Why Icahn-Backed Transocean Is Still Attractive for Long-Term Investors

By Sarfaraz A. Khan and Gohar Yousuf

The world's largest offshore drilling contractor and one of the leading drilling management services providers Transocean (RIG) has joined the coveted S&P-500 Index on Monday. The company has replaced the struggling PC manufacturer Dell. This comes just a few days after Transocean announced a five-year contract with Chevron (CVX) to construct a new state-of-the art ultra-deepwater drillship. The delivery of the vessel is expected in the second quarter of 2016. The vessel will require investment of $725 million and will bring $1.1 billion as revenues. The construction of the drillship is expected to begin in fourth quarter of 2014 in Okpo, South Korea, where the company has a long history of operations. It has developed five enterprise-class drill ships at that facility and it currently has six other ultra-deepwater rigs under construction.

Going Towards Efficiency

In its previous fleet status report for the month of October, Transocean revealed that since Sept. 18, it has acquired new contracts worth $2.0 billion, which includes the new Chevron contract mentioned above. Back in 2012, Transocean reported a massive backlog of $27 billion, the biggest in the industry. This has significantly improved the company's visibility. This year, it has focused more on improving the profitability of its backlog.

Last year, Transocean started its initiative for improving its organizational efficiency by cutting costs and focusing on higher margin operations. The business has been selling non-core assets as it consolidates its operations. Last year, Transocean sold 38 older rigs for $1.05 billion as it shifted its concentration towards ultra-deepwater and high-specification rigs. The benefits from these measures will start to flow from 2014 and will translate into savings of around $300 million.

Industry's Outlook

The demand for deep! water oil exploration and production has been increasing due to the two main factors. First, the onshore resources have been extensively used for decades and there simply isn't a lot left to explore, particularly in the developed world.

Second, most of the unexplored and lucrative areas lie in the Middle East and Africa, a region which is known for its unstable business environment. For instance, Mozambique is home to enormous gas reserves and has been going on a path to prosperity over the last eight years, which is evident in its 7% GDP growth rates. Leading oil companies, such as Eni SpA (E) and Anadarko Petroleum (APC) have billions at stake in the country. However, the sudden termination of a peace deal by a rebel group recently has raised question marks over the country's ability to attract investment.

Meanwhile, the global oil demand will continue to increase and is expected to touch 96.7 million barrels a day by 2018. Due to these factors, oil companies have been shifting their focus towards offshore, particularly deepwater reserves.

Transocean is in a good position to capitalize on the trend of growing demand of deepwater drilling. The business gets almost 68% of its revenues from deepwater and ultra-deepwater assets. Transocean boasts of a fleet of 29 ultra-deepwater rigs which represent more than one-fifth of the industry's total global fleet. The company has a total backlog of nearly $30 billion, including $2 billion from new contracts mentioned earlier. Its ultra-deepwater rigs make up around 70% of its total backlog. These ultra-deepwater rigs look more promising than other deepwater rigs as they have higher revenue efficiency and utilization rates. Transocean's nearest competitor and the world's second largest ultra-deepwater operator, Seadrill (SDRL), has around 15 ultra-deepwater rigs.

The Carl Icahn Factor

Transocean is also backed by Carl Icahn of Icahn Capital Management. Icahn has been pushing for a higher dividend payout. The famed activi! st invest! or has increased its stake in Transocean by 1.3 million shares from the end of last quarter to 21.5 million shares, or 6% of the company. Moreover, the company's board also includes Icahn's backed members.

Conclusion

Therefore, due to the increasing demand of ultra-deepwater drilling, which is Transocean's core area of operation, and the company's focus on efficiency and margin enhancement, Transocean looks poised for long-term growth. The fact that Carl Icahn yields considerable influence in the company's board should give confidence to potential investors as the business will likely reward shareholders with dividends and buybacks. However, readers should note that Goldman Sachs has recently downgraded Transocean from Neutral to Sell with a $50 price target. This follows just a few days after Argus also downgraded Transocean from Buy to Hold.

In the last six months, Transocean's shares have dropped by 6%, as opposed to S&P 500 ETF (SPY) and Seadrill that have risen by 11% and 23%, respectively. Due to the recent downgrades, its shares will likely remain under pressure in the short term. However, a further decline could create a buying opportunity. Its shares are certainly not expensive at the moment as they are trading 10.5 times their trailing earnings, as opposed to the industry's average of 14 times. Moreover, at these price levels, Transocean gives an attractive yield of 4.65%, considerably above the industry's average of 2.5%.

Notes:

Transocean Fleet Status Report October 2013 (Pdf File)

Disclosure: This article was written by Sarfaraz A. Khan, with valuable contribution from Gohar Yousuf, research assistant at Half Bridge Business Review. Neither Sarfaraz A. Khan, nor Gohar Yousuf have any positions in the stock(s) mentioned in this article.

Does Chesapeake Have More Upside Potential?

With shares of Chesapeake Energy Corporation (NYSE:CHK) trading at around $21.87, is CHK an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

Everything covered in this article will be important in regards to the future potential for Chesapeake, but there is one factor that stands out above the rest, which is heavy insider buying over the past month. It's important to understand that there has been heavy insider selling throughout the broader market recently, not heavy insider buying. Furthermore, when insiders buy with conviction, it almost always leads to higher stock prices down the road. This factor alone makes Chesapeake appealing.

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Chesapeake has shown steady revenue improvements on an annual basis, but the bottom line has been inconsistent. A lot of this had to do with heavy spending. However, with a new CEO in place, Chesapeake is more focused on fiscal responsibility, mostly by paying a lot more attention to its most profitable assets. It should also be noted that management has promised to return more capital to shareholders as soon as possible.

Q1 is old news, but for a quick overview to show the direction of the company, below are several important points:

41.5 percent revenue increase year-over-year Average daily production increased 7.5 percent year-over-year Natural gas equivalent realized price increased 10.9 percent year-over-year Production expenses decreased 18.1 percent year-over-year Operation cash flow increased 237.2 percent year-over-year

It looks as though Chesapeake is heading in the right direction, and direction is everything on Wall Street.

The chart below shows some basic fundamentals for Chesapeake, Anadarko Petroleum Corporation (NYSE:APC), and Devon Energy Corporation (NYSE:DVN).

	CHK	APC	DVN
Trailing P/E	N/A	64.65	N/A
Forward P/E	10.64	16.52	11.21
Profit Margin	-5.13%	5.11%	-22.15%
ROE	-2.65%	3.43%	-9.30%
Operating Cash Flow	3.49B	8.95B	4.93B
Dividend Yield	1.60%	0.40%	1.50%
Short Position	11.40%	2.00%	2.50%

Let's take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

Chesapeake has performed well over the past year, and it has outperformed its peers year-to-date as well over the past month.

	1 Month	Year-To-Date	1 Year	3 Year
CHK	14.46%	33.15%	43.34%	-1.66%
APC	4.32%	19.16%	52.91%	102.6%
DVN	1.20%	10.54%	0.26%	-8.89%

At $21.87, Chesapeake is trading above its averages.

50-Day SMA	20.01
200-Day SMA	19.13

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Chesapeake is close to the industry average of 0.50. The debt-to-equity ratio is also likely to improve in the future.

	Debt-To-Equity	Cash	Long-Term Debt
CHK	0.76	33.00M	13.63B
APC	0.66	3.74B	14.76B
DVN	0.62	6.52B	12.15B

E = Earnings Have Been Inconsistent

Earnings have been inconsistent over the years, which has had a lot to do with heavy spending. Chesapeake is now more focused on efficiency. As far as revenue goes, the pace has slowed, but there have still been annual improvements for three consecutive years. This is a positive considering many companies throughout the broader market suffered revenue setbacks in 2012.

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in millions	11,629	7,702	9,366	11,635	12,316
Diluted EPS ($)	1.14	-9.57	2.51	2.32	-1.46

When we look at the last quarter on a year-over-year basis, we see improvements in revenue and earnings. However, revenue and earnings both declined on a sequential basis.

Quarter	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012	Mar. 31, 2013
Revenue ($) in millions	2,419	3,389	2,970	3,539	3,424
Diluted EPS ($)	-0.11	1.24	-3.19	0.39	0.02

Now let's take a look at the next page for the Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

Conclusion

Chesapeake is the second largest natural gas producer in the United States, it has improved oil production, and the right management seems to be in place. At the moment, it looks as though it's all systems go. However, Chesapeake won't be resilient if a deflationary environment is ahead of us. Many people think inflation is the big threat, but the Federal Reserve has been fighting deflation for years for a reason.

Compass Diversified Names New CFO

Westport, Conn.-based Compass Diversified Holdings (NYSE: CODI  ) will soon have a new CFO.

On Thursday, the diversified holding company of manufacturing, distribution, consumer products, and services businesses announced that current Chief Financial Officer James J. Bottiglieri intends to retire from the company on November 30, 2013. At that time, he will be replaced by newly promoted CFO Ryan J. Faulkingham (although Bottiglieri will remain on the Board of Directors).

In a statement, Faulkingham pronounced himself "proud and honored to be appointed as CODI's CFO."

In a filing with the SEC Thursday, Compass revealed that, upon taking his new position, Faulkingham will be paid an annual base salary of $335,000, plus an unspecified annual bonus to be "based on certain performance objectives."

The filing also reveals that, technically, this promotion is taking the form of a "secondment." An employee of Compass's management company, Compass Group Management LLC, Faulkingham will essentially be leased out by the managing LLC to the publicly traded company in the capacity of Compass's CFO, receiving at least part of his salary from Compass.

