You can still find small-cap superstars
Small-cap superstars still abound

There are some picks in this sector that have excellent valuations and strong earnings growth.

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Hands-on investors can use subsector funds to benefit from various developments in the health care industry, such as M&A activity.

By TheStreet Staff May 3, 2011 11:20AM

By Don Dion, TheStreet

 

The evolution of the ETF industry has led to the development of funds that are aimed toward tracking various subcomponents of a single sector. For example, while investors can use the iShares Dow Jones Transportation Average Index Fund (IYT) to access a collection of airlines, railroads and delivery services, it is also possible to use the Guggenheim Airline ETF (FAA) to specifically target airlines.

 

The same goes for health care. The Health Care Select Sector SPDR ETF (XLV) tracks a basket of firms hailing from branches of the health care industry including pharmaceuticals, providers and biotechnology. The instant diversification that comes with XLV makes the fund an attractive choice for those looking for catch-all exposure to health care.

 

Hands-on investors, meanwhile, may find funds such as the iShares Dow Jones U.S. Pharmaceuticals Index Fund (IHE), First Trust NYSE Arca Biotechnology Index Fund (FBT) or iShares Dow Jones U.S. Healthcare Providers Index Fund (IHF) more to their liking.

 

Google and Cirrus are logical choices.

By Motley Fool Pick of the Day May 3, 2011 11:14AM

By Eric Bleeker

 

This month, I'm headed back to the well for my real-money Rising Stars portfolio. I'm scooping up more shares of Cirrus Logic (CRUS), a company that's ridden Apple's (AAPL) coattails to record levels of profitability, but has seen its stock falter as production issues on a recent design rattled investors. The event highlighted the execution risk that could undermine Cirrus' future growth within Apple's product lines. However, I feel that given the known risks, Cirrus remains attractively priced.

 

However, I'm also going to add Google (GOOG) to the portfolio. While the businesses of Google and Cirrus Logic couldn't be any different, my rationale for buying both stocks is the same.

 

Our mobile future
A key theme of the portfolio I'm building is that mobile, connected devices will be a change on par with the emergence of the personal computer in the 1980s. This extends well beyond the idea of general smartphone or tablet sales, and into a broader "consumerization of information technology" trend.

 

The Sept. 11 terrorist attacks led to policies that prevent money laundering, but more needs to be done.

By TheStreet Staff May 3, 2011 10:57AM

By Dan Freed, TheStreet

 

The Sept. 11, 2001 attacks were, among many other things, an attack on Wall Street.

 

Killed by U.S. forces on Sunday, Osama Bin Laden was largely ineffective in bringing down the U.S. financial system.

 

However, some important changes to the system did result.

 

Many of Wall Street's best-known companies at the time, such as Morgan Stanley (MS), Bear Stearns and JPMorgan Chase (JPM), were headquartered in Midtown at the time of the attacks.

 

Upscale offerings are on the docket for every major chain, indicating an industry-wide effort to improve margins.

By InvestorPlace May 3, 2011 10:31AM

McDonald's (MCD) has changed the fast-food industry in many ways since its first franchise location opened more than 50 years ago. One of its most recent contributions is the idea that a burger joint can be a specialty-drink powerhouse, too. A 2008 study showed that Mickey D's stores offering premium McCafe coffees generated 15% more revenue than a standard location.


So it's no surprise that every fast-food joint under the sun is trying to get in on the beverage biz. Specialty drinks are a high-margin business and are an easy way to experiment with creative new flavors to reach new customers.


The summer heat is a perfect occasion for testing these thirst quenchers, and a laundry list of quick-service restaurants are rolling out drinks that include a Double Stuff Oreo shake, frozen strawberry lemonade and new zero-calorie sodas. Here are some highlights:

 

With the Dow up 10%, it's natural to consider a move into consumer staples. But once they catch up to the rest of the market, they may underperform.

By Jim Cramer May 3, 2011 9:27AM

the streetjim cramerIf a rotation lasts three days, I can deal with it. But if it lasts three weeks, it's not a rotation. To me it becomes a trend.

 

That's what people are starting to talk about when it comes to staples like Procter & Gamble (PG), Colgate (CL) and AstraZeneca (AZN) as they report just so-so numbers and then rally as if they got it right.

 

Of course, they don't rally hard. They go up 38 cents here and 42 cents there. But on a day like Monday, they were on display doing some terrific things versus riskier stocks like Caterpillar (CAT) and Apache (APA) that really gut-shotted your performance.

