries Inc. (NASDAQ: FEED), a hog feed and breeding company.

"I’ve been bullish on China for several years, but my recent 3-week trip confirmed my bright outlook for this emerging market. The best news for investors is that just like the rapid growth Chinese economy, many China stocks are profitable and expanding, yet their shares are trading at very attractive valuations.

"AgFeed Industries sells products to distributors and large-scale pig farms. Pork is a big business in China, and the country is the largest consumer of pork in the world.
"In China it is estimated that nearly half of consumer spending goes towards food, and pork is an essential component of the Chinese diet and accounts for over 60% of total meat consumed. My first-hand experience is that pork is far and away the most popular meat in China.

"China discourages pork imports, so suppliers operating within the country need to meet almost all of the nation's pork demand. The country produced 625 million hogs in 2008, almost 50% of the total worldwide production and five-times the number produced in the U.S.

"The challenge for Chinese producers is that undersized backyard farms still account for over 70% of production, and the country has yet to industrialize the farming industry.
"However, the government is encouraging sustainable farming with the goal of increasing food production, and this is a mandate that should bode well for agricultural stocks.

"AgFeed Industries has made two strategic agreements this year that will boost production and expand margins.

"The company recently signed a joint venture with M2P2, a production and management consulting firm. This venture will modernize AgFeed Industries' production facilities and enhance total production capability.

"The company also formed a partnership with Hypor, a genetics development company which will increase the quality of the hogs.  "Both partnerships combined may boost total output by 30%, while improving the product quality. The end result for AgFeed will be a higher market price and contribute to margin expansion in 2012 and beyond.

"During the first nine months of this year, AgFeed Industries grew revenues by 20% to $117 million from $97.2 in the first nine months of last year.

"Margins have decreased this year as hog prices cannot keep up with the rise in feed price. As a result, profit margins declined to 15.8% from 27% in the first three quarters of fiscal 2012. Naturally, earnings have also come down from last year's record levels, with EPS of $0.18 versus $0.42 in the same period last year.

"But investors should view these results as a short-term bump in the road on a long- term growth opportunity. AgFeed shares have fallen 45% since their 52-week high back in June, a reflection of the poorer than expected financial results.

"This minor set back should not concern long-term investors in AgFeed. Despite the fall in hog prices earlier this year, the company was still able to bring in $1.9 million in operating cash flow. AgFeed is also sitting on over $36 million in cash, and has minimal debt obligations.

"I expect EPS of $0.31 for this year and $0.70 in 2012. Shares of AgFeed are currently trading 14.5-times my 2012 EPS estimate. And looking forward to 2012, shares are valued at just 6-times my earnings estimates.

"For a company with expanding sales and future upside from expanding profit margins, I see significant upside for AgFeed shares which I believe should trade at a P/E of 15.5-times 2012 EPS.

"My AgFeed share price target of $10.50 represents a 138% increase from the late December share price, and provides investors in this stock with lots of upside."


Best Nu Stock Quote 2012: China Mobile (CHL)


Validea is an intriguing advisory that bases its stock selections on the known investment criteria of legendary stock market investors.

John Reese explains, "China Mobile Ltd. (NYSE: CHL) is one of the rare stocks to get approval from three of tour Guru Strategy computer models; it earns top marks from my Warren Bu?ett-, Peter Lynch-, and James O'Shaughnessy-based models.

"With the Western world still working its way through the aftermath of the credit crisis, a number of top strategists are looking eastward for growth in 2012.

"Byron Biggs, Anthony Bolton, Jim Rogers -- these are just some of the market gurus who have been keying in on China, where one of the world's greatest exporting nations is now poised for some major domestic growth as well.

"I also see a lot of opportunities in China, and Hong Kong-based China Mobile may be the greatest. The country's largest mobile phone network, it topped the 500-million- subscriber mark in the third quarter.

"The Bu?ett approach looks for firms with lengthy histories of earnings growth and conservative financing, and China Mobile delivers.

"It has upped earnings per share in each year of the past decade (and is on track to do so again in 2012), and its debt of $1.45 billion is less than a tenth of its annual earnings ($16.6 billion).

"The company also has averaged a 23.1% return on equity over the past ten years, a sign of both the strong management and durable competitive advantage Bu?ett is known to look for.

"The Lynch model, meanwhile, considers China Mobile a 'fast-grower' -- Lynch's favorite type of investment -- because of its 24.4% long-term EPS growth rate. (I use an average of the three-, four-, and five-year EPS growth figures to determine a long-term rate.)

" Lynch is famous for using the P/E/Growth ratio to identify growth stocks selling on the cheap, and the model I base on his writings considers P/E/Gs below 1.0 acceptable, and those below 0.5 the best case.

"When we divide China Mobile's 11.3 P/E ratio by its growth rate, we get a P/E/G of just 0.46, a great sign. Lynch also liked conservatively financed firms, and China Mobile's tiny 2.3% debt/equity ratio easily passes muster with my Lynch-based strategy.

"Finally, the model I base on James O'Shaughnessy's value stock approach targets large firms with strong cash flows and high yields.

"China Mobile's $185 billion market cap, $6.97 in cash flow per share (vs. the market average of just $0.49), and 3.8% dividend yield are all good enough to earn this model's approval. Disclosure: I'm long CHL and own the stock in the portfolios o?ered by my advisory firm, Validea Capital Management."



Best Nu Stock Quote 2012: China Tel (CHTL)


Growth stock specialist Toby Smith turns to a speculative micro-cap stock for his top pick for 2012:ChinaTel Group, Inc. (Other OTC: CHTL).

With the added disclosue that he personally own shares in CHTL, along with his clients at ChangeWave Research, the advisor looks to the firm's potential role in a new joint venture in the China telecom space.

