5 Best Mutual Funds for the First Quarter

For the first quarter, there were certainly enough reasons to dump stocks or mutual fund investments.  Of course, the world saw revolutionary changes — with the removal of several long-time dictators in the Middle East as well as a war in Libya.  Also, there was the massive earthquake and tsunami that resulted in a nuclear crisis in Japan. 401k investors had a lot to deal with.
Other problems?  Well, oil prices surged and inflation started to perk-up.  There were even continued debt issues in places like Portugal.
But such things were not problems as the S&P saw its best gains since 1998, with a 5.4% return.  The Dow was up 6.4%.  And many mutual funds performed in kind.
And yes, equity mutual funds were a good place to put your money.  Some of the best categories included  energy (+13.34%), small growth (+9.66%), health (8.34), natural resources (+8.30%) and even European stocks (+6.98 %).
So, let’s take a look at some of the mutual funds that were the best performers of the first quarter:

Fidelity Select Energy (FSENX)

For the quarter, crude oil futures spiked 17% to over $106 per barrel. No doubt, the Middle East turmoil has been a big driver.  Consider that Libyan oil is light, sweet quality – which is tougher to refine.
A beneficiary of the price increase was the Fidelity Select Energy (MUTF: FSENX) mutual fund, which has $3 billion in assets.  No doubt, the portfolio manager, John Dowd, has a good sense for value and timing.  This was definitely the case on how he traded the shares of BP (NYSE: BP) during the Deepwater Horizon oil spill.
And as for the first quarter, Dowd had a standout performance.  His fund posted a sizzling gain of 18.80%.

Oppenheimer Discovery (OPOCX)

As investors warm-up to risks, they are putting more money into small cap companies.  After all, as the economy rebounds, they should be winners.
One of the quarter’s top small cap funds was Oppenheimer Discovery (MUTF: OPOCX).  The mutual fund manager, Ron Zibelli, looks for growth opportunities but tries to minimize the risks.  This includes investing in various industries as well as keeping a focus on lower valuations.  The top market segments include industrials (17.02%), technology (31.49%), healthcare (14.40%) and consumer cyclicals (18.49%).
The performance for the first quarter?  It was a hefty 15.32%.

T. Rowe Price Health Sciences (PRHSX)

Over the past couple years, healthcare stocks have been laggards.  But with attractive valuations – as well as less concern about Obama-care – investors have been putting more money into the sector.
For example, the T. Rowe Price Health Sciences (MUTF: PRHSX) fund posted a 13.64% return in the quarter.  Interestingly enough, the focus is mostly on smaller companies.  The fact is that mega pharma companies are facing tough problems with patent expirations and a thin pipeline of new drugs.
The top five holdings of the T. Rowe Price fund are:  Alexion Pharmaceuticals (NASDAQ: ALXN), Gilead Sciences (NASDAQ: GILD), Merck (NYSE: MRK), Celgene (NASDAQ: CELG) and Incyte (NASDAQ: INCY).

Ivy Global Natural Resources (IGNAX)

There seems to be no end to the commodities boom.  Then again, there continues to be heavy demand from emerging economies like China and India.
A strong performer for the quarter is the Ivy Global Natural Resources (MUTF: IGNAX) fund, which has $7.1 billion in assets.  The fund posted a 12.77% return.
In light of the growth in natural resources, it is not easy to find cheap companies.  But Ivy Global’s portfolio manager, Fred Sturm, has been able to uncover good values.  He also understands market cycles.  Keep in mind that Sturm has managed the Ivy Global fund since 1997.

ING Euro STOXX 50 Index (IDJAX)

It seems that most of the news that comes from Europe is bad.  There is even talk that the euro will eventually go away.
Despite all this, that there are still many opportunities.  Just look at the ING Euro STOXX 50 Index (MUTF: IDJAX).  In the quarter, the fund increased by 12.77%.
The fund is based on the Dow Jones Euro STOXX 50 Index and has a reasonable expense ratio of 0.90%.  Top holdings include Total (NYSE: TOT), Siemens (NYSE: SI), Telefonica (NYSE: TEF), Banco Santander (NYSE: STD) and BASF (PINK: BASFY).

How to Find a Stock's Value Using the Dividend Discount Model: Introduction

One of the most elusive questions in investing is, "What is the right price for this stock?"
There are a number of ways to calculate a stock's value, but one of the most elegant and relatively simple ways continues to be via the dividend discount model (DDM). By using the DDM, individual investors can estimate the price they should be willing to pay for a stock or determine whether a given stock is undervalued or overvalued.
The dividend discount model starts with the premise that that a stock's price should be equal to the sum of its current and future cash flows, after taking the "time value of money" into account.
Now, there are two different concepts in that sentence, and both of them are vital to your understanding of investing. Let's walk through each one, and then discuss how they are joined together in the DDM.
Estimating Current & Future Cash Flows
The cleanest and most clear-cut measure of cash flow is the dividend. Hopefully this makes sense to you, but if it doesn't, consider that the dividend is the mechanism companies use to pay their investors. People invest in companies with the intention of getting their money back and then some. Dividends are one of the main ways companies return money to investors. Dividends are paid out in cash, and therefore are the most straightforward estimate of the future cash you can expect to receive.
Even if a company does not pay a dividend right now, the price of its stock is calculated under the assumption that at some point in time the company will begin paying one. If there is no hope of ever getting money back, investors would have no reason to buy a stock. It would be worth nothing.
The Time Value of Money
Investing is a method of saving. Because you have extra money left over after paying your expenses, you can set it aside for future use. The whole point of investing is to turn a sum of today's money into a larger sum in the future.
Understanding the time value of money is of utmost importance to investing. Time value of money is a series of concepts that allows you to compare different options: Is it better to receive $24,000 today or $25,000 one year from today? If you understand the concept of present value, you can easily perform a calculation and come up with the right decision.
The time value of money is directly relevant to the dividend discount model because the DDM's main objective is to put future cash flows into today's dollars. To do so, we'll use present value calculations.
Using the DDM Formula
Now let's get to the DDM formula itself. The dividend discount model is based on a basic valuation model that is the foundation for many other investing techniques. This basic valuation principle, used far and wide, combines expected future cash flows and the time value of money into one easy-to-use formula:
Stock Price = the Sum of the Present Value of All Future Dividends
Or, more precisely,
Price = ∑ (D_t / (1 + r)^t)
where,
t = period
D_t = dividend during period t
r = required rate of return on the stock
If you don't understand the concept right now, it should get easier after looking at a couple of examples.
Buy-and-Hold
Let's look at the stock of hypothetical Company ABC.  Stock ABC pays a $3 annual dividend. We decide that we must make 5% annually on this investment for it to be worth our while (this is known as the required rate of return, also known as the discount rate, or "r" in this tutorial).  We're also planning on holding the stock for the very long term.
Luckily, when we talk about an infinite holding period and a constant dividend, the DDM simplifies to this formula:
Stock Price = D / r
So to calculate the price of Stock ABC, we plug in the numbers to get:
Stock Price = $3 / (0.05) = $60
This formula tells you that if you buy at $60, the $3 annual dividend will ensure you receive a 5% return on your investment. If Stock ABC is trading below $60 right now, it's a buy. If it's trading above $60, we should wait for the price to come down.Note that this model could be used for any asset that throws off a constant stream of cash flow. For example, assume you've found a commercial property, and the tenants just signed a lease to pay $100,000 per year for an unlimited term. If you want to make a 5% return on your investment, then the property is worth $100,000 / 0.05 = $2,000,000.
Calculating the value of a stock using the dividend discount model is easy if we assume the dividend will never change and we'll hold the stock forever. But in the real world, most investors expect companies to grow dividends. So let's look at another example.
Factoring in Dividend Growth
So what happens if Stock ABC has potential to grow its dividend? This isn't an unreasonable assumption at all. As long as a company can grow its earnings, it should be able to grow its dividend. Let's assume we think Company ABC can grow its dividend by 2% every year.
Adding this growth assumption gives us the "reduced form DDM" with the following formula:
Stock Price = D₁ / (r - g)
where,
D₁ = the dividend at year 1
g = the dividend growth rate
To calculate the dividend at year 1, all we need to do is multiply the current dividend ($3) by the dividend growth rate (2%): D₁ = $3 x (1 + 0.02) = $3.06. Now we can plug it into the formula with the rest of our assumptions:
Stock Price = $3.06 / (0.05 - 0.02) = $102
Note how much more valuable Stock ABC comes if it is able to realistically grow dividends by 2% per year ($102 vs. $60).
The calculation gets more and more complicated as you add other assumptions. For example, what if you only want to hold the stock for 1 year, 5 years or 10 years? What if the dividend growth rate is expected to change over time? What if the company doesn't pay a dividend yet? These more advanced scenarios will be addressed in future tutorials.
For now, let's look at the pros and cons of the DDM to get even more insight into how and why the model is used.
Model Advantages and Disadvantages
The main advantage of the dividend discount model is that it is relatively easy to use. There are only a few calculations involved. This model is a good starting point for valuing stocks, since it connects dividend payments and dividend growth to the stock price.
The dividend discount model works best for companies that are experiencing stable growth. There is a version of the model that can be used for companies transitioning from rapid growth to more moderate growth, but the calculations are much more complicated.
There are also some drawbacks to using the dividend discount model. A major shortcoming of the model is that it works best for a stock that already pays dividends. But almost two-thirds of publicly traded companies don't pay a dividend. Instead, these companies retain all of their earnings so they can grow. You can use the DDM for non-dividend paying companies, but you need to make some pretty tenuous assumptions about when they will start paying a dividend and how much they'll pay.
Another flaw of the dividend discount model (and any model, for that matter) is that it requires numerous assumptions to be made. Investors must guess a company's growth rate as well as the required rate of return. The model is only as good as its inputs. Even a slight miscalculation in any of these inputs can result in dramatically overvaluing or undervaluing a stock.
An odd weakness of the model is that it cannot value a company if that company is growing its dividend faster than the required rate of return. If the dividend is growing faster, the denominator in the dividend discount model becomes a negative value.  For example, suppose Stock A pays a $3 dividend, has a 15% growth rate and has a required rate of return of only 10%. According to the dividend discount formula, the value of Stock A = ($3 x 1.15) /(0.10-0.15) = -$69.  That's not terribly useful.
Despite these flaws, the dividend discount model remains a worthwhile analytical tool. It's simple to use and the model's basic premise -- that the value of a stock is equal to the sum of current and future dividend payments -- is sound. The dividend discount model is a good starting point for valuing a stock since the model encourages investors to think about the relationship between risk, returns and growth.

