Volaris Raises $346 Million in No. 3 Mexico Airline’s IPO

Volaris expects to add 15 U.S. destinations over the next three years, the carrier's chief executive officer said after completing Mexico's first initial public offering by an airline since 2011.

The expansion goes along with Volaris's growth plans in Mexico, where its low fares are helping win customers away from other airlines and bus companies, CEO Enrique Beltranena said today in a telephone interview from New York. The shares surged 15 percent to 17.88 pesos at the close in Mexico City after the IPO raised at least $346 million.

"When you look at per-capita air trips, Mexico is well below the world average, and that's because of the huge market of bus passengers," Beltranena said. "We made a business model that would cater to the middle class, offer point-to-point service and cannibalize the bus market."

Adding U.S. markets would help the Mexico City-based airline, officially known as Controladora Vuela Cia. de Aviacion SAB, build on its Mexican base. Volaris flew 23 percent of domestic passengers this year through July and almost doubled its market share in the past five years, government data show.

The carrier now flies to 11 U.S. cities, including Los Angeles, Denver and Chicago. Beltranena declined to say what U.S. destinations he's considering in its expansion plan.

In its home market, Volaris is targeting a bus industry that had 74 million passenger trips in its so-called executive and luxury category last year, the airline said in a Sept. 16 prospectus. Domestic air passengers totaled 28.2 million in 2012 as Mexico's total air traffic climbed at the fastest pace since 2007 to a record 56.8 million, according to the Ministry of Communications and Transportation.

Other Airlines

Volaris became Mexico's second publicly traded carrier, after larger competitor Grupo Aeromexico SAB (AEROMEX*) sold stock in 2011. Airlines in Mexico have expanded into a void left when Cia. Mexicana de Aviacion, then largest based on passenger traffic, sought protection from creditors and ceased operations in 2010.

Interjet, Mexico's No. 2 airline, is studying a share sale for 2014 or 2015, Executive President Miguel Aleman Magnani said last month. The country's fourth-largest airline, Aeroenlaces Nacionales SA, known as VivaAerobus, has hired Barclays Plc to help prepare a possible offering, according to three people familiar with the matter.

Record Issuance

The Volaris IPO, Mexico's first since July 23, extends a record pace of stock issuance in the country this year. Not including the Volaris offering, Mexican companies raised a record $9.93 billion in equity markets in 2013, 10 percent more than the $9.02 billion in all of 2012. Grupo Financiero Banorte SAB, Mexico's third-biggest bank, raised $2.53 billion in a follow-on stock offering in July.

Deutsche Bank AG, Morgan Stanley and UBS AG led the Volaris share sale, data compiled by Bloomberg showed. The airline sold American depositary receipts at $12 each, the bottom of the projected $12 to $14 range the airline gave in a Sept. 16 regulatory filing.

The ADRs climbed 17 percent to $14.01 at the close in New York.

Demand was 2.85 times the total shares offered, Beltranena said. The Mexican shares were priced at 15.51 pesos each.

"For me, what was important was to build a solid portfolio that would attract investors, give them an upside and lead to solid trading as we move ahead," Beltranena said. "The history of Volaris is one that gives an important potential to the stock."

Cost Advantage

The company began operations in 2006 and its fleet includes Airbus SAS single-aisle A319 and A320 jets. Owners include Indigo Partners LLC, Evercore Partners Inc. (EVR) and Evercore Co-Chairman Pedro Aspe, a former Mexico finance minister, according to the pre-IPO filing.

Volaris has said it has some of the lowest operating expenses among publicly traded carriers in the Americas, with costs per available seat mile, an industry benchmark, at 9.4 cents. Sales for 2012 totaled $887 million, up from $397 million in 2008 based on average exchange rates during the respective years, according to the airline.

The carrier will spend $164 million of the proceeds from the share offering on aircraft pre-delivery payments during the next three years, Beltranena said.

Volaris has firm commitments for 49 Airbus A320s for delivery over next eight years, according to the prospectus. The carrier has no plans to add smaller or larger aircraft to its fleet, Beltranena said.

5 Best Performing Growth Mutual Funds Year to Date - ...

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For investors looking for capital growth rather than regular current income through dividend pay outs, growth funds would be a good choice. These funds reinvest their return and focus on long term capital appreciation. Investors need to have higher tolerance to risk as their capital remains unavailable to them for a longer period of time. These funds mainly select those securities for investment that have higher growth potential and whose values are estimated to rise over the long term.

Below we will share with you the 5 best performing growth mutual funds year to date. To view the Zacks Rank and past performance of all growth funds, investors can click here to see the complete list of funds.

Mutual Fund	Zacks Rank	Total Return YTD
Hodges	#3 Hold	28.08%
Vanguard Capital Opportunity	#2 Buy	23.11%
Biondo Focus Investor	#3 Hold	22.02%
PRIMECAP Odyssey Growth	#1 Strong Buy	21.08%
Vanguard PRIMECAP	#1 Strong Buy	19.61%

Hodges (HDPMX) invests in companies without regard to their market capitalization. A maximum of 25% of assets may be utlised in short-sale transactions. A portion of the fund is also invested in money market instruments. Call and put options of domestic trading companies can also be bought. Companies witnessing mediocre growth but offering high dividend yield also attract investment up to 25% of assets. The growth mutual fund has a three year annualized return of 14.43%.

The growth mutual fund has a minimum initial investment of $250 and an expense ratio of 1.43 to a category average of 1.26%.

Vanguard Capital Opportunity Investor (VHCOX) seeks capital growth on a long-term basis. The fund invests predominantly in domestic securities with substantial earnings growth potential. It invests in securities of companies regardless of their size. The stocks selected are expected to provide returns greater than the overall market over a three to five year period. The growth mutual fund has a three year annualized return of 13.46%.

Theo A. Kolokotrones is the fund manager and he has managed this growth mutual fund since 1998.

Biondo Focus Investor (BFONX) invests in a combination of common stock of domestic companies, American Depository Receipts (ADRs) and investment grade fixed income securities. The fund may also invest in exchange-traded Funds (ETFs) and options on common stock. The fund holds long and short positions in these and other types of securities. The growth mutual fund has a three year annualized return of 6.27%.

The growth mutual fund has a minimum initial investment of $1,000 and an expense ratio of 2.55% compared to a category average of 1.24%.

PRIMECAP Odyssey Growth (POGRX) seeks capital growth on a long-term basis. It invests in common stocks of domestic companies, especially those with the ability to return above a! verage gr! owth. It focusses on investing in large and mid-cap companies. The fund also invests substantially in stocks issued by large cap firms. The growth mutual fund has a three year annualized return of 17.06%.

