Does Anyone Shop at Sears Anymore?

Hot Industrial Conglomerate Stocks To Own Right Now

NEW YORK (TheStreet) -- If there was anything good to say about Sears Holdings' (SHLD) third-quarter earnings report, it was hard to find.

The Hoffman Estates, Ill.-based retailer, run by hedge fund manager Eddie Lampert, reported a net loss attributable to shareholders that widened in the Nov. 2-ended quarter to $534 million, or $5.03 a share. Last year's quarterly loss attributable to shareholders was $498 million, or $4.70 a share.

Revenue dropped 6.6% to $8.27 billion, which Sears attributed to fewer Kmart and Sears full-line stores in operation, lower domestic comparable-store sales and the separation for the Sears Hometown and Outlet stores, which occurred in the third quarter of 2012.

Analysts, according to Thomson Reuters, expected the company to post a whopping loss of $3.13 a share on revenue of $8.38 million. Sears' adjusted loss of $286 million for the quarter was in the range that the company had previously announced.

Sears' results beg the question: Is anyone even shopping at Sears or Kmart anymore? The competition may be too much to bear for this retailer. "The results from Sears are not those of a company set up to thrive and survive in holiday 2013, or be around for holiday 2020," said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors. The company announced at the end of October that it was considering spinning of Lands' End and possibly selling its Sears Auto Centers. It was also selling five Canadian store leases. Sears forecast a third-quarter adjusted operating loss between $250 million and $300 million, compared to a loss of $156 million in the prior year's quarter. It also said that quarterly comparable-store sales through Oct. 26 dropped 3.7% overall and by 4.8% in its domestic stores. Sears said Thursday that comparable-store sales declined 3.1%, with Kmart comp sales falling 2.1% and Sears' domestic stores dropping 4%. The company must have seen some pick-up in the final week, as the numbers are slightly better than the comps it previously reported. "The decline at Kmart reflects decrease in our transaction categories, such as grocery and household and drugstore, as well as declines in consumer electronics and toys," according to the company's earnings release. "These decreases were partially offset by increase in the apparel and seasonal and outdoor living categories." "The decline at Sears Domestic reflects decreases in most categories including the consumer electronics, lawn and garden, tools, home appliances and apparel categories as well as declines at Sears Auto Centers, partially offset by an increase in the home category," it said. Gross margin fell 23.3% of revenue compared to 25.4% in the prior-year period. Written by Laurie Kulikowski in New York.

Good Samaritan fired by Wal-Mart says he won’t …

LINDEN, Mich. — A man whom Wal-Mart fired for aiding an assault victim in the store's parking lot rejected the store's offer to return to his job.

Kristopher Oswald, 30, of Linden, Mich., said Thursday that Bentonville, Ark.-based Wal-Mart has been "unwilling to compromise" in negotiating his return to his job, which he lost Oct. 15 after assisting a woman two days earlier who had screamed for help in the store parking lot.

STORY: Wal-Mart offers good Samaritan job back
STORY: Court says OK to fire 'irresistable' worker

"The entire situation has left me with incredible anxiety," Oswald said. "Wal-Mart feels it's absolutely not their responsibility to help an associate harmed while on the clock. I have refused their offer to take my job back for fear of retaliation.

"They could not guarantee that nothing would happen from management if I did take my job," he said. "It's a day-to-day struggle. I feel like if I say the wrong thing, I'm going to have a company coming after me."

Oswald initially had said that work was scarce in the area in which he lives, about 45 miles northwest of Detroit, and that he fought hard to get his Wal-Mart job about 20 miles from his house.

Messages to Wal-Mart's corporate public information office for comment have not been returned.

Wal-Mart fired Oswald, who had an $8.70-an-hour job stocking pet supplies overnight at Hartland, Mich., store, because it said he had violated company policy in helping the 18-year-old woman, whose former boyfriend was later arrested and charged with drunken driving, malicious destruction of property and domestic violence.

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After Oswald's story was disseminated nationally and reaction against the company on social-media sites such as Twitter was scathing, the company reconsidered its stance Oct. 18 and offered Oswald his job back.

Oswald said he wants the company to issue a formal apology"and eliminate from his personnel record that he was fired for vio! lating store policy.

Oswald said he tried to help the woman, but her alleged attacker, whom police identified as Dylan Tierney, 17, of Milford, Mich., assaulted him and threatened to kill him. The fight ended when Tierney and two friends who joined Tierney left after Oswald's co-workers came to his aid.

Livingston County Sheriff Bob Bezotte said the dispute between Tierney and his former girlfriend began earlier in the evening at a party. The woman was walking down the road when Tierney tried to stop her and get her to return to the party.

Then Tierney tried to run the woman over, Bezotte said, but she was able to move out of the way before he struck her. The victim had a girlfriend pick her up and transport her to the Hartland Wal-Mart where she had parked her car, and Tierney and his two friends followed.

Tierney was taken into custody after tussling with Oswald when deputies stopped his vehicle, the sheriff said. Bezotte previously praised Oswald for getting involved and coming to the woman's assistance.

Tierney returns Tuesday to Livingston County District Court in Howell, Mich. He is free on a $1,000 bond, and that worries Oswald.

"He lives less than a half hour from my house," Oswald said. "And that concerns me."

An outdoors sign for Walmart is seen in Duarte, Calif.(Photo: By Damian Dovarganes, AP)

Favorites for International Growth

Not only a noted authority on Canadian stocks, Gordon Pape is a long-standing expert on global investing. In his Internet Wealth Builder, he highlights two international stocks that he particularly likes for 2014—one, a Chinese Internet firm, the other, a London-based liquor distributor.

Baidu Inc. (BIDU) is the Chinese equivalent of Google, which obviously makes it a very large company with great growth potential. The stock has been extremely volatile, falling to as low as $82.98 last April. But it has been on a tear since mid-summer.

The company has experienced higher costs, primarily due to promotional expenses for mobile products. Research and development rose 77.5% over 2012, due mainly to an increase in the number of R&D personnel.

Best Medical Stocks To Buy Right Now

Both these factors represent an investment in future growth, so investors were not overly concerned by the small size of the profit increase.

Baidu's market cap is increasing rapidly and now stands at almost $63 billion. The stock is not cheap, with a trailing 12-month p/e ratio of 36.1 and a forward p/e of 28.7. And there is no dividend, so this is strictly a security for growth-oriented investors who are willing to live with volatility.

But China has almost 600 million Internet users and most of them use Baidu. A few years from now, the current price will look cheap.

Meanwhile, London-based Diageo plc (DEO) controls many of the best-known liquor brands, including Johnnie Walker, Crown Royal, J&B, Bushmills, Captain Morgan, Tanqueray, Guinness, and a host of others.

It's hard to lose money on booze and this is the world's largest liquor company. The stock fell all the way to the $40 level during the 2008-09 crash, but has been on a steady rise since.

The company only releases financials twice a year, with the announcement of the first half results for fiscal 2014 due on January 30. The dividend is tied directly to the bottom line; the payout in 2013 was $2.92 per share, up from $2.76 in 2012. It's expected we will see another increase in the dividend this year.

The company has a market cap of almost $90 billion. The trailing 12-month p/e ratio is 21.8, while the forward p/e (based on expected 2014 results) is 17.5.

This is one of the rare growth stocks that also offers a reasonable dividend, with a current yield of 2.2%. It is, therefore, well-suited for all types of portfolios.

Subscribe to Internet Wealth Builder here…

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A Tobacco Giant Worth Your While

Hot Cheap Companies To Buy For 2015

The tobacco industry is one of the most profitable markets for investors, given its large margins and shareholder returns. However, these past few years governments all over the world have been tightening up on regulatory laws and raising taxes, therefore reducing consumer volume of cigarettes. But the largest tobacco company worldwide, supported by investment gurus Joel Greenblatt (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio), has successfully sustained its product demand and steadily increased revenue. So, let's take a look at its business model and what the future holds in store.

A Powerful Brand Portfolio and Emerging Market Presence

Phillip Morris International Inc. (PM) is the world's largest tobacco manufacturer in the world, after China National Tobacco, and holds 29% of the entire industry's market, outside the U.S and China. Most commonly known for its flagship brand, Marlboro (accounts for one-third of total volume), this firm also owns seven of the 15 international leading cigarette brands. Its supporting brands — L&M, Phillip Morris, Bond Street, Parliament, Chesterfield and Lark — have allowed the company to attain consistent growth margins over the past decade. Given its addictive product and global manufacturing and distribution system, this comes as little surprise.

