Retail Stocks Stumble Again as Express and Aeropostale Fall

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

Retail stocks fell again today as the broad market edged lower for the fourth day in a row despite a strong employment report from ADP. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) finished down 25 points, or 0.2%.

According the employment report from ADP, the nation's largest payroll processor, 215,000 jobs were added in November, well ahead of expectations of 160,000 and last month's total of 184,000. The figure was also better than October's official tally from the Department of Labor of 204,000. While the ADP report at times differs from the Labor Department's reading, it's the best predictor of the official total, which will come out Friday

Investors have begun to fear the Fed's stimulus taper will come sooner than expected if it sees strong employment growth, which explains why stocks did not move higher today. Elsewhere, economic reports were mixed as a gain in exports drove the trade deficit down, and new-home sales for September and October were short of expectations as was November's ISM services index.

Retail stocks continued to take it on the chin as concerns about weak holiday sales persisted. Wal-Mart fell 1.2% to make it the Dow's worst performer, while Express (NYSE: EXPR  ) shares finished down 23% as the fashion label issued downbeat guidance in its quarterly report. Management lowered its full-year EPS outlook from $1.52-$1.60 to $1.46-$1.51, below the consensus as it sees an increasingly competitive promotional environment this holiday season. Management also said Thanksgiving week sales did not meet its expectations, and that same-store sales will be in the low single digits for the current quarter.

Reporting earnings after the bell, Aeropostale (NYSE: ARO  ) shares fell 4% after a 4% drop during regular trading. The teen retailer has had a forgettable 2013, and it only got worse with today's report as it delivered a per-share loss of $0.29, below estimates of a $0.24 loss. Revenues dropped 15.1% to $514.6 million, missing the consensus at $519.8 million, and comparable sales fell 15%, in line with the trend for the year. CEO Thomas Johnson said, "We were disappointed in our overall performance as customer adoption is occurring more slowly than we would like against the backdrop of a challenging retail environment." Fourth-quarter guidance was similarly terrible as the retailer sees a per-share loss of $0.24-$0.32. Aeropostale is in the midst of closing some stores and repositioning itself, but it's hard to believe in the turnaround at this point.

Who will win in 2014?
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Check into this Hotel Trio

Turnaround specialist George Putnam sees long-term potential in the hotel sector; the editor of The Turnaround Letter highlights three companies showing improving fundamentals.

Steve Halpern: We're here with George Putnam, editor of The Turnaround Letter. How are you today?

George Putnam: Fine, thank you Steve.

Steve Halpern: Each month in your newsletter, you look into a number of market sectors, looking for the best turnaround opportunities. You recently reviewed the hotel industry, where you see improving fundamentals. What's your overall outlook for the hotel sector?

George Putnam: Well, the hotel sector looks favorable because, while business travel, and in fact, all travel is improving (therefore, there's higher demand for hotel rooms), the supply of new hotel rooms has really been stagnant since the financial meltdown in 2008.

It remains hard to get financing for new hotel projects, so when you have a market with increasing demand and steady supply, that usually means higher prices for the rooms, which goes right to the bottom line.

Steve Halpern: Most of the stocks in this sector are structured as real estate investment trusts. How would that impact the decision for an investor looking at these selections?

George Putnam: Well, it means, not only can the stock price increase if the result improves, but a REIT has to pass through 90% of the earnings to the stockholders in the form of dividends, so you'll also see dividends increase as the results improve.

Steve Halpern: You would view this as a favorable group for income-oriented investors, as well as growth?

George Putnam: Yes.

Steve Halpern: Now, one of the positions that you've looked at is FelCor Lodging (FCH). Could you tell us a little about that?

George Putnam: Sure. Well, it grew fairly rapidly before the downturn in 2008 and didn't really have a great focus. With the new management team after 2008, they have sold off a lot of non-core properties and are focusing on more upscale properties and strong markets, and they've used the proceeds from asset sales to help the balance sheet. They have paid down a lot of high-priced debt, which also helps the bottom line.

Steve Halpern: Now, you've also looked at a company called Hersha Hospitality (HT). How are they involved in the industry?

George Putnam: Well, Hersha, again, has been refocusing its business. It was a little unfocused before. It had both a suburban and urban market, and it's recently agreed to sell the last of its suburban properties.

And it's used the proceeds from earlier sales to buy properties in some strong markets like San Diego and Miami. As a result of this transformation, it's a focused urban operator with properties in some of the best performing markets in the US.

Steve Halpern: Like the general real estate mantra, location is very important for these holdings.

George Putnam: Yes, location, location, location, as they say.

Steve Halpern: Now, another pick that you have is Sotherly Hotels (SOHO). Could you tell us about that company?

George Putnam: Sure. This is a small-cap name. Like many others in the industry, it had to struggle a bit from 2008 and has devoted most of its attention to getting its balance sheet back in order, and some of its existing hotels fixed-up and repositioned.

But it's now largely completed that and is on a much sounder financial footing, so they can go back to what they've always done well, which is buying somewhat troubled properties and fixing them up, and if they can successfully do that in this environment, I think it could really help results a whole lot.

Steve Halpern: Now, finally, just in terms of your time prospective for listeners who are looking at these ideas, you're not generally expecting these to turn around immediately, but you take a longer term view on where the sector and these companies are going, in fact, looking out sometimes over years.

George Putnam: Yes, that's right. It's very hard to predict how a stock will move in the short-term, but when you've got industry fundamentals going the right way, even a stock that's out of favor at the moment, eventually investors will see the merit in it, and the stock should do quite well.

Steve Halpern: Well, thank you very much for joining us today. We appreciate your time.

George Putnam: Thank you Steve.

Subscribe to The Turnaround Letter here...

The expert featured in this column, George Putnam, may or may not own positions in any investment vehicle mentioned here. The views and opinions expressed are his or her own.

Advance Auto Parts buying General Parts for $2B

RICHMOND, Va. — Advance Auto Parts said Wednesday it is buying General Parts International Inc. for $2.04 billion in cash, which the companies say will create the biggest automotive replacement parts provider in North America.

As part of the transaction targeted to close by late 2013 or early 2014, Advance Auto will get 1,246 company operated stores and 1,418 independently owned Carquest locations. Its shares soared in premarket trading.

The Roanoke, Va., seller of auto parts and batteries currently operates more than 4,015 stores in the U.S., Puerto Rico and the Virgin Islands. General Parts is a privately held distributor and supplier of original equipment and aftermarket replacement products for commercial markets operating under the Carquest and Worldpac brands. The combined company will be based in Roanoke, Va., and continue to have a presence in Raleigh, N.C.

WEDNESDAY STOCKS: How markets are doing

Advance Auto CEO Darren Jackson said the transaction provides a "compelling strategic opportunity" to expand the company's geographic presence. In January, the company acquired privately held Northeast car parts supplier B.W.P. Distributors Inc., accelerating its growth in the Northeast.

Advance Auto also said Wednesday it expects third-quarter earnings of $1.42 per share on revenue of $1.52 billion, compared with year-ago earnings of $1.21 per share on revenue of $1.46 billion. Revenue at stores open at least a year is expected to decrease 2 percent. That's an important measure for retailers because it excludes results from newly opened or closed stores.

Analysts polled by FactSet predict earnings of $1.31 per share on revenue of $1.55 billion.

The company on Wednesday also reaffirmed its full-year adjusted earnings forecast of between $5.30 and $5.45. Analysts expect $5.55 per share.

When vehicle sales tumbled a few years ago, auto parts retailers such as Advance Auto Parts got a sales boost, as more Americans kept their vehicles longer and invested mo! re in keeping them running.

But Americans have been buying new cars and trucks at a healthy pace in recent months, fueled by low interest rates, better credit availability and aging cars that need replacement.

3 Things IPOs Can Teach You About Investing

Initial public offerings have always been popular among investors, as they offer the chance for some amazing and quick gains. Yet after the Facebook (NASDAQ: FB  ) IPO, many investors swore off initial public offerings forever, seeing them as a rigged game that they couldn't win. Now, some new and successful IPOs have those investors wondering what they should do next.

In the following video, Dan Caplinger, the Fool's director of investment planning, looks at three lessons that you can take from the IPO market. First, Dan notes that you can't count on the big gains many expect from IPOs. Facebook is the obvious example, with lots of hype before the initial public offering building high expectations that the company couldn't deliver on for more than a year after the shares went public. Some companies never recover from their IPOs. For instance, Zynga (NASDAQ: ZNGA  ) trades well below its IPO price and is still struggling to find a viable business model in a rapidly evolving and highly competitive industry.

Second, Dan observes that you also can't count on being able to get in on a stock at cheaper prices after its initial public offering. Google (NASDAQ: GOOG  ) and MasterCard (NYSE: MA  ) are two examples Dan mentions, with Google having jumped just about from its outset because of its immense popularity and its success in growing its profits quickly. Similarly, MasterCard managed to stay above its IPO price even in the midst of the financial crisis, largely because its card-network model didn't involve the credit risk that other financial companies took on.

Finally, Dan reminds investors that you can't expect to be 100% sure about any company going public, as most IPOs involve new and untested businesses. By the time you're comfortable with a company, it has often already produced huge gains that you've missed out on.

Don't wait for great IPOs to invest
Facebook's IPO debacle only added fuel to the fire that the financial crisis started, leading millions of Americans to stay out of the market and thereby miss the huge gains that stocks have posted in recent years. By doing so, they've put their financial futures in jeopardy. To learn more about why investing is so important and what you need to do to get started, read our brand-new special report, "Your Essential Guide to Start Investing Today." Inside, Dan walks you through the basics to help you move forward with your financial life. Click here to get your copy today -- it's absolutely free.

