7 Deep-Value Energy Leaders With 68% Upside

2013 is shaping up to be the year when the energy sector and energy stocks finally emerge from a brutal 2-year bear market.

After surging into a new multi-year high in 2011, the energy sector proceeded to crash, with the Energy Select Sector SPDR ETF (XLE) falling more than 40% in just over 4 months. The next 2 years weren't much better, with the energy sector languishing in a wave of volatility and showing no real upward progress.

But that all changed in 2013. After consolidating into a wedge pattern, the energy sector and energy stocks are breaking out in a big way. You can see that big move in the chart below, with XLE surging into a new multi-year and all –time high.

But in spite of the awesome reversal, energy stocks still look hugely undervalued. A good bear market will do that to a sector as sentiment crashes and shorter-term players bail. And that is creating a great opportunity for investors to cash in on energy stocks while the sector is still being mostly ignored by the Street. How often do you see headline articles about undervalued oil stocks? And how often do you read headlines about insanely overvalued Tesla (TSLA)? Point made: sentiment is low.

Here is a list of 6 deep-value stocks: from the list I am highlighting Anadarko and Transocean because they offer unique combinations of value and growth.

Transocean Ltd (RIG)

Forward P/E: 11X10-Year Average: 14X

Cimarex Energy Co. (XEC)

Forward P/E: 11X10-Year Average: 18X

Anadarko Petroleum (APC)

Forward P/E: 12X10-Year Average: 21X

Stone Energy (SGY)

Forward P/E: 11X10-Year Average: 8X

Conoco Phillips (COP)

Forward P/E: 9X10-Year Average: 12X

British Petroleum (BP)

Forward P/E: 10X10-Year Average: 9X

Seadrill Ltd. (SDRL)

Forward P/E: 12X10-Year Average: 15X

Anadarko Petroleum (APC)

Anadarko has seen big gains in 2013, up a market-beating 25% in the last 9 months. But in spite of that bullish movement, shares still look deeply undervalued, trading with a forward P/E of 12! x against its 10-year average of 21x. Looking forward, analysts are calling for 9% earnings growth this year, 19% next year and average annual earnings growth of 7% in the next five years. If shares simply traded with the same P/E as its 10-year average, Anadarko would climb 68%. Anadarko also carries a little .80% dividend yield.

Transocean Ltd. (RIG)

Transocean has struggled in 2013, falling 24% since mid-February. But while shares have been weak on the chart, earnings and estimates have been holding steady in higher territory. As it stands, RIG is expected to earn $4.14 in 2013, a 5% growth projection, and $5.52 in 2014, a 33% growth projection. Much like Anadarko, that has shares trading deep into value territory, with a forward P/E of 11X against its 10-year average of 14x and industry average of 13X. Transocean has also turned into a yield hog, carrying a dividend of 5% that is 2X the 10-year average.

The Takeaway

Energy stocks are back on the upswing are a brutal 2-yar run. But in spite of that bullish movement, the sector still looks deeply undervalued, with many leading companies trading with P/E's well below their 10-year average. It's a chance for investors to capitalize on rising crude and natural gas prices while most investor remain uninterred in energy stocks.

For more top stock picks and analysis, check out a 4-week free trial to Michael's premium newsletter the iStock Growth Trader. The iStock Growth Trader is loaded with the hottest trends, the best stocks and detailed analysis that will keep your portfolio one step ahead of the game.

5 Best Penny Stocks To Invest In 2014

John Dessauer, editor of John Dessauer Investments, looks at two important tech leaders. Although both companies disappointed analysts in the latest quarter, Dessauer sees the setbacks as opportunities.

Intel (INTC) reported second quarter earnings of $0.39 a share, a penny below the consensus estimate. Sales at $12.8 billion were in line with the analysts' estimates.

The quarter suffered because PC sales were sluggish and most analysts expect that to be the case in coming quarters.

Intel was slow to get involved in the mobile and handheld technology market, but has been making real progress in that regard.

Intel has a new CEO. Analysts are waiting to see how the changes he is making work out in terms of sales and profits. He has already flattened the management structure to improve new product development and basic decision making.

Intel is in transition, with a new CEO and an aggressive move into new markets. Intel is ahead of the competition in servers, and moving fast in mobile and handheld devices.

5 Best Penny Stocks To Invest In 2014: PIMCO California Municipal Income Fund III(PZC)

PIMCO California Municipal Income Fund III is a close ended fixed income mutual fund launched and managed by Allianz Global Investors Fund Management LLC. It is co-managed by Pacific Investment Management Company LLC. The fund invests in fixed income markets. Its investment portfolio include California municipal bonds, and other municipal bonds and notes; California variable rate notes and other variable rate notes; California variable rate demand notes and other variable rate demand notes; U.S. treasury bills; and call options written and put options written. Allianz Global Investors Fund Management LLC serves as an investment Manager to the fund. PIMCO California Municipal Income Fund III was formed in 2002 and is based in New York City.

5 Best Penny Stocks To Invest In 2014: China North East Petroleum Holdings Limited(NEP)

China North East Petroleum Holdings Limited engages in the exploration and production of crude oil in northern China. As of December 31, 2010, it operated 295 producing wells with proven reserves of 5,476,200 barrels of crude oil at Qian?an 112, Hetingbao 301, Daan 34, and Gudian 31 oilfields. The company, through its subsidiary, Song Yuan Tiancheng Drilling Engineering Co., Ltd., provides contract land drilling and other oilfield services for state-owned and non-state-owned oil companies. China North East Petroleum Holdings Limited is headquartered in Song Yuan City, the People?s Republic of China.

Top 10 Penny Companies For 2014: ENSCO plc(ESV)

Ensco plc, together with its subsidiaries, provides offshore contract drilling services to the oil and gas industry. The company engages in the drilling of offshore oil and natural gas wells by providing its drilling rigs and crews under contracts with international, government-owned, and independent oil and gas companies. As of February 15, 2010, it owned and operated 42 jackup rigs, 4 ultra-deepwater semisubmersible rigs, and 1 barge rig. The company also has 4 ultra-deepwater semisubmersible rigs under construction. It operates in Asia, the Middle East, Australia, New Zealand, Europe, Africa, and North and South America. The company was formerly known as Ensco International plc and changed its name to Ensco plc in March 2010. Ensco plc was founded in 1975 and is based in London, the United Kingdom.

Advisors' Opinion:

• [By Chris Hill]

  In this segment, Jason and Taylor tell investors why they'll be watching shares of Transocean (NYSE: RIG  ) , Ensco (NYSE: ESV  ) and McDonald's (NYSE: MCD  ) this week.

5 Best Penny Stocks To Invest In 2014: Gentiva Health Services Inc.(GTIV)

Gentiva Health Services, Inc. provides home health services and hospice care in the United States. The company offers skilled nursing and therapy services, paraprofessional nursing services, and homemaker services primarily to adult and elderly patients through licensed and Medicare-certified agencies. It also provides its services through specialty programs comprising Gentiva Orthopedics, which offers individualized home orthopedic rehabilitation services to patients recovering from joint replacement or other major orthopedic surgery; Gentiva Safe Strides that provides therapies for patients with balance issues; and Gentiva Cardiopulmonary, which helps patients and their physicians manage heart and lung health in a home-based environment. In addition, the company offers services through Gentiva Neurorehabilitation, which helps patients who have experienced a neurological injury or condition by removing the obstacles to healing in the patient?s home; Gentiva Senior Health that addresses the needs of patients with age-related diseases and issues; and Rehab Without Walls unit, which provides neurorehabilitation therapies for patients with traumatic brain injury, cerebrovascular accident injury, and acquired brain injury. Further, it offers consulting services to home health agencies, which include operational support, billing and collection activities, and on-site agency support and consulting. Additionally, the company provides hospice services primarily in the patient?s home or other residence, such as an assisted living residence or nursing home, as well as in a hospital. Gentiva Health Services, Inc. was founded in 1999 and is headquartered in Atlanta, Georgia.

