Packaging Corp. Buys Boise for $1.3B

NEW YORK (TheStreet) -- Packaging Corp. of America (PCA) (PKG) is buying packaging specialist Boise (BZ) in a deal worth almost $1.3 billion, pushing shares of both companies up in premarket trading on Monday.

Boise shares climbed 26.71% to $12.62 on news of the deal, which is expected to close in the fourth quarter. Shares of PCA rose 11.9% to $61.04.

PCA will pay $12.55 a share in cash for Boise's outstanding common shares. The total transaction value is $1.995 billion, although this includes $714 million of outstanding Boise debt.

"The acquisition is an excellent fit, both geographically and strategically, with unique and substantial synergies," said PCA Executive Chairman Paul Stecko, in a statement. "It provides the containerboard that PCA needs to support our strong corrugated products growth." PCA said that its containerboard capacity under the deal will increase to 3.7 million tons from the current level of 2.6 million. The acquisition will increase PCA's corrugated products volume by about 30%, it added, and expand the company's market presence into the Pacific Northwest --Written by James Rogers in New York. Follow @jamesjrogers >Contact by Email.

How To Beat The Big 2013 Capital Gains Tax Hike

10 Ways To Beat Capital Gains Tax

Last year's historically low capital gains tax rate of 15% is, well, history, but there are still ways around the new higher rates that went into effect Jan. 1. The 15% top capital gains tax rate went up to 20%. High income earners have to tack on another 3.8% (the net investment income surtax). Look at this before year-end if you want to avoid a surprise capital gains tax bill when you file your tax return next April.

"You start looking at these numbers, and it all adds up in a hurry," says R. Jeremy Wilson, a CPA and financial planner with Draffin & Tucker in Atlanta. One elderly client with $7 million of stock with $6 million of built-in gain is going to hold onto it until death rather than sell or give it to her adult children now.  By running appreciated assets through your estate your heirs get your assets with a step-up in basis, and no capital gains tax is due. Call it the big deferral. Wouldn't you rather pay 0% than 23.8% capital gains tax?

Luckily, there are ways to exploit the 0% rate while you're alive. Those in an ordinary income tax bracket of 15% or below can sell stock at a 0% gains rate. For 2013 a couple can have up to $72,500 and a single up to $36,250 in taxable income and still be in the 15% ordinary income bracket. Add in the standard deduction and personal exemptions, and that translates into an adjusted gross income of up to 92,500 for a couple and $46,250 for a single filer. Take enough gains to fill up that 15% bracket.

If you're in a high bracket but your adult children or parents aren't, consider giving them appreciated stock. You can give $14,000 a year in cash or property each to as many individuals as you'd like without eating into your lifetime gift/estate tax exemption. The recipient of your stock gift takes on your basis—and later sells at the 0% rate.

Rethinking your retirement savings strategies can also help. A young doctor who's right on the cusp of getting hit with the 3.8% surtax (for singles earning more than $200,000/couples earning more than $250,000) was making his 401(k) contributions 50% pre-tax and 50% after-tax. He's shifted it to 75% pretax to keep him under the threshold for owing the 3.8% surtax, on the advice of his CPA, Stephen Bigge with Keebler & Associates in Green Bay, Wisc. "Don't be allured by the tax-free nature of the Roth," Bigge warns, adding that a 100% Roth 401(k) allocation makes sense for those who expect to be in the highest marginal tax bracket indefinitely, are in the lowest tax brackets, or are in lower tax brackets today but expect to be in higher brackets when they pull the money out.

Bigge is also helping clients ladder stock sales or exercise options over a period of time so as not to trip the top 20% rate and the surtax. Some clients are increasing their exposure to municipal bonds and making oil & gas investments so as to get the intangible drilling costs as a pre-AGI deduction to keep their income below the thresholds for the taxes kicking in.

If you don't want to change your investment mix, you can focus on basic strategies like harvesting losses to offset gains. Or take gains avoidance a step further. Philip Clinkscales, a financial planner with Sound River Advisors in Atlanta, sells out of mutual funds just before the fund manager declares capital gains payouts for the year, buys a similar exchange traded fund, and then buys back the actively managed fund.

Sometimes rebalancing just means paying gains tax, and shouldn't you be happy you have gains in the first place? Wilson advises a couple in their 30s, a lawyer and a corporate executive who earn $1 million and were rebalancing their portfolio and looking at more than $100,000 in gains. They were basically stuck with the 23.8% rate. "I told them, 'Let's just be thankful that in the current economy you both have that kind of income," he says. "I would always take paying the tax with a gain as opposed to offsetting my income with a loss."

Check out these strategies to bypass capital gains altogether or at least lessen the bite.

15 Best 401(k) Plans in Pro Sports

In 2009, Sports Illustrated estimated that 78% of NFL players were bankrupt or faced serious financial stress within two years of ending their careers. It also estimated that 60% of professional basketball players were broke within five years of retiring from the NBA. Athletes including Dorothy Hamill, John Daly, Lenny Dykstra, Scottie Pippen and, more recently, Mike Tyson (who is currently suing his financial advisor for fraud) have experienced headline-making money management difficulties.

But it’s not for lack of trying. Believe it or not (although we rarely see them this way) professional athletes are employees of corporations.

Now the research firm BrightScope has listed the top organizations in the sports industry with the highest ranked 401(k) plans containing more than $25 million in assets.

"It's easy to see our favorite athletes and sports teams on television and not relate to them as employees of their respective organizations with retirement plans, just like you and me," said Brooks Herman, head of data and research for BrightScope. "However, saving for the future is still very important even for members of public and popular organizations like these."

Key statistics found on the list of the organizations with the best 401(k) plans:

Keep reading for the sports organizations with the highest ranked 401(k) plans (Company Name — Plan Name — BrightScope Rating):

15. New York Racing Association — The 401(k) Plan of the New York Racing Association —  59.72

14. Anschutz Entertainment Group — Anschutz Entertainment Group, Inc. 401(k) Plan — 61.91

(Anschutz has ownership interests in the Los Angeles Kings, the Los Angeles Galaxy, the Los Angeles Lakers, and owns the Staples Center.)

13. Penske Racing South — Performance Group 401(k) Retirement Savings Plan — 63.59

12. Speedway Motorsports — Speedway Motorsports 401(k) Plan and Trust — 64.55

11. Joe Gibbs Racing — Joe Gibbs Racing 401(k) Savings Plan — 69.60 10. National Football League — The National Football League Capital Accumulation Plan — 71.75

9. National Hockey League — National Hockey League Savings Plan for National Hockey League/NHL Enterprises Employees — 76.47

8. National Football League — NFL Pension Plan — 76.48

7. Major League Baseball Office of the Commissioner — Major League Baseball 401(k) Plan and Trust — 80.91

6. National Basketball Association — NBA Retirement Plan — 81.52 5. Savings Board of the NFL Player Second Career Savings Plan — NFL Player Second Career Savings Plan — 83.36

4. Board of Trustees of the National Hockey League Players' Pension Plan — National Hockey League Players' Pension Plan — 87.25

3. Pension Committee of MLB Players Benefit Plan — Major League Baseball Players Investment Plan — 90.00

2. U.S. Member Clubs of the National Hockey League — National Hockey League Pension Plan for Players of United States Member Clubs — 90.46

1. National Basketball Association — NBA-NBPA 401K Savings Plan — 91.91

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Check out these related stories on AdvisorOne:

Strong Sell on MRC Global - Analyst Blog

Zacks Investment Research downgraded MRC Global Inc. (MRC) to a Zacks Rank #5 (Strong sell) on Jul 2, 2013.

Why the Downgrade?

Weak top-line results in the last quarter as well as below expected sales outcome in the two months ended May 2013 resulted in lower earnings estimates for MRC Global.

As per recent disclosures, management of MRC Global revised its revenue guidance down from $5.75-$5.95 billion to $5.4-$5.8 billion for 2013 while it anticipates the second quarter 2013 revenue to range within $1.25-$1.35 billion.

Line pipe sales are expected to be $100 million below the original forecast and roughly 10% down on a year-over-year basis for the second quarter 2013. The same is expected to be down roughly $300 million year over year for 2013. MRC Global's OCTG sales are expected to be down $70 million for the second quarter 2013 and $200 million for 2013 compared with their respective year-ago periods.

