Top Stocks

Earlier in the year, Target (TGT) broke ties with Visa (V) over its store-branded credit cards (see related Top Stocks post here). Rather than let the credit card giant take a cut, the big-box retailer decided it would process the payments itself.

Now that Target has taken the reins of its credit card business, it's looking to pump up sales with a huge promotion -- 5% discounts on any purchase within the store that's charged to your Target credit card!

The move seems too good to be true for cash-strapped consumers. But is that actually good for the retailer, considering that bad debt and credit card delinquencies have been a problem recently for Target?

 

By Jim Cramer, TheStreet

 

Is it time to start thinking about BP's (BP) bankruptcy? There is an incredible belief that somehow the company's cash flow of almost $7 billion a quarter is enough to get it through this.

 

I am beginning to think that this thing will swallow the company, just swallow it. And the claims are unfathomable as long as the spill continues. If we get a storm, a big storm, it's pretty much "game over" for the company, and I doubt anyone can argue against that.

 

I have heard many analogies to the Exxon (XOM) Valdez, but I am beginning to believe that this one's more like asbestos and the endless number of companies that had to file for bankruptcy protection to deal with the never-ending claims from people who worked with asbestos.

 

This year marks a very important transition for Maxwell Technologies (MXWL), one that, unfortunately, won't make life easy for the company, given the state of the auto industry. You can see the results of that transition in the company's somewhat disappointing earnings for the first quarter of 2010.

Maxwell really runs two businesses.

One business is composed of the older microelectronics (radiation-hardened components and computers for use in space) and transmission (capacitors used in high-voltage electrical transmission lines) product lines. Back in 2006, these product lines accounted for two-thirds of the company's sales.

 

If you had listened to analysts, you would have run screaming from Huntington Bancshares (HBAN), which had twice as many sell ratings as buys in December.

But if you had bought the stock, you would have seen a 66% rise this year as Huntington became a star performer, Bloomberg reports.

It's the same story with Eastman Kodak (EK) and Sunoco (SUN), which both soared 20% even though nearly one out of three analysts covering them urged investors to sell, writes Lynn Thomasson. 

Google (GOOG) wants to organize all the world's information and make it accessible, but the company has largely ignored one key area: music.

That could change this year, reports say, when the company launches its own music download service. An online subscription service could follow in 2011.

• 5 tech-bubble victims back from the dead

Why would Google want to jump into a business that is low margin, low profit, ultra-competitive and full of headaches? The answer, in one word, is Android.

 

By Jake Lynch, TheStreet

 

U.S. stocks rallied yesterday after China said it would relax its yuan currency peg. The move will make U.S. goods cheaper overseas, benefiting American exporters. Here are 5 companies that will capitalize on a weaker dollar.

 

5. Boeing (BA) is an aerospace and defense company.

 

Quarter: First-quarter profit dropped 15% to $519 million, or 70 cents a share, as revenue declined 7.8%.

 

By Dan Freed, TheStreet

 

BP (BP) likely will be able to deduct payments it has agreed to make to compensate people damaged by the oil spill in the Gulf of Mexico, according to a tax expert.

 

BP last week agreed to establish a $20 billion escrow account to compensate victims of the spill. In determining whether the fund is tax-deductible, BP first must establish that it is an "ordinary and necessary" expense it incurs as part of conducting its business -- a hurdle it clears fairly easily, according to a report Monday from Robert Willens, a longtime Lehman Bros. tax expert who now heads his own consulting firm.

 

Willens cites a past case in which the Internal Revenue Service allowed a taxpayer to deduct a payment made to settle a lawsuit, since the act that gave rise to the lawsuit was part of the ordinary business activity of the taxpayer in question.

 

Great dividend stocks are easier to find than you think.

Income investors looking for safe dividend stocks in which to stash their retirement money are already familiar with many blue chips that have hefty yields. It's just that when investors stop at the grocery store or pay their phone bills, they aren't thinking about how the big brands they're doing business with are actually good income investments.