Fine Art Can Be A Fine Investment

The painting you bought to match your sofa may increase in worth, or it may be as salable as your kid's pasta-filled craft project. As with any investment, you need to do your research and go beyond your comfort zone. The art market is fickle, and there are no guarantees of profitability, but with a little legwork and forethought you can fill your home with images that may prove worthy investments down the line. Consider these tips for choosing fine art and identifying the Michelangelo from the macaroni.

Original Ideas: Paintings and Giclées
You walk into a gallery and fall in love with a $5,000 painting, but you just can't justify the price tag. The gallery owner shows you a selection of the same artist's work for a humble $500, explaining that the pieces are giclées. A giclée is a machine-made print, a reproduction printed on fine paper or canvas with color and clarity that can rival the original. But it's still a copy.

The rarity of a work of art is what gives it value, so an original will always be worth more than a reproduction. While a giclée may come labeled with superlatives like "museum quality" or "archival", and the seller may hawk a certificate of authenticity, it will never be as valuable as an original. Some artists and appraisers even view giclées as a gimmick for novice artists and neophyte collectors.

Still, there's no denying that a giclée puts fine art within reach for many art enthusiasts, and while a certificate doesn't lend much value to the reproduction, a fresh signature and especially a remarque (an original drawing made by the artist in the margin of the giclée) could bump up future value.

You may hear stories of giclées being proudly exhibited at such noble institutions as the BritishMuseum and the Metropolitan Museum of Art, but the pieces held in these collections are limited edition Iris prints of digital images or digital manipulations - such as "Nest and Trees" by Kiki Smith at the Met. They are not reproductions of original paintings. Museums do, however, sell giclée versions of masterpieces to generate income. These giclées, though pleasing to your eye and soul, won't pull in any future income for you.

Doing the Loupe de Loupe: Prints and Posters
Maxfield Parrish and Courier & Ives brought art into the homes of America at the turn of the century with their mass-produced prints. These images are the predecessors of the posters sold in malls and museum shops today. Posters, like giclées, give you access to a masterpiece, but a poster is not the same as a fine art print, which can be in the form of a hand-pulled silkscreen, lithograph or block print.

You can often distinguish an artist print from a poster with the naked eye, though in some cases you may need a loupe or magnifying glass. The process of offset printing leaves a tiny dot matrix on the paper - think of a comic book or a Roy Lichtenstein painting with its exaggerated dots of color.

Several factors determine the value of an artist's print: the size of the edition, that is, the number of prints the artist makes of one work; the significance of the work; the condition of the print; and whether it is signed and numbered by the artist. In the market for prints, it is rarity that bestows value. A low run of limited edition prints is more valuable than a mass-produced image. Even an earlier pull of a print - say No.10 of 100 (rather than No 80 of 100) - can mean better value.

Cruising Cruise Art Auctions
A cruise art auction is exactly as it sounds: it's a sea cruise that displays and sells fine art. With name-brand artist prints, drawings and paintings that come hyped with certificates of authenticity, the cruise auction can seem like a boon to the aspiring art investor. The artwork changes each day as lots are sold off, and written appraisals suggest pieces are offered at a fraction of their value. You might feel like you've stumbled into a floating investment paradise.

The artwork at these auctions is genuine, but that doesn't necessarily make it a good investment. Cruise auctions work on the principle that buyers believe authenticity equals high value. Unfortunately, authenticity does not guarantee the rarity of a piece or its importance in the art world. The critical guideline for buying art cannot be repeated too often: art that is valuable is art that is rare.

But how can you know whether your auction find is a rare commodity? Do your research. Hit the internet café on your ship before you plunk down the plastic. You can Google the artist and the specific artwork to get some history, and check sites such as artfact.com or eBay to get a representative sample for pricing.

Selling Your Art Investment
Most people who buy paintings don't end up selling them later on, and that fact can skew pricing samples for art. When a painting is auctioned, it's often because the owner of the work thinks the piece will attract a handsome price. Auction prices reflect only a tiny amount of art resales, and some experts estimate that only 0.5% of paintings bought are ever resold.

If you have a true find hanging on your wall and you're ready to part with it, your best shot at a decent payout will be a fine art auction house, which will typically charge as little as 3% or as high as 50% of your sale price for auctioning your piece, according to ChicagoAppraisers.com. The do-it-yourself internet auction sites usually draw far less coin.

Still, art is a long-term investment, and while the art market can be stable or even show gigantic returns on an investment during boom times, it is one asset that can easily plummet in value during seasons of recession.

Final Tips for Investing in the Arts
When you're ready to hit the galleries and invest in the future of art, go in with your eyes wide open. Gallery owners will tell you that buying art is an emotional decision, but don't fall for that line if you are thinking of it as an investment. Research any living artists who catch your eye. Learn about their education, their commissions and their exhibits. Visit museums, galleries and art institutions in your area regularly so you can recognize potential movers and shakers in your region. If you're considering a piece by a renowned artist, get an appraisal. Look for quality, and don't buy anything in bad condition. With a little effort, you may befriend the next Rothko or unearth a lost masterpiece that's worth a million.

Smucker Reaches 52-Week High - Analyst Blog

Shares of food manufacturer The J.M. Smucker Company (SJM) reached a new 52-week high of $106.00 on Jul 11 following its fourth quarter fiscal 2013 results. The share price has been on the rise since the fourth quarter results on Jun 6, gaining 7.7% in just one month.

The stock closed at $105.93 on Jul 11, recording a healthy return of 19.4% on a year-to-date basis. The company's long-term estimated EPS growth rate is 8.28%. Average volume of shares traded over the last three months came in at approximately 586K.

Solid Fourth Quarter

Smucker reported better-than-expected fourth quarter fiscal 2013 adjusted earnings of $1.29 per share. The results exceeded the Zacks Consensus Estimate by 12.2% and the prior-year adjusted earnings by 17% on the back of higher operating income, lower taxes and lower share count due to share buybacks.

Though revenues declined due to a decrease in net price realization, the company achieved volume gains in the U.S. Retail Coffee and U.S. Retail Consumer Foods segments, driven by higher priced K-Cups coffee and Dunkin Donut brands.

Smucker's gross margin improved 240 basis points to 36.1%, driven by lower input costs primarily that of green coffee. Operating margin also increased 100 basis points to 16.8%, despite higher operating expenses.

We are encouraged by the company's continued focus on its brands through innovations and promotional offerings, strategic acquisitions, improving volumes, and effective utilization of cash through buybacks. We believe the company is well positioned to drive profits in the coming quarters.

With a Zacks Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method) of +1.68% and a Zacks Rank #2 (Buy), Smucker is likely to beat earnings in its upcoming quarter, results of which are likely to be announced in August.

Other Stocks to Consider

Other stocks in the food business that are currently doing well and are worth considering include Flower Foods I! nc. (FLO), B&G Foods Inc. (BGS) and Kraft Foods Group Inc (KRFT). While Flower Foods and B&G Foods carry a Zacks Rank #1 (Strong Buy), Kraft Foods holds a Zacks Rank #2.

Qualcomm, Inc. Misses Q4 Estimates; Shares Sink 4% In After Hours (QCOM)

The San Diego-based communications and networking bellwether, Qualcomm Inc. (QCOM), announced fourth quarter earnings results after the bell on Wednesday that came in slightly below analysts’ expectations.

QCOM Earnings in Brief

-The company’s Q4 EPS came in at $1.05 a share, compared to the expected $1.08 a share.
-In terms of revenues, QCOM raked in $6.48 billion last quarter, beating the projected figure of $6.34 billion.
-The company’s net income of $1.50 billion marks an impressive 18% increase year-over-year, but is down 5% from the last quarter.
-Looking ahead, QCOM sees FY2014 EPS of $4.95-$5.15 a share, compared to the consensus of $4.95; revenues are expected to come in at $26 billion to $27.5 billion versus the consensus of $27.5 billion, reflecting a lackluster guidance from the company.

CEO Commentary

Dr. Paul Jacobs, company chairman and CEO, commented after the earnings report was made public, stating ”I am very pleased with our record financial performance this year as we delivered revenues of $25 billion, up 30% versus last year. Our technologies underpin the global growth of wireless data, and our semiconductor solutions are used across the industry’s flagship smartphones.” He went onto add, “Looking forward, we expect continued strong growth of 3G and 3G/4G multimode devices around the world, particularly in China with the anticipated launch of LTE. Qualcomm remains well positioned from a growth standpoint, and we expect double-digit compound annual growth rates for both revenues and earnings per share over the next five years.”

Dividend Commentary 

There was no mention of a dividend raise in QCOM’s quarterly report; looking back, the last dividend hike was in June of this year, when the quarterly payout increased from $0.25 to $0.35 a share. Given the company’s sound financial footing and solid track record of dividend increases over the long-haul, it is expected that it will raise its distribution again in the foreseeable future.

Stock Performance 

Investors fretted over QCOM’s results as evidenced by the stock sinking over 4% in after-hours trading. Year-to-date, QCOM is lagging behind the broad market with a 12% return compared to the S&P 500′s gain of 24%.

Why Transocean Is Poised to Bounce Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, offshore drilling giant Transocean (NYSE: RIG  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Transocean and see what CAPS investors are saying about the stock right now.

Transocean facts

Headquarters (founded)	Vernier, Switzerland (1953)
Market Cap	$17.9 billion
Industry	Oil and gas drilling
Trailing-12-Month Revenue	$9.3 billion
Management	CEO Steven Newman CFO Esa Ikaheimonen
Return on Equity (average, past 3 years)	(7.5%)
Cash/Debt	$3.7 billion / $11.2 billion
Dividend Yield	4.5%
Competitors	Ensco Noble  Saipem

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 98% of the 6,064 members who have rated Transocean believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, TempoAllegro, tapped Transocean as a particularly attractive bargain opportunity:

Transocean is an experienced, worldwide underwater oil driller still available at a discount. It has a large enough footprint in this industry to weather just about any storm, and deepwater drilling won't get done without experienced operators like Transocean (RIG).