While present in 180 countries, Asia, Eastern Europe, the Middle East and Africa are currently the key drivers of this firm's revenue growth. Phillip Morris is likely to benefit from increasing sales in these regions, due to their growing populations, product consumer habits, rising income and looser restrictions on tobacco companies. As such, long-term revenue in expected to increase by 10% in Asia, and 5% in the remaining regions. Also, the firm's international presence gives it a strong competitive advantage towards market rivals Altria Group Inc. (MO), Reynolds American Inc. (RAI) and Lorillard Inc. (LO). In addition to the popularity of its brands, Phillip Morris benefits from scale advantages, combined with the historically strong brand loyalty among smokers, earning the firm strong pricing power. This advantage has allowed revenue to nearly double since 2006, leaving its current level of $77.4 billion.

Regarding Taxes, Regulations and Margins

Despite recent anti-tobacco laws passed by the European Union and the Food and Drug Administration (FDA) in the U.S, the company's pricing power has helped maintain its margins. In 2012, for example, Phillip Morris hiked prices on its products in Russia, Germany, Belgium, Canada, France, Greece and Spain, among others. Although the necessary measure caused substantial volume declines in these countries, consumers rapidly became accustomed to the increased prices, and returned to their habitual product consumption. Given the success of this strategy, the firm is likely to rely on it in Japan for 2014, where taxes are expected to increase yet again by 8%, after the 40% spike in October 2010.

Another profitable business opportunity may come from the company's recent cross-licensing agreement with its parent firm Altria, regarding next-generation products. The deal will allow Phillip Morris to market Altria's eCig products outside the U.S, while the parent firm commercializes the tobacco giant's two heated tobacco products, Platform 1 and Platform 2, within the U.S. Platform 1 is meant to launch in 2014, and Platform 2 a year later, which should help the company branch out to changing consumer habits among smokers and generate further revenue. On another note, Phillip Morris' shareholder returns should not pass unseen by investors. Since 2008, the company has returned $59.1 billion to its investors via share repurchases ($27.9) and dividends ($24), and currently holds a steady dividend yield of 4.39%.

Bottom Line

With an EPS growth of 16.90% — well above the industry's average — and an impressive revenue growth of 12.80%, this tobacco giant holds all the right cards to sustain its industry leading position. Despite possible changes in consumer habits and tobacco regulation enforcements, I feel highly bullish about this firm's future growth, especially in the emerging markets.    

Disclosure: Patricio Kehoe holds no position in any stocks mentioned.

Also check out: Joel Greenblatt Undervalued Stocks Joel Greenblatt Top Growth Companies Joel Greenblatt High Yield stocks, and Stocks that Joel Greenblatt keeps buying

Currently 5.00/512345 Rating: 5.0/5 (1 vote)

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Top 10 Net Payout Yield Companies To Own In Right Now

The idea that stocks are riskier than bonds is widely accepted at face value in finance and investing.  Stock prices tend to swing both higher and lower, and more frequently, than bond prices, and unlike with a bond, owning shares in a company doesn�� come with a commitment that your investment principal will be paid back at a future date.

As Modern Portfolio Theory holds, to compensate for this higher risk, an investor in equities should expect to earn a higher rate of return over time than an investor in fixed income.  This concept is generally called the ��quity risk premium��and historically, broad indices of stocks have outperformed their fixed income counterparts, while experiencing much higher volatility in returns, also known as standard deviation (see Exhibit 1 below).

However, a popular misconception among many investors is that a portfolio invested only in fixed income is the ��east risky��possible portfolio. This view ignores two key issues. First, not all bonds are created equal in terms of minimizing volatility and risk ��a long-duration bond with poor credit quality typically has substantially higher volatility than a short-duration treasury. Second, by virtue of being assets that do not move in tandem (and may even move inversely), a mix of stocks and bonds can actually result in an overall portfolio with lower volatility than bonds alone.

Top 10 Net Payout Yield Companies To Own In Right Now: Responsys Inc.(MKTG)

Responsys, Inc. provides on-demand software and professional services primarily in North America, the Asia Pacific, and Europe. The company offers Responsys Interact suite, a software-as-a-service platform that provides marketers with a set of integrated applications to create, execute, optimize, and automate marketing campaigns in various channels, including email, mobile, social, and the Web. Its platform also leverages third-party applications and data from real-time sources allowing customers to deliver targeted content to its customers and known prospects as part of their interactive marketing campaigns. In addition, it provides professional services, such as strategic, creative, deliverability, campaign, and education services. The company offers its on-demand software and professional services to retail and consumer, travel, financial services, and technology industries through a direct sales force. Responsys, Inc. was founded in 1998 and is headquartered in San Bru no, California.

Advisors' Opinion:

• [By Seth Jayson]

  Calling all cash flows
  When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Responsys (Nasdaq: MKTG  ) , whose recent revenue and earnings are plotted below.

• [By The GeoTeam]

  Our recent 2013 articles on SaaS companies Selectica (SLTC), E2open (EOPN), Responsys (MKTG), Vocus (VOCS), and ExactTarget (ET) highlighted such opportunities. The average return since the inception of our coverage currently stands at around 34% (55% at their highs).

Top 10 Net Payout Yield Companies To Own In Right Now: Abbastar Uranium Corp (ABA.V)

Abbastar Resources Corp. engages in the identification, acquisition, and exploration of mineral interests in Canada. The company primarily explores for gold, pyrite, copper sulphide, zinc sulphide, copper, and uranium deposits. It owns an option to acquire a 100% undivided interest in the Talbot Lake project located in the Talbot Lake Area in northern Ontario, Canada; and holds a 35% interest in the Doran Property consisting of 47 contiguous mineral claims covering an area of approximately 2,500 hectares located in the Baie Johan Beetz area of Costebelle Township in Quebec, Canada. The company also has an option to earn a 100% interest in the Kid Copper Property that covers an area of approximately 67.5 hectares in the Liard Mining division, northern British Columbia; the Smith Creek Property, which covers an area of 189 hectares located in Hedley, British Columbia; and the Manson River Property located in the Omineca Mining Division in central British Columbia, Canada. Th e company was formerly known as Abbastar Uranium Corp. and changed its name to Abbastar Resources Corp. in July 2009. Abbastar Resources Corp. was incorporated in 1992 and is headquartered in Vancouver, Canada.

Top 10 Cheap Stocks For 2014: Aviva(AV.L)

Aviva plc provides insurance, savings, and fund management products and services worldwide. It offers life insurance and savings products, which comprise pensions products, such as personal and group pensions, stakeholder pensions, and income drawdown; annuities; protection products, including term assurance, mortgage life insurance, flexible whole life, and critical illness cover; bonds and savings comprising single premium investment bonds, regular premium savings plans, mortgage endowment products, and funding agreements; and investment products consisting of unit trusts, individual savings accounts, and open ended investment companies, as well as equity release and structured settlements. The company also provides general and health insurance products that include personal lines of insurance products, such as motor, household, travel, and creditor insurance; commercial lines of insurance products consisting of fleet, liability, and commercial property insurance; health insurance products comprising private health, income protection, personal accident, and corporate healthcare insurance products; and insurance for corporate and specialty risks. In addition, it offers fund management products and services for institutional, pension fund, and retail clients. Aviva plc sells its products through various distribution channels, including direct sales forces, intermediaries, corporate partnerships, bancassurance, and joint ventures, as well as through the telephone and Internet. The company was formerly known as CGNU plc and changed its name to Aviva plc in July 2002. Aviva plc is headquartered in London, the United Kingdom.

Top 10 Net Payout Yield Companies To Own In Right Now: Enbridge Inc Com Npv (ENB.TO)

Enbridge Inc. transports and distributes crude oil and natural gas primarily in North America. It operates crude oil and liquids transportation system comprising approximately 24,738 kilometers of crude pipeline. The company also engages in natural gas gathering, transmission, and midstream businesses, as well as power transmission; and provides liquids and natural gas contract storage services. In addition, it owns and operates natural gas distribution pipelines; provides distribution services in Ontario, Quebec, and New Brunswick in Canada, as well as in New York State; and operates offshore pipelines comprising approximately 2,400 kilometers that transport offshore deepwater natural gas production in the Gulf of Mexico. Further, Enbridge Inc. holds interests in a portfolio of renewable energy projects comprising 8 wind farms with 1,017 megawatts (MW) capacity, 4 solar energy operations consisting of 150 MW capacity, and a geothermal project with 23 MW capacity. The comp any was formerly known as IPL Energy Inc. and changed its name to Enbridge Inc. in October 1998. Enbridge Inc. was founded in 1949 and is based in Calgary, Canada.