Apple's iWatch Conundrum

News from the Japanese trademark office that Apple (NASDAQ: AAPL  ) has applied to trademark "iWatch" is a strong indication that the product will ultimately come to fruition. While the release of a new device in a new product segment has the potential to be a win for Apple, there are concerns that investors should understand. As rumors continue to circulate, and anticipation builds, the stakes for Cupertino are likely on the rise.

In the video below, Fool.com contributor Doug Ehrman discusses the pros and cons of the iWatch, and how it positions Apple relative to Google (NASDAQ: GOOG  ) in the wearable tech space.

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Broadcom Guidance Sinks Shares

Broadcom Corp. (NASDAQ: BRCM) reported third quarter 2013 results after markets closed on Tuesday. For the quarter, the semiconductor maker posted adjusted diluted earnings per share (EPS) of $0.76 on revenues of $2.15 billion. In the same period a year ago, the company reported EPS of $0.79 on revenues of $2.09 billion. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.69 EPS and $2.13 billion in revenues.

On a GAAP basis, Broadcom reported quarterly diluted EPS of $0.55, compared with EPS of $0.38 in the same period last year. GAAP net income included a one-time gain of $75 million, a charitable contribution of $25 million and $12 million in restructuring charges.

The company's CEO said:

Looking forward, we are taking the necessary steps to tightly manage the business while focusing on strategic initiatives, including LTE, data center innovation and driving the next generation of home video with HEVC [high-efficiency video coding].

For the fourth quarter of the 2013 fiscal year, Broadcom expects revenue of $1.975 billion, plus or minus 3% and gross margins down in a range of 0.5% to 1% compared with the third quarter. The consensus estimate calls for fourth quarter EPS of $0.59 on revenues of $2.13 billion. For the full year, the consensus estimate calls for EPS of $2.62 on revenues of $8.36 billion.

Broadcom's fourth-quarter forecast will cancel the top and bottom line beats the company posted for the third quarter. Lower pricing for high-end mobile devices from all manufacturers has taken a particular toll on Broadcom. Shares are down nearly 20% over the past 12 months, while peers like Qualcomm Corp. (NASDAQ: QCOM), Texas Instruments Inc. (NASDAQ: TXN), and Nvidia Corp. (NASDAQ: NVDA) are up around 17%, 45%, and 30%, respectively.

Broadcom shares are trading down about 6.6% at $25.35 in after-hours trading Tuesday, in a 52-week range of $23.25 to $37.85. Thomson Reuters had a consensus analyst price target of around $32.60 before today's report.

5 Best Clean Energy Stocks To Own Right Now

NV Energy (NYSE: NVE  ) � is a selection for the real-money Inflation-Protected Income Growth portfolio. Like any investment, it needs to be reviewed from time to time to see if it's still worth owning. In the brief video below, portfolio manager Chuck Saletta reviews its valuation, balance sheet, and dividends, and decides whether to hold on to the stock or let it go.

To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, simply click here.

Will Exelon's troubles soon be over?
As the nation moves increasingly toward clean energy, Exelon is perfectly positioned to capitalize on having the largest nuclear fleet in North America. This strength, combined with an increased focus on balance sheet health and its recent merger with Constellation, places Exelon and its resized dividend on a short list of the top utilities. To determine if Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for instant access.

5 Best Clean Energy Stocks To Own Right Now: X-Rite Incorporated(XRIT)

X-Rite, Incorporated develops, manufactures, markets, and supports color solutions through measurement instrumentation systems, software, color standards, and services in the United States, Europe, and the Asia Pacific. Its measurement instrumentation systems include colorimeters utilized to measure printed colors on packages, labels, textiles, and other materials; spectrophotometers, which measure light at various points over the visible spectrum; densitometers that are instruments that measure optical or photographic density, compare such measurement to a reference standard, and signal the result to the operator of the instrument; spectrodensitometers, which combine the function of a densitometer with the functions of a colorimeter and a spectrophotometer; and sensitometers that are used to expose various types of photographic film for comparing with a reference standard. The company also provides software and databases that allow the users to collect and store color mea surement data, compare that data to established standards and databases, communicate color results, and formulate colors from a database. In addition, it offers standards product line comprising products for the communication and reproduction of color digitally or in print for establishing color standardization; and support services that provide customers, an access to color professional specialists, training, and technical support through color seminars, classroom workshops, on-site consulting, and interactive media development, as well as service repair operations. Further, the company provides retail paint matching systems for home centers, mass merchants, hardware stores, and paint retailers. It serves printing, packaging, photography, graphic design, video, automotive, paints, plastics, textiles, and dental and medical markets through sales personnel, independent sales representatives, and dealers. The company was founded in 1958 and is headquartered in Grand Rapids, Mi chigan.

5 Best Clean Energy Stocks To Own Right Now: Amsurg Corp.(AMSG)

AmSurg Corp., through its wholly owned subsidiaries, engages in the development, acquisition, and operation of ambulatory surgery centers in partnership with physicians in the United States. The company?s surgery centers perform colonoscopy and other endoscopy procedures in the area of gastroenterology; cataracts and retinal laser surgery in the area of ophthalmology; and knee and shoulder arthroscopy and carpal tunnel repair in the area of orthopedics. As of December 31, 2010, it owned interest in 204 surgery centers in 33 states and the District of Columbia, including 140 centers performed gastrointestinal endoscopy procedures, 37 centers performed ophthalmology surgery procedures, 19 centers were multiple specialties, and 8 centers performed orthopaedic procedures. AmSurg Corp. markets its surgery centers directly to patients; and referring physicians and third-party payors, such as health maintenance organizations, preferred provider organizations, other managed care o rganizations, and employers. The company was founded in 1992 and is headquartered in Nashville, Tennessee.

Advisors' Opinion:

• [By Seth Jayson]

  AmSurg (Nasdaq: AMSG  ) is expected to report Q1 earnings on April 24. Here's what Wall Street wants to see:

  The 10-second takeaway
  Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict AmSurg's revenues will grow 13.6% and EPS will grow 4.0%.

• [By Tom Lydon]

  Top holdings based on the index include Acadia Healthcare Companies (ACHC), Amsurg Corporation (AMSG), Brookdale Senior Living (BKD), Clarcor (CLC) and Community Health Systems (CYH).

10 Best Growth Stocks To Own For 2014: Hilltop Holdings Inc. (HTH)

Hilltop Holdings Inc., through its subsidiary, NLASCO, Inc., operates as a property and casualty insurance company in the United States. The company�s personal product line includes homeowners, dwelling fire, manufactured home, flood, and vacant insurance policies; and commercial product line consists of commercial, builders risk, builders risk renovation, sports liability, and inland marine insurance policies. It distributes its insurance products through a network of independent agents and managing general agents. The company was formerly known as Affordable Residential Communities Inc. and changed its name to Hilltop Holdings Inc. in July 2007. Hilltop Holdings Inc. was founded in 1948 and is headquartered in Dallas, Texas.

Advisors' Opinion:

• [By Roberto Pedone]

  Hilltop (HTH) operates as a holding company for PlainsCapital Bank that provides business and consumer banking services in Texas. This stock closed up 8.7% at $17.96 in Monday's trading session.

  Monday's Volume: 2.29 million
  
  Three-Month Average Volume: 414,214
  
  Volume % Change: 436%

  From a technical perspective, HTH gapped up sharply higher here back above its 50-day moving average of $16.52 with strong upside volume. This move pushed shares of HTH into breakout and new 52-week-high territory, since the stock closed above some previous resistance at $17.63.

  Traders should now look for long-biased trades in HTH as long as it's trending above Monday's low of $17.07 and then once it sustains a move or close above its new 52-week high at $18.23 with volume that this near or above 414,214 shares. If we get that move soon, then HTH will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $20 to $23.

5 Best Clean Energy Stocks To Own Right Now: Jp Morgan Co Inc(JPM.L)

JPMorgan Chase & Co., a financial holding company, provides various financial services worldwide. Its Investment Bank segment offers various investment banking products and services, including advising on corporate strategy and structure, capital-raising in equity and debt markets, risk management, market-making in cash securities and derivative instruments, prime brokerage, and research services for corporations, financial institutions, governments, and institutional investors. The company?s Commercial Banking segment provides lending, treasury, investment banking, and asset management services to corporations, municipalities, financial institutions, and not-for-profit entities. Its Treasury and Securities Services segment offers cash management, trade, wholesale card, and liquidity products and services to small and mid-sized companies, multinational corporations, financial institutions, and government entities. This segment also holds, values, clears, and services secu rities, cash, and alternative investments for investors and broker-dealers; and manages depositary receipt programs. The company?s Asset Management segment provides investment and wealth management services to institutions, retail investors, and high-net-worth individuals. This segment offers investment management in equities, fixed income, real estate, hedge funds, private equity, and liquidity products, as well as trust and estate, banking, and brokerage services to high-net-worth clients; and retirement services for corporations and individuals. Its Retail Financial Services segment offers consumer and business, and mortgage banking products and services that include checking and savings accounts, mortgages, home equity and business loans, and investments. The company?s Card Services and Auto segment provides payment processing and merchant acquiring services. JPMorgan Chase & Co. was founded in 1823 and is headquartered in New York, New York.