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.
More about the best and top stocks in

5 Top Fidelity Funds to Buy Now

Founded over 65 years ago, Fidelity Investments is a financial powerhouse.  In all, the firm has $3.5 trillion in assets under administration and serves over 20 million individual investors.  Fidelity also provides services to more than 5,000 financial intermediaries.
No doubt, the core business at the firm is its mutual fund platform.  There are roughly 500 offerings — with a bulk of them invested in equities.  It helps that the firm has an excellent training and mentoring program for its analysts.  It’s a farm system that produces top-notch money managers.
So which funds stand out?  Let’s take a look:

Fidelity Contrafund (FCNTX)

When it comes to stock funds, one of the best money managers is Will Danoff.  In fact, he has operated the Fidelity Contrafund (MUTF: FCNTX) for roughly 20 years.  So he understands how to deal with bull and bear cycles.  Keep in mind that the annual average return since 1990 is a sizzling 12.8%.
In light of this, it should be no surprise that the Contrafund has been a magnet for investor funds (assets under management are $79.4 billion).  Yet, this size seems to be no hindrance for Danoff to generate nice returns.  For the past year, the fund was up 14.20%.
Of course, the Contrafund has a large number of big-time companies.  Some of the top holdings include Apple (NASDAQ: AAPL), Google (NASDAQ: GOOG), Berkshire Hathaway (NYSE: BRK.B, BRK.A) and Disney (NYSE: DIS).  But Danoff also sprinkles some smaller companies in the portfolio.

Fidelity Capital & Income (FAGIX)

In a low rate environment, it is tough for bond funds to generate juicy returns.  But there are certainly opportunities in the securities of smaller companies.  These are often referred to as “high yield” bonds.
To participate in the market, there is the Fidelity Capital & Income (MUTF: FAGIX) fund.  Actually, the portfolio manager, Mark Notkin, is not afraid to ramp up the risk level when he sees value.  Some of his top bond holdings include GMAC, Sprint (NYSE: S) and HCA.  At the same time, the fund invests a part of the portfolio in stocks.
True, the volatility can be high.  But over the long run, the swings should dampen.  For example, the Fidelity Capital & Income fund has posted an average annual return of 14.09% for the past three years.

Fidelity Small Cap Discovery (FSCRX)

Small cap stocks go through hot and cold streaks.  They can also vary based on the investment styles – that is, value or growth.
So why not blend the two?  This is the approach of the Fidelity Small Cap Discovery (MUTF: FSCRX) fund.
The flexibility has helped to stabilize returns.  For example, during the 2008 financial crisis, the loss was only 27.57%, which was much better than the 37% decline in the S&P 500.  Then a year later, the fund posted a gain of 50.69% and a 32.38% return in 2010.

Fidelity Diversified International (FDIVX)

So far, it’s been topsy-turvy for global markets.  The Middle East is in the midst of upheaval and Japan continues to suffer from the massive earthquake and tsunami.
Despite all this, the fact remains that international investing is critical for any portfolio.  And a good mutual fund for this is the Fidelity Diversified International (MUTF: FDIVX).
The portfolio manager, Bill Bower, has a good sense for value.  Interestingly enough, he has had relatively light exposure to Japan.
For the most part, the focus is on large cap growth companies.  The top holdings include BP plc (NYSE: BP), Royal Dutch Shell (NYSE: RDS.A), BHP Billiton (NYSE: BHP) and Novo-Nordisk (NYSE: NVO).

Fidelity New Markets Income (FNMIX)

Investing in emerging markets sounds scary to many investors.  Just look at the massive volatility in the Egyptian stock market lately. But emerging markets can provide substantial long-term growth for a diversified portfolio.
Although, there is a lower-risk way to play this category:  investing in the bonds.  And yes, one option is the Fidelity New Markets Income (MUTF: FNMIX) fund.
Consider that the fund focuses primarily on debt that is denominated in U.S. dollars.  Basically, this helps to further lower the risk levels.
The fund also diversifies across various countries.  Holdings are in places like Russia, Bolivia and even Lebanon.
In 2009, the fund saw a 44.56% gain and then posted a return of 10.94% in the following year.
Tom Taulli’s latest book is “All About Short Selling” and his Twitter account is @ttaulli. He does not own a position in any of the stocks named here.

5 Best Emerging Growth Stocks to Buy Right Now

I’m very excited about the five stocks at the top of my Emerging Growth Buy List this month — these are some of the most powerful small-cap companies on Wall Street right now, and they are experiencing tremendous growth. In the past month alone, these five stocks jumped an average of nearly 11%, while the major indices posted a 2% gain.
Let’s take a look at my Top 5 Emerging Growth Stocks for April:

5 Best Emerging Growth Stocks to Buy Right Now #1 Monster Beverage Corporation

Monster Beverage Corporation (NASDAQ:MNST) is a play on the energy drink market; it is responsible for Monster, the second most popular energy drink in the nation. The company’s monster grip on the youth market makes it a fantastic takeover candidate by a larger beverage maker. Back in January, 100-year-old Hansen Natural Corp. revamped its brand by adopting the Monster Beverage name and ticker symbol. And, it looks like the company’s new look has piqued investor interest — the stock has gained 30% since then. Monster’s next earnings announcement is tentatively scheduled for early May, and it is already shaping up to have a strong showing.
Right now, analysts forecast 25% sales growth and 26.7% earnings growth — compared with the 20% earnings growth forecast for the rest of the Soft Drinks industry. Analysts have also been steadily increasing their earnings estimates, to the tune of 12% in the past two months. Typically, such aggressive earnings revisions precede future earnings surprises. This stock has been appreciating in a smooth, steady manner so I recommend that you add shares.

• Also from Louis Navellier: 6 Small Cap Stocks to Sell Now

5 Best Emerging Growth Stocks to Buy Right Now #2 Susser Holdings Corporation

Susser Holdings Corporation (NASDAQ:SUSS) is a great stock to hold if you want to profit from summer road trips. This company operates a system of 540 Stripes convenience stores and also supplies motor fuels to 560 dealers across the country. So, U.S. travelers are Sussers’ bread and butter. Higher diesel and gasoline prices continue to help to boost the company’s overall sales growth, so the summer months should be very good to this company. This company also has a history of blowout earnings surprises, trouncing estimates by 100%, 135%, 86% and 61% in the past four quarters.
And the way things are shaping up, Susser’s’ next earnings announcement (due in late May) should be equally stunning. Currently analysts are looking for 16% sales growth and 100% earnings growth — that’s compared with the 18.4% forecast for the rest of the Grocery Stores industry. And, in the past two months, analysts have upwardly revised their estimates by 200%. There is still plenty of time until Susser’s earnings announcement, so now is a great time to plan ahead and pick up shares.

5 Best Emerging Growth Stocks to Buy Right Now #3

Questcor Pharmaceuticals Inc.

Questcor Pharmaceuticals Inc. (NASDAQ:QCOR) has been a Top 5 veteran for some time now. It specializes in prescription drugs for central nervous system disorders, and its primary product, H.P. Acthar Gel, is used to treat multiple sclerosis. Lately, I have been getting questions on why I’ve kept Questcor on the Top 5 despite the fact that it has been sitting still recently. Well, one thing that you should know about Questcor is that it is what I like to call a “bunny” stock. This means it tends to “sit” during the quiet times and then suddenly “hop” on good earnings news. So, just because a stock has been sitting for a little while doesn’t mean that it doesn’t have explosive profit potential. In the case of Questcor, this company is headed towards a stunning earnings announcement, so I fully expect it to hop when it announces earnings in late May.
Currently, analysts expect the drugmaker to grow sales by 136.4% and earnings by 155%, while the rest of the biotechnology industry is headed towards just 16.9% earnings growth. This company has a strong history of earnings surprises — in the past four quarters it has trumped expectations by 17.6%, 15%, 42% and 11.9% respectively. Finally, in the past two months, analysts have upwardly revised their estimates by 21%, so it looks like the company will post another double-digit surprise this quarter. With this in mind, I recommend that you purchase shares of this stock.

5 Best Emerging Growth Stocks to Buy Right Now #4

Plains All America Pipeline L.P.

Plains All America Pipeline L.P. (NYSE:PAA) is involved with the transportation and storage of crude oil, so it has been profiting from the latest boom in gasoline prices. Better yet, this company has been aggressively expanding its footprint through five strategic acquisitions totaling $2.3 billion dollars. Notably, the company is acquiring British Petroleum’s (BP) Canadian natural gas liquid business for $1.67 billion; this deal is expected to close by the end of the second quarter. To fund this acquisition, Plains recently completed a five million-share secondary offering at $80.03 per share in early March. Now, secondary offerings tend to depress stock share prices, but this presents the perfect opportunity to get in at a good level with this stock.

5 Best Emerging Growth Stocks to Buy Right Now #5

Tessco Technologies Inc.

TESSCO Technologies Inc. (NASDAQ:TESS), provides a broad range of products that support mobility and data wireless systems to organizational clients in the U.S. And TESSCO’s business is booming. At the end of March, management announced that the company has been awarded a five-year contract by Western States Contracting Alliance (WSCA). WSCA is a state purchasing cooperative association, and it needs TESSCO to provide mobile device accessories to state agencies nationwide. TESSCO will accomplish this through its extensive network with the best manufacturers in the industry. At this time, every state in the union, including their agencies and employees, is eligible to participate. No financial details have been released yet, but this will undoubtedly boost TESSCO’s top line.
Looking ahead, analysts forecast 40.6% sales growth and 95.2% earnings growth for this quarter. TESS remains a strong buy.