As of March 2013, this growth mutual fund held 116 issues, with 6.09% of its total assets invested in Seattle Genetics Inc.

Vanguard PRIMECAP (VPMCX) seeks capital growth over the long term. The fund invests in stocks with substantial growth potential. It focuses on acquiring large and mid-cap stocks. The growth mutual fund has a three year annualized return of 15.42%.

Howard B. Schow is the fund manager and he has managed this growth mutual fund since 1984.

To view the Zacks Rank and past performance of all growth mutual funds, investors can click here to see the complete list of funds.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.

Target, Walmart May Not Be Selling the Right Stuff

In its second-quarter earnings report released before markets opened on Wednesday, Target Corp. (NYSE: TGT) announced adjusted earnings per share (EPS) of $1.19 on revenues of $17.12 billion, compared with the consensus estimates from Thomson Reuters for EPS of $0.96 on revenues of $17.26 billion. In the same period a year ago, the big-box retailer posted EPS of $1.06 on revenues of $16.78 billion.

When Wal-Mart Stores Inc. (NYSE: WMT) reported results last week, the mega-retailer posted EPS of $1.24 on revenues of $116.2 billion, compared with the consensus estimates of $1.25 on revenues of $118.47.

Walmart chopped its outlook for the third quarter and the full year, and today Target said its full-year EPS would come in at the low-end of its previous guidance of $4.70 to $4.90. Both stores have cited cautious spending by consumers who face tighter budgets going forward.

That is part of the story, but not all of it. Take a look at the results from Lowe's Companies Inc. (NYSE: LOW) and Home Depot Inc. (NYSE: HD). Both posted nice gains and raised their full-year outlooks. And both stores noted that sales were solid in all departments.

What consumers have spent money on are home improvement items, appliances, smartphones and other electronic gear. The big-ticket stuff — home improvement items and appliances — are not offered at either Target or Walmart. Best Buy Co. Inc. (NYSE: BBY) specifically noted that appliance sales experienced strong growth in the second quarter, helping the company to confound nearly everyone with its big earnings beat on Tuesday.

Both Lowe's and Home Depot raised their outlooks as they expect customers to continue to invest in their homes. Target and Walmart, which sell a lot of discretionary items, have reined in their outlooks, probably recognizing that if consumers are going to spend on discretionary goods it is not going to be on the stuff these stores sell.

More retailers are having a rough quarter than are having a good one. According to Retail Metrics, the projected blended earnings growth from the retail sector has fallen from 10.3% last week to 6.6% as of Tuesday, and that retailers the firm tracks that already have reported earnings have missed expectations by an average of 2.1%. And that decline includes Home Depot.

Top Warren Buffett Stocks To Buy For 2014

These numbers do not suggest a banner year for the back-to-school season, and the set-up for this year's holiday season is not looking too good either. For consumers this could mean steeper discounts after the back-to-school season and earlier discounts going into the holiday season. Good for consumers, not so good for retailers.

Target's shares are trading down 2.2% early trading, at $66.41 in a 52-week range of $58.01 to $73.50. The consensus price target from Thomson Reuters was around $73.80 before today's results were announced.

4 Tech Stocks Under $10 Triggering Breakout Trades

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Big Trades to Take as the Fed Hits the Gas

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Stocks Insiders Love Right Now

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside today.

Global Telecom & Technology

Global Telecom & Technology (GTT) is a cloud network provider delivering simplicity, speed and agility to enterprise, government and carrier customers in over 80 countries worldwide. This stock closed up 6.5% to $4.59 in Thursday's trading session.

Thursday's Range: $4.39-$4.60

52-Week Range: $1.02-$4.75

Thursday's Volume: 77,000

Three-Month Average Volume: 12,816

>>5 Tech Stocks in Breakout Territory With Big Volume

From a technical perspective, GTT bounced sharply higher here right above its 50-day moving average of $4.28 with above-average volume. This move is quickly pushing shares of GTT within range of triggering a near-term breakout trade. That trade will hit if GTT manages to take out Thursday's high of $4.60 and then once it clears its 52-week high at $4.75 with high volume.

Traders should now look for long-biased trades in GTT as long as it's trending above its 50-day at $4.28 or above more near-term support at $4.01 and then once it sustains a move or close above those breakout levels with volume that hits near or above 12,816 shares. If that breakout triggers soon, then GTT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $6 or $7.

FalconStor Software

FalconStor Software (FALC) provides disk-based data protection. This stock closed up 11.7% to $1.33 a share in Thursday's trading session.

Thursday's Range: $1.14-$1.36

52-Week Range: $0.88-$2.89

Thursday's Volume: 627,000

Three-Month Average Volume: 264,280

>>5 Stocks Set to Soar on Bullish Earnings

From a technical perspective, FALC skyrocketed higher here right above some near-term support at $1.10 with strong upside volume flows. This stock had been downtrending badly for the last three months, with shares falling from its high of $1.90 to its recent low of 88 cents per share. After hitting that low, shares of FALC have reversed its downtrend and entered a new uptrend. That move has now pushed shares of FALC within range of triggering a near-term breakout trade. That trade will hit if FALC manages to take out Thursday's high of $1.36 and then once it clears some past resistance at $1.43 with high volume.

Traders should now look for long-biased trades in FALC as long as it's trending above $1.20 or above Thursday's low of $1.14 and then once it sustains a move or close above those breakout levels with volume that hits near or above 264,280 shares. If that breakout hits soon, then FALC will set up to re-test or possibly take out its next major overhead resistance levels at $1.90 to $2.20.

Rambus

Rambus (RMBS) develops world-changing products and services in security, advanced LED lighting and displays, and immersive mobile media. This stock closed up 2.2% to $8.83 in Thursday's trading session.

Thursday's Range: $8.64-$8.83

52-Week Range: $4.01-$10.85

Thursday's Volume: 576,000

Three-Month Average Volume: 964,248

>>5 Rocket Stocks to Buy as Mr. Market Climbs

From a technical perspective, RMBS trended modestly higher here right above some near-term support at $8.38 with lighter-than-average volume. This stock recently came out of a sharp downtrend, which took the stock from $10.85 to $7.95. Shares of RMBS now look to have put an end to its downside volatility in the short-term, since the stock has reversed course and entered a moderate uptrend over the last few weeks. That move is now pushing shares of RMBS within range of triggering a near-term breakout trade. That trade will hit if RMBS manages to take out its 50-day at $9.14 and then once it clears more resistance at $9.17 with high volume.