Top 10 Net Payout Yield Companies To Own In Right Now: Sypris Solutions Inc.(SYPR)

Sypris Solutions, Inc. provides of outsourced services and specialty products primarily in North America and Mexico. It offers a range of manufacturing, engineering, design, and other technical services under contracts with corporations and government agencies primarily in industrial manufacturing, and aerospace and defense electronics markets. The company supplies forged and machined components to the commercial vehicle, off highway vehicle, light truck, and energy markets, as well as produces drive train components, such as axle shafts, gear sets, differential cases, steer axle forgings, and other components. It also provides solutions in cyber security, secure communications, global electronic key management, Sypris Data Systems branded products, and product design and development to the United States Government, defense and civilian agencies, international government agencies, as well as worldwide defense and aerospace prime organizations. In addition, the company desi gns and builds information assurance products, including link encryptors, data recording products, and electronic key fill devices. Further, it offers electronic manufacturing services, including circuit card and full box build manufacturing; dedicated space and high reliability manufacturing; integrated design and engineering services; systems assembly and integration design for manufacturability; and design to specification works. The company was founded in 1954 and is based in Louisville, Kentucky.

Top 10 Net Payout Yield Companies To Own In Right Now: Paramount Gold And Com Stk Usd0 (PZG.TO)

Paramount Gold and Silver Corp., an exploration stage company, engages in the acquisition, exploration, and development of gold, silver, and precious metal properties in Mexico and the United States. The company owns a 100% interest in the San Miguel property located in southwestern Chihuahua, northern Mexico. Its projects also include the Sleeper Gold project located in Humboldt County; the Mill Creek property located to the south of Battle Mountain; the Reese River/Horse Mountain Window project located in Lander County; and the Spring Valley property located in the Spring Valley area in Pershing County, Nevada. The company was founded in 2005 and is headquartered in Winnemucca, Nevada.

Top 10 Net Payout Yield Companies To Own In Right Now: Melrose Resources(MRS.L)

Melrose Resources plc, through its subsidiaries, engages in the exploration, development, and production of oil and gas properties. It holds interests in properties located in Egypt, Bulgaria, Romania, Turkey, and France. As of December 31, 2010, it had proved and probable reserves of approximately 105.2 million barrels of oil equivalent. The company was founded in 1992 and is headquartered in Edinburgh, the United Kingdom. Melrose Resources plc is a subsidiary of Skye Investments Limited.

Top 10 Net Payout Yield Companies To Own In Right Now: Homeloans Ltd (HOM.AX)

Homeloans Limited engages in the mortgage origination and management of home loans in Australia. The company originates residential mortgages through external mortgage brokers, satellite offices, and internal consultants. It is also involved in the securitization of mortgages through the residential mortgage trust, a special purpose vehicle used to issue residential mortgage backed securities. In addition, the company offers various types of home loans, including variable rate, fixed rate, split, lo doc, bridging, interest only, standard, and line of credit home loans. Further, it provides home loans for building and renovating, refinancing and debt consolidating, and investing activities, as well as for first home buyers and self employed borrowers. Additionally, the company offers various insurance policies comprising home and contents, motor vehicle, landlords, and life insurance policies. Homeloans Limited was founded in 1985 and is based in Sydney, Australia.

CCOs Under Fire: When Enforcers Get Burned by Regulators

While chief compliance officers are on the frontlines of making sure that their colleagues and firms adhere to securities rules and regulations, they can also become targets of regulators for their own misdeeds.

In its annual compilation of disciplinary actions brought by the Securities and Exchange Commission and the Financial Industry Regulatory Authority against chief compliance officers, the law firm Sutherland found a bevy of violations.

From January to June 2013, the SEC and FINRA brought disciplinary actions against CCOs and in-house counsel for a range of conduct, including failure to supervise, due diligence failures, aiding and abetting primary violations, anti-money laundering (AML) deficiencies, failure to report customer complaints, advertising violations, registration deficiencies, books and records violations, and suspension from practicing before the SEC.

As the Sutherland attorneys Brian Rubin and Katherine Kelly note, being a CCO or in-house counsel poses “very real challenges,”´because while they’re responsible for keeping their colleagues in line, they don’t necessarily have the power to enforce their advice.

The following are some of the actions that Sutherland highlights that were taken against CCOs in the above mentioned areas.

Supervisory Systems

In a case where a firm allegedly failed to have adequate procedures, a CCO was disciplined in April 2013 in connection with his firm’s sale of nonexempt unregistered securities.

Three customers had opened accounts at the firm, deposited shares of unregistered securities into their accounts, and then sold the unregistered shares to others. According to FINRA, the registered representative for the accounts failed to conduct a “searching inquiry” to ensure that the sales were proper. FINRA determined that the firm failed to have adequate written supervisory procedures (WSPs) in place designed to prevent the sale of nonexempt unregistered securities The CCO was suspended in any principal capacity for six months, but was not fined due to a demonstrated inability to pay.

In another case, in a March 2013 settlement, FINRA alleged that a CCO failed to maintain and implement an adequate supervisory system for filing and amending Forms U4.

Specifically, the CCO, who was responsible for the firm’s Forms U4 and U5, failed to amend registered representatives’ U4s to reflect customer complaints involving compensatory damages of $5,000 or more. For this and other conduct, the CCO was fined $5,000 and suspended in a principal capacity for 10 business days.

Supervision of Individuals

CCOs or in-house counsel may be considered supervisors, and therefore potentially liable as such, when they have sufficient “responsibility, ability, or authority to affect the conduct of the employee whose behavior is at issue.”

In a March 2013 settlement, FINRA disciplined a CCO for failing to supervise his firm’s owner (and producing manager), who excessively traded in at least five customer accounts.

Another case illustrated the perils of CCOs acting as direct supervisors. In an April 2013 settlement, a CCO was disciplined for failing to supervise a registered rep in connection with the sale of non-exempt unregistered securities. Three customers opened accounts with the firm, deposited unregistered securities in the accounts, and shortly thereafter sold the unregistered securities. The CCO was the direct supervisor of the registered rep who effected the sales of the unregistered securities.

The CCO was suspended in any principal capacity for six months, but was not fined due to a demonstrated inability to pay. /* .premium-promo { border: 1px solid #ddd; padding: 10px; margin: 0 10px 10px 0; width: 200px; float: left; } .premium-promo li, .premium-promo ul { list-style-type: none; margin: 0; padding: 0; } .premium-promo li { margin: 0 0 10px; padding: 0 0 10px; border-bottom: 1px dotted #ddd; } .premium-promo h3 { text-transform: uppercase; font-size: 11px; } .premium-promo h4 { font-size: 16px; } .premium-promo a { text-decoration: none !important; } .premium-promo .btn { background: #0069a1; border-radius: 4px; display: inline-block; padding: 5px 10px; clear: both; color: #fff; font-weight: bold; } .premium-promo .btn:hover { background: #034c92; } */ Due Diligence

Three recent cases against CCOs involved inadequate oversight of private placement investments.

In January 2013, FINRA disciplined a CCO in connection with his firm’s allegedly inadequate due diligence of private placement investments. FINRA determined that the CCO failed to respond reasonably to red flags indicating risks associated with a particular private placement offering.

In August 2008, the CCO approved a private placement offering despite knowledge that the issuer of that private placement had missed payments of distributions to customers on a prior offering and eventually suspended sales in that offering.

In a March 2013 settlement, a CCO was disciplined for failing to conduct adequate due diligence of private placement offerings consisting of preferred stock. As president and CCO, he was responsible for approving private placement offerings for sale.

Books and Records

In a March 2013 default decision, a CCO was disciplined for, among other things, his firm’s failure to retain, preserve and review incoming and outgoing correspondence in conformity with NASD Rule 3110.

In particular, FINRA found that the firm failed to retain all incoming and outgoing correspondence from 2009 through July 2010 and most incoming and outgoing correspondence for the following year and a half. For this and other conduct, the CCO was fined $10,000.

In June 2013, the SEC affirmed FINRA’s imposition of a bar against a CCO who had ordered that records be destroyed prior to his termination. In that case, FINRA had found that the CCO (who was also president of the firm) had violated NASD Conduct Rule 2110 when, in anticipation of being fired, he resigned from his firm and invited others to help him remove books and records, erase electronic files and remove backup tapes, which they did.

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The Biggest Stock Market News Today as the Dow Soars

Stock market news today kicks off on a good note with the Dow Jones Industrial Average up more than 100 points before noon on Monday.

But investors still await more clarity on whether the United States will attack Syria.

U.S. President Barack Obama is trying to shore up support for his plan to take action against Syria for using chemical weapons against its citizens. Congress returns from summer recess today to face a slew of issues, including resolving budget deficit woes. President Obama is likely to face a difficult time convincing the House to go along with the plan, which means investors are very uncertain regarding what's next.

In other stock market news today, U.S. economic indicators include a report on consumer credit at 3 p.m. today, but the data front is otherwise fairly quiet.

In major earnings news, Hovnanian Enterprises Inc. (NYSE: HOV) is up 2% today as it reports its third-quarter earnings fell to $0.06 per share from $0.25 the year earlier. Its earnings missed the Street consensus of $0.07 by $0.01 per share.