 

Anyone running a diversified portfolio wants to be in some of these. I am no different. I like Coca-Cola (KO) very much. At the right price I would like PG and Unilever (UN) and maybe Kimberly-Clark (KMB), certainly Altria (MO). But they are no longer at those prices. In fact, this rotation has moved them up to where unless you got a definitive break in commodity prices you could end up underperforming from here, because, alas, I think these moves are just catch-up moves to the rest of the market.

 

The luxury handbag company plans to open 30 new stores in China this year and next.

By Jim J. Jubak May 2, 2011 4:24PM
Jim JubakAs my grandmother used to say, "Build a better cookie cutter, and the world will beat a path to your door."

Coach (COH) has done just that. The company developed a successful strategy for going overseas when it built a business in Japan from its U.S. base.

Coach now holds a 16% share of a country that counts for 40% of the global market for luxury handbags. (Coach also has 20% of the U.S. market, Standard & Poor’s estimates.)

And now the company is applying the same strategy to China. S&P estimates that the company holds about 4% of the Chinese market for luxury handbags.

I think you can see where the company thinks this story is headed.
 

Whole Foods is sagging, so I'm replacing it in my Wall Street Survivor portfolio with biotech company Techne.

By Jim Van Meerten May 2, 2011 1:47PM

Last week I detected some weakness in Whole Foods Market (WFMI) and needed to replace it with a stock that has positive momentum. The chart below should make it obvious why WFMI needed to be cut. 

 

Most of my picks follow what some people call momentum investing. I do not look for patterns, but I do use Barchart to find stocks that deserve to be recognized for their increases in sales and earnings.


Techne (TECH) is just such a stock, so I added it to my Wall Street Survivor portfolio.


Techne is a holding company with two operating units concentrating on hematology controls, which are used in laboratories to check the accuracy of blood analysis instruments, and biotechnology products such as purified proteins and antibodies.

 

The automaker's share price is going nowhere, even though the company is gaining momentum. Why?

By Kim Peterson May 2, 2011 1:47PM
The three-month chart for General Motors (GM) says it all. This stock is going nowhere.

But why? GM is gaining in market share, its Chevrolet Volt is one of the most-talked-about cars of the year, and the company seems poised for a full-fledged revival. Why is the stock such a dud?

Climbing gas prices are obviously a huge problem. But shares of Ford (F) haven't suffered nearly as much. SmartMoney visited the New York International Auto Show and found one key difference: Shoppers don't consider GM cars a good value.

Post continues after this video debate about whether GM stock is a buy: 
Tags: gm

In 5 hours of questioning at Berkshire Hathaway's annual meeting, the Oracle tries to set the record straight on David Sokol.

By Kim Peterson May 2, 2011 1:08PM
Berkshire Hathaway (BRK.A) annual meetings are usually festive, high-spirited events. But this weekend's meeting was a little different, as Warren Buffett endured five hours of questions and repeatedly condemned the actions of a former lieutenant brought down in a stock-trading scandal.

Buffett grabbed the controversy by the horns, jumping right into the matter on everyone's minds: David Sokol, the former Berkshire executive who had traded stock in a company he urged Buffett to buy.

Buffett said Sokol's failure to tell him the whole story about Lubrizol was inexcusable, according to The Wall Street Journal, which sent reporters to the meeting. The whole affair, he said, was "a situation that's sad for Berkshire, sad for Dave and inexplicable."

Post continues after this video interview with Warren Buffett about the Sokol affair
Tags: gold

Bullish chart patterns and the potential for upside earnings surprises this week mean that investors should be looking to play the long side on these four energy stocks.

By MoneyShow.com May 2, 2011 12:05PM
By Tom Aspray, MoneyShow.com

This is a big week for oil company earnings, and there are four companies I think should be bought—not sold. Most of them announce earnings on Monday, May 2. 

As part of my analysis, I keep a close eye on the short interest data, as it often can help uncover good trading or investing ideas.

A couple months ago, in “Four Stocks You Shouldn’t Short,” I took a look at four stocks that had reported an increase in the number of shares sold short and also showed positive chart patterns. With the recent strong stock market, it is no surprise that all of these stocks now show nice gains.

In utilizing the short interest data, one can look for a large percentage increase in the number of shares sold short, or the short interest ratio, which tells the number of trading days that would be needed to cover the short position.

Sometimes these numbers reach astounding levels, and the most recent data, as of April 27, lists several stocks with a short interest ratio of over 50. That means using the stock’s average volume, it would take 50 days of normal-volume trading to cover the positions.