Traders should now look for long-biased trades in RMBS as long as it's trending above support at $8.38 or at $7.95 and then once it sustains a move or close above those breakout levels with volume that hits near or above 964,248 shares. If that breakout hits soon, then RMBS will set up to re-test or possibly take out its next major overhead resistance levels at $10 to its 52-week high at $10.85.

Glu Mobile

Glu Mobile (GLUU) designs, markets and sells mobile games. This stock closed up 5.3% to $2.35 in Thursday's trading session.

Thursday's Range: $2.23-$2.44

52-Week Range: $1.99-$5.16

Thursday's Volume: 3.54 million

Three-Month Average Volume: 1.53 million

From a technical perspective, GLUU ripped higher here right above some near-term support at $2.10 with monster upside volume. This move is quickly pushing shares of GLUU within range of triggering a near-term breakout trade. That trade will hit if GLUU manages to take out its 50-day moving average at $2.48 and its 200-day moving average at $2.55 and then once it clears more resistance at $2.59 with high volume.

Traders should now look for long-biased trades in GLUU as long as it's trending above Thursday's low of $2.23 or above $2.10 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.53 million shares. If that breakout triggers soon, then GLUU will set up to re-fill its previous gap down zone from August that started at $2.80. If that gap gets will with strong volume, then GLUU could easily tag $3 or $3.25.

To see more stocks that are making notable moves higher today, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Stocks Under $10 Set to Soar

>>Beat the S&P With These 5 Shareholder Yield Champs

>>5 Stocks Rising on Unusual Volume

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Kandi Jumps On China Electric Vehicle Subsidies; Tesla At Fresh Highs

Kandi Technologies (KNDI) was soaring 17.5% at recent check as the auto maker announced that the Chinese government will offer subsidies for electric cars.

The long-awaited policy covers not only pure electric vehicles, but also plug-in hybrid electric and fuel cell battery cars, and runs through 2015. According to the report, the government would offer up to RMB 60,000 (approximately USD 9,800) for the purchase of an all-electric passenger vehicle and up to RMB 500,000 (approximately USD 81,700) for the purchase of an electric bus.

However, the news did little to stop Tesla (TSLA), which was revving toward fresh all-time highs, up more than 5% to $174.78.

Nor did news Wednesday that Volkswagen plans to have electric vehicles for sale in the U.S. by 2015.

However, Tesla plans to have its own innovations to offer not long after that year, as CEO Elon Musk said that it is designing a self-driving car that will be available within the next three years. The company is obviously taking aim at Google (GOOG), so far the leader in auto-pilot cars.

Top 5 Financial Companies To Watch In Right Now

Deutsche Bank boosted its price target for Tesla to $200 yesterday. Also, Northland Securities is making positive comments on the stock today, reports Briefing.com.

12 Buy-Rated, Dividend-Boosting Tech

The indicated yield for the tech sector now stands at 1.9%, higher than the indicated yields for the consumer discretionary or financial services sectors, observes Beth Piskora, of S&P Capital IQ in The Outlook.

In fact, tech contributed 15.4% of the overall yield of the S&P 500 as of August 31, up from only 10.3% at the end of 2011. As a sector, it contributes more yield to the S&P 500 than any other sector.

That is, perhaps, not surprising, as it is also the biggest sector (from a market cap perspective) in the S&P 500. However, as recently as 2011, tech was only the sixth largest contributor to yield of the ten sectors.

The yield for the tech sector now perfectly matches the yield on the S&P 500 Growth style index (1.9%), still slightly lower than the yield on the S&P 500 as a whole (2.2%).

Twenty-nine stocks in the S&P 500 technology sector initiated or boosted dividends this year (through August 31).

Of the 29 tech stocks with higher dividends now than at the end of last year, 12 are ranked strong buy or buy by S&P Capital IQ analysts.

They are listed below:

Altera (ALTR)—yielding 1.7%

Apple (AAPL)—yielding 2.5%

Applied Materials (AMAT)—yielding 2.6%

Cisco (CSCO)—yielding 2.9%

EMC Corp. (EMC)—yielding 1.5%

International Business Machines (IBM)—yielding 2.0%

KLA-Tencor (KLAC)—yielding 3.2%

Microchip Technology (MCHP)—yielding 3.6%

Oracle (ORCL)—yielding 1.5%

Qualcomm (QCOM)—yielding 2.1%

Texas Instruments (TXN)—yielding 2.9%

Xilinx (XLNX)—yielding 2.3%

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Oppenheimer Institutional Portfolio Managers Favor Communications Equipment Stocks

In a secular bull market rally, sectors tend to go up and down on a favorable basis as they become either overbought or just lose momentum. The Institutional Portfolio team at Oppenheimer highlighted that the communications equipment sector has shown two months of notable improvement. The breadth of analyst revisions and secularly depressed valuations create a compelling industry-level opportunity for relative outperformance. Most importantly, they point out that valuations are remaining at generational lows. The communications equipment arena looks best positioned to outperform, while limiting downside risks. Here are the top stocks to buy at Oppenheimer in the sector.

ADTRAN Inc. (NASDAQ: ADTN) is a leading global provider of networking and communications equipment. Its products enable voice, data, video and Internet communications across a variety of network infrastructures. ADTRAN solutions are currently in use by service providers, private enterprises, government organizations and millions of individual users worldwide. The Thomson/First Call price target for the stock is $22, and investors receive a 1.4% dividend.

Arris Enterprises Inc. (NASDAQ: ARRS) has become a major competitive threat to Cisco after its acquisition of the set-top box business of Motorola Mobility. IHS estimated that the global set-top box shipment will grow 8% year-over-year to 269 million units in 2013 from 250 million units in 2012. This is further expected to increase 6% in 2014 to 286 million units and another 1% in 2015 to 290 million units. Moreover, IHS also estimated that the global set-top box revenues will reach a record-high $22.2 billion in 2013. The consensus price target for Arris is $17.25.

Ciena Corp. (NASDAQ: CIEN) is a top stock to buy at Oppenheimer and also was recently raised to Outperform at William Blair. Ciena provides communications networking equipment, software and services that support the transport, switching, aggregation and management of voice, video and data traffic worldwide. The consensus price target for the stock is $23.

Cisco Systems Inc. (NASDAQ: CSCO) is a mega-cap tech stock that has roared back into the game. The company is moving to be an innovator in providing the automobile industry with the Cisco enterprise-grade, seamless wireless network switching technology, which is highly secure and is designed to connect passengers to the right network based on their location on the road and their user preference. It is the complete Internet and communications experience for tomorrow's driver today. The consensus price objective for this top tech name is $27. Investors are paid a 2.6% dividend.

