Top Stocks

Wal-Mart's (WMT) international business is on fire, vastly outperforming its U.S. sales. And the company continues its global march, moving into other countries with ruthless efficiency.

Russia, however, is putting up some resistance to Wal-Mart's plans. Two of its largest grocery store chains, Pyaterochka and Kopeika, plan to merge operations to fight the Wal-Mart onslaught, The New York Times reports.

The deal is worth about $1.7 billion. Wal-Mart doesn't yet have a store in Russia but has been talking with Kopeika about getting into the business. 

By James Dlugosch

 

The Santa Claus rally took some time in coming, but investors are cheering its arrival. Stocks gained across the board last week, with the S&P 500 ($INX) gaining a fat 3%.

 

Our weekly top ETFs captured most of that gain, moving up 2.65%. That puts our little portfolio on track for an annualized return of more than 30%.

 

After 10 weeks, the evidence is clear: An absolute-return approach using exchange-traded funds produces substantial income without taking on nearly as much risk as pure trading or pure equity buying.

 

Consumer Reports dealt AT&T (T) a severe blow this week, naming the company the worst cell phone service provider in the nation.

This may not be a surprise to anyone with an iPhone. And it comes at just the wrong time for AT&T, if reports are correct that Apple (AAPL) will let Verizon (VZ) have the iPhone next year.

The top-scoring cell provider in Consumer Reports' user survey was U.S. Cellular (USM). And all the other majors came in ahead of AT&T, including Verizon, Sprint (S) and T-Mobile, which is a division of Deutsche Telekom (DT). 

Today our eye is on ION. We're ready to get geophysical. I can't think of any more seismic quips, so it's time for Bryan White to tell us why he's buying.

 

Rex Moore, Motley Fool Top Stocks editor 

 

What do fireflies, roller coasters and China's bull run on commodities have in common? They all play into my investment thesis for buying a 3% position in ION Geophysical (IO), an oil-facing seismic technology company.

 

Yep, this tax deal is terrific for the market. No doubt, though, someone will immediately sell on the news, saying it was "in the stock market." That it is the reason the Retail HOLDRs (RTH) is so strong or the industrials have been signaling it the whole time.

 

Ask the people who say this, "What is your exposure to the market? What percent net?" I am telling you that it will certainly be nowhere near 100%. Or 90%. Or 80%.

 

Not only is the deal good for stocks, it is bigger than even I (Mr. We Will Have a Deal) have been saying. It is truly better than expected. It is great, in particular, for the consumer-spending stocks and fantastic for gold, because it will cost the government more than $400 billion. That's what the two-year extension of the cuts and a payroll tax break will do to the budget.

 

By James Rogers, TheStreet

 

Google's (GOOG) eBooks venture kicked off on Monday as the search giant ramps up its efforts to challenge Amazon (AMZN) in the digital-book market.

 

The Google eBookstore contains more than 3 million titles, according to a Google blog posting, and the Internet company says that it has hundreds of thousands of books for sale.

 

Rumors that Google was putting the finishing touches to its e-book effort emerged last week, with the Wall Street Journal reporting that the project had overcome several technical and legal hurdles.

 

I love the idea of giving someone a stock gift for the holidays. It's an unusual present and loaded with potential. It also teaches kids some financial lessons.

But the gift of stock isn't easy to give anymore. Sometimes you can't even get the paper certificate that certifies ownership. General Motors (GM) and Visa (V) don't offer them these days, USA Today reports.

There simply aren't many good options, and the ones that do exist come with hefty fees or sound like a huge pain. But if you're really motivated, Matt Krantz of USA Today lays out some ways to give stock: 

The battle between Starbucks (SBUX) and Kraft Foods (KFT) is getting nastier, and now the inevitable legal fight has begun.

At the heart of the dispute are the bags of Starbucks coffee sold at grocery stores, which, as you might guess, make a lot of money for both companies. Kraft gets the coffee from Starbucks and then markets and distributes it to stores.

The partnership brings in $500 million in sales every year and great profit margins -- perhaps as much as 20%, Reuters reports. But now Starbucks wants out of the 12-year marriage. 

If you have any thoughts of investing in the beaten-down commercial real-estate space, we've got some advice for you. As Fool analyst Andy Louis-Charles explains, the key is not so much the horse but betting on the right jockey.

 

Rex Moore, Motley Fool Top Stocks editor

 

If you believe commercial real estate has bottomed out, I have a California strip mall I'd like to sell you.

 

No, really.

 

By Don Dion, TheStreet

 

Here are five exchange-traded funds to watch this week.

 

1.    SPDR S&P 500 ETF (SPY)

 Although U.S. markets stumbled in November, hindered by fears of euro debt contagion and concerns about China's steps to curb inflation, the SPDR S&P 500 ETF and other broad market index-tracking ETFs started off the final month of 2010 with a bang.

 

As we head into this week, it will be interesting to see if funds such as SPY, SPDR Dow Jones Industrial Average ETF (DIA) and PowerShares QQQ (QQQQ) can hold onto their gains.

 

If Wells Fargo (WFC) takes out $29, you know what? It will be ready to roll. And I think you want to be there. Here's why.

 

The reportorial coverage on homes, as I have told you again and again, is very weak. Those of us who follow this industry closely and are involved in real estate are relatively amazed that the reporting is bad.

 

It hadn't mattered much. The stocks connected with housing had done nothing at all. Until now.

 

One factor that had me so worried last month was the sell-off that hit the global bond market, which pushed down the price of everything except U.S. Treasury bonds. Since the bull market in stocks is built on the foundations of a credit bull market (see my column on the subject here), this was very bad news.  

 

That's all changed now, and investors are returning in droves. The European Central Bank has restarted its monetary spigots, calming the eurozone bond market dramatically. Portuguese bond yields fell from 7.1% to just 5.8% last week as a country that seemed destined to follow Ireland into the eurozone bailout club got a new lease on life.

 

As a result, the risk trade-up theme that I outlined in my column has resumed. But not all investments will benefit equally.

 

With banks, it's the spread that counts. And it looks like the turmoil in the financial markets is expanding the spread between what banks have to pay for funds and what they can charge for their loans.

That should add to bank profits in the fourth quarter. If you're looking to take advantage of that trend, look for banks with big deposit-gathering machines. My choice would be JPMorgan Chase (JPM). The stock is already a member of my Jubak's Picks portfolio. 

Here's how spreads work: Banks pay for funds either through interest to investors who buy their short-term commercial paper (and other debt) or in the interest paid to depositors. They then lend that money to borrowers in the form of home mortgages, small-business loans, real-estate development loans, corporate loans, whatever.

 

Last night's episode of "The Office" is already on Hulu's website. But Netflix (NFLX) doesn't have it. In fact, all Netflix can give you is the previous season.

That's a glaring deficiency for Netflix, and the company is trying to change that. Problem is that getting current-season episodes costs a lot of dough.

The New York Post reports that Netflix is approaching television studios with wads of cash, willing to pay between $70,000 and $100,000 per episode. Netflix would not officially comment on the report. 

Are you a value investor or a growth investor? In my dozen-plus years of studying history's most successful investment strategies, one of the biggest lessons I've learned is that you can -- and should -- be both.

 

While often portrayed as polar opposites, value and growth are really more like cousins. As Warren Buffett put it in his 2000 letter to Berkshire Hathaway shareholders, "market commentators and investment managers who glibly refer to 'growth' and 'value' styles as contrasting approaches to investment are displaying their ignorance, not their sophistication. Growth is simply a component -- usually a plus, sometimes a minus -- in the value equation."