A weak revenue outlook as well as lower earnings guidance raises skepticism over the financial results in the quarters ahead. Currently, for MRC Global, we have an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of -5.0% for the second quarter 2013, -5.0% for 2013 and -0.4% for 2014.

Also in the last 60 days, the Zacks Consensus Estimate for 2013 has gone down by 11.9% to $1.99 while for 2014, the estimate decreased 8.9% to $2.47.

Other Stocks to Consider

MRC Global primarily engages in the distribution of pipes, valves, and fittings (PVF), and related products and services to the energy industry worldwide. The company currently has a $2.9 billion market capitalization.

Other stocks to watch out for in the industry are Mueller Water Products, Inc. (MWA), Valmont Industries, Inc. (VMI) and W.W. Grainger, Inc. (GWW).

Royal Babies and Economic Growth - Smead Capital Management

On a recent business trip to Europe, we noticed—anecdotally—a lack of hope in the economic future of Europe. There is a good reason for the lack of hope. Hope, we believe, comes in the form of new life. When all of the austerity being practiced in developed nations around the world is pretty much done, something else needs to happen for economic growth to take hold. At Smead Capital Management, we believe developed economies need rebirth and the birth last week of a son to the Royal family is a watershed event. In our view, this kind of hope could be a critical factor in the success of the US large cap equity market in 2014 and beyond.

A "watershed event" is an event that occurs at a critical time. In the genre of Malcolm Gladwell'sTipping Point, these events can be a point in time where a major trend starts. We think it might be helpful to look at some historical watershed events to better understand this one and its importance.

In the late 1950's the Russians completed a successful space flight with Sputnik. This encouraged a huge effort by the US in math and science under President Kennedy and resulted in man walking on the moon by 1969. President Nixon and his key foreign policy advisor, Henry Kissinger, reached out to the Chinese to do business in the early 1970's, under the theory that some economic progress and freedom would lead to the urge for more freedom. Look at what has happened in China since then! Ronald Reagan stared down the air-traffic controllers in 1981 at the height of what economists called "cost-push inflation". By 1984, inflation had dropped from 11% to 4%.

Why would the birth of a child be important both economically and from an investment standpoint? We've developed a few thoughts on this subject. First, population growth has been tied closely to economic growth in developing and developed nations. It only makes sense that more people equates to the production of more food, clothing, shelter, along with other goods and services. When it is a bab! y, it means a bigger or better organized home and a kid-friendly car will be needed. On top of that spending comes heavy spending during pregnancy and the toddler stage. Prince William and Lady Kate are affluent and he is 31 years old. Older and more affluent parents mean older and more affluent grandparents. If developed nation echo-boomers follow their lead, these babies are going to drive spending which could be equivalent to what two children caused thirty years ago.

In a presentation to investors recently, Home Depot shared the following chart of remodeling/home improvement spending as a percentage of GDP:

[ Enlarge Image ]

We believe babies cause existing homes to be reorganized and remodeled. Some call this "nesting". We believe the spending on homes will rebound to at least historical averages over the next five to ten years. The US government reports that 2.75 times as much labor is used to build single-family home square footage as compared to the same square footage in multi-family housing. The US had 220 million people in the 1977 census and we built 1.4 million single family homes in 1978. The US has about 316 million people now. Should we expect anything less than a single family housing start peak of 2 million single-family homes in a year this time? What does this mean for blue collar employment? Trades people and those who work for the companies which provide inputs to housing could see their numbers grow and their wages rise. In the process, we could see income inequality narrow. I hate fighting traffic against these folks, but I love doing business with all them.

Second, leadership is critical to success in life. People all over the world saw and couldn't help but get excited about the birth of Kate and William's baby boy. In the US and Canada, where the special bond of heritage exists between the countries and Great Britain, the joy was so thick that you felt lik! e you cou! ld be cut it with a knife. Just look at the USA Today front page story and the Wall Street Journal's coverage to understand how pumped we are in the US for the birth of this child.

Third, all the smart policy and austerity practiced won't mean a thing in developed counties unless the current paltry birth rates don't pick up. Birth rates in Europe and other developed countries like Japan are closer to 1.4 kids per family than 2.0 and the deep recession of 2007-2009 help lead the US birth rate below two per household.

Lastly, the good news is there are a huge number of echo-boomer kids in the developed world which could follow the lead of Kate and William. In the US alone, there are 86 million people between the age of 18 and 37. The heart of that group is at an average age of 28. Fortunately for us, the average age for a woman to marry in the US is 26.5 and for men it is 28.7. The weddings and babies could become a "cool" thing to do and "cool" is what President Kennedy, Henry Kissinger and Ronald Reagan had in common. People follow "cool" leaders. William and Kate are a great couple and a wonderful example. We hope they fill their house with babies and ignite their continent.

The investment tie is very simple. The USA Today cover photos showed Charles and Diana hold Prince William right after he was born in 1982, alongside the picture of William and Kate holding the new royal baby. In 1982, it was the beginning of a strong period of economic growth which lasted for twenty years. If the economy's of the developed world rebound in the coming years as a result of a wave of babies, the bull market in US large cap stocks is probably somewhere around the third inning or halfway through the first half of the soccer (football) game, depending on which side of the pond you live on.

http://smeadcap.com/

LinkedIn Launches Two-Step Verification for Accounts

LinkedIn  (NYSE: LNKD  )  launched a new two-step verification option for its users, allowing them to add an extra security to accounts. 

The two-step verification is an optional feature that, when activated, requires a user to type in a numerical passcode when accessing a LinkedIn account from an unrecognized device. The passcode is sent via text message, and has to be entered each time a new device is used for the first time.

LinkedIn said in a blog post today that, "When enabled, two-step verification makes it more difficult for unauthorized users to access your account, requiring them to have both your password and access to your mobile phone."

The new security feature will also send an email to a user if the LinkedIn account has been accessed from a new device – so users can keep track of which devices have been authorized.

LinkedIn users can sign up for two-step verification by logging into their LinkedIn account and accessing the settings, selecting the "account" tab, and then clicking the "manage security settings" option.

Golf Clap for Patterson Companies

Patterson Companies (Nasdaq: PDCO  ) reported earnings on May 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 27 (Q4), Patterson Companies met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue grew. GAAP earnings per share grew.

Gross margins increased, operating margins contracted, net margins were steady.

Revenue details
Patterson Companies booked revenue of $964.9 million. The 14 analysts polled by S&P Capital IQ predicted sales of $969.5 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

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

EPS details
EPS came in at $0.62. The 15 earnings estimates compiled by S&P Capital IQ forecast $0.62 per share. GAAP EPS of $0.62 for Q4 were 5.1% higher than the prior-year quarter's $0.59 per share.

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

Margin details
For the quarter, gross margin was 33.6%, 10 basis points better than the prior-year quarter. Operating margin was 10.8%, 20 basis points worse than the prior-year quarter. Net margin was 6.6%, much about the same as the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $923.4 million. On the bottom line, the average EPS estimate is $0.50.

Next year's average estimate for revenue is $3.80 billion. The average EPS estimate is $2.22.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 97 members out of 112 rating the stock outperform, and 15 members rating it underperform. Among 49 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 45 give Patterson Companies a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Patterson Companies is outperform, with an average price target of $37.77.

Is Patterson Companies the best health care stock for you? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average health care logistics company. Click here for instant access to this free report.

Add Patterson Companies to My Watchlist.

Is Facebook Home a Bigger Success Than We Think?

Recently, AT&T (NYSE: T  ) dropped the price for the HTC First, an Android handset with Facebook's (NASDAQ: FB  ) Home app pre-installed. The move called into question Home's attractiveness as a platform. Now it seems the criticism may have been premature.

Reporting on an open session conducted by Facebook VP of Mobile Engineering Cory Ondrejka, TechCrunch says more 1 million have downloaded Home and that those who have it use Facebook 25% more in spite of Google's  (NASDAQ: GOOG  )  efforts to bolster Android.