Of course someone investing in Transocean needs to be aware of the ongoing drag of potential liabilities for the Deepwater Horizon catastrophe, however, it can be safely assumed that Transocean would have been the last to want to see its rig sunk and its men killed. While the legal cases are ongoing, logically, one would think the owner of the field that pushed to stay on schedule, possibly at the risk of overlooking safety concerns – the same company that has already offered to pay the lion's share of the cleanup costs – would bear most of the responsibility. Or the other company that did not properly seal the cement casing on the well that caused the blowout would be more liable. No matter how you slice it, Transocean did not want this to happen and more of the blame will likely fall on its partners. With this in mind, shares are artificially depressed, and will eventually bounce back.

If you want market-topping returns, you need to put together the best portfolio you can. Of course, despite its five-star rating, Transocean may not be your top choice.

We've found another energy play we are incredibly excited about -- excited enough to dub it "The Only Energy Stock You'll Ever Need." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

3 Stocks to Get on Your Watchlist

I follow quite a lot of companies, so the usefulness of a watchlist to me cannot be overstated. Without my watchlist, I'd be unable to keep up on my favorite sectors and see what's really moving the market. Even worse, I'd be lost when the time came to choose which stock I'm buying or shorting next.

Today is Watchlist Wednesday, so I'm discussing three companies that have crossed my radar in the past week -- and at what point I may consider taking action on these calls with my own money. Keep in mind that these aren't concrete buy or sell recommendations, nor do I guarantee I'll take action on the companies being discussed. What I can promise is that you can follow my real-life transactions through my profile and that I, like everyone else here at The Motley Fool, will continue to hold the integrity of our disclosure policy in the highest regard.

Apple (NASDAQ: AAPL  )
You can go ahead and give yourself all the reasons in the world why Apple should sell off after announcing its Street-topping second-quarter results, but I can give you 145 billion reasons why it remains an intriguing buy!

For the quarter, Apple reported an 11% increase in revenue to $43.6 billion as it upped sales of the iPhone to 37.4 million from 35.1 million in the year-ago period, and iPad sales launched to 19.5 million from 11.8 million. Yes, PC sales remain a weak point with Mac sales dipping again, but overall this was another strong quarter of cash flow generation and consistent execution.

Not only did Apple end the quarter with $145 billion in cash, but it also announced a long-awaited increase in its dividend and a big boost in its share repurchase program. Apple upped its dividend by 15% to $3.05 per quarter and plans to return $100 billion in capital to shareholders through these dividends and share buybacks over a three-year period. As such, Apple's board authorized a 500% increase in its share repurchase program to $60 billion from $10 billion that is expected to be completed by the end of calendar 2015.

Again, what's wrong with Apple? Other than a big group of emotional traders, nothing that I can tell!

Chipotle Mexican Grill (NYSE: CMG  )
Sticking with the theme of earnings-driven stock moves, fresh-Mex restaurant chain Chipotle rocketed higher last week after reporting better-than-expected first-quarter results.

For the quarter, Chipotle delivered a 13% increase in revenue to $726.8 million as adjusted EPS jumped 24%, but it achieved this mainly through the opening of new stores. Chipotle's actual same-store sales growth improved just 1%. Looking ahead, Chipotle cautioned investors to expect same-store sales growth to be flat to up low-single-digits.

As I take everything into consideration with Chipotle, I can't help but come to the conclusion that it's grossly overvalued at current levels. It does have the benefit of catering to healthier casual dining consumers who appreciate that their meat isn't laden with unnecessary antibiotics. Then again, Chipotle is walking a very thin tightrope of not raising prices in order to keep customers from being driven to competitors. It shunned boosting prices last year and its margins have suffered because of it.

Until taxpayers become more acclimated with their smaller spending budgets due to higher taxes, and Chipotle comes to terms with the fact that pricing power is its best friend, I'd suggest looking at this from a short-selling standpoint.

Canadian National Railway (NYSE: CNI  )
Once more the theme is an earnings-driven event. Canadian National, known as CN, is a railroad company to the north that delivered net income of $541 million in the first quarter compared to the $755 million it reported in profits in the year-ago period. Despite tougher weather conditions being one of the primary factors for the volume shortfall, investors still came down on Canadian National.

However, I see CN as a sneaky oil and bitumen transport play from the oil-heavy Bakken formation. One-trick drillers like Continental Resources (NYSE: CLR  )  have been utilizing its shipping their oil by rail past Cushing, Okla., to Louisiana terminals and netting the difference between the higher Brent crude price as compared to the West Texas Intermediate price after shipping costs. Continental is currently shipping 65% of its oil production in the Bakken this way, proving it's obviously a profitable venture.

Similarly, CN can be viewed as a prime transporter of oil and bitumen into various regions of Canada. As the U.S. looks to beef up its energy reserves, you can expect oil production, especially in the oil-rich Bakken, to increase, only furthering the need for transport by rail. We obviously can't predict the impact of weather on CN's operations, but the demand for its services is bound to remain strong for decades to come.

Foolish roundup
Is my bullishness or bearishness misplaced? Share your thoughts in the comments section below, and consider following my cue by using these links to add these companies to your free, personalized Watchlist to keep up on the latest news with each company:

Add Apple to My Watchlist. Add Chipotle Mexican Grill to My Watchlist. Add Canadian National Railway to My Watchlist.

Is Apple a buy following its second-quarter earnings report?
There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

The 3 Best Coal Stocks to Buy Now

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It hasn’t been the best couple of years for investors in coal stocks.

Coal stocks have faced the dual threat of falling demand coupled with rising regulation. First, our abundance of natural gas — which has been great for the oil stocks — has pushed prices down for the fuel towards historic lows. That's causing utilities to abandon coal in favor of cheap natural gas for electricity generation.

Exacerbating the plight of coal stocks is rising environmental legislation. New rules created by the EPA have pushed utilities towards natural gas. New plants are essentially being forced to run on the abundant and cleaner burning fuel. That's prompted several coal stocks to close mines and others to like Patriot Coal (PCXCQ) to close up shop and file for bankruptcy protection.

However, all this hatred towards coal stocks could provide tantalizing values for investors who want bargains. Several of the largest and best-run coal stocks are currently trading for peanuts. Meanwhile, coal is still widely used worldwide in steel manufacturing and in many emerging markets to generate electricity.

Simply put, the coal stocks trio of Peabody Energy (BTU), Alpha Natural Resources (ANR) and Cloud Peak Energy (CLD) could be some of the biggest bargains out all energy stocks.

Best Coal Stocks to Buy Now – Peabody Energy (BTU)

When it comes to coal stocks, Peabody Energy (BTU) is definitely king of them all.

BTU stock is appealing because Peabody is one of the largest producers of the mineral. The BTU empire spans 28 different mines across several nations — including the U.S., Australia, Indonesia and China. That global reach has allowed Peabody Energy to profit even when things turned sour for coal stocks here at home. BTU has a much easier time tapping into markets in electricity-hungry Asia than many other domestic coal stocks.

Not to mention that prices for coal are better overseas as well.

For the first nine months of the year, Peabody Energy was able to sell Australian-produced coal at around $112 per ton. Meanwhile, it only cost BTU around $80 per ton to produce. By contrast U.S. mined coal only netted BTU around $18 per ton at a cost of $13.

Meanwhile, Peabody Energy continues to cut costs via prudent CAPEX spending and lowering its debt. BTU stock currently features an industry low debt-to-equity ratio of 130%.

All in all, its global reach and low costs of production have made BTU stock one of the only profitable coal stocks around. Based on 2016 earnings estimates, BTU stock currently can be had for dirt cheap P/E of just 7.

Best Coal Stocks to Buy Now – Cloud Peak Energy (CLD)

For coal stocks, Wyoming's Powder River Basin features some of the best coal reserves on the planet. Aside from the sheer amount of coal, it has some of the lowest sulfur-producing reserves. That makes it ideal for utilities trying to skirt new EPA rules about emissions.

It also happens to be the primary stomping ground for Cloud Peak Energy's (CLD) — one of the top coal stocks out there.

With royalty agreements with the Powder River Basin's Crow Tribe, CLD has unprecedented access to the region’s vast reserves at cheaper costs than its competitor's holdings. CLD stock could get a boost from future exports of PBR coal. The pending Gateway Pacific Terminal — which will be used to send PBR coal directly to Asia — happens to sit in CLD's back yard.

With that sea-port still in the planning/construction stages, CLD has been cutting costs, conserving cash and idling excess mine supply. That puts coal stocks like CLD in a prime position to benefit when coal prices rebound.

CLD stock can currently be had for P/E of 16.

Best Coal Stocks to Buy Now Alpha Natural Resources (ANR)

With the global economy finally beginning to move forward, Alpha Natural Resources (ANR) is one of a few coals stocks that could be an interesting turnaround play. See, unlike CLD and BTU, ANR mainly produces metallurgical coal — the kind used in steel making.

Currently, metallurgical coal prices are flat due to oversupply. That's hurt the company’s bottom line and ANR stock over the last few quarters. However, with industrial output ramping up in key steel producing nations — namely, Japan, China and South Korea — the medium- to longer-term picture seems to be a bit rosier for ANR stock.

At the same time, ANR has a few aces up its sleeve vs. other coal stocks. First, Alpha Natural Resources plans on selling its ownership stake in a shale gas joint venture for $300 million in cash and shares to Rice Energy. Aside from boosting its near-term liquidity, Rice Energy plans to IPO in early 2014. That will provide a nice exit event for ANR stock.