5 Best Clean Energy Stocks To Own Right Now: AGL Energy (AGK.AX)

AGL Energy Limited operates as an integrated renewable energy company in Australia. It buys and sells natural gas, electricity, and energy-related products and services to residential and business customers; constructs and/or operates power generation and energy processing infrastructure; develops and operates natural gas production and storage facilities; and explores, extracts, produces, and sells coal seam gas. The company also provides energy efficiency and carbon management services; invests, explores, develops, and produces gas tenements; and explores and develops geothermal renewable energy sources. It primarily generates electricity from coal, gas, hydel, wind, landfill gas, biomass, biogas, solar, and diesel; and retails natural gas, electricity, and energy-related products and services to 3.47 million customer accounts in New South Wales, Victoria, South Australia, and Queensland. The company is headquartered in North Sydney, Australia.

Will Google Continue Its Explosive Run Post-Earnings?

With shares of Google (NASDAQ:GOOG) trading around $1,010, is GOOG 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

Google is a global technology company focused on improving the ways people engage with information. The business is based on the following areas: search, advertising, operating systems and platforms, and enterprise. The company generates revenue primarily by delivering online advertising. Google is a search giant with most of the market share, largely because of its execution and delivery. An increasing number of consumers and companies worldwide are coming online, which will surely increase the amount of eyes on the company's ads and, in turn, advertising revenue. At this rate, look for Google to remain on top of the Internet world.

Google shares are up after reaching an all-time high in after-hours trading on Thursday on third-quarter earnings that beat expectations. Strength in Google's search sector, which makes up 92 percent of the company's overall business, was credited for the growth, according to CNNMoney. Earnings came in at $10.74 per share and sales grew 12 percent year-over-year to $14.9 billion. Google still showed losses in its mobile search and Motorola businesses, however.

T = Technicals on the Stock Chart Are Strong

Google stock has been exploding to the upside in the past several years. The stock is currently trading near all-time highs and looks poised to continue. 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, Google is trading above its rising key averages, which signals neutral to bullish price action in the near-term.

Source: Thinkorswim

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Google Options	20.56%	0%	0%

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

	Put IV Skew	Call IV Skew
November Options	Flat	Average
December Options	Flat	Average

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

E = Earnings Are Increasing 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 Google’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Google look like and, more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	21.08%	-5.53%	13.6%	17.06%
Revenue Growth (Y-O-Y)	11.94%	15.52%	31.23%	24.87%
Earnings Reaction	13.76%*	-1.55%	4.43%	5.49%

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

* As of this writing

P = Average Relative Performance Versus Peers and Sector

How has Google stock done relative to its peers – Yahoo (NASDAQ:YHOO), Microsoft (NASDAQ:MSFT), and Baidu (NASDAQ:BIDU) — and sector?

	Google	Yahoo!	Microsoft	Baidu	Sector
Year-to-Date Return	42.21%	66.91%	30.63%	63.96%	47.93%

In a strong sector, Google has been an average relative performer, year-to-date.

Conclusion

Google is an Internet giant that provides valuable search and advertising services to a growing user base worldwide. A recent earnings release has markets buzzing about the company. The stock has been exploding higher in recent years and is currently trading near all-time high prices. Over the last four quarters, earnings and revenues have been rising, which has investors excited about recent earnings announcements. Relative to its strong peers and sector, Google has been an average year-to-date performer. Look for Google to OUTPERFORM.

Casey's General Stores's Upcoming Earnings: What You Need To Know

Casey's General Stores (Nasdaq: CASY  ) is expected to report Q4 earnings around June 12. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Casey's General Stores's revenues will expand 4.5% and EPS will expand 3.3%.

The average estimate for revenue is $1.83 billion. On the bottom line, the average EPS estimate is $0.62.

Revenue details
Last quarter, Casey's General Stores reported revenue of $1.66 billion. GAAP reported sales were 5.3% higher than the prior-year quarter's $1.58 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $0.42. GAAP EPS of $0.40 for Q3 were 7.0% lower than the prior-year quarter's $0.43 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 15.0%, 50 basis points better than the prior-year quarter. Operating margin was 1.9%, 30 basis points worse than the prior-year quarter. Net margin was 0.9%, 20 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $7.30 billion. The average EPS estimate is $2.90.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 121 members out of 134 rating the stock outperform, and 13 members rating it underperform. Among 36 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 34 give Casey's General Stores a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Casey's General Stores is hold, with an average price target of $57.40.

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Add Casey's General Stores to My Watchlist.

5 Best Low Price Stocks To Own For 2014

According to the GuruFocus Value Screen for finding companies with Historical Low Price/Sales Ratios, there are currently 23 U. S. companies featured, including many familiar brand names. Here are three popular brand companies and a gold producer with historical low price/sales ratios, along with billionaire trading details as of the second quarter of 2013.

Weight Watchers International Inc. (WTW)

Predictability: 4 Stars

The current share price is around $37.74, which is 6.1% above its 52-week high. The P/S ratio is 1.19; its 10-year P/S low is 0.93. The Yield is 1.85%.

Down 28% over 12 months, Weight Watchers International Inc. has a market cap of $2.12 billion.

Weight Watchers International Inc. is a provider of weight management services, operating globally through a network of company-owned and franchise operations.

Guru Action: As of June 30, 2012, the top Guru stakeholder is Third Avenue Management with 0.64% of shares outstanding or 360,000 shares.

5 Best Low Price Stocks To Own For 2014: Deer Consumer Products Inc.(DEER)

Deer Consumer Products, Inc., through its subsidiaries, engages in the design, manufacture, and sale of small home and kitchen electronic appliances. The company offers blenders and juice extractors, soy milk makers, food processors, popcorn makers, meat grinders, coffee machines, and hot water kettles primarily under the Deer brand name, as well as under one store brand for a retailer?s private label programs. It sells its products through agents to retailers in the People?s Republic of China. The company also operates as an original design manufacturer and original equipment manufacturer to provide its products to consumer products companies and electrical appliance manufacturers internationally. Deer Consumer Products, Inc. is based in Shenzhen, the People?s Republic of China.

5 Best Low Price Stocks To Own For 2014: Tumi Resources Limited(TM.V)

Tumi Resources Limited, a junior mineral exploration company, engages in the acquisition and exploration of precious metals on mineral properties located in Mexico and Sweden. It primarily explores for silver, as well as gold, tungsten, and base metal deposits. The company was formerly known as Planex Ventures Ltd. and changed its name to Tumi Resources Limited in May 2002. Tumi Resources Limited was incorporated in 2000 and is headquartered in Vancouver, Canada.

5 Best Financial Stocks To Own For 2014: Vernalis Grp(VER.L)

Vernalis plc, a development stage pharmaceutical company, involves in the research, development, and commercialization of pharmaceutical products for a range of medical disorders through structure and fragment-based drug discovery. The company?s marketed product includes Frovatriptan, a 5-HT1B/1D receptor agonist for an acute oral treatment of migraine headache and its associated symptoms. Its product pipeline for central nervous system diseases include V158866 for the treatment of a range of pain disorders, which is in Phase I trial; and V81444, an A2A receptor antagonists for the treatment for Parkinson?s disease, which is in pre-clinical stage development. The company?s product pipeline for treating oncology diseases comprises AUY922, a novel intravenous Hsp90 inhibitor for treating a range of cancers in Phase II trial; CHR2797, an orally active aminopeptidase inhibitor that halts cell growth and causes apoptosis in cancer cell lines under Phase II trial; HSP990, an orally available Hsp90 inhibitor for treating various cancers in Phase I trial; and V158411, a molecule to improve the effectiveness against cancer cells of a range of cytotoxic agents, such as gemcitabine and irinotecan under pre-clinical stage development. Vernalis also offers V85546, a macrophage elastase inhibitor for treating inflammation, including COPD, multiple sclerosis, and liver fibrosis in Phase I trial; and RPL554, a long acting inhibitor of phosphodiesterase 3 and phosphodiesterase 4, for the treatment of asthma and allergic rhinitis. It has operations primarily in Europe and North America. The company was founded in 1986 and is headquartered in Winnersh, the United Kingdom.

5 Best Low Price Stocks To Own For 2014: Bridgeline Digital Inc.(BLIN)

Bridgeline Digital, Inc. engages in the development of Web experience management (WEM) product and interactive technology solutions that help organizations to optimize business processes. Its iAPPS product suite includes iAPPS Content Manager that allows non-technical users to create, edit, and publish content through a browser-based interface; iAPPS Commerce, an online B2B and B2C eCommerce solution, which allows users to maximize and manage various aspects of commerce initiatives; and iAPPS Marketier, a marketing lifecycle management solution that comprises customer transaction analysis, email management, surveys and polls, event registration, and issue tracking to measure campaign return on investment and client satisfaction. The company also provides iAPPS Analyzer to manage, measure, and optimize Web properties by recording detailed events and mine data within a Web application for statistical analysis; and iAPPS Rapid Site for building custom Websites. It delivers it s iAPPS product suite through cloud-based software as a service business model or via a traditional perpetual licensing business model. The company?s end-to-end interactive technology solutions consist of digital strategy, user-centered design, Web application development, SharePoint development, rich media development, search engine optimization, and Web application hosting management. Bridgeline Digital serves various markets, such as financial services, consumer products and goods, health services and life sciences, high technology (software and hardware), retail brand names, transportation and storage, associations and foundations, and the U.S. Government through its direct sales force. The company was formerly known as Bridgeline Software, Inc. and changed its name to Bridgeline Digital, Inc. in March 2010. Bridgeline Digital, Inc. was founded in 2000 and is based in Burlington, Massachusetts.