That's an important stat, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following interview with the Fool's Erin Miller. Engaged users are more likely to accept ads, which in turn could accelerate mobile ad revenue growth and push Facebook stock to new highs. Look to buy on weakness, Tim says.

Do you agree? Please watch the video to get Tim's specific take, and then let us know whether you would buy, sell, or short Facebook stock at current prices.

Social graces
For further analysis of the social network's mobile ambitions, try our newest premium research report in which we dissect Facebook's expanding empire and tell you what the company is really worth, and whether there's reason to "like" the stock for your portfolio. Access your report now by clicking here.

Legacy Reserves Incrementally Lifts Dividend

Legacy Reserves (NASDAQ: LGCY  ) has drawn more money out of the ground for its investors. The company will distribute $0.575 per share of its common stock on May 15 to holders of its common units as of May 2. This amount represents an increase of $0.005 per unit, or 3.6%, over the company's previous payout of $0.570. Before that, Legacy Reserves paid $0.565 per share.

The new dividend annualizes to $2.30 per share, which yields 8.5% at Legacy Reserves' most recent closing stock price of $27.21.

The company also announced that it will discuss its Q1 results in a conference call and webcast on the morning of May 7.

More Expert Advice from The Motley Fool

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

8 Fascinating Reads

Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are eight fascinating ones I read this week.

New American dream
Home ownership may be losing its luster, writes The New York Times:

Fifty-seven percent of adults believe that "buying has become less appealing," and 54 percent believe that "renting has become more appealing" than it was before.

And nearly half of current homeowners (45 percent) say they can see themselves renting at some point in the future.

I'm sure he won't amount to much
Steve Jobs' first boss writes about how unique the Apple (NASDAQ: AAPL  ) co-founder was, and what his passing means for the company:

"The truth is that very few companies would hire Steve, even today," Bushnell writes in his book. "Why? Because he was an outlier. To most potential employers, he'd just seem like a jerk in bad clothing."

Bushnell says he is worried that Apple is starting to lose the magic touch that Jobs brought to the company. It's a concern shared by many investors, who have been bailing out of Apple's stock amid tougher competition for the iPhone and the iPad and the lack of a new product line since Tim Cook became the company's CEO shortly before Jobs' death.

Supply and demand
Wal-Mart (NYSE: WMT  ) averaged 338 employees per store before the recession. Today, it's down to 281 per store. The results, according to The New York Times, are predictable:

Walmart, the nation's largest retailer and grocer, has cut so many employees that it no longer has enough workers to stock its shelves properly, according to some employees and industry analysts. Internal notes from a March meeting of top Walmart managers show the company grappling with low customer confidence in its produce and poor quality. "Lose Trust," reads one note, "Don't have items they are looking for -- can't find it."

Bloomberg has a similar story here.

Consequences and actions
ThinkProgress writes on the economic case for gun liability insurance. Here's University of Michigan economist Justin Wolfers:

Another even more powerful approach is to recognize that the problem isn't guns per se, but gun violence. Thus, instead of taxing guns, we should tax gun violence. Basically, this is the same as saying that we should make gun owners liable for any damage their guns do. Not only would this discourage some people from buying guns, it would lead those who do keep guns to be more careful with how they're stored. Indeed, greater care would surely have kept Adam Lanza out of his mother's cache. The problem, though, is that Nancy Lanza is neither with us to pay the damages her gun caused, nor could she afford to pay for the enormous damage her gun wrought in Newtown. And so the only way this solution works is if guns required mandatory liability insurance, much as we force car owners to buy insurance for the damage their machines wreak.

Revenge of the nerds
This is an old article, but one of the best I've seen on what went wrong with Wall Street:

"The financial system nearly collapsed," he said, "because smart guys had started working on Wall Street." ...

"Two things happened. One is that the amount of money that could be made on Wall Street with hedge fund and private equity operations became just mind-blowing. At the same time, college was getting so expensive that people from reasonably prosperous families were graduating with huge debts. So even the smart guys went to Wall Street, maybe telling themselves that in a few years they'd have so much money they could then become professors or legal-services lawyers or whatever they'd wanted to be in the first place. That's when you started reading stories about the percentage of the graduating class of Harvard College who planned to go into the financial industry or go to business school so they could then go into the financial industry. That's when you started reading about these geniuses from M.I.T. and Caltech who instead of going to graduate school in physics went to Wall Street to calculate arbitrage odds."

Backfired
The Wall Street Journal writes about innovation backfiring at Procter & Gamble (NYSE: PG  ) :

For years, consumer-product makers could count on extra sales from shoppers who poured in too much detergent with every load. The phenomenon became more pronounced when manufacturers rolled out increasingly concentrated detergent.

But the bubble burst when P&G introduced its new laundry product -- Tide Pods capsules -- which fixed the amount of detergent used per wash and ushered in the era of "unit dose" products. Total U.S. sales of laundry detergents fell 2.1% in the 12 months to March.

Pricing power
Calculated Risk shows nationwide apartment vacancy rates now at the lowest level in more than a decade:

Information superhighway
Via Wonkblog, here's a 1995 video on something new called the "Internet."

Enjoy your weekend. 

H&R Block Invests $3 Million in Teaching Teens About Money

Shutterstock In a new program dubbed the "H&R Block Budget Challenge," the world's largest tax services company is offering $3 million to help kids get smarter about money matters. As H&R Block (HRB) explains, "By learning strong budgeting skills and fiscal discipline early, kids can gain the knowledge and confidence to manage their own financial future." To help that process, Block has set up a free online game that schoolteachers can use to improve teen financial literacy. Real Life, Online Within the program, students take on the role of recent college graduates, gainfully employed and equipped with "a regular paycheck, a checking account [and] a 401(k) savings account." Students must then use their income and assets to navigate situations that should be familiar to any adult, such as "paying bills, managing expenses, saving money, investing in retirement, paying taxes and more." Points can be earned for "maximizing 401(k) savings, paying bills on time and responding correctly to quiz questions." Conversely, students who trip up and leave themselves open to paying late fees on bills, overdraft fees for overdrawing their accounts, and finance charges for carrying too much credit card debt will see their scores hurt. For bonus points, students can take quizzes to test their knowledge of financial concepts over the course of the game. Teamwork Pays Off Classrooms play as a team, scored for the average performance of students within each classroom, and competing with other student classrooms for a total of as much as $3 million in potential grants and scholarships. These break down like so: 60 classroom grants worth up to $5,000 apiece. 132 opportunities for student scholarships of $20,000 each. One grand prize scholarship of $100,000. Periodic student incentives that can be won during game-play. When you add all those up, H&R Block may end up paying out slightly more than $3 million from this program. Each classroom has the potential to win a total of two grants based on good performance in the competition -- one awarded midway through the competition and one at the program's conclusion. (It began Oct. 3, and the final period ends April 16.) Individual students can also win scholarships -- with 22 available for the highest individual scorers in each of the program's six sessions. (Only one win per student.) And the best-performing student over the competition can win the grand prize scholarship of $100,000. High school teachers (grades nine-12) wanting to participate in the H&R Block Budget Challenge can register online. Both public and private schools are eligible to enter the program -- and indeed, Block is even making the Budget Challenge available to home-schoolers (who can win scholarships, but not classroom grants). The Upshot For H&R Block, this program sounds like a great way to get some good PR for its business, and at a very modest cost -- the $3 million in scholarship money represents barely 1.2 percent of the $237 million that H&R Block spent on marketing and advertising last year, according S&P Capital IQ. And if it ends up generating smarter financial consumers who might eventually decide they could use some of H&R Block's own financial services down the road -- all the better. For teachers and students, meanwhile, this is free money (and not insignificantly, free lesson planning for time-pressed teachers) and not to be passed up. And if it also helps to improve America's abysmal record for financial literacy among teens, [**DF EDS: Rich asks that you please link to his "4 Key Financial Lessons for Teens From Bankers," once that runs. https://cms.aol.com/554/content/posts/edit/20974934/Thanks!**] well, that would be nice, too. More from Rich Smith
•3 Credit Card Benefits You Probably Didn't Know You Had •7 Valuable Things You Can Get for Free •Pssst, Millennials! When You Pay, Choose Credit, Not Debit

Why Penn Virginia, Hanesbrands, and zulily Jumped Today

Wednesday proved to be another example of the resiliency of the bull market in stocks, as major market benchmarks bounced back from yesterday's losses to regain a substantial chunk of their lost ground. Even though U.S. GDP figures for the first quarter got revised downward to an ugly drop of 2.9%, few investors believe that the decline is anything but a one-time seasonal aberration. Helping to lead the market higher today were stocks from a number of different industries, including Penn Virginia (NYSE: PVA  ) , Hanesbrands (NYSE: HBI  ) , and zulily (NASDAQ: ZU  ) .