6 Best Auto Industry Stocks To Invest in 2012 that Heading for a Crash

The auto industry seems to be on the mend, thanks lately to both record imports and exports. Consumer spending has firmed up and strong emerging market sales seem to indicate growth. Just today we learned auto sales surged in March, led by small cars.
However, not all auto stocks are revved up. There are winners and losers in this sector, spanning both major manufacturers and parts suppliers, and investors need to be discerning about which car makers and parts suppliers they kick the tires on.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I am looking at six auto stocks to sell.
Here they are, in alphabetical order. Each one of these stocks gets a “D” or “F” according to my research, meaning it is a “sell” or “strong sell.”
6 Best Auto Industry Stocks To Invest in 2012 #1 Federal-Mogul (NASDAQ:FDML) is a global supplier of powertrain and safety technologies. In the last year, Federal-Mogul stock has posted a loss of 33%, compared to a gain of 7% for the Dow Jones in the same time. FDML stock gets an “F” grade for operating margin growth, an “F” grade for earnings growth, an “F” grade for earnings momentum, and an “F” grade for cash flow. For more information, view my complete analysis of FDML stock.
6 Best Auto Industry Stocks To Invest in 2012 #2 General Motors (NYSE:GM) is an American designer, builder and seller of cars, trucks and automobile parts. GM stock is down 17% since last April. GM stock gets a “D” grade for sales growth, an “F” grade for earnings momentum, and a “D” grade for its ability to exceed the consensus earnings estimates. For more information, view my complete analysis of GM stock.
6 Best Auto Industry Stocks To Invest in 2012 #3 Gentex (NASDAQ:GNTX) is a supplier of automatic-dimming rear-view mirrors, and other lighting products. In the last year, Gentex stock has dropped 18%. GNTX stock gets a “D” grade for its ability to exceed the consensus earnings estimates on Wall Street, and a “D” grade for the magnitude in which earnings projections have increased over the past months. For more information, view my complete analysis of GNTX stock.
6 Best Auto Industry Stocks To Invest in 2012 #4 Goodyear (NYSE:GT) is one of the most well-known tire producers and has watched its stock value sink 25% since this time last year. Goodyear stock gets an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street, an “F” grade for the magnitude in which earnings projections have increased over the past months, and a “D” grade for cash flow. For more information, view my complete analysis of GT stock.
6 Best Auto Industry Stocks To Invest in 2012 #5 Johnson Controls (NYSE:JCI) is a provider of automotive interiors. A 22% drop for JCI stock in the last year has shareholders questioning their purchases. Johnson Controls stock gets a “D” grade for operating margin growth, a “D” grade for earnings momentum, and a “D” grade for the magnitude in which earnings projections have increased over the past months. For more information, view my complete analysis of JCI stock.
6 Best Auto Industry Stocks To Invest in 2012 #6 Visteon (NYSE:VC) supplies climate, electronics, interiors and lighting systems. VC stock rounds out the list with a loss of 15% in the last 12 months. Visteon stock gets a “D” grade for sales growth, an “F” grade for operating margin growth, an “F” grade for earnings growth, an “F” grade for earnings momentum, a “D” grade for operating margin growth, a “D” grade for earnings momentum, and an “F” grade for the magnitude in which earnings projections have increased over the past months. For more information, view my complete analysis of VC stock.

Top 6 Stocks to Buy for April in 2012

Stocks  in 2012 have been rising since the bottom made in October 2011, and this year the Dow has gained 8.14%, the S&P 500 is up 12%, the Nasdaq is up 18.67%, and the Russell 2000 has gained just under 5%. In a market where second-half gains in earnings are in question and volume and breadth suggest that a consolidation is due, where can you find reasonably valued stocks?
Stocks in the building sector, especially apartment construction, should grow, and health care companies should benefit with or without “Obama Care.” And, despite the current administration’s resistance to fossil-fuel programs, the assumption is that the Keystone XL pipeline will eventually be built.
The bull market is still in its infancy, and the public has mostly been absent, put off by a “wall of worry” that appears to be growing, and that is a positive for stocks. Plus, the Fed will continue to pump money into the market.
This month’s stock picks are generally focused on stocks that will benefit from the economic engines that drive the market.
Here are your top stocks to buy for April:

Top Stock to Buy in 2012 #1 – AvalonBay Communities (AVB)

Real estate investment trust (REIT) AvalonBay Communities (NYSE:AVB) specializes in upscale apartment communities. An improving U.S. economy with high apartment occupancy levels should result in higher rental rates for AVB, and new development activities will be an important driver of earnings in 2012. Funds from operations (FFO) per share in 2012 is forecast at $5.30, up from $4.57 in 2011. AVB has a dividend yield of 2.83%, and it is expected to increase.
On March 30, the stock broke from a multiple top with a trading objective of $150. But longer-term investors should consider AVB as a cornerstone REIT with an objective of $175.

Top Stock to Buy in 2012 #2 – DENTSPLY International (XRAY)

DENTSPLY International (NASDAQ:XRAY), the world’s largest dental products maker, should benefit from demographic trends and a rising demand for dental services in underdeveloped nations. S&P forecasts earnings of $2.30 in 2012 and $2.60 in 2013.
The stock executed a golden cross early in February, and is very close to breaking out from a complex of tops at around $40. If successful, XRAY could run to $48. Buy now with a stop-loss at $37.50.

Top Stock to Buy in 2012 #3 – Ford Motor Co. (F)

Ford Motor Co. (NYSE:F), the second largest producer of cars and trucks in the United States, also has automobile financing and insurance operations. Analysts expect Ford to increase revenues this year chiefly from operations in the United States, China, and most European countries.
After some weakness in the first half of the year, improved profits are expected in the second half of 2012, and 2013 revenues are expected to rise 9.7%. Earnings this year should fall to $1.46, but rise to $1.71 in 2013. The first-half decline should already be factored into the price of the stock. And these estimates may be very conservative in that the average life of cars “on the street” is currently over 10 years. Increased consumer appreciation of Ford’s product quality and confidence in its management should also raise demand for the stock.
Technically Ford broke its bear market resistance line in January, jumping from $10 in December to $13 in late January. It has been consolidating since then between $12 and $13, but just flashed a buy signal from its stochastic. A break from $13 should result in a quick run to $14 to $15. Longer-term investors should benefit from much higher prices and an increase in its dividend yield, now at 1.62%.

Top Stock to Buy in 2012#4 – Southwest Airlines (LUV)

Southwest Airlines (NYSE:LUV) is our “bottom fisher’s choice” for this month. The stock fell from over $14 in October 2010 to almost $7 in October 2011. But a turnaround appears to be occurring with the acquisition of AirTran, which resulted in an immediate 20% growth.
Earnings are estimated at 70 cents in 2012 versus 43 cents in 2011. The airline is known for the high quality of its management and enjoys an excellent reputation among customers.
Although technically still in a bear market, LUV has a solid base at $8 and recently flashed a buy signal from the stochastic and our internal indicator, the Collins-Bollinger Reversal (CBR). The trading target for LUV is $9 to $9.50, but long-term investors have an opportunity to buy this stock for a possible double or more.

Top Stock to Buy in 2012 #5 – TransCanada Corporation (TRP)

TransCanada Corporation (NYSE:TRP) is an energy infrastructure company that focuses mainly on natural gas and oil pipelines. It is the primary developer and manager of the Keystone pipeline system, and it is the company that manages non-regulated facilities in Alberta, Canada.
In January, the U.S. State Department rejected TRP’s application to build Keystone XL, an extension that would carry heavy crude from the Alberta oil sands and Bakken Shale to Gulf of Mexico refiners. Earnings for 2012 and 2013 are expected to be $2.35 and $2.70, respectively, but could be higher if the overall Keystone XL project is approved. President Obama has already approved the southern half of the line from Cushing, Okla., to the Gulf, saving months of delays. If the entire line were to be approved, the company’s earnings would improve significantly.
Technically the stock is in a bull channel with prices hugging the 50-day moving average. TRP’s overall price objective is $50-plus, depending on the political swings in the fall. Buy under $42.

Top Stock to Buy in 2012#6 – United Health Group (UNH)

UnitedHealth Group (NYSE:UNH), a diversified health and well-being company, provides health care programs, retirement plans, has a life sciences group, and provides health plans to physicians, clinical services, etc.
Credit Suisse analysts say, “We continue to view United as the best-positioned large-cap managed care plan for where we see the best growth prospects… especially in the shift to Bundled Payments under Medicare.”
They look for earnings of $4.85 this year compared to $4.73 in 2011, and an increase to $5.60 in 2013. UNH has a dividend yield of 1.17%.
Technically the stock consolidated in a broad nine-month cup, then broke from that cup in February at $54. From mid-February until recently, it consolidated between $54 and $55. Last week, it broke from $56 to $58.10. The trading target for UNH is $65. Longer term, Credit Suisse is predicting an annual target of $72.

3 Best Kids Stocks to Invest in 2012

Retail stocks have been having a good 2012 so far. The total return year-to-date for the S&P Retail Select Industry Index is 16.41%, 11th best out of 23 industry indexes. Virtually every apparel store is having a winning year. February retail sales were broadly positive, and the U.S. economy appears to be getting stronger.
Although gas prices continue to be a major concern, I don’t believe they’ll slow this train down. Retail stocks across all categories should continue their rise for the remainder of 2012. The easiest way to play this is to buy the 3 Best Kids Stocks to Invest in 2012 -SPDR S&P Retail ETF (NYSE:XRT), which seeks to replicate the S&P Retail Select index.
But for those interested in specific stocks, here are three retailers that have stumbled but look set to be comeback kids — and are, therefore, attractive now.

