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Renowned value investor Seth Klarman just reported his first-quarter portfolio.  

By Bill Gunderson

 

Here we sit in the year 2013 and guess what? A railroad stock is one of the leading stocks in the entire market!

Union Pacific (UNP) is a $71.7 billion large-cap stock, whose company is headquartered in Omaha, Neb. It's also a stock I own in my conservative growth accounts.

 

Now you may be asking: Isn't this a stock of yesteryear, a stodgy old one? Yes, but it doesn't have the performance of the majority of stocks of yesteryear. It continues to retain its "Best Stocks Now"-like performance!

 

By Chris Ciaccia

 

The music-streaming service industry is about to get a lot more crowded as Google (GOOG) reportedly gets set to enter the fray. Meanwhile, Google shareholders are listening to a happy tune as the stock moves past $900.

 

A Google music-streaming service could hurt the likes of Spotify, Rdio and Pandora (P), as the companies fight for advertising dollars, users and mindshare. It's unclear what Google would charge for the service, though Spotify and Pandora both have free ad-supported versions, as well as plans with a monthly charge for unlimited, ad-free listening. Spotify charges $9.99 per month to listen to an unlimited number of songs on any device, while Pandora charges $3.99 per month for its service.

 

Information provided by Theflyonthewall.com

Wednesday's noteworthy upgrades include:

• Aeropostale (ARO) upgraded to Outperform from Market Perform at BMO Capital
• Gap (GPS) upgraded to Buy from Neutral at Citigroup
• Regal-Beloit (RBC) upgraded to Outperform from Neutral at Credit Suisse
• Unilever (UN) upgraded to Buy from Reduce at Nomura
• Prudential (PRU) upgraded to Buy from Hold at Argus

 

By Mark Skousen, Forecasts & Strategies

Homebuilder stocks have made a significant turnaround in the past year, and that trend should continue.

New data show the U.S. housing market is recovering after years in the doldrums. Sales of single-family properties climbed 1.5% last month, and the March numbers contributed to the best quarter for new home sales since 2008. Housing starts rose to their highest level in five years, and while existing home sales fell last month, they're still ahead compared to a year ago. Inventories, too, have fallen to their lowest level in 20 years. Home prices are also coming back, thanks to the Federal Reserve's easy money policies.

Best way to play it? DR Horton (DHI), the country's largest residential homebuilder.

 

Long before there was Apple (AAPL), Sony (SNE) was synonymous with cutting-edge technology, with must-have products like the Walkman, which launched in 1979, and the PlayStation, which debuted in 1994. Sony has tried for years for another hit without much success, and at least one big investor has waited long enough.  

By David Sterman

Investors who seek to hedge their portfolios by taking short positions in certain stocks have felt a huge amount of pain in recent quarters. As the S&P 500 ($INX) is on track to post its eighth straight monthly gain, the vast majority of stocks have been pushed higher, which has fueled unnerving losses for short sellers.

Faced with the prospect of yet more losses, some short sellers are simply throwing in the towel by covering their positions and moving to cash. Data released May 9 showed that in just the last two weeks of April, the short positions in Microsoft (MSFT), Micron Technology (MU), Groupon (GRPN), Comcast (CMCSA) and Nokia (NOK) fell by more than 15%. That's a huge amount of short covering in such a short amount of time.

 

By Benjamin Shepherd, Money & Medicine

When investors contemplate opportunities in the health care sector, the first choices that typically come to mind are sexy investments such as pharmaceutical companies making breakthroughs in treating diseases or hospitals developing ground breaking surgical procedures.

However, many unsung companies deal with the nitty-gritty of patient care and make the best investments because there's value in doing the dirty work. That's where Healthcare Services Group (HCSG) comes in.

Patients in a hospital or long-term care facility receive more than just medical attention; they require clean sheets, towels and gowns and three meals a day.