"Our bullishness is based on a pending China Tel and Chinacomm joint venture as a 'basic telephone service' (BTS) licensed carrier in China. The other BTS carriers are all large companies with $10 billion+ market caps, such as China Mobile, China Netcom and China Unicom. Today's market cap for China Tel is $130 million.

"The Chinacomm/ChinaTel joint venture owns 37,000 kilometers of fiber-optic network and 3.5Ghz spectrum for wireless broadband in 29 of the biggest China cities. That infrastructure alone has a book value of over $1 billion.

"ChinaTel has su?ered a great credibility problem on the Street due to a set of failed capital raising deals that failed to close.

"But the delays in their closing equity financing over the last 18 months has turned out to be a blessing in disguise, as the potential valuation for the China Wi-Max network has at least doubled since the previous failed deal.

"We have advised clients to be positioned in China Tel now, ahead of what we consider to be imminent PIPE  (private investment in public equity) deal, which CHTL announced in their latest SEC 8K. The size of the PIPE will undoubtedly be larger and at higher value than the failed $3.14 per share Olotoa deal.

"CHTL's announcements in the last few weeks on $500M+ of new private network business alone from the People's Republic of China ministries adds $1 a share (or more) to the $3.20 book value that Olotoa was paying for 49% of CHTL.

"In addition, CHTL just closed stock-only consulting contracts with their key employees on Dec 1. Nobody takes a stock deal in lieu of cash unless they know a lot about the near future of the PIPE transaction.

"Based on our analysis, the PIPE deal o?ers disclosed in Oct 8K are from Asian telco/ high tech firms itching to capitalize on the China Internet miracle - -they are the only market other than India with less than 40% wirless/fixed broadband penetration.

"We believe ChangeWave Research is the only independent research firm following China Tel Group; we rate the stock a 'strong buy' with a $5 a share target for 2012 and a $9-$10 target for 2012."


Best Nu Stock Quote 2012: Canadian Oil Sands Trust

by David Dittman, contributing editor Canadian Edge

Canadian Oil Sands Trust (COSWF) has clearly lagged broad-based and energy-sector benchmarks alike over the trailing 12 months. A series of unplanned turnarounds at the Syncrude operation, of which Canadian Oil Sands owns 36.7 percent, have analysts questioning whether rising costs will ever allow Canadian Oil Sands to really benefit from elevated oil prices.

And the very skeptical wonder if actual output will ever match Syncrude's capacity potential. All in all, after years of hype and outperformance the bar is now set rather low for Canadian Oil Sands. The stock is likely to revert back to its usual pattern of trading in sympathy with crude oil prices, a relationship that did break down in 2010.

New demand from Asia, old demand in the developed world and a desire from investor for hard assets will keep the per barrel price of oil elevated over the next 12 months.

Canadian Oil Sands will restrain the excruciating growth of unplanned turnaround costs, and Syncrude will get on the path to realizing its potential.

At the new rate of CAD0.20 per share per quarter, the stock will yield about 3 percent. The stock has taken a hit in the second half of 2010, and management has shown it will boost the payout to re?ect upside oil-price surprises. Soon-to-convert Canadian Oil Sands Trust is a solid total return play on one of the world's most intriguing resource stories, set up for capital appreciation as well as dividend growth. Buy it up to $28.


Best Nu Stock Quote 2012: Catlin Group

by Vivian Lewis, editor Global Investing

Insurers benefit when things go wrong. That explains our latest pick, Catlin Group (CNGRY). Incorporated and regulated in Bermuda, listed primarily in London as CGL, the stock's ADR is equal to two British shares.

It is the largest syndicator at Lloyd's of London, the reinsurance business. It's also a favorite holding of institutional investors.

It very conservatively invests its premiums, in cash and fixed income with only 2.5% in hedge funds, yet it managed to produce a return on equity of 1.8% in H1 and of 2.9% in 2009 and Q3.

It keeps raising its dividend, more steadily if you buy in sterling than the ADR. Given its current yield of 6% I'm satisfied with the payout but Citigroup analysts say it will go to 7.7%..

It's a family businees, under CEO Steve Catlin, established as a Lloyd's underwriter in 1984.

It's green, funding the Catlin Arctic Survey to measures the thickness and density of ice foes in the Arctic Sea and carbon dioxide absorption (ocean acidification). Nice but not why to buy.

Rather, you should buy because Catlin is a globally diversified insurance business operating 88-89% in US dollars. It is quick to develop new businesses to benefit from macro-economic trends.

It shifted its casualty lines from insuring British solicitors and surveyors, to hot button more profitable US insurance lines: medical malpractice; directors and o#cers (D&O) insurance; cover for architects, engineers, and construction and design professions; and environment risk.

Catlin justifies these new lines (priced by its experienced actuaries) as "short tail" controlled latent risk cover for underserved niches.

Longer-tail risk is very selectively underwritten by Catlin based on claims made. (Tails refer to the extremes of a normal curve, the unexpected events. Longer-tails mean unexpected payouts.)

"Crysalis" is innovative oil production insurance, launched in Feb for oil and gas drillers. New business is booming post-Gulf of Mexico, and not just from US drillers.

BP's disaster explains the rush for Crysalis cover. BP had a Bermuda "captive" (self-financed) insurance firm.

What it will be able to collect for its captive, say industry sources, is $1.5-3.5 bn. Against this, the economic loss from the Gulf disaster is $40 bn. And since the Macondo sank, BP shareholders losses from the stock's drop topped $73 bn, a compelling argument for buying insurance. Crysalis standard contracts cap the amount of cover per event at $200 mn, and per company at $100 mn, shortening the tail.

Not everything went Catlin's way. Its first half earnings were nipped 8% from prior year by Chilean earthquake claims and the Gulf of Mexico. However, we had a benign hurricane season.

And for all the dollar's appeal, getting a decent investment return is not easy in the present QE2 environment.