Over the years, I have found that even a short interest ratio as low as 5, when combined with a positive technical pattern, can set up a good trading opportunity.
 

KIT digital is in the sweet spot of a burgeoning industry.

By Motley Fool Pick of the Day May 2, 2011 11:11AM

By Sean Sun

 

KIT digital (KITD) is the kind of company that you expect to find headquartered in New York, Los Angeles, or at the very least, Paris. Instead, the company and its namesake, the entrepreneur-cum-turnaround artist Kaleil Isaza Tuzman, can instead by found in Prague, the capital of the Czech Republic. From there, Tuzman has transformed the company from a headless chicken into what might become the salesforce.com (CRM) of the burgeoning video asset management software (VAMS) industry.

 

As its name suggests, KIT digital's particular expertise in this $10 billion-$15 billion market is in dealing with digital and Internet video. The company's solutions allow customers like MTV, Verizon, and CNN to create, manage, and distribute the increasing number of videos that are now popping up all over the Internet.

 

It's a simple thesis, really. Video content is going to increase: everything from more handheld electronic "access points" (tablets and smartphones, for instance) to cheaper and faster bandwidth point to this upward trend in video volume. As it increases, it will become increasingly less efficient for companies to handle all the necessary functions in-house.

 

These well-known companies are still finding more ways to grow.

By TheStreet Staff May 2, 2011 10:32AM

By Scott Rothbort, StockPickr

 

The other day a good friend -- whom I refer to in my writings on TheStreet.com as "Craig the Jeweler" -- and I were discussing the difference between stocks and commodities. My opinion is that stocks have earnings, accumulate assets and pay dividends, whereas commodities have either industrial applications or social value. Craig asked me why companies such as Wal-Mart (WMT) and Home Depot (HD) perform poorly. After all, he hypothesized, they are all making good money. I told him it's all about growth.

 

Investors tend to seek one or more of the following: value, growth, income. Growth is the furtherance of a company's sales and net worth. Income represents the dividends that the company pays shareholders. Valuation looks at the worth of a company versus its market price.

 

One of the classic models of stock valuation is the discounted cash flow model, or DCF, a growth-based model that considers the present value of a company's future earnings. Another model, the dividend discount model, or DDM, values companies based on dividends per share divided by the discount rate less the dividend growth rate.

 

The question isn't whether to hold AmBev but what the stock will do for you.

By Jim J. Jubak May 2, 2011 10:19AM
Jim Jubak
Considering all the headwinds, shares of Companhia de Bebidas das Americas -- better known as AmBev (ABV) -- have done just fine this year.

The headwinds include:
  • Rising prices for the raw materials that go into the company’s beer.
  • Rumors that a big international competitor, such as SABMiller, will buy Brazil’s second largest brewer, Primo Schincaril Industria de Cervejas e Refrigerantes, and put big money into taking some of AmBev's 70% market share in Brazil.
The biggest headwind of all is fears that the government of Brazilian President Dilma Rousseff is losing the fight against inflation. That last fear has pushed Brazil’s Bovespa down 5.2% this year.
 

Investors should monitor the impact the Nasdaq's rebalancing will have on PowerShares QQQ. With video.

By TheStreet Staff May 2, 2011 10:09AM

By Don Dion, TheStreet

 

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

 

1. PowerShares QQQ (QQQ)

 

Investors holding QQQ will want to stay vigilant at the start of the week when the Nasdaq ($COMPX)’s well-documented and anxiously awaited rebalance goes into effect.

 

A number of companies including Google (GOOG), Oracle (ORCL) and Microsoft (MSFT) will see their weightings change.

 

The firm, however, that most investors will likely have their eyes on will be Apple (AAPL). After the rebalance, the tech goliath will remain the index's largest component. However, its weighting will be dropped by 8 percentage points to 12.5%.

 

Company executives bowed for several seconds Sunday to apologize, saying they will make amends.

By Kim Peterson May 2, 2011 10:03AM
Ten million credit card numbers. That's an enormous security breach that Sony (SNE) is trying to recover from this week.

The company said hackers stole the names, addresses and birth dates of account holders in its online gaming, movie and music services, The Wall Street Journal reported. We don't know for sure whether the hackers got credit card numbers as well. Sony said it can't rule out the possibility that 10 million customers may have had their card information compromised -- but it knows the hackers didn't get the security codes for those cards.

Post continues after this video about Sony's cyberattack: 

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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.

The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More


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