Among today's other movers, Lululemon Athletica Inc. (Nasdaq: LULU) shares are welcoming strong gains after Citigroup initiated coverage on the stock at a "Buy." LULU is up about 3% in morning trade.

And, in other consumer stock market news today, Yum! Brands Inc. (NYSE: YUM) is up 2.4% in this morning after it reported after hours on Friday that August same-store sales for its China division declined by 10% year over year. This included an estimated decline of 12% at KFC and 5% growth at Pizza Hut Casual Dining.

Stock Market News Today: Technology

The tech market's news today includes a plunge in Hanwha SolarOne Co. Ltd. (Nasdaq: HSOL) shares, which are down 5% in morning trade after its second-quarter loss narrowed to $0.32 per share from a loss of $0.43 in Q1.

The non-generally accepted accounting principles net loss per share was $0.25 compared to the Street estimate for a loss of $0.32. Total revenue was at 192.7 million compared to $179.2 million in Q1.

Also, the drawn-out dispute over the bid to take over Dell Inc. (Nasdaq: DELL) has finally come to an end as investor Carl Icahn says he is backing down, saying the battle would be "almost impossible to win," MarketWatch reports.

Stock Market News Today: Healthcare

And in the healthcare sector, Isis Pharmaceuticals Inc. (Nasdaq: ISIS) is up 11% as it and Biogen Idec Inc. (Nasdaq: BIBB) have entered into a broad, multi-year collaboration to advance the treatment of neurological diseases. ISIS will receive an upfront payment of $100 million. Most of that payment will be reflected as research and development expense in BIIB's third-quarter financial results.

ISIS is eligible to receive milestone payments, license fees, and royalty payments for all treatments developed through this collaboration, with the specific amount dependent on the modality of the molecule advanced by BIIB. In the case of antisense molecules, the milestone payments could be as much as $220 million, plus additional amounts related to the cost of clinical trials conducted by ISIS under the collaboration.

Finally, PDL BioPharma Inc. (Nasdaq: PDLI) expects third-quarter revenue of about $97 million, as compared with actual revenue of $85 million for the third quarter last year, an approximate 14% increase. Analysts expect revenue of $97.9 million.

Now for today's big story: The High-Tech "Gold Rush" Officially Begins...

Another reason to file and suspend Social Security benefits

Thank goodness for Investment News readers who come up with such intriguing questions. By pushing the envelope on what I know about Social Security claiming rules, their queries sometimes send me scurrying to the Social Security Administration for answers and we all learn a little bit more as a result.

Just before Christmas, a reader wrote to me asking what would happen if he filed and suspended his Social Security benefits at his full retirement age of 66 and later decided he would like a partial lump-sum payout? Could he request one?

As regular readers of this column now know, it is possible to lift a voluntary suspension of retirement benefits and request a lump-sum payment of benefits back to the date of suspension.

This recently discovered use of the file and suspend strategy makes particular sense for single people who, unlike married couples, don't have to worry how their claiming decision might affect spousal or survivor benefits.

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For single people especially, the file and suspend strategy can be used as an insurance policy.

The premise is to file for benefits at full retirement age, currently 66, and then immediately suspend benefits with the intention of earning delayed retirement credits worth 8% per year for every year they postpone collecting benefits beyond full retirement age, up to 70.

But anyone who files and suspends benefits can change their minds and request a lump-sum payout back to the date of the original suspension. Of course, if they did, they would forfeit the delayed retirement credits earned during that period.

Why would you want to file and suspend and then request a lump sum?

Let's say you're single and had expected to live a long time, and at 68 receive a terminal diagnosis. Longevity is suddenly the least of your worries and a lump sum payout might come in handy. Going forward, you would collect Social Security benefits based on your age when you suspended benefits, not larger benefits based on your current, older age.

Married beneficiaries may also file and suspend, but probably would be more concerned about maximizing their retirement benefits and subsequent survivor benefits by accruing delayed retirement credits rather than requesting a lump sum payout.

But what about receiving a partial lump sum benefit?

“What if you file and suspend at full retirement age and then three years later wish you had a lump sum? Can you request a partial payout?” the reader asked in an e-mail. “Maybe just a year's worth? “

Frankly, I didn't know the answer, so I asked my contacts at the Social S! ecurity national press off

Icahn says he bought more Apple shares

SAN FRANCISCO — Carl Icahn says he bought more Apple stock as the activist investor tries to increase pressure on the technology company to share more of its giant cash hoard with shareholders.

"Having purchased $500 million more $AAPL shares in the last two weeks, our investment has crossed the $3 billion mark yesterday," Icahn wrote on Twitter Wednesday morning.

Apple's board of directors "is doing great disservice to shareholders by not having markedly increased its buyback," Icahn also tweeted. An "in-depth" letter will follow soon, he added.

Apple spokesman Steve Dowling did not respond to an e-mail seeking comment on Wednesday.

Icahn is one of the best known activists, a type of investor who takes large positions in companies that are either under-performing or sitting on a lot of cash. These investors usually push management and directors to change strategies, sell the company or return money to shareholders through share buybacks or increased dividends.

Icahn disclosed his Apple position on Twitter in August, when the stock was trading at $468. Since then, the investor said his firm has been buying more shares, repeating his opinion that the investment is a "no brainer."

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Apple shares rose 0.5% to $551.70 in trading Wednesday. The stock traded as high at $700 in September 2012, but it has fallen on concern cheaper alternatives to the company's iPhone and iPad devices are pressuring profit margins and revenue growth.

Apple had almost $150 billion in cash at the end of its 2013 fiscal year. In April, the company said it planned to return $100 billion to shareholders in the form of buybacks and dividends through the end of the 2015 calendar year. That made the company one of the largest dividend payers and share re-purchasers in the world.

But Icahn is pushing for more. At Apple's upcoming annual s! hareholder meeting, he plans to propose that the company commit to buy back at least $50 billion of its stock in its 2014 fiscal year, which ends in late September.

"If you step back and see what Apple, CEO Tim Cook and the board are doing, I don't think it's a cash-management problem," said Trip Chowdhry, managing director of Global Equities Research. "The problem is how do they think big, bold and bravely."

Instead of worrying about the size of Apple buybacks and dividends, the focus should be on building the next big industry, the analyst added.

Google also has a lot of cash, but the Internet search giant is spending money on efforts to develop new robotics and connected-device businesses that could grow into substantial new industries, Chowdhry said.

That's why Google shares are hitting new records, while Apple's are well below their all-time high, he noted.

"I don't think Apple should follow Icahn's advice," Chowdhry said. "Share buybacks and dividends are what a loser company does. Companies who are winners bravely create new industries, while losers create incremental product enhancements -- that's a clear contrast between Apple and Google."

AAA urges 'consumer rights' to protect car data

Drivers used to have to just worry about losing their car to thieves. Now they need to worry about losing the data from their cars to marketers, the government or others.

To deal with these privacy issues, roadside-service giant AAA has drafted a bill of rights, of sorts, and is urging those companies to adopt it.

AAA's threefold Consumer Rights for Car Data calls for transparency, choice and security. It says car owners should have a right to:

•Clearly understand what information is being collected from their vehicle, and how it is being used.

•Decide with whom to share their data and for what purpose. This includes ongoing monitoring systems, repair and any data of the vehicle owner's choice.

•Not to be forced to relinquish control of data as a condition of purchasing or leasing a vehicle or of receiving a connected-vehicle service.

•Expect that connected-vehicle manufacturers and service providers will use reasonable measures to protect vehicle data systems and services against unauthorized access and misuse.

Congress ordered an audit last year of the privacy practices of 10 navigation and telematics service providers. The audit found that of those providers, which included domestic and foreign automakers as well as navigation-system manufacturers, all or nearly all collect and share with third parties drivers' location data in order to provide services like turn-by-turn directions and real-time traffic alerts.

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Four providers also stored that information without offering the option for deletion. Two shared data with public agencies for study. One
acknowledged sharing data with marketers.

About 20% of new cars sold this year will collect and transmit data outside the vehicle to improve safety and convenience for drivers, according to AAA. Within a decade, the majority of cars on the road will be conne! cted in some way.

"Many connected car features are made possible through the collection of large amounts of potentially sensitive data from drivers," said AAA CEO Bob Darbelnet in a statement. "Companies collecting, using and sharing data from cars should do everything possible to protect consumer rights as they offer these exciting technologies."