5 Best Penny Stocks To Invest In 2014: Crown Crafts Inc.(CRWS)

Crown Crafts, Inc., through its subsidiaries, offers infant and toddler products primarily in the United States. Its products include crib and toddler bedding, blankets, nursery accessories, room d

10 States With The Worst Health Coverage

Last year, just under 15% of the U.S. population did not have health insurance coverage. But as the different stages of the Affordable Care Act roll out over the next few years — and more Americans become insured — this rate is likely to fall.

For now though, health insurance remains out of reach for many Americans. In states like Florida and Alaska, more than one in five residents are without insurance. And an estimated 22.5% of Texans didn’t have health insurance last year. Based on data recently released by the U.S. Census Bureau, 24/7 Wall St. reviewed the 10 states with the lowest rates of health insurance coverage in the U.S in 2012.

Click here to see 10 States

People 65 and older are automatically eligible for Medicare. Nationally, 15.5% of the population is covered by this program. Several of the states with lower overall coverage rates have disproportionately fewer residents over 65, and as a result they have lower rates of Medicare coverage.

The opposite is also true. In Florida, where 20.1% of the population is without health insurance, has the the second-highest proportion of residents covered by Medicare.

The other large public health insurance program, Medicaid, covers Americans who cannot afford coverage. Roughly 18% of the population is covered under the program. Many of the states with the lowest health insurance coverage have relatively low median household income and high poverty rates. But, like Medicare, there does not appear to be a strong relationship between high Medicaid coverage and lower overall rates of uninsured residents.

In an interview with 24/7 Wall St., Peter Cunningham, senior fellow at Center for Studying Health System Change, explained that while Medicare and Medicaid can impact a state's health insurance coverage rate. While Medicaid plays a small roll, "It's really the variation in the rates of employer-provided private insurance coverage that drives the variation in uninsured rates,” Cunningham said.

Indeed, over 65% of the U.S. population is covered through private health insurance, and the vast majority of that is through employers. All of the 10 states with the lowest overall health insurance coverage rates had among the lowest rates of employer-provided insurance.

These states have low rates of employer-provided insurance, Cunningham explained, because of the industries that are common in these states. Most of these states have lower proportions of higher paying jobs or unionized manufacturing jobs, in which employers tend to provide insurance. In fact, all but one of these states had below the national average manufacturing employment. "We all talk about the decline of American manufacturing, but it's still the case that in a lot of states, the traditional manufacturing jobs still play a pretty big role."

Cunningham also explained that states with high uninsurance rates are typically poorer because lower-wage jobs are much less likely to provide health insurance coverage. Cunningham gave the example of Florida. "The economy in Florida is based on tourism. A lot of the service and hospitality sector jobs don't pay a lot and don't offer health benefits. It's a very different economy than states that have much lower uninsured rates." Florida had the lowest rate of employer-provided health insurance in the country.

Based on the Census Bureau's 2012 American Community Survey, 24/7 Wall St. reviewed the 10 states with the lowest percentage of the population covered by a health insurance plan. We also reviewed a variety of additional data from the ACS for 2012, including age distribution, poverty, income, and the proportion of residents covered by private insurance, Medicaid and Medicare. We also reviewed 2012 average unemployment rates from the U.S. Bureau of Labor Statistics.

These are the ten states with the worst health coverage.

Rieder: Support crucial for non-profit journalism

Steve Waldman has a modest proposal for securing the future of non-profit news outlets.

How about if companies that have flourished in the new economy — think Apple, Google, Verizon — stepped up to the plate and subsidized some of these valuable but financially struggling upstarts, the journalist and Web entrepreneur asks.

"If the winners of the new economy put a tiny bit of their wealth into this (area), this whole space would be transformed," says Waldman, the principal author of the FCC's major 2011 study of the state of the American news media.

Waldman issued the challenge at a recent conference at the Pew Research Center in Washington, D.C., on the future of non-profit journalism. In recent years, as traditional news organizations have cut back deeply in the face of the digital tsunami, non-profits large and small, generally online operations, have arisen to help fill the gap. While their total workforce is a mere fraction of the journalism jobs that have vanished, many of the new players are doing important work, ranging from powerful investigative reporting to granular, street-level local coverage. They are an exciting addition to the media mix.

But most if not all are supported by philanthropy, and major foundations generally don't like to fund their beneficiaries forever. As my friend Ed Wasserman, now dean of the Graduate School of Journalism at the University of California-Berkeley, has pointed out, "Going to rich people periodically asking for money isn't a real business model."

So the key question is: Can non-profit journalism go the distance?

Moderator Alan Murray, president of the Pew Research Center, kicked things off on a positive note. "The fact that we're having such a forum means there is a future," he said.

And there was some tangible good news to emerge at the conclave. Michael Maness, head of the John S. and James L. Knight Foundation's Journalism & Media Innovation program, disclosed that Knight was on the verge of making "a pre! tty sizable amount of money" available to the non-profits. While the pot of gold still needs approval by the foundation's board, it sounded like the largess will soon be a done deal.

Often, the non-profits are launched with support from a single angel. One of the keys to staying afloat is diversifying the revenue base. And that means two different things: diversifying the lineup of donors and finding new money streams — from advertising, from staging events, from memberships.

The big daddy in the field is ProPublica, an investigative powerhouse with 41 staffers in its New York City newsroom, 23 of them reporters. But many of the start-ups are lean and mean, with one- and two-person staffs, fueled by passion and commitment.

Launched in 2008 with money from the wealthy, liberal-leaning Sandler family, ProPublica reduced the Sandler share of its budget to 38% last year and hopes to shrink it to 30% this year, according to President Dick Tofel.

Tofel stresses that it's important to distinguish between family foundations like the Sandlers' and institutional foundations, which tend to act more like venture capitalists and don't plan on doling out the dollars indefinitely.

In order to attract and retain philanthropic support, the non-profits need to show that they are having an impact. But how do you measure that? Foundations like "metrics." But what are the right ones? Simply counting how many people visit the websites doesn't really cut it.

In fact, tallying the number of unique visitors "is worth zero," says Joel Kramer, co-founder and CEO of MinnPost, a non-profit news site in the Twin Cities. That stat, he says, is irrelevant unless you're in the business of selling national advertising.

What really matters is what the journalism accomplishes. Did it sweep out corrupt politicians or lead to important reforms? The key is "what happens because of what you do," says Mark Horvit, executive director of Investigative Reporters and Editors. "You can't simply look at h! ow many e! yeballs are coming to the site."

One piece of good news: The Knight Foundation and the Bill & Melinda Gates Foundation are underwriting a study at the University of Southern California to find better ways to measure engagement and impact. "What funders really care about are outcomes," says Daniel Green, who manages media and information grants at the Gates Foundation. "It's not helpful to say you need metrics if we don't help you figure out what the right ones are."

Foundations often want to see their charges wean themselves from charity and stand on their own. But that's an unrealistic expectation for many non-profit news operations, cautions Kevin Davis, CEO and executive director of the Investigative News Network, a consortium of more than 80 non-profit newsrooms.

As in the case of symphony orchestras, "Philanthropy needs to remain in the mix," he says. "Certain content will need to be subsidized. Not all will be self-sustaining."

And it's just not good enough if only the big boys like ProPublica and the Berkeley, Calif.-based Center for Investigative Reporting survive while smaller but worthy outfits succumb. If that turns out to be the case, Davis says, "We will have failed."

It would be great if the Googles and the Apples of the world listen to the wisdom of Waldman and reach for their checkbooks. The non-profit news movement is well worth the investment.

BofA-Merrill Settles Gender Discrimination Suit for $39M

Less than a week after Bank of America-Merrill Lynch (BAC) settled a lawsuit with some 700 black brokers to the tune of $160 million, the wirehouse has agree to pay $39 million to resolve a lawsuit filed in Brooklyn, N.Y., involving about 4,800 female advisors who work or have worked previously for the firm.