Source: Paul Lowry, Flickr.

Penn Virginia climbed 12% after the oil and gas production company got a wake-up call from investor George Soros, who owns about 9% of the company. Soros has said that he believes that Penn Virginia needs to put itself up for sale in order to maximize shareholder value, and if Penn Virginia doesn't do so, then Soros will have to take further action that could result in a proxy fight or other activist-investor activity. Soros also cited alleged mistakes by Penn Virginia management, which included privately offering convertible securities in a manner that diluted existing shareholders, and failing to make best use of the proceeds of that sale. Given the huge promise in energy, Soros' move shows that Penn Virginia, and similarly situated companies, can't afford just to move slowly without a firm strategy for the future.

Hanesbrands gained 9% as the apparel maker made its own foray into the mergers and acquisitions market, agreeing to buy French lingerie manufacturer DBApparel in an all-cash deal that values the company at about 400 million euros on an enterprise basis after adjusting for DBApparel's balance-sheet cash and outstanding debt. The acquisition will give complete control of the valuable Wonderbra and Playtex brands to Hanesbrands, and the combined company will enjoy some cost savings from production synergies, as well as giving Hanesbrands the ability to expand into uncharted territory in Europe. The deal shows that not all M&A activity involving international brands is motivated by tax considerations, as Hanesbrands didn't announce any intent to try to shift its headquarters abroad as a result of the merger.

Source: zulily.

For zulily, today's 9% rise came after the flash-sale specialist got an upgrade from a major Wall Street firm. Analysts argued that, after a dramatic drop in the value of zulily stock during the past several months, the shares now look like an attractive value proposition, especially given the steep growth trajectory of zulily's revenue in recent years. With moves to expand its growth efforts, zulily appears to have plenty of ways to seek to take maximum advantage of its e-commerce opportunity, and value-seeking investors appeared to appreciate that fact today.

Leaked: This coming consumer device can change everything
Imagine the multi-billion dollar sales potential behind a product that can revolutionize the way the world shops and interacts with its favorite brands every day. Now picture one small, under-the radar company at the epicenter of this revolution that makes this all possible. And its stock price has nearly an unlimited runway ahead for early, in-the-know investors. To be one of them and hop aboard this stock before it takes off, just click here.  

Economists see wages climbing in 2014

Tired of getting raises that you can jangle in your pocket? This year may be different.

After stagnating for years, wage gains will accelerate in 2014, a wide majority of leading economists predict in USA TODAY survey. The bigger paychecks should help fuel a more rapid recovery.

"This is kind of the final piece of the puzzle for the consumer," says Scott Anderson, chief economist of Bank of the West.

The 40 economists, surveyed May 2-6, also say economic and job growth will ratchet higher the rest of this year despite an economy that stalled in the first quarter.

Average wages have risen about 2% a year since the recovery began in mid-2009, and have been virtually flat after adjusting for inflation. The modest increases have held back consumer spending, which typically accounts for nearly 70% of U.S. economic activity.

But the jobless rate has been falling rapidly, to 6.3% from 8.1% in August 2012. Anderson is among economists who say that as unemployment approaches 6% by year's end, a more limited supply of available workers will force employers to step up pay hikes.

Last month, average hourly earnings were up just 1.9% from a year ago. But pay for production and supervisory employees rose 2.3% during that period — a sign that wages will drift higher for all types of workers, says economist Michael Gapen of Barclays Capital.

Wage pressures are already building in fields such as technology and construction as employers struggle to find skilled workers, says Stuart Hoffman, chief economist, of The PNC Financial Services Group.

But even low-wage employees could soon benefit from faster-growing paychecks. Since the Affordable Care Act lets workers buy moderately-priced insurance without having a full-time job, many retail, restaurant and other workers are likely to retire or scale back their hours, says Dean Baker, co-director of the Center for Economic and Policy Research. Employers, he says, will have to pay more to attract a smaller pool of remaining work! ers.

Anderson expects average pay increases of close to 3% this year. Robert Mellman of JPMorgan Chase forecasts more modest advances of about 2.2%.

The wage gains will likely coincide with stronger economic growth. The nation's gross domestic product expanded just 0.1% annualized in the first quarter, but much of the slowdown was temporary. Nearly 90% of the economists surveyed said bad weather affected the economy a lot or a fair amount the first three months of the year.

The economists predict the annual rate of GDP growth will be 3% or more in the current quarter and in the final two quarters of the year, according to their median estimate, the longest such stretch since 2005. They also say monthly job gains will average 210,000 in that period, up from an average 194,000 last year.

Michael Englund, chief economist of Action Economics, cites rising household wealth and lower debt, pent-up demand among businesses for new equipment and fewer federal budget cuts.

Bill Nygren Comments on General Motors

Our worst performer was General Motors (GM), down 15%, due to what we believe was the market's overreaction to GM's handling of a recent product recall.From Bill Nygren (Trades, Portfolio)'s Oakmark Fund first quarter 2014 commentary.
Also check out: Bill Nygren Undervalued Stocks Bill Nygren Top Growth Companies Bill Nygren High Yield stocks, and Stocks that Bill Nygren keeps buying

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Adviser reviews coming soon to a website near you

Financial advisers should keep an eye open for a new form of client feedback that's on its way — public reviews.

The guidelines issued last week by the Securities and Exchange Commission for how financial advisers can use testimonials in social media is expected to spur the creation of more online venues for the public to review and rate their financial advisers.

The SEC said advisers can now link to sites such as Yelp!, as long as the reviews are independent from the adviser and aren't organized to display only chosen testimonials, such as exclusively positive feedback. Regulators also said advisers may advertise on these third-party sites.

“I don't think that online searches for financial advisers is going to turn the world upside down in 2014, but long-term, the writing is on the wall,” said Grant Easterbrook, a senior research associate at consulting firm Corporate Insight.

(Take the quiz: Are your client review tactics compliant?)

Just as many Americans have learned to use online recommendations to pick restaurants, hotels and even doctors, the process of choosing a financial adviser is likely to incorporate a check of his or her online reviews.

(See Michael Kitces' take on the new guidelines.)

In fact, a Corporate Insight survey of American investors in December 2013 found that 67% of Generation Y/Millennials said they would definitely or probably use an online search tool to find an adviser. About 28% of baby boomers said they would use one, Mr. Easterbrook said. These online searches often include third-party sites that give a rating and testimonials to companies offering a given service.

Several general online research tools like Yelp!, AngiesList and FindtheBest already incorporate adviser reviews, but the number of reviews that have been posted are small. Personal-finance focused WalletHub also allows for adviser reviews.

Pinnacle Advisory Group's Michael Kitces on how review sites could impact the advisory business.

Financial information website Brightscope Inc. plans to add reviews in light of the new guidance, said Sonia Ahuja, the firm's executive vice president of strategy and business development. U.S. News and World Report also might considering adding reviews in the future for its new Advisor Finder directory, said Kirk Shinkle, senior editor for money and business.

The SEC's action is too late for the entrepreneurs who started TippyBob as a site for financial adviser ratings and reviews in 2012. They shut down the site last year because they couldn't “get enough traction,” said co-owner Annie Campbell.

“There was just too much regulation regarding testimonials at! that time,” she said.

WalletHub chief executive Odysseas Papadimitriou said he believes more advisers will advertise on WalletHub now that the SEC has given them the green light. That would help his firm generate revenue.

Wallethub created profiles for about 250,000 financial advisers based on public information before it launched in August 2013. Advisers can claim their profile and customize it for free. Mr. Papadimitriou said the firm doesn't know how many people have written adviser reviews.