Why Verizon Is Paying 30% More for Its Wireless Unit

David Paul Morris/Bloomberg via Getty Images NEW YORK -- It's not often that Wall Street shrugs off what amounts to a 30 percent price hike for an asset inside of four months. But that is what happened to Verizon Communications (VZ) when news broke that it is in talks to buy out Vodafone Group (VOD) 45 percent stake in their U.S. wireless venture for up to $130 billion, up from the $100 billion price range that it was considering back in April. Verizon shares closed 2.7 percent higher Thursday as investors took in stride the prospect of the company taking on tens of billions of dollars in debt to fund such a deal. For years, Verizon has made no secret of its ambitions to own all of Verizon Wireless -- the top U.S. mobile service provider -- because it has the best customer growth rate and profitability of any telecom company in the country. But concern around overpaying for an asset that it already controls has always gotten in the way. Analysts saw three big motivating factors to support a deal now: rising interest rates, rapidly intensifying competition and a 12 percent drop in Verizon's shares since April. If these trends continue, and analysts expect they will, a deal gets that much more expensive for Verizon to pull off. "With interest rates rising, Verizon and Vodafone are cognizant of the fact that they have a narrow window to get this deal done," said New Street analyst Jonathan Chaplin. Vodafone has confirmed it is in talks with Verizon but declined to give details. Verizon declined to comment. The U.S. Federal Reserve has said it expects to begin scaling back its monthly purchases of government and mortgage-backed debt with an aim to eventually ending the practice next year. The expectation that this policy shift may come as soon as September has already lifted long-term interest rates. In such a rate environment, a deal for Verizon Wireless will only get more expensive the longer Verizon waits. Already, Verizon can expect to pay several hundred million dollars more in annual interest rate payments today than it would have expected to pay in April. The yield on the benchmark 10-year U.S. Treasury note has risen about 1 percentage point to 2.76 percent. Steep Price Looks Worth It Even with the higher interest rate costs, Macquarie analyst Kevin Smithen estimated that buying the rest of Verizon Wireless could still increase Verizon's 2014 earnings per share by 14.7 percent. But if Verizon had done a $130 billion deal earlier this year, when its share price was higher and interest rates were lower, that increase would have been more like 21.8 percent, according to Smithen. "If price was the only sticking point, we're not sure why Verizon didn't pull the trigger earlier," said Smithen. Verizon, which currently leads the U.S. pack in wireless customer growth and profitability, needs new ways to grow as the U.S. market slows because most people already own smartphones, and competition is intensifying rapidly. Thanks in part to aggressive marketing, No. 4 U.S. mobile operator T-Mobile US (TMUS) started reporting net subscriber growth in the second quarter after years of losses to rivals such as Verizon Wireless. Sprint (S) is also expected to become a tougher rival as it beefs up its network and now has the backing of majority owner SoftBank Corp. "Verizon would like to have total control of this asset, particularly as we're getting into a more competitive environment," said S&P analyst James Moorman. "When you look at the value of this asset it makes sense to get it in house." Still, such a deal isn't without risk as it would saddle Verizon with a heavy debt burden that could tie up its cash flow. Craig Moffett of Moffett Research was more hesitant about the merits of such a huge deal at a time when growth is slowing in the U.S. wireless market. Because the United States has been one of the best wireless growth markets in the world and Verizon has been a leader, it is unlikely to face much more improvement to its business, he said. "There is little prospect for things getting materially better for Verizon Wireless, and a meaningful chance that things get worse," Moffett said. The downside to swallowing such a high price tag is it might make it tough for Verizon to bid in upcoming spectrum auctions, leaving the coast clear for rivals like AT&T (T), noted New Street's Chaplin. But he said investors would likely still prefer to see Verizon buying "the best asset globally in telecom. "Its worth $130 billion," he said. Analysts also point out that full ownership of Verizon Wireless would automatically boost Verizon cash flow without it having to make any strategic changes. With Verizon Wireless' free cash flow of $28.6 billion last year, RBC Capital Markets analyst Doug Colandrea said Verizon has the ability to pay back debt "very rapidly." -.

Consumers have stake in net neutrality defeat

Cord cutters, it could be worse than you think.

Higher Netflix bills might just be the beginning of the effects from a federal circuit court's recent striking-down of the Federal Communications Commission's open Internet rules.

Consumers could be facing an online future that more resembles the current pay TV ecosystem — the exact thing that many Netflix consumers attempt to evade as they cut the cord.

"People are going to be upset. What I hate about my pay TV service you are going to do to my Internet service, too?" says Phil Swann, president of TVPredictions.com. "It's opened the door to the likelihood of that reality unless something changes."

Back in 2010, the FCC adopted so-called net neutrality rules requiring broadband providers to treat all Net traffic the same. Verizon challenged those rules, and on Jan. 14 the U.S. Court of Appeals in Washington upheld the company's challenge.

The result? "Companies are going to be able to negotiate (with Internet service providers) for certain most-favored-nation status and smaller companies that can't afford that are going to get left out," says Corynne McSherry, intellectual property director for the Electronic Frontier Foundation. "And the consumer will never know because all they will know is this service is working better than others."

Since Netflix is a bandwidth hog, accounting for nearly one-third of all Net traffic during peak periods, subscribers rightly feel threatened. But the streaming giant could just be the most obvious target in a new non-neutral Net.

"Companies would make deals just as they make deals to be on a cable system or satellite system," Swann says. "And your Internet would not just be $30, $40 or $50 per month; it's going to be so much per month depending on what services you get with that. I think that's where the ISPs will eventually go with this. It's too good for them not to do that."

Consumers have embraced streaming movies and TV with subscription services up 31% to nearly $3.2 b! illion in 2013, according to IHS Technology. And new Internet TV ventures are in the works at Sony and possibly DirecTV, which has expressed interest in a sports streaming service aimed at younger viewers who might not get pay TV.

Add those two projects to the already-crowded streaming space with Amazon, Apple, Google, Target and Verizon/Redbox and "that's a lot of companies with a lot of money," Swann says. "And ISPs are going, 'What a feast this could be for us.'"

Echoing Swann's concerns is Rashad Robinson, executive director of minority consumer group ColorOfChange.org, who said in a statement that "the Internet could very soon start looking like cable TV, where one corporation holds the power to decide which content we're able to access."

Similarly, the Writers Guild of America, East labor union urged the FCC to "figure out how to protect the interests of the public, and of the men and women who devote themselves to creating the content the public loves."

Not everyone is convinced that consumers will see a lot of change on home broadband service, or that they would bear the brunt alone. "People are really concerned about the concept of quality of service and ISPs blocking things," says Dan Bowman, chief technology officer of networking company Sandvine. "We think that the court of public opinion protects from that occurring."

It's the Waterloo, Ontario, firm's report that found Netflix accounts for 32% of all downstream Net traffic during peak periods with YouTube close behind, accounting for 9%.

More likely, it is major networking companies such as Cogent and Level 3 that provide connectivity for ISPs (the AT&Ts and Verizons of the world) and content providers (Netflixes and Amazons) that will seek to adjust deals on each end of the equation, Bowman says.

For an ISP to tell a residential customer "that 'if you pay more, it will be less bad' is a hard message to sell," Bowman says.

Netflix might already be preparing to pay more to connect to cons! umers, as! it has been testing a lower-priced $6.99 plan for new customers to get a single stream of standard definition video. At the same time, the company plans this spring to begin streaming 4K video, which delivers more than four times the resolution of HD — but thankfully won't increase video data traffic at quite that rate because of encoding.

"It doesn't take too much creativity to see a Netflix go, 'If you just want standard definition streaming it's going to be this much a month, if you want high definition, it's going to be this much and if you want 4K streaming this much per month' and so on," Swann says.

The FCC may appeal the court decision — the fine points of which can be complicated to the average consumer. Basically, the agency attempted to "pick and choose" its regulatory powers in regard to the Internet, Bowman says, sometimes looking at broadband providers as common carriers, like telephone companies, and other times as information services.

Instead, the court said that "the FCC has the duty to encourage openness on data services but they can't do it this complicated way," he says.

While FCC Chairman Thomas Wheeler mulls over an appeal or a new strategy, Sen. Ed Markey, D-Mass., has said he plans to introduce a bill that gives the agency the power to "preserve competition and safeguard consumers."

In the meantime, the EFF's McSherry encourages consumers to write or tweet concerns about #NetNeutrality to their Internet providers. "Some companies really respond to that and if they know that people care about more than just speedy Netflix access," she says, "they will respond."

Wells Fargo Adds 2 Execs to Client-Focused Push

Wells Fargo Advisors (WFC) said Wednesday that it tapped two managers for new client-focused positions. Anne Larson is now director of client acquisitions, and Erin Rich has become director of client experience for the group.

“This is a time when the need for more and better advice has never been greater,” said Wells Fargo Advisors President and CEO Danny Ludeman, in a press release. “Our firm is making a significant investment in bringing in new clients and making sure their experience is exceptional. We believe our firm offers clients the best experience in helping them succeed financially. Anne and Erin’s perspective and experience will help us to continue to grow and remain successful.” 

With $1.3 trillion in client assets as of June 30, Wells Fargo Advisors includes close to 15,300 full-service financial advisors and 3,340 licensed bankers.