If in?ation takes o", claims will be higher and coverage from investment income lower. But then Catlin can raise its premiums. And it may have shifted the policies it o"ers into another currency.

Citi expects the total payout next year for this "undervalued" (rated low risk, high return) share to come to 23.4% in sterling, and 16.6% in dollars at its target price of $12.80. Citi's 2010 profit forecast is $369 million, vs $243.8 million in 2009 and $384.9 million in 2008. (Per share, the hit was even greater in 2009 because Catlin did a rights o"ering to invest more during the crisis.).

Its Sept. quarter saw Catlin premium income up 9% and earned income up 13%. Market cap is $1.982 billion, with the ADR stock at $11.50. It has an A.M. Best A rating from the insurance watchdog.

Its combined ratio, a key metric, is 97% -- meaning expenses are 97% of premium income so underwriting was 3% to the good before any investment income. Buy CNGRY.



Best Nu Stock Quote 2012: Eldorado Gold (EGO)


"While my primary focus is on the international financial markets, it’s the glint of gold that has caught my eye for 2012," says Martin Hutchison.

The contributing editor to both Money Map Report and Money Morning, explains, "Gold – or mining companies like Eldorado Gold (NYSE: EGO) – an especially compelling investment for 2012.

"There hasn’t really been a commodity bubble like the current one since the late 1970s. It will end, as these things always do – but only when the world’s central banks decisively tighten monetary policy and turn o? the spigots flooding the system with cash.

"That’s unlikely to happen until consumer inflation has shown itself rising sharply. In relative terms, gold’s price is still far below its all-time highs – the 1980 top at $875 per ounce is equivalent to $2,400 today, roughly double the current price.

"Supply is also becoming an ever-larger factor – the total global supply of new gold in 2012 was valued at under $90 billion, with another $35 billion or so available from recycling.

"That first number is unlikely to change as mining output has been declining by about 1% per annum in volume terms, in spite of the recent surge in gold’s price.

"This means that if the big boys – such as the hedge funds (global assets of $1.9 trillion) or China (o?cial reserves of $2.3 trillion) – get involved, demand is likely to quickly exceed supply by a huge margin.

"Even though all the gold ever mined is still with us, it has a value of only about $5 trillion – a lot of money, but not huge in light of global investment flows.

"So, if the money really pours into gold, the price could again take o?. After all, $2,400 an ounce is still some distance away, and there’s a lot more speculative capital around today than there was in 1980.

"There’s no money tightening in the works currently. The Fed has kept monetary policy extremely loose for a year now, and has said it has no intention of raising rates in the near term.

"The European Central Bank, the Bank of Japan and the Bank of England have also indicated they do not intend to tighten, while China’s M2 money supply has risen by 29% in the past year.

"Given all this money supply sloshing around, it’s not surprising that gold prices have zoomed upwards – and will continue doing so as long as the Fed and its central bank brothers maintain a loose-money policy.

Rather than gold itself, I’d recommend gold mining shares – first choice, Eldorado Gold – for two reasons:

1    * First, there’s the leverage. A gold mining company with extraction costs of $600 per ounce doubles its profits when gold goes from $900 to $1200.

2    * Second, commodity speculation pushes up share valuations, so chances are you’ll make even more money. After all, the earnings growth rate becomes pretty spectacular, which can make a very simple company look like a Google!

"As a bonus, Eldorado is not just in gold, it’s in Chinese gold – both internally and through a takeover it recently executed.

"That means it benefits not only from any rise in gold prices, but directly from increases in Chinese wealth. Chinese investors, when they buy gold, will naturally turn first to domestic output.

"Eldorado plans to double current production by 2013 (even without its recent acquisition) – no decline here. What’s more, it’s reasonably valued – actually quite cheap – considering its earnings potential.

"The company was founded in 1992, and has come a long way in a relatively short time, building to a recent market capitalization of $5.15 billion.

"It owns the Kisladeg gold mine in Turkey, which produced 58,000 ounces of gold in the third quarter of 2012, and the Tanjanishan gold mine in western China, which produced 31,000 ounces.

"In addition, its Efemcukuru project, with projected reserves of 1.7 million ounces of gold in Turkey, is expected to begin production in the fourth quarter of 2012.

"Eldorado also has gold-development projects in Greece and Brazil and an iron-ore project in Brazil. Its current gold reserves, proved and probable, total 7.6 million ounces.

"In September 2012, Eldorado made an agreed-share-exchange o?er for Sino Gold, the largest international gold mine in China. The o?er values Sino Gold at approximately $2.2 billion and will give Sino shareholders approximately 25% of the combined group.

"Sino has two operating mines in China – Jinfeng, the country’s second-largest mine with production of 151,000 ounces, and the White Mountain Gold Mine, which began production in January 2012. The Eastern Dragon project in Heilongjiang province will become Sino’s third mine.

"The combined companies will have gold reserves of 12.7 million ounces, with annual production expected to reach 850,000 ounces in 2012. In the third quarter, Eldorado earned $30.2 million, or 8 cents a share – up from 5 cents a share in the third quarter of 2008.

"That’s at an average gold price received of $957 per ounce, compared with a total production cost, including overhead, of $430 per ounce. Based on third-quarter earnings, EGO has a P/E ratio of about 35 times – steep, but not excessive given the growth potential.

"That should become obvious in the year-end figures, which will show the rise in gold prices we saw in recent months dropping straight to Eldorado’s bottom line.

"Just estimating, if the gold price for the fourth quarter averages $1,100 an ounce, that will send an extra $150 per ounce or so in profits to shareholders, adding about 35% to EPS and reducing the P/E correspondingly.

"Yes, labor and energy costs could rise a bit, but not much – Eldorado’s costs were only $402 per ounce in the third quarter of 2008, when oil was at $147 a barrel.

"Bottom line: Increasing gold production – check. Contained costs – check. In the middle of the world’s fast-growing Chinese gold market – check.  Decent balance sheet and profitability – check. What’s not to like?"