Secondly, ANR recently issued a series of convertible notes at a cheap 4.875% interest rate. Those notes will be used to retire current liabilities. Overall, the bond issue and shale gas sale boosted ANR stocks liquidity to nearly $2 billion. That should be more than enough to help ANR stock ride out the downturn in metallurgical coal prices until they rebound. That liquidity position is enviable for many other coal stocks.

In view of the better long-term picture, investors may want to give ANR stock a go. And if not, the other coal stocks on this list are solid if you want to bet on the beaten-down sector.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.

Top Medical Companies To Invest In 2014

NEW YORK (AP) — A portfolio manager for one of the nation's largest hedge funds who was accused by the government of cheating to boost sagging results in 2007 was convicted on Wednesday of insider trading charges.

The verdict against Michael Steinberg in Manhattan federal court was announced only after he was checked by a nurse because he had slumped in his seat and appeared to faint when the jury first entered the courtroom.

U.S. District Judge Richard J. Sullivan, who set sentencing for April 25, told jurors Steinberg had a "bit of a dizzy spell" but that he had been checked by the nurse and Steinberg's brother, who's a doctor, and that everyone including the 41-year-old defendant agreed he was fit to receive the verdict. When the first of five guilty verdicts was read aloud, Steinberg's head dropped back and he looked up.

"Disappointing verdict, I know," the judge told Steinberg after jurors left the courtroom as he again offered medical assistance if the defendant required it. Steinberg did not.

Top Medical Companies To Invest In 2014: StemCells Inc (STEM.W)

StemCells, Inc. (StemCells), incorporated in August 1988, is engaged in the research, development, and commercialization of stem cell therapeutics and related tools and technologies for academia and industry. The Company is focused on developing and commercializing stem and progenitor cells as the basis for therapeutics and therapies, and cells and related tools and technologies to enable stem cell-based research and drug discovery and development. The Company�� primary research and development efforts are focused on identifying and developing stem and progenitor cells as potential therapeutic agents. The Company has two therapeutic product development programs, including its CNS Program, which is developing applications for HuCNS-SC cells, its human neural stem cell product candidate, and its Liver Program, which is characterizing the Company�� human liver cells as a therapeutic product.

CNS Program

The Company in its CNS Program, is in clinical development with its HuCNS-SC cells for a range of disorders of the central nervous system. The CNS includes the brain, spinal cord and eye. In February 2012, the Company had completed a Phase I clinical trial in Pelizeaus-Merzbacher Disease (PMD), a fatal myelination disorder in the brain.

The Company�� CNS Program is focused on developing clinical applications, in which transplanting HuCNS-SC cells protect or restore organ function of the patient before such function is irreversibly damaged or lost due to disease progression. The Company�� initial target indications are PMD, and more generally, diseases in which deficient myelination plays a central role, such as cerebral palsy or multiple sclerosis; spinal cord injury, disorders in which retinal degeneration plays a central role, such as age-related macular degeneration or retinitis pigmentosa. The Company�� product candidate, HuCNS-SC cells, is a purified and expanded composition of normal hum an neural stem cells. Its HuCNS-SC cells can be directly tr! a! nsplanted.

Liver Program

Liver stem or progenitor cells offer an alternative treatment for liver diseases. A liver cellular therapy or cell-based therapeutic provide or support liver function in patients with liver disease. The Company held a portfolio of issued and allowed patents in the liver field, which cover the isolation and use of both hLEC cells and the isolated subset, as well as the composition of the cells themselves.

The Company�� range of cell culture products, which are sold under the SC Proven brand, includes iSTEM, GS1-R, GS2-M, RHB-A, RHB-Basal, NDiff N2, and NDiff N2B27. Its iSTEM is a serum-free, feeder-free medium that maintains mouse embryonic stem cells in their pluripotent ground state by using selective small molecule inhibitors to block the pathways, which induce differentiation. RHB-A is a defined, serum-free culture medium for the selective culture of human and mouse neural stem cells and their maintenanc e and expansion as adherent cell populations. RHB-Basal is a defined, serum-free basal medium. When supplemented with specific growth factors, this media is formulated for the propagation and differentiation of adherent neural stem cells. RHB-Basal can also be tailored to specific-cell type requirements by the addition of customer preferred supplements.

The Company�� NDiff N2 is a defined serum-free scell culture supplement for the derivation, maintenance, expansion and/or differentiation of human and mouse embryonic stem (ES) cells and tissue-derived neural stem cells supplement. Its NDiff N2-AF is a serum-free and animal component-free version of NDiff N2. Its NDiff N2B27 is a defined, serum-free medium for the differentiation of mouse embryonic stem cells to neural cell types. NDiff N27-AF is a serum-free and animal component-free version of NDiff N27. Its GS1-R is a serum-free media formulation shown to enable the derivation and long-term maintenance of tr ue, germline competent rat embryonic stem cells without! the ! ad! dition ! of cytokines or growth factors. Its GS2-M is a defined, serum- and feeder-free medium for the derivation and long-term maintenance of true, germline competent mouse iPS cells.

The Company also markets a number of antibody reagents for use in cell detection, isolation and characterization. These reagents are also under the SC Proven brand and it includes STEM24, STEM101, STEM121 and STEM123. Its STEM24 is a human antibody that recognizes human CD24, also known as heat stable antigen (HSA), a glycoprotein expressed on the surface of many human cell types, including immature human hematopoietic cells, peripheral blood lymphocytes, erythrocytes and many human carcinomas. Its CD24 is also a marker of human neural differentiation. Its STEM101 is a human-specific mouse antibody that recognizes the Ku80 protein found in human nuclei. Its STEM121 is a human-specific mouse antibody that recognizes a cytoplasmic protein of human cells. Its STEM123 is a human-specific mouse antibody that recognizes human glial fibrillary acidic protein (GFAP).

The Company�� Other products marketed under SC Proven include total cell genomic DNA (gDNA), RNA and protein lysate reagents purified from homogenous stem cell populations for intra-comparative studies, such as Epigenetic fingerprinting, Southern, Western and Northern blots, PCR, RT-PCR and microarrays. This range of purified stem cell line lysates includes mouse embryonic stem (ES) cells propagated in SC Proven 2i inhibitor-based GS2-M media and mouse ES cell-derived and fetal tissue-derived neural stem (NS) cells propagated in SC Proven RHB-A media.

Top Medical Companies To Invest In 2014: Oncolytics Biotech Inc (ONCY)

Oncolytics Biotech Inc. (Oncolytics), incorporated on April 2, 1998, is a development-stage company. The Company is focused on its research and development of REOLYSIN, which is its cancer therapeutic. REOLYSIN is developed from the reovirus. This virus has been demonstrated in tumour cells bearing an activated Ras pathway. Oncolytics is directing a clinical trial program with the focus of developing REOLYSIN as a human cancer therapeutic. The clinical program includes clinical trials, which it sponsors directly along with Third Party Clinical Trials. Third Party Clinical Trials are clinical trials that are being sponsored by other institutions. As of December 31, 2011, the United States National Cancer Institute (NCI), the University of Leeds and the Cancer Therapy & Research Center at the University of Texas Health Center in San Antonio (CTRC) were sponsoring part of its clinical trial program.

The Company�� clinical trial program has included human trials using REOLYSIN alone, and in combination with radiation and chemotherapy, and delivered via local administration and/or intravenous administration. Oncolytics uses contract toll manufacturers to produce REOLYSIN. On December 31, 2011, the Company had two wholly owned subsidiaries, Oncolytics Biotech (Barbados) Inc. (OBB) and Valens Pharma Ltd. Oncolytics Biotech (US) Inc. and Oncolytics Biotech (U.K.) are wholly owned subsidiaries of OBB.

Advisors' Opinion:

• [By John Udovich]

  The biotech sector along with small cap biotech stocks Cardiome Pharma Corp (NASDAQ: CRME), Oncolytics Biotech, Inc (NASDAQ: ONCY), Vital Therapies Inc (NASDAQ: VTL) and TNI BioTech (OTCMKTS: TNIB) have all been producing their share of news this week for investors and traders alike to trade on. Moreover and while some 42 ��ife sciences��companies have gone public raising about $3 billion from investors so far this year, there are a growing number of biotechs pulling the plug on upcoming IPOs who are citing market conditions. With that in mind, here is a look at important news from the biotech sector and small cap biotech stocks this week:

• [By Maxx Chatsko]

  T-VEC is not your traditional biologic drug. It is actually a bioengineered form of the herpes virus that, once injected into cancerous tumors, replicates, and produces an immune-stimulating protein that puts a bulls eye on cancer cells throughout the body. Despite its promise and intriguing mechanism of action, T-VEC is not in further development at Amgen. However, Oncolytics (NASDAQ: ONCY  ) has shown promising results for its bioengineered form of reovirus called Reolysin. Initial phase 3 results showed that 86% of patients taking the drug had reduced tumor mass or growth after six weeks of treatment. �

• [By Sean Williams]

  With this in mind, I feel it'd be prudent of biotech-savvy investors to give Oncolytics Biotech (NASDAQ: ONCY  ) a closer look.

  The big risks
  I'm quite aware that there are a lot factors that'd raise a red flag with Oncolytics. Similar to Affymax, you could say that Oncolytics has put all of its eggs in one basket with its lead experimental drug, reolysin. According to Oncolytics' website, including its U.K., Canadian, and U.S. studies, reolysin as either a monotherapy or combination therapy is the basis for all 31 clinical trials! Obviously, if reolysin proves ineffective or unsafe, Oncolytics is going to be a world of hurt.