5 Best Low Price Stocks To Own For 2014: Twenty-First Century Fox Inc (FOXA)

News Corporation, incorporated on October 23, 1979, is a diversified global media company. The Company operates in six segments: Cable Network Programming; Filmed Entertainment; Television; Direct Broadcast Satellite Television; Publishing, and Other. Cable Network Programming produces and licenses news, business news, sports, general entertainment and movie programming for distribution through cable television systems and direct broadcast satellite operators in the United States and internationally. Filmed Entertainment engages in the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media worldwide, and the production and licensing of television programming worldwide. Television is engaged in the operation of broadcast television stations and the broadcasting of network programming in the United States. It engages in the direct broadcast satellite business through its subsidiary, SKY Italia. It also owns significant equity interests in BSkyB and Sky Deutschland AG (Sky Deutschland), which are engaged in the DBS business. The Company is engaged in the publishing business, primarily through its subsidiaries News International, News Limited, Dow Jones, The New York Post, The Daily, Harper Collins Publishers and News America Marketing Group. Its digital media businesses include IGN Entertainment, Inc. (IGN), and other Internet properties. In November 2012, News Corporation, through a wholly owned subsidiary, completed acquisition of ESPN's partnership interest in ESPN STAR Sports.

During the fiscal year ended June 30, 2011 (fiscal 2011), it acquired an additional interest in Asianet Communications Limited (Asianet), acquired Wireless Generation. In June 2010, the Company acquired Skiff, LLC. In November 2010, the Company formed a joint venture with China Media Capital (CMC). In December 2010, the Company disposed of the Fox Mobile Group (Fox Mobile), and acquired Making Fun, Inc. (Making Fun). In April 2! 011, the Company acquired Shine Limited (Shine). In July 2011, the Company sold its 79% stake in News Outdoor Russia and News Outdoor Romania. On June 29, 2011, the Company sold Myspace, including its stake in Myspace Music, LLC, to Specific Media, a digital media company, and received a minority equity stake in Specific Media in connection with the sale. In July 2011, the Company sold its majority interest in its outdoor advertising businesses in Russia and Romania. In May 2011, IGN acquired UGO Entertainment, Inc., which owns the ugo.com and 1up.com men�� lifestyle and video gaming sites, from Hearst Corporation in exchange for a minority ownership stake in IGN. Also in May 2011, IGN sold its Direct2Drive digital distribution site to GameFly, Inc. (GameFly).

Cable Network Programming

FOX News owns and operates the FOX News Channel, as well as the FOX Business Network. FOX News also produces a weekend political commentary show, FOX News Sunday, for broadcast on local FOX television stations throughout the United States. FOX News, through its FOX News Edge service, licenses news feeds to FOX Affiliates and other subscribers to use as part of local news broadcasts throughout the United States and abroad. FOX News also produces and runs the Websites, FOXNews.com and FOXBusiness.com, and owns and produces the national FOX News Radio Network, which licenses news updates, long form programs and the FOX News Talk Channel to local radio stations and to satellite radio providers. Fox Sports Net, Inc. (FSN, Inc.) is a regional sports network (RSN) programmer in the United States, focusing on live professional and collegiate home team sports events. FSN, Inc.�� sports programming business consists primarily of ownership interests in 12 RSNs, including numerous sub-regional feeds (the FSN RSNs) and National Sports Programming, which operates FSN (FSN), a national sports programming service. FSN, Inc. also is affiliated with, through FSN, an additional nine RSNs that are not owned by F! SN, Inc. ! (the FSN Affiliated RSNs). FSN provides the FSN RSNs and the FSN Affiliated RSNs with national sports programming, featuring original and licensed sports-related programming, as well as live and replay sporting events.

As of June 30, 2011, reaching more than 78 million households in the United States, SPEED brings viewers season-long coverage of the National Association of Stock Car Auto Racing (NASCAR) races, events and original programming, including exclusive coverage of the annual NASCAR Sprint All-Star Race and NASCAR Hall of Fame ceremonies. In addition, SPEED delivers programming from other top racing series, such as Formula One, Grand American Road Racing, the 24 Hours of Le Mans, World of Outlaws, AMA Pro Racing, AMA Supercross, AMA Motocross, Monster Jam, World Superbike and MotoGP. The Company also produces and distributes SPEED HD, a 24-hour national programming service produced and distributed in high definition. SPEED�� new broadband network includes SPEED2.

FUEL TV is a domestic 24-hour programming service dedicated to action sports and the lifestyle surrounding it. FUEL TV covers both competitive and performance action in the arenas of skateboarding, surfing, BMX, freestyle motocross, snowboarding and wakeboarding. Programming includes the United States and international action sports events and competitions, as well as original series and specials about top action sports athletes and their music, art and culture from a global perspective. Fox College Sports consists of three regionally-aligned networks, FCS Pacific, FCS Central and FCS Atlantic. Fox College Sports provides live and delayed collegiate events from the collegiate conferences, coaches��shows and collegiate highlight and magazine-format programming from the FSN RSNs and certain of the FSN Affiliated RSNs across the country. Fox Movie Channel (FMC) was Hollywood�� studio-based movie network. FMC airs Twentieth Century Fox films, as well as documentaries and original series that explore the movi! emaking p! rocess from script to screen. Fox Soccer Channel is an English-language programming service offering coverage soccer. Properties include the UEFA Champions League, England�� Barclays Premier League, Italian Serie A, FA Cup and 2011 Major League Soccer, along with daily soccer news programs, magazine shows and in depth coverage on the sport. The Company also produces and distributes Fox Soccer Channel HD, a 24-hour national programming service produced and distributed in high definition.

The Company has an approximate 33% equity interest in Fox Pan American Sports LLC (FPAS). FPAS owns and operates Spanish-language sports businesses, including the Fox Sports Latin America network (a Spanish-language sports network distributed to subscribers in certain Caribbean and Central and South American nations outside of Brazil). Through the Company�� interest in FPAS and an additional direct ownership interest, the Company has a 53% interest in Fox Deportes (the first Spanish-language sports programming service to be distributed in the United States). The Company owns an approximate 51% interest in the Big Ten Network, a 24-hour national programming service dedicated to the Big Ten Conference and Big Ten athletics, academics and related programming, and Big Ten Network HD, a 24-hour national programming service produced and distributed in HD. The Company holds an approximate 70% interest in NGC Network US LLC (NGC Network), which produces and distributes the National Geographic Channel and National Geographic Channel HD, Nat Geo Wild and Nat Geo Wild HD in the United States, with NGHT, LLC, a subsidiary of the National Geographic Society (NGHT), holding the remaining interest.

Fox International Channels (FIC) operates, develops and distributes primarily factual and general entertainment channels in various countries in Europe, Latin America, the Caribbean, Africa and Asia, including the Fox Channel, Fox Life, FX, SPEED, Utilisima, which is also distributed in the United States, Fox Cr! ime, NEXT! , FOX History & Entertainment, the Voyage Channel, FOX Sports, STAR World and STAR Movies. FIC also owns a 52.2% interest in NGC Network International LLC and NGC Network Latin America LLC (collectively NGC International), with NGHT holding a 26.8% interest and a subsidiary of BSkyB holding a 21% interest. NGC International produces and distributes the National Geographic Channel in various international markets. NGC International also produces and distributes the National Geographic Channel HD, the Nat Geo Adventure channel (in both HD and SD), the Nat Geo Wild channel (in both HD and SD) and the Nat Geo Music channel in international markets. FIC owns a 55% equity interest in LAPTV, a partnership that distributes six pay television channels (Movie City, Movie City HD, City Mix, City Family, City Stars and City Vibe and their multiplexes) and two basic television channels (The Film Zone East and West and Cinecanal) in Latin America (excluding Brazil).

FIC also owns a majority equity interest in Elite Sports Limited, a company that owns and distributes BabyTV. FIC also manages Channel [V] Thailand in which the Company owns a 49% interest. Channel [V] Thailand owns a Thai language music channel. FIC licenses its Channel [V] brand to a third party in Australia to operate a music channel. In addition, FIC has a joint venture with CJ Media, a Korean media conglomerate for the distribution of the tvN channel, a 24-hour general entertainment channel featuring Korean content, such as original dramas, variety shows, reality and lifestyle programs. STAR India develops, produces and broadcasts 28 channels in eight languages, which are distributed primarily via satellite to local cable, Internet protocol television (IPTV) and direct-to-home (DTH) operators for distribution throughout Asia, the United Kingdom, Continental Europe and North America to their subscribers. STAR India�� channels include the flagship Hindi general entertainment channel STAR Plus, the Bengali general entertainment channel ST! AR Jalsha! and the Marathi general entertainment channel STAR Pravah.

Asianet Communications Limited, which is a joint venture with Asianet TV Holdings Private Limited, was formed to provide television services for South Indian audiences. The joint venture consists of the Company�� approximate 81% interest in the Tamil language channel Vijay and the Company�� approximate 75% interest in the Malayalam language channels Asianet and Asianet Plus, the Kannada language channel Suvarna and the Telugu language channel Sitara. The Company also owns an approximate 26% stake in Balaji Telefilms Limited (Balaji), which is a television content production company in India. Balaji produces serials broadcast on general entertainment channels in India. The Company also holds an approximate 30% interest in Tata Sky Limited, which owns and operates a DTH platform in India. The Company has a 50/50 joint venture with Den Networks Limited (Star Den) to operate a television channel distribution business in India, Nepal and Bhutan that exclusively distributes STAR India�� owned and affiliated channels in these territories. The Company has expanded into television home shopping in India through a 50/50 joint venture with CJ O Shopping Co. Ltd., a home shopping company in South Korea and China.

