Thursday, October 31, 2013

Brent Pushes Towards $110

The spread between Brent and US oil widened on Thursday morning after the Federal Reserve's policy meeting ended with many wondering if the bank was going to taper sooner than expected. Brent crude oil traded at $109.58 at 6:15 GMT on Thursday.

Although the Federal Reserve opted not to taper its $85 billion per month asset purchasing plan, investors were surprised by the statements released following the meeting which many took to mean the bank could cut back on its spending sooner rather than later.

Related: PreMarket Primer: Thursday, October 31: BOJ Bullish On Inflation

In the bank's statement following the meeting, many felt the bank took a more hawkish tone than was expected. Though the statement reignited taper woes, most aren't expecting the US central bank to make any sudden moves until early 2014.

Brent prices were buoyed by reports that Libya's crude exports declined even further as protests continued to close down the nation's oilfields. CNBC reported that Eni, an Italian energy company, has reduced its 2014 production outlook, citing the outages in both Libya and Nigeria.

Best Cheap Companies For 2014

However, talks between Western leaders and Iranian officials have kept a ceiling above prices as the two sides move closer to an agreement on Iran's disputed nuclear program. Iranian leader Hassan Rouhani has said he is willing to make the nation's nuclear research facilities more transparent in exchange for the removal of sanctions on Iranian oil.

The unprecedented cooperation between the two sides has many wondering if Iranian oil could flood the market relatively soon.

Posted-In: Federal ReserveNews Commodities Forex Global Pre-Market Outlook Markets Best of Benzinga

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Around the Web, We're Loving... Learn to Use Trading Platforms Like Hedge Fund Traders do Rumsfeld: Denial of Benefits to Fallen Soldiers' Families 'Inexcusable' Come See How the Pro's Trade in this Exclusive Webinar Facebook, Baidu Lead Big Caps Beating Shutdown What Should You Know About AMZN? Most Popular IBM Authorizes $0.95 Dividend; Authorizes $15B In Additional Buybacks What is Apple's Tim Cook Hinting at for 2014? Facebook Shares Edge Higher After Hours Following Upgrade to Buy from BTIG's Greenfield Is a Beer Mega-Merger On Tap? Earnings Scheduled For October 30, 2013 Net Optics Announces Pending Acquisition by Ixia for $190M in Cash Related Articles (BNO + BROAD) Eurozone Sentiment Picks Up Brent Pushes Towards $110 Euro's Strength Could Provoke Action From ECB Brent Slips On Rising Libyan Exports Early Stages Of Eurozone Banking Union To Be Difficult Protests In Libya Boost Brent View the discussion thread. Partner Network #marketfy-ae-block { display: none; border: 2px solid #0a3f75; overflow: hidden; width: 300px; height: 125px; text-align: center; background-color: #45719E; position: relative; z-index: 1; } #marketfy-ae-block a { display: block; width: 300px; height: 125px; position: relative; z-index: 2; color: #ffffff; text-decoration: none; } #marketfy-ae-block-countdown-text { color: #f9fc99; padding: 0px 0 0 0; font-size: 19px; font-weight: bold; line-height: 19px; } #marketfy-ae-block-countdown-text-start { font-size: 12px; } #marketfy-ae-block-countdown { padding: 5px 0 5px 0; font-size: 26px; } #marketfy-ae-block-signup { padding: 5px 47px; } #marketfy-ae-block-signup:hover { background-color: #457a1a; } #marketfy-ae-block #marketfy-ae-block-logo { display: block; padding: 3px 0 0 0; margin: 0; } #marketfy-ae-block-logo { text-indent: -9999px; } #marketfy-ae-block-free { display: block; position: absolute; top: 7px; right: -23px; width: 80px; height: 16px; line-height: 16px; text-align: center; opacity: 1; -webkit-transform: rotate(45deg); -moz-transform: rotate(45deg); -ms-transform: rotate(45deg); transform: rotate(45deg); font-size: 13px; font-weight: normal; color: #333333; background-color: yellow; z-index: 500; text-shadow: 1px 1px #999999; } #marketfy-ae-block-arrow { position: relative; width: 60px; height: 60px; z-index: 10; margin: -80px 0 13px -21px; } #marketfy-ae-block-arrow img { height: 60px; width: auto; } Marketfy's International
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Wednesday, October 30, 2013