Hot Growth Companies To Invest In Right Now: Inovio Pharmaceuticals Inc (INO)

Inovio Pharmaceuticals, Inc., incorporated on June 29, 1983, is engaged in the development of a new generation of vaccines, called synthetic vaccines, focused on cancers and infectious diseases. The Company's SynCon technology enables the design of universal vaccines capable of providing cross-protection against existing or changing strains of pathogens, such as influenza and human immunodeficiency virus (HIV). The Company's electroporation delivery technology uses brief, controlled electrical pulses to increase cellular uptake of the vaccine. Its clinical programs include cervical dysplasia (therapeutic), avian influenza (preventive), prostate cancer (therapeutic), leukemia (therapeutic), hepatitis C virus (HCV) and HIV vaccines. It is advancing preclinical research and clinical development for a universal seasonal/pandemic influenza vaccine, as well as preclinical work for other products, including malaria and prostate cancer vaccines. Its partners and collaborators include University of Pennsylvania, Drexel University, National Microbiology Laboratory of the Public Health Agency of Canada, Program for Appropriate Technology in Health/Malaria Vaccine Initiative (PATH/MVI), National Institute of Allergy and Infectious Diseases (NIAID), Merck, ChronTech, University of Southampton, United States Military HIV Research Program (USMHRP), the United States Army Medical Research Institute of Infectious Diseases (USAMRIID) and HIV Vaccines Trial Network (HVTN). As of December 31, 2011 it owned 16.1% interest in VGX Int��.

Inovio�� Solution

The Company�� synthetic vaccine platform consists of its SynCon vaccine design process and electroporation delivery technology. It has developed a preclinical and clinical stage pipeline of vaccines. The Company�� synthetic vaccines are designed to prevent a disease (prophylactic vaccines) or treat an existing disease (therapeutic vaccines). Its synthetic vaccine consists of a deoxyribonucleic acid (DNA) plasmid encoding a selected antigen! (s), which is introduced into cells of humans or animals with the purpose of evoking an immune response to the encoded antigen. The Company�� synthetic vaccines are designed to generate specific antibody and/or T-cell responses.

The Company�� SynCon technology provides processes that employ bioinformatics, which combine extensive genetic data and sophisticated algorithms. Its design process uses the genetic make-up of a common antigen(s) from multiple strains of a virus within a viral sub-type or taxonomic group (family) of pathogens, such as HIV, hepatitis C virus (HCV), human papillomavirus (HPV), influenza and other diseases to synthetically create a new antigen for the desired pathogen target that does not exist in nature. Its synthetic vaccine candidates are being delivered into cells of the body using its electroporation (EP) DNA delivery technology.

Cancer Synthetic Vaccines

The Company has two broad types of cancer vaccines: preventive (or prophylactic) vaccines, which are intended to prevent cancer from developing in healthy people, and treatment (or therapeutic) vaccines, which are intended to treat an existing cancer by strengthening the body�� natural defenses against the cancer. Two types of cancer preventive vaccines are available in the United States. The United States Food and Drug Administration (the FDA) has approved two vaccines, Gardasil and Cervarix that protect against infection by the two types of HPV-types 16 and 18-that cause approximately 70% of all cases of cervical cancer worldwide. In addition, Gardasil protects against infection by two additional HPV types, 6 and 11, which are responsible for about 90% of all cases of genital warts in males and females but do not cause cervical cancer.

Cervarix manufactured by GlaxoSmithKline, is composed of virus-like particles (VLPs) made with proteins from HPV types 16 and 18. Cervarix is approved for use in females��ages 10 to 25 for the prevention of cervical cancer caused by! HPV type! s 16 and 18. Gardasil manufactured by Merck, is approved for use in females for the prevention of cervical cancer, and some vulvar and vaginal cancers, caused by HPV types 16 and 18 and for use in males and females for the prevention of genital warts caused by HPV types 6 and 11. The vaccine is approved for these uses in females and males ages 9 to 26. The FDA has also approved a cancer preventive vaccine that protects against hepatitis B virus (HBV) infection.

Inovio�� VGX-3100 is designed to raise immune responses against the E6 and E7 genes of HPV types 16 and 18 that are present in both pre-cancerous and cancerous cells transformed by these HPV types. E6 and E7 are oncogenes that play an integral role in transforming HPV-infected cells into cancerous cells. In March 2011, it initiated a randomized, double-blind Phase II study of VGX-3100 delivered using the CELLECTRA intramuscular electroporation device in women with HPV Type 16 or 18 and diagnosed with, but not yet treated for, cervical intraepithelial neoplasia (CIN) 2/3. The study is designed to enroll 148 subjects. In January 2011, it announced the publication of a scientific paper in the journal Human Vaccines detailing potent immune responses in a preclinical study of its SynCon vaccine for prostate cancer targeting two antigens, prostate specific antigen (PSA) and prostate specific membrane antigen (PSMA).

In January 2011, the Company announced the regulatory approval of a Phase II clinical trial (WIN Trial) to treat leukemia utilizing its new ELGEN 1000 automated vaccine delivery device. The single dose level, Phase II study, called WT1 immunity via DNA fusion gene vaccination in haematological malignancies by intramuscular injection followed by intramuscular electroporation. Cancer Vaccines encodes for hTERT, an antigen related to non-small cell lung, breast and prostate cancers. The vaccine is delivered using its electroporation delivery technology.

Infectious Disease Synthetic Vaccines

In Marc! h 2011, the Company announced the initiation of a follow-on open label, single dose Phase II clinical study in collaboration with ChronTech of the ChronVac-C HCV DNA vaccine delivered using its electroporation technology in treatment naive HCV infected individuals. Its HIV vaccines consist of candidates for HIV prevention, as well as therapy or treatment. PENNVAX-B is designed to target HIV clade B (most commonly found in the United States, North America, Australia and the European Union (EU). PENNVAX-G is designed to target HIV clades A, C and D, which are more commonly found in Asia, Africa, Russia and South America. This Phase I clinical study of PENNVAX-B (HVTN-080) vaccinated 48 healthy, HIV-negative volunteers to assess safety and levels of immune responses generated by Inovio�� PENNVAX-B vaccine delivered with its CELLECTRA electroporation device. PENNVAX-B is a SynCon vaccine that targets HIV gag, pol, and env proteins.

The Company�� VGX-3400X targets H5N1. The vaccine consists of three distinct DNA plasmids coded for a consensus hemagglutinin (HA) antigen derived from different H5N1 virus strains; a consensus neuraminidase (NA) antigen derived from different N1 sequences; and a consensus nucleoprotein (NP) fused to a small portion of the m2 protein (m2E) based on a broader cross-section of influenza viruses in addition to H5N1 and H1N1. Conventional vaccines are strain-specific and have limited ability to protect against genetic shifts in the influenza strains they target. They are therefore modified annually in anticipation of the next flu season�� new strain(s). It is focused on developing DNA-based influenza vaccines able to provide broad protection against known as well as newly emerging, unknown seasonal and pandemic influenza strains.

Animal Health/Veterinary

VGX Animal Health, Inc. (VGX AH), a majority-owned subsidiary, has licensed LifeTide, a plasmid-based growth hormone releasing hormone (GHRH) technology for swine. LifeTide is one of onl! y four DN! A-based treatments approved for use in animals and is the only DNA-based agent delivered using electroporation that has been granted marketing approval (Australia). VGX AH is also developing a GHRH-based treatment for cancer and anemia in dogs and cats. It is developing a synthetic vaccine for foot-and-mouth disease (FMD) administered by its vaccine delivery technology. The FMD virus is one of the most infectious diseases affecting farm animals, including cattle, swine, sheep and goats, and is a serious threat to global food safety.

The Company competes with Crucell N.V, Sanofi-Aventis, Novartis, Inc., GlaxoSmithKline plc, Merck, Pfizer, AstraZeneca, Inc., Novartis, Inc., MedImmune and CSL.

Advisors' Opinion:

• [By Sean Williams]

  No fairytale ending
  Fairytale endings work great in the movies, but you rarely see them come to fruition in the real world. Small-cap biopharmaceutical Inovio Pharmaceuticals (NYSEMKT: INO  ) has seen shares nearly triple since April on the heels of multiple intriguing studies, but will the glass slipper fit over the long term?

• [By Sean Williams]

  On the clinical data front, Alnylam Pharmaceuticals (NASDAQ: ALNY  ) and Inovio Pharmaceuticals (NYSEMKT: INO  ) both put investors in their happy place.

• [By George Budwell]

  Inovio Pharmaceuticals (NYSEMKT: INO  ) develops DNA-based vaccines and delivers them using a proprietary electroporation technique. Shares of Inovio have been a roller coaster all year long, and have certainly been the playground of day traders. Last week, Inovio shares lost more than 10% of their value on heavy volume, suggesting the stock may continue to experience downward pressure. This rapid move downward is surprising because the company recently signed a licensing deal with Roche (NASDAQOTH: RHHBY  ) to commercialize Inovio's multi-antigen DNA immunotherapies for prostate cancer and hepatitis B. As part of the deal, Inovio received $10 million upfront, and milestone payments could go as high as $412 million.

Top Medical Companies To Invest In 2014: NeoStem Inc (NBS)

NeoStem, Inc., incorporated on September 18, 1980, operates in cellular therapy industry. Cellular therapy addresses the process by which new cells are introduced into a tissue to prevent or treat disease, or regenerate damaged or aged tissue, and consists of a separate therapeutic technology platform in addition to pharmaceuticals, biologics and medical devices. The Company�� business model includes the development of novel cell therapy products, as well as operating a contract development and manufacturing organization (CDMO) providing services to others in the regenerative medicine industry. Progenitor Cell Therapy, LLC, the Company�� wholly owned subsidiary (PCT), is a CDMO in the cellular therapy industry. PCT has provided pre-clinical and clinical current Good Manufacturing Practice (cGMP) development and manufacturing services to over 100 clients advancing regenerative medicine product candidates through rigorous quality standards all the way through to human testing.