STAR Taiwan develops and broadcasts Chinese language television programming focused at Chinese-speaking audiences in Taiwan and the rest of Asia on a pay television basis. STAR Taiwan�� television services are distributed primarily via satellite to local cable, IPTV and DTH operators in Asia and North America. STAR Taiwan�� channels include STAR Chinese Channel, STAR Chinese Movies, STAR Chinese Movies 2, STAR Chinese Movies HD and Channel [V] Taiwan. The Company has an approximate 15% interest in Rotana Holding FZ-LLC (Rotana), which operates a diversified film, television, audio, advertising and entertainment business across the Middle East and North Africa. The Company also has a 50% interest in Broadcast Mid! dle East ! FZ-LLC (BME). The Company owns a 50% interest in ESPN STAR Sports. ESPN STAR Sports is a sports broadcaster in Asia and operates 22 channels in different languages. The Company owns an approximate 18% interest in Phoenix.

Filmed Entertainment

Fox Filmed Entertainment (FFE) produces, acquires and distributes motion pictures worldwide under a variety of arrangements. The motion pictures of FFE are produced and/or distributed by the units of FFE: Twentieth Century Fox and Fox 2000, which produce and acquire motion pictures for mainstream audiences; Fox Searchlight Pictures, which produces and acquires specialized motion pictures, and Twentieth Century Fox Animation, which produces feature length animated motion pictures. In addition, Fox International Productions, Inc. co-produces, co-finances and acquires local-language motion pictures for distribution outside the United States. Pursuant to an agreement with Monarchy Enterprises Holdings B.V. (MEH), the parent company of New Regency in which the Company has a 20% interest, and certain of MEH�� subsidiaries, FFE distributes certain New Regency films and all films co-financed by FFE and New Regency in all media worldwide, excluding a number of international territories with respect to television rights. Motion picture companies, such as FFE, seek to generate revenues from various distribution channels. FFE derives its worldwide motion picture revenues primarily from four basic sources: distribution of motion pictures for theatrical exhibition in the United States and Canada and markets outside of the United States and Canada (international markets); distribution of motion pictures in various home media formats; distribution of motion pictures for exhibition on pay-per-view, video-on-demand and premium pay television programming services, and distribution of motion pictures for exhibition on free television networks, other broadcast program services, independent television stations and basic cable programming services, including c! ertain se! rvices, which are affiliates of the Company. Through Twentieth Century Fox Home Entertainment LCC, the Company distributes motion pictures and other programming produced by units of FFE, its affiliates and other producers in the United States, Canada and international markets in all home media formats, including the sale and rental of DVDs and Blu-rays.

Units of FFE license motion pictures and other programs in the United States, Canada and international markets to various third party and certain affiliated subscription pay television, subscription video-on-demand, pay-per-view, video-on-demand and electronic sell-through services. Units of FFE also license motion pictures in the United States to direct broadcast satellite (DBS) pay-per-view services operated by EchoStar Communications Corporation, as well as to pay-per-view and video-on-demand services operated by The DIRECTV Group, Inc. and iN Demand L.L.C. In addition, units of FFE license motion pictures and other programs to third parties, including Apple Inc. (Apple) and Amazon.com Inc. (Amazon), for electronic sell-through over the Internet, enabling consumers in the United States to acquire the right to retain permanently such programs.

Twentieth Television licenses both television programming and feature films for domestic syndication to television stations and basic cable services in the United States. Twentieth Television distributes a program portfolio that includes the Company�� library of television and film assets, and first-run programming produced by its production companies for sales to local stations, including stations owned and operated by the Company, as well as to basic cable networks. First-run programs distributed by Twentieth Television include the game shows Are You Smarter Than A 5th Grader? and Don�� Forget the Lyrics!, and the court shows Divorce Court and Judge Alex. Twentieth Television derives revenue from off-network, theatrical and first-run program sales from both broadcast and cable lice! nsees, an! d from the sales of national advertising units retained by Twentieth Television in its programs. Twentieth Television licenses such shows as Modern Family, Glee, How I Met Your Mother, It�� Always Sunny in Philadelphia, My Name Is Earl, Family Guy, American Dad, M*A*S*H, Bones, and The Simpsons to cable and broadcast networks. Twentieth Television also manages and distributes the long running series, COPS and America�� Most Wanted, and sells national advertising on behalf of other third party syndicators.

Fox Television Studios (FtvS) is a program supplier to the United States and international broadcast and cable networks. FtvS is producing the series Burn Notice and White Collar for USA Network, The Glades for A&E, The Killing for AMC, Kendra and Holly�� World for E! and In the Flow with Affion Crockett for FOX. Shine Limited (Shine) is an international television production and distribution group with 26 production companies across 12 countries creating and exploiting scripted and non-scripted content in the global marketplace. The Company�� motion picture and television library (the Fox Library) consists of varying rights to several thousand previously released motion pictures and many television programs.

Television

Fox Television Stations, Inc. (Fox Television Stations) owns and operates 27 full power stations. Fox Television Stations owns and operates two stations in nine designated market areas (DMAs), including New York, Los Angeles and Chicago. Of the 27 full power stations, 17 stations are affiliates of FOX (FOX Affiliates). In addition, Fox Television Stations owns and operates 10 stations affiliated with Master Distribution Service, Inc. (MyNetworkTV). FOX has 203 FOX Affiliates, including the 17 stations owned and operated by the Company. FOX�� prime-time programming features such series as House, The Simpsons, Bones, Fringe and Glee; unscripted series, such as American Idol and So You Think You Can Dance; and various specials. As of June 30! , 2011, M! yNetworkTV had 181 affiliates, including 10 stations owned and operated by the Company, reaching approximately 97% of the United States households.

Direct Broadcast Satellite Television

SKY Italia distributes more than 175 channels of basic, premium and pay-per-view programming services through satellite and broadband directly to subscribers in Italy. This programming includes exclusive rights to sporting events, newly-released movies and SKY Italia�� original programming, such as SKY TG 24, a 24-hour news channel.

Publishing

News International publishes The Times, The Sunday Times and The Sun. On July 7, 2011, News International announced that July 10, 2011 would be the last issue of News of the World. News International also publishes The Times Literary Supplement. News Limited is a newspaper publisher in Australia, owning approximately 146 daily, Sunday, weekly, bi-weekly and tri-weekly newspapers, of which three are free commuter titles and 102 are suburban publications (including 16 of which News Limited has a 50% interest). News Limited publishes a nationally distributed newspaper in Australia, a metropolitan newspaper in each of the Australian cities of Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart and Darwin and a suburban newspaper in the suburbs of Sydney, Melbourne, Adelaide, Brisbane and Perth. News Limited�� principal daily newspapers in Australia are: The Australian; The Daily Telegraph, published in Sydney; the Herald Sun, published in Melbourne; The Courier-Mail, published in Brisbane; The Advertiser, published in Adelaide; The Mercury, published in Hobart, and the Northern Territory News, published in Darwin. News Limited�� principal Sunday newspapers in Australia are: The Sunday Telegraph, published in Sydney; the Sunday Herald Sun, published in Melbourne; The Sunday Mail, published in Brisbane; the Sunday Mail, published in Adelaide; The Sunday Times, published in Perth; the Sunday Tasmanian, published in Hobart, and the! Sunday T! erritorian, published in Darwin.

Dow Jones is a global provider of news and business information, with newspaper, newswire, Website, newsletter, magazine, database, conference, radio and video businesses. Dow Jones offers products targeting both individual consumer and business and institutional customers, including The Wall Street Journal, Dow Jones Newswires, Factiva, Barron��, MarketWatch, SmartMoney and other products. Products targeting business and institutional customers, including Dow Jones Newswires and Factiva, combine news and information with technology and tools designed to inform decisions and to aid awareness, research and understanding. The Dow Jones Local Media business publishes community newspapers, Websites and other products in seven United States states. The Wall Street Journal is available in print, online at WSJ.com, and on mobile devices, such as smart phones, e-readers and tablets. The Wall Street Journal also publishes a regional edition for the New York City area called Greater New York. Barron�� is available in print, online at Barrons.com, and on mobile devices. Barron�� caters to financial professionals, individual investors and others interested in financial markets. Its print edition is published weekly. SmartMoney publishes news and information focusing on personal finance, and is available in print, online at SmartMoney.com, and on mobile devices. The print edition of SmartMoney is published monthly. The Wall Street Journal Digital Network (WSJDN) consists of business and financial news Websites and mobile applications. In addition to WSJ.com, Barrons.com and SmartMoney.com, WSJDN includes MarketWatch, AllThingsD.com and related sites.

The Wall Street Journal Europe print edition is headquartered in London and printed in Belgium, Germany, Italy, Spain, Switzerland, Turkey and the United Kingdom. The Wall Street Journal Asia print edition is headquartered in Hong Kong and printed in Hong Kong, India, Indonesia, Japan, Malaysia, the Philip! pines, Si! ngapore, South Korea, Taiwan and Thailand. Regional coverage from The Wall Street Journal Europe and The Wall Street Journal Asia is also available online at WSJ.com. Dow Jones also publishes The Wall Street Journal Special Editions. Factiva provides news and business information with search and discovery technology and tools to assist business and institutional customers with research, awareness and decision-making. Dow Jones Newswires is a provider of business news and information to financial professionals and online investors worldwide via terminals, portals and intranet sites with hundreds of thousands of financial professionals and millions of online investors relying on this information each trading day.

