EPA proposes reducing biofuel mandate

WASHINGTON — The Obama administration on Friday proposed to reduce the amount of ethanol in the nation's fuel supply for the first time, acknowledging that the biofuel law championed by both parties in 2007 is not working as well as expected.

While the proposal highlights the government's struggle to ramp up production of homegrown biofuels that are cleaner-burning than gasoline, but is unlikely to mean much for consumers at the pump.

The change would require almost 3 billion gallons less ethanol and other biofuels to be blended into gasoline in 2014 than the law requires.

The 2007 law tried to address global warming by requiring oil companies to blend billions of gallons of biofuels into their gasoline each year. But politicians who wrote the law didn't anticipate fuel economy to improve as much as it has in recent years, which reduced demand for gasoline.

Meanwhile, next-generation biofuels, made from agricultural waste such as wood chips and corncobs, have not taken off as quickly as Congress required and the administration expected.

President Obama has championed biofuels since his days as an Illinois senator, and his administration has resisted previous calls to lower biofuel volumes or repeal the law.

EPA officials said they were still committed to alternative fuels as part of a comprehensive energy strategy. If the EPA stuck to the volumes mandated by law, the amount of biofuel required would generate more ethanol than many engines can safely handle, officials said.

"Biofuels are a key part of the Obama administration's 'all of the above' energy strategy, helping to reduce our dependence on foreign oil, cut carbon pollution and create jobs," said EPA Administrator Gina McCarthy.

Biofuel supporters, however, said the proposal marked a departure for the Obama administration.

"This is the first time that the Obama administration has shown any sign of wavering," said Brooke Coleman, executive director of the Advanced Ethanol Council.

Hot Small Cap Companies To Invest In 2014

Bob Dinneen, the head of the Renewable Fuels Association, the Washington group that lobbies on behalf of the ethanol industry, said the proposal "cannot stand."

"An administration committed to addressing climate change cannot turn its back on biofuels," Dinneen said.

The ethanol mandate created an unusual alliance between oil companies, which have seen ethanol cut into their share of the gasoline market, and environmental groups that oppose planting more corn for fuel. A recent AP investigation found that corn-based ethanol's effect on the environment is far worse than the government predicted or admits.

The oil industry lobbied hard for a reduction.

Auto Parts: You Must Own One Stock in This Sector

Popular Posts: 3 Best ETFs to Own Until You Die5 Safe Dividend Stocks Yielding North of 7%Auto Parts: You Must Own One Stock in This Sector Recent Posts: Auto Parts: You Must Own One Stock in This Sector 5 Safe Dividend Stocks Yielding North of 7% Time to Tune in to AMC Networks View All Posts

Plenty of sectors have at least one must-own long-term stock. With a little thought and research, they aren’t too hard to find. But in a few cases, little subsectors might contain companies that don’t get a lot of recognition despite their products being intrinsic to our everyday human experience.

Cars come to mind, and you could probably get away with owning a common car dealer like Toyota (TMC). The problem with this approach, though, is that auto manufacturers are economically sensitive and can have really bad years. That's why I go one level deeper to what I call "infrastructure" plays, which in this case means auto parts.

See, cars are always going to be on the roads all over the world. They will always be sold because all cars eventually die. And along the way, no matter how well-engineered they are, they will need parts and require maintenance. That's why you should own a stock in the auto parts sector for the long term. The challenge is in picking the right one.  Here's a quick look at your options:

AutoZone (AZO) is a $15 billion company with 5,109 stores in the US and Mexico. It holds $4 billion in debt and $133 million in cash and generates very reliable free cash flow of $800 million to $900 million annually. AZO has a projected long term-growth rate of 14.8%, and trades at a FY13 P/E of just 14. That’s a lot of debt for the company, but it’s cheap at just under 5%, and very manageable.

Genuine Parts Company (GPC) is a $12 billion company with 1,100 Napa Auto Parts stores in the US, Canada, and Mexico. It holds $250 million in debt and $197 million in cash.  Free cash flow improved to $800 million in FY12 from $600 million in FY11. GPC has a projected long term-growth rate of 10%, and trades at a FY13 P/E of 19, so I consider it vastly overvalued.

Advance Auto Parts (AAP) is a $7.4 billion company with 4,000 stores in the US, Canada, and Mexico. It’s $604 million in debt is almost entirely offset by its $520 million in cash.  Free cash flow is a bit inconsistent, swinging up and down over the years, but presently at a very solid $410 million. AAP has a projected long-term growth rate of 13.5%, and trades at a FY13 P/E of 18, so it is also overvalued.

O'Reilly Automotive (ORLY) is also a $15 billion company with 4,000 stores in the US alone. It holds $1.4 billion in debt and $366 million in cash, and generates strongly increasing levels of free cash flow — from $350 million in FY10 to $800 million in FY11, up to $950 million in FY12. It has a projected long-term growth rate of 17.3%, and trades at a FY13 P/E of 18.5. The stock is a bit pricey, but the fantastic cash flow trend, and 3% interest on debt makes it a compelling consideration.

Pep Boys (PBY) is a $690 million company with 750 stores in the US. It holds only $197 million in debt and $65 million in cash. Its free cash flow situation is less compelling, with only $34 million in FY12, coming after a breakeven FY11 — that's what you get with a smaller company trying to expand its footprint. It's a bit slower growing at 14% long-term, and trades at a current year P/E of 13, so it is arguably a tiny bit undervalued. Buying here means you are betting they will win market share in a very crowded field.

Motorcar Parts of America (MPAA) is the tiniest entry at only a $208 million market cap. It's a bit more specialized, focusing more on alternators, starters and wheel hub assemblies. It also distributes only through the DIY stores. MPAA sits on $100 million in debt and $16 million in cash. It’s cash flow negative and trades at a P/E of 14 on long term growth of 15%. I'd stay away from this one, given the cash flow situation.

In conclusion, I think you want to be with AutoZone or O'Reilly here. The latter is on a stronger cash flow trend, but both appear to be slightly undervalued, and very good stocks to own.

As of this writing, Lawrence Meyers did not hold a position in any of the aforementioned securities. He is president of PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at pdlcapital66@gmail.com and follow his tweets @ichabodscranium.

Cisco: Fundamental Value

This leading maker of computer networking gear plunged in price after issuing a much weaker than expected outlook for the current quarter, observes value investor John Buckingham in The Prudent Speculator.

Interestingly, Cisco Systems (CSCO) joined the majority of companies (68.0% of the S&P 500 (SPX)), according to the latest tally from Bloomberg) that have topped estimates when it announced fiscal Q1 non-GAAP EPS of $0.53, versus forecasts of $0.51.

Cisco's Q1 revenue of $12.1 billion did come in light of projections, with CEO John Chambers explaining, "While our revenue growth was below our expectation, our financials are strong, our strategy is strong, and our innovation engine is executing extremely well. We remain confident in our long-term goal to be the Number One IT company in the world."

Unfortunately, Mr. Chambers went on to say that revenue in fiscal Q2 would decline by 8% to 10%, due to weakness in demand in emerging markets like China (orders off 18%), Russia (orders down 30%), and Brazil (orders dropped 25%), as well as caution from businesses in the wake of the US government shutdown.

Meanwhile, the company announced a $15 billion addition to its stock repurchase authorization, hardly an insignificant figure for a company with current market capitalization of $115 billion.

While we have trimmed our Target Price for CSCO to $32, we remain buyers of the shares, as the stock now changes hands at 11.5 times earnings, 2.0 times book value and 2.4 times sales. Those are all fundamental valuation multiples that are well below the historical averages.

True, Cisco's growth potential isn't what it used to be, but the inexpensive price tag is supported by a superb balance sheet loaded with significant net cash and investments, not to mention a dividend yield of 3.2%.

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Hot Value Companies To Own For 2014

With shares of Costco (NASDAQ:COST) trading around $114, is COST an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let�� analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Costco is engaged in the operation of membership warehouses in the United States and Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Australia, and through majority-owned subsidiaries in Taiwan and Korea. The company�� depots receive container-based shipments from manufacturers and reallocate these goods for shipment to its individual warehouses, generally in less than 24 hours. Costco�� typical warehouse format averages approximately 143,000 square feet, where many products are offered for sale in case, carton, or multiple-pack quantities only.

Earlier this quarter, Sinegal James D, who is Director at Costco, sold 8,000 shares at $115.92 per share for a total value of $927,360. The shares recently traded near $115 per share.

Hot Value Companies To Own For 2014: Schlumberger N.V.(SLB)

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

Advisors' Opinion:

• [By Alex Planes]

  Last year, CARBO made almost half of its total revenue from just two customers: Halliburton (NYSE: HAL  ) and Schlumberger (NYSE: SLB  ) . A dependence on major players can be part of the game in this energy niche, as much of the onshore drilling services industry is in fact dominated by Halliburton and Schlumberger. However, CARBO's deepwater proppant could help it diversify in a big way, provided the company can handle what are sure to be more bothersome logistics problems than already exist with its land-based delivery network. Creating more distribution hubs closer to oil fields can help CARBO reduce its transportation costs and further reduce its dependence on the big two's infrastructure.

• [By P.I.A.]

  This Libra story only involves one location out of several around the globe that are favorable to offshore drillers. Some say the industry itself is poised to outperform. The Market Vectors Oil Services ETF (OIH) could make sense to investors. The fund tracks 25 international companies, with Schlumberger Ltd (SLB) comprising 20.6% of its holdings, compared to 4.3% SDRL. Even with the heavy weighting toward SLB, diversification provides safety.

Hot Value Companies To Own For 2014: Caterpillar Inc.(CAT)

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

Advisors' Opinion:

• [By Jeremy Bowman]

  The Dow Jones Industrial Average (DJINDICES: ^DJI  ) �traded mostly mixed today as investors reacted to an ambiguous earnings season thus far, finishing the day up 0.1%. Even then, it was the worst performer among the three major indexes. Stock downgrades weighed on the blue chips, while Caterpillar (NYSE: CAT  ) shares jumped despite missing earnings estimates.