PCT has two cGMP, cell therapy research, development, and manufacturing facilities in New Jersey and California, serving the cell therapy community with integrated and regulatory compliant distribution capabilities. Its core competencies in the cellular therapy industry include manufacturing of cell therapy-based products, product and process development, cell and tissue processing, regulatory support, storage, distribution and delivery and consulting services. The Company�� wholly-owned subsidiary, Amorcyte, LLC (Amorcyte) is developing its own cell therapy, AMR-001, for the treatment of cardiovascular disease. AMR-001 represents its clinically advanced therapeutic product candidate and enrollment for its Phase II PreSERVE clinical trial to investigate AMR-001's safety and efficacy in preserving heart function after a heart attack in a particular type of post Acute Myocardial Infarction (AMI) patients.

Through the Company�� subsidiary, Athelos Corporation (Athelos), the Company is collaborating w! ith Becton-Dickinson in early stage clinical development of a therapy utilizing T-cells, collaborating for autoimmune and inflammatory conditions, including but not limited to, graft vs. host disease, type 1 diabetes, steroid resistant asthma, lupus, multiple sclerosis and solid organ transplant rejection. The Company�� pre-clinical assets include its Very Small Embryonic Like (VSEL) Technology platform. The Company has basic research and development capabilities, manufacturing facilities on both the east and west coast of the United States.

Advisors' Opinion:

• [By Stock Investor]

  Back in April in my article titled, "Regenerative Medicine's Time Has Come", I covered two very interesting companies focused on this field: NeoStem Inc. (NBS) and Neuralstem Inc. (CUR).

• [By Monica Gerson]

  NeoStem (NYSE: NBS) priced an underwritten public offering of 5,000,000 shares of common stock at an offering price of $7.00 per share. NeoStem shares dipped 9.44% to $7.10 in after-hours trading.

Top Medical Companies To Invest In 2014: DENTSPLY International Inc.(XRAY)

DENTSPLY International Inc. designs, develops, manufactures, and markets dental consumable products, dental laboratory products, and dental specialty products worldwide. The company?s dental consumable products include dental sundries, such as dental anesthetics, prophylaxis pastes, dental sealants, impression materials, restorative materials, tooth whiteners, and topical fluoride; and small equipment, including high and low speed handpieces, intraoral curing light systems, dental diagnostic systems, and ultrasonic scalers and polishers used in dental offices for the treatment of patients. Its dental laboratory products comprise dental prosthetics, including artificial teeth, precious metal dental alloys, dental ceramics, and crown and bridge materials, as well as equipment, such as computer aided machining ceramic systems and porcelain furnaces used in the preparation of dental appliances by dental laboratories. The company?s dental specialty products consist of endodonti c instruments and materials, implants and related products, bone grafting materials, 3D digital implantology, and orthodontic appliances and accessories. Its customers include dentists, dental hygienists, dental assistants, dental laboratories, and dental schools. The company distributes its dental products directly to dental laboratories and dental professionals, as well as through distributors, dealers, and importers. DENTSPLY International Inc. was founded in 1983 and is headquartered in York, Pennsylvania.

Advisors' Opinion:

• [By Seth Jayson]

  There's no foolproof way to know the future for DENTSPLY International (Nasdaq: XRAY  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

• [By Monica Gerson]

  DENTSPLY International (NASDAQ: XRAY) shares touched a new 52-week high of $47.65. DENTSPLY's trailing-twelve-month ROE is 15.95%.

  Sun Life Financial (NYSE: SLF) shares gained 2.47% to create a new 52-week high of $34.80 on Q3 results. Sun Life reported its Q3 operating net income from continuing operations of $422 million.

• [By Ben Levisohn]

  Shares of Align have surged 24% to $57 at 12:37 p.m. Sirona Dental Systems (SIRO) has risen 0.8% to $69.61, Dentsply International (XRAY) is up 0.1% at $45.44, Integra Lifesciences (IART) has� gained 0.4% to $44.23 and Danaher (DHR) has fallen 0.3% to $72.13.

Top Medical Companies To Invest In 2014: Galena Biopharma Inc (GALE.PH)

Galena Biopharma, Inc. (Galena), formerly RXi Pharmaceuticals Corporation, incorporated on April 3, 2006, is a biotechnology company focused on discovering, developing and commercializing therapies addressing unmet medical needs using targeted biotherapeutics. The Company is pursuing the development of cancer therapeutics using peptide-based immunotherapy products, including its main product candidate, NeuVaxTM (E75), for the treatment of breast cancer and other tumors. NeuVax is a peptide-based immunotherapy intended to reduce the recurrence of breast cancer in low-to-intermediate HER2-positive breast cancer patients not eligible for trastuzumab (Herceptin; Genentech/Roche). On January 19, 2012, the Company initiated enrollment in its Phase 3 PRESENT clinical trial for NeuVax (E75 peptide plus GM-CSF) vaccine in low-to-intermediate HER2 1+ and 2+ breast cancer patients in the adjuvant setting to prevent recurrence (Clinicaltrials.gov identifier NCT01479244). The Preven tion of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment study is a randomized, multicenter, multinational clinical trial that will enroll approximately 700 breast cancer patients. The Company�� Phase 2 trial of NeuVax achieved its primary endpoint of disease-free survival (DFS). On April 13, 2011, the Company completed its acquisition of Apthera, Inc.,(Apthera).

The Company focuses to start a Phase 2 trial comparing NeuVax in combination with trastuzumab (Herceptin) versus trastuzumab, alone, in a 300-patient, randomized study in the adjuvant breast cancer setting. The Company's second product candidate, Folate Binding Protein-E39 (FBP), is a vaccine, consisting of the peptides E39 and J65, aimed at preventing the recurrence of ovarian, endometrial, and breast cancers. On February 14, 2012, the Company announced the initiation of a Phase 1/2 clinical trial in two gynecological cancers: ovari an and endometrial adenocarcinomas. Folate binding protein! h! as very limited tissue distribution and expression in non-malignant tissue and is over-expressed in more than 90% of ovarian and endometrial cancers, as well as in 20% to 50% of breast, lung, colorectal and renal cell carcinomas.

In April 2011, the Company acquired Apthera Inc and its NeuVax product candidate. The Company focuses on developing a pipeline of immunotherapy product candidates for the treatment of various cancers based on the E75 peptide, the advanced of which is NeuVax, which is targeted at preventing the recurrence of breast cancer. NeuVax has had positive Phase 1/2 clinical trial results for the prevention of breast cancer recurrence in patients who have had breast cancer and received the standard of care treatment (surgery, chemotherapy, radiotherapy and hormonal therapy as indicated). The Company had also initiated its Phase 3 PRESENT clinical trial of NeuVax for the prevention of breast cancer recurrence in early-stage low-to-intermediate HER2 breast cancer patients. NeuVax directs killer T-cells to target and destroy cancer cells that express HER2/neu, a protein associated with epithelial tumors in breast, ovarian, pancreatic, colon, bladder and prostate cancers. NeuVax is comprised of a HER2/neu-derived peptide called E75. E75 is a nine-amino acid sequence that is immunogenic (produces an immune response) and GM-CSF is a commercially available protein that acts to stimulate and activate components of the immune system such as macrophages and dendritic cells.

The Company also develops novel applications for NeuVax based on preclinical studies and phases 2 clinical trials which suggest that combining NeuVax and trastuzumab (Herceptin; Genentech/Roche) can increase antigen presentation by tumor cells by promoting receptor internalization and subsequent proteosomal degradation of the HER2 protein. The Company also is pursuing additional therapeutic indications for NeuVax that are in Phase 1/2 clinical trials. RXI-109, is a dermal anti-scarring therapy that ! targ! ets! conne! ctive tissue growth factor (CTGF) and that may inhibit connective tissue formation in human fibrotic disease.

The Company competes with Roche Laboratories, Inc., Pfizer Inc., Bayer HealthCare AG, Sanofi-Aventis, US, LLC, Amgen, Inc., GlaxoSmithKline plc, Renovo Group plc, CoDa Therapeutics, Inc., Sirnaomics, Inc., FirstString Research, Inc., Merz Pharmaceuticals, LLC, Capstone Therapeutics, Halscion, Inc., Garnet Bio Therapeutics, Inc., AkPharma Inc., Promedior, Inc., Kissei Pharmaceutical Co., Ltd., Eyegene, Derma Sciences, Inc., Healthpoint Biotherapeutics, Pharmaxon, Excaliard Pharmaceuticals, Inc., Alnylam Pharmaceuticals, Inc., Marina Biotech, Inc., Tacere Therapeutics, Inc., Benitec Limited, OPKO Health, Inc., Silence Therapeutics plc, Quark Pharmaceuticals, Inc., Rosetta Genomics Ltd., Lorus Therapeutics, Inc., Tekmira Pharmaceuticals Corporation, Arrowhead Research Corporation, Regulus Therapeutics Inc. and Santaris.

Top Medical Companies To Invest In 2014: Uroplasty Inc (UPI.PH)

Uroplasty, Inc., incorporated in January 1992, is a medical device company that develops, manufactures and markets products for the treatment of voiding dysfunctions. The Company�� primary focus is on two products: the Urgent PC Neuromodulation system and Macroplastique Implants. The Urgent PC system is a United States Food and Drug Administration (FDA)-approved minimally invasive, office-based neuromodulation therapy for the treatment of overactive bladder (OAB) and associated symptoms of urinary urgency, urinary frequency, and urge incontinence; and Macroplastique Implants a urethral bulking agent for the treatment of adult female stress urinary incontinence primarily due to intrinsic sphincter deficiency (ISD). Outside of the United States, the Company�� Urgent PC is also approved for treatment of fecal incontinence, and Macroplastique is also approved for treatment of male stress incontinence and vesicoureteral reflux.

