3 reasons why betting on equities still makes sense

The economy is not yet out of woods despite a raft of measures taken by the authorities. Investors then prefer to sit on cash, unable to find an attractive avenue for earning good returns. However, a three-pronged approach based on better monsoon, the rupee fall against US dollar and an impending recovery could throw up fresh opportunities to invest.

Monsoon, the rupee fall and telecom

"The equity market is now skewed," Prasad Koparkar, senior director, Industry & Customised Research at Crisil, the domestic arm of global rating agency S&P; told moneycontrol.com on the sidelines of an event organised by Kotak Mahindra Bank and Crisil Research on Tuesday.

"Investors are ready to pay higher premium for quality stocks as uncertainties continue. A better-than-expected monsoon will drive rural consumption while a depreciating rupee would bless export oriented sectors like information technology. Thirdly, a lot of weeding out of unproductive customers has made telecom an attractive bet," he said.

PE differential

The difference between top ten high valued listed companies with price earning (PE) ratio in the range of 30-40 and ten low valued listed stocks with PE at 3-5, perhaps hit a decade high, pointed out Koparkar. PE ratio is an indicator of stock valuation. Lower PE suggests, the stock is under-valued.

RBI on rains

In its first quarter (April-June) monetary policy the Reserve Bank of India (RBI) exuded confidence over good rains and its impact on the economy. Spurred by the timely arrival of the monsoon and above long period average rainfall so far (17 percent excess up to July 26, 2013), kharif sowing has been significantly higher than a year ago, with total sown area at around 7.5 crore hectares as on July 26 compared with about 6.5 crore hectares a year ago, RBI said.

FMCG, 2-wheeler and pharma

"Consumption is likely to increase especially in segments like two-wheeler sales and Fast Moving Consuming Goods (FMCG) sector. However, upside in FMCG stocks is limited. Moreover, one can bet on pharmaceutical sector as well," the director said adding that PFCI (Private Final Consumption Expenditure), an index for showing country's consumption levels, recorded at 4.5 percent in FY13 as against a yearly average 8-12 percent.

Increased consumption

Crisil Research expects PFCI to grow at 6.5 percent in 2013-04. This in turn means that people will have more money to spend or consume. Inflation too is expected to come down.  The wholesale price inflation (WPI) stood at 4.9 percent in June 2013 while retail inflation was close to 10 percent during the same period.

Telecom trove

For telecom sector, the recent tariff rise after a long spell drew Koparkar's attention. Earlier, telecom companies were engaged in a marketing war to grab the market share. Consequently, they used to offer huge discounts on tariffs impacting their profit margins. Even the regulatory overhaul is also over.

saikat.das@network18online.com

How To Reduce Your Debts Without Spending Unnecessarily

Diminishing household debt has been a recurring feature of the U.S. economy during the last four years, as citizens have fought hard to reduce the nation's cumulative debt from its 2008 peak of $12.7 trillion. Having fallen to just $11.2 trillion by the beginning of 2013, it appears as though these efforts are having a positive impact on consumer confidence and the economy as a whole.

As a result of this effort and improved sentiment, the month of May saw borrowing rise at its fastest pace in more than a year. U.S. citizens increased their borrowing by $19.6 billion from April's figures, as consumer confidence soared from 69 to 74.3 over a four-week period. This trend even continued into June, with more and more Americans using credit to make small- and large-scale purchases.

Breaking the Cycle of Debt: Reducing your Liability without Unnecessary Spending
While these statistics may be positive news for the U.S. economy, the revolving nature of credit card debt means that increased borrowing may ultimately have a negative impact on the nation's long-term growth. This is especially true if consumers borrow based on sentiment and impulse rather than cold hard fact, or fail to dramatically reduce their personal debt liability before seeking out new lines of credit. In short, consumers must ensure that they continue to reduce their debt levels in an effective and responsible manner, without borrowing unmanageable sums of money.

It is also important that you attempt to reduce your debt without spending unnecessarily, as there are numerous management solutions that demand an initial investment without delivering value for your money. This can undermine much of your hard work, so consider the following steps towards reducing debt in a cost-effective manner:

Be Wary of Free Credit Reports and Hidden Financial Products
It is well known that by partnering with credit experts such as Experian, Equifax and TransUnion, you can access a free copy of your credit report. While this is an important step towards understanding your full financial liability and organizing a manageable payment plan, you should be wary of additional financial products that may be charged as a result of using an affiliated service.