• [By Justin Loiseau]

  Although Caterpillar (NYSE: CAT  ) reported lackluster earnings last week, it's not out of the limelight yet. The company thinks its stock is cheap, and it announced a $1 billion buyback program yesterday that pushed shares up 1.2%. Shares are still down 2.9% from last Monday, but a billion dollars is a lot to bet on a bluff.

• [By Monica Gerson]

  Caterpillar (NYSE: CAT) is estimated to report its Q3 earnings at $1.67 per share on revenue of $14.32 billion.

  Airgas (NYSE: ARG) is expected to report its Q2 earnings at $1.22 per share on revenue of $1.28 billion.

• [By Dan Carroll]

  Caterpillar (NYSE: CAT  ) shares are down about 1.4% today, and like Alcoa, this is one stock that will take a hit from economic problems across the Pacific. Growing infrastructure construction once made Caterpillar's future in China look rosy, but with China's economic slowing and the country's credit crunch making lending a costly proposition, manufacturing has taken a blow. Caterpillar's not in so bad a position as Alcoa due to its retention of the top space in such a cyclical industry, but China's rash of problems will exacerbate the manufacturing sector's sluggishness and lengthen the time it takes for Caterpillar and its rivals to bounce back.

Top 10 Dividend Stocks For 2014: Dollar Tree Inc.(DLTR)

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

Advisors' Opinion:

• [By Mani]

  Dollar Tree, Inc. (NASDAQ:DLTR) is one of the companies that are set to exploit the ongoing trend of consumers' increasing focus on value with significant opportunity to grow its store base, and expand margins.

• [By Lawrence Meyers]

  The finance sector, as mentioned, can make money in many ways. The second-highest growth sector is expected to be consumer discretionary, with a 6.2% increase. When you look at earnings from luxury brands like Tiffany & Co. (TIF), and that the hotel sector continues to do very well, it suggests that those people who are in good financial shape are spending their money. Meanwhile, dollar players like Dollar Tree (DLTR) continue to perform very well, suggesting that folks with less money are spending it on cheaper items.

• [By Terri Stridsberg]

  Dollar Tree (DLTR), has had a banner 2013, gaining 45.3% year-to-date, and tagging a new record high of $59.68. Nevertheless, short interest skyrocketed by close to 398% over the most recent reporting period, and now accounts for a healthy 6.7% of the equity's available float.

Hot Value Companies To Own For 2014: Tupperware Corporation(TUP)

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

Advisors' Opinion:

• [By Monica Gerson]

  Tupperware Brands (NYSE: TUP) is expected to report its Q3 earnings at $1.03 per share on revenue of $623.34 million.

  Varian Medical Systems (NYSE: VAR) is projected to post its Q4 earnings at $1.12 per share on revenue of $779.02 million.

• [By Dan Caplinger]

  Where growth will come from
  One area that Newell Rubbermaid still has to tap fully is emerging markets. The company has done a good job of expanding overseas, with 17% annual growth in Latin America. But with barely a quarter of its sales coming from outside the U.S. and Canada, the company has a lot further to go. Storage rival Tupperware (NYSE: TUP  ) gets fully 60% of its total revenue from emerging markets, and it too has seen impressive gains in South America as well as the Asia-Pacific region.

Top 10 Companies To Own In Right Now

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) closed the day down 36 points, or 0.24%, and now sits at 15,512 while the S&P 500 and the Nasdaq also slide lower. The tech-heavy index lost 0.39% while the S&P 500 gave back 0.37% of its value during today's session. The main catalyst for the markets' decline was the disappointing pending home sales report from the National Association of Realtors. June's pending homes sales or the number of contracts signed to purchase an existing home in June declined 0.4% from May's results when the number hit a six year-high. Despite the slight decline, June's homes sales number was still more than 105 higher than were it was in June of 2012, but everyone is now concerned that May's sudden interest rate jump has scared off potential buyers and that the housing industry may see slower growth in the coming months. �

Now let's take a look at a few of today's big Dow losers.

Shares of Microsoft (NASDAQ: MSFT  ) were downgraded this morning by Atlantic Equities from overweigh to neutral. The stock fell 0.25% today on the news as the price target was also lowered from $35 per share to $33. The firm stated that structural headwinds are greater than what had previously been expected. The discounts now being offered for Windows and slow growth in the server business caused the firm to make the downgrade. Although the stock did decline more than 10% just a few weeks ago, shares are still up 18.08% year to date and that's not including the 2.9% dividend yield while the Dow is up 18.45% over the same time frame. Investors should sit tight while the future of the PC plays out and see if the company can gain any ground in the mobile arena.

Top 10 Companies To Own In Right Now: Conquest Resources Limited (CQR.V)

Conquest Resources Limited, a development stage junior exploration company, engages in the acquisition, exploration, development, and operation of mineral properties primarily in Canada. It explores for gold properties in Ontario, Canada. The company holds interest in the Alexander gold project located in the northwestern Ontario's Red Lake gold mining district. The company, through its joint venture with Detour Gold Corporation, also holds interests in the Sunday Lake property comprising 13 square kilometers of prospective mineral leases situated at Detour Lake, Ontario. In addition, it has interest in the Smith Lake Gold project located at Missanabie. The company was formerly known as Conquest Yellowknife Resources Ltd. and changed its name to Conquest Resources Limited in January 2000. Conquest Resources Limited was incorporated in 1945 and is headquartered in Toronto, Canada.

Top 10 Companies To Own In Right Now: Vecta Energy Corporation (VER.V)

Vecta Energy Corporation, a junior oil and gas company, engages in the exploration and production of petroleum and natural gas reserves in Canada. It has working interests in approximately 16,000 acres of lands in the foothills of Alberta and North east British Columbia; and approximately 20 barrels per day of oil equivalent production from the Brewster area. The company was formerly known as Kroes Energy Inc. and changed its name to Kroes Energy Inc. in June 2009. Vecta Energy Corporation is headquartered in Calgary, Canada.

Top 5 Clean Energy Stocks To Invest In 2014: Donegal Group Inc. (DGICA)

Donegal Group Inc., an insurance holding company, offers property and casualty insurance to businesses and individuals in the Mid-Atlantic, Midwestern, New England, and southern states. It operates in two segments, Personal Lines of Insurance and Commercial Lines of Insurance. The Personal Lines of Insurance segment offers private passenger automobile policies that provide protection against liability for bodily injury and property damage arising from automobile accidents, as well as protection against loss from damage to automobiles. This segment also provides homeowners policies, which offer coverage for damage to residences and their contents from fire, lightning, windstorm, and theft; and liability of the insured arising from injury to other persons. The Commercial Lines of Insurance segment offers commercial automobile policies that provide protection against liability for bodily injury and property damage arising from automobile accidents, and protection against loss from damage to automobiles owned by the insured; commercial multi-peril policies, which offer protection to businesses against various perils, primarily combining liability and physical damage coverages; and workers� compensation policies that offer benefits to employees for injuries sustained during employment. The company markets its insurance products through a network of approximately 2,500 independent insurance agencies. Donegal Group Inc. was founded in 1986 and is headquartered in Marietta, Pennsylvania.

Top 10 Companies To Own In Right Now: Sina Corporation(SINA)

SINA Corporation provides online media and mobile value-added services (MVAS) in the People?s Republic of China. It provides advertising, non-advertising, and free services through SINA.com, Weibo.com, and SINA Mobile. SINA.com offers free interest-based channels that provide region-focused format and content, including news, sports, automobile-related news, finance, entertainment, luxury, technology, digital, tools, collectibles, video, music, and wireless application protocol, as well as interactive platform for fashion-conscious users to share comments and ideas on a range of topics, such as health, cosmetics, and beauty. The company's microblogging platform, Weibo.com, enables its users to follow the hottest topics being discussed online, as well as discussions related to people they know. Weibo accounts consist of celebrities, commercial enterprises, government entities, and grass root Internet users. Its SINA Mobile service allows users to receive news and informatio n, download ring tones, mobile games and pictures, and participate in dating and friendship communities. The company also offers SINA Game, which serves as an interactive platform that provides users with downloads and gateway access to popular online games; SINA eReading, a shop for book reviews; SINA.net, an enterprise solutions platform to assist businesses and government bodies; and SINA Mall, an online shopping Website. In addition, it provides a platform for Chinese bloggers; photo-sharing platform; free email, VIP mail, and corporate email for enterprise users; audio and video-based instant messaging tools; proprietary search technology; and classified advertising services, as well as hosts topic-specific discussion forums in Chinese language; and creates user-maintained and supported online communities. The company has strategic cooperation agreement with China Unicom (Hong Kong) Limited. SINA Corporation was founded in 1997 and is headquartered in Shanghai, the Peop le?s Republic of China.

Advisors' Opinion:

• [By Kevin Chen]

  While the media continues to call SINA� (NASDAQ: SINA  ) Weibo China's main Twitter-like service, saying it doesn't make it so. Digging deeper into the numbers and looking at the broader social networking market, it seems like SINA stock will continue its two-year-and-counting decline.

• [By Kevin Chen]

  Even when foreign companies like Yahoo!�have been forthcoming in self-censoring themselves, Beijing seems to put up obstacles to favor its domestic companies like SINA� (NASDAQ: SINA  ) , which ultimate profit.

Top 10 Companies To Own In Right Now: Wee Hur Holdings Ltd. (E3B.SI)

Wee Hur Holdings Ltd., an investment holding company, engages in the construction and property development businesses in Singapore. The company offers various construction services, including new construction, additions and alterations of existing buildings, refurbishment and upgrading of existing buildings, and restoration and conservation of heritage buildings to customers. Its projects comprise residential projects, such as condominiums, apartment buildings, landed housing, and public housing; commercial projects, which include office buildings, hotels and shopping complexes; institutional projects comprising schools, tertiary institutions, community clubs, and hospitals; industrial projects consisting of factories and warehouses; religious buildings that include churches and temples; and heritage and conservation buildings. The company is also involved in the property investment and property development activities, such as property related investments, the holding of i nvestments in property related assets, and trading in and the development of property. In addition, it engages in the construction and sale of residential and commercial properties. The company was founded in 1980 and is based in Singapore.