Best Nu Stock Quote 2012: Flagstar Bancorp

by Mark Skousen, editor The Hedge Fund Trader

My favorite speculative stock idea for 2012 is Flagstar Bancorp (FBC), the Troy, Michigan-based bank with 165 branches in Michigan, Indiana, and Georgia.

The stock was trading for over $140 a share before the financial crisis; the stock fell to $5 a share last May, and it is now under $1.50.

Earnings are way down, and the stock has su"ered from heavy tax loss selling in November and December. In fact, it's selling for a fraction of its book value ($5.30). But there is some good news coming out. Quarterly revenues tripled to $459 million, and the bank is expected to be marginally profitable next year. They are growing rapidly again by using a little-known but powerful technique called "EVA momentum."

Economic Value Added (EVA) -- a powerful new metric in finance -- was co-invented by Joel Stern and Bennett Stewart as a performance measure in excess of the opportunity cost of capital.

Joel Stern is a genius who teaches finance at six graduate schools, including Chicago, Carnegie-Mellon, and Cape Town, and speaks each year at FreedomFest.) Flagstar broke positive this year with an EVA momentum of 11.5%, one of the highest rankings of all thrift and mortgage finance companies.

In short, Flagstar is creating value for its shareholders at a rapid pace, and that fact will re?ect itself in a higher stock price.

Currently it has nearly $3 billion in cash to deal with its $3.65 billion in debt. It might be a good takeover candidate by one of the regional banks.

The tax selling is probably over by now, and FBR Capital just upgraded its rating of the stock to "outperform."

Moreover, company o#cers and directors are buying stock, 2.2 million shares worth since November 1 at between $1 and $1.35. In every way, this small bank stock is a super bargain. It could double in value and still sell below book.



Best Nu Stock Quote 2012: Hard Asset Producers (HAP)


"Whenever inflation heats up, there's no better place to park your cash than in tangible commodities," says Nathan Slaughter.

his The ETF Authority, he noes "Our favorite play on this sector is Market Vectors Hard Asset Producers (NYSE: HAP), an ETF whose 300-stock portfolio provides one-stop shopping for six distinct commodity sub- sectors.

"History has shown conclusively that there is one asset class that thrives above all others under these hostile conditions: commodities. A depreciating dollar is a sure-fire recipe for rising commodity prices. And when inflation is on the rampage, investors always like the reassurance of owning hard assets.

" Instead of watching prices for things like steel and gasoline rise all around you, why not convert your dollars into these commodities directly and enjoy the ride?

"Even if the Fed does manage to keep inflation in check, we believe that good old supply-and-demand fundamentals favor rising prices anyway.

"With the global economy getting back on track and emerging powers like China swallowing mountains of raw materials, the short-circuited commodities rally will have juice once again.

"Investors have a dizzying array of options here, but our favorite is Market Vectors Hard Assets. The fund is invested in six commodity sub-sectors.with top billing going to the energy sector, where integrated oil & gas giants, o?shore drillers and equipment/service providers soak up about 40% of the fund's assets.

"Elsewhere, shareholders will have a large stake in agricultural firms, ample exposure to gold and silver producers, along with aluminum, nickel, iron ore and other critical industrial metals. Rounding out the portfolio are holdings linked to coal, steel, uranium and even forest products.

"Whether it's to protect purchasing power against the ominous threat of currency debasement or a simple bet on stronger economic expansion, both point to a continued run-up in commodity prices -- and the shares of producers that bring us these goods."


Best Nu Stock Quote 2012: Harmonic (HLIT)

by Elisea Frishberg, contributing editor The MoneyMan Market Report

TV, cable and satellite systems all over the world are making huge investments to providing high definition programming.

As a result, Harmonic (HLIT) could easily turn out to be one of the world's biggest winners for 2012; the company makes encoders, advanced fiber optic and digital delivery systems.

And as domestic satellite systems and emerging cable systems embrace these HLIT products, revenues are growing fast, while profits are literally exploding. The best part of this story is that the markets are still pricing HLIT based on last year's shaky economy.

Harmonic has made a number of acquisitions of video technology over the past several years; it bought Entone's VOD business for $45 million in 2006, and purchased Rhozet's transcoding technology in 2007.

However, Omneon is the largest of its recent deals, and we expect the impact on Harmonic's profitability in the next two years to be huge.

Omneon sells storage and networking equipment for media companies to enhance their distribution of high end TV products and services.

Omneon already had an impressive customer base, including the BBC, BSkyB, CBS, Comcast, Discovery Communications, Echostar, NBC Universal, News Corporation, Televisa, Turner Broadcasting and Viacom. Together, Harmonic says the two companies have 2,000 customers across more than 100 countries.

With a market cap below $1 billion and dependence on the continuation of global growth for the next few years, I would put this in the class of aggressive investments. However, we expect continuation of the global growth cycle, combined with accelerating U.S. results.

Accordingly, we believe that HLIT's stock price has not yet caught up with its very impressive growth prospects. As the skepticism about economic growth subsides, so will the multiples a"orded Harmonic, Inc. expand.

Rapidly developing middle classes around the world is leading to increasing interest in TV distribution systems such as cable providers.

Overall, the company is in exactly the right place at the right time. In our view, this underappreciated stock is on track be one of the top performers for 2012.


Best Nu Stock Quote 2012: iShares Silver (SLV)


"2012 will be the year that silver shines," says metals and  mining specialist Gene Arensberg. In his Got Gold Report, a specialty service from The Gold Newsletter, he says, “We believe that the metal-backed exchange traded fund iShares Silver Trust (NYSE: SLV) is a safe and convenient way for most investors to gain exposure to the silver market.

"When the general public becomes fully involved in gold, silver shines brightly … for a time.  At least it did so in the last public rush into gold which peaked about 30 years ago.