3 Best Kids Stocks to Invest in 2012 - Urban Outfitters

Investing is more about looking forward than backward, and in that respect, Urban Outfitters (NASDAQ:URBN) has much to look forward to. For instance, its online sales grew 16.3% to $505 million in 2012 and now represent over 20% of its total revenue. Retailers intent on sustaining profits must do a good job in this area because the margins are so much higher online than for physical stores.
Today, stores act like billboards telling customers what’s for sale. Rising gas prices combined with worsening traffic congestion and the relative inconvenience of “going shopping” will only make e-commerce more vital with each passing day.
On the inventory front, Urban Outfitters managed to turn it over 6.45 times in 2012 compared to 5.8 times a year earlier, achieving its highest turnover ratio in at least five years. That’s critical when your merchandise has been poorly received. If it isn’t selling, get rid of it quickly and make sure you do a better job next time.
During the first quarter, full-price selling started to return, an indication the merchandise has improved. Lastly, Urban Outfitters plans to open 55 to 60 stores in fiscal 2013, increasing square footage in its retail stores by low double digits. That’s great news. With just 429 stores globally, it has plenty of expansion available when and if it sees fit.
Personally, I’d like to see it stick to the current rate of store openings because bricks-and-mortar retail is expensive. Long-term, Urban Outfitters’ margins will come back and when they do, so too will its stock price, now around $28.

3 Best Kids Stocks to Invest in 2012 -Guess 

What’s happened to Guess? (NYSE:GES). The one-time darling of denim has seen its stock, now trading around $32, lose 15.5% of its value in the last year. Fourth-quarter earnings announced March 14 were mediocre. Management, at a minimum, expects earnings-per-share in 2013 of $2.50 on revenue of $2.74 billion. Analysts were expecting $3.21 per share on $2.84 billion in revenue. This knocked 10% off its stock on March 15.
Guess is definitely on sale. Its enterprise value is now less than 5 times EBITDA. Abercrombie & Fitch (NYSE:ANF), whose operating margins are half those of Guess, has an enterprise value 7.5 times EBITDA.
Guess investors appear to be focusing too closely on its European business instead of its Asian business. While Asia represents less than 10% of Guess’s $2.7 billion in overall revenue, sales there grew by 25% year-over-year. This will become an important part of its business in years to come.
In the meantime, its European and North American businesses are still very profitable. Factor in the fact its North American wholesale and licensing businesses generate operating margins of 25% and 90%, respectively, and what you have is an extremely healthy business. With zero debt and $5 per share in cash, you’re currently paying $11 for $1 in earnings.
Guess shares haven’t been this low since 2009. Same-store sales might be negative, but its long-term prognosis surely isn’t. Guess remains a strong generator of cash, with a stock that’s available at a deep discount. I love it when a stock goes on sale.

3 Best Kids Stocks to Invest in 2012 - rue21

This stock is a classic case of Jekyll and Hyde. rue21 (NASDAQ:RUE) is a value-focused teen fashion retailer that went public in November 2009 to a great deal of fanfare. Priced at $19, it jumped out of the gate fast with a 28% first-day return. Since then, it has tacked on an additional 12.2%.
Unfortunately, its stock is an underachiever. On three occasions in the past 28 months, it hit $35 only to drop back within days. The last time it did this was July 2011, reaching a high of $37.63, only to fall to $22 by September. Since the beginning of 2012, it’s up 24%, and is now just under $27.
It’s on its way back to $35. Positives in 2011 included a revenue increase of 19.8% to $760.3 million, gross margins improving 70 basis points to 37.7% and diluted earnings per share jumping 28% year-over-year to $1.55. The only fly in the ointment was flat same-store sales.
In 2012, rue21 expects same-store sales to grow in the low single digits. Frankly, as long as it continues to expand margins, I couldn’t care less about same-store sales. rue21′s profitability is higher now than it’s ever been, yet its stock trades at a similar valuation to Aeropostale (NYSE:ARO). That’s just nuts. In the immortal words of Charlie Sheen from the movie Wall Street, “It’s a comer!”

Top 9 Financial Stocks to Invest In April For 2012

Mar 22, 2012, 6:30 am EDT   |   By Louis Navellier, Editor, Blue Chip Growth

In the wake of recent Federal Reserve stress tests, some banks are looking better than others. While there are indeed some systemic risks to the financial sector, there are also opportunities for the very best players.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I’ve identified nine financial stocks to buy.
Each one of these stocks gets an “A” or “B” according to my research, meaning it is a “strong buy” or “buy.” Here they are:
Top 9 Financial Stocks to Invest In April For 2012 - BlackRock (NYSE:BLK) is an independent investment management firm. In the last year, BLK stock is up 10%. BlackRock stock gets a “B” grade for the magnitude in which earnings projections have increased over the past months. For more information, view my complete analysis of BLK stock.
Top 9 Financial Stocks to Invest In April For 2012 - Mitsubishi UFJ Financial (NYSE:MTU) is a Japanese holding company mainly engaged in the banking business. Mitsubishi Financial has posted a gain of 11% since this time last year. MTU stock gets a “B” grade for operating margin growth, a “B” grade for the magnitude in which earnings projections have increased over the past months, and an “A” grade for cash flow. For more information, view my complete analysis of MTU stock.
Top 9 Financial Stocks to Invest In April For 2012 - U.S. Bancorp (NYSE:USB) provides its customers with lending and depository services, cash management, foreign exchange and trust and investment management services. Since this time last March, USB is up 19%. USB stock gets an “A” grade for operating margin growth, a “B” grade for earnings growth, a “B” grade for its ability to exceed the consensus earnings estimates on Wall Street, a “B” grade for the magnitude in which earnings projections have increased over the past months, an “A” grade for cash flow, and a “B” grade for return on equity. For more information, view my complete analysis of USB stock.
Top 9 Financial Stocks to Invest In April For 2012 - Sumitomo Mitsui Financial Group (NYSE:SMFG) is another Japanese financial services-related company to make the list. Sumitomo Financial has jumped 9% in the last 12 months. SMFG stock gets a “B” grade for earnings momentum, an “A” grade for the magnitude in which earnings projections have increased over the past months, and an “A” grade for cash flow in my Portfolio Grader tool. For more information, view my complete analysis of SMFG stock.
Top 9 Financial Stocks to Invest In April For 2012 - BB&T (NYSE:BBT) owns the commercial banking subsidiary, Branch Banking and Trust Company, and has posted a gain of 16% since last March. BB&T stock gets an “A” grade for operating margin growth, an “A” grade for earnings growth, a “B” grade for earnings momentum, an “A” grade for the magnitude in which earnings projections have increased over the past months, and a “B” grade for cash flow. For more information, view my complete analysis of BBT stock.
Top 9 Financial Stocks to Invest In April For 2012 - Banco de Chile (NYSE:BCH) provides a range of credit and non-credit products and services to its Chilean customers. Banco de Chile is up 23% in the last 12 months. BCH stock gets an “A” grade for return on equity. For more information, view my complete analysis of BCH stock.
Top 9 Financial Stocks to Invest In April For 2012 - Credicorp (NYSE:BAP) is involved with banking, pension funds, insurance and brokerage services. BAP stock has outpaced the broader markets with a gain of 21% in the last year. Credicorp stock gets a “B” grade for sales growth, a “B” grade for earnings momentum, a “B” grade for the magnitude in which earnings projections have increased over the past months, an “A” grade for cash flow, and an “A” grade for return on equity. For more information, view my complete analysis of BAP stock.
Top 9 Financial Stocks to Invest In April For 2012 - American Express (NYSE:AXP) is best known for its charge and credit payment card products. Since last March, American Express stock has gained 29%. AXP stock gets a “B” grade for operating margin growth, a “B” grade for earnings growth, a “B” grade for the magnitude in which earnings projections have increased over the past months, a “B” grade for cash flow, and an “A” grade for return on equity. For more information, view my complete analysis of AXP stock.
Top 9 Financial Stocks to Invest In April For 2012 - Discover Financial Services (NYSE:DFS) is also best known for its credit card service. Since last March, Discover stock has posted the biggest gain on this list at 45%. DFS stock gets an “A” grade for sales growth, a “B” grade for operating margin growth, an “A” grade for the magnitude in which earnings projections have increased over the past months, an “A” grade for cash flow, and an “A” grade for return on equity.

Top 4 Restaurant Stocks To Buy Right Now

With consumer confidence showing some signs of life, a few select restaurant and eatery stocks are looking to benefit. As more Americans resume eating out instead of cooking at home, some of these companies will benefit.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, we’ve found four high-growth restaurant stocks to buy.
Each one of these stocks gets an “A” or “B” according to my research, meaning it is a “strong buy” or “buy.” Here they are:
Top 4 Restaurant Stocks To Buy Right Now - McDonald’s (NYSE:MCD) is perhaps the most well-known fast-food chain in the world. In the last year, McDonald’s stock has posted a gain of 34%, compared to a gain of 11% for the Dow Jones in the same time. MCD stock gets a “B” grade for earnings growth and an “A” grade for return on equity. For more information, view my complete analysis of MCD stock.
Top 4 Restaurant Stocks To Buy Right Now - Starbucks (NASDAQ:SBUX) operates an international chain of specialty-coffee restaurants. SBUX stock has posted a gain of 54% since this time last year. Starbucks stock gets a “B” grade for sales growth, a “B” grade for operating margin growth, a “B” grade for the magnitude in which earnings projections have increased over the past months and an “A” grade for return on equity. For more information, view my complete analysis of SBUX stock.
Top 4 Restaurant Stocks To Buy Right Now - Yum! Brands (NYSE:YUM) is known for owning the chains KFC, Pizza Hut and Taco Bell. Since last March, YUM stock has jumped 38%. YUM stock gets a “B” grade for sales growth, a “B” grade for earnings growth, a “B” grade for earnings momentum, a “B” grade for the magnitude in which earnings projections have increased over the past months and an “A” grade for return on equity. For more information, view my complete analysis of YUM stock.
Top 4 Restaurant Stocks To Buy Right Now - Chipotle (NYSE:CMG) operates more than 1,200 Mexican restaurants predominantly in the U.S. Chipotle stock has gained 67% in the last year, compared to smaller gains by the broader markets. CMG stock gets a “B” grade for sales growth, a “B” grade for earnings growth, a “B” grade for earnings momentum, a “B” grade for the magnitude in which earnings projections have increased over the past months, an “A” grade for cash flow and a “B” grade for return on equity. For more information, view my complete analysis of CMG stock.