Larson (left) will focus on developing practical growth strategies, training and other programs. She has over 20 years of experience in the financial-services industry. Most recently, she was head of marketing for Wells Fargo Merchant Services. Earlier, Larson worked for Charles Schwab (SCHW), where she led 30 branches and 100 financial consultants as regional vice president of sales.

In her new role, Rich will work with other brokerage-firm leaders to ensure that clients with Wells Fargo Advisors experience a consistently high level of service and advice throughout its different business channels. She has been with Wells Fargo for 18 years and recently created and led an effort focused on sales strategies and customer experience within Wells Fargo Bank.

On Monday, Wells Fargo said it added 34 teams and some $5.4 billion in assets under management to the its independent-advisor channel, Wells Fargo Advisors Financial Network, during the first half of 2013. The bank says this is “the second-most successful half-year recruiting effort in its history.” (Its top recruiting results came in early 2009, when the financial crisis led many wirehouse and other advisors to seek out new career options.)

With the latest additions, FiNet includes 577 practices composed of 1,205 financial advisors.

Global Market Believes Again

Retail sales numbers for December were announced and it seems like US growth enthusiasm has come back, says MoneyShow's Jim Jubak, but he wonders if it will last.

Global financial markets were believers in growth again yesterday.

Tuesday, what the headlines are calling "solid" (but I'd call tepid) retail sales growth in December, reassured investors and traders that the US economy wasn't about to slow down. (That was last week's fear, after all.)

And yesterday, we had new forecasts from the World Bank (echoing comments from the International Monetary Fund) for higher growth in the global economy in 2014.

On the return of optimism about economic growth, the US Standard & Poor's 500 Index (SPX) was up 0.53% as of 3:00 PM New York time. The German DAX (IX:DAX) finished the day up 2.03%. And the Japanese Nikkei 225 Index (NKY) closed up 2.5%.

Retail sales (excluding volatile auto sales) climbed 0.7% in December. That was the largest increase in ten months. Including autos retail sales climbed 0.2%. Economists had expected an increase of just 0.1% in December. Revisions took November's growth down to 0.4% from the previous 0.7%.

Other than the very real possibility that the miniscule beat for December came from sales pulled from the November revision, the story for holiday sales suggests the limits of the good cheer in these numbers. Holiday sales (excluding autos, gasoline, and restaurant meals) rose 3.8% in the 2013 holiday shopping period, according to the National Retail Federation. That was a higher growth rate than in 2012, it's true, but not by a whole lot. Holiday retail sales in 2012 grew by 3.5%. And, reports the Retail Federation, the holiday period saw heavy discounting that ate into profit margins. Exactly how big the profit erosion was won't be totally clear until we get reports from individual retailers during the fourth quarter earnings season.

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The World Bank increased its growth forecast for the global economy to 3.2% in 2014. That's up from 2.4% in 2013 and marks a big increase from the 3% growth the World Bank forecast for the global economy in 2014, back in June 2013. Developed economies are the source of the higher forecast with the World Bank raising its economic projections for developed economies to 2.2% from the previous 2% growth, on improved growth in the United States, and Japan, and a bottom for Europe's economies.

Full disclosure: I don't own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund may or may not now own positions in any stock mentioned in this post. The fund did not own shares of any stock mentioned in this post as of the end of December. For a full list of the stocks in the fund see the fund's portfolio here.

FTC Request for ACT-WCRX Deal - Analyst Blog

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Actavis, Inc. (ACT) and Warner Chilcott plc (WCRX) recently announced that both companies have received a request from the Federal Trade Commission (FTC) for additional information regarding Actavis' upcoming acquisition of Warner Chilcott.

As a result, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) will get extended until 30 days after Actavis and Warner Chilcott have complied with the request. This time period may be extended voluntarily by the concerned parties or terminated earlier by the FTC.

Actavis had first announced its intention to acquire Warner Chilcott in May 2013. The stock-for-stock transaction, valued at about $8.5 billion, includes the assumption of Warner Chilcott's net debt of $3.4 billion.

The successful completion of this deal will lead to the creation of a leading global specialty pharmaceutical company with combined annual revenues of about $11 billion. The combined company will hold the third position in the US specialty pharmaceutical market with annual revenues of about $3 billion.

Actavis and Warner Chilcott continue to expect the deal to close in the second half of this year. The two companies will be combined to form a new company domiciled in Ireland where Warner Chilcott is currently incorporated.

We are positive on this deal which makes strategic and financial sense. The deal is expected to be immediately accretive. Moreover, it will provide strong operating cash flow and allow Actavis to de-lever its balance sheet. The tax rate will also be significantly below current levels.

While Actavis currently carries a Zacks Rank #3 (Hold), Warner Chilcott is a Zacks Rank #2 (Buy) stock.

Other companies that currently look well-positioned include Mylan, Inc. (MYL) and Simcere Pharmaceutical Group (SCR). Both are Zacks Rank #2 stocks.

Why Middleby's Warranty Is Such a Game-Changer

In the following video interview, Motley Fool CEO Tom Gardner speaks with Middleby CEO Selim Bassoul. Since becoming CEO in 2000, Bassoul has led a remarkable transformation at Middleby, the cooking equipment maker, turning the stock into a nearly 50-bagger over that time. In the video, Bassoul discusses the importance of Middleby's warranty to his customers and to his company's innovation. 

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Tom Gardner: So let's talk about the no-quibble warranty. What is itm and what does it mean for your customers?

Selim Bassoul: Well, it's most probably the biggest game-changer for us. I wish more businesses adopted that. I have adopted this no-quibble warranty from Costco, and I know, I understand. I saw the video of Jim Sinegal sitting here. Jim Sinegal affected and Costco affected me personally more than any other business executive. I had the chance to visit Costco. In fact, everything I wear here, except the belt and the shoes, are Costco -- the shirt, the pants, the socks. Underneath those, the pants and the shirt, are all Costco products.

I like the way they run their businesses. They are frugal. They take care of their customers, and they stand behind a phenomenal -- they have the best warranty in the industry, in retail, bar none. You can return any product. You can even return flowers. I have seen people return flowers because they didn't last two weeks and they wanted them to last more than two weeks. So I adopted that, and I say I need to take our quality to that level.

We started in 1997 with the no-quibble warranty, where we allow customers for 90 days to take a product, and if they don't like it, they return it. Two years ago, we extended that to a year. Remember, we are selling $100,000 kitchens. By the time we take it back, it's all pretty damaged and banged up and scratched, so we can't resell it. But what happened is it gave us three things. That no-quibble warranty, which has not been emulated by any of our competitors. We are the only one worldwide in this industry to create a no-quibble warranty that's in writing. It's clear. It's simple.

It gives us three things. One, it allows our customers to experiment with new technology without fear. So we can roll out a lot faster -- new products a lot faster than anything else. For example, we're rolling out with a major chain a waterless steamer. Think of it. A steamer without water. We'll talk about it in a few minutes. Well, they adopted it because they have a guarantee from us.

Number two, it allows us to make sure that our quality is perfect, because if it's a division that gets a lot of returns, it means that there's something wrong. I give you an example. Many years ago, when we acquired Blodgett, in 2001, we instituted a no-quibble warranty, so Blodgett ended up selling to a new chain, and it's a convection oven similar to the one sitting behind me that has glass. And the glass gets hot, and every time that chain was rolling in the food into that oven, they used a stainless steel cart, and sometimes the cart was pushed against the glass door, and it broke the glass.

And the Blodgett people at the time said, "Well, it's not our fault. The customer is using a stainless steel cart with sharp edges." So we will get -- there's a no-quibble warranty, we'll get all those ovens back. And the management of Blodgett said, "But Selim, this is abuse! This is neglect! This is not how the oven works! It's not our fault." I said, "Well, let's go and create a better mousetrap. Let's get a glass oven that does not break." And today we have a glass door that doesn't break.

Gardner: If a company that is selling $100,000 kitchens can give a 100%, one-year refund, think about what would happen if every company did that. In fact, what would happen? What would happen is people would buy with a little bit more reckless abandon knowing that they could experiment and try things out and return them if they didn't work. It would also lower the defect rate, as you said, so people's quality standard would go up. It would be completely transformative and revolutionary if literally everything that you could buy was 100% warrantied.

Bassoul: Tom, you are totally right. It will change the United States. It will change the way our quality gets better. I think we'll probably beat the Japanese and the Germans on our quality if we adopted that.

Number two, I think it gives a significant warranty and guarantee for people to experiment, and I think that sometimes we are not willing to venture because we say, "Well, what happens if it doesn't work?" Now in my experience, I love the Costco experience because they allow the return, even better than Target or Wal-Mart.