"SLV tracks the spot price of silver, less accumulated fees capped at 0.5% per annum.

Since the exchange traded fund’s inception in April, 2006, the trust has accumulated over 300 million ounces of silver.

"That is about 9,500 metric tonnes of bar silver held in ultra-secure soccer field sized vaults by a custodian in London. In December, 2012, the SLV silver stash was worth about $5.3 billion.

“Silver fell out of popularity until just recently, but we see that changing now. For more than 20 years, from 1980 to about 2003, investors all over the globe were conditioned by a weak silver price and not much joy of ownership.

"'Who cares?’ sums up the public attitude before this bull market for silver began in 2003.  Even now that attitude prevails among the same investing establishment that has grudgingly accepted gold as an investment class.

“During that long bear market for silver, government dishoarding of excess silver metal, metal left over from when governments actually had silver in their coinage, acted as a cap to the price.

"That excess supply from o?cial sources is all gone now, but the e?ects of the artificial over-supply are only just now retreating.

“Silver stayed so low-priced for so long it made the second most popular precious metal di?cult to mine profitably. Because of that, annual production of silver has not kept pace with increasing industry and investment demand.

"A factoid that some will find di?cult to believe is that because prices for actual physical silver metal have been so cheap for so long, and because global industry consumes more silver each year than miners are able to produce, there is actually considerably less silver metal in existence than there is gold.

“Gold recently rose to new all-time nominal highs above $1,200 the ounce, but its sister precious metal has lagged so far. In fact it hasn’t even gotten to half of where it did in the last bull market peak in January, 1980.

"Silver reached about $50 an ounce briefly then, but so far this cycle has yet to beat its May 2008 $21.44 pinnacle.  That is with gold having bested its 1980 high of $850 by more than $350 an ounce. As such, we believe that silver has some serious catching up to do.

"“What is so enticing about the silver story is that it currently takes about 64 ounces of silver to buy an ounce of gold. That is called the gold:silver ratio. During the bull market for precious metals thirty years ago the ratio fell to about 16:1 or 16 ounces of silver to one ounce of gold.

"If gold simply stood still at $1,100 an ounce and the ratio were to fall to 1980 levels, silver would climb to about $69 an ounce. That suggests achievable upside for silver and SLV of nearly 4X from today.

“But wait, there’s more. Consider that compared to period of the last bull rush for precious metals the world has about 50% more people in it. Governments have inflated their fiat currencies since then by a factor of 10.

"World inventories of actual physical silver metal for investment have actually fallen to less than half of the amount that was available in 1980.

"Recently the government of China re-legalized the ownership of precious metals for its 1.3 billion people and is actually encouraging its citizens to accumulate them.

"The number of people of a?uence and means in the developing countries like Brazil, Russia, China and India has increased exponentially in the last thirty years.

“So, we see the currently unloved silver market as ripe for an investment renaissance of epic proportions. Think about it.

"Today versus 1980 we have globally 50% more people who will be using 1,000% more dollars, yen, euro, pounds sterling, yuan, etc., to chase less than half as much silver metal in a world where anyone can buy a silver ETF with just a mouse click from their study, even in their underwear.

“Isn’t that a potent recipe for silver? We think 2012 could very well be the year that a global popular rush, a veritable tsunami of liquidity into silver gets underway in earnest as more and more people discover just how little of it remains above ground for investment.  Our favorite way to participate is SLV.”


Best Nu Stock Quote 2012: Marvell Technology Group

by Paul McWilliams, editor Next Inning

Marvell Technology Group (MRVL) clearly fits the bill of a stock that is currently unloved by Wall Street. As a matter of a fact, there's not much at all that Wall Street likes about the company. Nevertheless, I would choose this as one of my favorite stocks for the coming year.

Nearly half of Marvell's revenue comes from the hard disk drive (HDD) industry, and even though it has gained market share, Wall Street believes the HDD sector will be wiped out by solid state drive (SSD) technology.

We'll set aside for now that Marvell is also a leader in SSD controllers, which it just so happens to sell for more than it does its industry leading HDD controllers.

As I see it, Wall Street has penned the HDD obituary far in advance of when we should plan to attend the funeral.

The short story for Marvell comes in two intersecting pieces. First, Marvell is one of only three semiconductor companies in the world that has an Architectural License from ARM Holdings (ARMH). This means Marvell can tweak the internal design of the ARM core processor to optimize it for targeted applications.

It has done this very eectively in the past to dominate the HDD controller market, and the company has more recently taken a new approach to design highly integrated smartphone chips that are intended to materially drive down the total cost for smartphones, and thereby radically increase their presence in emerging markets.

China is, of course, the first target, and I believe we'll see a ?urry of new Marvell-powered smartphones released there in 2012.

Intersecting with Marvell's expertise with ARM core processors, which you'll find in some shape or form in roughly 95% of the chips Marvell ships, is Marvell's integration talent.

Few, if any, competitors can match Marvell when it comes to mixed-signal integration (integrating analog and digital functions on a single chip)."" "

While integration skills have always been important for semiconductor companies, we are now at a tipping point where the companies that are very good at it will have an opportunity to accelerate growth. I believe that tipping point will occur sometime between now and 2015, and when it does, Marvell's growth curve has the potential to ride a very favorable wave. That said, my price target range for 2012 is somewhere in the high-$20s to very low $30s.



Best Nu Stock Quote 2012: Kinder Morgan (KMP)


For her top pick for 2012, income specialist Amy Calistri looks to Kinder Morgan Energy Partners L.P. (NYSE: KMP).

The editor of The Daily Paycheck explains, "I always look for the gift that keeps on giving; that's how I view this master limited partnership, which produces a steady stream of income each and every quarter.

"Kinder Morgan Energy Partners is one of the largest owners and operators of energy- product pipelines and storage facilities in the United States.