Hot High Tech Stocks To Own For 2014

Flashback to the start of 2008

The markets are roaring and everyone� who� been left out of the equity ride up is rushing to enter. Cut -- to the start of 2009: equity is worse than a four-letter bad word by now. Nobody can get it right 100% of the time; and, at both these times, the investor would have been protected with the asset allocation approach �taken out profits when his weightage of equity shot up beyond his risk-taking ability; and entered when no one dared to even look towards the markets in 2009.

Look at the Whole Picture

The allocation to debt is met for the salaried class through regular deductions and investment in the employee provident fund (EPF) scheme; and others create their safety net through Public Provident Fund, bank deposits, Post Office deposits, National Savings Certificates and the like. We all spend more time on analyzing why we made a loss of 10% on one share, even when that share is a miniscule proportion of one� total financial assets. The focus needs to move away from making a profit in every transaction to having a suitable risk-adjusted return portfolio.

Hot High Tech Stocks To Own For 2014: Aspial Corporation Limited (A30.SI)

Aspial Corporation Limited, an investment holding company, engages in the manufacture, wholesale, retail, and export of jewelry. It offers fine contemporary jewelry principally under the Lee Hwa, Goldheart, and CitiGems brand names. The company also engages in property investment, development, and management; investment holding; building construction and contracting; and pawn broking activities. It specializes in the development, marketing, and management of small to medium sized apartments. Aspial Corporation operates 22 pawnshops. The company was formerly known as Lee Hwa Holdings Pte Ltd. and changed its name to Aspial Corporation Limited in 2001. The company was incorporated in 1970 and is based in Singapore. Aspial Corporation Limited is a subsidiary of MLHS Holdings Pte Ltd.

Hot High Tech Stocks To Own For 2014: Ashtead Grp(AHT.L)

Ashtead Group plc, an investment holding and management company, engages in the rental of equipment to industrial and commercial users primarily in the non-residential construction sectors of the United States and the United Kingdom. It supplies equipments that lift, power, generate, move, dig, compact, drill, support, scrub, pump, direct, and ventilate under the brand names of Sunbelt Rentals and A-Plant. The company provides a range of industrial and construction equipment, such as earthmoving equipment, aerial work platforms, high reach forklifts and other materials handling units, tools, and pumps, as well as power generation, portable site accommodation, scaffolding, formwork and false work, and temporary traffic management equipment; and new and used equipment. Ashtead operates 106 stores in England, Scotland, and Wales; and 316 full service stores and 40 Sunbelt at Lowes shops in the United Kingdom. It serves construction and industrial markets, disaster relief agen cies, sport and music event organizers, governments, local authorities, facilities management, and homeowners. The company was founded in 1947 and is based in London, the United Kingdom.

Top 10 Safest Companies For 2014: Dot Hill Systems Corporation(HILL)

Dot Hill Systems Corp. designs, manufactures, and markets a range of software and hardware storage systems for the entry and midrange storage markets worldwide. Its storage solutions consist of integrated hardware, firmware, and software products employing a modular system that allows end-users to add various protocol, performance, capacity, or data protection schemes. The company offers AssuredSAN products, a flexible line of networked data storage solutions for open systems environments, including fiber channel, Internet small computer systems interface, and serial attached small computer systems interface, or SAS storage markets. Its AssuredSAN product lines range from approximately 146 gigabyte to 192 terabyte storage systems. The company also provides RAID software for industry standard Windows and Linux servers, as well as storage management applications, which manage its storage system configurations. In addition, it sells DMS software products comprising AssuredSna p, AssuredCopy, AssuredRemote, and RAIDar. Further, the company offers standalone storage software products, such as AssuredUVS, a unified virtual storage appliance product; and AssuredVRA. It sells its products through original equipment manufacturers, systems integrators, distributors, and value added resellers. The company was founded in 1988 and is headquartered in Longmont, Colorado.