The SEC's move last week “is validation to the importance of reviews in this space,” he said.

“The thing I get nervous about with third-party review sites is, there's always a bad apple who figures out how to game the site,” said Amy McIlwain, president of consulting firm Financial Social Media. “We don't want that to happen in the financial space.”

With some review sites, people can essentially buy a collection of positive reviews, she said, and that's not what the SEC has in mind. Adviser review sites also will have to have a strict policy about authenticating the people who are reviewing or rating advisers to make sure they aren't ex-employees or competitors posing as clients.

Advisers will have to be aware of where their names are popping up on third-party sites and interact with those profiles “to paint a clear picture of what they do from a business perspective,” Ms. McIlwain said.

“You don't want people going to a blank profile,” she said. “Advisers need to continually monitor their brand and online reputation.”

Advisers also have to accept that there likely will be negative reviews, as consumers often are more inspired to write about bad service than to compliment a positive experience, said Joanna Belbey, a social media and compliance specialist with Actiance Inc.

"Advisers will have to think about how they'll deal with bad reviews," she said.

Alan Moore, an adviser who mostly handles clients fr! om Genera! tions X and Y, said his clientele has been asking where they could offer online reviews of his service.

He's eager to see review sites become more robust.

“We're the only profession where you can't comparison shop online,” said Mr. Moore, founder of Serenity Financial Consulting. "Those of us in the good-apple bunch are going to benefit from this."

Don’t fall in love with your stocks

A previous version of this column incorrectly stated Andrea Frazzini's titles. It has been corrected.

Getty Images

Investors spend far more time searching for stocks to buy than thinking about when to sell. That is a potentially costly shortcoming, especially in a bull market that is approaching its fifth birthday, which is how old its predecessor was when it ended in 2007.

You should carefully analyze your stock holdings to decide which, if any, should be sold. One general rule of thumb is to subject your stocks to the same valuation criteria that you used when initially deciding to purchase them. If you bought a stock because its price/earnings ratio is well below the market's, for example, then you should consider selling it if its P/E is now well above.

Click to Play Guys! Don't do these five things on Valentine's Day

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Researchers also have identified a handful of lesser-known indicators that you can use to help identify stocks you might want to unload. They derive from the aversion most investors have to selling. A stock that nevertheless is on the decline, or that a large number of analysts are betting is about to decline, must really have problems — and is a good bet to lag the market in coming months.

The reluctance of investors to part with stocks they once loved enough to buy plays out in many ways. For example, investors typically sell a stock only when they need cash to buy another one about which they have become particularly excited, according to Terrance Odean, a finance professor at the University of California, Berkeley. Furthermore, he says, they often resist selling any stock they are holding at a loss — something that, needless to say, has nothing to do with its potential.

As a result, Odean says, "for most investors, buying is a forward-looking activity and selling is a backward-looking activity."

This inertia tends to lead to a protracted selloff of unloved stocks, says Andrea Frazzini, a finance professor at New York University and a principal at AQR Capital Management, a firm that manages several hedge funds and other investment offerings and has nearly $100 billion in assets. The takeaway, he says: Bite the bullet on a stock that has significantly lagged the market over the past 12 months.

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/conga/story/misc/alerts_sixwide.html 239164

Individual investors aren't the only ones who exhibit a strong aversion to selling; Wall Street analysts do, too. Currently, for example, just 25 stocks within the S&P 1500 index (SPSUPX)  have a consensus analyst recommendation to either sell or underweight, according to FactSet. Two-thirds fall into the "buy" or "overweight" categories.

We therefore should pay particular attention when analysts do actually say "sell." In one academic study conducted in the 1990s, the average consensus sell-rated stock lagged the market by 8.3 percentage points a year — more than twice as much as the margin by which the typical stock with a consensus "buy" rating outperformed the market.

Brad Barber, a finance professor at the University of California, Davis, and one of the co-authors of that study, says that while more recent studies reached broadly similar results, he isn't aware of any that have updated it. He says that the message of the research is that it makes more sense to follow a consensus sell signal from Wall Street analysts than a consensus buy.

A third indicator you can use when deciding to sell: Traders whose very focus is to bet against stocks they think are going to fall in price. This group is known as short sellers, who sell borrowed shares in hopes of repaying with cheaper shares later.

Adam Reed, a finance professor at the University of North Carolina at Chapel Hill, says that stocks tend to significantly trail the market if they have a high degree of short interest, which is calculated by dividing the number of a company's shares that currently are sold short by the total number of shares outstanding. In fact, he says, "short interest is one of the strongest return predictive signals in the academic literature."

You don't have to actually sell a stock short to follow short sellers' lead, Frazzini adds. You can instead use the short-interest data to determine which of the stocks you currently own that you might want to sell first.

The following list contains all stocks from the S&P 1500 broad-market index that have declined at least 5% over the past year, according to FactSet. (The index itself has gained 20% over that period.) Each also has a below-average consensus rating from Wall Street analysts, and the number of shares currently sold short amount to at least 10% of shares outstanding.

The stocks are C.H. Robinson Worldwide (CHRW)  , a freight-transportation company; chip maker Cirrus Logic (CRUS)  ; independent oil company Forest Oil (FST)  ; investment bank Greenhill & Co. (GHL)  ; Intrepid Potash (IPI)  , a fertilizer company; retailer J.C. Penney (JCP)  ; Quest Diagnostics (DGX)  , a medical diagnostic company; Strayer Education (STRA)  , a for-profit college; Tower Group International (TWGP)  , an insurance company; and Windstream Holdings (WIN)  , a rural telecommunications firm.

Even if you get smarter at selling, though, you can't overcome a bad buying decision. As Odean points out, there is no evidence the average individual can pick stocks that outperform the market. That is why he recommends investing in a broad-based index fund. One of the very cheapest and most diversified is the Vanguard Total Stock Market ETF (VTI)  , with an expense ratio of 0.05%, or $5 per $10,000 invested.

More from MarketWatch:

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Is Warren Buffett laughing at you for selling?

You're invited to ... Bitcoin: Boom and Bust

The rise of bitcoin has triggered a lively debate over the risks and rewards of virtual currencies. If you're interested in bitcoin, and will be in New York on Tuesday, March 4, you're invited to join us for an evening of cocktails and conversation on the topic. MarketWatch Senior Columnist Robert Powell will moderate a panel discussion with guests Todd Harrison, founder and CEO of Minyanville Media, and Mark T. Williams, a banking and risk management expert and a professor at the Boston University School of Management. This MarketWatch Investing Insights event is free, but space is limited. To attend, just RSVP to MarketWatchevent@wsj.com by Friday, Feb. 28.

Apple Stock Slammed by Poor iPhone Sales

Apple (Nasdaq: AAPL) stock plunged more than 8% in after-hours trading after it announced that it sold fewer iPhones than analysts expected in its Q1 of 2014.

Apple sold just 51 million iPhones versus analyst expectations of 56 to 57 million. The iPhone contributes about half of Apple's earnings.

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Not helping was that Apple revenue guidance for the current quarter was also below expectations. The company's mid-point of $43 billion missed the $45.74 billion consensus.

However, Wall Street's main beef was with the iPhone miss.

Overlooked is that Apple's other businesses made up for the iPhone's shortcomings. Apple beat expectations on earnings per share - $14.50 versus $14.35 - and barely missed on revenue - $57.6 billion versus $58 billion.

That was made possible in part by the iPad selling more units than expected, 26 million versus 24 to 25 million, and more Macs, 4.8 million versus 4.6 million.

Original post from 1 p.m.:

It's the worst of both worlds: Apple (Nasdaq: AAPL) stock will get hard if it reports lousy earnings today after the closing bell, but good earnings won't affect the Apple stock price much at all.

That's the unfortunate legacy of Apple's mega-boom years from 2010-2012, when it posted 50% or higher earnings growth for nine consecutive quarters.

Apple's long streak of outstanding earnings distorted Wall Street's expectations to the point where only a huge beat is enough to move Apple stock up significantly. But even a minor disappointment will result in a major pullback, particularly in the generally weak market we've seen since the start of the New Year.