Here are three of America's best-known corporations with yields about twice what 10-year Treasurys pay. These low-risk blue chips are some of the most famous high-yield dividend stocks out there:

 

By Jim Cramer, TheStreet

 

Time for the patented rollover? Did we rally and rally until everything got taken up too high and too much money came in?

 

Sure looks like it. Just like that, the bid is gone underneath, we are worried about the euro, the Chinese are still regarded as cheaters, oil went too high and we are worried about a weak economy, punctuated by the spill in the Gulf.

 

It's as if the whole move upward was based on nothing but an easing of the crisis and the soft landing in China -- and now we are back in the range. I expect oil to slip back to $70, the euro to go back to $1.20 against the dollar and gold to go higher as a sign of craziness and destruction.

 

Until earnings are reported.

 

China's decision to end a strict yuan-dollar peg is getting all the headlines -- even though the likely appreciation of the yuan versus the dollar is in the vicinity of 3% or so in 2010. That's hardly a game changer. (For more on why China made this move now, see this post.)

But the bigger China-U.S. news dates back a few days to June 15: After reducing its holdings of U.S. Treasury debt by 6.5% from November 2009 through February 2010, China reversed its policy. 

In March and April, China increased its investment in U.S. government notes and bonds by 2.6% to $900.2 billion.

 

As a growth guy who focuses on sales and earnings, I have very strict guidelines as to how I screen penny stocks. Small stocks come with big risk, and there aren't always the concrete numbers I demand in these investments.

However, if you do your homework, you can often separate the poor penny stocks from the shiny picks that could deliver big profits overnight.

Here are three of my favorite penny stocks right now: 

After the stock market's antics in May, things appear to be on the mend in June, with the broader market trending upward -- especially thanks to a bullish start for this week as China moves to revalue its yuan.

But a rising tide does not lift all boats. Some stocks have been pushed down for a reason after the stock market's consolidation last month, and these picks need to be trimmed from your portfolio immediately.

 

Here are the three worst blue chips, according to my latest analysis of the market:

 

Risky assets bounced higher in overseas trading today after China finally acquiesced to global pressure and announced that it would once again allow its currency, the renminbi yuan, to start appreciating again. The Shanghai Composite jumped 2.9%, Japan's Nikkei index added 2.4%, and European stocks gained 1%.

 

But American traders are using the good news as cover to sell. As I write this, the smaller and riskier stocks in the Russell 2000 have dropped from a gain of 1.8% to trade with a deepening loss of 0.7%. The U.S. dollar is also moving higher and is trading with its largest gain since stocks bottomed on June 8.

 

With the major indexes overbought in the short term, and after a recent cross of significant technical resistance at the 200-day moving averages on the S&P 500 and Dow Jones Industrial Average, a pause for breath was to be expected. There is evidence, both historical and anecdotal, that stocks have further to fall.

 

The e-book industry was shaken up Monday as Amazon(AMZN) and Barnes & Noble (BKS) made aggressive cuts to the prices of their book-reading devices.

First, Barnes & Noble cut its Nook reader to $199 from $259. That reader comes with 3G technology. The company also introduced a Nook that connects only through Wi-Fi for $149.

• Has America lost its edge?
  

A few hours later, Amazon followed by dropping the Kindle to $189 from $259. Other e-readers, such as one by Sony (SNE), are sure to follow.

 

We've spent a lot of time talking about the federal bailout of the banking industry, but guess what: The government's takeover of Fannie Mae (FNM) and Freddie Mac (FRE) will cost taxpayers even more money.

That's according to The New York Times, which had an excellent report Sunday on the sad state of Fannie and Freddie. The tab to take care of the companies is up to $146 billion, and the Congressional Budget Office predicts it could climb as high as $389 billion.

What happened here? Fannie and Freddie have been getting investors to fund mortgage loans for decades, promising to repay if borrowers defaulted, Binyamin Appelbaum writes. The companies used the money to buy loans already made by banks.