Urgent PC Neuromodulation Syst em

Using a small-gauge needle electrode inserted above the ankle, the Urgent PC System delivers electrical impulses to the tibial nerve that travel to the sacral nerve plexus, a control center for pelvic floor and bladder function. Components of the Urgent PC system include a hair-width needle electrode, a lead set, and an external, handheld, battery-powered stimulator. For each 30-minute, office-based therapy session, the physician or other qualified healthcare provider inserts the needle electrode in the patient�� lower leg and connects the electrode to the stimulator. Typically, a patient undergoes 12 consecutive weekly treatment sessions, with follow-up maintenance treatments as required to sustain the therapeutic effect. The Company has received regulatory clearances for sale of the Urgent PC system in the United States, Canada and Europe. It also has launched its second generation Urgent PC system.

Macroplastique

Macrop lastique is designed to restore the patient�� urinary co! nt! inence immediately following treatment. Macroplastique is a soft-textured, permanent implant injected, under endoscopic visualization, around the urethra distal to the bladder neck. It is a composition of heat vulcanized, solid, soft, irregularly shaped polydimethylsiloxane (solid silicone elastomer) implants suspended in a biocompatible excretable carrier gel. Macroplastique does not degrade, is not absorbed into surrounding tissues and does not migrate from the implant site. The Company has sold Macroplastique for several urological indications in over 40 countries outside the United States.

Other Uroplasty Products

The Company markets outside of the United States minimally invasive products to address fecal incontinence. Its PTQ Implants offer minimally invasive, soft-textured permanent implant for treatment of fecal incontinence. The PTQ Implants are implanted circumferentially into the submucosa of the anal canal, creating a bulking and support ive effect similar to that of Macroplastique injection for the treatment of stress urinary incontinence. The PTQ is Conformite Europeenne (CE) marked and is sold outside the United States in various international markets. The Urgent PC is also CE marked and sold outside of the United States for the treatment of fecal incontinence. In addition to urological applications, the Company markets its tissue bulking material outside the United States for otolaryngology vocal cord rehabilitation applications under the trade name VOX Implants. In the Netherlands and the United Kingdom only, the Company distributes certain wound care products in accordance with a distributor agreement.

The Company competes with Pfizer Inc., Johnson and Johnson, Novartis, Allergan, GlaxoSmithKline, Carbon Medical Technologies, BioForm, Inc., Q-Med AB and Contura.

Top Medical Companies To Invest In 2014: DiaMedica Inc (DMA)

DiaMedica Inc. (DiaMedica) is a development-stage company. The Company is a biopharmaceutical company engaged in the discovery and development of drugs for the treatment of diabetes and related diseases. DiaMedica's compound, DM-199, is a recombinant human protein for the treatment of both Type I and Type II diabetes and their complications. DiaMedica is starting a Phase I/II clinical trial for DM-199. DM-199 is a recombinant human protein, which improves glucose control, protects beta cells through the expansion of a population of antigen-specific immunosuppressive cells (Tregs), and proliferates insulin producing beta cells through the activation of certain growth factors. The Company�� DM-204 is a G-protein-coupled receptor agonist (GPCR) monoclonal antibody to treat Type II diabetes and some of the associated complication's. activating a receptor resulted in insulin sensitivity, insulin secretion and vasodilation. Advisors' Opinion:

• [By Richard Rhodes]

  Given this economic backdrop, and developing pressure on corporate revenues, margins, and earnings, we feel that risk is being misplaced at current levels.

  The 14-day and 40-day models are now overbought. Now, the 14-day and 40-day are peaking, which would certainly indicate a correction stands as the highest probability.
  
  The % of stocks above their 10-day moving average (dma) is at the 70%-level; still a major divergence with prices.
  
  The % of stocks above their 200-dma stands at 77%. The 87% level marked previous highs. The 50-dma/150-dma cross breakdown now confirms a larger correction. Bottoms form between 30%-40%.
  
  Overall, the risk-reward remains skewed to the downside, regardless of whether prices remain above trendline resistance, as our model group suggests a correction to the 110-day moving average, currently at S&P 1711.
  
  

  A clear breakdown at that level would accelerate the decline towards the wide 200-dma and 380-dma range, between 1657-1571.

3M: Dividend Increase, Stock Buyback, Earnings Guidance, Oh My

Today, it almost seems like 3M (MMM) looked at Boeing’s (BA) dividend increase and share buyback and decided to one-up them by tossing some earnings guidance into the mix as well.

ZUMAPRESS.com

Reuters has the details on 3M’s announcement today:

3M Co, whose products include Post-it notes and film for flat-panel televisions, said it expects organic sales to rise by 3-6 percent excluding the effect of foreign exchange in 2014.

The company also raised its dividend for the first quarter by 35 percent to 85.5 cents per share.

3M forecast 2014 earnings of $7.30 to $7.55 per share. Analysts on average expected $7.40 per share on revenue of $32.63 billion, according to Thomson Reuters I/B/E/S.

The company expects to spend $17 billion-$22 billion on share repurchases for 2013-17, compared with its previous estimate of $7.5 billion-$15 billion.

Rob McIver, the co-portfolio manager of the Jensen Quality Growth Fund (JENSX) calls himself “delighted” by the news. “3m has been paying a dividend consistently to shareholders for 97 years, and this is the 57th consecutive year of dividend increases,” McIver says. “It has competitive advantages, and strong and growing free cash flow. 3M reminded [investors of that today],” he adds.

Shares of 3M have gained 3M have gained 2.4% to $130.69 today, trumping Boeing’s 1% rise to $136.10.

Unloved bull market rally has room to run

The U.S. stock market's steady and almost uninterrupted advance over the past year has left many investors wondering if a major decline is now inevitable. We are aware of a number of technical, or pattern-recognition, analysts who are calling for such a decline. Others, with a more fundamental approach, have pronounced the market to be “overvalued” at current levels. Finally, the sluggish economic growth over the past several years and the ongoing, less-than- hopeful news reports confronting people every day in the popular media have given many an uncomfortable, cautious feeling about the market.

We want to address some of the issues investors are struggling with as the U.S. market approaches its fifth consecutive year of positive returns but first we want to point out that in managing our equity income, all cap equity and value portfolios, we spend the vast majority of our time looking at sectors and companies with a view toward populating the portfolio with a diversified list of stocks, each of which has — by our analysis — an attractive combination of valuation and growth characteristics. That is, we are not trying to “time” the overall market or spend an inordinate amount of time on “top-down,” macroeconomic analysis. Nor are we well-trained students of technical or pattern- recognition analysis. In our experience, those approaches fail about as often as they succeed.

We believe we can do better with our “bottom-up,” stock-by-stock approach to investment. Having said that, we do have some observations about the overall state of the U.S. equity market. We disagree with the notion that U.S. stocks are overvalued at current levels. There is no denying that stock prices have advanced a lot from the depths that were reached in March 2009. But we must not lose sight of the fact that corporate earnings, one of the key underpinnings of stock values, have advanced right along with prices. In 2009, S&P 500 earnings came in at $57; this year,! we expect earnings of around $107: nearly doubling in four years. It is true that stock-price increases have outpaced earnings, rising from around 660 on the S&P 500 at the bottom in 2009 to more than 1,800 currently. So stocks are valued more highly today than in March 2009 but we hardly believe the current level of the market represents significant “overvaluation” on the basis of earnings. The measure has just made it back to the long-term median P/E but remains many multiple points below the bull-market peaks of the late 1990s.

It is also important to remember that during the time when that long-term P/E ratio of around 15 was being established, the average high-quality bond yield was nearly 7%. Today, the yield on the 10-year U.S. Treasury bond, for example, is less than 3%. That comparison becomes more meaningful if one thinks of the price/earnings ratio as a yield or, if you will, an “earnings yield.” Invert the P/E to create an earnings/price ratio: the yield one would receive if one owned the entire market and could take the whole market's earnings as a return on investment. A P/E of 15 becomes an earnings yield of 6.7% (1 divided by 15). Using this measure, it is possible to compare stocks and bonds by considering their respective yields over time.

The gap between bonds' yields and stocks' earning yields is known as the “equity-risk premium,” or ERP. Because of the riskier nature of equities vs. bonds, the earnings yield on stocks is usually higher than the yield on bonds, hence the name. As with the simple P/E measure, the ERP can fluctuate over time. It is a meaningful measure, in our view, of the relative attractiveness of equities compared to bonds.

The ERP is down from the 5%-plus level reached a few years ago but it remains elevated compared to historical experience. To us, this indicator — like the absolute level of P/E ratios — shows that stocks remain attractive. In this case, they are attractive compared to recent history and to fixed-income alternatives.

We believe the U.S. equity market represents good value at current level, notwithstanding the price appreciation of the past few years, but there are two points we should mention:

Valuation measures are a function of the underlying components. In this case, earnings and interest rates. If one has strong conviction that interest rates are going much higher and/or earnings are on the verge of collapse, none of the preceding valuation analysis should be persuasive. It is our base case, however, that — lookin! g at the U.S. economy and likely actions of the Federal Reserve — earnings can continue to grow and interest rates will stay close to current levels over the next couple of years.

It has been our view since the U.S. recession ended nearly five years ago that slower-than-average growth was to be expected. That is the almost-immutable lesson of history: In the aftermath of a severe financial crisis precipitated by over-leverage and widespread credit defaults, economic growth is slower than average as the excesses of the prior cycle are corrected. After those type of events, economic growth has averaged around 2% rather than the 3%-4% or higher that has been the experience after more typical, inventory- or Federal Reserve-induced recessions. The bright spot, however, in an otherwise-mediocre economic recovery has been the corporate sector.