There have been complaints made by consumers who have accessed free copies of their credit history, only to be subsequently billed for monitoring services including fraud alerts and the restriction of access to their reports. These services may be offered by a partnering firm, so it is important to make a note if you are transferred to an alternative website or asked to participate in any free trials. If you do unwittingly subscribe to an unwanted service, you must opt out as soon as possible if you are to avoid incurring a charge.

Know your Rights and Avoid Paying Unwarranted Charges
While paying minimum monthly fees may not enable you to eliminate your liability quickly, it at least helps you to develop a reputation as a reliable and consistent debtor. Regular repayments are important if you are to reduce the accrual of additional charges and interest, but you must also be wary of your rights as a consumer and understand the exact details of each individual debt. This will prevent you from paying inflated sums on a regular basis, while it will also ensure that you are not misled by lenders and forced into an unmanageable repayment plan.

According to the Financial Protection Bureau, banks and third-party debt collection agencies must adhere to a strict code of practice if they are to avoid financial penalties. In the wake of a record $3.2 million fine being levied against the world's largest debt collection firm, Expert Global Solutions, government agencies are keen to level the playing field for debtors and help them to reduce their liability in a responsible manner. This is why you must remain extremely savvy as a consumer, especially when it comes to determining the exact amount that you owe on your outstanding accounts.

Re-Negotiate More Favorable Terms with your Creditors
Scrutiny of debt collection practices has intensified in the wake of the Great Recession, while Barack Obama has been keen to help consumers repay their secured loans by cracking down on unscrupulous lenders. Programs such as the recently extended Home Affordable Refinance Program provide a relevant case in point, as they assist consumers in renegotiating the terms of their financial agreements to avoid foreclosure or other unenviable consequences of falling behind on a secured loan.

Negotiating with creditors is subsequently far easier than it has been previously, as this provides stricken debtors with an opportunity to reduce their financial burden without spending outside of their existing means. By opening the lines of honest communication with each individual lender, you can explain your exact circumstances and ask them to consider revised terms that will benefit you going forward. Whether this involves an adapted payment schedule or the implementation of a reduced interest rate, it can help you to pay off your debt without incurring more.

The Bottom Line
While it is not possible to repay your debts without investing money into the process, you should avoid spending unnecessary sums of cash in the pursuit of a financially liberated future. Costly financial products, unwarranted charges and unmanageable payment plans will only add to your debt over time, so your ability to acquire knowledge as a consumer and pay attention to detail will ultimately help you to achieve more effective results.

Tesla Motors to Replace Oracle in Nasdaq 100, QQQ ETF ...

Oracle (ORCL) recently announced that the company would be leaving the Nasdaq and will be listed on the NYSE exchange instead. The move represents a big loss for Nasdaq, as Oracle is a key technology firm and one of the largest, most traded securities on the exchange.

By moving, Oracle will also be giving up its spot in the Nasdaq-100 index, the benchmark for the popular PowerShares QQQ ETF (QQQ), as well as the equal-weight versions the First Trust Nasdaq 100 Equal Weighted Index Fund (QQEW) and the Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE).

Currently, ORCL makes up roughly 4.3% of QQQ, enough to put it into fourth place in terms of biggest holdings in the ETF. The product also makes up about 1% in QQEW and QQQE, though its position in these funds is much more variable due to the equal weight nature of the products. Given this, the loss of ORCL looks to have a modest impact on both of these ETFs, as well as the risk reward profile of each product (also read The Apple Effect and Nasdaq ETFs).

What will replace ORCL?

It has been announced that a new replacement has been found for ORCL in the key benchmark; Tesla Motors (TSLA). The company, thanks to its incredible surge this year, is now the biggest firm trading on the Nasdaq that isn't in the Nasdaq-100 Index, making it the replacement pick.

The stock is now trading around the $123/share mark, an increase of roughly 240% since the start of 2013. This gives TSLA a valuation of just over $14.25 billion, making the company an easy choice to replace Oracle in the benchmark (see Three Great Tech ETFs that Avoid Apple).

The change will officially take place—in both the Nadsaq 100 Index and the Nasdaq 100 Equal Weighted Index—prior to the market opening on July 15th.

How will this impact Nasdaq 100 ETFs?