“We are pleased to resolve this matter, which was filed in 2007 before Merrill Lynch was acquired by Bank of America,” the bank said Friday in a statement. “The resolution includes a number of additional and enhanced initiatives that will enrich our existing diversity, inclusion and development programs, providing even more opportunities for women to succeed as financial advisors.”

In the lawsuit, the advisors charged Bank of America-Merrill Lynch with gender discrimination tied to certain policies, from account redistribution to how advisors were put into teams.

“This settlement helps ensure that Merrill Lynch is a place where women can thrive and be successful,” Cara E. Greene, a lawyer for the plaintiffs, said in a statement shared with Bloomberg “Hopefully others will follow Merrill Lynch’s example.”

As part of the settlement, the company, which made no admission of wrongdoing or liability, agreed to put in place certain measures that will be overseen by an independent monitor. These issues include team formation and partnership agreements, business generation, account distributions, manager evaluations, promotions, training and complaint processing and procedures.

In addition, an independent consultant will conduct an internal study of Bank of America’s team formation practices, according to a spokesperson. The bank says it founded the Global Wealth Investment Management Women's Exchange in 2004 with 34 members; the group now includes some 4,000 advisor and non-advisor members.

As of June 30, the number of Merrill Lynch financial advisors was 15,759, while the number of GWIM advisors was 16,989. The total headcount for client-facing financial professionals was 19,689.

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Check out Sallie Krawcheck: Beware of Bank Stocks on ThinkAdvisor.

 

Natural Gas Inventory on Track for Massive Increase

The U.S. Energy Information Administration (EIA) today reported that U.S. natural gas stocks increased by 57 billion cubic feet last week, compared with an expected build of 65 billion cubic feet anticipated by analysts. Natural gas futures prices were trading up by about 1.2% in advance of the EIA's report, at around $3.50 per million BTUs, and rose to $3.52 immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 3.06 trillion cubic feet, about 44 billion cubic feet higher than the five-year average of 3.02 trillion cubic feet. Working gas in storage totaled 3.3 trillion cubic feet for the same period a year ago. Natural gas inventories remain roughly in the middle of the five-year range. The five-year average increase for the period is 56 billion cubic feet.

Demand for cooling is expected to rise with temperatures across the Midwest over the next couple of weeks. The late summer hot spell should keep natural gases prices higher during the period and into the fall injection season.

The EIA today issued a forecast for total natural gas storage inventories to reach 3.8 trillion cubic feet by the end of October. Peak capacity for U.S. natural gas storage is 4.265 trillion cubic feet. The agency noted that natural gas use for electricity generation is down about 20%, from last year and demand is expected to fall by another 12% in the third quarter. The impact on prices could be slightly negative.

Here is how stocks of the largest U.S. natural gas producers are reacting to today's report:

Exxon Mobil Corp. (NYSE: XOM), the country's largest producer of natural gas, is up about 1% at $87.32 in a 52-week range of $84.70 to $95.49.

Chesapeake Energy Corp. (NYSE: CHK) is up 1.3% at $25.58 in a 52-week range of $16.23 to $25.64.

EOG Resources Inc. (NYSE: EOG) is up 1.8% at $154.49 in a 52-week range of $105.45 to $161.47.

The US Natural Gas Fund (NYSEMKT: UNG) is up 2.3% at $18.77 in a 52-week range of $16.59 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up 1.6% at $45.12 in a 52-week range of $36.24 to $46.78. The first fund tracks spot prices; the second includes major drillers and services companies.

[video] Cramer Quick Take: Under Armour Runs Higher

NEW YORK (TheStreet) -- TheStreet's Jim Cramer tells "Mad Money" research director Nicole Urken that Under Armour (UA) is one of his favorite technology stocks.

Cramer says Under Armour is a technical apparel company and a "stealth" play on technology.

The company continues to innovate and consumers love the brand. That allows it to continue to command premium pricing, according to Cramer.

Under Armour has a market cap of just $8.5 billion, much smaller than Nike's (NKE) $60 billion, so Under Armour has a lot of potential to go higher, despite being up 66% in 2013, according to Cramer. With just a small share in the international market, Cramer said the company has a ton of opportunity abroad and that CEO Ken Plank is a very competitive leader. He concluded that the stock has plenty of upside remaining and those who have betted against the company based on valuation have been wrong so far. At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in stocks mentioned. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell

Hot Tech Stocks To Buy Right Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Synaptics (NASDAQ: SYNA  ) climbed 11% today after the touch-screen technologist raised its outlook for the current quarter. �

So what: The stock has slumped over the past month on concerns over slowing growth, but today's upbeat guidance reignites optimism on Wall Street over the mobile trends working in Synaptics' favor. The company also expects gross margins to be higher than previously expected, suggesting that its competitive position is strengthening as well. ���

Now what: Management now sees fourth-quarter revenue of $227 million to $230 million, up from a prior view of $190 million to $205 million and also well ahead of Wall Street's estimate of $198.6 million. "The Company's updated outlook is being driven by higher than expected revenue from mobile products, reflecting strong demand from a broad range of leading-edge designs across multiple mobile customers," Synapics wrote in a statement. With the stock still well off its 52-week highs and currently trading at a forward P/E of 12, there might even be some room left to benefit from that operating momentum. �

Hot Tech Stocks To Buy Right Now: Standard Microsystems Corporation(SMSC)

Standard Microsystems Corporation designs and sells a range of silicon-based integrated circuits that utilize analog and mixed-signal technologies worldwide. It offers USB 2.0 hub controllers and combination hub/flash memory card reader products; USB 2.0 flash memory card readers; USB-to-Ethernet controllers; Ethernet controllers and transceivers, as well as software drivers for consumer electronics and industrial applications; network multimedia processing engines supporting multiple high-definition audio/video streams, software protocol stack management, and security; and embedded communications products for wireless base stations, copiers, building automation, robotics, gaming machines, and industrial applications. The company also provides embedded Ethernet switches; embedded controllers for original equipment manufacturer and original design manufacturer personal computer designers; advanced I/O controllers; and x86-based server solutions. In addition, it develops ana log products for computing, consumer, and industrial applications; portable products designed for smart phones, personal digital assistants, and other handheld mobile devices; and automotive products. Further, the company markets Media Local Bus, a chip interconnect technology; sells software stacks, and system design and diagnostic tool products; and offers software development and systems integration support services for automotive networking applications. Its products provide connectivity, networking, or input/output control solutions for various high-speed communication, computer and related peripheral, consumer electronics, industrial control systems, or automotive information applications. The company sells its products through a direct sales force, third party sales representatives, and distributors. Standard Microsystems Corporation was founded in 1971 and is headquartered in Hauppauge, New York.

Hot Tech Stocks To Buy Right Now: Lorain Capital Corp(MWX.V)

Medworxx Solutions Inc. engages in the provision of health information technology solutions for hospitals primarily in Canada, the United States, and the United Kingdom. It develops technologies that are used to assist health care practitioners? abilities to communicate, aggregate, and analyze knowledge. The company offers patient flow solutions, including Medworxx utilization management, a clinically-based solution to assess, analyze, and advance patient flow challenges; Medworxx bed board, an electronic bed board that presents status indicators for every bed and patient; and Medworxx assessments for special patient flow measures. It also provides compliance and education solutions comprising Medworxx learning management system that supports the development, management, and delivery of classroom and online learning; Medworxx content management system, a content management system that is used by hospitals to improve the functionality and content of Intranet and Internet W ebsites; Medworxx policy and documentation management system, which enables healthcare organizations to automate and simplify the management and publication of policies and procedures in a Web-based environment; and Medworxx emergency readiness systems. In addition, the company offers maintenance and hosting, and consulting services. Medworxx Solutions Inc. was founded in 2004 and is headquartered in Toronto, Canada.