Analysts are looking for a strong quarter from Apple, the first of the company 2014 fiscal year and historically its most lucrative because of heavy holiday sales.

The quarter is also an important barometer for how Apple will fare for the rest of the year, as it hints at how the tech giant's new offerings, introduced over the course of the fall, are likely to sell through subsequent quarters.

Here's what to expect from Apple earnings:

Breaking Down Apple (Nasdaq: AAPL) Earnings Expectations

The consensus numbers on AAPL are for earnings per share of $14.35 on revenue of $58 billion. Both would be new all-time highs, and would represent growth of 6.6% on the top line and 4% on the bottom line.

As usual, most investor attention will be focused on iPhone sales, as that iconic product accounts for about half of Apple's earnings. This quarter will tell us how the iPhone 5C is doing, the slightly cheaper and less capable brother to the iPhone 5S.

Most reports have indicated the 5S is much more popular, which will help boost Apple's margins, something that tends to please analysts. Expectations are for a gross margin of 37.5%.

Actual iPhone unit sales are expected to be 56-57 million, about 10 million more than the year-ago-quarter. And that's without the deal with China Mobile, which did not go into effect until after the quarter ended but will open up the iPhone to 700 million new customers.

Analysts are looking for 24-25 million iPad units, a slight increase over last year's 22.86 million.

With regard to the iPhone and iPad, analysts will likely grill Apple over the declining market share of those products in its competition with smartphones and tablets running Google Inc.'s (Nasdaq: GOOG) Android software.

And Mac sales should be about 4.6 million, which would represent a healthy 13.3% gain in a slumping PC market.

One issue that will definitely come up during the conference call will be activist investor Carl Icahn's continued demands for Apple to buy back more shares.

So far Apple has been polite with Icahn, and has bought back at least 47 million shares over the past year (which has improved its EPS, by the way), and that has helped buoy the Apple stock price, currently trading at about $550. But the company may not be willing to do much more.

What Will Move Apple Stock Higher

One thing you won't hear about in Apple's earnings call is plans for new products, such as the long-rumored iWatch or Apple television. CEO Tim Cook will say that Apple has exciting products in the pipeline, but won't get any more specific.

But one of those new products - or both, or something else - is what the company needs to push Apple stock back to its previous all-time high just north of $700 and beyond.

The deal with China Mobile certainly helps, but there simply isn't enough growth left in the smartphone and tablet markets to move Apple stock in a big way. The company needs a new product category to create a fresh conduit of profits in order to again start chasing that elusive $1,000 price target.

The phenomenal growth of Apple since the 2007 introduction of the iPhone is a grand illustration of why tech is where investors can find huge profits. That's why we've identified several tech trends that are on the verge of experiencing exponential growth. This is how savvy investors can double their money...

After Takeoff in 2013, Time for Airlines to Reach Cruising Altitude

The big airlines–Delta Air Lines (DAL) and American Airlines (AAL), among them–took off in 2013. Can they reach cruising altitude in 2014?

EPA

Absolutely, says Cowen’s Helane Becker. She writes:

2013 proved to be a very strong year for the airlines, trading up 57.6%. Our 2013 thesis of capacity discipline, last major airline merger and the beginnings of capital deployment announcements played out in line with expectations. We expect 2014 to be a strong year for the group, as the airlines have really only benefited from merger
announcements rather than merger synergies. We expect [United Continental (UAL)] and American to continue rationalizing capacity, helping with the pricing environment. United will announce their return of capital plans in late 2014 to be executed in 2015, while Delta will announce further capital deployments at their annual meeting in June.

Becker’s top picks: Southwest (LUV), United Continental, Delta and American.

Top picks they may be, but they haven’t all performed that way. While American Airlines has gained 1.6% to $26.96, Delta Air Lines has risen just 0.2% to $29.28, United Continental has ticked down 0.1% to $39.90 and Southwest Airlines has dropped 1.3% to $19.17.

Is this the result of a shift into American from other airlines?

Order a Tesla Now and Get It in March

Even as America’s well to do continue to buy cars in impressive numbers, pushing inventories of some models low, most luxury vehicles can still be given as Christmas gifts. Not so the products of Tesla Motors Inc. (NASDAQ: TSLA). The wait time for the once-popular car now is four months. Buy a Tesla S online, and have it by March — at the earliest. The deposit is only $2,500.

The demand for Tesla autos, which probably dropped on concerns about engine battery fires, likely will rise again. Tesla recently announced that one of its Model S vehicles and its battery charger were not the cause of a fire in a California garage last month. German investigators concluded a recent investigation into Tesla’s safety and said they found no manufacturer’s defects.

Tesla has said on a number of occasions that it cannot produce enough cars to keep up with demand. The car fire frenzy may have changed that math and allowed supply to build. At least investors may think so. Despite some recent recovery, Tesla’s share price is down 15% over the past three months, while the S&P 500 is up 5%. If investor sentiment is a reasonable proxy for a public company’s prospects, then assurances about the safety of Tesla cars have not caused a complete rebound in enthusiasm about the car, or dampened all worries that the blemish on the Tesla brand will be gone soon.

Presumably, a four-month wait for a car is a four-month wait, whether the car is bought at a dealer or online. Tesla has continued to battle the efforts of car dealers to block sales through Tesla-owned stores. The legal wrangling is likely to go on for some time as the challenges to the Tesla retail model move from state to state. Analysts who follow Tesla sometimes wonder what its sales would be if customers could walk directly into dealers, drive the cars and order them on the spot — as is the case with virtually every other luxury car in the world.

Dealers or not, the problem of a four-month wait for a new car cuts two ways. Some buyers will walk away to places where they can get a car right away. Others can brag to friends that they are on the Tesla wait list — at least until March.

Finra will be in charge of crowdfunding platforms

Usually the thought of Finra regulation sends a shudder through the target, but online platforms that will conduct equity sales in startup companies contend that they welcome the prospect.

The Financial Industry Regulatory Authority Inc. will oversee the portals under the Jumpstart Our Business Startups Act, which eases securities registration for small companies. On Wednesday, the Securities and Exchange Commission and Finra released proposed rules for implementing the so-called crowdfunding provision of the measure.

“Equity crowdfunding will not survive if there aren't rules to help protect both [issuers and investors],” said Ryan Caldbeck, co-founder and chief executive of CircleUp Network Inc., a crowdfunding site that focuses on consumer and retail companies. “Having a governing body overseeing those rules is positive for all the parties involved.”

Finra already regulates Mr. Caldbeck's site, which conducts equity crowdfunding for accredited investors. The rules that were proposed on Wednesday would extend access to crowdfunding to ordinary investors, who could buy equity offerings in small amounts.

“We've had a productive and positive relationship [with Finra],” Mr. Calbeck said. “They're receptive to how we're trying to help investors and companies connect.”

Finra's regulation of crowdfunding portals will be less stringent than its oversight of broker-dealers, according to Robert Colby, the regulator's chief legal officer. Portals will not be allowed to engage in brokerage activities, such as soliciting investments, making recommendations or maintaining custody of client funds.

“This is one of our first efforts to create a slimmed-down rule book for a limited-purpose type of entity,” Mr. Colby said. “It is lighter than regulation of brokers consistent with what [portals] do.”

Finra will be monitoring the relationships between portals and brokers.

“We want to make sure the conduct stays in the right channels,” Mr. Colby said. “What I worry about is that in the go-go [online] environment, funding portals may not understand that they cannot go into full sales operations.”

MicroVentures, another crowdfunding site that works with accredited investors, has been overseen by Finra for the last three years. It has been examined twice by Finra in the past three years.

“It's never easy,” said Bill Clark, founder and president of MicroVentures. “They're very thorough. They follow up on everything. For us, it wasn't very painful. It's just time-consuming.”

He said that his portal has two full-time compliance officers and spends about $100,000 to $150,000 annually on ensuring that all regulations are followed.

Judd Hollas, founder and chief executive of Equitynet, said that he is not concerned about Finra regulation. But, he noted, it will pos! e a burden for new crowdfunding sites, most of which are small startups themselves.

“I'm assuming that a lot of crowdfunding operators would view regulatory oversight as an added challenge to their already full plates,” Mr. Hollas said. “It's certainly going to be a material cost in the tens of thousands of dollars at a minimum.”

