Top Stocks

The really good news for Microsoft (MSFT) investors was what wasn't in the company's last blowout earnings report. It's what's happened to business since then.

The second-quarter results, reported Jan. 28, were good enough on their own. (Microsoft's fiscal year ends in June.)

The company reported earnings of 60 cents a share. Once you added back in $1.7 billion in deferred revenue and about 14 cents a share in earnings from sales of Windows 7 that Microsoft decided it would recognize in future quarters, the earnings picture looked even better at 74 cents a share. (Microsoft is the publisher of MSN Money.)

 

Having been raised on a healthy diet of MTV, I'd say there are few music videos that could shock me anymore.

Until this one.

Warren Buffett does Axl Rose in a bizarre -- but strangely catchy -- video made by employees of the Geico insurance company. You've never seen Buffett like this: black leather, long hair held in a bandanna, faux tattoos and the red plaid kilt that Rose favored. 

By Dan Freed, TheStreet

The largest US banks have had a strong run of late, with the Philadelphia KBW Bank Index ($BKX) climbing 72% during the past year. We've pulled together five reasons to be cautious about their future prospects.

1. The second foreclosure wave

Roughly five to seven million home owners are technically in default, but have not yet been foreclosed upon, according to a report last week from the Washington Post.

 

By Ed Elfenbein, editor of Crossing Wall Street

Here’s a fact you don’t often hear -- even index funds that have rock-bottom fees are over-charging you.

It’s true! With a little creativity, investors can closely mimic the performance of an index fund and bypass the fees that go to the mutual fund companies – and keep that money in their pockets. You may not be able to get 100% accuracy this way, but you can get awfully close if you do your homework.

For instance, if you take these four Dow Jones Industrial Average component stocks, you can correlate the performance of the broader market with 89% accuracy:

 

College basketball fans are gearing up for Round 1 of the NCAA Men's basketball tournament, which begins today.

 

Bubble teams hope theirs won't burst, while workers across the country test their betting strategies and devotion in office pools.

 

The hoops hype also means a lot of lost productivity, according to a report by outplacement firm Challenger, Gray & Christmas. In fact, Challenger estimates that workers distracted by March Madness could cost employers up to $1.8 billion in unproductive wages during the first week of the tournament.

 

By Jim Cramer, TheStreet

 

At this point it is all about the streak.

Can the streak of wins handle a down-euro day? Can it handle the notion of a Sunday nonsurprise, a vote in favor of the health care bill that Washington says is good but Wall Street knows will be paid for with taxes on the positives from stocks: capital gains and dividends, with the dividend portion being hardest hit? Can it handle the expiration, which miraculously has had no down days this week? Can it handle the speculation among the little stocks, stocks that should do better only if the U.S. economy is improving, because that's what little stocks are levered to?

 

I wish it couldn't.

 

The Dow just marked a 17-month high Wednesday after gaining 48 points. The major indexes are up about 60% from the March 9 lows in 2009.

 

But the rising tide has left behind a few boats. In fact, these stocks are not just lagging but taking on water in a hurry. That means investors should flee these picks like rats from a sinking ship!

 

Nine of the worst stocks (complete list here) posted an average loss of 17.7% in the last 12 months of trading. But three service industry stocks in particular are worth calling out because they are concrete examples of the challenges faced by many companies as consumers and businesses rein in spending.

 

By Rich Duprey, The Motley Fool

 

When a stock's share price is lower than a North Dakota thermometer in winter, investors tend to give it the cold shoulder. But as the market warms to a stock's prospects, its price can heat up in a hurry. Alas, you can rarely tell that a stock is melting investors' hearts until after it's made that upward leap.

 

But MSN CAPS' proprietary ratings, aggregated from the experience and knowledge of 160,000-plus participants, offer a great way to monitor investor sentiment. Tracking a CAPS rating trend is one way investors can determine the best time to buy a stock.

• Need a broker's help with stocks?

Let's look at a handful of companies that not long ago had paltry one- or two-star ratings at CAPS but as of last week had been bumped up to three stars as investors warmed to their prospects.