Top 5 Companies To Buy Right Now: Acorn Energy Inc.(ACFN)

Acorn Energy, Inc., through its subsidiaries, provides technology driven solutions for energy infrastructure asset management worldwide. It offers sonar and acoustic related solutions for energy, defense, and commercial markets with a focus on underwater site security for strategic energy installations and other acoustic systems, as well as develops and produces real-time embedded hardware and software. The company also develops and markets remote monitoring systems to electric utilities and industrial facilities, which are used in a range of utility applications, including outage management, power quality monitoring, system planning, trouble shooting and proactive maintenance, and condition monitoring; and provides the intelligence to transmission and distribution network operators. In addition, it develops and produces fiber optic sensing systems for the energy, commercial security, and defense markets. The company?s patented ultra-high sensitivity fiber optic sensors a re designed to replace electronic sensors with fiber optic sensors. Further, it engages in the design, manufacture, marketing, and sale of wireless remote systems that monitor standby power generation, backup power generators, remote powered equipment, cellular towers, emergency towered communications, and remote tower sites; cathodic protection products to monitor pipeline integrity; and other wireless remote systems. Acorn Energy, Inc. was founded in 1986 and is based in Montchanin, Delaware.

Hot Tech Stocks To Buy Right Now: Plexus Corp.(PLXS)

Plexus Corp., together with its subsidiaries, provides electronic manufacturing services to original equipment manufacturers and other technology companies. The company offers product development and design services, including program management, feasibility studies, product conceptualization, specification development, circuit design, field programmable gate array design, printed circuit board layout, embedded software design, mechanical design, development of test specifications, and product verification testing. It also provides value-added services, such as engineering change-order management, cost reduction redesign, component obsolescence management, product feature expansion, test enhancement, and component re-sourcing. In addition, the company offers prototyping and new product introduction services comprising assembly of prototype products, materials management, analysis of the manufacturability and testability of a design, test implementation, and pilot productio n. Further, it provides test equipment development; material sourcing and procurement; agile manufacturing; fulfillment and logistic; after-market support; and regulatory requirements services. The company serves the wireline/networking, wireless infrastructure, medical, industrial/commercial, and defense/security/aerospace markets in the United States, Malaysia, China, the United Kingdom, Mexico, and Romania. Plexus Corp. was founded in 1979 and is headquartered in Neenah, Wisconsin.

Hot Tech Stocks To Buy Right Now: Perfect World Co. Ltd.(PWRD)

Perfect World Co., Ltd., through its subsidiaries, engages in the research, development, operation, and licensing of online games primarily in the People?s Republic of China, the United States, and the Rest of Asia. It develops online games based on its game engines and game development platforms. The company?s 3D massively multiplayer online role playing games (MMORPGs) include Perfect World, an adventure and fantasy game with traditional Chinese settings; Legend of Martial Arts, an adventure story of Chinese swordsmen set in an ancient kingdom; and Perfect World II, which is set in a similar content and graphic background as Perfect World. It also offers Zhu Xian that is based on martial arts focused adventure set in a fantasy world; Chi Bi, a war story developed based on ancient Chinese history known as the Three Kingdoms; Hot Dance Party, a 3D online casual game; Pocketpet Journey West, a 3D MMORPG based on the classical novel of Chinese literature, Journey to the West ; Battle of the Immortals, a mysterious adventure, which enables game players to travel between eastern and western cultures, and adventures in historic sites and turf wars; and Fantasy Zhu Xian, a 2D turn-based MMORPG based on the Internet fantasy novel Zhu Xian. It also involves in the production and distribution of films, as well as television advertising activities. The company was founded in 2004 and is based in Beijing, the People?s Republic of China.

Hot Tech Stocks To Buy Right Now: Rexahn Pharmaceuticals Inc (RNN)

Rexahn Pharmaceuticals, Inc. (Rexahn) is a development-stage biopharmaceutical company. The Company focuses on the development of cures for cancer to patients worldwide. The Company�� pipeline features one drug candidate in Phase II clinical trials. The Company also has several other drug candidates in pre-clinical development. In addition, the Company has two renal cell carcinoma (CNS) candidates, Serdaxin, CNS Disorders drug for depression and neurodegenerative diseases and Zoraxel, which is a erectile dysfunction (ED) and sexual dysfunction drug that are in clinical stages and the Company is are exploring options for further development . The Company�� drug candidate, Archexin is an anticancer Akt inhibitor.

Archexin

Archexin is potent inhibitor of the Akt protein kinase (Akt) in cancer cells. Archexin has FDA orphan drug designations for five cancers (RCC, glioblastoma, and cancers of the ovary, stomach and pancreas). Multiple indications for other solid tumors can also be pursued. Archexin inhibit both activated and inactivated forms of Akt, and to reverse the drug resistance observed with the protein kinase inhibitors. Archexin is an antisense oligonucleotide (ASO) compound that is complementary to Akt mRNA, and selective for inhibiting mRNA expression and production of Akt protein. As of December 31, 2011, Archexin was in Phase II clinical trials for the treatment of pancreatic cancer with enrollment completed in September, 2011.

Serdaxin

Serdaxin is an extended release formulation of clavulanic acid, which is an ingredient present in antibiotics approved by the FDA. The Company had been developing Serdaxin for the treatment of depression and neurodegenerative disorders. From January to September, 2011, the Company conducted a randomized, double-blind, placebo-controlled study compared two doses of Serdaxin, 0.5 milligram and 5 milligram, to placebo over an eight-week treatment period for major depressive disorder (MDD) patients. As of Dec! ember 31, 2011, the Company had not made a determination of Serdaxin�� future paths or resource allocations to further develop Serdaxin to treat MDD.

Zoraxel

Zoraxel is an orally administered, on-demand tablet to treat sexual dysfunction. Zoraxel is a dual enhancer of neurotransmitters in the brain that play a key role in sexual activity phases of motivation and arousal, erection and release, and may be the ED drug to affect all three of these phases of sexual activity. As of December 31, 2011, the Company was evaluating how to proceed with the Phase IIb study of Zoraxel.

The Company�� Pre-clinical Pipeline Drug Candidates includes RX-1792, which is a small molecule anticancer EGFR inhibitor; RX-5902, which is a small molecule anticancer ribonucleic acid (RNA) helicase regulator; RX-3117, which is a Small molecule anticancer deoxyribonucleic acid (DNA) synthesis Inhibitor; RX-8243, which is a small molecule anticancer aurora kinase inhibitor; RX-0201-Nano, which is a nanoliposomal anticancer Akt inhibitor; RX-0047-Nano, which is an nanoliposomal anticancer HIF-1 alpha inhibitor and RX-21101, which is a nano-polymer Anticancer.

Seven Highly Educated Jobs Making the Least Money

More than two-thirds of 2011's college graduates had student debt. Those students, according to the Project on Student Debt, had an average of more than $25,000 in back loans. To make matters worse for many recent graduates, college graduates have a smaller chance of finding a job than they once did.

For some, the jobs they get with their degree pay so little that it can take years for them just to pay off their loans. 24/7 Wall St. reviewed Bureau of Labor Statistics (BLS) data to find jobs that require a bachelor's degree to be competitive, yet pay less than the median annual wage of $34,750. For example, legislators — elected government officials — earn a median of less than $20,000 annually even though most have bachelor's degrees. These are the seven highly educated jobs making the least money.

Click here to see the seven jobs

Part of the reason these jobs pay less than the median is that they are temporary, so a full-time, supporting salary isn't always needed. Graduate-level teaching assistants, who earn a median of just over $30,000 per year, typically pursue a different career once they leave school. Many legislators are only elected for a single term, and some maintain a separate job while in office. President Barack Obama, for example, was a state senator and law school lecturer simultaneously.

In the case of legislators or radio and television announcers, a bachelor's degree is not required, but it tends to provide the skills needed to be successful in these positions. In other cases of low-paying occupations, it is more or less impossible to get a job without a degree. Most clinics require a candidate for a rehabilitation counselor position to have master's degree in counseling or a related field.