"Formed in 1992, KMP is structured as a publicly-traded master limited partnership (MLP). MLPs are an important asset class for income investors because they are legally required to distribute most of their taxable income and cash flow to shareholders (known as 'unitholders').

"KMP's extensive pipeline systems carry products such as gasoline and heating oil from the Gulf Coast to the East and West Coasts.

"KMP also owns and operates a network of carbon-dioxide (CO2) pipelines, which are used in a process known as enhanced oil recovery. These pipes carry CO2 to old oil fields where it is injected into the fields to increase productivity. These enhanced recovery techniques become more popular as oil prices rise.

"And KMP is continuing to grow its pipeline revenues through expansion. This past November , the Rockies Express Pipeline became fully operational.

"KMP owns a 50% stake in the 1,679-mile project, which carries natural gas from the Rocky Mountains to the Pennsylvania/Ohio border.

"Although KMP is an energy-related company, its revenues are relatively insensitive to energy prices. The partnership earns fees based on the amount -- not the price -- of gas, oil or refined products it processes and transports.

"Many of its interstate pipelines charge rates that are regulated by the Federal Energy Regulatory Commission. These regulated rates are set to allow Kinder Morgan a steady, reliable return on invested capital.

"Further, the partnership has already locked in guaranteed capacity from a few shippers on its pipes. KMP appears to be on track to not only deliver, but also continue to grow, its distributions.

"And when it comes to distributions, KMP has a stellar track record, having made quarterly payments like clockwork since October 1992.

"KMP also has a very consistent record of dividend growth, boosting distributions nearly every year since its inception. The partnership has increased its distributions at an annualized rate of +7.5% in the last five years alone.

"KMP currently pays a quarterly dividend of $1.05 per unit, equivalent to $4.20 per year for a yield of approximately 7% at current prices. It should be noted that MLPs are best held in taxable accounts as most of their distributions are classified as 'return of capital'."


Best Nu Stock Quote 2012: NovaGold Resources

by Stephen Leeb, editor The Complete Investor

NovaGold Resources (NG) -- my top pick for 2012 -- is an up-and-coming mining outfit that owns a pair of world-class deposits.

It has partnered with a couple of industry heavyweights to develop these projects, and it has the backing of some of the savviest investors around, giving it the wherewithal that will enable the company to transition from junior explorer to mid-tier producer in a few short years.

The company's Galore Creek property in northwestern British Columbia is a copper/gold deposit it is developing in a 50-50 partnership with Teck Resources. The property's measured reserves include 8.9 billion pounds of copper, 7.3 million ounces of gold and 123 million ounces of silver -- as well as commercial quantities of lead and zinc.

NovaGold is in the process of acquiring Copper Canyon Resources, whose property adjacent to Galore Creek will add substantially to those reserve figures.

And the property's resource base is likely to prove to be even greater once additional exploration e"orts are conducted.

NovaGold is working with Barrick Gold in a similar arrangement to bring Donlin Creek in Alaska, one of the largest undeveloped gold deposits in the world, on line.

With 33.6 million ounces of proven and probable gold reserves, once operational the open-pit Donlin Creek mine is expected to produce more than a million ounces of the Midas metal annually

Both mines are several years from commercial production and both with require investments in the billions, in addition to huge technical hurdles to overcome. Yet that has not deterred some of the best hedge managers around from taking large stakes in NovaGold, these notable investors include John Paulson, George Soros and Tom Kaplan Adding to its attractiveness, while many gold companies are turning to politically unstable countries around the world in search of new ore bodies, developing NovaGold's U.S. and Canadian assets requires no such risk.

Indeed, the company has strong support for its projects from State and Provincial governments as well as local native associations who are eager to see economic development and job creation for their populations.

This stock has been an outstanding performer in the last two years but it literally has the potential to rise another 10-fold in the coming yearsif it's not acquired by a larger competitor first.

With an excellent team running the show we think the company will successfully conquer the challenges it faces and reward shareholders immensely in the process.


Best Nu Stock Quote 2012: Monsanto (MON)


"Monsanto (NYSE: MON) is my top investment idea for 2012," says Sy Harding, an advisor well-known for his seasonal timing strategies.

In his Street Smart Report, he observes, "Monsanto is the world’s leading provider of biotech-advanced seeds and agricultural products for growers; seeds for corn, soybeans, cotton, fruit, and vegetables, which are produced by its genomics division.

"Monsanto experiences high grower demand for such seeds, which are genetically engineered to provide increased crop yields, increased quality, insect and disease resistance, and drought tolerance.

"The company recently introduced two new products, SmartStax for corn, and Round- up Ready-2-Yield soybeans, which are potential drivers for significant growth going forward.

"The company said it expects to plant 8 to 10 million acres of Roundup Ready-2-Yield soybeans in 2012, along with a more than 4 million acre launch of SmartStax seed corn, both significantly higher than earlier projections for the new products.

"The company has also introduced two versions of a lower cost genetic corn seed, VT Double Pro, and VT Triple Pro.

"The goal of those products is to let growers test the advantages of farming with genetically engineered seeds without having to move all the way to the higher-priced SmartStax seeds.

"The lower price products were introduced in anticipation that the growers will be so impressed with their extra yield, quality, and profits that they will move up to SmartStax the following year.

"he company invests roughly 10% of revenues back into research and development of new products, and has also demonstrated an ability to make meaningful acquisitions, which in recent years have included DeKalb, Asgrow, and DeltaPine, which add to its technology and product base, while at the same time eliminating some competitors.

"The company has received import approval for its Roundup Ready-to-Yield soybeans in China, which potentially will result in demand from growers in South America, who export large quantities of soybeans to China.

"The risks include that consumers are not completely sold on genetically altered foods, and growers will only grow from biotech-advanced seeds that percentage of their crops that they know they can sell. And of course Monsanto’s sales are influenced seasonally by weather and commodity grain prices.