3 Best Top Game-Changing Stocks To Buys for February in 2012

 Here are three stocks currently on my buy list that are good buys right now. If you’re new to investing or have money to put to work, I recommend you give these stocks strong consideration:
3 Best Top Game-Changing Stocks To Buys for February in 2012-Johnson Controls’ (NYSE:JCI) recent earnings report disappointed the market, and the company is coming under some criticism for inconsistent profit margin and cash flow performance. However, those should be short-term concerns for a couple of reasons. First, some of the problems in the quarter were beyond JCI’s control, such as weak battery sales due to the abnormally warm winter weather. And more important, management is taking direct action to boost margins, including cost cuts in its HVAC division and hiring experts to make production processes more efficient.
Despite its challenges, JCI still expects record earnings in its fiscal year (ending September 2012) of $2.70 to $2.85 a share. I like the changes the company is making and, in the bigger picture, it remains well-positioned to benefit from global growth in automobiles and the demand for more efficient building controls. The stock has stabilized after pulling back after earnings, and this is a good opportunity.
3 Best Top Game-Changing Stocks To Buys for February in 2012-Cerner (NASDAQ:CERN), which I added last month, slid back a bit in the middle part of January. It has regained momentum as well in recent days, and I continue to like the stock ahead of the company’s Feb.7 earnings report. The health care information technology company is already benefiting from the strong trend toward electronic records, and its Cerner Millennium software is an exciting game changer that allows doctors to access patient information in real time.
Revenue growth has accelerated in response to the HITECH Act, which mandates digital medical record-keeping, with sales growing 24% last quarter. I expect a good showing in the next report as well, and I still like the stock a lot long term.
3 Best Top Game-Changing Stocks To Buys for February in 2012-Zeltiq Aesthetics (NASDAQ:ZLTQ) has bounced back nicely after its mid-January management change that sent shares down to $10 from $12. Its core story remains intact, and the company should continue to see rapid revenue growth for its CoolSculpting system, a noninvasive procedure that removes fat from stubborn areas. The procedure is relatively low-cost ($700), which makes it an appealing alternative to other more involved and more expensive surgeries such as tummy tucks.
ZLTQ’s revenues have grown from just $1.5 million in 2009 to $25.4 million in 2010 — including a doubling of revenues through just the first nine months of 2011. I like the razor and blades business model, which will generate a lot of high-margin recurring supply sales as the procedure grows in popularity.

5 Best Market-Moving Earnings Reports Analyzed in February in 2012

This earnings season has been a busy one. Last week I gave you an idea of what to expect from some of the most notable companies reporting earnings. Here’s the epic conclusion for the majority of them:

5 Best Market-Moving Earnings Reports Analyzed in February in 2012 - Ford

Ford (NYSE:F) reported a profit of $20.2 billion for 2011 — its third straight annual profit — but posted Q4 earnings of 20 cents a share, which was 5 cents below expectations and less than the 30 cents earned a year ago.
Earnings were hurt by higher materials prices, and, to a lesser extent, one-time costs associated with its new four-year agreement with the United Auto Workers that locked in U.S. labor costs for an extended period at favorable rates. Higher materials prices especially hurt Ford’s challenged European unit, where the operating net loss increased to $190 million from $51 million — despite sales increasing to $8.3 billion from $8.1 billion on improvements from volumes and revenue mix. The Asia Pacific segment lost $83 million on lower volume and fallout from flooding in Thailand.
North American operations fared better, earning $889 million — a nice bump up from $670 million a year ago with U.S. sales rising 11% for the year. Management expects higher automotive production in North America in 2012, estimating industry-wide production to be 13.5 million to 14.5 million units — up from 13 million units in 2011 and a similar forecast to the one given recently by rival

5 Best Market-Moving Earnings Reports Analyzed in February in 2012 -General Motors (NYSE:GM).

Guidance for 2012 was roughly in line with expectations. The company expects better automotive profit but also looks for a decline in European productions from 15.3 million units to 14.0 million — 15 million units. Ford believes its financial services segments will remain highly profitable, but less so than last year due to lower interest rates. The company is also projecting little change in net interest income and believes pretax operating profit in 2012 will be close to last year’s levels, so we’re likely to see 2012 earnings somewhere around 2011’s $1.51 a share.
One other note: Ford reported this week that North American vehicle sales in January increased 7%. Strength was well-balanced, with the small car Focus sales up 60%, accounting for 30% of the growth. Also strong was the F series — up 8% — helped by the addition of a more fuel efficient V-6 engine. The company did not change previous guidance of a 3% increase in North American production so, as expected, domestic operations are solid at Ford.
Shares hit a six-month high around $13 before the earnings report and then dipped briefly under $12. They’ve moved higher since and are still up almost 18% to start 2012. Despite the short-term disappointment, Ford is moving forward with aggressive goals for 2015 that portend further improvement — driven by growth in its Asia Pacific operations. I definitely would buy F on pullbacks.     

5 Best Market-Moving Earnings Reports Analyzed in February in 2012 -ICU Medical

ICU Medical (NASDAQ:ICUI) had a mixed fourth quarter, beating earnings expectations but missing on revenue with sales of $76.5 million falling just shy of the expected $78.6 million, but still up 1.1% over a year ago. The revenue miss had been hinted at by management as a possibility at the end of its third quarter, so it wasn’t much of a surprise. Earnings per share of 70 cents (excluding an extraordinary gain of 56 cents on the sale of the company’s Orbit diabetes induction set business) came in well ahead of expectations of 62 cents.
As we’ve talked about before, it’s important to analyze ICUI on an annual basis rather than a quarterly one because sales can be erratic. For the whole year, revenues increased 6.2% to $302.2 million. Growth was driven by the company’s infusion therapy — where sales increased 5.3% to $198.9 million — and in the small but rapidly growing oncology unit — where sales increased 33% to $24.4 million.
Competition is continuing to impact the critical care unit, and sales declined 3.1% to $61.4 million for the year. Gross profit margin in 2011 increased 122 basis points to 47.1%. Earnings (excluding the extraordinary gain) increased to $2.59 from $2.23 in 2010.
Management was upbeat on the conference call about the year ahead — with more new products to be introduced than at any time in the company’s history. Revenues are expected to grow 5% to 9% ($318 million to $330 million) — with infusion therapy and oncology again leading the way. However, margins will be hurt by expenses related to a new plant in Slovakia, which is needed to service ICUI’s rapidly growing international operations that saw a 14% sales increase in 2011. Due to the higher expenses, management projected earnings of $2.45 to $2.70 per share.
The low end of that range is pretty far below current expectations of $2.68, so the stock initially sold off following the report on Jan. 30. But the stock quickly recovered the next day as investors realized the long-term growth story still is intact. ICUI is a good buy as it hovers just below $47.

Jacobs Engineering

Jacobs Engineering (NYSE:JEC) met expectations with earnings of 70 cents a share — up 35% from a year ago — in a fiscal first quarter that reinforced for investors how the company continues to benefit from the global economic recovery.
Revenues were up 11.7% to $2.633 billion, and margins expanded on higher sales volume and good cost controls. Pricing remains competitive, especially in government work. Management is hopeful pricing will improve in work outside the government, and believes their strong relationships with core clients will enable them to increase prices as the business environment improves.
It was good to see order activity was either steady or improving across most segments of the business, and JEC’s backlog rose to $14.5 billion — up more than 10%, from $13 billion, at the end of 2010. Demand remains strong in the mining and materials, chemicals and oil & gas segments.
Management maintained its guidance for 2012 earnings of $2.80 to $3.20, which was the main reason the stock fell after the report. The low end of that range ($2.80) would represent growth of only about 7.7% from 2011, and that seems too low to me — given the momentum JEC showed in the quarter and the very upbeat tone of management on the conference call. I think management is being overly cautious, and I expect 2012 earnings will come in closer to the high end of the range, especially with global economies still growing.

5 Best Market-Moving Earnings Reports Analyzed in February in 2012 -Jack Henry

Jack Henry (NASDAQ:JKHY) reported another strong quarter, posting increases of 5% in revenue, 4% in gross profit and 7% in net income during its fiscal second quarter. The tech solutions company also grew its order backlog and confirmed analysts’ estimates for its 2012 fiscal year.
As CEO Jack Prim pointed out, the quarter showed solid execution on all fronts. Revenues rose as the company’s core community bank customers continue to spend money on JKHY’s data processing services and the industry outlook brightened. The company also continues to watch costs and actually had lower operating expenses in the quarter, which allowed operating income to increase 10.5%. Management used its significant free cash flow to lower debt, leading to a decline in interest expenses, and pretax income rose 13.2%.

Bottom line results were limited by an increase in the effective tax rate to 35.2% — from 31.4% in the prior year — as the prior year accrual was a little bit lower than normal. Still, net income was up 7%, and earnings increased to 44 cents (from 42 cents).
Backlog stood at $378.8 million at year-end — up an impressive 11% from 2010 and 5% from the previous quarter. Management indicated it has seen a good amount of wins from competitors’ existing business. In addition, JKHY says it is seeing no significant headwinds from bank consolidation at this time. Management also endorsed current earnings estimates of $1.74 in the 2012 fiscal year — good for growth of 10%.
Given the company’s strong history and market share gains, I see more growth ahead.