In order to identify the seven most overeducated jobs making the least money, 24/7 Wall St. reviewed wage data from the Bureau of Labor Statistics' Occupational Employment Statistics (OES) Database that earned less than the median annual salary of $34,750. We used the BLS Occupational Outlook Handbook to identify educational requirements and long-term job prospects. O*Net Online, an independent career research and advisory site, was used to determine the percentage of people in each occupation with a bachelor's, master's or doctorate. The seven occupations on our list required a bachelor's degree for most employers.

These are the seven highly educated jobs making the most money.

Would Peter Lynch Buy Tesla?

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Consumer Confidence in U.S. Economy Falls to 5-Month Low

Jennifer Whitney/Bloomberg via Getty Images NEW YORK -- U.S. consumer sentiment fell to a five-month low in September, with Americans worried that higher interest rates will put a damper on the housing market and overall growth, a survey released Friday showed. The Thomson Reuters/University of Michigan's preliminary reading on the overall index of consumer sentiment fell to 76.8 in September, the lowest since April. That was below August's 82.1 and the 82.0 reading economists had expected this month. Survey director Richard Curtin attributed the decline to "growing concerns that higher interest rates will diminish the pace of economic growth as well as job gains." He added that a "cooling housing market has also affected homeowners' sense of personal financial progress." Americans' outlook is not much sunnier. A gauge of consumer expectations fell to an eight-month low of 67.2 from 73.7 in August, with only one in four households expecting to be better off financially in the year ahead. The survey's barometer of current economic conditions fell to a five-month low of 91.8 from 95.2 last month. Mortgage rates have risen sharply in recent months as markets prepare for the Federal Reserve to reduce the amount of bonds it buys each month to support U.S. recovery. Investors expect the first reduction in the nearly year-old program to be announced at next week's Fed policy meeting. That has already started to slow a rebound in the housing market, which, thanks to Fed support, had seen a rise in loan demand and prices over the last year. Applications for home loans declined and refinancing activity has slowed sharply. Consumers were also apprehensive about fiscal policy and another potential battle in Washington over raising the government's legal borrowing limit, the survey showed. If the trend persists, economists fear it could further depress consumer sentiment and spending. A separate report on Friday showed U.S. retail sales, while up for a fifth straight month, rose less than expected in August. "If changes in monetary and fiscal policies....act to slow economic growth, declining confidence could lengthen and deepen the slowdown," Curtin said, but said confidence should rebound if these fears prove not to have such a negative effect.

Americans Agree Financial Literacy Is Important, but in Short Supply

Although most Americans know they’d get an A or a B on a test of saving and investing know-how, the grade they gave the average American was a D.

While there may be more than a little pride inflating respondents’ opinion of their own literacy level, respondents almost unanimously agreed that financial literacy is important — and something they don’t have enough of.

Whose job is it to teach Americans about finance? Three-quarters of respondents said it was up to them to learn how to be financially responsible. Fifty-six percent said parents are responsible for teaching financial lessons and 50% said schools and teachers should take responsibility. Just one-third of respondents put the responsibility for teaching Americans about finance on the financial industry.

“We learn is much of our financial behavior from our parents,” Barbara Nusbaum, a psychologist and money coach who consulted Genworth on the survey data, told ThinkAdvisor on Thursday. “I think a lot of times people don’t think we should learn from our parents because it’s just not done, so there isn’t the expectation that it should be done that way. I think it doesn’t happen because a lot of people don’t feel competent and confident enough to do it.”

Nusbaum said it was crucial to give more attention to that early education. “It’s crucial that we talk about money at home and that we do financial education in lots of different forms, but in ways that are appropriate for kids. There are a lot of blocks that we all have about money and what it means to us. It’s not just a knowledge gap, but it’s also a block around our personal feelings.”

While the economy was the most commonly cited reason for low retirement savings overall, respondents put a lot of the blame on individuals. Fifty-eight percent said lack of financial education was a reason for low savings, almost the same percentage who put the blame on irresponsible spending (57%).

As is usually the case in studies determining financial literacy, women scored themselves lower than men. Two-thirds of male respondents gave themselves an A or a B, while just 40% of women gave themselves the same score. Furthermore, women were more likely than men to say they went looking for more information out of fear (21% versus 14%).

“Women are good at some financial planning, but I think it’s not necessarily what’s measured and talked about,” Nusbaum said. “Women are less focused on money accumulation than men are. Financial competence means accumulating money for men. For women, it’s much more focused on security.”

Nusbaum (left) also noted that women tend to grade themselves harder than men. “Women, whether it’s about finance or other things, say they’re less good at things and men say they are better at things than their actual performances.”

She said it was important for women to deliberately talk and learn about money instead of avoiding it. “Instead of the fight and flight response to financial anxiety, I say you can affiliate and connect. That’s a female way to deal with something that they’re anxious about.”

Another strategy Nusbaum suggested for women is to “acquire and hire. They need to learn some things, but not everything.”

Securing a stable future was the primary motivation for looking for more education, at 67% of all respondents. Just 18% said fear running out of money was the main driver.

“I think fear of running out of money is terrifying and raises a lot of anxiety. Ensuring future financial security is something you can have empowerment around: you can educate yourself, you can be active, you can have an impact on your future. If you’re scared of running out of money, that’s a pretty dire possibility, and it can be overwhelming. The perfect level of anxiety is not too much, not too little.”

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Check out 4 Reasons Uninsured Should Heed Obamacare Mandate Now on ThinkAdvisor.

Best Stocks to Buy Now: A Money Morning Weekly Roundup

Investors hunting for the best stocks to buy last week encountered a few new market-moving factors: Syria's civil war, rising oil prices, and a rebound in gold.

In addition, the U.S. Federal Reserve's decision to taper or not remains at the forefront of investors' minds. Friday's August jobs report might provide more clarity on the central's bank next move, which will be shared - or again teased - at the Sept. 17-18 Federal Open Market Committee (FOMC) meeting.

And amid all this uncertainty, the market's fear gauge spiked.

That's why Money Morning last week featured a number of moves investors can make to weather the uncertainty. In case you missed them, we've highlighted below the best investments and stocks to buy now given new and continuing market factors:

The present bull market is looking old and tired at 54 months, a full 11 months longer than the average bull market run since 1953. Money Morning Chief Investment Strategist Keith Fitz-Gerald calls it the most unloved bull market in history. But there's no need to completely flee the market if you know the right moves to make. That's why we covered how to invest amid a market correction, plus how to invest in today's volatility. Money Morning Executive Editor William Patalon III rang up in-house energy expert Dr. Kent Moors to get the scoop on what investors need to do in the midst of mounting Middle East unrest. Moors, who runs our Energy Advantage advisory service, is one of best-connected insiders in the world's energy sector. He says investors should prepare themselves for the instability and continued surges in energy that will likely linger from a prolonged conflict. Speaking of moves to make right now, Money Morning's Global Investing & Income Strategist Robert Hsu warns investors to immediately find out how much exposure they have to real estate investment trusts (REITs), and in particular, mortgage REITs. You see, with mortgage rates spiking, REITs have come under pressure as worries grow that higher financing costs and rising capitalization rates (which often lead to lower property values) will weigh on the sector. A number of these investment vehicles are down some 24% to 30% in less than five months. Hsu cautions it is going to get a lot worse. That's why he's waving a red flag. Everyone needs to take note because practically every "properly diversified" portfolio, from exchange-traded funds to target funds to variable annuities, cashes dividend checks from these REITs. The good news - there is one REIT that still allows you to safely profit. Get the full story. Another story for income investors: We also shared a piece on how investors can boost their returns through DRIPs, dividend reinvestment plans. We're always looking out for our readers. In Here's What These Top Activist Investors Do to Stocks You Own, we explain the anatomy of activist investors, the impact they can have on a stock, and what you should do if an activist investor targets one of your portfolio's holdings. Gold moved sharply higher last week, ending August with a 6% gain. The yellow metal, which peaked at nearly $1,900 an ounce in 2011, endured an excruciating 36% bear market slide that ended in June. To date, gold has gained some $200 an ounce, or 20%, putting it officially in a bull market. Money Morning delved into what's driving the yellow metal's rally and featured why legendary commodity investor Jim Rogers says gold and oil are going much, much higher. That's also why we highlighted some beaten-down gold stocks that have caught the eye of "smart money" investors. Silver gained a sterling 21.3% in August and looks poised to go much higher. The white metal got a nice boost last week from bullish comments from industry experts. Physical, investment, and industrial demand remains robust, and we're entering a period that has historically been particularly kind to precious metal. Read more in Silver Price News Today. Microsoft Corp. (Nasdaq: MSFT), with a 5% gain in August, was the best-performing Dow stock for the month, raising the question of whether shares are still a buy. Most of the gains came after the announcement of Chief Executive Officer Steve Ballmer's resignation. Money Morning Chief Investment Strategist Keith Fitz-Gerald shared his views on who may fill Ballmer's shoes, along with his prescription for turning the fading tech giant around. He also noted the conditions that need to be addressed and met before he'd be a buyer of MSFT. Get that story here. Amgen Inc. (Nasdaq: AMGN), the world's largest independent biotechnology company, inked a $10.4 billion deal to buy Onyx Pharmaceuticals (Nasdaq: ONXX) last week, marking the fifth-largest biotech deal in history. This is part of a much bigger trend that will point to some of the best stocks to buy now in biotech. Brazil's economy surged in the second quarter. However, doubts linger about the extent to which Latin America's largest economy is gaining traction. Expectations are modest for the remainder of 2013, with a more promising showing in 2014. We managed to find some great buys in South America, but not in Brazil. In Best Stocks to Buy in South America, we share three stocks to buy now to play this other country's upcoming economic growth. Finally, Money Morning Defense & Tech Specialist Michael Robinson says he's "looking down the barrel of a device that will be made by the trillions" and will be in demand in every single sector of the economy, from agriculture to smartphones to diapers. It also stands to make the company that manufactures it, and sophisticated individuals who invest in it, a bundle of money. Read more at Some People Will Get Stinking Rich on These Devices.

For more of our favorite stocks to buy now, check out this special free investor analysis: Five Profit Plays for 2013's Second Half.

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Sterne Agee Sees More Book Value Risks for High-Yield Dividend MBS REITs

The analyst team at Sterne Agee has updated its book value estimates for the high-yield mortgage-backed securities (MBS) real estate investment trust (REIT) sector. The move is based on rising interest rates that keep adding pressure on MBS asset prices, even while the option-adjusted spreads have remained relatively stable or narrowed. The problem for investors seeking the double-digit dividend yields here is that book value models have continued to decline since the end of the last quarter.

Since the end of the last quarter, the 10-year Treasury yield increased 30 basis points and the low coupons and higher duration 30-year mortgage securities are underperforming higher coupon mortgage securities. The net result is a modest decline in non-agency MBS values. Sterne Agee shows that its models suggest a decline of 1.4% or so this quarter. In the June quarter, the firm’s models suggested an average decline of 10% to 12% and the actual book values declined on average about 15%.

So here is the thing to consider. These MBS REITS have been plummeting in price as high-yield dividend buyers know that they have to worry about the effects of rising interest rates. A 1% or 2% drop in book value does not seem enough on the surface to bother with a report of this length. That is just on the surface. Where this gets complicated is that drop is after only one month, and it is on top of significant losses already. imagine what happens to these book values if interest rates really start to rise, say another 100 or 200 basis points.

MFA Financial Inc. (NYSE: MFA) has an estimated $0.20 decline in book value. This is partially attributable to the company’s recent special dividend declaration. For the third quarter, Sterne Agee sees MFA with a core earnings per share of $0.19, yet the dividend of $0.50 is a combined $0.22 estimated and $0.28 special.

Sterne Agee’s team said, “We continue to prefer credit risk oriented Mortgage REITs over their Agency-only focused counterparts. Among the larger cap names in our coverage, our top picks are MFA Financial, Inc. (NYSE: MFA) and PennyMac Mortgage Investment Trust (NYSE: PMT).”

MFA’s target price is $8.25, versus $7.28 recently, and we did not see PennyMac’s price target in the full research report. Other companies in the high-yield dividend MBS REITS covered are as follows:

American Capital Agency Corp. (NASDAQ: AGNC) with a neutral rating. The firm’s price target is $22.00, and that is slightly under the current $22.80 price in the report. Last quarter’s book value was $25.53, and Sterne Agee is projecting a book value of $25.31.

Annaly Capital Management Inc. (NYSE: NLY) is considered king of the MBS REITs. Sterne Agee only rates it as Neutral with a $10.75 price target against a recent price of $11.60. The book value last quarter was $13.03, and Sterne Agee sees the book value as $12.64 by the end of August.

Dynex Capital Inc. (NYSE: DX) is rated as Buy, with a price target of $9.00, versus a recent price of $8.02. The book value was $8.94 at the end of last quarter and was projected to be $8.91 by the end of August.

Ag Mortgage Investment Trust (NYSE: MITT) also has a Buy rating, with a target of $19.00, versus a recent price of $17.45. The last book value was $19.78, and the end of August projected book value was $19.58.

Two Harbors Investment Corp. (NYSE: TWO) has a Neutral rating with a $11.50 price target, but a $9.59 recent price in the report. Its book value was $10.48 at the end of the quarter and was projected to be $10.39 at the end of August.

Again, the drop of 1% or 2% in book value doesn’t sound bad on the surface. The issue is that this drop was in just one or two months. Imagine what happens if or when interest rates rise another 100 basis points or more. Stay tuned.

Is Facebook a Thumbs Up at These Prices?

With shares of Facebook (NASDAQ:FB) trading around $23, is FB an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Facebook is engaged in building products to create utility for users, developers, and advertisers. People use Facebook to stay connected with their friends and family, to discover what is going on in the world around them, and to share and express what matters to them to the people they care about. Developers can use the Facebook Platform to build applications and websites that integrate with Facebook to reach its global network of users and to build personalized and social products. Advertisers can engage with more than 900 million monthly active users on Facebook or subsets of its users based on information they have chosen to share. Social networking has been a powerful movement and tool in recent years that has changed the way many companies and consumers operate. Facebook is a pioneer and a leader in the social network trend that looks to be here to stay. Facebook will see rising profits through its engagement with the increasing user base that social networking is seeing in coming years.

T = Technicals on the Stock Chart are Weak

Facebook stock has struggled to find a consistent valuation so it has experienced a fair amount of volatility since its initial public offering last year. The stock is now trading at lows for the year but may be getting ready to stabilize. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Facebook is trading below its key averages which signal neutral to bearish price action in the near-term.

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(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Facebook options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Facebook Options	37.49%	66%	65%

What does this mean? This means that investors or traders are buying a significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
July Options	Steep	Average
August Options	Steep	Average

As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral to bearish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Facebook’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Facebook look like and more importantly, how did the markets like these numbers?

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	0.00%	-89.46%	-120.00%	-172.73%
Revenue Growth (Y-O-Y)	37.81%	40.14%	32.29%	32.29%
Earnings Reaction	5.61%	-0.83%	19.12%	-11.69%

Facebook has seen decreasing earnings and increasing revenue figures over the last four quarters. From these numbers, the markets have been indecisive about Facebook’s recent earnings announcements.

P = Poor Relative Performance Versus Peers and Sector

How has Facebook stock done relative to its peers, LinkedIn (NASDAQ:LNKD), Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), and sector?