F5 Networks Inc. (NASDAQ: FFIV) had truly become an out-of-favor stock recently. It blew away earnings, and the stock responded well. Despite some continued weakness in telecom spending, the rest of the year looks very positive for the company. The consensus price objective stands at $95.

Harmonic Inc. (NASDAQ: HLIT) is a top small cap name to buy at Oppenheimer. Revenue in the second quarter totaled $117.1 million, and bookings were $126.3 million. Non-GAAP net income was $5.6 million, or $0.05 per share. That bottom-line result is a welcome improvement compared to the adjusted net loss of $0.02 per share a year ago. The stock was up as much as 16% after earnings, and it may be a top name to own for the rest of the year. The consensus price target for the stock is $7.

Juniper Networks Inc. (NYSE: JNPR) announced in June a plan to repurchase $1 billion in stock and added an additional $1 billion when they announced preliminary earnings on July 23. The consensus price for this top tech name is $22.

Qualcomm Inc. (NASDAQ: QCOM) rounds out the top communications equipment stocks to buy at Oppenheimer. The company reported fantastic third-quarter results. Revenue surged 35% year-over-year to $6.2 billion, handily exceeding consensus estimates. Non-GAAP earnings per share jumped 21% year-over-year to $1.03, roughly in-line with consensus estimates. Free cash flow was fantastic at $1.85 billion, equivalent to 30% of revenue. The consensus price target for this top tech name is $75. Investors receive a 2.1% dividend.

The Institutional Portfolio managers at Oppenheimer think that earnings revisions, sentiment and alpha momentum can be used as tools from a contrarian or trend-following perspective toward identifying future periods of outperformance. The communications equipment sector may be poised to lead in the second half of the year, and their stocks to buy may be timely portfolio additions now.

Is Starbucks Still A Hot Stock?

With shares of Starbucks (NASDAQ:SBUX) trading around $64, is SBUX an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Starbucks is a roaster, marketer and retailer of coffee operating worldwide. The company purchases and roasts coffees that it sells, along with handcrafted coffee, tea and other beverages and a variety of fresh food items, through its stores. It also sells a variety of coffee and tea products and licenses its trademarks through other channels, such as licensed stores and national food service accounts. In addition to its flagship Starbucks brand, the Company's portfolio also includes Tazo Tea, Seattle's Best Coffee, Starbucks VIA Ready Brew, Starbucks Refreshers beverages and the Verismo System by Starbucks. Starbucks has developed an amazing reputation over the last several years which has generated a lot of buzz for its products. Consumers continue to enjoy Starbucks branded products around the world which will surely lead to rising profits.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

T = Technicals on the Stock Chart are Strong

Starbucks stock has seen an explosive move higher, over the last few years. Currently, the stock is trading at all-time high prices where it is still catching a bid. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Starbucks is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Starbucks Options	20.4%	6%	5%

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

	Put IV Skew	Call IV Skew
June Options	Flat	Average
July Options	Flat	Average

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

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

E = Earnings Are Increasing Quarter-Over-Quarter

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

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	27.50%	14.00%	-0.51%	19.44%
Revenue Growth (Y-O-Y)	11.26%	10.59%	10.96%	12.67%
Earnings Reaction	-0.82%	4.1%	9.05%	-9.4%

Starbucks has seen increasing earnings and revenue figures over most of the last four quarters. From these figures, the markets have been very excited with Starbucks’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has Starbucks stock done relative to its peers, Dunkin’ Brands (NASDAQ:DNKN), McDonald’s (NYSE:MCD), Green Mountain Coffee Roasters (NASDAQ:GMCR), and sector?

	Starbucks	Dunkin’ Brands	McDonald’s	Green Mountain Coffee Roasters	Sector
Year-to-Date Return	18.94%	27.40%	14.94%	94.97%	16.86%

Starbucks has been an average relative performer, year-to-date.

Conclusion

Starbucks provides highly demanded coffee and tea products and services to consumers who are eager to enjoy their products. The stock has been on fire and is now trading at all-time high prices. Earnings and revenue have been growing at an explosive pace which has kept investors excited about the stock. Relative to its strong peers and sector, Starbucks has been an average year-to-date performer. Look for Starbucks to OUTPERFORM.

Wal-Mart vows to open D.C. stores, after mayor vetoes wage bill

Wal-Mart said it will resume plans to open stores in Washington D.C.

NEW YORK (CNNMoney) Wal-Mart said it will go forward with plans to open stores in Washington D.C. now that the capital's mayor has vetoed legislation that would require large retailers to pay higher wages.

Mayor Vincent Gray on Thursday overturned a new law, which would have required big box stores like Wal-Mart (WMT, Fortune 500) to pay no less than $12.50 an hour in combined wages and benefits. The city's current minimum wage is $8.25.

The hotly-debated Large Retailer Accountability Act, which passed the D.C. Council last month, applied to stores with more than $1 billion in annual sales. Last year, Wal-Mart reported sales of $469 billion.

Wal-Mart had planned to open D.C. locations for three years, but told the council a day before the bill passed that it would back away if the legislation went through.

Soon after the mayoral veto came through, Wal-Mart said it would resume its plans.

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"Now that this discriminatory legislation is behind us, we will move forward on our first stores in our nation's capital," Wal-Mart spokesman Steven V. Restivo said in a statement.

In a letter to D.C. Council members, Mayor Gray called the bill a "job-killer," because "nearly every large retailer now considering opening a store in the District has indicated that they will not come here or expand here if this bill becomes law."

He also said the bill would only raise the minimum wage for a small fraction of the district's workforce.

The Council, however, can override the Mayor's veto with a two-third vote. That means that nine out of the 13 council members would need to vote in favo! r of an override. The bill originally passed with an 8-5 vote.

The council's office said that it has a vote scheduled for Tuesday morning at 10 am.

The debate over Wal-Mart wages spans beyond Washington. The store's workers have been protesting nationwide for higher wages and better hours since last November.

-- CNN's Greg Seaby and Dezelle Bennett contributed reporting.

5 Things the Fed Hopes You'll Never Find Out

Most Americans assume the U.S. Federal Reserve is a powerful government institution that seeks only to safeguard the dollar, boost the economy and drive employment higher.

That's what the Fed wants you to think.

The illusion of the Fed as a stabilizing, positive government entity has more or less existed since its creation under dubious circumstances in 1913.

"It not only avoided the word bank, it cleverly implied federal, or government, control over the establishment of a pool of reserves that would backstop the new banking 'system,'" said Money Morning Capital Wave Strategist Shah Gilani.