Top 10 Companies To Own In Right Now: Sprint Nextel Corp (S.C)

Sprint Nextel Corporation (Sprint), incorporated on November 15, 1938, is a holding company, with its operations primarily conducted by its subsidiaries. The Company operates in two segments: Wireless and Wireline. Sprint is a communications company offering a range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. Its operations are organized to meet the needs of its targeted subscriber groups through focused communications solutions that incorporate the capabilities of its wireless and wireline services. Its services are provided through its ownership of extensive wireless networks, an all-digital global long distance network. The Company offers wireless and wireline voice and data transmission services to subscribers in all 50 states, Puerto Rico, and the United States Virgin Islands under the Sprint corporate brand, which includes its retail brands of Sprint, Nextel, Boost Mobile, Virgin Mobile, and Assurance Wireless on networks that utilize third generation (3G) code division multiple access (CDMA), integrated Digital Enhanced Network (iDEN), or Internet protocol (IP) technologies. The Company also offers fourth generation (4G) services utilizing Worldwide Interoperability for Microwave Access (WiMAX) technology through its mobile virtual network operator (MVNO) wholesale relationship with Clearwire Corporation and its subsidiary Clearwire Communications LLC (together Clearwire) and, in October 2011, it announced its focus to deploy Long Term Evolution (LTE) technology as part of its network modernization plan, Network Vision. As of October 19, 2012, the Company controls 50.8% interest in Clearwire Corp.

Wireless

The Company offers wireless services on a postpaid and prepaid payment basis to retail subscribers and also on a wholesale and affiliate basis, which includes the sale of wireless services that utilize the Sprint network but are sold under! the wholesaler's brand. The Company supports the open development of applications, content, and devices on its network platforms through products and services, such as Google Voice, which allows for functionality, such as one phone number for all devices (home, wireless and office), routing calls between devices, and in-call options to switch between devices during a call and Google Wallet, which provides the ability to store loyalty, gift and credit cards, and to tap and pay while the customer shop using their wireless device. The Company has also launched multiple Sprint ID packs that download applications, widgets and other content related to a person's interest at the push of a button. In addition, it enables a variety of business and consumer third-party relationships, through its portfolio of machine-to-machine solutions, which it offers on a retail postpaid and wholesale basis. Its machine-to-machine solutions portfolio provides a secure, real-time and reliable wireless two-way data connection across a range of connected devices, including original equipment manufacturer (OEM) devices and after-market in-vehicle connectivity and electric vehicle charging stations, point-of-sale systems, kiosks and vending machines, asset tracking, digital signage, security, smartgrid utilities, medical equipment and a variety of other consumer electronics and appliances.

The Company offers price plans tailored to business subscribers, such as Business Advantage, which allows for the mix and match plans that include voice, voice and messaging, or voice, messaging and data to meet individual business needs and which also includes its Any Mobile Anytime feature with certain plans. Its prepaid portfolio includes multiple brands, each designed to appeal to specific subscriber segments. Virgin Mobile serves subscribers who are device and data-oriented with Beyond Talk plans and its broadband plan, Broadband2Go, that offer subscribers control and connectivity through various communication vehicles. Assuran! ce Wirele! ss provides eligible subscribers, who meet income requirements or are receiving government assistance, with a free wireless phone and 250 free minutes of local and long distance monthly service. Wireless data communications services include mobile productivity applications, such as Internet access, messaging and email services; wireless photo and video offerings; location-based capabilities, including asset and fleet management, dispatch services and navigation tools, and mobile entertainment applications, including the ability to view live television, listen to satellite radio, download and listen to music, and game play with full-color graphics and polyphonic and real-music sounds from a wireless handset.

Wireless voice communications services include basic local and long distance wireless voice services throughout the United States, as well as voicemail, call waiting, three-way calling, caller identification, directory assistance and call forwarding. It also provides voice and data services to areas in numerous countries outside of the United States through roaming arrangements. It offers customized design, development, implementation and support for wireless services provided to companies and government agencies. Its services are provided using a variety of multi-functional devices, including smartphones, mobile broadband devices, such as air cards and hotspots, and embedded tablets and laptops manufactured by various suppliers for use with its voice and data services. It sells accessories, such as carrying cases, hands-free devices, batteries, battery chargers and other items to subscribers, and it sells devices and accessories to agents and other third-party distributors for resale.

The Company delivers wireless services to subscribers primarily through its existing networks or as a reseller of 4G services through its MVNO wholesale relationship with Clearwire. Its Sprint platform, an all-digital wireless network with spectrum licenses that allows the Company to provide! service ! in all 50 states, Puerto Rico and the United States Virgin Islands, uses a single frequency band and a digital spread-spectrum wireless technology, code division multiple access (CDMA), that allows a number of users to access the band by assigning a code to all voice and data bits, sending a scrambled transmission of the encoded bits over the air and reassembling the voice and data into its original format. It provides nationwide service through a combination of operating its own digital network in United States metropolitan areas and rural connecting routes, affiliations under commercial arrangements with third-party affiliates (Affiliates) and roaming on other providers' networks.

The Company markets its postpaid services under the Sprint and Nextel brands. It offers these services on a contract basis typically for one or two-year periods, with services billed on a monthly basis according to the applicable pricing plan. As it deploy Network Vision, it will continue to focus on the Sprint platform postpaid subscriber base, including the migration of existing Nextel platform subscribers to other offerings on its Sprint platform, which includes future offerings on its multi-mode network, such as Sprint Direct Connect. It markets its prepaid services under the Boost Mobile, Virgin Mobile, and Assurance Wireless brands as a means to provide value-driven prepaid service plans to particular markets. Its wholesale customers are resellers of its wireless services rather than end-use subscribers and market their products and services using their brands.

The Company competes with AT&T, Verizon Wireless (Verizon), T-Mobile, Metro PCS Communications, Inc., Leap Wireless International, Inc. and TracFone Wireless.

Wireline

The Company provides a suite of wireline voice and data communications services to other communications companies and targeted business and consumer subscribers. In addition, it provides voice, data and IP communication services to its Wireles! s segment! , and IP and other services to cable Multiple System Operators (MSOs). Cable MSOs resell its local and long distance services and use its back office systems and network assets in support of their telephone service provided over cable facilities primarily to residential end-user subscribers. The Company is a provider of long distance services and operate all-digital global long distance and Tier 1 IP networks.

The Company�� services and products include domestic and international data communications using various protocols such as multiprotocol label switching technologies (MPLS), IP, managed network services, Voice over Internet Protocol (VoIP), Session Initiated Protocol (SIP) and traditional voice services. Its IP services can also be combined with wireless services. Such services include its Sprint Mobile Integration service, which enables a wireless handset to operate as part of a subscriber's wireline voice network, and its DataLinkSM service, which uses its wireless networks to connect a subscriber location into their primarily wireline wide-area IP/MPLS data network.

The Company also provides wholesale voice local and long distance services to cable MSOs, which they offer as part of their bundled service offerings, as well as traditional voice and data services for their enterprise use. The Company also continues to provide voice services to residential consumers. Its Wireline segment markets and sells its services primarily through direct sales representatives. It offers VoIP-based services to business subscribers and transport VoIP-originated traffic for various cable companies.

The Company competes with AT&T, Verizon Communications, CenturyLink and Level 3 Communications, Inc.

Top 10 Companies To Own In Right Now: Industrial Services of America Inc.(IDSA)

Industrial Services of America, Inc. engages in recycling stainless steel, ferrous, and non-ferrous scrap, as well as provides waste services. The company operates in two segments, Recycling and Waste Services. The Recycling segment collects, purchases, processes, and sells stainless steel, and ferrous and non-ferrous scrap metal to steel mini-mills, integrated steel makers, foundries, and refineries. It purchases ferrous and non-ferrous scrap metals from industrial and commercial generators of steel, iron, aluminum, copper, stainless steel, and other metals, as well as from scrap dealers and retail customers who deliver these materials directly to the company?s facilities. This segment also processes scrap metal through its sorting, shearing, shredding, cutting, and baling operations. In addition, it purchases, processes, and sells stainless steel, nickel-based, and high-temperature alloys. Further, this segment?s scrap recycling operations consist of collecting, sortin g, and processing various grades of copper, aluminum, and brass. The Waste Services segment provides waste management services, including contract negotiations with service providers, centralized billing, invoice auditing, and centralized dispatching. It also rents, leases, sells, and services waste handling and recycling equipment. This segment represents contracts with retail, commercial, and industrial businesses to handle their waste disposal needs, primarily by subcontracting with commercial waste hauling and disposal companies. The company offers its services primarily in the United States and Canada. Industrial Services of America, Inc. was founded in 1953 and is headquartered in Louisville, Kentucky.

Top 10 Companies To Own In Right Now: El En(ELN.MI)

El.En S.p.A., through its subsidiaries, engages in the research, development, manufacture, distribution, and sale of laser systems in Europe and internationally. It offers laser systems for medical applications, including aesthetics, surgical, physiotherapy, dermatology, surgery, cosmetics, dentistry, and gynaecology. The company also provides laser systems for industrial applications, such as cutting, marking, and welding of metals, wood, plastic, and glass, as well as in the decoration of leather and fabric, and the conservative restoration of works of art; and systems for scientific applications and research. In addition, it offers after-sales service, including support for the installation and maintenance of its laser systems; and spare parts, consumables, and technical assistance services. The company sells its products through its subsidiaries, as well as through a network of distributors. El.En S.p.A. was founded in 1981 and is headquartered in Calenzano, Italy.