While it isn't clear at this time how much Tesla will make up of the ETFs, we can speculate based on its current market cap, compared to other similarly-sized stocks. These sec! urities include SanDisk (SNDK) and Netflix (NFLX), both of which receive about 0.4% in the ETF, suggesting that TSLA may receive a similar allocation. However, it is worth noting that this will likely change as ORCL's rather large allocation gets divided up among the smaller components in the ETF.

Meanwhile, for the equal weight products, TSLA looks to take up about 1% of the assets in both cases (see Clean Energy ETFs: The Real Bull Market?).

Bottom Line

Some changes are fast approaching for investors in any of the Nasdaq ETFs on the market today. One of the biggest companies in the cap weighted benchmark, ORCL, will no longer be a component leaving a tilt towards smaller cap securities likely. Equal weight Nasdaq ETFs will also see big changes as ORCL's 1% allocation is swapped out for a 1% holding for TSLA (see Alternative ETF Weighting Methodologies 101).

Granted, none of these changes are enormous, but they do look to slightly shift the exposure profile for each of the Nasdaq ETFs going forward. Plus, the news could actually be good for TSLA as well, as it could lead to some forced ETF buying of the stock in order to get it up to its proper allocation in each of the three aforementioned funds (currently TSLA has a Zacks Rank #3- Hold).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>



Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

4 Tips to Help the 50-Plus Crowd Manage Their Debt

DreamPictures, Getty Images Letting debt overwhelm your finances is bad news no matter when it happens in your life. But for those 50 and older, it's even more important to rein in the negative side of your balance sheet and get a handle on paying it down while you're still in a relatively strong earning position. Historically, advisors have urged those 50 and older to get their debts paid off entirely before they consider retirement. But the trends in the U.S. show that advice is hardly being followed. The Harvard Joint Center for Housing Studies cites Census Bureau data showing that median debt levels have risen at a much faster rate for older Americans than for other age groups. Specifically, the median debt level for people ages 55 to 64 rose by more than 60 percent between 2000 and 2011, while those 65 and older saw an even more dramatic increase -- nearly 120 percent -- during the same period. The JCHS also observed that among those 65 and older, the percentage of households with mortgage debt doubled to 40 percent in 2010, while among those ages 55 to 64, 70 percent now carry mortgage debt, citing the Federal Reserve's most recent Survey of Consumer Finances. That's not the direction you want finances going. As your future earnings prospects dwindle, it's more important than ever to get debt under control. With that in mind, here are four things that those 50 and older should consider. 1. Insure Against Your Biggest Financial Threats. For younger people supporting families, life insurance coverage is an important way to protect against unforeseen tragedy. But even though life insurance can still play a role for those 50 and older, the bigger financial threats are those that will leave you facing major long-term medical expenses. Maintaining health-insurance coverage throughout your career and adding supplemental insurance coverage to Medicare when you're eligible will go a long way toward preventing massive medical bills from eating away your savings. Moreover, looking into long-term care insurance as you head north of 50 can help you avoid the financial damage that paying out-of-pocket for skilled nursing care and other specialized health care can cause. With Medicare and most health insurance providing only limited coverage for long-term care, a separate policy is worth considering to further reduce your financial risk. 2. Understand Your Debt-Handling Options. Older Americans have access to some debt-management products that others don't. The most popular is the reverse mortgage, which allows you to tap the equity in your home without the same risks of a conventional mortgage or home-equity line of credit.

Top 5 Small Cap Stocks To Buy For 2014

By structuring a reverse mortgage according to your needs, you can access either regular monthly payments, a lump sum, or a line of credit from which you can draw at will. Yet before you jump at the chance to take out a reverse mortgage, you need to understand its terms. Although the reverse mortgage has features that allow you to live in your home throughout your lifetime, unfortunate incidents involving the loss of the home for surviving spouses or due to failure to make regular tax payments make it clear that there are potential pitfalls. Before choosing any debt-management option, make sure you know how it works in every circumstance -- including worst-case scenarios. 3. Wean Dependents Off of Your Money. Before you hit age 50, you've likely faced the challenges of not only taking care of your own finances but those of other family members. But once you reach age 50, you'll most likely see the light at the end of the financial-support tunnel, and it's important to start focusing your savings toward your own needs rather than those of dependents. In today's tough economy, many young adults have remained financially dependent on parents well past graduating from college, and members of the Sandwich Generation have also had to provide support for struggling parents. As hard as it is to start insisting those dependents fend more for themselves, you can't afford to take on new debt or divert money away from paying off existing debt in order to support them. The sooner you start the process, the more gradually you'll be able to work toward regaining your financial independence and taking care of your own money needs. 4. Beware Of Debt-Reduction Scams. Con artists often prey on older Americans, and fraudulent credit-counseling and debt-management services are an increasingly popular way for those scammers to take advantage of the unwary. Although legitimate credit-counseling services exist, be especially cautious about any service that charges you a large upfront fee or doesn't review your finances before asking for money. In addition, demand everything in writing, and contact your creditors before you pay money to a credit-counseling service to ensure that they've actually agreed to its terms.