Advisors' Opinion:
  • [By John Udovich]

    Small cap storage stock Dot Hill Systems Corp (NASDAQ: HILL) is up 193.4% since the start of the year for a much better performance than its larger cap peers Western Digital Corp (NASDAQ: WDC) and SanDisk Corporation (NASDAQ: SNDK), which are 55.5% and 35.3%, respectively, since the start of the year. So why has this relatively unknown small cap storage stock been a better performer than its better known storage stock peers?

Hot High Tech Stocks To Own For 2014: Cir-comp(CIRX.MI)

CIR S.p.A., through its subsidiaries, engages in the utilities, media, automotive components, healthcare, and financial services businesses. In the utilities sector, the company engages in the sourcing, marketing, and supply of electricity and natural gas. It operates wind, photovoltaic, hydro, thermo, and biomass power generation plants with an installed capacity of approximately 4,000 megawatts. In the media sector, the company is involved in publishing la Repuibblica national daily newspaper, 17 local dailies, 1 three-weekly paper, L'Espresso weekly magazine, 2 monthlies, 2 quarterlies, and various guide books; providing Internet and applications for mobile and new generation devices; broadcasting 3 national radio stations comprising Radio Deejay, Radio Capital, and Radio M2O; and operating the national TV channel Deejay TV, as well as the satellite channels MyDeejay and Onda Latina. In the automotive components sector, the company offers filtration systems, such as oil , engine air, petrol fuel, diesel fuel, and cabin air filters; and flexible suspension components, including coil springs for shock absorbers, stabilizer and torsion bars, stabilinks, leaf springs, precision springs, and track adjusters. In the healthcare sector, it operates nursing homes under the Anni Azzurri brand; psychiatric rehabilitation units under the Santo Stefano and Redancia brands; and hospital facilities under the Medipass brand. The company manages 60 facilities with a total of approximately 5,600 beds in central and northern Italy. In the financial sector, it engages in the acquisition and management of non-performing loans; venture capital, private equity, and hedge funds business; operation of restaurants; and provision of hospitality management training. The company has operations in Italy, other European countries, North America, South America, and Asia. CIR S.p.A. was founded in 1976 and is headquartered in Milan, Italy.

Hot High Tech Stocks To Own For 2014: Isis Pharmaceuticals Inc.(ISIS)

Isis Pharmaceuticals, Inc. engages in the discovery and development of antisense drugs using antisense drug discovery platform. The company?s antisense drug development programs focus on treating cardiovascular, metabolic, cancer, and severe neurodegenerative diseases. It has commercialized antisense drugs and has 24 drugs in development. Isis Pharmaceuticals, through Regulus Therapeutics Inc., also focuses on the discovery, development, and commercialization of microRNA-based therapeutics. The company has strategic alliances and collaboration agreements primarily with GlaxoSmithKline; Genzyme Corporation; Archemix Corp.; Alnylam Pharmaceuticals, Inc.; Bristol-Myers Squibb; Ortho-McNeil-Janssen Pharmaceuticals, Inc.; and Eli Lilly and Company. Isis Pharmaceuticals, Inc. was founded in 1989 and is based in Carlsbad, California.

Advisors' Opinion:
  • [By Keith Speights]

    A penny costs a lot these days
    Isis Pharmaceuticals (NASDAQ: ISIS  ) reported its first quarter results on Tuesday, missing analysts' earnings estimate by $0.01 per share. Isis shares fell 15% for the week. Is a penny worth that much these days? Not really.