Top 10 Companies To Own In Right Now: ScanSource Inc.(SCSC)

ScanSource, Inc. engages in the wholesale distribution of specialty technology products to technology resellers and integrators in North America, Latin America, and Europe. It offers automatic identification and data capture (AIDC) and point-of-sale (POS) products, which interface with computer systems that automate the collection, processing, and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, and warehouse management. The company?s ADIC products comprise bar code printers, hand-held and fixed-mount laser scanners, mobile and wireless data collection devices, and magnetic stripe readers; and POS products include computer-based terminals, monitors, receipt printers, pole displays, cash drawers, keyboards, peripheral equipment, and fully integrated processing units. It also sells products that attach to the POS network in the store comprising kiosks, network acce ss points, routers, and digital signage displays. In addition, the company offers voice and data products, such as private branch exchanges (PBX), key systems, and telephone handsets and components for use in voice, fax, data, voice recognition, call center management, and IP communication applications; and converged communications products, including telephone and IP network interfaces, VoIP systems, PBX integration products, and carrier-class board systems-level products. Further, it provides communications solutions, including video and audio conferencing and networking products; telephony solutions, including voice over IP; and computer telephony building blocks. Additionally, the company distributes electronic security equipment, such as identification, access control, video surveillance, intrusion- related products, and wireless infrastructure products. ScanSource, Inc. was founded in 1992 and is headquartered in Greenville, South Carolina.

Top 10 Companies To Own In Right Now: Genting Singapore Plc (G13.SI)

Genting Singapore PLC, an investment holding company, engages in the development and operation of integrated resorts. It operates casinos; hotels with approximately 1500 rooms; approximately 22 beach villas; and a marine life park. The company is also involved in the provision of sales and marketing support services to leisure and hospitality related businesses; online gaming operations; and the food street business. It has operations in Europe and the Asia Pacific. The company was incorporated in 1984 and is headquartered in Singapore. Genting Singapore PLC is a subsidiary of Genting Overseas Holdings Limited.

What Is Fiscal Policy?

Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is the sister strategy to monetary policy through which a central bank influences a nation's money supply. These two policies are used in various combinations to direct a country's economic goals. Here we look at how fiscal policy works, how it must be monitored and how its implementation may affect different people in an economy.

Before the Great Depression, which lasted from Sept. 4, 1929 to the late 1930s or early 1940s, the government's approach to the economy was laissez-faire. Following World War II, it was determined that the government had to take a proactive role in the economy to regulate unemployment, business cycles, inflation and the cost of money. By using a mix of monetary and fiscal policies (depending on the political orientations and the philosophies of those in power at a particular time, one policy may dominate over another), governments are able to control economic phenomena.

How Fiscal Policy Works
Fiscal policy is based on the theories of British economist John Maynard Keynes. Also known as Keynesian economics, this theory basically states that governments can influence macroeconomic productivity levels by increasing or decreasing tax levels and public spending. This influence, in turn, curbs inflation (generally considered to be healthy when between 2-3%), increases employment and maintains a healthy value of money. Fiscal policy is very important to the economy. For example, in 2012 many worried that the fiscal cliff, a simultaneous increase in tax rates and cuts in government spending set to occur in January 2013, would send the U.S. economy back to recession. The U.S. Congress avoided this problem by passing the American Taxpayer Relief Act of 2012 on Jan. 1, 2013.

Balancing Act
The idea, however, is to find a balance between changing tax rates and public spending. For example, stimulating a stagnant economy by increasing spending or lowering taxes runs the risk of causing inflation to rise. This is because an increase in the amount of money in the economy, followed by an increase in consumer demand, can result in a decrease in the value of money - meaning that it would take more money to buy something that has not changed in value.

Let's say that an economy has slowed down. Unemployment levels are up, consumer spending is down and businesses are not making substantial profits. A government thus decides to fuel the economy's engine by decreasing taxation, which gives consumers more spending money, while increasing government spending in the form of buying services from the market (such as building roads or schools). By paying for such services, the government creates jobs and wages that are in turn pumped into the economy. Pumping money into the economy by decreasing taxation and increasing government spending is also known as "pump priming." In the meantime, overall unemployment levels will fall.

With more money in the economy and fewer taxes to pay, consumer demand for goods and services increases. This, in turn, rekindles businesses and turns the cycle around from stagnant to active.

If, however, there are no reins on this process, the increase in economic productivity can cross over a very fine line and lead to too much money in the market. This excess in supply decreases the value of money while pushing up prices (because of the increase in demand for consumer products). Hence, inflation exceeds the reasonable level.

For this reason, fine tuning the economy through fiscal policy alone can be a difficult, if not improbable, means to reach economic goals. If not closely monitored, the line between a productive economy and one that is infected by inflation can be easily blurred.

And When the Economy Needs to Be Curbed …
When inflation is too strong, the economy may need a slowdown. In such a situation, a government can use fiscal policy to increase taxes to suck money out of the economy. Fiscal policy could also dictate a decrease in government spending and thereby decrease the money in circulation. Of course, the possible negative effects of such a policy in the long run could be a sluggish economy and high unemployment levels. Nonetheless, the process continues as the government uses its fiscal policy to fine-tune spending and taxation levels, with the goal of evening out the business cycles.

Who Does Fiscal Policy Affect?
Unfortunately, the effects of any fiscal policy are not the same for everyone. Depending on the political orientations and goals of the policymakers, a tax cut could affect only the middle class, which is typically the largest economic group. In times of economic decline and rising taxation, it is this same group that may have to pay more taxes than the wealthier upper class.

Similarly, when a government decides to adjust its spending, its policy may affect only a specific group of people. A decision to build a new bridge, for example, will give work and more income to hundreds of construction workers. A decision to spend money on building a new space shuttle, on the other hand, benefits only a small, specialized pool of experts, which would not do much to increase aggregate employment levels.

The Bottom Line
One of the biggest obstacles facing policymakers is deciding how much involvement the government should have in the economy. Indeed, there have been various degrees of interference by the government over the years. But for the most part, it is accepted that a degree of government involvement is necessary to sustain a vibrant economy, on which the economic well-being of the population depends.

Benzinga Weekly Preview: US Government Shutdown Looks Set To Continue

After four days with no resolution in sight, Democrats and Republicans in Washington are still locked in a heated debate over the terms of a negotiation that will restart Federal government operations.

The fact that congress can't make any progress on an emergency spending bill doesn't bode well for upcoming negotiations about the US debt ceiling, which, if not resolved, would cause an unprecedented sovereign debt default.

Key Earnings Reports

Next week investors will be waiting for several key earnings reports including Lindsay Corporation (NYSE: LNN),RPM International Inc. (NYSE: RPM), ADTRAN, Inc. (NASDAQ: ADTN), and Del Frisco's Restaurant Group, Inc (NASDAQ: DFRG)

Lindsay Corporation

Lindsay Corporation is expected to report fourth quarter EPS of $0.91 on revenue of $155.69 million, compared to last year's EPS of $0.68 on revenue of $127.82 million.

The analyst team at Piper Jaffray gave Lindsay Corporation a Neutral rating with an $89.00 price target. In a report on October 4th, Piper Jaffray cited Ukraine's decision to install irrigation as a possible opportunity for Lindsay, but ultimately believed that the company's shares are fairly priced.

"This week, Ukraine's Ag Minister announced plans to borrow $3 billion from China to install irrigation to bolster the country's grain production. This move continues the recent agricultural collaboration between the two countries. Of the $3bil outlay, half is expected to be spent on irrigation equipment commencing in 2014 - which presents a large market opportunity for Lindsay and its competitors in the region. Next year, Lindsay will also benefit from the Golden Gate Bridge movable barrier project and the accretion from the Claude Laval acquisition. When combining these factors with surprisingly stable commentary from U.S. irrigation dealers about demand and orders, we believe that 2014 earnings are likely to hold up reasonably well considering the sharp decline in grain prices."

The team at Wedbush took a similar stance and gave Lindsay a Neutral rating as well with a price target of $80.00. Wedbush noted the role that weather conditions have played in the past year and said that improving weather conditions could increase demand as well.

"Weather plays a significant factor on crop prices and the demand for center pivot irrigation and severe droughts or floods can impact crop planting, production, and crop prices. All of these can impact net farm income, which ultimately drives demand for center pivot irrigation. Drought conditions drove a spike in corn prices this year; and a reversal in recent trends could put downward pressure on expectations for farm income and LNN shares. Meanwhile, recent drought conditions had a meaningful impact on the quarter and may overstate demand, in effect borrowing sales from future periods. If weather conditions improve, future demand may also decrease. "

RPM International Inc.

RPM International Inc is expected to report first quarter EPS of $0.71 on revenue of $1.13 billion, compared to last year's EPS of $0.64 on revenue of $1.05 billion.

On October 3rd, Morgan Stanley gave RPM an Overweight rating with a price target of $39.00. Morgan Stanley noted that its optimistic outlook for RPM was partially attributed to the NeverWet product's success.

"We are raising our estimate for the F1Q14 quarter ended August 31 from $0.67 to $0.69, compared to consensus $0.71. Our estimate includes an assumption for 12% organic growth in the Consumer segment – while this may appear optimistic, we feel comfortable with the assumption, given that the NeverWet product launch alone (which began at the beginning of the quarter) could have added between 2-7% of growth to the segment. This represents the largest upside risk to the quarter, in our view"

In mid-September, Piper Jaffray also gave the stock an Overweight rating, but with a $43.00 price target. Piper Jaffray based its  rating on a consumer survey which indicated that consumers were planning to spend more on future progress.

"We maintain our Overweight rating and $43 price target on shares of RPM following an analysis of responses in our most recent consumer survey. Consistent with previously collected sentiment data, the consumers we surveyed indicated that they intend to spend more in the future on projects than they had over the past 12 months (slightly under half of respondents have plans to remodel, versus 35% having engaged in are modeling project in the past 12 months). Importantly, we believe that the willingness on behalf of consumers to take on larger-ticket projects (notably kitchens & bathrooms) is increasing. We view both the inclination to start remodeling projects as well as the potential for larger projects as positives for RPM, and both support the assumptions embedded in our model."

ADTRAN, Inc.

ADTRAN is expected to report third quarter EPS of $0.11 on revenue of $175.10 million, compared to last year's EPS of $0.15 on revenue of $162.12 million.

Goldman Sachs gave ADTRAN a Buy rating with a 12 month price target of $30.00, citing a stronger tier-1 carrier spending environment and strong earnings results from Ciena and Finisar.