The Dow Jones Local Media business publishes local media print publications, including eight general interest dailies in California, Maine, Massachusetts, New Hampshire, New York, Oregon and Pennsylvania, and related local Websites. The Dow Jones Local Media business also publishes 13 weekly newspapers, performs commercial printing at its five printing locations and offers other products and services. Dow Jones VentureSource is a database for venture capital and private equity markets tracking key developments. Dow Jones Watchlist helps compliance professionals identify high-risk clients and business associates. The eFinancialNews business, based in London, serves the European financial services industry with print, online, training and events businesses. The Wall Street Journal Professional Edition provides business and professional readers with specialized and targeted news and information. Dow Jones also distributes news and information to individual consumers through other channels of content distribution, including television, radio/audio, online video, consumer electronic licensing, The Wall Street Journal classroom, campus and Sunday editions, and WSJ.Magazine. Dow Jones also owns an interest in Vedomosti, which publishes a Russian language business daily.

The New! York Pos! t (the Post) is a mass circulation, metropolitan morning newspaper published seven days a week and primarily distributed in the New York metropolitan area, the Northeast, Florida and California. The Company prints the Post in a printing facility in the Bronx, New York and uses third party printers in its other markets in the United States. The Company�� Community Newspaper Group also owns several local newspapers and other publications distributed in the New York metropolitan area. The Daily is a daily national news publication built as an application for tablet computing. HarperCollins Publishers (HarperCollins) is engaged in English language book publishing on a worldwide basis and is an English language book publisher. HarperCollins��principal businesses are HarperCollins Publishers LLC (HarperCollins U.S.), HarperCollins Publishers Limited and The Zondervan Corporation LLC. HarperCollins primarily publishes fiction and non-fiction, including religious books, for the general consumer. In the United Kingdom, HarperCollins publishes some titles for the educational market as well.

News America Marketing Group (NAMG) publishes free-standing insert publications and provides in-store marketing products and services. NAMG is a publisher of free-standing inserts in the United States. Free-standing inserts are multiple-page marketing booklets containing coupons, rebates and other consumer offers, which are distributed to consumers through insertion primarily into local Sunday newspapers. Advertisers, primarily packaged goods companies, pay NAMG to produce free-standing inserts, and NAMG contracts with and pays newspapers to include the free-standing inserts primarily into the newspapers��Sunday editions. SmartSource is the brand name that is linked with NAMG�� assortment of marketing products, including, among others, free-standing inserts, NAMG�� instant coupon machines and various shelf advertising products. The SmartSource iGroup manages NAMG�� portfolio of database and electronic ! marketing! solutions. The database marketing business, branded SmartSource Direct, provides direct mail solutions via its national network of retailer frequent shopper card databases. The SmartSource Savings Network, which includes SmartSource.com, encompasses all of NAMG�� electronic couponing and sampling solutions accessed through the Web, mobile and tablet-based programming.

Other

These businesses develop and promote content and experiences for Internet audiences and generate revenue through Internet advertising, sponsorships, subscriptions and e-commerce. IGN�� network of video game, lifestyle and entertainment-related Internet properties represent many of the Web properties in their respective categories across the Internet. IGN�� Games sites (IGN.com, 1UP, GameSpy, FilePlanet, TeamXbox and others) is a gaming information network on the Internet. IGN�� GameSpy Technology group provides technology for online game play in video games. IGN also owns and operates a men�� lifestyle Websites, AskMen.com. Making Fun is a social games developer and publisher acquired. Making Fun makes games for various platforms, including Facebook, Android, and iOS, and has launched its first games with additional ones in development. The Company has interests in FOX TV in Turkey and Channel 10 in Israel, which are free-to-air, general entertainment television stations.

News Digital Media is the Company�� Australian online division. In addition to maintaining the Company�� Australian websites, News Digital Media is responsible for online advertising and transactions in Australia. News Digital Media sites include carsguide.com.au, news.com.au, MOSHTIX.com.au, GetPrice.com.au and truelocal.com.au. News Digital Media also has a 50% stake in CareerOne.com.au. The Company holds an approximate 39% interest in BSkyB. BSkyB operates a pay television broadcast service in the United Kingdom and Ireland, as well as broadband and telephony services. BSkyB acquires and commissions programmin! g to broa! dcast on its own channels and supplies certain of those channels to cable operators for retransmission by the cable operators to their subscribers in the United Kingdom and Ireland. BSkyB also retails channels (both its own and those of third parties) to DTH subscribers and to certain of its own channels to a limited number of DSL subscribers. It holds an approximate 49% interest in NDS. NDS creates technologies and applications that enable pay television operators to deliver digital content to televisions, set-top boxes, DVRs, personal computers, portable media players, removable media and other mobile devices securely.

The Company, Telstra Corporation Limited, an Australian telecommunications company, and Consolidated Media Holdings, an Australian media and entertainment company, own and operate FOXTEL, a cable and satellite television service in Australia with 25%, 50% and 25% interests, respectively. As of June 30, 2011, FOXTEL had approximately 1.65 million managed subscribers (including subscribers to Optus, an Australian telecommunications company). As of June 30, 2011, 100% of the FOXTEL managed subscriber base was connected to FOXTEL�� digital service, which delivers over 180 channels on cable and satellite. The Company owns an approximate 44% interest in Sky Network Television Limited, a land-linked UHF network and digital DBS service in New Zealand. The Company has an approximate 32% equity interest in Hulu, LLC (Hulu).

The Company owns a 49.9% equity interest in Sky Deutschland, a pay television operator in Germany and Austria. The core business of Sky Deutschland is subscription pay-tv and it offers a range of programming in Germany and Austria and can be received via Teleclub in Switzerland. Sky Deutschland�� program offering includes current feature films, new series, children�� channels, documentaries and live sports, such as the German Bundesliga and UEFA Champions League.

The Company competes with ABC, NBC, CBS, The CW Television Network, CN! N, MSNBC,! CNN Headline News, Bloomberg Television, ESPN, ESPN2, Versus, USA, TNT, Spike TV, Home Box Office, Inc. (HBO), Showtime Networks Inc. (Showtime), Discovery Channel, History Channel, Animal Planet, Travel Channel, Science Channel, History International, Military Channel, Biography, Tru TV, FT.com, New York Times Digital, TheStreet.com, Bloomberg, Forbes.com, CNET, CNN Money, MSNMoney/CNBC, Thomson Reuters, Bloomberg L.P., LexisNexis, Hoover��, OneSource, Google, Microsoft, Yahoo!, Amazon, Apple, Barnes & Noble, Random House, Penguin Group, Simon & Schuster and Hachette Livre.

Advisors' Opinion:

• [By Tim Beyers]

  Through its first two weekends in theaters, Iron Man 3 has generated more than $680 million in sales worldwide for Marvel Studios and parent Walt Disney (NYSE: DIS  ) . That must have Time Warner (NYSE: TWX  ) , which owns the DC Comic characters, News Corp. (NASDAQ: FOXA  ) , which owns the film rights to Marvel's X-Men characters, and Sony (NYSE: SNE  ) , which owns the film rights to the Spider-Man franchise, thinking of ways to bring more superheroes to the cinema.

• [By Tim Beyers]

  Reuters reports that former News Corp. (NASDAQ: FOXA  ) President Peter Chernin has bid just $500 million for Hulu, which helped to create in 2007. Walt Disney (NYSE: DIS  ) and News Corp. control Hulu as of this writing. Comcast also has a non-voting ownership interest.

After Debt Ceiling and Government Shutdown Fiasco, Lawmakers Must Focus on Adding Value

My son was seven when he laid off his pet parakeet for "not pulling his weight." The bird was pretty but didn't deliver tangible benefits like our laying hens, weed-eating rabbits, barn cat and guard dogs. The kid decided the bird's upkeep wasn't worth the empty show, so we found it a new home.

My kids know that Congress has just ended a costly and internationally humiliating 16-day impasse that included a complete government shutdown. They — along with most of the rest of us — wonder exactly how these lawmakers' actions create value for our country.

Cute but not especially productive. Photo: Dave Ginsberg

The government shutdown set us back at least $4.7 billion, according to ShutdownCost.com, and that's a very conservative number. It doesn't include the financial damage to the lives of furloughed workers, families dependent on Head Start for child care, small-business owners who cater to government employees, and other people indirectly but seriously affected by the shutdown.

While the overall national and global impact of the shutdown will take time to analyze, some big businesses have been up-front about the immediate impact. Family Dollar Stores (NYSE: FDO  ) says the shutdown hit its sales right away (although the company is in growth mode), and Stanley Black & Decker and W.W. Grainger voiced profit and sales concerns, respectively. The shutdown also created an FCC review backlog for new products from Apple, Google and other tech businesses.

Noise and wing-flapping

Not that members of Congress took an income hit. While the government was closed for business, the 352 sitting legislators brought in a conservatively estimated total of $4 million—a nice haul for the legislative equivalent of chirping and strutting.

House Republicans really don't like Obamacare. We get it. But good governance is about more than contests of ideas. It's about people's lives and livelihoods. For any group -- a family, a company, or a country -- to be strong, resilient, and competitive, it has to build and protect value.

And adding value isn't just about making more money. A robust economy can provide better safety nets for people in need. It can fund infrastructure and R&D that improve our quality of life through safer roads, better schools, new medical treatments, and technological advances. A high-value economy gives us the ability to help allies and trading partners build their own nest eggs.

Will Congressional Republicans change their song?

Not surprisingly, corporate America is less than pleased right now with the traditional party of business. For a certain faction of Congress, infighting and grandstanding are now more important than guarding and growing our country's economy and the financial well being of our citizens. Look for business to support challengers to these incumbents in the next primary cycle.