And I love something else: I buy all my cars from a dealership in Chicago called Motor Works. Fascinating. Motor Works taught me another example. I ended up buying from them many, many years ago an E-Class Mercedes, which is diesel. I wanted to save money, and diesel was running 35 miles per gallon, and they were giving a discount on diesel because they couldn't sell them. So the owner of that dealership said to me, "Selim, don't worry about it. Try it. You'll be happy with it, and if you don't like it for a month, return it." So I bought that car in 2004, which I am still driving now. And my father was visiting from Beirut, Lebanon. So my father stopped and filled up, and instead of putting diesel he put in regular gasoline. So within half a mile, that car stopped. And what's fascinating is, I called the dealership. I said, "My father made a mistake." They took the car back and said, "Don't worry about it. It's our problem. The manufacturer should have made sure that you could not put a fuel nozzle that's regular versus diesel."

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So I learned a lot from those two experiences, and I said I'm going to adopt the same. Today, every car -- all my employees, almost, buy their car from Motor Works because of that experience. They connected with me.

Will This Be the Breakthrough of All Breakthrough Therapy Drugs?

In July 2012, the Food and Drug Administration Safety and Innovation Act was signed into law; and little did we know at the time, but the drug development process was about to be altered forever. This bill expanded many of the existing governing powers of the FDA, but also added one intriguing new provision -- the breakthrough therapy designation.

Recognizing unique therapies
This new designation, as described on the FDA's website, is to "assist drug developers to expedite the development and review of new drugs with preliminary clinical evidence that indicates the drug may offer a substantial improvement over available therapies for patients with serious or life-threatening diseases." 

Put even more simply, the breakthrough therapy designation is a monumental step in potentially bringing clinically superior drugs to market years ahead of the schedule they'd normally have to follow. Previously, drug developers had to run three separate clinical stage trials. Now, for drugs with the breakthrough therapy designation, preliminary data, (i.e., phase 1/2) can be used as the precursor for a new drug filing, shaving anywhere from one or maybe multiple years off the process of bringing a revolutionary drug to market.

According to the FDA, since Oct. 1, 2012, the agency has received 61 separate breakthrough therapy designation requests. Through June 28, 2013, it had granted 23, denied 15, and had an additional 23 pending.  

What's perhaps more remarkable is the fact that Pharmacyclics (NASDAQ: PCYC  ) has three of those 23 approved breakthrough therapy designations for its lead experimental drug, ibrutinib. Ibrutinib, which is also licensed to Johnson & Johnson (NYSE: JNJ  ) subsidiary Janssen Pharmaceuticals, was designated as a breakthrough therapy for patients with chronic lymphocytic leukemia, mantle cell lymphoma, and Waldenstrom's macroglobulinemia. The big potential indication here is CLL, which is the most common adulthood leukemia and occurs in 113,000 people in the U.S. By comparison, MCL diagnoses number about 5,000 each year.

Is this the breakthrough of all breakthrough therapies?
But, if you thought all of the fun stopped at the actual breakthrough therapy designation, then you have another thing coming. Yesterday, Pharmacyclics and J&J took the first step toward proving whether this new designation pathway is going to have some merit by filing for a new drug application for ibrutinib.

Source: ppdigital, Deviantart.com.

The trial results, published in The New England Journal of Medicine last month appear to be unmistakably in favor of an eventual approval for ibrutinib. In the MCL trial across both cohorts (those who had taken Takeda Pharmaceuticals' Velcade and those who were Velcade-naive), ibrutinib delivered a 68% overall response rate with a median response duration of a whopping 17.5 months. The results in the CLL and small lymphocytic leukemia, or SLL, trial were even more impressive, with ibrutinib delivering an overall response rate across the two doses being tested of 71%. Furthermore, estimated progression-free survival at 26 months was estimated at an incredible 75%! 

The results sort of speak for themselves, but even more than that it speaks to the breakthrough in the NDA process via the new breakthrough therapy designation. Ibrutinib, whether it likes it or not, will be the guinea pig of the breakthrough therapy drug approval process, thus making it the breakthrough candidate of breakthrough-designated drugs.

In addition, by moving ibrutinib along via this expedited pathway, it gives a previous small fry in the biotech sector, Pharmacyclics, a chance to kick around the big boys like AbbVie (NYSE: ABBV  ) and Celgene (NASDAQ: CELG  ) . AbbVie's experimental late-stage CLL and SLL drug, ABT-199, was placed on clinical hold in February following the death of two patients from a condition known as tumor lysis syndrome. This hold will delay any additional trials until the proper dosing is worked out and gives ibrutinib a chance to run away in treating CLL/SLL. For Celgene, which just received the added indication for Revlimid to treat MCL, it's a kick in the pants. Revlimid's MCL trial overall response rate was 26% compared to the 68% ORR in ibrutinib's mid-stage trial.

Not so fast, optimists...
As exciting of a time as this might be for biotechnology and pharmaceutical companies, there are a lot of factors still to play out here. In trials, ibrutinib showed what I feel is reasonable safety, with most adverse events being reported as grade 1/2 (i.e., not serious). But, with such a small subset of patients being tested in some of these trials, the potential concerns over drug safety and their effect on the body over time cannot be discounted.

Another factor to consider is whether there will be sufficient data from an early stage or mid-stage trial to merit confidence in physicians and insurers to prescribe a drug. Again, I'm not trying to pick on ibrutinib at all here, but simply point out that with a small subset of patients, even the stamp of approval from the FDA may not be enough to get insurers or physicians to go along with prescribing the drug.

Let's not forget that drug approvals are only half of the battle. Once approved, properly pricing a drug and marketing it effectively to patients and physicians is the other half of the battle. Too many drugs are approved with plenty of promise, only to flop miserably once on pharmacy shelves. In sum, keep your emotions and expectations in check.

Which drug could be next?
On top of watching ibrutinib move through the process, yesterday's NDA filing is only bound to increase the chatter over which drug could follow next. Although it's unlikely to come until the first-half of next year because of ongoing late-stage trials, I feel Pfizer's (NYSE: PFE  ) palbociclib may be next.

In mid-stage metastatic breast cancer trials, when combined with Novartis' Femara, palbociclib more than tripled progression-free survival to 26.1 months compared to just 7.5 months on Femara alone. If the ongoing late-stage data remains even remotely consistent to what we saw in mid-stage trials, expect an NDA filing around mid-2014.

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6 Stocks That Moved the Market on Thursday

Stocks were mixed on Thursday, with the S&P 500 and the Dow fighting between positive and negative territory. As the Dow was hardly changed, 24/7 Wall St. decided to focus the stocks that moved the market on the key S&P 500 Index stocks. one was jettisoned from the index, but many still consider it a key stock. This is all ahead of what could be a major market-moving unemployment report on Friday. These six stocks may have helped the S&P avoid a worse day.

These are the “unofficial” closing bell levels for the stock market on Thursday right at the 4PM bell:

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Dow/DJIA  16,445.91; -16.83 or -0.10%

S&P 500 1,838.13; +0.64 or 0.03%

Macy’s Inc. (NYSE: M) may not be a favorite among employees after news that it was laying off 2,500 workers and shutting five stores, but shares ended up at a new high after the company’s earnings guidance. Macy’s shares were trading up in the final minutes of the trading day.

United Continental Holdings (NYSE: UAL) was the airline leader of the day with big gains. The company’s passenger miles rose by 4.1% in December and its load factor was up 3 points to 85.4%. The airline giant’s shares were up 6.8% at $43.81 late in the trading session.

J. C. Penney Company, Inc. (NYSE: JCP) may be an index departure stock now, but if this crummy turnaround retailing stock can get a boost from an upgrade then any other one can too. Piper Jaffray raised the retailer to Overweight with an $11 price target, nearly an unimaginable move based upon recent trends. Shares were up over 3.6% at $$7.64 in the final seconds of the day.

Walgreen Co. (NYSE: WAG) traded higher after its annual shareholder meeting discussed the firm’s growth strategies for the years ahead. Shares were trading higher by over 3% at $61.20 in the final seconds of trading. What stood out even more than the unexpected gain was that Walgreen’s share trading volume was nearly three-times the 5.2 million shares that trade on an average day.

Aetna Inc. (NYSE: AET) was the leader among the large insurance stocks on Thursday. Credit Suisse raised the rating to Outperform from Neutral. The upgrade sent shares to an all-time high because the $83 price target is over 10% higher than the street consensus price target of about $74.50. This is now a street high price target. Aetna shares were up by 3.75% at $71.73 right before the close.

Ford Motor Co. (NYSE: F) surged by more than 2% on news that it was lifting its dividend payout rate by 25%. This takes Ford’s dividend yield to well above 3%, trumping GM as it does not even have its dividend reinstated yet. Ford shares were riding the heels of the news that Alan Mulally would be staying on this year as well. Ford shares were up 2.1% at $15.88 in active volume right before the close.