"After several years of access equipment under-investment, we believe larger global carriers are beginning a multi-year investment cycle catalyzed by faster broadband speeds required to compete with Google Fiber and DOCSIS 3.0. We view Adtran as best positioned to capitalize on this trend, given its exposure to global tier-1 carriers, including large wins at AT&T and Deutsche Telecom. We also think Adtran is positioned to gain market share among tier-2/3 North American carriers and should benefit from a positive inflection in gross margins. In contrast, our Sell-rating for Calix is driven by 1) normalizing tier-3 spending following the 2013 recovery, with tier-3 carriers driving 50-60% of Calix's sales, 2) declining tier-2 capex and potential share loss to Adtran, and 3) a wind down of Broadband Stimulus (BBS) revenues into 2015."

On October 4th, Merrill Lynch gave ADTRAN an Underperform rating with a $19.00 price objective. The firm took more conservative stance, saying that the company's share price accounts for optimistically high growth.

"We believe FY14 is shaping up as a strong year for Adtran, driven by DT, a $200mn opportunity over 3 years, and the start of the ramp at AT&T (through Ericsson), which could be more meaningful than DT spanning over several years. While FY14/15 consensus revs of $719mn/$777mn have been revised up by 7%/15% vs. 6 months ago, we believe both have yet to reflect the full benefits from both opportunities, which could support the stock in the intermediate term. That said, we maintain our Underperform rating as we believe current valuation implies a bull case scenario for peak cycle EPS of ~$2.50 (refer to Table 1), which we view as optimistic as we see a return to normal GM level of mid 50s, as unlikely given competitive pressures. We believe a best case scenario for GM long term is the high 40s, hence peak cycle EPS for Adtran would be 15-20% below what the bull case is implying in the current share price."

Del Frisco's Restaurant Group, Inc

Del Frisco's is expected to report EPS of $0.11 on revenue of $55.07 million, compared to last year's EPS of $0.10 on revenue of $47.89 million.

Piper Jaffray gave Del Frisco's an Overweight rating with a price target of $23.00 in mid-September. The firm cited favorable pricing of prime beef products for its optimistic rating.

"Through August we are encouraged by relatively favorable levels of prime beef pricing which was down approximately 18% on a YTD YoY basis. We recognize that these favorable prices are more so being driven by relatively favorable YoY comparisons as we lap the high prices of 1H12 vs. true beef price deflation. Pricing favorability on choice cuts has lagged to date vs. prime but could catch up as we start to lap the higher prices experienced in 2H12. As we look to CY14, increasingly favorable pricing outlooks for grains lead us to believe that beef prices should be relatively manageable. We believe Del Frisco's remains well-positioned to handle this cost environment given its strong operational focus at the restaurant-level and its natural hedging capability vis-a-vis its portfolio of restaurants. We maintain our Overweight rating and $23 price target on DFRG shares (based on 21x our FY14E EPS)."

Also in mid-September, Deutsche Bank gave Del Frisco's a Buy rating with a $24.00 price target. Although the firm noted sluggish industry sales trends, it maintained its Buy rating for Del Frisco's for three reasons:

"1) new stores, which are a key driver of the story, continue to open well, and DFRG remains one of the few restaurant cos. with multi-yr. visibility on double-digit annual unit growth. 2) 3Q is the least important qtr. of the yr., representing ~20% of annual revs. and ~10% of annual EPS. 3) the combination of easing compares (incl. lapping Hurricane Sandy) and a 1-2% planned menu price increase (likely in early Oct.) provide support to the 4Q SSS outlook. Maintain Buy & $24 PT."

Economic Releases

If the US government shutdown persists and economic data is again delayed, markets will likely respond negatively as a full picture of the US' economic health won't be available. An agreement on an emergency spending bill will ease some of the worries, however the deadline for the US budget ceiling is also quickly approaching.

The Bank of England will hold its policy meeting next week where it is seen maintaining interest rates and using forward guidance to manage expectations.

Daily Schedule

Monday

Earnings Releases Expected: Tower Group, Inc. (NASDAQ: TWGP) Economic Releases Expected: Japanese leading economic index and trade balance, eurozone investor confidence, New Zealand business confidence, British housing price balance, US consumer credit change

Tuesday

Earnings Expected From: No notable economic releases expected Economic Releases Expected: Chinese Services PMI, German trade balance and factory orders, Canadian housing starts, US trade balance, Bank of Japan policy meeting minutes

Wednesday

Earnings Expected From: RPM International Inc. (NYSE: RPM), Ruby Tuesday, Inc. (NYSE: RT), ADTRAN, Inc. (NASDAQ: ADTN), Del Frisco's Restaurant (NASDAQ: DFRG) Economic Releases Expected: Chinese new loans, British industrial and manufacturing production and trade balance, British GDP estimate

Thursday

Earnings Expected From: Lindsay Corporation (NYSE: LNN), Emmis Communications Corporation (NASDAQ: EMMS), API Technologies Corp. (NASDAQ: ATNY) Economic Releases Expected: Australian unemployment rate, Japanese consumer confidence, French industrial output, Italian industrial output, Bank of England interest rate decision, US initial and continuing jobless claims

Friday

Earnings Expected From: No notable earnings expected Economic Releases Expected: eurozone CPI, US nonfarm payrolls, business inventories and retail sales

Posted-In: Bank Of England Barack Obama US CongressNews Eurozone Commodities Previews Global Econ #s Federal Reserve After-Hours Center Markets Trading Ideas Best of Benzinga

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

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5 Big Trades to Take for a Fed Taper

BALTIMORE (Stockpickr) -- Here we go again. The latest round of Fed minutes revealed that a QE taper might be in the works, kicking speculation into full gear again and posting moderate losses for all three major indices yesterday.
P/>>>Profit From 5 Trades Warren Buffett Made

If the Fed starts shutting off the faucet, it puts the stock rally at risk -- or at least that's what investors are worrying about.

But what else is new? There's constantly been some big black cloud grabbing the market headlines all year long. But from a technical standpoint, this rally isn't showing any signs of slowing just yet. Focusing on high-probability trades is still the key to wringing out gains in the final quarter of the year, taper or not.

Today, I'll show you a closer technical look at five of them.

If you're new to technical analysis, here's the executive summary.

Technicals are a study of the market itself. Since the market is ultimately the only mechanism that determines a stock's price, technical analysis is a valuable tool even in the roughest of trading conditions. Technical charts are used every day by proprietary trading floors, Wall Street's biggest financial firms, and individual investors to get an edge on the market. And research shows that skilled technical traders can bank gains as much as 90% of the time.

Every week, I take an in-depth look at big names that are telling important technical stories. Here's this week's look at five high-volume stocks to trade this week.

Polaris Industries

Shareholders in Polaris Industries (PII) are having a stellar year in 2013; shares of the $9 billion ATV manufacturer are up more than 55% since the calendar flipped over to January. But even if you missed the move, you shouldn't ignore this stock. PII looks like it's still got higher ground ahead of it.

That's because Polaris is currently forming an ascending triangle pattern, a bullish price setup that's formed by a horizontal resistance level above shares at $137 and uptrending support to the downside. Basically, as PII bounces in between those two technical levels, it's getting squeezed closer and closer to a breakout above $137. When that happens, we've got a buy signal in shares.

Berkshire is currently forming a descending triangle pattern, the bearish opposite of the ascending triangle in PII. The descending triangle is formed by downtrending resistance pushing down from above shares and horizontal support to the downside, in this case at $111. A breakdown through $111 is Berkshire's sell signal.

A parabolic drop in relative strength since June indicates that Berkshire has been woefully underperforming the S&P 500 in recent months -- you can see it from the stock's inability to make new highs in November. Buyers look anemic here, but failure to catch a bid at $111 is the start of something bigger.

Don't sell unless Warren Buffett's baby unless shares fall through that price floor.

Hospira

Pharmaceutical firm Hospira (HSP) hasn't done much since July; shares have been trading sideways for months now. But even though Hospira hasn't really participated in the recent rally, there's still a trade to be made here.

Hospira is currently forming a rectangle pattern, a price setup that's formed by a horizontal resistance level above shares at $42 and another horizontal support level down at $38.50. The rectangle gets its name because it essentially "boxes in" shares. The high-probability trade comes when HSP exits its channel -- a move through $42 is a buy signal, whereas a drop below $38.50 is a signal to sell.

Whenever you're looking at any technical price pattern, it's critical to think in terms of those buyers and sellers. Rectangles, triangles, and other pattern names are a good quick way to explain what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.

That $42 resistance level, for example, is a price where there has been an excess of supply of shares; in other words, it's a place where sellers have been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above it so significant -- the move means that buyers are finally strong enough to absorb all of the excess supply above that price level.

Sit on the sidelines until HSP breaks outside of the rectangle.

BHP Billiton

You don't have to be an expert technical analyst to figure out what's going on in shares of mining and petroleum giant BHP Billiton (BHP) -- the setup in the $112 billion stock is about as basic as it gets. BHP has been bouncing higher in an uptrend since July, hitting a floor on a trendline support level all the way up to today's close.

The channel in BHP is important because it provides us with a high-probability range for shares to stay within both on the upside and the downside. More important, trendline support has halted shares' pullbacks perfectly on the last four touches of the level – now we're hitting touch number-five.

A bounce in today's session is the buy signal in BHP.

Buying off a support bounce makes sense for two big reasons: It's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, we're ensuring the BHP Billiton can actually still catch a bid along that line.

Keep a tight stop in place under the channel if you decide to buy here.

IBM

At first glance the price action in IBM (IBM) looks like it's the opposite of the uptrending channel in BHP -- but a small divergence makes a world of difference for anyone who owns IBM right now. Sure, IBM is trending lower, but its trendlines are converging, indicating that buyers on the downside are halting the selling more quickly in this stock.

The setup in IBM is called a falling wedge, and it's a reversal trade. This pattern has historically been a significant setup to watch – one study puts the falling wedge's ability to spot a reversal at more than 90%. The buy signal comes on a breakout above resistance, a level that IBM is currently testing. Don't be early on this trade -- obviously, IBM could fall materially further and remain within the wedge before a breakout does happen.