Finra's more relaxed approach to this sector can be seen in part by the faster approval process for new portals than for new brokerages – 60 days compared to 180 days, according to Jilliene Helman, chief executive of Realty Mogul Co.

“It seems that their oversight of funding portals is going to be less onerous than their oversight of broker-dealers,” Ms. Helman said. “It suggests Finra understands how quickly things move in the tech world.”

Taking on regulation of crowdfunding portals won't distract Finra from its traditional broker-dealer constituency, according to Mr. Colby. The organization currently oversees about 4,200 securities firms. The SEC estimates that fewer than 100 crowdfunding portals will be operating when rules are approved. Finra has communicated with about 39 portals in a voluntary pre-registration initiative.

“If there are 50 to 100 portals, that's not a material change,” Mr. Colby said.

Mr. Clark said that he doesn't detect a culture clash between Finra and the online capital-formation community.

“The people I work with in [Finra's] Dallas district and in New York are open to crowdfunding, as long as they can have access to information they need to protect investors, which is the No. 1 goal,” Mr. Clark said.

Fidelity target date funds pile on stocks

Fidelity Investments is increasing the stock allocation across its target date funds after research found that investors are OK with more risk in retirement accounts and the outlook for bonds dims.

The biggest reason for the change was new research Fidelity conducted on how 401(k) plan participants reacted to the stock market plunge in 2008, the worst decline since the Great Depression. The firm's research uncovered no discernible change in the 401(k) participation rate or in fund turnover across the 12 million participants in its record-keeping platform.

“We looked at investor behavior in 2008 and our conclusion was that people can tolerate a lot more equities than we thought in their retirement planning,” said Bruce Herring, group chief investment officer of the global asset allocation division within Fidelity.

The most change will be in Fidelity's longer-dated target date funds. Freedom Fund investors will now hold a 90% allocation to stocks until they are about 20 years away from their retirement date. Currently, they invest in less than 75% equities at the same point.

“To start de-risking 25 years before the retirement date is too conservative,” Mr. Herring said. “We've never had a drawdown that hasn't been fully recovered within 19 years.”

Near-term target date funds will also see a boost in equities. The Fidelity Freedom 2020 Fund (FFFDX) will increase its stock holdings to 61%, from 53%, and decrease its bond allocation to 39%, from 47%.

Fidelity's outlook for the bond market played a role in the increased stock holdings.

Fidelity's capital market assumption team looks at 20 years of historical returns and current valuations to forecast asset class returns. The team's outlook for stocks is largely in line with historical averages but with the today's interest rates, it's not expecting bonds to perform the way they have.

“We think it's unrealistic the next 20 years will have the same returns of the last 20 years,” Mr. Herring said.

The alterations to the glide path are the latest change to the Fidelity target date funds as the mutual fund giant fights to hold on to its top spot in the target date fund world.

Late last year, Fidelity added new funds managed by superstar stock managers Will Danoff and Joel Tillinghast to the target date funds' underlying holdings. They each manage around 7% of the domestic stock allocation.

Fidelity target date funds are the largest in the industry, with $170 billion in assets, but its biggest competitor is catching up quickly.

The Vanguard Group Inc.'s $124 billion target date fund lineup had organic growth of 21% in 2012, more than double the rate of the Fidelity target date funds, according to Morningstar Inc.

Combined, the two fund companies manage approximately 58% of all target date fund assets.

Top Insider Trades: MVC VRX WBMD PACW

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By Jonathan Moreland, founder of Insider Insights and author of Profit From Legal Insider Trading.

NEW YORK (TheStreet) -- It is a victory for common sense. Tracking the trading behavior of company executives, directors and large shareholders in the stocks of firms they're registered in as "insiders" has proven to be profitable, according to both academic studies and (more importantly) the experience of professional investors.

Below are lists of the top 10 mainly open-market insider purchases and sales filed at the Securities and Exchange Commission Tuesday, Sept. 17, 2013 as ranked by dollar value. Please note, however, that these are only factual lists, not buy and sell recommendations. Dollar value is only one metric to assess the importance of an insider transaction, and, frankly, often not even the most important metric that determines if an insider transaction is significant. At InsiderInsights.com, we find new investment ideas just about every day using these and more intricate insider screens to determine where we should focus our subsequent fundamental and technical analysis. And while stocks don't (or shouldn't) move up or down based on insider activity alone, insiders tend to be good indicators of when real stock-moving events like earnings surprises, corporate actions, and new products may be in the offing. So use these regular Top Insider Trades columns as the initial research tools they are meant to be, and click the links in the tables to analyze a company's or insider's full insider history. Also feel free to contact us with any questions on our proprietary insider data, and how it is best analyzed.