Hot High Tech Stocks To Own For 2014: Ivanhoe Energy Inc Com Npv(IE.TO)

Ivanhoe Energy Inc., together with its subsidiaries, engages in the development and production of oil and gas properties. The company holds interests in the Tamarack property, which is a 6,880 acre block located to the northeast of Fort McMurray, Alberta, Canada; the Zitong block that covers an area of approximately 248,000 gross acres and is located in the Sichuan basin, China; the Dagang field, which covers an area of 10,255 gross acres and is located in Hebei province, China; the Nyalga Block XVI that covers an area of approximately 3.1 million gross acres and is located in the Khenti and Tov provinces, Mongolia; and the Pungarayacu heavy oil field in Block 20 that covers an area of 426 square miles and is located to the southeast of Quito, Ecuador. As of December 31, 2011, it had 49 gross producing oil wells; and proved reserves of 1,729 thousand barrels. The company was formerly known as Black Sea Energy Limited and changed its name to Ivanhoe Energy Inc. in June 1999 . Ivanhoe Energy was founded in 1995 and is headquartered in Calgary, Canada.

Hot High Tech Stocks To Own For 2014: STERIS Corporation(STE)

STERIS Corporation and its subsidiaries develop, manufacture, and sell infection prevention, contamination control, microbial reduction, and surgical support products and services for healthcare, pharmaceutical, scientific, research, industrial, and governmental customers worldwide. It provides steam, vaporized hydrogen peroxide, and ethylene oxide sterilizers; liquid chemical sterilant processing systems; washer/disinfector systems; general and specialty surgical tables; surgical and examination lights; equipment management systems; operating room storage cabinets; warming cabinets; scrub sinks; and other products and accessories. The company also offers connectivity solutions, such as operating room integration, workflow, patient tracking, and instrument management that allow transfer of information and images; cleaning chemistries and sterility assurance products; cleansing products, including hard surface disinfectants, and skin care and hand hygiene solutions; high-pu rity water equipment; vaporized hydrogen peroxide generators. In addition, it sells contract materials processing services using gamma irradiation and ethylene oxide technologies, as well as offers microbial reduction services based on customer specifications. Further, the company provides maintenance programs and repair services, sterilization and surgical management consulting services, information management and decision support services, and other support services, such as construction and facility planning, engineering support, device testing, customer education, hand hygiene process excellence, asset management/planning, and the sale of replacement parts. STERIS Corporation sells its products to end users, dealers, and distributors through direct field sales and service representatives. The company was formerly known as Innovative Medical Technologies and changed its name to STERIS Corporation in 1987. STERIS Corporation was founded in 1985 and is headquartered in Ment or, Ohio.

Advisors' Opinion:
  • [By Sean Williams]

    What: Shares of Steris (NYSE: STE  ) �-- a manufacturer of infection prevention, contamination control, and surgical support products for the health-care industry -- jumped as much as 10% after reporting better-than-expected fourth-quarter results.

Hot High Tech Stocks To Own For 2014: Fifth Third Bancorp(FITB)

Fifth Third Bancorp operates as a diversified financial services holding company in the United States. The company?s Commercial Banking segment offers credit intermediation, cash management, and financial services; lending and depository products; and foreign exchange and international trade finance, derivatives and capital markets services, asset-based lending, real estate finance, public finance, commercial leasing, and syndicated finance for business, government, and professional customers. Its Branch Banking segment provides deposit and loan, and lease products to individuals and small businesses. This segment?s products include checking and savings accounts, home equity loans and lines of credit, credit cards, loans for automobile and personal financing needs, and cash management services. The company?s Consumer Lending segment engages in the mortgage and home equity lending activities, such as origination, retention, and servicing of mortgage and home equity loans ; and other indirect lending activities, which include loans to consumers through mortgage brokers and automobile dealers. Its Investment Advisors segment offers investment alternatives for individuals, companies, and not-for-profit organizations. It offers retail brokerage services to individual clients, and broker dealer services to the institutional marketplace. This segment also provides asset management services; holistic strategies to affluent clients in wealth planning, investing, insurance, and wealth protection; and advisory services for institutional clients, as well as advises the company?s proprietary family of mutual funds. As of December 31, 2011, the company operated 1,316 full-service banking centers, including 104 Bank Mart locations; and 2,425 automated teller machines in 12 states in the midwestern and southeastern regions of the United States. The company was founded in 1862 and is headquartered in Cincinnati, Ohio.