Merrill Edge Expands Portfolio Series

Merrill Edge, the mass-affluent channel of Bank of America-Merrill Lynch, says it introduced two income-focused portfolios to this platform earlier this month.

With the Merrill Edge Income Portfolio and the Income & Growth Portfolio, there are now 12 portfolios available on the platform. The portfolios are actively managed and typically have eight to 16 positions in mutual funds and ETFs, a $20,000 investment minimum and a 1% yearly management fee.

“The first Merrill Edge portfolios were launched [in January 2012] to drive total return and were aligned with the interests of clients who want to grow assets and maximize returns in the accumulation stage of their investments,” said Alok Prasad (left), head of Merrill Edge, in an interview with AdvisorOne.

10 Best High Tech Stocks To Own Right Now

“The two new portfolios are more income oriented and are designed for those nearing or in retirement who want to augment their savings with income,” Prasad said.

The two income-focused portfolios include a variety of fixed-income securities and related products—including emerging-market bond funds, floating-rate products and REITs, according to Tom Halloran, head of Merrill Edge product development.

Earlier this year, Bank of America (BAC) rolled out the Merrill Edge Roadmap, a financial- planning tool for its 1.6 million mass-affluent Merrill Edge clients. As of June, it has some 1,800 Merrill Edge “financial solutions advisors,” about 1,000 of whom are located in BofA branch offices.

“The asset levels in our Merrill Edge portfolios are far exceeding our expectations,” Prasad said. “We keep our ears close to the ground to understand our clients and their goals.”

The two new portfolios "open up the door for clients to take advantage of important options, income-oriented portfolios for those in retirement," noted Halloran (right). "We are earlier in the process [of launching income-focused products] than some competitors, and we're off to go start."

As for the shape of future Merrill Edge portfolios, “It’s very conceivable that we might add portfolios with other dimensions and options in the future,” he explained. “There’s definitely room there to give clients more options and potentially more asset classes.”

***

For direct insights on the role of ETFs in client portfolios from multiple experts—including Rick Ferri, Ron Delegge, Skip Schweiss and more—we invite you to register for AdvisorOne’s premiere advisorcentric Virtual ETF Summit (and get multiple hours of CFP Board CE).

 

 

Kroger Plans to Buy Harris Teeter - Analyst Blog

Top 5 Undervalued Companies To Watch In Right Now

With expansion plans in key south-eastern and mid-Atlantic states, one of the largest grocery retailers The Kroger Co. (KR) has announced its decision to acquire all the shares of regional grocer Harris Teeter Supermarkets Inc. (HTSI) for $2.44 billion in cash. Per the deal, Kroger will pay $49.38 for each Harris Teeter share and will assume the latter's outstanding debt of about $100 million.

The deal has been approved by the boards of both companies. However, Harris Teeter has yet to receive shareholder approval.

Kroger will finance the deal with debt, and will therefore allocate some free cash flow to reduce its current debt burden in the subsequent quarters. Kroger expects net accretion to earnings per share in the range of 6 – 9 cents in year-one after the merger.

After the completion of the deal, Harris Teeter will become a subsidiary of Kroger. It will retain Harris Teeter's senior management and its headquarters at Matthews, NC. Kroger will not sell any of the Harris Teeter stores until there is an overlap in any of the Harris Teeter's markets.

Kroger is impressed with Harris Teeter's strong management team and variety of store formats located in high-growth markets. Harris Teeter operates stores in the Carolinas, Virginia, Maryland, Tennessee, Delaware, Florida, Georgia and the District of Columbia. The bulk of its stores are in North Carolina.