Congress has played along the whole time, first by approving the legislation that created this beast and later by endowing the Fed with its "dual mandate" to combat both inflation and unemployment.

The real reasons the Fed was created, and many of the things it does to this day, would shock many Americans.

"If the American people truly understood how the Federal Reserve System works and what it has done to us, they would be screaming for it to be abolished immediately," Michael Snyder writes on his website, The Economic Collapse.

Five Shocking Facts About the Federal Reserve

1. It's Not Really Part of the Government

Few people realize that the Federal Reserve didn't even exist until about 100 years ago. It was cooked up by the top Wall Street bankers of the time in a secret meeting on an island in Georgia (A book about it is actually titled "The Creature of Jekyll Island.")

The bankers wanted a central bank partnered with the government to serve as a backstop for their institutions, which then were prone to panics and bank runs.

The 12 regional banks that make up the Federal Reserve are not owned by the U.S. Treasury, but by the nation's private banks. According to Factcheck.org, "about 38% of the nation's more than 8,000 banks are members of the [Federal Reserve] System, and thus own the Fed banks."

2. The Federal Reserve's Primary Purpose is to Serve the Banks

While the stated purpose of the Federal Reserve is its congressional "dual mandate," in practice serving the needs of the big banks still comes first.

"Central banks - of which the Federal Reserve is, by far, the world's largest and most powerful - serve banks first and foremost," Gilani said. "Secondly, they serve their host governments.  They are the ultimate tool of the rich and powerful."

During the years of the financial crisis, for example, in addition to the well-publicized bailouts, the Fed made $16 trillion in little-known loans to more than a dozen big banks.

According to a Government Accountability Office document, some of the major beneficiaries included Citigroup Inc. (NYSE: C), which received $2.513 trillion in loans; Morgan Stanley (NYSE: MS), $2.041 trillion; Merrill Lynch, $1.949 trillion; Bank of America (NYSE: BOA), $1.344 trillion; Bear Stearns, $853 billion; Goldman Sachs Group Inc. (NYSE: GS), $814 billion; and JPMorgan Chase (NYSE: JPM), $391 billion.

3. The Federal Reserve is Paying Big Banks Billions in Interest

To fund its massive quantitative easing (QE) program, the Fed has encouraged banks to deposit excess reserves in the Fed's accounts. The big banks have been more than happy to comply (see chart), as they get paid interest on any money they park at the Fed. Last year, the Fed paid out about $4 billion in interest to the big banks; Bloomberg News has estimated that the annual payments to the banks could soar as high as $77 billion a year by 2015, depending on how much interest rates rise by then.

4. The Fed Has Destroyed the Dollar

The Federal Reserve has utterly failed in one of its mandates - to manage interest rates to control inflation.  Since its creation in 1913, inflation in the U.S. has eaten away 96% of the value of the dollar. So the same item that cost $100 in 1913 would cost nearly $2,300 today. And the problem has grown worse over time; the dollar has lost 83% of its value just since 1970. Since the financial crisis, the Fed has accelerated the process with inflation-fueling policies like QE and zero interest rates.

5. The Federal Reserve Enables Government's Profligate Spending

Washington could never have accumulated its $16.85 trillion national debt - which in recent years has grown at a rate of more than $1 trillion a year - without the help of the Federal Reserve. The Fed is essentially the mechanism through which federal debt is created and monetized, making it easy for the government to spend trillions of dollars beyond what it collects in taxes.  It's little wonder that Washington looks the other way when the Fed is giving special treatment to the big banks.

The story of the Fed is a lot juicier than people think. To find out exactly how the Federal Reserve came into existence, read Shah Gilani explain all the sordid details.

Related Articles and News:

Money Morning:
Why Crime Pays for "Too-Big-To-Fail" Banks Money Morning:
Why We Can't Avoid Ben Bernanke's "Monetary Cliff" Bloomberg:
Fed Seen Paying Banks $77 Billion on Reserves The Economic Collapse:
11 Reasons Why The Federal Reserve Should Be Abolished GAO:
The Federal Reserve System July 2011 Report

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UBS Has Prepared a Syrian Conflict Guide to Oil and Gas Stocks

With the increasing likelihood of a U.S.-led military intervention in Syria, the oil markets have become volatile. Brent prices rose to as high as $117 a barrel last week. The price strength also might be attributed to ongoing supply disruptions in Libya. The energy strategy team at UBS believes that if military action is taken in Syria, it will be short-lived, and that Libya outages are temporary. Barring escalation of the Syrian conflict to other regions in the Middle East, they expect no prolonged effects in the oil markets.

In a special report for investors, UBS has highlighted top names to buy that can either benefit from the current situation, or at the very least will be affected less than some of the other major firms. Here are the stocks to buy now, broken out by sector with analysis.

Integrated Major Oils

The UBS team expects the large integrated oil companies to benefit from the increase in oil pricing, even if it is temporary. Their concern would be for those with operations in and around the Middle East and Russia, should the conflict spread.

Chevron Corp. (NYSE: CVX), in addition to benefiting from Syria-related higher oil prices, announced last week that it will make large investments in Argentina's shale oil and gas fields. The UBS price target for the stock is $125. The Thomson/First Call estimate is at $135. Investors are paid a solid 3.3% dividend.

Exxon Mobil Corp. (NYSE: XOM) is very levered to oil pricing and should see a large benefit from the increase in oil pricing. The stock also has sold off significantly from the late July highs and may provide a solid entry point for investors. The UBS price target for the stock is $91. The consensus estimate is pegged at $95.50. Investors are paid a 2.9% dividend.

Exploration and Production Companies (E&Ps)

While UBS analysts expects E&P names may be the most volatile, they also may have the most upside potential of the energy names. The E&Ps earnings are more sensitive to changes in commodity prices than the majors, due to their smaller, more concentrated production activities. UBS says to focus on oil levered E&Ps that do not have operations in at-risk areas such as the Middle East, North Africa and Russia.

Devon Energy Corp. (NYSE: DVN) is one of the top names to buy with operations based in North America. The company holds interests in various properties located in Rocky Mountains, Mid-Continent, Permian Basin and Gulf Coast regions of the United States. It also owns oil and gas properties in Alberta, British Columbia and Saskatchewan provinces of Canada. The UBS price target for the stock is $60, and the consensus is at $71.50. Investors receive a 1.5% dividend.

EOG Resources Inc. (NYSE: EOG) also has substantial operations in North America. The company made news last week when a fire erupted at one of its wells in the Eagle Ford. The fire is under control and operations are returning to normal. The price target at UBS for the stock is $175, while the consensus target is $177. Investors are paid a small 0.5% dividend.