When and if shares break above resistance, I'd recommend keeping a protective stop on the other side of IBM's 50-day moving average.

To see this week's trades in action, check out this week's Must-See Charts portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

Now Is The Time To Buy Consumer Staples Stocks

As the overall market has swooned during the last few years, even dull sectors have gotten swept up in the in the gains. That's included the boring makers of razor blades, shampoo and mac-n-cheese. Consumer staple stocks have spent much of the year following the market higher- with the Consumer Staples Select Sector SPDR (NYSE:XLP) posting an impressive 22.89% year-to-date.

That sort of high flying return has some market pundits questioning whether or not the normal staid sector has gone up too much and even prompted fears of pending staples crash.

However, historical data is pointing to a number of reasons to be still bullish on those firms that make the daily items will all need. For investors, it may be too soon to give up on consumer staples.

Still Value Left

Companies like industry stalwart Procter & Gamble (NYSE:PG) that produce food, juice and soap may not be exciting, but they tend to be very predictable. Their non-cyclical nature makes them perfect additions for a portfolio looking for shelter. They also tend to have hefty cash flows and dividends. All of these factors could help explain why the consumer staples have become popular investments over the last few years.

However, popularity does have its drawbacks.

As many income seeking and older investors sought the relative safety of the staples, valuations for the group have been pushed upwards to what some analysts have called "bubble-like." At one point, the several stocks in the sector– such as spice maker McCormick (NYSE:MKC) –were trading at 22 times forward earnings an unheard of multiple for the sleepy sector.

Yet, after a recent pullback, the purveyors of toilet paper and cheese could be ripe for the picking.

According to a recent report by investment manager Fidelity, the price to earnings (P/E) ratio for consumer staples stocks was at 16.8 at the end of the third quarter. That's basically in-line with its long-term average. Nonetheless, when Fidelity compared thi! s appraisal to the S&P 500, the found that consumer staple stocks were only 6% more expensive than the overall market. That's below the historical 10% premium that they normally trade at. Secondly, staples stocks are trading at less-than historical norms relative to their high-flying consumer discretionary twins.

Adding this reversion to the mean to the sectors 2 to 3% earnings growth this year and Fidelity reckons that staples stocks could outperform well into 2014.

Making A Play For The Staples

Given the recent pull-back and the chance to outperform, investors may want to load up on the makers of toothpaste and the like. Aside from the previous mentioned XLP, a great choice could be the Vanguard Consumer Staples ETF (NYSE:VDC). The exchange traded fund tracks 111 different staples firms including Colgate-Palmolive (NYSE:CL). The fund is one of the cheapest options for investors as well. Expenses run just 0.14%. However, the funds underlying index does play a bit "loose" with the staples and includes some retail exposure Kroger (NYSE:KR). Another option could be iShares US Consumer Goods (NYSE:IYK) which strictly focuses on goods producers.

Another option could be individual staples stocks.

The beverage makers could be poised for outperformance in the months ahead. Coca-Cola (NYSE:KO) has declined about 15% since hitting its recent highs. Yet, new growth initiatives in developed nations- such as sports drinks and water beverages- as well as emerging markets newfound thirst for soda should help propel earnings forward. Meanwhile that decline has pushed shares below historically measures. KO can be had for a forward P/E of just 18 and 2.8% dividend. Likewise, smaller rival Dr. Pepper Snapple Group (NYSE:DPS) can be had for P/E of 15 and 3.1% yield. Both could great picks given their dividend strength and recent weakness.

Another great option could be Kimberly-Clark (NYSE:KMB). The company operates in the boring business of toilet paper and paper towels. And it's about to get even more boring. Kimberly recent announced that it is has plans to spin-off its healthcare business- which makes products such as sterile wraps, surgical face masks and catheters- as a standalone company. That business has been a volatile contributor to earnings and the spin-off should "smooth-ou! t" returns at KMB. This will ultimately lead to higher returns for shareholders.(L6)

The Bottom Line

As the markets have swooned, so have many boring sectors. That includes consumer staples stocks. Still, the sector could still be a value based on historical data. Investors may not want to abandon the producers of pickles, dish soap and cigarettes just yet.

Disclosure - At the time of writing, the author did not own shares of any company mentioned in this article.

Eurodollar contracts suggest rate hike a ways off

Best Small Cap Stocks To Watch For 2014

NEW YORK (MarketWatch) -- Even as equities and Treasurys sold off following the Federal Reserve's meeting minutes Wednesday, eurodollar futures contracts suggested that investors were not expecting a hike to the central bank's short-term interest rate any time soon. Certain eurodollar futures contracts held at record highs for those contracts after the Fed's minutes suggested the central bank was considering ways to scale back its bond-buying program. The contracts, which trade based on the projected path of the Fed's short-term policy rate, have priced in expectations in recent sessions that the central bank will keep interest rates low for the foreseeable future as the economic recovery gathers steam. The June 2015 contract (EDM5) has an implied fed funds rate of 0.56%. The rate, which moves inversely to price, is at its lowest on record, which goes back to 2005, according to FactSet. The March 2015 contract (EDH5) has an implied rate of 0.46%, while the December 2014 contract (EDZ4) has an implied rate of 0.36%, both the lowest on record.

Pentagon Awards $5.3 Billion "SeaPort Enhanced" Defense Contract

The Department of Defense announced $5.71 billion worth of new defense contracts Tuesday in the form of 10 separate contracts, but these contracts were not all created equal.

By far the largest contract of the day was a massive $5.3 billion indefinite-delivery/indefinite-quantity, multiple-award contract issued to a mind-boggling 914 separate recipients simultaneously. Winners included everyone from subsidiaries of brand-name defense contractors such as AAR Corp (NYSE: AIR  ) and SAIC (NYSE: SAI  ) to lesser-known, federally defined small businesses such as "Wakelight Technologies" of Honolulu and "Electromagnetic Compatibility Management Concepts" of Sterling, Va.

The contract permits each of these companies to compete for the right to fulfill task orders for the U.S. Navy's Naval Sea Systems Command, Naval Air Systems Command, Space and Naval Warfare Systems Command, Naval Supply Systems Command, Military Sealift Command, Naval Facilities Command, Strategic Systems Programs, Office of Naval Research, and also the U.S. Marine Corps.

As the Pentagon explained: "The 22 functional service areas within the scope of the contracts include: 1) research and development support, 2) engineering system engineering and process engineering support, 3) modeling, simulation, stimulation and analysis support, 4) prototyping, pre-production, model-making and fabric support, 5) system design documentation and technical data support, 6) software engineering, development, programming and network support, 7) reliability, maintainability and availability support, 8) human factors, performance and usability engineering support, 9) system safety engineering support, 10) configuration management support, 11) quality assurance support, 12) information system development, information assurance and information technology support, 13) ship inactivation and disposal support, 14) interoperability, test and evaluation, trials support, 15) measurement facilities, range and instrumentation support, 16) acquisition logistics support, 17) supply and provisioning support, 18) training support, 19) in-service engineering, fleet introduction, installation and checkout support, 20) program support, 21) functional and administrative support, and 22) public affairs and multimedia support."

All of these services are being awarded under the so-called SeaPort Enhanced (SeaPort-e) acquisition program. 2,838 contracts have already been awarded under this program. The government anticipates spending $5.3 billion -- annually -- on orders under this new contract. Each contract awarded will come with a base five-month period for performance, to be followed by potentially, a single five-year optional period.

Does Samsung Really Have an Edge Over Apple in Smartphones?

It wouldn't be a stretch to say that Apple (NASDAQ: AAPL  )  and Korean tech giant Samsung  (NASDAQOTH: SSNLF  ) don't exactly have the warmest of relationships.

Even as Apple still relies on Samsung to make some of the components for its smartphones and tablets, the two companies are also battling it out in the courtrooms of virtually every major economy around the world.

For some time now, Samsung has held the crown as the world's largest smartphone maker. Samsung shipped over 300 million smartphones last year, versus 150 million for Apple in its recently completed fiscal year for 2013.

However, many of Samsung's smartphone sales come from the cheap Android-based devices that are exploding in popularity in emerging markets today. As it turns out, only a fraction of Samsung's total smartphone sales actually come from the same high-end, high-margin devices that Apple actually competes with.

Hot Blue Chip Stocks To Watch Right Now

Investors should note this important distinction. In this video, Fool contributor Andrew Tonner compares and contrasts the difference between Apple's and Samsung's strategies, and discusses why Samsung's smartphone lead might not be as valuable as you might think.

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Top 5 Insurance Companies To Buy Right Now

One of the benefits of attending the Berkshire Hathaway (NYSE: BRK-B  ) shareholders' meeting is learning from the great value investors and Buffettologists who also make the yearly trek to Omaha. In this multipart series, Fool analyst Rex Moore speaks with Lawrence Cunningham, author of The Essays of Warren Buffett: Lessons for Corporate America. The book offers a unique approach by arranging all of Buffett's shareholder letters thematically, rather than chronologically.

Today, Professor Cunningham explains why this thematic approach allows readers to see how Buffett's enduring principles apply in good times and bad.

What about the stock?
Thanks to the savvy of investing legend Warren Buffett, Berkshire Hathaway's book value per share has grown a mind-blowing 586,817% over the past 48 years. But with Buffett aging and Berkshire rapidly evolving, is this insurance conglomerate still a buy today? In The Motley Fool's premium report on the company, Berkshire expert Joe Magyer provides investors with key reasons to buy as well as important risks to watch out for. Click here now for instant access to Joe's take on Berkshire!