Harris Teeter's fresh and prepared foods section is also expected to allow Kroger to expand its food business. Kroger also expects to benefit from Harris Teeter's online shopping system.

The deal will be a strategic fit for Kroger. It will provide the company with an opportunity to expand its footprint in several attractive and high-growth markets including Delaware, Florida, Maryland and Washington, DC, where Kroger currently does not have! a presence. Kroger will also get hold of Harris Teeter's distribution centers for grocery, frozen and perishable foods in Greensboro and Indian Trail, NC and a dairy facility in High Point, NC.

However, it is speculated that Kroger is undervaluing Harris Teeter. Harris Teeter thus have an option to re-consider the deal to provide best value to its shareholders.

Kroger's acquisition of Harris Teeter is the second biggest deal in the U.S. grocery industry in 2013 and the second-largest acquisition for Kroger after its purchase of Fred Meyer Inc for $13.89 billion in 1999.

Notably, the U.S. grocery industry has been consolidating from quite some time as chains like Harris Teeter have struggled to maintain market share against big retailers, dollar stores as well as drugstores. Retailers like Supervalu Inc (SVU) and Safeway Inc (SWY) are also selling off their assets.

In June 2013, Safeway agreed to sell its Canadian operations to Sobeys operator Empire Co Ltd while Supervalu struck a $3.3 billion deal to reduce debt by selling five of its chains to an investor group led by Cerberus Capital Management LP in Jan 2013.

We believe that the Kroger-Harris Teeter deal will provide excellent value in an increasingly competitive market. The combined business is expected operate 2,631 supermarkets in 34 states and the District of Columbia, with over 368,300 employees. Kroger holds a Zacks Rank #2 (Buy).

Top 10 Penny Stocks For 2014

If you owned stock in Tesla Motors (NASDAQ: TSLA  ) going into this year, you've probably made a pretty penny. In fact, Tesla stock has gained more than 100% in the past month with the stock now trading around $90 a share. However, it could be a bumpy ride going forward. The electric-car maker's disruptive retail strategy is catching heat from state lawmakers and dealership associations that could prevent Tesla from selling its cars in certain states.

Road-blocking the future
North Carolina's Senate Commerce Committee unanimously approved a proposal last week for a law that, if passed, could cripple Tesla's chances of selling its zero-emissions vehicles in the state. The North Carolina Automobile Dealers Association, which supports the bill, argues that Tesla's direct sales model threatens the livelihood of the state's licensed auto dealers, according to Raleigh's News & Observer.

Top 10 Penny Stocks For 2014: Nicholas Financial Inc.(NICK)

Nicholas Financial, Inc., through its subsidiaries, operates as a specialized consumer finance company. The company engages in acquiring and servicing contracts for purchases of new and used automobiles and light trucks. It also makes direct loans and sells consumer-finance related products. In addition, the company engages in developing, marketing, supporting, and updating industry-specific computer application software for small businesses located primarily in the Southeast United States. As of April 5, 2011, it operated 56 branch locations in 14 Southeastern and Midwestern states. The company was founded in 1986 and is headquartered in Clearwater, Florida.

Top 10 Penny Stocks For 2014: Gentiva Health Services Inc.(GTIV)

Gentiva Health Services, Inc. provides home health services and hospice care in the United States. The company offers skilled nursing and therapy services, paraprofessional nursing services, and homemaker services primarily to adult and elderly patients through licensed and Medicare-certified agencies. It also provides its services through specialty programs comprising Gentiva Orthopedics, which offers individualized home orthopedic rehabilitation services to patients recovering from joint replacement or other major orthopedic surgery; Gentiva Safe Strides that provides therapies for patients with balance issues; and Gentiva Cardiopulmonary, which helps patients and their physicians manage heart and lung health in a home-based environment. In addition, the company offers services through Gentiva Neurorehabilitation, which helps patients who have experienced a neurological injury or condition by removing the obstacles to healing in the patient?s home; Gentiva Senior Health that addresses the needs of patients with age-related diseases and issues; and Rehab Without Walls unit, which provides neurorehabilitation therapies for patients with traumatic brain injury, cerebrovascular accident injury, and acquired brain injury. Further, it offers consulting services to home health agencies, which include operational support, billing and collection activities, and on-site agency support and consulting. Additionally, the company provides hospice services primarily in the patient?s home or other residence, such as an assisted living residence or nursing home, as well as in a hospital. Gentiva Health Services, Inc. was founded in 1999 and is headquartered in Atlanta, Georgia.