Advisors' Opinion:
  • [By Rich Smith]

    Few regional banking stocks in the U.S. today cost more than BB&T (NYSE: BBT  ) stock. Indeed, the stock's biggest distinguishing factor is probably its priciness. Valued at 14.1 times trailing earnings, shares of BB&T cost 14% more than bigger rival US Bancorp (NYSE: USB  ) , and 33% more than smaller Fifth Third Bancorp (NASDAQ: FITB  ) . But is there a good reason for investors to pay up for BB&T stock?

Monday, October 28, 2013

The Long-Term, Strong ARM

10 Best Growth Stocks To Buy Right Now

Recently, this company experienced a major sell off as a result of their disappointing third quarter earnings. However, MoneyShow's Jim Jubak, also of Jubak's Picks urges you to consider the long-term opportunity that now awaits.

I'm going to use the sell off in ARM Holdings ((ARMH) in New York and (ARM) in London) on disappointing third quarter earnings, to add this technology, intellectual property stock to my Jubak's Picks portfolio. The New York traded ADRs fell 10.3% from October 21 to October 23. Even after Friday's move up to $47.82 as of noon New York time Friday, October 25, the ADRs are off 7.6% since October 21.

ARM Holdings is a classic, great, long-term story stock that has been sold-off on a timing issue that resulted in disappointing quarterly results. My advice: Look past the short-term story and pick up the long-term story at a temporary bargain.

Here's what happened to lead to the disappointment. The quarter ARM reported that sales had climbed 8% from the second quarter, and 26% from the third quarter of 2012. At $287 million for the quarter, sales were comfortably above the Wall Street consensus of $270 million. Earnings at 511 pence (ARM is an English company) beat the consensus of 510 pence.

No disappointment so far, right?

The problem came in the breakdown of sales. ARM Holdings makes its money by licensing its technology to other technology companies and from the royalties it garners on each unit sold by its licensing partners.

Licensing revenue was fine for the quarter—in fact, it was great. The company signed 48 licenses in the quarter at 24 different companies, including 11 companies that were licensing ARM Holdings' technology for the first time.

However, royalty revenue came in at $122 million, $7 million lower than Wall Street expected for the quarter.

It looks to me like the miss on royalty revenue is totally explicable. Apple (AAPL) is a major ARM Holdings licensee, and unit volumes of iPhones and iPads sold by Apple in the calendar second quarter lagged, as consumers waited to buy until after the widely anticipated new product announcements in September and October.

The irony in the miss and the sell off is that Apple announced huge new commitments to ARM Holdings' licenses in the new iPhone and iPad.

First, the company won a key slot in the new iPhone 5s for a 64-bit processor based on its design. Apple's use of ARM's technology in the A7 will result in a 20% hike to 60 cents from 50 cents in the royalties that ARM Holdings earns from every iPhone sale.

Second, Apple also announced that the new iPad, introduced just two weeks ago, will also use the company's technology in the A7 processor.

Think ARM Holdings might pick up all the unit volume and royalty revenue—and more—next quarter, that it missed this quarter?

But the importance of Apple's move to ARM's 64-bit technology extends far beyond the increase in revenue that the company will get from Apple.

Apple's move has raised the bar for all of its competitors, and I think we're already seeing a race to get 64-bit technology in cell phones and tablets across those markets.

For example, in the second quarter, MediaTek ((TT:2454) in Taiwan), which has the biggest share of the chip market in China for smartphones, licensed the same 64-bit architecture from ARM Holdings that Apple has. MediaTek is the first designer of inexpensive systems on a chip for smart phones to license ARM Holdings' 64-bit technology. Considering that MediaTek is expected to record 48% of the Chinese market in 2013, and over 50% in 2014, ARM Holdings is looking at another big royalty boost as MediaTek builds that new technology into a new generation of chips.