"We believe higher prices lie ahead for MON. Our upside target is $100 a share. We suggest a trailing 'mental' protective stop at $69.40."



Best Nu Stock Quote 2012: Range Resources

by Geoffrey Seiler, editor Bullmarket.com

We have selected Range Resources (RRC), which is on our recommended buy list, as our top investment idea for 2012.

The natural gas producer recently posted a loss of 5 cents per share, versus a loss of 19 cents, a year ago. Adjusted EPS was 12 cents, topping the 10-cent consensus.

Cash ?ow from operating activities totaled $138.4 million, while cash how from operations before changes in working capital fell -18% to $140.8 million. Revenues rose 11% to $227.0 million. Natural gas, NGL and oil sales climbed 9% to $219.6 million, while natural gas, NGL and oil sales including all cash-settled derivatives declined -4% to $245.4 million.

As previously announced prior to earnings, Q3 production volumes rose 15%, and 7% sequentially, to an average of 503 Mmcfe net per day. Production was 77% natural gas and 23% natural gas liquids (NGLs) and oil.

The company said the growth came from its e"orts in the liquids-rich portion of the Marcellus Shale play in Pennsylvania, as well as the Midcontinent and Permian Basin regions.

The company drilled 78 net wells and 5 net recompletions in the quarter with a 99% success rate.

Realized oil, gas and NGL prices, after adjusting for realized cash-settled hedges and cash-settled derivatives, averaged $4.97 per mcfe for the third quarter.

This was generally below analyst estimates, and lower than the $6.35 per mcfe last year and $5.07 per mcfe for Q2.

On the hedging front, the company has 335,000 Mmbtu per day of natural gas production hedged at an average ?oor price of $5.56 and an average cap of $7.20. Meanwhile, it increased its hedge position for both 2011 and 2012. For 2012, Range has now hedged its natural gas position to 408,200 Mmbtu per day at an average ?oor price of $5.56 and an average cap of $6.48.

For 2012, Range has increased its natural gas hedges to 119,641 Mmbtu per day at an average ?oor of $5.50 and an average cap of $6.25.

In conjunction with its earnings announcement, Range also announced that it was putting up its Barnett Shale assets for sales. The assets include 53,000 acres with 360 producing wells that average approximately 120-130 Mmcfe per day. "Divesting of our Barnett Shale properties re?ects Range's strategy of focusing on per-share growth," CEO John Pinkerton said in statement. While a sale of our Barnett Shale properties will provide substantial capital, it will not inhibit our per-share production and reserve growth outlook. We currently anticipate that we can grow production and reserves in 2012 on both an absolute and per-share basis, despite losing the production and reserves associated with the planned sale."

BMO Capital analyst Dan McSpirit believes a sale could gross around $1.6 billion based on recent asset sales in the area.



Best Nu Stock Quote 2012: Peabody Energy (BTU)


"Peabody Energy (NYSE: BTU), the world’s largest coal producer, is my  top pick for the coming year," says Hannah Choe.

The contributing analyst with Personal Finance explains, "Demand for coal, particularly from the Pacific Rim, China and India, is rebounding as the global economy recovers.

"The company reported better-than-expected third quarter earnings, primarily because of a lower costs associated with US operations, increased volumes of metallurgical coal, and strong trading results.

"Net income and revenue were down 71% and 12%, respectively, hurt mainly by lower US demand. But despite a di?cult economic environment, Peabody expanded US margins and shipped record volumes of coal in the third quarter.

"Although demand from Japan and South Korea hasn’t bounced back as strongly as it has in the early stages of prior recoveries, China has more than made up for this shortfall, emerging as a top coal importer.

"In the first nine months of 2012, Chinese imports of thermal and coking coal rose 167% and 400%, respectively. And India will rely heavily on coal imports over the next five to six years to feed its rising domestic consumption of electricity.

"Peabody CEO Greg Boyce anticipates that China will grow by 8% and India will grow by 6% in 2012, with even more impressive rates in 2012.

"As a result, management projects markets for metallurgical and thermal coal to have a 7.5% compound annual growth rate in the next five-plus years as demand for steel and coal-fueled electricity rise.

"As of mid-October, Peabody committed 3.3 million tons of coal for China deliveries in 2012, more than 1.7 million tons coming from its Australian operations. This demand from Asia should push Australia’s coal sales to 21 million to 23 million tons this year.

"Peabody’s US sales declined, in part due to recession pressures; cooler weather and rising use of natural gas also crimped results. This combination of trends has led

management to adjust 2012 product projects 15 million tons below 2008 levels.

"Although US numbers are weak, third quarter sales from Peabody’s Australia operations climbed 30 percent from the second quarter, driven by surging demand in China and India.

"The Australia unit projects sales of growth of 15% for 2012 over 2011 levels;Peabody actually plans to double exports from Australia over the next five years.

"As part of its shift in focus to Asia, Peabody established a trading hub in Singapore and a new business center in Indonesia during the third quarter. Based on emerging Asia’s rapid turnaround, Peabody forecasts higher prices for thermal and coking coal in 2012.

"Green energy is gaining popularity but coal remains king-half of the electricity generated in the US comes from it, and emerging markets want it, too. Global coal use
is still expected to grow by 55% by 2025, and Peabody Energy is well positioned to profit."



Best Nu Stock Quote 2012: Seadrill

by Elliott Gue, editor The Energy Strategist

Seadrill (SDRL) is the best-placed contract driller in my coverage universe. The company doesn't produce or explore for oil and natural gas; rather, it is in the business of owning drilling rigs that are leased out to major producers for a daily fee known as a day rate.

There are three major reasons to buy Seadrill. First, the company has the youngest and most advanced ?eet of drilling rigs of any of the major contractors.

Second, Seadrill's rigs are primarily booked under long-term contracts at attractive rates for several years into the future, providing a guaranteed backlog of cash how regardless of the path of commodity prices.