	Facebook	LinkedIn	Google	Microsoft	Sector
Year-to-Date Return	-10.78%	51.86%	25.58%	25.95%	30.18%

Facebook has been a poor relative performer, year-to-date.

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Conclusion

Facebook allows consumers and businesses around the world to connect and engage through its widely used platform. The stock has struggled to find proper valuation since its initial public offering so its been all over the place. Over the last four quarters, investors in the company have been a bit confused as earnings have decreased and revenues have increased. Relative to its peers and sector, Facebook has been a poor performer year-to-date. WAIT AND SEE what Facebook does in coming quarters.

Navistar's Turnaround Is Ugly And Bumpy, But Making Progress

At the risk of working a little too hard for the metaphor, as a foodie I know that there are certain foods that don't look all that appetizing (celeriac and morels come to mind), but have a lot to offer if you go past the looks. I'm starting to feel that way about Navistar (NYSE:NAV). Although this company's fall from the top was just as ugly as it looked, the turnaround efforts seem to be gaining some traction. The Street has taken a time-out with this name, as it traded down about 5% over the past three months after a big run, but patient investors may yet be able to reap better results as Navistar regains its footing in the medium-duty and heavy-duty truck markets.

Ugly Results, But How Much Does It Matter?

This year is still largely about fixing the problems of the past and getting the company on firm ground for the next upswing in the truck cycle. With that, I don't think investors should care too much about the details of the quarter.

Revenue fell 14% from last year, but did improve 13% sequentially. Truck sales drove all of that sequential improvement, as sales here did fall 18% from last year, but improved 26% from the prior quarter. Engines and parts were down both annually and sequentially – (1%)/(4%) and (8%)/(8%), respectively.

Gross margin did nearly double on a sequential basis, but was down two and a half points from last year and well below forecast, as the company once again had to spend more on warranty-related costs tied to its disastrous foray into self-built engines. With that, EBITDA missed expectations, as did the company's operating and segment losses. Although I would think the Street would probably overlook the warranty-related loss in the engine segment, the worse-than-expected performance in the truck business is a bigger concern.

Class 8 Share Recovering, And Management Looking to Improve Medium-Duty Results

From a high-water mark that saw Navistar hold roughly 30% of the Class 8 North American truck market, the company's share has plunged to a recent retail share of under 14% (as reported by ACT Research and confirmed by management).

That's the bad news. The good news is that order share continues to recover – from 12% in the second quarter to 20% this quarter. Working with Cummins (NYSE:CMI) to offer its engines in Navistar trucks has played a big part in this recovery, but it does remain to be seen how much share the company can ultimately retake from Freightliner (a subsidiary of Daimler), PACCAR (Nasdaq:PCAR), and Volvo (Nasdaq:VOLVY).

With Class 8 orders improving, Navistar is now looking to reverse some declines in medium-duty trucks as well. While Navistar still has about one-quarter of the MD market (down from over 40% two years ago), order share trends (16% in the third quarter) are going the wrong way. The company recently announced a deal with Cummins to offer their 6.7-liter engine in Navistar medium-duty trucks, and I'm optimistic that this can help stem the share declines.

Managing the Boardroom

In attention to shoring up the business, Navistar has also been looking to pacify its large shareholders. The company has put forth a new system whereby a shareholder owning 12% (or more) of the shares can nominate two board members, while a shareholder owning 7% to 12% can nominate one – a compromise that should give a voice to activist investors, but also compel them to maintain their stakes on a long-term basis.

The Bottom Line

I believe management has made a lot of important steps in reversing the bad decisions of the prior Navistar management team. While restoring Navistar to its former glories may be too much to ask, I do believe better results are possible. To that end, I believe Navistar can regain share and outgrow the market over the next five to six years, while also building toward a long-term free cash flow margin in the mid-single digits (on par with PACCAR).

With that (but excluding pension/retirement obligations from the net debt total), on a fully diluted basis these shares appear to be worth close to $39 – or about 20% more than today's price. As I don't currently believe that Navistar will go back above 25% share in Class 8 trucks, outperformance there would certainly lead to a higher fair value down the road.

Disclosure: As of this writing, the author has no financial positions in any companies mentioned.

Emerging Stocks Advance to Three-Week High Led by Russia

Emerging-market stocks rose to a three-week high as energy producers lifted Russian shares and Indian lenders surged on central bank plans to bolster the industry. Poland's WIG20 Index fell the most in the world.

The MSCI Emerging Markets Index added 1.1 percent to 947.67, the highest since Aug. 16. HDFC Bank Ltd. (HDFCB), India's largest lender by market value, surged 8.1 percent. Russian oil producer OAO Rosneft (ROSN) led the Micex Index to the biggest gain in a year. The WIG20 Index tumbled 4.6 percent, the most among 94 gauges tracked by Bloomberg, as Poland unveiled changes to its pension system. The Brazilian real advanced to a three-week high after policy makers sold foreign-exchange swap contracts.

Energy shares led gains among the 10 industries in the measure of developing nations as crude oil jumped. Reserve Bank of India Governor Raghuram Rajan announced a plan yesterday to provide concessional swaps for banks' foreign-currency deposits a move that will boost the authority's reserves by $10 billion, according to Bank of America Merrill Lynch. India's lower house of parliament passed a bill yesterday allowing international holdings in pension funds in a bid to shore up the rupee.

"There's optimism India's new central bank will help get the house in order," said Jonathan Ravelas, the chief market strategist at Manila-based BDO Unibank Inc. "These gains in emerging-market assets indicate some recovery in investor confidence. It's probably a temporary respite until the start of tapering in U.S. stimulus."

Investors also watched U.S. economic reports for clues on how soon the Federal Reserve will start tapering its bond-buying program. Fewer Americans than forecast filed applications for unemployment benefits last week, while growth at U.S. service industries unexpectedly accelerated in August. The employment report for August is due tomorrow.

Economic Growth

Emerging-market economic growth recovered in August from the first contraction since 2009 as business conditions improved in China and Russia, HSBC Holdings Plc said, citing a survey of purchasing managers.

The iShares MSCI Emerging Markets Index exchange-traded fund rose 1.2 percent to $39.40. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, slid 3 percent to 25.89.

Brazil's Ibovespa rose 1.2 percent, reversing a decline of as much as 0.9 percent, as Petroleo Brasileiro SA (PETR3), Brazil's state-run crude producer, surged. The real added 1.5 percent.

Russia, Poland

The Micex Index gained 3.4 percent, the most since September 2012 and the best-performance among 17 markets in eastern Europe tracked by Bloomberg. OAO Rosneft, Russia's biggest oil producer, added 4.3 percent. OAO Gazprom (OGZD), the nation's largest company, jumped 6 percent.

The WIG20 index slid 4.6 percent. Bank Handlowy SA dropped 8.4 percent, while Globe Trade Centre SA, a property developer, lost 8.1 percent. Poland will take over and cancel government bonds held by its privately managed pension funds, stopping short of fully "nationalizing" the system as it seeks to curb public debt, Prime Minister Donald Tusk said yesterday.

The lira touched a record low against the dollar as measures taken by the central bank failed to allay concern Turkey's economy will be hurt if its neighbor Syria is attacked in a U.S.-led military strike.

Indian stocks surged the most among major Asian markets, as HDFC led by the biggest rally in lenders since May 2009. The rupee jumped 1.5 percent after the new central bank governor took steps to boost dollar supply.

Chinese Shares

China's stocks fell for the first time in five days, led by material producers and steelmakers, after valuations for the benchmark index climbed to the highest level since June. Aluminum Corp. of China Ltd. and Jiangxi Copper Co. (358) declined at least 1.7 percent, sending a gauge of material producers to the biggest loss among industry groups.

The won dropped, reversing an earlier gain, on speculation authorities intervened to weaken the currency after it reached the strongest level in almost four months.

The premium investors demand to own emerging-market debt over U.S. Treasuries fell 10 basis points, or 0.1 percentage point, to 344 basis points, according to JPMorgan Chase & Co.