Best Tech Companies To Watch In Right Now: HopFed Bancorp Inc.(HFBC)

HopFed Bancorp, Inc. operates as the holding company for Heritage Bank that provides various banking products and services primarily in western Kentucky, and middle and western Tennessee. The company offers a range of deposit products, including demand deposits, time deposits, money market accounts, passbook savings accounts, individual retirement accounts, and certificates of deposit. Its loan portfolio comprises one-to-four family residential loans, multifamily residential loans, construction loans, nonresidential loans, commercial real estate loans, and land and land development loans, as well as loans secured by deposits, other consumer loans, and commercial loans. The company, through its subsidiary, Fall and Fall Insurance Agency, sells life and casualty insurance products to individuals and businesses. HopFed Bancorp offers its products and services through its branch offices located in Hopkinsville, Murray, Cadiz, Elkton, Fulton, Calvert City, and Benton, Kentucky; and in Clarksville, Pleasant View, Ashland City, Kingston Springs, and Erin, Tennessee. The company was founded in 1879 and is headquartered in Hopkinsville, Kentucky.

Top 10 Penny Stocks For 2014: Integrated Silicon Solution Inc.(ISSI)

Integrated Silicon Solution, Inc., a fabless semiconductor company, designs and markets integrated circuits for digital consumer electronics, networking and telecommunications, mobile communications, automotive electronics, and industrial markets. Its primary products include low and medium density DRAM; and high speed and low power SRAM. The company?s low and medium density DRAM products are used in wireless local area networks (WLANs), base stations, networking switches and routers, fiber to the home (FTTH), DSL and cable modems, set top boxes, digital cameras, MP3, flat panel TVs, LCD TVs, HDTVs, video phones, Voice over Internet Protocol, printers, disk drives, tape drives, audio/video equipment, instrumentation, global positioning systems (GPS), telematics, infotainment, smart meters, and other applications. Its SRAM products are used in WLANs, cell phones, base stations, networking switches and routers, FTTH, DSL modems, LCD TVs, set-top boxes, GPS systems, instrumen tation, engine control systems, medical equipment, telematics, audio and video equipment, satellite radio, POS terminals, fax machines, copiers, tape drives, and other applications. Integrated Silicon Solution, Inc. also designs and markets application specific standard products, including high performance serial EEPROMs for use in TVs, networking systems, modems, telephone sets, security systems, video games, automobiles, and other consumer products; and SmartCards that have applications in transportation passes, payment cards, health care cards, and other cards that store secure data. The company markets and sells its products in Asia, the United States, and Europe through direct sales force, independent sales representatives, and distributors. Integrated Silicon Solution, Inc. was founded in 1988 and is headquartered in San Jose, California.

Advisors' Opinion:

• [By Arohan]

  ISSI is another memory chip designer and marketer. It is a fabless semiconductor company so it outsources its manufacturing. The market currently values the company at $283 million ascribing a PE ratio of 4.75. The company has delivered an EPS growth of 39% in the last 5 years and its future outlook appears to be of modest growth as well, with a slight decline in the up coming year. The company has $88 million in cash and no debt and is well positioned to handle the slowdown in demand next year.

Top 10 Penny Stocks For 2014: UMH Properties Inc.(UMH)

UMH Properties, Inc. (UMH) is a real estate investment trust. The firm engages in the ownership and operation of manufactured home communities. It leases manufactured home spaces to private manufactured home owners, as well as leases homes to residents. The firm invests in the real estate markets of New York, New Jersey, Pennsylvania, Ohio, and Tennessee. In addition, it invests in debt and equity securities of REITs. United Mobile Homes was incorporated in 1968. The company was formerly known as United Mobile Homes, Inc. UMH Properties is based in Freehold, New Jersey.

Top 10 Penny Stocks For 2014: China Yida Holding Co.(CNYD)

China Yida Holding, Co. operates as a diversified entertainment company in the People?s Republic of China. The company operates in two segments, Advertisement and Tourism. Its Advertisement segment operates and manages the Fujian Education Television Channel, a television channel in Fujian; and an outdoor on-train programming, including the Journey through China on the Train programming on China?s railway networks. This segment manages the content and re-sells airtime to advertisers and agencies for the television channel, and produces the content for outdoor on-train programming. The Tourism segment develops, operates, manages, and markets tourist destinations comprising natural, cultural, and historical tourist destinations and theme parks. This segment also creates/designs and constructs tourist concepts, attractions, and properties for its tourist destinations. This segment operates the Great Golden Lake tourist destination, Yunding Recreational Park tourist destinatio n, and Hua?An Tulou cluster tourist destination. The company is headquartered in Fuzhou City, the People's Republic of China.