In the meantime, we could be looking at a repeat of this situation after the winter holidays. All Congress has done is to buy itself some time: an agreement to keep things running until Jan. 15 and kick the debt-limit issue down the road to February.

My kids, like most American children, know that if they make a mess they have to clean it up. Not everyone in Congress seems to have learned this basic childhood lesson, even after getting spanked by the administration and public opinion.

Senator Ted Cruz, from my home state, has provided a disappointing example of feather-ruffling and empty preening — so much so that the Houston Chronicle, which endorsed him, now openly pines for the days when his predecessor and fellow Republican, Kay Bailey Hutchison, "had an unswerving commitment to the highest and best interests of Texas at all times."

It's not my intention to malign parakeets by comparing them to uncooperative lawmakers. But it's true that squawking, flapping, and kicking litter all over the place — no matter how entertaining — don't do anything useful.

Right now we have a vocal and ornery subset of legislators who have proven themselves willing to destroy real value in order to make a futile political statement. For the sake of America's political values as well as our economic well being, we need to vote them out and replace them with people who deliver actual value.

A deeper dive on Obamacare

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Digging Into Citigroup's Earnings

Before the market opened yesterday, Citigroup (NYSE: C  ) added its name to the list of banks that performed abominably last quarter.

Following the lead of both JPMorgan Chase (NYSE: JPM  ) and Wells Fargo (NYSE: WFC  ) , the nation's third-largest bank by assets said its earnings before taxes plunged by $2.1 billion, or 32%, in the three months ended September 30.

Tracking down Citigroup's problems
Even a cursory glance at Citigroup's income statement reveals a number of troubling headwinds. The first is that its net interest income fell by $171 million. This is the amount of money a bank earns on its asset portfolio after the cost of funds (that is, deposits and loans) is deducted.

While we've known for some time banks would struggle to keep this figure steady in the face of still-historically low interest rates, Citigroup's performance was significantly worse than the other two megabanks to have reported thus far. Wells Fargo's net interest income was effectively flat for the quarter while JPMorgan's was up by $71 million thanks to a lower cost of funds.

It should be noted, moreover, that a decline in net interest income affects Citigroup to a much greater extent than its too-big-to-fail brethren. Whereas Wells Fargo and JPMorgan both look to noninterest income for roughly half of their total revenue, Citigroup's net interest income accounts for roughly two-thirds of its top line.

Digging a bit deeper, Citigroup also experienced declines in almost every category of noninterest income. Far and away the worst was its trading revenue, which dropped by 58% compared to the second quarter.

That trading revenues plummeted at the New York-based bank, and particularly in its fixed-income division, doesn't necessarily come as a surprise. Aside from its massive $9.2 billion charge-off related to litigation reserves, this was JPMorgan's Achilles' heel last quarter.

The impetus for the drop in trading income was twofold. First, trading volumes dropped after the Federal Reserve announced last month that it wasn't ready to taper its bond-buying stimulus program. This assured investors that it was safe to hold bonds for a least another month. And second, fears late in the quarter about an impending government shutdown made investors reluctant to trade, choosing instead to wait until the political storm blows over.

These issues are what CEO Michael Corbat was referring to when he said in the bank's earnings release that, "We performed relatively well in this challenging, uneven macro environment. While many of the factors which influence our revenues are not within our full control, we certainly can control our costs, and I am pleased with our expense discipline and improved efficiency year-to-date."

The silver lining in Citigroup's results
As Corbat noted, despite an otherwise abysmal performance, all was not lost at Citigroup. More specifically, it notched improvements in both its expenses and credit costs.

Compared to the second quarter, Citigroup's operating expenses fell by an impressive $485 million, with roughly half of that amount stemming from lower compensation costs. And its total provisions for credit losses dropped by 3% on a sequential basis and by 25% compared to the same quarter last year.

In addition, the bank continued to wind down its legacy asset division, which holds noncore assets and those that were impaired during the financial crisis. The division, known as Citi Holdings, now makes up only 6% of Citigroup's consolidated balance sheet and accounts for an increasingly smaller drag on the bank's bottom line.

And finally, Citigroup's capital base remained on an upward trajectory. At the end of the third quarter, its Basel III Tier 1 common capital ratio stood at 10.4% -- well above both JPMorgan and Wells Fargo – though this goes to show that capital is only a necessary, and not a sufficient, piece of the profitability puzzle for banks.

The Foolish bottom line
Citigroup has long been considered the basket case of Wall Street thanks to its legal antics (namely, its role in overturning Glass-Steagall) and geographically diverse assortment of businesses. This is why I've never been a fan of the bank. And, suffice it to say, last quarter didn't persuade me to change my opinion.

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Are Herbalife Whale Watchers Watching The Wrong Whale?

The Herbalife (NYSE: HLF) short squeeze saga involves many of the biggest "whales" in finance, but "whale watching" investors may be tracking the wrong ones to help decide their most profitable course of action. For those investors new to the term, in the financial industry "whale watching" is defined by InvestorWords.com as "An investing strategy of monitoring the investments of the most influential or wealthy investors". Following what is essentially a "who's who" of elite activist hedge fund managers, it appears that hundreds or maybe even thousands of investors have chosen sides to go long by buying Herbalife shares with Icahn, Soros, Loeb and Chapman or short with Ackman, Einhorn, etc. Everyone watches with bated breath for the next tweet, interview, filing etc of any of the aforementioned parties - whale watching in a fishbowl if such is possible. Each of the aforementioned whales has generally been perceived to be among the best minds in finance and all have earned their dorsal fins by doing what they do remarkably well, doing it repeatedly and almost always winning. As the saga evolves to the stage where the most important whale watching may be by the other whales, I wanted to take this opportunity to point out that one of the biggest winners will likely be the whale who took early profits from the Herbalife short squeeze, but appears to have "doubled down" on the MLM short squeeze strategy in a move so deft and strategically fruitful that other investors should give strong consideration to watching what he is doing and how he plays the game going forward.

Following the Whale That Can Make You The Most Money

Whale watching is more fun if you follow the whale that can make you the most money. I believe it is fair to say that John Rochon is a whale by most measures and he is best known for engineering historic and profitable deals that has occurred in the MLM space - the LBO of direct selling pioneer Mary Kay Cosmetics that made everyone involved wealthy or a lot wealthier. His Priva! te Equity shop Richmont Holdings has acquired very large stakes in Avon and made bids to acquire the entire company more than once. One of his current ventures, CVSL, (OTCBB: CVSL) is a company built from the ground up for the purpose of consolidating the most attractive segments of the MLM/direct selling space. Thus, one of the reasons that Herbalife longs, shorts and whale watchers playing the Herbalife trade might want to follow Mr. Rochon's lead is that he has something that none of the high profile whales has - a hands on, lived it for 30+ years understanding of what makes MLM/direct selling companies (like Herbalife) tick at a level that even the academic and regulatory experts brought in by the other whales cannot match. I think the best evidence of this advantage can be seen in what he has already accomplished in the "buy, sell or short the MLM" game -

1) Through CVSL, Mr. Rochon acquired a "large position" in Herbalife sometime after June 30 (CVSL 10Q ending June 30 confirms no HLF stake, while interview in September acknowledges the stake's purchase and sale) while the stock was trading in the mid 40's.

2) CVSL sold the HLF stake sometime in August or early September when HLF was trading in the mid 60's. It seems most likely that CVSL sold the shares in August, but at a minimum we know the stake was sold in a time frame that would allow the company to build a stake in Blyth before September 12. A review of Herbalife's chart indicates heavy buying of HLF shares in early July and heavy selling of HLF shares in late August which fits perfectly. Since the Blyth chart indicates heavy buying in mid to late August, this fits squarely within the time frames one might expect based on buying and selling of the "large position" in Herbalife that was mentioned in the interview and also in line with the building of a significant stake in Blyth prior to the interview on September 12.

3) CVSL sold its HLF stake to purchase a "substantial stake" in Blyth (NYSE: BTH) , linking the nascent sta! rtup to t! he venerable 30 year old billion dollar revenue (2012) generating MLM with the $185m market cap. The move was sheer genius - not only would CVSL benefit if Blyth's stock moves higher, but it allowed for the possibility that the stake would thrust CVSL into the spotlight as a significant player in the space. Given its stated goal of acquiring other direct selling companies, this could do much to get the CVSL name into the conversation around the industry. Better still, the additional exposure to investors in other MLM companies and exposure to more investors generally that might follow the successful acquisition of a stake in BTH had the potential to make this a winning proposition in other ways too. In the days since CVSL's stake in BTH has become more widely known, CVSL shares have more than doubled, reaching a level yesterday that gives the company a market cap of nearly $350m roughly 2x the size of Blyth's market cap.

4) The Herbalife short squeeze trade has the potential to evolve at this stage to a game of whales watching whales, as each on the long side must proceed with a close watch on what the others are doing, recognizing that the exit of even one has the potential to materially impact the profits of the others on this trade. As this process unfolds, the whale we should all probably be watching (John Rochon) has already cashed in and reinvested in another MLM company (Blyth) that is arguably a better short squeeze candidate than Herbalife.

Can There Be a Better Short Squeeze Candidate Than Herbalife?