5 Best Market-Moving Earnings Reports Analyzed in February in 2012 -Parexel

Parexel (NASDAQ:PRXL) jumped 18% Tuesday after reporting solid fiscal Q2 results and giving guidance that suggests the pharmaceutical research company’s earnings rebound is on track.
Adjusted earnings of 23 cents a share met the Street’s expectations, but revenues of $333.2 million fell about $1 million short. However, revenue rose in all three business segments, including a 9.5% jump in service revenues. This was helped by booking new business and lower-than-average cancellations. With backlog up 23.8% to $3.74 billion and a book-to-bill in the quarter of 1.50, I see more revenue gains ahead in the coming quarters. Profitability continues to be pressured by new hires to meet expected demand, but that’s a necessary part of running a growing business, and this will turn around as the demand comes online.
The operating margin on an adjusted basis was 7.1% in the quarter — down from 9.1% — due to the new hires. However, they improved sequentially from 4.8% in the third quarter on higher revenues and a recent restructuring designed to improve efficiency that will help earnings by an additional 5 cents a share in the third quarter. SG&A expenses were tightly controlled and remained flat compared to a year ago.
Management raised and tightened its guidance range for fiscal 2012, which ends in June. The company now expects earnings of $1.09 to $1.17 — up from previous guidance of 99 cents to $1.14. For calendar-year 2012, the company is projecting results of $1.33 to $1.47, which tells us earnings should continue to grow beyond the current fiscal year. Longer-term, further margin improvement could be in the works as PRXL believes it can get operating margins up to 10%. Meeting this goal would assure solid growth well into the future.

7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012

Well, January sure set a pleasant tone for 2012. The market recorded its best first month of the year since 1997, with the S&P 500 up 5%, the Dow up over 4% and Nasdaq up a stunning 9% from Jan. 1 to Feb. 1.
Warren Buffett didn’t seem to fare as well, though, with his iconic 7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - Berkshire Hathaway (NYSE:BRK.B) underperforming with a less than 3% return in January. But investors should know by now that Buffett stocks aren’t meant to be in your portfolio for a matter of weeks but for many months. The Oracle of Omaha has famously said that even if the market was open for just one day a year, he would still buy shares.
So don’t take this as a sign that Buffett has lost his edge just yet.
Which stocks is Buffett banking on in 2012? Here are the leaders so far. Share totals are as of the November filing for Berkshire Hathaway disclosure of equity stakes:
USG (NYSE:USG), 17.1 million shares. USG stock is up over 45% year-to-date in 2012.
Bank of America (NYSE:BAC), $5 billion in preferred shares bought with warrants at $7.14 per share. Common stock of BofA is up about 40% YTD, approaching $8 a share.
Ingersoll-Rand (NYSE:IR), 636,600 shares. Ingersoll-Rand is up 22% so far this year.
Moody’s (NYSE:MCO), 28.4 million shares. The ratings agency is up 14% in 2012.
7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - Intel (NASDAQ:INTC), 9.3 million shares. Intel is up 11% so far this year.
Wells Fargo (NYSE:WFC), 361 million shares. Wells is also up 11% YTD.
7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - American Express (NYSE:AXP), 151.6 million shares. AmEx is up 10% so far in 2012.
It’s no surprise that financials are the leaders here. Buffett’s value investing style has caused him to plow lots of cash into the financial sector in the wake of the crisis, and other Berkshire Hathaway holdings not making this list of double-digit gainers include U.S. Bancorp (NYSE:USB), Bank of New York Mellon (NYSE:BK) and 7 Warren Buffett Stocks Dishing Up Double-Digit Gains in 2012 - M&T Bank (NYSE:MTB), all up roughly 8% so far in 2011.
It’s strange, then, that Berkshire would underperform with so many high fliers in there. But remember, the stakes are far from equally distributed. Berkshire’s portfolio has are some 200 million shares of Coca-Cola (NYSE:KO) — with a total value of $13.6 billion, give or take a few hundred million. Coke stock is in the red year to date, and that has held back Buffett & Co.
But you can be sure that if financials keep rallying and Coke turns around, Buffett will do just fine in 2012.
In the meantime, take a good look at what Buffett has been buying, and ask yourself if any of these picks are right for your own portfolio.

10 Best Stocks to invest Under Barack Obama in 2012

There’s a lot of bluster this election year about the economy and President Barack Obama’s effect on jobs and the stock market. But what you may not realize is that many comparisons aren’t exactly fair.
Yes, in November 2008 when Obama won the election, unemployment was just shy of 7%, and when he took office in January it was under 8%. But comparing our current unemployment rate of 8.3% to what things were like when the president took office isn’t so simple. After all, the financial crisis was really only beginning in late 2008, and the Great Recession didn’t peak until mid-2009.
In many ways it’s an accident of timing that Obama has presided over a rise in unemployment more than anything else. It doesn’t take a rocket scientist to understand that a previous administration’s policies were in action for those first readings and Obama’s plans hadn’t yet had time to take shape.
The same can apply, however, to the stock market. The bottom of the bear market in equities came in early March 2009. So, in many respects, President Obama “bought the bottom” of the stock market and has simply presided over the rebound. The stock market is up about 55% since January 20, 2009, and a handful of equities are up by dramatically more than that.
Of course, the five-year return for the S&P 500 as of this writing is a loss of 8%, so we haven’t even gotten back to pre-crash levels yet. Let’s not pretend Obama ignited a stock market boom.
Still, investors are addicted to crunching numbers and tracking time frames. So I’ve decided to offer up some of the biggest winners since Obama took the oath of office in January 2009.
I could have included the losers too, but there would be too many tied for losses of 100% via bankruptcy — ranking from the recent failure of Borders to victims like (10 Best Stocks to invest Under Barack Obama in 2012)-General Motors (NYSE:GM), which went to zero but then got a second life with its 2010 IPO after Chapter 11 reorganization.
Instead, here are the 10 biggest “winners” under Obama, even though the president personally deserves little credit for these success stories:

1. Dollar Thrifty Automotive Group (NYSE:DTG), up 5,740%
2. Jazz Pharmaceuticals (NASDAQ:JAZZ), up 3,570%
3. (10 Best Stocks to invest Under Barack Obama in 2012)Pier 1 Imports (NYSE:PIR), up 2,750%
4. Cardtronics (NASDAQ:CATM), up 2,090%
5. Pharmasset (NASDAQ:VRUS), up 2,471% based on its buyout by Gilead (NASDAQ:GILD) that was completed Jan. 16 at $137 a share.
6. Boise (NYSE:BZ), up 1,560%
7. Dana Holding (NYSE:DAN), up 1,460%
8. Crocs (NASDAQ:CROX), up 1,390%.
9. (10 Best Stocks to invest Under Barack Obama in 2012)Valassis Communications (NYSE:VCI), up 1,230%
10. Ulta Salon (NASDAQ:ULTA), up 1,160%

Keep in mind that these figures are as of the opening bell on Feb. 2, and just a little difference in share price can really alter these returns considering the long-term change.
I’m not sure whether there are any lessons to learn from this list, either. But at least I hope you find it interesting.

6 Software Penny Stocks to Buy in 2012

There is no better place to find explosive growth than with low-priced penny stocks. I’m not talking about pink sheet stocks that are potentially nonexistent, or fraudulent names set to crash. I’m talking about real companies with real earnings — companies listed for more than one year on a major exchange like the AMEX, NYSE or Nasdaq, and that have a market cap in the ballpark of $100 million.
The returns can be even more powerful when you combine the power of technology stocks and penny stocks. Specifically, the software space is seeing lots of action thanks to the mass acceptance of smart phones and personal computing devices.
These devices are quite powerful, but they still need programs to make them run. The best software companies are those that make users more productive. In this tough economy, those companies that help workers do more with less are poised to be the penny stocks that really move higher.
Because these companies have the wind at their sails from an earnings perspective, these penny stock prices will not last long. Now is the time to pounce before the rest of the market catches on.
Here are six software penny stocks to buy now:

6 Software Penny Stocks to Buy in 2012 - NetSol

NetSol Technologies (NASDAQ:NTWK) is a penny stock with a near $100 million market cap. This is a real company with real products and real revenues. The company makes application software for the automobile finance and leasing industry as well as the banking, financial services and healthcare industries globally.
Shares have drifted lower since peaking near $2.40 per share earlier this year. You can buy this penny stock today for just $1.60 per share. That is a bargain that you should exploit.
NetSol beat estimates in the last quarter by 4 cents per share. Look for a similar result when it announces quarterly results. For the full year, the expectation is for a profit of 18 cents per share. If the company does better than expected, this stock could really take off.

6 Software Penny Stocks to Buy in 2012 -

Cover-All

The penny stock Cover-All Technologies (AMEX:COVR) has a market cap of $63 million and is part of the Russell micro cap index. In May, the stock was listed on the AMEX exchange taking shares off bulletin board status. The stock has gained about 50cents per share since that time.
Cover-All Technologies is in the business of providing software products and services for the property and casualty insurance space. That sector has been getting headlines this year with the uptick in natural disasters and inclement weather. Any chance to save money with technology will be more likely to be advanced under more difficult financial times.
Cover-All is profitable and expected to make seventeen cents per share in the current fiscal year. That number jumps 3 cents to 20 cents per share in 2012. The company has beaten estimates in the last two quarters. You can buy that 17% growth for less than 15 times estimated earnings.

Top Image

One of the problems owning penny stocks is trading volume is thin and liquidity makes it tough to sell shares for a profit. In the case of Top Image Systems (NASDAQ:TISA), we have a stock that sees an average of 300,000 shares trading hands each day. Clearly this stock will be followed by a fairly large group of investors.
Top Image system is in the business of making software with respect to data capture and manipulation. This Israeli-based company was founded in 1991. Shares of the company blasted higher in early May after the company reported positive results for its first quarter of 2011.
In the period, the company saw a 36% increase in revenue and posted a profit of seven cents per share as opposed to a loss in the year prior. That was enough to move the stock from $1.34 per share to $2.20 per share. Those are the types of moves you can expect from a penny stock when it delivers solid operating performance. I expect a repeat performance in future quarters.