 

I don't want to rain on anyone's parade, but we all know the Greek budget crisis hasn't been resolved, right? It's merely been postponed until April and May. 

That's when Greece has to refinance $27 billion in debt.

Doesn't seem like much? Well, if you scaled that number up to reflect the difference in size between the Greek economy -- an estimated $340 billion in gross domestic product, according to the CIA World Factbook -- and the U.S. economy's $14.3 trillion in 2009, Greece would be looking at the need to refinance $1.1 trillion in debt in just two months. (Tells you why there is a Greek budget crisis, doesn't it?)

 

Batch 19 is  a new beer being test-marketed by MillerCoors, and it has an interesting gimmick: It's based on a recipe that dates back to before Prohibition.

MillerCoors, 42% owned by Molson Coors (TAP), will roll out the beer next month in four cities: Chicago, Milwaukee, San Francisco and Washington, D.C., according to The Wall Street Journal.

• Video: Is beer-can collector an endangered species?

Batch 19 is being marketed as a "true, authentic, original beer," and it has a great backstory:

 

Ah, spring is in the air and dreams of summer are on the minds of many including business executives looking to boost sales.

 

Fast food giant McDonald's (MCD) plans to jump start its summer season with a dollar soft-drink promotion that will certainly have competitors nervous.

 

Forget about worries about soft-drinks and obesity. Sell a product at a low enough price and the masses will come.

 

• Top 10 stocks for 2010

 

As they should be I suppose, McDonald’s management is much more concerned about fattening profits.

 

When the "father of index funds" offers up eight ideas to consider, I'll listen. And Burton Malkiel, a Princeton University economics professor known for his work on these funds, does just that on CBS MoneyWatch.com.

Over 10-year periods, he writes, broad market index funds generally outperform at least two-thirds of actively-managed mutual funds. And they charge far less for portfolio management.

Bond index funds do even better, and beat most of their actively-managed counterparts, he added.

Malkiel suggests that investors look at two types of funds:  

Pepsi (PEP) announced this week it will be pulling sugary soft drinks from vending machines in U.S. schools. That has caused many watchdogs to start hollering that Coca Cola (KO) should start doing the same.

 

The move comes as the soft-drink giants are two of several food companies on the front line of Michelle Obama's war on childhood obesity. Brand giants like Kraft (KFT), Unilever (UL) and General Mills (GIS) in addition to Coke and Pepsi are some of the top targets in the first lady's efforts to promote healthier eating habits in young Americans.

• Video: Buffett digs Coke

So will the move hurt Pepsi’s bottom line? And more importantly, will it actually help improve childhood eating habits? Chances are the answer is “no” on both fronts.

 

Investors would be wise to pay attention to developments in 3D technology as it makes its way inevitably into consumers' homes.

 

What some might see as a gimmick now may very well be the next big thing that can line investor pockets with huge profits.

 

The announcement by electronic giants Sony and Samsung that they are ramping up for bigger sales of 3D televisions is an important sign of what's to come.

 

My favorite way to play this important development is with specialty glass maker Corning (GLW).

 

By Jason Notte, TheStreet

As evidenced by Wal-Mart Stores' (WMT) attempt to streamline shelf space, even garbage inspires brand loyalty among American consumers.

Earlier this month, Wal-Mart returned Clorox's (CLX) Glad bags and Pactiv's (PTV) Hefty bags to its shelves after cutting them in February and carrying only S.C. Johnson’s Ziploc bags and its own Great Value brand. Wal-Mart says the Hefty and Glad bags and hundreds of other items were taken out of the mix as part of a remodeling effort, but the retailer replaced them when it became clear it was losing not only a $4.99 single-item sale, but entire shopping excursions by people seeking specific brands as well.

"What we found is that you can discontinue items that don't sell but get you a trip," said Bill Simon, Wal-Mart's executive vice president and chief operating officer, at the Bank of America Merrill Lynch Consumer Conference last week. "So, we've been through the business and put 300 or so of those items back into the stores that were removed. We believe that that's going to solve some of those issues."