Whiting Petroleum Corp. (NYSE: WLL) just acquired more than 17,000 net acres of land in the oil-rich Bakken Shale for $260 million. Net oil and gas production from the properties is estimated to average 2,420 barrels of oil equivalent (BOE) per day last month. Whiting estimates proved reserves at 17.1 million BOE with 85% of reserves being oil. The UBS price objective for the stock is $55, and the consensus stands at $62.

Oil Services

While not directly exposed to rising and falling crude prices, this group tends to be volatile when oil prices are volatile. UBS would hold names in this group through the period, as the analysts believe the intermediate-term outlook for the subsector is good. They would buy the names in the group on any dip.

Top 5 Financial Stocks To Watch For 2014

Baker Hughes Inc. (NYSE: BHI) supplies oilfield services, products, technology and systems to the oil and natural gas industry worldwide. It offers drilling and evaluation products and services, including drill bits for performance drilling, hole enlargement and coring, as well as conventional and rotary steerable systems used to drill wells. UBS has a $54 price target, and the consensus is at $54 as well. Shareholders are paid a 1.3% dividend.

Halliburton Co. (NYSE: HAL) is one of the names we highlighted that stands to benefit from the opening of the doors in Mexico to outside energy companies. Oilfield services companies have bright long-term prospects in Mexico due to the oil reforms and the pipeline of large integrated projects. UBS has a $55 price target on this top name, the same as the consensus target.

Schlumberger Ltd. (NYSE: SLB) revenue grew 8% year-over-year to $11.18 billion in the second quarter of 2013, fueled by high growth in its international segment. While the company does generate 11% of revenue in the Middle East and Asia, only a prolonged Syrian conflict is expected to dent their strong results. UBS has a $98 price target and the consensus figure is at $96. Stockholders are paid a 1.5% dividend.

Refining and Refiners

UBS feels that the refiners are at a disadvantage as oil prices rise and better off when prices fall. Refiners could underperform as oil prices rise, as margins will be squeezed by the rise in feedstock costs, and they could outperform after the peak in oil prices as margins widen out again. The analysts are somewhat positive on Phillips 66 (NYSE: PSX) and Marathon Petroleum Corp. (NYSE: MPC). They would focus on the other stocks mentioned.

Middle East turmoil is nothing new in the geopolitical spectrum. What all analysts and strategists worry about is a spread of the conflict that ends up involving other nations. With ongoing political unrest in Egypt, and the Syrian situation most likely coming to a head sooner rather than later, investors need to keep a close eye on the headlines and the situation. Any big sell-off may offer an excellent entry point to these top energy stocks.

Top 10 Undervalued Companies To Buy For 2014

The stock market should seem attractive to you, because it's one of the best ways to build wealth and financial security for yourself over the long run. Averaging about 10% annually over long periods, it can turn a single $10,000 investment into almost $175,000 in 30 years. (So imagine what can happen if you invest more over time!) You have to be smart about it, though. Ideally, you'll keep learning how to invest in stocks more profitably for the rest of your investing life.

Learning how to invest in stocks effectively isn't hard, but many people never take the time to do it. Thus, they commit many classic blunders. Below are a few things that can cause you to get poor results when investing. Avoid these pitfalls and you'll likely boost your portfolio's performance.

Emotions
The classic maxim offered to those who want to learn how to invest in stocks is "Buy low, sell high." Yet despite that, many people do the opposite. They buy into stocks without a grasp of whether the stock is undervalued or overvalued. And if it suddenly heads south, they sell in a panic, locking in a loss instead of the hoped-for gain. Succumbing to fear and greed is a big no-no when investing. Choose stocks carefully after studying them, and aim to hang on for the long haul, as long as the underlying companies remain healthy, growing, and with sustainable competitive advantages. Expect ups and downs for your stocks and the overall market, and don't freak out when they occur.

Top 10 Undervalued Companies To Buy For 2014: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:

• [By Robert Holmes]

   Schlumberger has the most potential upside of any stock in this group of 50 that also makes the firm's Best Ideas list. Analyst Ole Slorer says Schlumberger has "what we consider the most advanced technology portfolio in the industry."

  "Its fundamentals are impressive, with what we think are some of the best field personnel, a pristine service and performance reputation, and leading market share in most of its product lines," Slorer writes.

  Though Slorer's price target is 42% above current levels, his most bullish scenario for Schlumberger over the next year would see shares climb a whopping 116%. On the downside, his most bearish scenario for the company would see shares slide 38% over the next 12 months.

Top 10 Undervalued Companies To Buy For 2014: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:

• [By Jim Cramer,TheStreet]

  Caterpillar (CAT) could be a monster in 2011, especially with the integration of Bucyrus International (BUCY), which I think will turn out to be a fantastic acquisition.

  Current earnings-per-share estimates of about $6 are, I think, way too low. I see this stock going to $120 in the next year. Too gutsy? Ask yourself what happens if the United States comes back as a growth nation? Right now almost all of the growth is overseas.

  Still a fantastic mineral play and a terrific call on world growth.

• [By Ben Levisohn]

  For one day at least, this CAT is not a dog.

  Caterpillar (CAT) has gained 2% to $86.22 today, its largest gain since in a month and the largest gain among the Dow components. The machinery manufacturer has dropped 11% during the past six months, however, as a slowdown in China and cost-cutting at mining companies have hit its shares.

  Bloomberg

  Susquehanna’s Ted Grace offers reasons for optimism, even as he lowers his 12-month price target to $97 from $104:

  CAT remains Positive rated with 15% upside to our $97 price target and upside-downside of 1.2-to-1 (which, like most of our machinery names, is admittedly shy of the 2-to-1 or better ratio we prefer). Despite our 2014-15 EPS being ~6% below consensus, we view our updated estimates as closer to buyside expectations while noting that consensus appears to embed a low tax rate that explains over half of the variance. While there remains plenty of uncertainty on 2014/15, particularly in mining, we believe CAT shares currently discount reasonable top-line expectations while recent meetings with mgmt suggest potential for structural cost savings that could drive better than expected margins/ incrementals. While difficult to identify discernible catalysts, if CAT’s framework for flat-to-better RI revenue growth in 2014 proves correct (admittedly not assumed in our estimates), this would almost certainly debunk the core of the bear thesis and be meaningfully positive for shares.

  Investors waiting for the stock to actually, you know, rise can take comfort in Caterpillar’s $2.40 dividend per share and its more than $3 per share in buybacks in 2013, Grace says.