Authentidate

Authentidate Holding Corp. (NASDAQ:ADAT) is in the business of making the health care industry less paper-intensive. Offering web-based solutions for health systems and physician groups, this penny stock has nearly doubled in value since early April.
I don’t think the gains are done there. This sort of momentum is what I like to see. Historically riding these waves of momentum has been very lucrative to me and my investors.
Authentidate is growing and continually adding to its impressive roster of customers. Most recently the company signed a deal with the Department of Veteran Affairs to provide telehealth solutions. The company is expected to lose money in 2011, but to be profitable in 2012. If so, the stock will double again from here.

Cinedigm Digital Cinema

Penny stocks can be quite volatile. Shares of Cinedigm Digital Cinema (NASDAQ:CIDM) have been on a roller coaster this year. In mid-March the stock caught fire and jumped a dollar per share over the course of a couple of months. Since that time, shares have given up half that gain to the ballpark of $1.90 per share.
Use the selling to get in on this penny stock ride. Cinedigm provides technology solutions and digital content to theater exhibitors. The company just completed a year of operating losses that it expects to sharply narrow in the 2012 fiscal year. Sales are growing rapidly and that is what investors should focus on today.
To the extent they beat expectations, profitability may arrive sooner than later.

Mind CTI

Mind CTI (NASDAQ:MNDO) is an Israeli-based technology company that provides convergent end-to-end billing and customer-care product-based solutions for service providers as well as telecom expense management solutions. After peaking at nearly $3.60 per share, the stock has slipped to current levels at $2.80 per share.
The move lower comes on the heels of a less-than-stellar quarterly earnings report for its first quarter ending March 31, 2011. Year over year revenue in the period was lower, but the company did post a profit of six cents per share. In addition to reporting a backlog to be recognized this year of $10.2 million Mind CTI had previously declared a cash dividend of 32 cents per share.
With telecom and wireless being all the rage around the globe, I expect Mind CTI to perform quite well for the remainder of the year.

How to invest in stocks 101 | learn stock market basics for beginners

Whether you are an active investor or just looking for a place to park your retirement money, your best bet is with the stock market.  You can reasonably expect a 8-12% annual return over time.  That could end up being a lot of money if you compound those returns over a long time horizon.  You really can’t expect those types of returns from other types of investments.
That being said, you really have to know how to invest in stocks in a variety of markets and economic conditions if you want these types of returns.  You generally won’t get this type of ROI by sitting on your hands the whole time.
It’s not difficult to learn how to invest in the stock market.  Even beginners can get started almost right away with the right investment strategy.  If you want to get started right away as you learn the basics, consider investing in a broad market index fund like the SPDR ETF, which is a vehicle that tracks the S&P 500 composite index.
You can also look at the Vanguard Total Stock Market Fund which tracks 3,000 stocks in an effort to match the broader US stock market.  Both of these index funds have historically produced the returns of 8-12% a year that I was talking about.
But again, if you want to get exceptional returns, you will need to do some learning.

Finding a Financial Advisor

Before you do anything, you should find a financial advisor.  A good one will do far more than just give you investment advice about individual stocks.  They will help you create a comprehensive investing strategy that is based on your risk profile, time horizon and financial objectives.
This doesn’t mean you should give up ownership of your own finances.  No one will care more about your personal finances than you.  You cannot hand this responsibility off to someone else.
At the same time, you don’t want to reinvent the wheel.  You can also benefit from another perspective as well as any research and investing ideas they might be able to offer.
You could go with a standard stock broker, but there are a lot of downsides to doing that if you are a beginner investor.  I would look for a fee based investment advisor that you can trust and feel comfortable with.  Some of the larger fee based advisory firms are Edward Jones and Ameriprise Financial Advisors.

Online Stock Market Trading Account

The next thing you will probably need to do is set up a trading account with a stock broker.  Most people these days go with an online stock broker.  The big ones that most investors use are Etrade, TD Ameritrade, and Scottrade.  Just put a “.com” after their name and you are there.

Stocks or Mutual Funds?

Again, it really depends on how active you want to be.  If you want someone else to manage your money for you, you should invest in a mutual fund.  If you are very interested in the stock market and would like to pick your own stocks, you can do that as well.
If you are going to stock pick yourself, be warned.  Most people cannot average market returns.  If you don’t beat the market, there is no point in actively picking your own stocks.  You might as well invest in a S&P 500 index fund ETF.  You would get better returns, cheaper transaction costs and with the fraction of the time investment.

Time Horizon

It is important that you consider your time horizon when investing.  If you are young and have 20-30 years before retirement, you should be a little more aggressive.  You should look at investing in small cap growth stocks or a mutual fund that does the same.
If you are older and closer to retirement age, you should be more conservative.  That means investing in large cap stocks that offer dividends with low risk of capital depreciation.  You should also start reallocating your assets into bonds and other fixed income investments as well.

Rebalancing Your Investment Portfolio

There is a spectrum to follow.  As you get older, you should get progressively more conservative in your investment strategy.  You do this with something called re-balancing.  This is where you check in with your portfolio regularly to reallocate your assets based on your time horizon.
For example, let’s say you want 80% in stocks and 20% in bonds.  In 3 months from now, your stocks may appreciate to 90% of your portfolio and bonds 10%.  To rebalance to get you back to your optimal ratio, you should sell your stocks and buy bonds.  Either that, you can leave the stocks the same and allocate more capital from elsewhere to your bonds.

Introduction

First of all, the stock market is a financial exchange where buyers and sellers get together to trade shares or stock in public companies.  Public companies issue shares of ownership in their company.  Some may have 1,000 owners, some may have 1 million owners.  In either case the owners are said to own stocks in that company.
In stock market investing and trading, those owners can freely sell their share of the company to a buyer for the market price.  Or they can buy additional shares in that company or in another company.  The stock market gives investors and traders an avenue to do this freely, efficiently and it streamlines this whole process.  These are basic things you need to know whether you are doing stock market trading or day trading for a living.

Terms and Definitions

Here are some stock market investing basics terms and definitions you will need to know to understand what’s going on in the market.  You can find these terms and learn more about them in stock market for dummies 101 books that I will eventually do a post on.  In the mean time, here are some of the more important ones that you would learn in most stock market courses and tutorials.
The Dow – When a CNBC reporter refers to the Dow, she is referring to the Dow Jones Industrial Average.  This is the average of the share price of 30 of the largest and most influential stocks on the New York Stock Exchange.  The Dow typically is looked at as an indicator of the state of the US economy.
S&P 500 Index - This is another composite of companies compiled by a credit rating agency called Standard & Poor’s, hence the S&P.  The 500 part refers to how many companies are included in this index.  S&P has a set of criteria to pick the 500 most important companies in the US.  This again is used to indicate the health of the US economy and stock market.
Share Price – Refers to the price of a single share of a company.
Market Cap – Also known as market capitalization, this is a measurement of the company’s size.  It’s calculated by taking the share price and multiplying it by the number of outstanding shares.  The 3 main categories of market caps are large-cap, mid-cap and small-cap.
P/E Ratio – This is the price per earnings ratio.  It gives an indication of how much real money a company is earning relative to it’s share price.  If their P/E is high, that means the price is way higher than what they are earnings, which means there is a market expectation that this particular stock will go up at some point in the future, the earnings will rise significantly, or both.
Stock Broker – Everyone needs one of these in one form or another to buy and sell stocks.  A broker trades shares on your behalf and you pay them a commission each time you do it.  Back in the old days, you’d have to call them on their landline to place an order.  You can still do that, but most people have an online brokerage account that they trade from these days.
Mutual Fund – This is when a money manager puts together an investment portfolio and let’s other people get in on it.  It’s like if you were picking stocks to invest in and other people started to ask you to do it for them.  You are basically paying a professional to invest your money for you and you pay them a management fee.
Investment Portfolio – This is your overall basket of stocks, bonds and other assets that you have invested in.  If I own shares in GE, Microsoft and Coca-cola, I would say that those stocks are in my investment portfolio.
Diversification – This is an important concept to understand when you are developing your investment strategy.  Diversification is the idea that you don’t put all of your eggs in one basket.  By buying a variety of stocks, bonds and other kinds of assets, you are diversifying your risk.  If one goes down the tube, you have other assets to make up for it.  It is unlikely that all of your assets will tank.  And if one does extraordinarily well, it will make up for the losses.  But you have no way of knowing which ones will do well and which ones won’t, so you buy all different kinds.

Forget One-Time Charges — Alcoa Is Your Best Stock to buy for 2012

Best Stocks for 2012 Aluminum stock Alcoa (NYSE:AA) announced this week that it will be taking a significant one-time charge from moves to cut smelting capacity. In the short term, this might seem like trouble — with Alcoa stock down more than 2% at the open Friday — but buy-and-hold investors might want to buy in on this dip.

AA stock has seen better days, to be sure. Shares are off about 70% from early 2008 and down about 40% in the past year. But the fact is Alcoa fundamentals are improving, in large part because of restructuring moves like this one that provide short-term pain but make the aluminum giant much more competitive in the long run. Alcoa remains my pick for one of the 10 best investments to buy and hold for all of 2012.

Here are the specifics of the recent charges: Alcoa will write off 15 to 16 cents per share in its fourth-quarter results thanks to moves that cut about 12% of its global smelting capacity. It will permanently close a smelter in Tennessee, along with two of six idled potlines at a Texas facility. Further curtailments will be announced “in the near future,” the company said.

Why would cutting back capacity be a good thing? Well, for one, demand is weaker after the financial crisis. Durable goods and construction products using aluminum just aren’t selling as fast as they used to. But another important reason is that aluminum prices are very soft, off about 27% from peak levels in 2011, and slashing supply will provide a floor for the price of Alcoa’s aluminum that it provides to manufacturers.

True, Best Stock to buy for 2012 Alcoa isn’t sexy. It’s a stodgy Dow Jones component that is hardly a 21st century company like Apple (NASDAQ:AAPL). And true, the headwinds Alcoa faces are obvious and pretty significant.

But Wall Street has unfairly battered this industrial giant, and that creates a big opportunity for buy-and-hold investors.