While Herbalife remains a good short squeeze target in many respects, it is currently trading over 150% higher than it was when the squeeze began following Bill Ackman's presentation and proclamation. Herbalife still remains on all the high short interest lists, ranking at #39 on the NYSE for having such a large percentage (25.5%) of its float sold short. With large institutional and insider ownership taking up a significant portion of the remaining float and the obvious advantag! e of havi! ng some of the deepest pockets and savviest minds in finance still on the long side, Herbalife is a stock that can still move higher quickly on any positive catalyst, but there has already been a substantial short squeeze to get the stock to its current levels and its public float has considerably more wiggle room for short sellers to maneuver than the current situation with Blyth.

In Blyth, Mr. Rochon's CVSL has found a billion dollar per year revenue producing (2012) MLM/direct seller that is still trading approximately 75% off the highs from 14 months ago and only slightly above the 20 year lows of its trading range and it is currently ranked #1 on the NYSE in terms of percentage of public float sold short. Because Blyth has a public float of only 6.5m shares, CVSL can command a very important status by acquiring a relatively small stake and in the process, gain tremendous exposure for CVSL among investors and potential acquisition candidates. Mr. Rochon's vision in deftly acquiring the BTH stake at time when BTH's short position had swelled to consume the majority of its public float (it was over 70% at the time) gives CVSL an even more powerful position than it would have otherwise. As such, going forward CVSL's additional purchases will necessarily have a significant impact on the trading of BTH even with relatively small additions to their holdings. The recent revelation of its stake in BTH has already helped CVSL gain a level of notoriety that would not have been likely to be achieved with the HLF stake (too many whales in the fishbowl).

While the whale watching we have enjoyed with the Herbalife short squeeze continues, whale watchers will want to add CVSL and BTH to their watch list so they can watch the whale who may turn out to be the biggest winner in the MLM short squeeze game. Last night's short interest update from the NYSE indicated that Blyth now has over 90.51% of its float sold short, what I believe this to be one of the highest short to float ratios in NYSE history. With! only 600! ,000 shares in the BTH float that have not already been sold short, CVSL essentially has the BTH short sellers cornered, as they will likely have to purchase over 5.8 million shares of a relatively thin trading stock to cover their bets in the near future. Any significant catalyst would likely catapult BTH shares higher, bringing more attention to the situation and greater exposure for CVSL. Even without a company or industry specific catalyst, the freakishly high short to float ratio and resulting lack of shares available to be borrowed for a short sale could cause the shares to move materially higher on any uptick in buying interest, causing the CVSL/BTH story to develop into a story that is more interesting and profitable for whale watchers than the Herbalife trade.

Source: Are Herbalife Whale Watchers Watching The Wrong Whale?

Disclosure: I am long BTH. 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...)

Additional disclosure: My intent in publishing this article is to inform investors about developments related to Herbalife and Blyth. I did not and do not intend to suggest any specific action by any investor or shareholder and strongly suggest that any decision made to buy or sell shares of this stock be made after consultation with an investment advisor as to the suitability of such an investment. I currently own shares of BTH and consider my investment in Bth to be a trade that could turn into a long term holding depending on marketplace developments and the company's execution of its growth plan. I may buy or sell shares at any time based on market conditions and the trading price of BTH.

JPMorgan Continues Its Rise in Spite of Itself

Big bank JPMorgan Chase  (NYSE: JPM  ) is on the rise once again this morning, with a 0.9% rise just after trading began. Not to mention the bank's stock is up 1.99% so far this week. JPM has been enjoying some much needed gains in the market despite more than one piece of negative news for its operations in the past week.

Quick rundown
Just to highlight the headwinds that JPMorgan faces, here are the latest headlines that may have investors concerned:

Another top executive left the bank last week, bringing the total to eight over the past few years. This gives rise to questions about succession plans and "deep benches." Energy rigging in California and Michigan -- not something you would normally think of for a bank's operations, but at least one executive has been called out as lying while under oath about the matter. Oversight. After the London Whale debacle, many investors cried out for more oversight (as did some regulators), and now they have their chance to demand it once again. Later this month a non-binding vote at the annual shareholders meeting will allow investors to speak up on whether Jamie Dimon's dual role as CEO and Chairman should be split up.

So with more and more pressure building on Dimon and the bank, how can it be making such a huge run this week?

Outside influences
Half of a week has already gone by and the market is still basking in the afterglow of the Berkshire Hathaway (NYSE: BRK-B  ) shareholder-palooza. While generally this would lead to boosts in other bank stocks, JPMorgan and more specifically Jamie Dimon, got a big plug from the Great One himself. When asked about the upcoming vote to split Dimon's role, Buffett gave the CEO his total support, saying that the bank will be run better with Dimon in both roles. He also said that he couldn't think of a better Chairman and that splitting the two posts would allow the CEO to be replaced much more easily, something that might not be a good thing for the bank.

Elsewhere in the banking sphere, competitor Bank of America's (NYSE: BAC  ) settlement with MBIA (NYSE: MBI  ) may also have something to do with JPM's continued rise.Since most of the banks continue to be plagued by lawsuits stemming from the financial crisis, when one is able to settle or dismiss a case, the others are looked at favorably as well. In the case of B of A, the bank made a big offer to the insurer MBIA and ducked some much larger payouts than it may have been forced to make had the case gone to trial.

Old hat
So none of this is new to the markets besides the B of A settlement, which just happened on Monday. But in stock market time, that's eons ago, right? If you're watching your stocks on a daily basis, you're doing yourself and your portfolio a disservice. Even if you don't trade daily, watching your stocks fall for no apparent reason will still hurt twice as much as if they rise for no reason. After time, that stress and pain from daily ups and downs will influence your decision to sell, possibly leaving you out in the cold as the long-term investors continue to profit. 

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or if finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, check out The Motley Fool's premium research report on the company. Click here now for instant access!

Financial Wellness Paves New Career Track for Advisors

As financial planning students look around for career opportunities, Financial Finesse suggests a slightly different track is presenting itself.

The firm hosted a webinar on Thursday that described financial wellness as a potential career path for advisors.

“The term ‘financial wellness’ has developed from a terminology into a whole industry,” Diane Winland, senior resident financial planner for Financial Finesse, said on the call. “Not only is it changing the way financial planners approach a relationship, it’s changing the way planners work.”

Financial Finesse found venture capital firms have invested more than $70 million in financial wellness startups over the past couple of years, Winland said.

Financial wellness programs are growing among employers, too. Winland referred to 2013 research from Aon Hewitt that found 80% of employers plan to implement or expand a financial wellness program within the next year.

Liz Davidson, CEO and founder of Financial Finesse, said more than 90% of inquiries from companies interested in the firm’s services are about wellness programs. She pointed out, though, that the term is still loosely defined. “What you see is such a broad spectrum of firms with different services that are folding them under the financial wellness umbrella.”

This creates a spectrum of firms that on one end are applying behavioral finance principles and truly acting as financial wellness firms, and on the other are simply selling products or services and calling it financial wellness “because they know the term resonates,” she said.

True financial wellness, Davidson said, “is a state of financial well-being where the person is not suffering financial stress. They have their finances under control. They have their debt under control or eliminated. They have their emergency saving, and they are proactively saving for future goals and are on track. That is financial wellness.”

Davidson described the evolution of the industry: “Two generations ago, there wasn’t really much of a financial planning industry. There was a brokerage industry. It did not look at a person’s overall needs. About 30 to 35 years ago, financial planning as an industry was born. The CFP Board was established, there was a certification process for financial planners that was much more holistic and looked at investing based on the individuals goals. However, the catch is that you need to have a lot of investable assets in most cases. The planners need to feed their families, and many middle-income employees may not have enough investable assets to be worth their time. With fee-only planners, it’s hard to get people who are struggling financially to pay for financial services precisely because they’re struggling financially.”

Financial wellness is “complementary” to financial planning, Davidson said, but there are differences. “Financial wellness is a holistic approach that starts with the participant and works backwards, she said. “I know one-on-one financial planning does that as well, but in a workshop format the traditional model has been a very didactic approach as opposed to engaging the employee and working with them to reach their goals.”

Another distinction is that financial wellness programs are “most typically paid for by the employer or by a company that is bringing it to the employer as part of their service offering. Employee does not pay for the service at all so those lower-income and middle-income employees who do need that guidance get it as an employee benefit.” Davidson noted this model is the most pervasive and most likely to continue.

Finally, “It’s truly unbiased, meaning that the financial wellness companies aren’t selling any financial products or services. They’re not managing assets. They’re not affiliated with firms that do or referring employees to individual financial planners. They are simply working with employees to help them improve their financial situation so that they ultimately amass those investable assets and can work with a planner to invest those assets effectively.”

Davidson stressed that successful financial wellness programs need to focus on underlying behavioral finance principles to change long-term behaviors. “It really is getting employees addicted to positive financial habits and behaviors the same way that so many of us are addicted to consumption. It’s setting up a system that gets them addicted to small wins and seeing their credit card balances go down and seeing their savings account balances go up.”

Davidson said advisors can help clients create this addiction if they focus on the principles of behavioral finance and what makes people develop positive habits instead of negative habits.

“It’s really a lifestyle choice,” Davidson said. “It’s a process, not an event.”

Barbara Delaney, an advisor to defined contribution and defined benefit plans, said more traditional methods of educating participants — seminars, workshops — have been ineffective. “What we’ve heard from plan sponsors is that they want this type of planning. If they’re going to do these meetings, they want them to be meaningful.”

Delaney’s firm is integrating financial wellness into all of its communications with plan participants. “It’s been really successful so far and clients really enjoy having a more holistic view of not only 401(k) plans, which can get quite boring, honestly; it’s more engaging for participants.”

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Check out Gender Gap in Financial Know-How Leveling Off on ThinkAdvisor.