 

There should have been mergers and acquisitions. That's right, during this whole run-up, there should have been many more deals, more acquisitions to spur growth or to take market share. We can sit here and wonder why the heck there's been such a dearth of M&A since February. Or we can reach a very logical, inescapable conclusion: Most CEOs were too stupid and pessimistic to take the opportunity to do any buying.

Well, here's some real bad news. The time for transformative deals, unless we get a broad-market pullback, has probably passed. Harsh judgment?

I don't think so.

 

By Zacks Equity Research

We upgraded semiconductor wafer probe card supplier, FormFactor (FORM) on May 6 to "outperform" based on its impressive first-quarter results and improving prospects.

Why the upgrade?

The company's first-quarter 2013 loss came in at 18 cents, well below the Zacks consensus estimate of a loss of 26 cents per share. Revenues increased 10.4% sequentially and 51.2% from the year-ago quarter to $52.6 million. Over the past four quarters, FormFactor has delivered an average surprise of 27.9%.

Following the release of the first quarter results, the Zacks consensus estimate of a loss for 2013 has gone down 30.8% to 9 cents per share. Moreover, the Zacks consensus estimate for 2014 has gone from a loss of 7 cents to a profit of 8 cents, up 214.3%.

 

By Matthew Kanterman

U.S. equity futures were lower in early premarket trade following a weaker than expected GDP report from the eurozone for the first quarter. GDP contracted by 0.2% on a quarterly basis, up from a 0.6% in the previous quarter, but missed forecasts of a 0.1% contraction. Weakness was notable in Germany, France and Italy, with the annualized rate of growth of Germany dropping to -1.4% vs. a 0.2% growth forecast.

In other news, the U.K. had fewer people claim unemployment benefits in April than expected, a positive sign for the labor market as the unemployment rate fell. The claimant count change in the U.K. fell by 7,300 people vs. a forecast decline of 3,000. The unemployment rate unexpectedly declined by one percentage point to 7.8%. However, most of the drop was due to people leaving the labor force.

 

 

Shares of Sony (SNE) hit a new 52-week high on Tuesday --  on news that hedge fund manager Dan Loeb was pushing for the company break off its entertainment division. Loeb owns a 6.5% stake in the entertainment giant.
 
What would a spin off mean for investors?  In our lead story on Tuesday's Investor Beat, Motley Fool analysts Andy Cross and Jason Moser tackle that question -- and also talk about the future of Sony. 

Enough already about splitting the roles of chairman and CEO at J.P. Morgan (JPM). Let's not forget that Chairman and CEO Dimon practically created what is now the very successful and profitable J.P. Morgan, through his ingenious melding and acquisition of companies that he couldn't have pulled off had he been handicapped by the lack of power, and board support, to do so.

As both chairman and CEO, Dimon elevated J.P. Morgan to become one of the most successful global banks worldwide, and it thrived even during the worst financial crisis in U.S. history in 2009. Unlike the other major U.S. banks, JPM didn't ask for a government bailout during the financial meltdown.

Operating in 50 countries with assets of nearly $2.4 trillion, J.P. Morgan has, indeed, become a mighty prize among the nation's financial institutions -- despite all kinds of global economic and financial headwinds. So it isn't surprising that many Wall Street analysts continue to maintain a positive outlook on J.P. Morgan.

 

Updated: 5:49 p.m. ET.

It's the middle of May and, thanks to hedge-fund manager David Tepper, the stock market cheerfully ignored the saw "Sell in May and go away." Instead, the market jumped to new highs.

Tepper (pictured) runs Appaloosa Management in New York. He went on CNBC Tuesday morning and said he was "definitely bullish" about U.S. stocks.

Wait a minute: Isn't the economy a mess? Nope, Tepper argued, the auto industry is stronger. Housing is recovering. Jobs are starting to come back. Plus, central banks in Australia, Europe, South Korea and Japan have joined the Federal Reserve in trying to boost regional economies.