Sprint (S) SoftBank BO 1,954,015 13,130,981 MVC (MVC) Goldstein P DIR 157,879 2,005,063 Sunday, May 10, 2015 Twitter: Yes or No at the New, Higher, IPO Price? Clearly the hype and demand surrounding Twitter’s IPO this week is building. The company upped its price range to $23-$25 a share from $17-$20 Monday, and there are reports out that it priced the IPO above the increased range. That's still unlikely to price many investors out. The folks handling Twitter’s IPO have learned a thing or two from Facebook's(FB) notorious debut last year. Twitter is looking to raise much less than Facebook did, offering fewer shares, and pricing them lower. Forget for a moment that Facebook was a bigger company, and profitable, at the time of its IPO. Facebook raised the number of shares it was selling, the number of shares insiders would sell and the pricing in the days before it began trading. Facebook raised $16 billion. But the stock priced plunged and struggled for much of the next 12 months. Twitter’s is selling 70 million shares, priced between $23-$25. If all goes as planned, they’ll raise around $2 billion, the smaller offering will be met with overwhelming demand, and shares will jump. Given the results of some other IPOs this year - Container Store Group, for example, doubled on its first day of trading on Friday – Twitter shares could rise rapidly. “The obvious question is should you still participate?” analyst Richard Greenfield of BTIG wrote on Monday. At the higher price range, shares will equal nine times the firm’s 2015 revenue estimate and 5.9 times its 2016 revenue estimate. Another ratio, EV/EBITDA (enterprise value to earnings before interest, taxes, depreciation and amortization) now sits at 52 times 2015 revenue estimate and 24 times 2016. “We would participate within the $23-$25 range,” Mr. Greenfield writes. But the firm’s view was that Twitter could go to $30 “over the next year.” That level might come much sooner than people think. One aspect of the company that Mr. Greenfield likes is that Twitter’s monetization efforts are still at an early stage. “Advertising on Twitter only began in the middle of 2010,” he wrote, “not to mention, mobile advertising did not even really exist before 2010.” The company has a light “ad load” (roughly 1% of the tweets on mobile devices are ads), which gives it room to increase ads. “We expect a lot of growth ahead in advertising.” Still, Twitter is operating from a smaller base than Facebook, and is likely to continue operating from a smaller base. “We believe investors should assume that Twitter’s penetration and user base will be materially smaller than Facebook’s,” Sanford Bernstein wrote. The firm sees Twitter with about 100 million active users monthly in the U.S., and 575 million overseas, by 2018. Facebook has more than 1 billion monthly active users. The bottom line that investors can’t completely dispense with, though, is this: Twitter is not profitable, and might not turn a profit for several years. While it’s unlikely that another competitor could completely supplant Twitter, the way Facebook did to MySpace, for example, a new competitor could come along and siphon off some of the audience and eyeballs. Heard of Knotch, for example? No? Well, that won’t be the last one you hear about. Twitter may be “sticky,” as the cool kids say, but that doesn’t mean it won’t face rivals, and that will add another pressure to its bottom line. The hashtag #twitterprofits is going to be a lonely space for the time being. At $30 and above, Barron’s Andrew Bary wrote, Twitter’s valuation becomes harder to justify. “Barron’s tends to be cautious on richly valued stocks,” he wrote, “but Twitter would look appealing at an IPO price of $20. Pay much more than that, however, and you might be tweeting your regrets later.” Tuesday, April 28, 2015 Vital to consider risk appetite while investing Through this article we are sure that the 'investment process' we have outlined herein would help many investors strike the correct chord. Before we understand the term risk appetite , let us try to understand by what is meant by "risk". To put it simply, risk is a result or outcome which is other than what is / was expected. While you assume risk as an investor, you could either make gains or suffer a loss; thus risk is nothing more than a state of uncertainty, and exists in every facet of life- including investments. The term "risk appetite" refers to one's willingness to take risk. But it doesn't merely end with willingness to make a prudent investment decision; but in fact needs to be backed by a rationale considering risk determinants such as the following:  Age: Your age plays a vital role to determine your risk appetite. Thus the younger you are, more risk you can take and vice-a-versa. This is because you are in the accumulation or earning stage of your life cycle, where you have more number of working years before you retire. Likewise, if you start investing at an early age the tenure which you get (while investing in an investment avenue) is greater, which enables you to make more aggressive investments and create wealth over the long-term to meet your financial goals. Income: Similarly, your income too is an important determinant to gauge your risk appetite. This is because if you income is high enough, you can afford to take high risk and vice-versa. Expenses: Your outgoings also influence the risk which you can afford to take while investing. Thus although you may be having a high income, but your disposable income is petite you could be refrained from taking risk. We think that in order to keep your financial health in pink in the long-term, it is important that you live within means and curtail your unnecessary expenses. It is this strategy which will enable you save a large portion of your monthly earnings, which can be deployed in suitable asset classes. Nearness to goal: Also if your investments are driven by an objective to meet a financial goal, that too would be a determinant for gauging your risk appetite. Thus if you are many years away from the financial goal you could afford to take more risk, while if you are not many years away from the financial goal you could be risk-averse. Thus ascertaining risk appetite is a combination of these aforementioned factors, and equation of all these can help you test your risk tolerance. It is noteworthy that while there are investment opportunities and avenues galore, you ought to take care and ensure that you are not cooking a recipe for disasters. As mentioned earlier, while there is information galore on investment avenues you ought to adopt caution and ensure that you are taking a wise investment decision which suits your needs and risk profile. There is no point in being carried away by an investment opportunity which has being hyped (even though it may be really worth it), if does not suit your risk profile. Moreover one should be wary of investment opportunities which harp on returns and does not emphasise on the risk involved.  As a matter of fact, in the absence of information related to risk, information isn't just incomplete, it's downright misleading. So the next time you hear or read of investment opportunities and avenues ask yourself a simple question "Does this investment opportunity or avenue suit my risk profile, although it may deliver luring returns?" Remember, investing is not about how much return you like, but how much returns you can safely handle. PersonalFN is a Mumbai based Financial Planning and Mutual Fund Research Firm Monday, April 27, 2015 Astellas Launches Xtandi in the UK - Analyst Blog Astellas Pharma, Inc. (ALPMY) recently announced the launch of its prostate cancer drug, Xtandi, in the UK. Xtandi had gained EU approval in late Jun 2013 for the treatment of adult men with metastatic castration-resistant prostate cancer (CRPC) whose disease has progressed on or after Sanofi's (SNY) Taxotere (docetaxel) therapy. Approval was based on encouraging results from a randomized, placebo-controlled, multicenter, phase III study (AFFIRM) which evaluated the safety and efficacy of the drug versus placebo. The study not only met the primary and secondary endpoints but Xtandi's safety profile was also found to be favorable. Xtandi was also approved in Japan and the US for the same indication in Jun 2013 and Aug 2012, respectively. According to Cancer Research UK, prostate cancer is estimated to be the second most common cause of cancer death in men in the UK. Medivation, Inc. (MDVN) entered into a deal with Astellas, for the development and commercialization of Xtandi, for the treatment of prostate cancer, in Oct 2009. While all US development and commercialization costs and profits will be shared equally, Astellas will be responsible for the ex-US development and commercialization of Xtandi. Medivation is currently working on expanding Xtandi's label. A phase III study (PREVAIL) in chemotherapy-naïve advanced prostate cancer patients is currently ongoing with data read-outs expected later this year. Medivation is also exploring Xtandi for breast cancer (phase II). Xtandi delivered net sales of $75.4 million in the first quarter of 2013, $18 million above the last quarter of 2012. Astellas carries a Zacks Rank #4 (Sell) while Medivation carries a Zacks Rank #3 (Hold). Right now, Jazz Pharmaceuticals (JAZZ) looks well positioned with a Zacks Rank #1 (Strong Buy). Monday, April 20, 2015 Stock Bubble Driven by Central Banks to Burst in 2014, Analyst Warns As Federal Reserve officials pursue the most aggressive monetary policy stimulus campaign in their institution’s history, they are mindful of the unintended consequences their actions can have on financial markets. Getty Images But as it now stands, most remain confident that huge injections of money into the economy haven’t created any bubbles big enough to threaten the overall course of the recovery. That has allowed them to press forward with their aggressive agenda of bond buying, which is aimed at pushing up asset prices in a bid to boost growth and lower unemployment. Against that confidence, an equities strategist is warning of a major bubble in global stock prices. In a research note, Nomura Securities strategist Bob Janjuah is warning that over the final three quarters of next year and into 2015, there “could be a 25% to 50% sell off in global stock markets.” Mr. Janjuah, who is co-head of macro strategy research at Nomura, sees a lot to worry about, and he sees central banks, including the Fed, at the center of the factors that eventually will bring woe to stocks. “The major themes are unchanged–anaemic global growth/mediocre fundamentals, what I consider to be extraordinarily and dangerously loose monetary policy settings, very poor global demographics, excessive debt, an enormous misallocation of capital driven by the state sponsored mispricing of money/capital, and excessive financial market/asset price speculation at the expense of any benefit to the real economy,” the analyst says. Mr. Janjuah says markets are now priced entirely for good news, leaving them vulnerable to adverse developments. But the main driver of the coming bursting of the stock market bubble, as the Nomura analyst sees it, is a much delayed rebalancing of the global economy as central banks pull back from all of their aggressive stimulus activities. “The next five years has to be about a rebalancing towards the ‘real economy’ and the bottom 90%, at the expense of the top 10%,” Mr. Janjuah writes. “This shift in policy emphasis will not be a happy time for financial markets and speculators while the transition happens,” he says. Fed officials don’t offer predictions of future equity price movements. But they do believe that rising asset prices boost the so-called wealth effect. As consumers feel richer, they feel emboldened to spend more, which lifts the broader economy. To that end, they have been pursuing very aggressive bond-buying policies while offering guidance on short-term rates that suggest monetary policy will be very easy for years to come. Over the course of this year, speculation about the Fed easing back on its bond buying generated considerable market volatility. Some officials welcomed this because they said it helped correct market complacency about future Fed policy while flushing out some pockets of excess in some corners of the bond market. But Fed officials also came to lament the move as they saw higher borrowing costs creating fresh headwinds for an economy that wasn’t growing fast enough to begin with. In an interview Monday, Federal Reserve Bank of St. Louis President James Bullard said when it comes to market levels, “I think we are at a good place right now.” He put himself in the camp of those who see some value in the rise in bond yields, saying the levels seen at the start of the year were so low that they were a bit worrisome. That said, the veteran central banker said the bubble issue remains challenging for Fed officials. “I don’t think we’ve come up with a really great answer” when it comes to dealing with markets that have gone out of line with fundamentals, Mr. Bullard said. Subscribe to: Comments (Atom) Blog Archive ►  2019 (37) ►  March (16) ►  February (21) ►  2018 (21) ►  August (1) ►  July (9) ►  June (3) ►  May (8) ▼  2015 (88) ▼  July (1) Packaging Corp. Buys Boise for $1.3B ►  June (11) How To Beat The Big 2013 Capital Gains Tax Hike 15 Best 401(k) Plans in Pro Sports Strong Sell on MRC Global - Analyst Blog Royal Babies and Economic Growth - Smead Capital M... LinkedIn Launches Two-Step Verification for Accounts Golf Clap for Patterson Companies Is Facebook Home a Bigger Success Than We Think? Legacy Reserves Incrementally Lifts Dividend 8 Fascinating Reads H&R Block Invests $3 Million in Teaching Teens Abo... 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