Balance sheets, cash on hand, profit margins and the level of profits have never been better. Corporate profits have recovered and now exceed pre-recession levels. And it is corporate profits that are a principal underpinning of stock prices.

As we move further away from the crisis and as the proximate cause of the crisis (i.e., collapsing home prices) continue to recover, we believe it is likely that some acceleration in economic growth next year is possible. Employment continues to grow moderately, resulting in income growth. Income growth, in turn, leads to growing sales and production, which leads to more employment growth. That is a “virtuous” economic cycle that provides a positive backdrop for equity investing. If this acceleration in gross domestic product (GDP) growth does come to pass, we believe it is worthwhile to ponder this question: If companies could bring profits back to all-time highs with growth at 2%, where would profits be with growth at 3% rather than 2%? We don't have an exact number in mind but it seems clear to us that the answer is: “Higher.”

As for interest rates, we believe the appointment of Janet Yell! en as cha! ir of the U.S. Federal Reserve ensures a continuation of current policies at least through next year … and probably longer. Short-term rates will be held at zero-bound level. The Fed at some point will moderate its long-term asset purchases (i.e., the taper) but the magnitude of overall purchases still will be large. As the economy recovers, it would not surprise us to see the yield on 10-year Treasuries gravitate toward the growth of nominal GDP: maybe around 3%.

We don't believe that would do much damage to the valuation argument. Moreover, the outlook for profit growth would be improved in such an environment, likely offsetting any valuation headwinds brought on by slightly higher bond yields.

Valuation is not a timing tool. In our view, an attractively valued market improves the chances of investment success but is no guarantee against short-term fluctuations and drawdowns. The current market has risen for a long time without much of a correction. We can state without fear of contradiction that the market will have a meaningful correction at some point; however, the “when” and “from what level” are the key, but unknowable, issues.

We would make the general observation, based on our time in the investment business, that this is the most unloved bull market we ever have seen. There are many underinvested and underperforming investors today who would like nothing better than a market pullback to enable them to do what they should have done several years ago: invest in equities. There is an old saying that the market will do whatever it takes to frustrate the maximum number of people. Right now, the most frustrating thing the market can do — and has been doing — is to keep going up and not let the underinvested have an easy entry point.

Ed Cowart, CFA, is a managing director and portfolio co-manager at Eagle Asset Management Like what you've read?

YHOO – Yahoo Stock Has Room to Run Under Mayer’s Leadership

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Welcome to the Stock of the Day!

Some users of Yahoo!’s (YHOO) free email haven’t been able to access their accounts since Monday. What started as an ordinary service outage has devolved into a big PR headache for Yahoo.

However, all the while, Yahoo stock shares have continued to climb this week. What has these investors singing a different tune? Should we follow suit?

Find out today.

Company Profile

Yahoo! is one of the world’s largest internet corporations. With nearly 12,000 employees and operations in 25 countries, Yahoo is widely recognized for its web portal, search engine and email service. This stock is a testament to how quickly new opportunities can open up in the tech sector. In the 1990s and early 2000s, Yahoo was the darling of the internet industry.

But in the new millennium the company has had some difficulty adapting to increased competition and lightning-fast upgrades issued by companies like Google (GOOG). The company continued to lose market share through the years until things came to a head in early 2012. That year, Yahoo saw 14% of its workforce cut and the ouster of then-CEO Scott Thompson. But then in summer 2012, former Google exec Marissa Mayer was appointed CEO and Yahoo hasn’t been the same since.

Alibaba IPO

Despite headaches caused by Yahoo Mail, Yahoo stock shares have held steady this week. That’s because in other parts of the web, Yahoo is plowing ahead. Yahoo’s 24% stake in China’s e-commerce giant Alibaba will pay off this holiday season.

On Single’s Day, China’s version of Cyber Monday, Alibaba generated $5.7 billion in merchandise revenue. This is very good news for Yahoo because it drums up further interest in Alibaba Group’s IPO, which is slated for Q1 2014 (but Alibaba is working to delay it until as late as December 2014).  Yahoo will be required to sell 40% of its current stake when Alibaba goes public, so a higher price means a better deal for Yahoo. Analysts estimate that Yahoo’s stake in Alibaba is currently worth $36 billion.

M&A Buzz

Meanwhile, the M&A frenzy continues. The latest rumor is that CEO Marissa Mayer is seriously considering a buyout of photo-sharing site Imgur. Run by just ten people the site has more than 100 million users. Imgur has been more successful in monetizing its service than many other social media and sharing websites, so analysts estimate that Yahoo would need to offer $100 million to $500 million for the company.

In other news, Yahoo also expanded its mobile presence by recently acquiring QuikIO, a video streaming app for Apple Inc’s (AAPL) iOS devices. With this latest acquisition, Yahoo has made 29 acquisitions, the biggest deal being the buyout of Tumblr in June.

Current Ratings

Before you buy any stock, you should always run it through my free Portfolio Grader ratings system. After a rocky 2012, YHOO has spent the past twelve months in buy territory. This stock is an interesting case because on the fundamental sides, Yahoo receives a D-rating overall.

That’s because YHOO receives less-than-stellar grades for five of the eight metrics I grade it on, including sales growth, operating margin growth and earnings growth. Marissa Mayer has spearheaded an aggressive acquisition strategy and this has weighed on earnings in the short-run. But with analysts projecting double-digit earnings growth through the end of 2014, I expect Yahoo to improve its balance sheet soon enough.

Meanwhile, YHOO is A-rated in terms of Quantitative Grade, indicating that it’s still a favorite of institutional investors.

Bottom Line: As of this posting, I consider YHOO a B-rated Buy. Marissa Mayer has accomplished a lot in her first year and change at Yahoo and I’m confident that the company will continue to progress under her leadership.

How income investors can play defense as rates rise

Whither post-taper interest rates?

The fact is that nobody knows anything. Quantitative easing will taper off, but some say rates will remain relatively low. Others equate a liquidity reduction with escalating rates. It'll happen real soon. Or it will happen in June. Or it might happen early in the first quarter. Or maybe in March.

That there is such broad uncertainty about "Life After Taper" isn't an insignificant matter, because if nobody knows when and to what extent it will occur then some will have guessed right, but everyone else will be surprised — and wrong. Guessing is mere gambling, not investing. And surprised investors become panicked investors who typically make very bad decisions.

/quotes/zigman/4868283/delayed 10_YEAR 2.88, +0.0010, +0.03%

Thus, what we know is that it is coming and that nobody knows when. But based on recent history we can proffer some reasonable possibilities.

If interest rates were to rise modestly — say, up to 3.5% for the 10-year Treasury note during 2014 — and then stabilize, we might thereupon expect bond prices to correspondingly dip and then level off for a while. This could delight stock investors who dismiss it as the natural result of an improving economy and corporate profits.

Bond investors would be less enthused, though somewhat relieved that rates didn't reflexively shoot through the roof. Still, depending on the respective durations of their holdings, bondholders could find themselves merely treading water, at best, due to still low rates. And they'd retain the worry of a painful decline in bond values as, sooner or later, rising rates accompany an improving economy. That could be an interminable, agonizing slog.

Remember, the most recent long-term trend in interest rates lasted three decades. It was an upward trend, but the next secular one will be in the other direction.

Of course, the economy, which has recently shown fits and starts of a possible upturn, could abruptly blast off, spurring the Fed to totally plug the liquidity spigot. Rates might then rise unabated. While unlikely, that scenario is on the table.

But nobody knows. And that is why bond managers, who really have no other choice, are roundly touting their timing skills. While acknowledging the inevitability of tapering, they assure their respective investors that they, and only they, will be able to see the whites of Janet Yellen's eyes in time to outflank her.

I don't buy it. They sure didn't outmaneuver Ben Bernanke last May, and his was a mere head fake. Within days of the chairman's taper murmurings, bond funds began to sag. Of course, it turned out to be a nonevent, but neither bond rates nor prices have returned to their May levels.

The coming one-way direction of rates makes this a particularly critical moment. There are a lot of Pollyannas out there. I'm a card-carrying Cassandra. Investor sentiment, no doubt influenced by a 30% year-to-date stock market rise, is very high. That is a red flag. Such optimism is normally attended by complacency and an inclination to ignore even highly likely, near-term events.

And the daily apologies, oh my: We're hearing abstruse distinctions between "tapering" and "tightening," as if they were discrete elements in a sure mathematical theorem that determines absolute market outcomes. Such semantic gymnastics are surely a warning.

History informs that times such as these aren't favorable to the complacent. The time to avoid disaster is before it occurs. Now is a time to play defense.

For bond investors, that means it is time to completely eliminate interest-rate risk, even if rates shan't rise at all for a few months. Why? Because trying to time it is too difficult. Oh, fund managers will tell you they'll be able to time it right up to the last millisecond. But they can't.

For purposes of income, it is better to take more credit risk now than rate risk, so I'm OK with (judiciously) going farther out on the yield curve at the expense of credit quality. Besides, any given underlying security's default risk will soon terminate if you keep your durations short.

Therefore, in both my personal and managed portfolio, I have jettisoned all long-duration fixed-income funds, in favor of low-duration funds like PowerShares Senior Loan Portfolio (BKLN) and Guggenheim BulletShares 2014 High Yield Corporate Bond ETF (BSJE) . Both have short overall maturities and yields in the 3%-4% area. I personally continue to believe that is a rewarding way to play defense if rates rise.

DISCLAIMER: The investments discussed are held in client accounts as of November 30, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable. Past performance is no guarantee of future results. Lewis owns positions in BKLN and BSJE.