Surprisingly Enough, Prepaid Phone Plans Have Not Hurt High-End Device Makers

According to the NPD group, in the first quarter of 2013, y-o-y smartphone sales increased by 42 percent, with 36% of the volume increase coming from prepaid smartphone sales. In fact, y-o-y prepaid smartphone unit sales doubled in Q1 and accounted for 32 percent of total smartphone unit sales, which is an 11 point increase y-o-y and a 10% point sequential increase from the record-high share of 22% reached in Q4 2012.

The prepaid phone market has one simple purpose: To provide wireless service to people who are unable to secure a regular contract account or people who don't want one.

Prepaid plans enable people to pay for their device in cash and then choose any kind of plan they want. And because users pay up-front for the device, they tend to buy a lower priced device. People who simply want to talk and don't ask much more from their smartphone, are apt to choose this route.

In Europe this is extended to prepaid sim cards as well. In other words, you buy a device and then choose a carrier by buying a prepaid sim card. In this particular case you don't have any monthly bills at all. If you don't make many calls -- but mostly receive calls -- you can go by with a 10 euro prepaid sim card for months. Here is an example of a sim card for Blackberry (BBRY) phones.

Obviously, as more and more people go on a prepaid plan, the percentage of people that will fork out $700 for a high end phone will be less, right?

That might be true for some consumers, however it also works the other way around. In other words, because people have a lower fixed monthly bill, they can afford to pay a little extra for a better device up-front.

And indeed, as far as the U.S. market is concerned, this is exactly what has been happening. NPD tells us that "both LG and Apple (AAPL) made significant inroads into the segment since Q1 2012, with LG's! unit share doubling and Apple's unit share increasing fourfold".

In fact NPD tells us that the Apple iPhone 4S was among the two top-selling phones in 2012. Consumers looking at prepaid phones look for value, and that does not necessarily mean cheap or obsolete phones, says NPD group.

So in the prepaid market, surprisingly enough, Apple has actually scored points, despite the fact that it's a high-end high priced device maker. LG however is probably the biggest winner, because NPD tells us it doubled its market share, while Samsung (SSNLF.PK) has remained in the number one position having retained its market share. The biggest surprise of all however is that Nokia (NOK) is not on this list.

(click to enlarge)

The bottom line is that the prepaid phone market is not necessarily bad for smartphone makers. Surprisingly enough, people are willing to pay more money up front for a high-end device, in exchange for a lower phone bill.

Source: Surprisingly Enough, Prepaid Phone Plans Have Not Hurt High-End Device Makers

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Baird Grabs 7 Wells Fargo Advisors With $1.9B

Baird said early Tuesday that it added seven veteran financial advisors in Houston, all of whom are legacy A.G. Edwards & Sons advisors recently with Wells Fargo Advisors (WFC). The advisors have more than $1.9 billion in client assets and focus on retirement planning for executives in the energy business.

To enhance its support of such retirement work, the employee-owned broker-dealer also announced that it rolled out Baird Retirement Management, a program to help advisors nationwide boost their retirement planning and investment consulting services.

“Baird reminds legacy A.G. Edwards advisors of many of the characteristics of what they loved about A. G. Edwards,” before it became part of Wachovia and Wells Fargo, said Jarrett Kovics (left), director of the Texas market for Baird Private Wealth Management, which now includes about 715 advisors and more than $80 billion in assets, in an interview with AdvisorOne.

“They have a strong memory of what they felt was most important” in the culture of their firm, explained Kovics, who joined Baird from Morgan Stanley Smith Barney (MS) in 2010. “We are different from A.G. Edwards, but the cultural similarities get [advisors] to the table … and it becomes a really good fit for them and the quality of their work.”

Joining Baird in Houston are Richard Ashcroft and Darrell Pesek of the Ashcroft Pesek Group; Greg Evans, Stephen Allain and Jarred Crumley of the Evans-Allain-Crumley Group; John Barnfield; and William Barrow.  They will work out of Baird’s second office in Houston, which is located in the Memorial City district, where many energy firms are based. “You can’t find real estate there, since there’s been so much expansion and growth,” Kovics said.

In April, Baird recruited a team of seven employee advisors with about $770 million in client assets from Wells Fargo in Houston. It also opened its second office then and hired former UBS (UBS) branch manager John S. Hantak to lead the new location, which also caters to high-net-worth energy professionals and their retirement needs.

“Baird Retirement Management, which we’ve been working on for a while, could support  teams of financial advisors with a retirement focus on technology companies in Silicon Valley or steel companies in Upstate New York,” Kovics said. “The resources emphasize marketing and other materials specific to retirement planning … it’s another attractive selling point for Baird.”

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Check out Baird Expands Recruiting of Trainees, Advisors.

3 Reasons Why You Need Inflation Protection Now

All this talk from A. Gary Shilling and others about the coming danger of deflation? Bleh.

That’s the message delivered in a recent whitepaper from Seth Masters.

The chief investment officer of Bernstein Global Wealth Management says deflation, that “persistent drop in the value of assets,” is unlikely any time soon.

Even if it does, Masters notes that investors already protect themselves from deflation through their bond purchases.

Rather inflation, although dire warnings of which have yet to materialize, is still the threat, Masters argues, and even modest amounts of inflation can be harmful—in some ways, even more so than deflation.  

“Inflation-protected assets will always have a place in investor’s portfolios because of heightened uncertainty, the availability of better inflation hedges and reasonable costs for inflation protection,” he writes. “While rare, inflationary periods are notoriously difficult to predict. History shows that major bouts of inflation often strike suddenly and without warning, which is what makes inflation particularly dangerous.”

He sees three key reasons why an allocation to inflation protection is even more compelling today: heightened uncertainty, the availability of better inflation hedges, and reasonable costs for inflation protection.

1). More Uncertainty — “Even in the best of times, there’s no reliable forecast of the future path of inflation,” he writes. “Today, however, uncertainty about economic policy and its impact on the price level have become especially high, mainly because no one can confidently predict exactly what will happen as the enormous monetary expansion since the global financial crisis is ultimately unwound.”

On the one hand, some view inflation as inevitable, given the pervasive climate of supportive monetary policy across developed economies, Masters notes. On the other hand, mixed economic data have kept the specter of deflation alive.

“Given the experimental and opportunistic nature of central bank policy measures, economists’ outlook for the breadth of possible inflation outcomes is highly divergent today. This heightens the risk of surprises, and makes inflation protection all the more vital.”

2). Better Hedges — Fortunately, better inflation hedges are available today than existed in past inflationary periods, he explains.

“From a portfolio construction standpoint, inflation hedges can be divided into two categories that complement a traditional portfolio: real bonds that protect risk-mitigating assets such as traditional bonds, and real assets that protect return-seeking assets such as stocks.”

Inflation-linked bonds such as Treasury Inflation-Protected Securities (TIPS) can provide very effective inflation protection for the bond portion of the asset mix. For taxable accounts, he also recommends a muni inflation strategy that layers inflation protection onto a municipal bond portfolio.

“Real assets, such as commodity futures, natural resource stocks, and inflation-sensitive REITs, generate cash flows tightly linked to important components of the overall price level. Shares in mining and other natural resource stocks, as well as some real estate companies, can also benefit from rising prices. Note that most individual real assets are quite volatile, and so it makes sense to diversify a real asset portfolio across a wide range of inflation-sensitive investments. We also see real assets as a good investment.”

3). Reasonable Costs — Reasonable costs represent the final rationale for adopting proactive inflation protection today, Masters concludes. TIPS are fairly priced, with a breakeven rate—or the difference in yield between inflation-protected securities and nominal bonds of the same maturity—of less than 2% for 10-year maturities.

“That’s not much of a premium to purchase inflation protection, especially compared to a high of 2.6% last fall when the Fed’s third round of quantitative easing was announced. Real assets are also sensibly priced relative to their fundamentals.”