Top 5 Insurance Companies To Buy Right Now: Fairfax Financial Holdings Ltd (FRFHF.PK)

Fairfax Financial Holdings Limited (Fairfax) is a financial services holding company. The Company, through its subsidiaries, is principally engaged in property and casualty insurance and reinsurance and the associated investment management. The Company�� segments consist of Insurance, Reinsurance, Insurance and Reinsurance Other, Runoff, and Corporate and Other. On December 22, 2011, the Company completed the acquisition of 75% interests in Sporting Life Inc. On August 16, 2011, the Company acquired William Ashley China Corporation. On March 24, 2011, an indirect wholly owned subsidiary of Fairfax completed the acquisition of The Pacific Insurance Berhad. On February 9, 2011, an indirect wholly owned subsidiary of Fairfax completed the acquisition of First Mercury Financial Corporation. In October 2012, its RiverStone runoff subsidiary acquired all the outstanding shares of Brit Insurance Limited.

Advisors' Opinion:

• [By Infinity Group]

  With 515 million shares outstanding, this equates to 33% of all shares being shorted. It should also be noted that Prem Watsa's Fairfax Financial Holdings (FRFHF.PK) is holding 51.8 million BlackBerry shares. Prem Watsa stated at the annual FairFax shareholders meeting that Fairfax is holding a long position with BlackBerry and anticipates shareholder value increasing over the next 2-3 years. The cost basis for FairFax financial holdings is approximately $17 per BlackBerry share.

• [By Alex Jordon]

  There's talk that Prem Watsa, head of Fairfax Financial Holdings (FRFHF.PK), could possibly be involved in a privatization bid for the company. Consider:

Top 5 Insurance Companies To Buy Right Now: Prudential Financial Inc (PRH)

Prudential Financial, Inc. (Prudential Financial) is a financial services company. Prudential Financial has operations in the United States, Asia, Europe and Latin America. Through its subsidiaries and affiliates, the Company offers an array of financial products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. It offers these products and services to individual and institutional customers through proprietary and third party distribution networks. Prudential Financial has two businesses: the Financial Services Businesses and the Closed Block Business. The Financial Services Businesses consists of its United States Retirement Solutions and Investment Management division, United States Individual Life and Group Insurance division, and International Insurance division, as well as its Corporate and Other operations. The Closed Block Business consists of the assets and related liabilities of the Closed Block described below and certain related assets and liabilities. On January 1, 2012, it merged with Gibraltar Life Insurance Company, Ltd (Gibraltar Life).

On February 1, 2011, Prudential Financial completed the acquisition from American International Group, Inc. (AIG), of AIG Star Life Insurance Co., Ltd. (Star), AIG Edison Life Insurance Company (Edison), and certain other AIG subsidiaries. In July 2011, it sold its global commodities business to Jefferies Group, Inc. In November 2011, it acquired an office building located in downtown Chicago's Central Loop. On December 06, 2011, the Company announced the sale of Prudential Real Estate and Relocation Services (PRERS), the Company's real estate brokerage and relocation services unit, to Brookfield Residential Property Services.

Financial Services Businesses

The Financial Services Businesses consist of three operating divisions, which together encompass six segments, and its Corporate and Other operations. The United States Retirement Solutions an! d Investment Management division consists of its Individual Annuities, Retirement and Asset Management segments. The United States Individual Life and Group Insurance division consists of its Individual Life and Group Insurance segments. The International Insurance division consists of its International Insurance segment. Its Corporate and Other operations include corporate items and initiatives that are not allocated to business segments, as well as businesses that have been or will be divested.

The Individual Annuities segment manufactures and distributes individual variable and fixed annuity products, primarily to the United States market. The Company�� annuity products are distributed through a diverse group of independent financial planners, wirehouses, banks, and insurance agents, including Prudential Agents and the agency distribution force of The Allstate Corporation (Allstate). It offers variable annuities that provide its customers with tax-deferred asset accumulation together with a base death benefit and a suite of optional guaranteed death and living benefits. Its variable annuity investment options provide the customers with the opportunity to invest in proprietary and non-proprietary mutual funds, frequently under asset allocation programs, and fixed-rate accounts. The Company�� prudential agents distribute variable annuities with proprietary and non-proprietary investment options, as well as fixed annuities. Its individual annuity products are also offered through a range of third party channels, including independent brokers, wirehouses, banks, and Allstate�� proprietary distribution force.

The Company�� retirement segment, which is referred as Prudential Retirement, provides retirement investment and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors. Its full service business provides recordkeeping, plan administration, actuarial advisory services, tailored participant education and communicati! on servic! es, trustee services and institutional and retail investments. It services defined contribution, defined benefit and non-qualified plans. For participants leaving the clients��plans, it provides a range of rollover products through its broker-dealer, Prudential Investment Management Services LLC, its bank, Prudential Bank & Trust, FSB (PB&T), and certain of its insurance companies. Its institutional investment products business offers guaranteed investment contracts (GICs), funding agreements, institutional and retail notes, structured settlement annuities, and group annuities, for defined contribution plans, defined benefit plans, non-qualified plans, and individuals.

The Company�� full service business offers plan sponsors and their participants a range of products and services to assist in the delivery and administration of defined contribution, defined benefit, and non-qualified plans, including recordkeeping and administrative services, comprehensive investment offerings and consulting services to assist plan sponsors in managing fiduciary obligations. As part of its investment products, it offers a range of general and separate account stable value products and other fee-based separate accounts, as well as retail mutual funds and institutional funds advised by affiliated and non-affiliated investment managers.

It also offers fee-based separate account products, through which customer funds are held in a separate account, retail mutual funds, institutional funds, or a client-owned trust. These products generally pass all of the investment results to the customer. In addition, it offers guaranteed minimum withdrawal benefits associated with certain defined contribution accounts, and hedge certain of the related risks utilizing externally purchased hedging instruments. It also offers a range of rollover solutions, including individual retirement accounts, mutual funds, and guaranteed income products. Its rollover products and services are marketed to participants who ter! minate or! retire from organizations that are clients of its retirement plan recordkeeping services.

The Asset Management segment provides an array of investment management and advisory services by means of institutional portfolio management, mutual funds, asset securitization activity and other structured products, and strategic investments. These products and services are provided to the public and private marketplace, as well as its United States Individual Life and Group Insurance division, International Insurance division and Individual Annuities and Retirement segments, as well as the Closed Block Business. Its products and services include Public Fixed Income Asset Management, Public Equity Asset Management, Private Fixed Income Asset Management, Commercial Mortgage Origination and Servicing, Real Estate Asset Management, Strategic Investments, and Mutual Funds and Other Retail Services.

The public fixed income organization manages fixed income portfolios for United States and international, institutional and retail clients, as well as for its general account. Its products include traditional broad market fixed income strategies and single-sector strategies. It manages traditional asset-liability strategies, as well as customized asset-liability strategies. It also manages hedge strategies, as well as collateralized loan obligations. It also serves as a non-custodial securities lending agent. The public equity organization provides discretionary and non-discretionary asset management services to a range of clients. It manages an array of publicly-traded equity asset classes using various investment styles. The public equity organization is consisted of two wholly owned registered investment advisors, Jennison Associates LLC and Quantitative Management Associates LLC.

The private fixed income organization provides asset management services by investing in private placement investment grade debt, private placement below investment grade debt, and mezzanine debt securi! ties. The! se investment capabilities are utilized by its general account and institutional clients through direct advisory accounts, insurance company separate accounts, and private fund structures. The commercial mortgage operations provide mortgage origination, asset management and servicing for its general account, institutional clients, and government-sponsored entities, such as Fannie Mae, the Federal Housing Administration, and Freddie Mac. It also originated shorter-term interim loans for spread lending that are collateralized by assets generally under renovation or lease up

The global real estate organization provides asset management services for single-client and commingled private and public real estate portfolios and manufactures and manages a range of real estate investment vehicles investing in private and public real estate, primarily for institutional clients through 22 offices worldwide. Its domestic and international real estate investment vehicles range from fully diversified open-end funds to specialized closed-end funds that invest in specific types of properties or specific geographic regions or follow other specific investment strategies. The Company makes strategic investments to support the creation and management of funds offered to third-party investors in private and public real estate, fixed income and public equities asset classes. Other strategic investments are made with the intention to sell or syndicate to investors, including its general account, or for placement in funds and structured products that it offers and manages. It also makes loans to, and guarantees obligations of, the Company�� managed funds that are secured by equity commitments from investors or assets of the funds.

The Company manufactures, distributes and services investment management products primarily utilizing asset management expertise in the United States retail market. Its products are designed to be sold primarily by financial professionals, including both Prudential Agents an! d third p! arty advisors. It offers a family of retail investment products consisting of 41 mutual funds as of December 31, 2011. These products cover an array of investment styles and objectives designed to retain assets of individuals with varying objectives and to accommodate investors��changing financial needs. In addition, it offers banks and other financial services organizations a wealth management platform, which permits, such banks and organizations to provide their retail clients with services, including asset allocation, investment manager research and access, clearing, trading services, and performance reporting. The U.S. Individual Life and Group Insurance division conducts its business through the Individual Life and Group Insurance segments. Its Individual Life segment manufactures and distributes individual variable life, term life and universal life insurance products primarily to the U.S. mass middle, mass affluent and affluent markets. During 2011, its primary insurance products are variable life, term life and universal life and represent 41%, 49% and 9%, respectively, of its face amount of individual life insurance in force, net of reinsurance.

The Group Insurance segment manufactures and distributes a range of group life, long-term and short-term group disability, long-term care, and group corporate-, bank- and trust-owned life insurance in the United States primarily to institutional clients for use in connection with employee and membership benefits plans. Group Insurance also sells accidental death and dismemberment, preferred provider and indemnity dental and other ancillary coverages, and provides plan administrative services in connection with its insurance coverages. It offers group life insurance products, including employer-pay (basic) and employee-pay (voluntary) coverages. This portfolio of products includes basic and supplemental term life insurance for employees, optional term life insurance for dependents of employees and group universal life insurance. It also of! fers grou! p variable universal life insurance, basic and voluntary accidental death and dismemberment insurance and business travel accident insurance. It also offers a living benefits option that allows insureds that are diagnosed with a terminal illness to receive a portion of their life insurance benefit upon diagnosis, in advance of death, to use as needed.