  Caterpillar’s 2% gain has trumped the Dow Jones Industrial Average’s 0.04% rise, and United Technology’s (UTX) 0.1% drop, while competitor Deere (DE) has gained 1.9% to $83.22.

• [By Roberto Pedone]

  Caterpillar (CAT) is staging a textbook breakout in May. Shares of heavy equipment maker haven't exactly been kind to investors year-to-date; CAT has barely broken even during a time when the broad market has been in a historic rally. But a textbook breakout should change that.

  CAT started forming an inverse head and shoulders pattern back in early April. The inverse head and shoulders is formed by two swing lows that bottom out around the same level (the shoulders), separated by a lower low called the head; the buy signal comes on the breakout above the pattern's "neckline" level, which was just below $86 for CAT. That puts this stock's upside target right around $92.

  Even though CAT has nearly hit its upside target already (the post-breakout buying has been very quick), the longer-term implication for investors is a break of the downtrend that had been haranguing shares this year. Now, with that downtrend broken, CAT should have more room to move higher. I'd just expect some consolidation first.

Top 5 Growth Stocks To Own Right Now: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:

• [By Sam Collins]

  Dollar Tree (NASDAQ:DLTR) is a leading operator of discount variety stores. The stock has hugged its 50-day moving average since mid-February. But a recent minor revision of earnings for this year by several analysts and the recent market sell-off have resulted in a fall from its high of the year at over $70 to under $66. However, Goldman Sachs (NYSE:GS) increased its price target to $73 from $69.

  Technically DLTR is oversold, according to MACD. A break below its 50-day moving average could result in a pullback to $64, but positions could be taken at the current market price. The trading target for DLTR is $72.

Top 10 Undervalued Companies To Buy For 2014: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:

• [By Sam Collins]

  Household name Tupperware Brands Corp. (NYSE:TUP) is a global direct seller of products with multiple brands through an independent sales force of 2.4 million people. Its product line focuses on kitchen storage and serving solutions, as well as personal-care products. Over 60% of sales in 2011 are expected to come from Europe and Asia, and the stock has appeal as an emerging markets story.

  S&P estimates that 2011 earnings will increase to $4.54 versus $3.53 in 2010, and it increased its rating to a “five-star strong buy” with a recently revised 12-month target of $81, up from $73. The 2005 purchase of Sara Lee’s (NYSE:SLE) direct-sales business, which has a high growth rate, should be a long-term benefit. TUP’s annual dividend yield is 1.92%.

  Technically TUP had a pullback following a new high at over $70 and is currently oversold. Buy TUP at the current market price with a trading target of $70, but longer term a much higher target will likely be attained.

Genworth, Cetera Close Unit Sales Deals

As private equity’s attraction to the advisor industry stays strong, Genworth Financial Wealth Management and Cetera Financial Group both announced the completion of business sales on Tuesday.

Genworth Financial Wealth Management, located in Pleasant Hill, Calif., is moving forward as an independent company with the completion of its sale from Genworth Financial (GNW) to a partnership of two private equity firms, Aquiline Capital Partners and Genstar Capital.

Officials with the parent company said in March that the deal would take a $40 million after-tax loss, with $35 million recorded in the first quarter. Genworth Financial said proceeds from the deal would be used to address its debt due in 2014 or before. The company will continue to use the Genworth Financial Wealth Management name until it announces a new name later this year.

Gurinder Ahluwalia (left), president and CEO of Genworth Financial Wealth Management, said the firm’s new investment partners shared a belief in the importance of independent financial advice and a commitment to serving advisor clients.

And unlike the firm’s former publicly held owner, the new private equity owners offer the firm greater flexibility without the worries of reporting quarterly results as part of a larger corporation.

“In many ways, we are getting back to our roots and looking forward to taking our business to the next level,” Ahluwalia said in a statement.

In a phone interview, Ahluwalia added that the firm’s new name will be announced sometime between the end of October and the new year.

“We want a name that embodies where we are today and the importance we place on serving the advisor,” he said. “Today is our first day as an independent company, and we’re very aware that we are in the business of helping advisors become more successful.”

Ahluwalia said he feels enthusiastic about his firm’s future because private partners Aquiline and Genstar are equally enthusiastic about growing the business . “It’s really fun when you have an alignment around that objective. We feel more empowered as an organization. There is flexibility in being able to take the longer view on what’s really serving the advisor.”

Genworth Financial Wealth Management is now developing products and services to support advisors and their clients. In the coming months, the firm plans to introduce new investment solutions and more efficient processes for managing client assets on its platform. The firm has approximately $20 billion in assets on its platform and helps more than 6,000 advisors.

Cetera Financial Group, meanwhile, on Tuesday announced the completed acquisition of MetLife’s two independent broker-dealers, Tower Square Securities and Walnut Street Securities. With those closed deals, the company has added approximately 800 advisors and more than $25 billion in client assets.

Cetera, a privately held, independent broker-dealer, now serves approximately 7,400 advisors with more than $141 billion in total client assets, including more than $33 billion in fee-based advisory assets.

“We are excited to be given the opportunity to serve these advisors. Helping them deepen their relationships with their clients and grow their practices is at the core of what we do,” said Cetera CEO Valerie Brown in a statement. “This acquisition will also be a win for our current advisors as we benefit from the expertise that Tower Square and Walnut Street have in the retirement and insurance markets.”

Tower Square and Walnut Street will join one of Cetera’s four firms, Cetera Advisor Networks. Advisors with Tower Square and Walnut Street are located throughout the country, and will expand Cetera’s footprint in the Midwest and Northeast. Cetera is headquartered in El Segundo, Calif.

In 2010, ING Groep completed the sale of three of its four independent broker-dealers (FNIC, Primevest and Multi-Financial) to Lightyear Capital, which used them as the basis for Cetera.

“We’ve begun building personal connections with these advisors, and are impressed with how well they fit the culture of this firm,” said Doug King, president and CEO of Cetera Advisor Networks, in a statement. “We look forward to the new ideas that this group brings to the firm.”

The new advisors will gain access to Cetera’s broker-dealer and RIA resources, including its wealth management and technology platform, new fee-based financial consulting programs, and its Connect2Clients and C2CSocial marketing platforms.

---

Check out these related stories on ThinkAdvisor:

Should you invest in gold even at current levels?

Below is the verbatim transcript of Gaurav Mashruwala's interview on CNBC-TV18

Q: I and my husband have LIC policies and term insurance and now we want to buy mutual fund, so which one is better?