And finally, Seadrill has a policy of paying out sizeable quarterly dividends supported by its backlog of rig contracts.

In the most recent quarter, Seadrill paid $0.65 per share, equivalent to an annualized yield of approximately 8 percent at the current price.

I see the company boosting its payout to around $0.75 per quarter by the fourth quarter of 2012; given strong investor preference for income-paying stocks, a growing dividend will continue to drive further upside in the stock.

Seadrill owns a feet of sixteen deepwater drilling rigs including ten semi-submersibles and six drillships.

The average operating Seadrill rig is less than five years old and that only includes the 13 rigs currently working on contracts.

The remaining 10 rigs in the feet were all built between 2008 and 2010 and are of the most modern and capable design.

All are ultra-deepwater rigs able to drill in waters more than 10,000 feet deep and are powerful enough to complete wells more than 6 miles in length.

Deepwater operations are only going to get more complex in coming years; as a result, producers need the most advanced, state-of-the-art rigs In addition to its deepwater feet, Seadrill also owns around 20 shallow-water jackup rigs and 17 tender rigs that are used to ferry people and equipment and to support o"shore drilling operations.

Seadrill has a backlog of over $8.5 billion in contracts covering its deepwater rigs, $2 billion covering its jack-ups and $1.5 billion for tender rigs.

Since these revenues are essentially guaranteed under long-term deals signed with major oil and gas producers, this represents a highly visible stream of cash?ow over the next few years.

With a ?eet that's ideal for the current market, a growing 8 percent yield and opportunities to grow via new rig construction, the stock rates a buy under $38.



Best Nu Stock Quote 2012: Standard Chartered (SCBFF)


Yiannis Mostrous is a leading expert on Asian Stocks. For his top pick last year, advisor choseStandard Chartered (London: STAN, OTC: SCBFF) as  his top pick.

The stock has risen 110% since his original recommend -- and remains  his top pick for 2012 as well. Here's the latest from his The Silk Road Investor.

"Standard Charter is an international bank focused on consumer and corporate banking and treasury activities.

"Though based in London, the bank gives exposure to emerging markets in Asia, the Middle East and Africa. Asia makes up 59% of the firm’s profits with Hong King as its biggest single concentration of customers.

"The economies in Asia are rebounding faster than those in the west, increasing competitor activity amongst international and local banks.

"The banks strategy is to continue to develop its consumer banking franchises while maximizing profitability in its historically strong wholesale operations.

"For the January-November period, the firm reached record income and pretax profit highs, driven by growth in the corporate banking business.

"Standard Chartered has a relatively low loan-to-deposit ratio of 75%, giving the bank the luxury of relying less on borrowed funds and more on its increasingly strong, less costly deposits for expansion.

"Valuations are attractive; share price per trailing earnings is 14.3, trading at 1.5 times tangible book value. The firm maintains a strong balance sheet and a healthy liquidity position."


Best Nu Stock Quote 2012: Yongye International

by Jim Trippon, editor Global Profits Alert

Yongye International (YONG) is a leading developer, manufacturer, and distributor of plant and animal nutrient products in the People's Republic of China.

Its plant nutrient product can significantly increase the plant's output and nutritional value and improve its taste.

As a result of receiving greater value in the marketplace, Yongye says its product helps increase farmers' incomes and improves their living standards. Directly addressing the need for greater e#ciency and more environmentally friendly require?

ments in the agricultural sector, Yongye's products dramatically increase the quality of crops and yields, and improve the health of livestock, according to the firm. The company is striking for its valuation with a bargain basement PEG ratio of only 0.15 Yongye has impressive financials with gross margins above 57 percent and a profit margin of 24.86 percent. Earnings per share are expected to climb 43 percent next year.

While the company has only been in operation a short amount of time, its predecessor, Inner Mongolia Yongye Company, had over 15 years' operational history which it has passed on to Yongye.

From this experience, Yongye International says it aims to inherit its predecessor com?pany's managerial experience and corporate culture to continue emulating its long-term success.

Learn more about this financial newsletter at Jim Trippon's Global Profits Alert.


Best Nu Stock Quote 2012: Verenium (VRNM)


"The Energy Security Act of 2007 has received little investor attention; however, it contains provisions that are likely to lead to significant returns for investors," suggests Andy Obermueller.

In his Government-Driven Investing, he notes, "The law codifies the  federal production targets for biofuel, which we believe presents a real opportunity for Vernenium (NASDAQ: VRNM).

"'Biofuel' has, for decades, been code for 'corn-based ethanol.' But this law also contains provisions for a new, advanced biofuel derived from cellulose, an organic compound found in all plant matter.

"Instead of using corn -- which uses valuable farmland and can drive up the price of a staple food  -- cellulose can be derived from any plant, wheat or rice straw, corn stalks, scrap wood or even grass.

"The law calls for hundreds of millions of gallons of cellulose ethanol. There’s just one problem: Very little of cellulosic ethanol is being produced. By 2022, however, the nation will need, by virtue of federal law, 16 billion gallons.

"All problems, of course, are really opportunities in disguise. Especially for one company: Verenium. This is a biotech company that has mastered the enzymes required to unlock the energy in cellulose.

"It has built two demonstration-scale plants, one in Jennings, La., and another in Japan, and has announced it will build the nation’s first commercial-scale ethanol plant.

"It has two partners in this endeavor: Petroleum giant BP and the U.S. federal government, which has begun its due diligence on a federal loan guarantee for the project.

"The demand for cellulosic ethanol will rise many-fold in coming years, and Verenium, the leader in this field, will likely see similar gains as it puts this ground-breaking technology to work in the new plant and licenses the technology to hundreds of others.

"The loan guarantee for the plant will likely be a significant catalyst for these shares, and the continued demand for cellulosic ethanol will fill its co?ers -- and reward shareholders -- for years to come."