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The grades of seven commercial banking stocks are better this week, according to the Portfolio Grader database. Every one of these stocks has an “A” (“strong buy”) or “B” overall (“buy”) rating.

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CVB Financial () is progressing from last week’s rating of B (“buy”) as the company improves to an A (“strong buy”) this week. CVB Financial provides various banking and trust services for small and medium-sized businesses, professionals, and individuals. In Portfolio Grader’s specific subcategories of Earnings Growth and Margin Growth, CVBF also gets A’s. .

Wintrust Financial Corporation () ups its rating to a B (“buy”) this week after earning a C (“hold”) in the week before. Wintrust Financial provides traditional community banking services, wealth management services, commercial insurance premium financing, short-term accounts receivable financing and certain administrative services. .

Independent Bank Corp.’s () ratings are looking better this week, moving up to a B from last week’s C. Independent Bank is the holding company for Rockland Trust. .

Bridge Capital () boosts its rating from a C to a B this week. Bridge Capital Holdings provides commercial and retail banking services to small and medium size commercial businesses, business professionals, and retail customers primarily in California. .

MidWestOne Financial Group, Inc. () is seeing ratings go up from a C last week to a B this week. Midwest One Financial Group is a bank holding company that provides commercial and retail lending services to businesses, individuals and government agencies. .

Center Bancorp, Inc. () earns an A this week, jumping up from last week’s grade of B. Center Bancorp is a provider of various lending, depository, and related financial services for commercial, industrial, and governmental customers. .

This is a strong week for NBT Bancorp (). The company’s rating climbs to B from the previous week’s C. NBT Bancorp is a financial holding company that, through subsidiaries NBT Bank and Pennstar Bank, provides commercial banking and financial services. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

Small cap RetailMeNot Inc (SALE) Jumps But Insiders Have Been Exiting (GRPN)

On Monday, small cap RetailMeNot Inc (NASDAQ: SALE) jumped 7.67% to $31.01 on an analyst upgrade, but the stock had declined after a pre-Christmas run-up – meaning investors might want to take a closer look at what is going on with the company plus take a look at the performance of peer Groupon Inc (NASDAQ: GRPN).

What is RetailMeNot Inc?

Small cap RetailMeNot, which went public in July 2013, operates the world's largest digital coupon marketplace as the company's websites enable consumers from across the globe to save money through hundreds of thousands of digital coupons and offers from retailers and brands. RetailMeNot experienced more than 500 million visits to its websites in the last 12 months and its portfolio of coupon and deal websites includes:

www.RetailMeNot.com, the leading digital coupon site in the United States. www.RetailMeNot.ca in Canada. www.VoucherCodes.co.uk, the leading digital coupon site in the United Kingdom. www.Deals.com in Germany. www.Actiepagina.nl, a leading digital coupon site in the Netherlands. Bons-de-Reduction.com and www.Ma-Reduc.com, leading digital coupon sites in France.   www.Poulpeo.com, a leading digital coupon site with cash back in France.  www.Deals2Buy.com, a leading discount offer site in North America.

Meanwhile, Groupon serves 500 markets and 48 countries with its deal-of-the-day website that features discounted gift certificates usable at local or national companies. However, the company has had a troubled history as outlined on its Wikipedia page.

What You Need to Know or Be Warned About RetailMeNot Inc

Late last Friday, RBC Capital Markets Internet analyst Mark Mahaney offered an update on the outlook for various online advertising and retail stocks where he predicted continued benefits to the group from trends in social, local and mobile transactions. In the update, Mahaney upgraded RetailMeNot from sector perform to outperform with a $33 price target.

However and just after Christmas, RetailMeNot was following Internet and social-media stocks downward by dropping some 7% after steadily rising during the last few weeks of the Christmas holiday season. Not helping matters was the fact that investors started noticing all the recent insider sales for the month of December with the only other insider sales since July occurring in October.

Insider Transactions Reported - Last Two Years

DateInsiderSharesTypeTransactionValue*

Dec 20, 2013	CUNNINGHAM G COTTEROfficer	35,306	Direct	Sale at $26 per share.	917,956
Dec 20, 2013	BALL CHARLES THOMASDirector	755,825	Indirect	Sale at $26 per share.	19,651,450
Dec 20, 2013	AV PARTNERS IX LLCBeneficial Owner (10% or more)	755,825	Indirect	Sale at $26 per share.	19,651,450
Dec 20, 2013	AV PARTNERS IX LLCBeneficial Owner (10% or more)	755,825	Indirect	Sale at $26 per share.	19,651,450
Dec 17, 2013	PHO STEVEN TOfficer	12,812	Direct	Sale at $26 per share.	333,112
Dec 17, 2013	AYLOR THOMASOfficer	7,031	Direct	Sale at $26 per share.	182,806
Dec 17, 2013	AYLOR THOMASOfficer	7,031	Direct	Option Exercise at $11.40 per share.	80,153
Dec 17, 2013	BATH JAGJIT S.Officer	17,156	Direct	Sale at $26 per share.	446,056
Dec 17, 2013	AV PARTNERS IX LLCBeneficial Owner (10% or more)	1,706,746	Indirect	Sale at $26 per share.	44,375,396
Dec 17, 2013	BEOUGHER KELLIOfficer	28,000	Direct	Sale at $26 per share.	728,000
Dec 17, 2013	BEOUGHER KELLIOfficer	28,000	Direct	Option Exercise at $1.12 per share.	31,360
Dec 17, 2013	ROGERS PAULOfficer	17,375	Direct	Sale at $26 per share.	451,750
Dec 17, 2013	PHO STEVEN TOfficer	3,000	Direct	Option Exercise at $2.08 per share.	6,240
Dec 17, 2013	BALIS JILLIAN L.Officer	17,156	Direct	Sale at $26 per share.	446,056
Dec 17, 2013	BALIS JILLIAN L.Officer	17,156	Direct	Option Exercise at $2.08 per share.	35,684
Dec 17, 2013	MALTZ JULES A.Director	250,000	Indirect	Sale at $26 per share.	6,500,000
Dec 17, 2013	AV PARTNERS IX LLCBeneficial Owner (10% or more)	1,706,746	Indirect	Sale at $26 per share.	44,375,396
Dec 17, 2013	ROGERS PAULOfficer	17,375	Direct	Option Exercise at $2.08 per share.	36,140
Dec 17, 2013	BALL CHARLES THOMASDirector	1,706,746	Indirect	Sale at $26 per share.	44,375,396
Dec 17, 2013	SHARPLES BRIANDirector	4,983	Indirect	Sale at $26 per share.	129,558
Dec 17, 2013	SHARPLES BRIANDirector	7,031	Direct	Option Exercise at $2.08 per share.	14,624
Dec 17, 2013	CUNNINGHAM G COTTEROfficer	190,694	Direct	Sale at $26 per share.	4,958,044
Dec 17, 2013	SHARPLES BRIANDirector	7,031	Direct	Sale at $26 per share.	182,806

 

It should be noted though that back in early December, RetailMeNot filed for an offering of 6.3 million shares consisting of 2 million shares of series 1 common stock with selling shareholders offering another 4.3 million shares of series 1 common stock. At the time, the company's float stood at 15.16 million shares while outstanding shares stood at 50.56 million shares - so it was a fairly large number of shares to dump on the market.

Nevertheless, investors should be aware that RetailMeNot is pretty profitable as its reported revenues of $47.35M (3 months ending 2013-09-30), $43.40M (3 months ending 2013-06-30), $40.56M (3 months ending 2013-03-31) and $144.69M (12 months ending 2012-12-31) for the past four reported quarters (notice the 4th quarter uptick) and net income of $5.59M (3 months ending 2013-09-30), $5.12M (3 months ending 2013-06-30), $6.97M (3 months ending 2013-03-31) and $25.99M. In addition, RetailMeNot has reported revenues of $144.69M (2012), $80.40M (2011) and $16.86M (2010) for the past three reported years and net income of $25.99M (2012), $16.96M (2011) and $2.34M (2010).  

Share Performance: RetailMeNot vs Groupon 

On Monday, small cap RetailMeNot rose 7.67% to $31.01 (SALE has a 52 week trading range of $25.51 to $39.50 a share) for a market cap of $1.82 billion plus the stock is up 11.95% for retail investors since last July. Her is a look at the performance of Groupon verses RetailMeNot:

As you can see from the above performance chart, Groupon has not exactly rewarded investors, but things started to improve in late 2012.

Finally, here is a look at the latest technical charts for RetailMeNot and Groupon:

The Bottom Line. Certainly insiders selling is never a good sign. Then again, insiders wanting to cash in some of their chips after an IPO is understandable. Given the fact that RetailMeNot has been profitable for the past three years, investors looking for action in the Internet or ecommerce space might want to at least take a closer look at what the stock might have to offer.