A: There is less risk in the market right now so if it has to fall, how much more. In giant wheel people get scared at the top and not at the bottom and in stock market it is reverse, people get scared at bottom. So, if you are saving for some financial goal, which is likely to happen in seven to nine years or even earlier like four-five years and starts in systematic investment plan into equity fund, you should be fine. If you have requirement nearer to that then equity fund is not a good option otherwise it is perfectly alright.

Index fund would be replicating index, so less volatile compared to an actively traded fund, depends what kind of time and skill one has or may even split. So, your core portfolio could be into an index fund or a Nifty fund or a Sensex fund and you can still take extra exposure into actively managed funds.

Q: Is it advisable to invest in gold at these levels?

A: The portfolio should have all the asset classes, debt, equity and gold to that extent should be part of one's portfolio. If you already have gold and because of valuations going up, its kind of skewed in favour of gold than liquidate. But if you do not have it then keep on adding at regular basis because that is one asset class which does not have any direct correlation between debt and equity. So, debt and equity has inverse correlation, gold has its own path and to that extent, on overall portfolio it acts as a balancing factor.

American Riviera Bank Reported Profitable Growth (OTCMKTS:ARBV, OTCMKTS:CLNO)

American Riviera Bank (ARBV)

Today, ARBV surged (+1.16%) up +0.10 at $8.70 with 1,000 shares in play thus far (ref. google finance Delayed: 9:50AM EDT July 24, 2013).

American Riviera Bank previously reported unaudited net income of $391,000 ($0.15 per share) for the quarter ended June 30, 2013 and $730,163 ($0.29 per share) for the six months ended June 30, 2013. Pre-tax income for the quarter increased 68% to $649,000 at June 30, 2013 compared to the $386,000 reported for the quarter ended June 30, 2012. Pre-tax income for the first six months of 2013 was $1,211,334, an 83% improvement from the $660,928 reported for the first six months of 2012.

American Riviera Bank (ARBV) 5 day chart:

Cleantech Transit, Inc. (CLNO)

Cleantech Transit, Inc. (OTCMKTS:CLNO) (www.cleantechtransit.net ) through its Discovery Carbon subsidiary, develops emissions offset strategies for companies, municipalities, and countries. Today, CLNO has shed (-16.82%) down -0.037 at $.183 with 195,002 shares in play thus far (ref. google finance Delayed: 12:06PM EDT July 24, 2013), but don't let this get you down.

CLNO's daily range is at ($.1895 – $.157) thus far and currently at $.183 would be considered a (+16536.36%) gain above the 52 wk low of $.0011. The stock is up +0.18 ( +8218.18%) since the concerning dates of January 25, 2013 – July 24, 2013. +8218.18% is the 6 month high and rightly so.

Cleantech Transit, Inc. (CLNO ) 5 day chart:

Schwab Reveals Secret of Fastest-Growing RIAs

The fastest-growing registered investment advisors in 2012 saw net organic growth rise five times faster than all other firms because they excel at delivering "the client experience" and as a result get more referrals, according to a Schwab Advisor Services benchmarking survey released Wednesday.

Regardless of their size, these fast-growing firms generated an average of 36% more new clients from referrals than all other firms, said Jonathan Beatty (left), senior vice president of Schwab Advisor Services’ sales and relationship management, in an interview in New York on Tuesday. In addition, he noted that the top third of RIAs in the survey reported that they were on track to double their assets by 2014.

Of approximately 1,000 RIAs surveyed, the top 20% saw 2012 net organic growth (defined as the change in assets from existing clients, new clients and assets lost to client attrition) of 15% of AUM growth. This compares with 2.9% net organic growth for all other firms in the study with $250 million or more. The top firms reported more referrals than other firms (see chart) whether they managed $250 million to $500 million, $500 million to $1 billion or more than $1 billion.

“These firms have black-belt status at relationship marketing,” Beatty said, noting that the fastest growers understand their specific value proposition and ideal client profile, which makes them better able to generate more referrals through strong client and community relationships. “The client experience floats all the way through the system.”

The median RIA firm in the Schwab study ended 2012 with $572 million in AUM, an increase of 13.3% over the previous year, while overall revenues grew by 7.1% to $3.4 million in 2012.

Beatty added that revenues should hold about flat this year.

“Based on AUM, we’re predicting 7% revenue growth for RIAs in 2013 given normal market conditions,” he said.

Investment performance across peer groups accounted for 8.5% of RIAs’ growth in 2013, “reflecting sound strategies and a broadly improved market,” according to a Schwab statement.

Top 20% Are Better at Getting Referrals

The ability to offer outstanding client experiences to “the right kinds of clients” was a key trend reflected in the survey results, said Schwab Advisor Services.

“RIAs that excel at relationship cultivation benefit more from referrals from existing clients and centers of influence (COI),” according to the published survey results. “Across all peer groups, these fastest-growing firms acquired referrals from COIs at a higher rate than all other firms do from COIs and existing clients combined.”

Acquisitions Are a Theme

Although client referrals and COI are a primary channel for RIA growth, according to the study, another theme that emerged was the number of firms looking to achieve growth by mergers or acquisitions.

“Approximately 25% of RIAs in the $100 million to $1 billion AUM segment indicated they are actively seeking to acquire another firm,” Schwab Advisor Services reported. “Among firms managing $1 billion or more in AUM, 34% are actively looking to acquire another firm. Among the fastest growing firms, 1 in 5 reported plans to acquire another RIA while 1 in 3 of all other firms is looking to acquire.”

Surprisingly, Beatty said that the fastest-growing RIAs were the least interested in acquisitions.

“We see less interest in M&A from the fastest-growing firms because they’re having such success from organic growth,” he said.

In a statement accompanying the survey results, Beatty noted that a desire to grow was an undeniable trend in the RIA space.

“Although we understand growth is not the strategy of every RIA, we do see the overall industry trend is a disciplined approach to growing and to maximizing financial results,” he said. “Interestingly, we see many similarities in the practices and operation of the fastest-growing firms that lead to growth, including attracting and retaining clients through existing client referrals and their centers of influence.”

Another surprise in the survey results was the relative lack of advisor interest in technology integration — most RIAs dealt with that hot-button issue in 2011.

“Finally, technology integration appears to be reaching a critical mass, with just 38% of study firms citing it as a challenge to their firms, versus 59% saying it presented a challenge in the previous year,” Schwab Advisor Services reported. “Additionally, digital strategies in 2013 are viewed as a means to communicate and enhance the client experience. From an operational standpoint, 86% of firms now invest or plan to invest in the next 12 to 18 months in workflow technology; 73% now invest or plan to invest in mobile technologies; and 67% invest now or plan to invest in cloud-based technologies.”

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