The Company�� International Insurance segment manufactures and distributes individual life insurance, retirement and related products, including certain health products with fixed benefits. It provides these products to the broad middle income market across Japan through multiple distribution channels, including Life Advisors, who are associated with its Gibraltar Life operations. It also provides similar products to the mass affluent and affluent markets in Japan, Korea and other countries outside the United States through its Life Planner operations. It also offers variable life products in Japan, Korea, Taiwan and Poland and interest-sensitive life products in all countries with the exception of Brazil and Mexico. In most of its operations, it also offers certain health products with fixed benefits, some of which include a high savings element. In addition, similar products are offered to the middle income market across Japan through Life Advisors, the distribution channel of the Company�� Gibraltar Life Insurance Company, Ltd. (Gibraltar Life) operation.

The Company�� international insurance operations offer various traditional whole life, term life, endowment policies, which provide for payment on the earlier of death or maturity and retirement income life insurance products that combine an insurance protection element similar to that of term life policies with a retirement income feature. It also offers variable life products in Japan, Korea, Taiwan and Poland and interest-sensitive life products in all countries. It also offers certain health products with fixed benefits, as well as annuity products, which are primari! ly repres! ented by United States and Australian dollar-denominated fixed annuities in its Gibraltar Life operations.

Closed Block Business

The Closed Block Business includes liabilities for its individual in participating products, together with assets that are used for the payment of benefits and policyholder dividends, expenses and taxes with respect to these products. The Closed Block is 90% reinsured, including 7% by a wholly owned subsidiary of Prudential Financial. During 2011, the Company also reinsured 90% of the short-term risks associated with the Closed Block policies to a wholly owned subsidiary of Prudential Financial.

Top Gold Companies To Invest In 2014: Prudential Financial Inc.(PRU)

Prudential Financial, Inc., through its subsidiaries, offers various financial products and services in the United States, Asia, Europe, and Latin America. The company operates through three divisions: The U.S. Retirement Solutions and Investment Management, The U.S. Individual Life and Group Insurance, and The International Insurance and Investments. The U.S. Retirement Solutions and Investment Management division provides individual variable and fixed annuity products, as well as offers retirement investment and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors. This division also provides investment management and advisory services to the public and private marketplace. The U.S. Individual Life and Group Insurance division offers individual variable life, term life, and universal life insurance products; and group life, long-term and short-term group disability, long-term care, and group corporate-, bank-and trus t-owned life insurance products to institutional clients. This division also sells accidental death and dismemberment, and other ancillary coverages, as well as provides plan administrative services; and offers preferred provider and indemnity dental coverage plans to clients. The International Insurance and Investments division provides international individual life insurance products in Japan, Korea, and other foreign countries; and offers proprietary and non-proprietary asset management, investment advice, and services to retail and institutional clients internationally. In addition, the company engages in real estate brokerage franchise business, which involves marketing its franchises to the real estate companies. Further, it provides institutional clients and government agencies with various services in connection with the relocation of their employees. Prudential Financial, Inc. was founded in 1875 and is headquartered in Newark, New Jersey.

Advisors' Opinion:

• [By Sofia Horta e Costa]

  Prudential Plc (PRU), the U.K.�� biggest insurer, lost 0.9 percent to 1,145 pence. The company said that the profit margin on new business at its U.S. unit narrowed to 54 percent of the annual premium equivalent in the first quarter, from 64 percent a year earlier. The annual premium equivalent is calculated as all the regular payments plus 10 percent of any lump-sum payments that the insurer received during the reporting period. The shares have still rallied 33 percent so far this year.

• [By Dan Caplinger]

  Rising long-term rates, however, would help boost insurers' income. Already, you've seen Prudential (NYSE: PRU  ) and Hartford Financial (NYSE: HIG  ) hit multiyear highs as their shares have anticipated the climb in rates. If that trend continues, then the boost to portfolio income could be substantial enough to provide nice earnings growth, leading to further share-price appreciation even without an expansion in their earnings multiples.

• [By Dan Caplinger]

  Many of the problems MetLife and its peers have faced recently stem from products beyond vanilla life-insurance policies. A Moody's report last month discussed how MetLife, along with rivals Hartford Financial (NYSE: HIG  ) and Prudential (NYSE: PRU  ) , failed to protect against all the risks involved in the variable-annuity products they offered customers. By assuming that more customers would drop their annuities than actually did, MetLife and its peers have had greater-than-expected guarantee obligations under the annuities.

Top 5 Insurance Companies To Buy Right Now: AmTrust Financial Services Inc (AFSI)

Amtrust Financial Services, Inc., incorporated on November 7, 1990, is a holding company. The Company is a multinational specialty property and casualty insurer focused on generating consistent underwriting profits. The Company operates in four business segments: small commercial business, specialty program and personal lines reinsurance. The Company transacts business through 11 insurance company subsidiaries: Technology Insurance Company, Inc. (TIC), Rochdale Insurance Company (RIC), Wesco Insurance Company (WIC), Associated Industries Insurance Company, Inc. (AIIC), Milwaukee Casualty Insurance Company (MCIC), Security National Insurance Company (SNIC), AmTrust Insurance Company of Kansas, Inc. (AICK) and AmTrust Lloyd�� Insurance Company of Texas (ALIC). In January 2013, the Company acquired First Nonprofit Companies, Inc. In February 2013, the Company's subsidiary acquired Car Care Plan (Holdings) Limited (CCPH) from Ally Insurance Holdings, Inc.

Small Commercial Business

Small Commercial Business segment provides workers��compensation to small businesses that operate in low and medium hazard classes, such as restaurants, retail stores, physicians and other professional offices, and commercial package and other property and casualty insurance products to small businesses. The Company is authorized to write its Small Commercial Business products in all 50 states. The Company distributes its policies through a network of over 8,100 select retail and wholesale agents who are paid commissions based on the annual policy premiums written. Commercial package products provide a range of insurance to small businesses, including commercial property, general liability, inland marine, automobile, workers��compensation, and umbrella coverage.

The Company maintains Small Commercial Business property and casualty claims operations in several of its domestic offices and the commercial package claims operation is separated into four processing units: casualty, propert! y, cost-containment/recovery and a fast-track physical damage unit. As of December 31, 2012, its Small Commercial Business property and casualty claims were approximately 61% automobile and 13% property and inland marine with the remaining 26% involving general liability and umbrella losses.

Specialty Risk and Extended Warranty

The Company��Specialty Risk and Extended Warranty segment provides coverage for consumer and commercial goods and custom designed coverages, such as accidental damage plans and payment protection plans offered in connection with the sale of consumer and commercial goods in the United States and Europe, and certain niche property, casualty and specialty liability risks in the United States and Europe, including general liability, employers��liability and professional and medical liability. specialty risk business primarily covers, such as legal expenses in the event of unsuccessful litigation; property damage for residential properties; home emergency repairs caused by incidents affecting systems, such as plumbing, wiring or central heating; latent defects that materialize on real property after building or completion; payment protection to insureds if they become unable to meet financial obligations under finance contracts; guaranteed asset protection (GAP) to cover the difference between an insurer�� settlement and the asset value in the event of a total loss, and general liability, employers��liability, public liability, negligence of advisors and liability of health care providers and medical facilities.

The Company's extended warranty business covers selected consumer and commercial goods and other risks, including personal computers; consumer electronics, such as televisions and home theater components; consumer appliances, such as refrigerators and washing machines; automobiles (excluding liability coverage); furniture, and heavy equipment. The Company also serve as a third party administrator to provide claims handling and ca! ll center! services to the consumer products and automotive industries in the United States and Canada. It underwrites the specialty risk coverage on a coverage plan-level basis, which involves substantial data collection and actuarial analysis, as well as analysis of applicable laws governing policy coverage language and exclusions.

Specialty Program

The Company�� Specialty Program segment provides workers��compensation, package products, general liability, commercial auto liability, excess and surplus lines programs and other specialty commercial property and casualty insurance to a narrowly defined, homogeneous group of small and middle market companies. The type of risk covered by this segment is similar to the type of risk in Small Commercial Business but also covers, to a small extent, certain higher risk businesses. The coverage is offered through accounts with various agents to multiple insureds. Policyholders in this segment primarily include industries, such as retail, wholesale, service operations, artisan contracting, trucking, light and medium manufacturing, habitational and professional employer organizations. As of December 31, 2012, the Company underwrote 77 programs through 44 independent wholesale and managing general agents. Workers��compensation insurance consists approximately 33% of this business during the year ended December 31, 2012.

Personal Lines Reinsurance

The Company�� Personal Lines Reinsurance Segment has a 20% participation in the Personal Lines Quota Share, by which it receive 10% of the net premiums of the personal lines business. The Personal Lines Quota Share provides that the reinsurers, severally, in accordance with their participation percentages, will receive 50% of the net premium of the GMACI Insurers and assume 50% of the related net losses.

Top 5 Insurance Companies To Buy Right Now: Principal Financial Group Inc(PFG)

Principal Financial Group, Inc. provides retirement savings, investment, and insurance products and services worldwide. The company?s Retirement and Investor Services segment provides retirement savings and related investment products and services, including a portfolio of asset accumulation products and services primarily to small and medium-sized businesses and individuals in the United States. This segment offers products and services to businesses for defined contribution pension plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, and employee stock ownership plan consulting services; and annuities, mutual funds, and bank products and services to the employees of its business customers and other individuals. Principal Financial Group?s Principal Global Investors segment offers a range of equity, fixed income, and real estate investments, as well as specialized overlay and advisory services to institutional inve stors. The company?s Principal International segment offers retirement products and services, annuities, mutual funds, institutional asset management, and life insurance accumulation products in Brazil, Chile, China, Hong Kong SAR, India, Indonesia, Malaysia, Mexico, Singapore, and Thailand. Principal Financial Group?s U.S. Insurance Solutions segment offers individual life insurance, as well as specialty benefits in the United States. Its individual life insurance products include universal and variable universal life insurance and traditional life insurance; and specialty benefit products comprise group dental and vision insurance, individual and group disability insurance, and group life insurance, as well as fee-for-service claims administration and wellness services. The company was founded in 1879 and is based in Des Moines, Iowa.