And I don't think that this is the end of this string of good news (and higher royalties) for ARM Holdings. Apple's move to 64-bit technology (and the move of China's handset makers to that technology), will push Android phone makers outside of China, such as global market share leader Samsung, to move to the new generation of 64-bit processors.

In the short-term, say the next quarter of two, as volumes move up on Apple's sales of the new iPhones and iPads, I'm looking to see the ARM Holdings' ADRs move up 15% or so, to $56. From there the price will continue to trend upward, but the pace will depend on how quickly other 64-bit products hit the market.

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

Sunday, October 27, 2013

Investors, Beware This Growing Fast Food Trend

Last week, Wendy's  (NASDAQ: WEN  ) announced in its second-quarter earnings report that it will sell 425 company-operated stores to franchisees. This will reduce the number of company-owned and -operated stores in the Wendy's system from 22% to 15%.  Coupled with earnings that beat expectations, Wendy's stock rose more than 8.5% on the day of the announcement. After a few years of rather aimless wandering while McDonald's (NYSE: MCD  ) increased its dominance, and Burger King  (NYSE: BKW  ) returned to the public markets courtesy of merger-savvy Brazilian billionaires, is Wendy's poised to excite investors again?

"Refranchising" is the new growth mantra
Wendy's decision to reduce its ownership stake in branded restaurants to roughly one out of every seven locations is indicative of a trend toward greater franchising in the quick service restaurant business. In the industry, selling existing company stores to franchisees is known as "refranchising." In Wendy's case, it is selling the restaurants to some of its most capable franchisees, in order to convert these restaurants to a higher-end concept as part of a half-billion dollar initiative the company calls its "Image Activation Program."  

Wendy's management highlighted the advantages of decreasing company-owned stores in its earnings announcement, and the reasons fairly define the industry's interest in this trend. CEO Emil Brolick stated the following in regards to updating locations and refranchising: 

We expect to generate a higher operating margin and stronger free cash flow, along with further enhancing the quality of our earnings with a more predictable revenue stream from a higher percentage of royalty and rent income. We believe system optimization will also enable us to increase our long-term earnings-per-share growth rate and return incremental cash to shareholders in the form of dividends and share repurchases. ...

Risks of a refranchising strategy
Shifting overhead to franchisees indeed improves margins and can open up free cash flow. But this strategy is not without significant risks. Company-owned stores are the proving ground for a restaurant's concept. Company locations provide a working laboratory for a fast food operator to study menu and operational innovations; develop best practices in speed, quality, and safety; and collect data to assist marketing in each geographical region. Having its own stores interspersed among franchisees in every geographic location helps a franchisor understand both the challenges and opportunities facing its independent operators.

Ceding too much authority to franchisees can ultimately affect the bottom line. Without an appreciable independent source of revenue, a franchisor has little leverage if franchisees balk against a pricing strategy or disagree with menu development.

The big experiment in this arena is being undertaken by Burger King. Burger King is moving toward a 100% franchisee model. Currently, 97% of its locations are owned by franchisees, and it expects to reach the 100% mark by the end of the current fiscal year. The company is quite candid about the potential weak spots in its strategy:

Our franchise dominated business model also presents a number of drawbacks and risks, such as our limited control over franchisees and limited ability to facilitate changes in restaurant ownership. In addition, our operating results are closely tied to the success of our franchisees, and we are dependent on franchisees to open new restaurants as part of our growth strategy. 

Balance is key
About a decade ago, McDonald's owned three out of every 10 restaurants in its system.The company whittled this ratio down for many of the same reasons that Wendy's and Burger King have pursued their respective strategies. The proportion of company-owned stores to total stores was reduced to the 20% range, and it has held steady at between 19% and 20% for the last five years.

So what is a good ratio of company-owned stores to franchisees? There is no single formula due to the differences in business models. Burger King may succeed in a 100% franchise model as it is setting up joint ventures with franchisees around the world, thus retaining a modicum of control. McDonald's ratio of one out of every five system restaurants seems a balanced number. It's hard to predict how much lower than this proportion McDonald's can go and still retain its famous edge of consistency of product. This is why I am personally skeptical of Wendy's drive to reduce its company-owned stores all the way down to 15%.