Alcoa is a bargain. AA stock hasn’t seen the $9 level since spring 2009. Do you really have less confidence in the economy than you did almost three years ago, when the sting of the financial crisis was fresh in all our minds? Alcoa has a forward P/E of about 10 right now and a price/book of less than 0.7, so the depressed pricing seems to be an overreaction.

Fundamentally, Alcoa is looking better than you might think, too. Alcoa has seen year-over-year profit increases in each of the last eight quarters. It also has seen revenue go up year-over-year for seven straight quarters.

There’s also a modest 1.3% dividend to sweeten the pot, with the potential of an increase in 2012. That payment has been stagnant since March 2009, and stability in the company might mean a decent uptick in the quarterly payday for shareholders, since a dividend increase is long overdue.

Top 5 Emerging Growth Stocks to Buy for January in 2012

If you have cash to invest this month, I highly recommend these five below. Here they are, in no particular order:

Taiwan-based Silicon Motion Technology (NASDAQ:SIMO) has its hand in lots of hot markets and is a big player in flash memory storage — flash memory cards, USB flash drives, card readers and solid-state hard drives. In fact, most of the NAND flash and next-generation flash products on the market — whether produced by Samsung (PINK:SSNLF), SanDisk (NASDAQ:SNDK), Toshiba, Micron (NASDAQ:MU) or Intel (NASDAQ:INTC) — are supported by Silicon Motion controllers. Silicon Motion also produces multimedia chips including embedded graphics processors, image processors and TV tuners. Lastly, it has been increasingly focused on controllers for smartphones, tablets and notebook PCs, as well as wireless transceivers for 4G LTE smartphones and tablets.

In the third quarter, Silicon Motion’s sales rose 25% to $63.2 million compared with $50.5 million in the second quarter. Looking forward, the analyst community is expecting annual fourth-quarter sales growth of 51% and 88.9% earnings growth. In the past three months, the analyst community has revised their consensus earnings estimate 32% higher — a phenomenon that typically precedes blowout earnings surprises.

Top 5 Emerging Growth Stocks to Buy for January in 2012 - Questor Pharmaceuticals (NASDAQ:QCOR) likes a challenge. As a specialist of difficult-to-treat central nervous system disorders, the company has been particularly successful with its multiple sclerosis treatment, H.P. Acthar Gel. The company also makes Doral, which is used for the treatment of insomnia. In the massive biotechnology industry, Questcor is top-notch in terms of earnings per share growth and return on equity.

For the fourth quarter, the analyst community is expecting 127.4% annual sales growth and 265.7% earnings growth of 38 cents per share. In the past three months, the analyst community has revised their consensus earnings estimate 32.6% higher. Typically, such positive analyst earnings revisions precede future earnings surprises.


Top 5 Emerging Growth Stocks to Buy for January in 2012 -Hansen Natural (NASDAQ:HANS) is the mastermind behind Monster, a dominant energy drink in the U.S. Looking at a can of Monster Energy drink, the flashy staple of sleep-deprived college students, one wouldn’t think that the company’s humble beginnings stem back to just one father and three sons working with a juicer in Southern California. In fact, although Hansen sells supercharged drinks like Monster and Java Monster, most of its drink roster is actually very wholesome. For example, it has 30 real fruit and spice soda flavors, a number of immune system-boosting drinks, vitamin waters and an array of teas and lemonades.

In recent quarters, Hansen Natural has reported “monster” sales and profit growth. Third-quarter sales jumped 24% from $381.5 million last year to $474.7 million this quarter. Over the same period, net income also rose 24% to $82.4 million, or 88 cents per share. Plus, speculation is heating up that Monster might be an acquisition target by Red Bull or one of the major soft drink companies. With Red Bull’s recent decision to pull out of NASCAR as a sponsor, a “monster” acquisition might be just what the energy drink maker needs to capture additional U.S. market share.


Top 5 Emerging Growth Stocks to Buy for January in 2012 - Spectrum Pharmaceuticals Inc. (NASDAQ:SPPI) is familiar pharmaceutical company I once discussed in the Top 5 Emerging Growth Stocks for December. Spectrum specializes in oncology — the treatment of cancer — and currently has two cancer treatments on the market: Fusilev, a treatment for advanced colon cancer, and Zevalin, a treatment for a type of lymphoma.

But what really excites me about this company is what it has in its pipeline: Spectrum has more than 10 drugs in either late-stage development or development! This includes Apaziquone, a treatment for bladder cancer, Belinostat, another lymphoma treatment and Ozarelix, a treatment of prostate cancer. This is a midsize biotechnology company already at the top of the industry — in terms of return on equity — and is about to experience blowout growth.


Top 5 Emerging Growth Stocks to Buy for January in 2012 - Jazz Pharmaceuticals Inc. (NASDAQ:JAZZ) has two flagship drugs — Xyrem, the only narcolepsy treatment approved by the World Anti-Doping Agency, and Luvox CR, its obsessive compulsive disorder treatment. But there are a number of exciting developments on the near horizon, including Jazz’s massive buyout of Dublin-based Azur Pharma Ltd., which should close within the next couple of weeks, and the company’s subsequent moving of its headquarters to Dublin. After the move, Jazz will be able to take advantage of Ireland’s competitive tax rate.

The company’s sales climbed 63.3% and earnings surged 115.6% in the third quarter, and for the fourth quarter, the analyst community is expecting 54% annual sales growth and 70.5% earnings growth. Jazz Pharmaceuticals is flush with cash and recently prepaid $33 million in long-term debt, and I’m excited to see how developments play out in the company’s next earnings release. Also, despite those who might think that Jazz Pharma’s bullish run looks tapped out, I remain optimistic.

3 Small-Cap Stocks to Buys for January in 2012

First up this month, I have CVD Equipment (NASDAQ:CVV), a manufacturer of the gear behind tomorrow’s futuristic nanotechnologies, including solar cells, electronic components, carbon nanotubes, LEDS and smart material coatings.

But what really has the company in investor headlines lately is its involvement with graphene, the thinnest and toughest material ever produced. Graphene is a one-atom-thick layer of carbon. Academics have recently figured out how to manipulate the way the material conducts electricity, a breakthrough that opens the door to its use in computers, since graphene conducts electricity 30 times faster than silicon — approaching the speed of light!

Graphene is an extraordinary material — in 2010, Andre Geim and Konstantin Novoselov won the Nobel Prize in Physics for their groundbreaking experiments with it, and there are a lot of companies, universities and industries researching it. It’s too soon to tell which of these players will be the big winner, so I want to go straight to the source and invest in the equipment that all of these players need for their research.

With the excitement about graphene and its possible uses, it’s no surprise that CVD’s order backlog has soared this year, climbing 141% in the third quarter. Sales in the third quarter rose 119.3%, to $8.8 million, compared with $4 million year-on-year. During the same period, CVD Equipment’s earnings surged 566.7%, to $1.2 million — $0.20 per share. The analyst community was expecting earnings of $0.11 per share, so the company posted a whopping 81.8% earnings surprise.

For the fourth quarter, the analyst community is expecting 66.7% annual sales growth and 87.5% earnings growth. In the past three months, analysts have revised their consensus earnings estimate 30.6% higher. Of course, such positive analyst earnings revisions usually precede tremendous future earnings surprises.


3 Small-Cap Stocks to Buys for January in 2012 - Mitcham Industries (NASDAQ:MIND) is a high-tech provider of seismic equipment to the energy industry, enabling the next generation of oil-and-gas exploration.

Oil companies are increasingly finding it difficult to extract gas from traditional deposits and are being forced to look at alternative sources and methods of extraction. With viable alternative energy sources still a ways off, Mitcham’s products are going to become integral to the maintenance of our energy status quo.

The company leases seismic equipment to energy companies that allows them to get a picture of what’s happening below ground. Mitcham also manufactures and sells seismic gear under the well-known Seamap brand name.

Mitcham’s manufacturing-and-leasing business model provides superior margins compared with other segments of the seismic industry. In the third quarter, sales rose 40%, to $28 million, compared with $20 million in the same quarter a year ago. During the same period, earnings soared 642.9%, to $6.8 million, or $0.52 per share. The analyst community was expecting earnings of $0.22 per share, so the company posted a whopping 136.4% earnings surprise.

In the third quarter, Mitcham says, there was strong demand from Latin America and companies tapping the gas-holding shale formations of the U.S. Looking forward, Mitcham predicts strong results in Russia and Canada this winter. In addition, the company says it’s encouraged by the number of inquiries and orders for long-term work. For the fourth quarter, the analyst community is expecting 47.8% annual sales growth and 135.9% earnings growth.

3 Small-Cap Stocks to Buys for January in 2012 - Plains All American Pipeline (NYSE:PAA) is cashing in big time on the transportation and storage of crude oil, refined products and natural gas in the U.S. and Canada. And in December, the company announced five asset-rich strategic acquisitions totaling $2.3 billion.

Its blockbuster deal was snapping up British Petroleum’s (NYSE:BP) natural-gas liquids business in Canada for $1.67 billion in cash, which will expand Plains All American’s Canadian footprint and provide the capacity to increase its U.S. operations. The location of the BP pipelines and plants allows for processing of gas from new U.S. formations, including the Bakken formation in North Dakota and the Marcellus formation in Pennsylvania. In total, the acquisition includes about 2,500 miles of pipelines, 21 million barrels of LNG capacity and seven gas-processing plants. The deal is expected to close in the first half of this year.

The company also announced four “bolt-on” acquisitions for about $620 million, including a South Texas crude-oil and condensate-gathering system, a Canadian trucking operation, a multiple-product storage facility in Yorktown, Va., and a pipeline in the Permian Basin.

Plains All American has an extremely attractive 5.4% dividend, and as a Master Limited Partnership, it can allow for pass-through income, eliminating the “double taxation” that is generally applied to corporations. Looking forward to the fourth quarter, the analyst community is expecting annual sales growth of 38.3% and earnings growth of 59.3%. In the past three months, the analyst community has revised its consensus earnings estimate 20.6% higher.
3 Small-Cap Stocks to Buys for January in 2012 -