Watch this trend going forward
In some ways, the push toward refranchising can be seen (somewhat) as taking the easy way out. The traditional fast food burger franchises have struggled for some years with competition from higher-grade, healthier dining options. Refranchising presents a novel way to achieve to bump up shareholder returns as it relieves companies of overhead. But in taking very important operational skin out of the game, the giant fast food chains may be further diminishing their ability to discern the appropriate mix of value, ambience, menu, and price to compete long-term with an ever-growing number of affordable dining options.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report, "3 Stocks That Will Help You Retire Rich," names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

What is difference between bond and share?

Hot Heal Care Companies To Buy Right Now

A: You buy share for capital appreciation, you buy share for growth, you buy share to create wealth. You buy bond to protect your wealth you have created so, in a way it is different but interestingly like equity have a PE multiple, bond also have PE multiple. Therefore, it could be good guide to you to look at when you should invest in the bond fund, for instance if a bond have a 10 PE multiple then it means the current yield is 10 percent and if a bond have a 12.5 PE multiple then it means the bond is offering 8 percent. So, you can use that as a tool to invest in the bond or not to invest in a bond.

Second thing share market plays a very important role when one look at investing in the bond because many time people invest in the bond or deposits of the company which are unknown and once they invest they do not know what happen to their portfolio, what has happened to the company but if you invest in the company which is listed on a stock exchange, the price of the share will tell you many things which perhaps is the financial of the company may not be able to tell you. So, in a way they are not connected but in a way they are connected.

Saturday, October 26, 2013

Homemade Soda Is the New Store-Bought Soda

On Monday, Green Mountain Coffee Roasters (NASDAQ: GMCR  ) filed a trademark application for a soda maker that looks like it could compete with SodaStream   (NASDAQ: SODA  ) . The Karbon trademark is set to be used for soda making and sparkling beverages, according to the company's filing. The success of Green Mountain's Keurig coffee brewers should give SodaStream pause, and perhaps a reason to re-evaluate the aggressiveness of its marketing.

SodaStream is currently in a comfortable position as the only real name in homemade soda. While other companies have made attempts, none of them have had the clout that Green Mountain could bring to the venture. The move makes sense for Green Mountain, and the long road for SodaStream just got bumpier.

Why Green Mountain would want soda
The beauty of the soda-maker model is that it parallels the company's existing coffee model. There's a countertop machine that uses disposable cartridges, and the company sells the machines at close to cost to make long-term cash off the cartridges. In its last quarter, for instance, Green Mountain earned 79% of its revenue from its single serve packs. Homemade soda is almost the same thing. SodaStream generated 60% of quarterly revenue from consumables last quarter, and that revenue grew 37% year over year.

For Green Mountain, the ease of transitioning into soda makes it a natural fit. The company already gets how the system works, and it has a great network of companies that it can work with. While SodaStream has mixes from Kool-Aid, Country Time, and Crystal Light, Green Mountain has coffee connections that it's ready to put to work in the soda business.

Green Mountain works with Newman's Own, Starbucks (NASDAQ: SBUX  ) , and Snapple, to name a few. Those brands all have flavors that would work well with the new carbonating system, and Starbucks in particular has a gold mine up its sleeve. The company's Refreshers line of energy drinks has been a success, and the beverages lend themselves to carbonation.

The good news for SodaStream
While the idea of Green Mountain getting into carbonated beverages may seem like bad news for SodaStream, I think the increased competition is going to work well for the company. By adding its bulk to the industry, Green Mountain should bring more consumers into the "make your own" world.

If SodaStream continues to produce high-quality machines, it's going to get more and more attention as consumers compare the Karbon to the SodaStream line. That should result in more sales for both companies, and give SodaStream a nice little boost to its bottom line. Overall, I think the addition of Green Mountain to the soda system business is going to be a good thing for everyone.

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