Top 10 Penny Stocks For 2014: LJ International Inc.(JADE)

LJ International Inc., together with its subsidiaries, engages in the design, manufacture, marketing, and sale of precious and color gemstones, and diamond jewelry. The company offers colored jewelry; and pieces set in yellow gold, white gold, or sterling silver, as well as adorned with colored stones, diamonds, pearls, and precious stones. Its product line includes earrings, necklaces, pendants, rings, and bracelets. The company distributes its products to fine jewelers, national jewelry chains, department stores, TV shopping channels, discount chain stores, and electronic and specialty retailers in North America and Western Europe. It also involves in the retail of jewelry products under the ENZO brand. As of December 31, 2010, the company operated 133 ENZO stores in the People's Republic of China, Hong Kong, and Macau. In addition, it owns commercial and residential properties in Hong Kong, which are held primarily for lease. The company was founded in 1987 and is based in Hung Hom, Hong Kong.

Top 10 Penny Stocks For 2014: Aerosonic Corporation(AIM)

Aerosonic Corporation, together with its subsidiaries, engages in the design, manufacture, and sale of aircraft instruments worldwide. It offers mechanical and digital altimeters, airspeed indicators, rate of climb indicators, microprocessor controlled air data test sets, and other flight instruments. The company also produces mechanical and electro-mechanical cockpit instruments, angle of attack stall warning systems, digital cockpit instruments, integrated flight display systems, aircraft sensors and monitoring systems, and integrated multifunction probes, such as integrated air data sensors. It markets its products to manufacturers of corporate and private jets, contractors of military jets, the United States government, and private aircraft owners. The company sells its products directly through its sales personnel, as well as through distributors and commissioned sales representatives who resell to aircraft operators. Aerosonic Corporation was founded in 1953 and is b ased in Clearwater, Florida.

Top 10 Penny Stocks For 2014: National American University Holdings Inc.(NAUH)

National American University Holdings, Inc., through its subsidiary, Dlorah, Inc., engages in the ownership and operation of National American University that provides post-secondary education services primarily to working adults and other non-traditional students in the United States. It provides associate?s, bachelor?s, and master?s degrees programs in business-related disciplines, such as accounting, applied management, and business administration, as well as information technology; and healthcare-related disciplines, such as nursing and healthcare management. The company also offers diploma programs consisting of a series of courses focused on a particular area of study, for students who seek to enhance their skills and knowledge in the areas of healthcare coding, practical nursing, therapeutic massage, and veterinary assisting. National American University Holdings offers its courses through educational sites, as well as online. As of May 31, 2010, the company had enr olled approximately 3,565 students in online programs, 3,742 students on-campus, and 1,451 students in hybrid learning centers. In addition, it manages apartment units, as well as develops and sells multi family residential real estate in the Rapid City, South Dakota area. The company was founded in 1941 and is headquartered in Rapid City, South Dakota.

Top 10 Penny Stocks For 2014: SORL Auto Parts Inc.(SORL)

SORL Auto Parts, Inc., through its principal operating subsidiary, Ruili Group Ruian Auto Parts Co., Ltd., engages in the development, manufacture, and distribution of automotive brake systems and other safety related auto parts for commercial vehicles, such as trucks and buses. The company, through its 90% ownership in Ruili Group Ruian Auto Parts Co., Ltd., a Sino-foreign joint venture, offers various products, including spring brake chamber, clutch servos, air dryers, relay valves, and hand brake valves. It also provides auto metering products, auto electric products, anti-lock brake systems, retarders, hydraulic brakes, and power steering products. SORL Auto Parts, Inc. markets its products under the SORL brand to automotive original equipment manufacturers and the related aftermarket customers in the People?s Republic of China and internationally. The company was founded in 2003 and is headquartered in Ruian City, the People?s Republic of China.

Advisors' Opinion:

• [By Robert Hsu]

  Sorl Auto Parts (NASDAQ: SORL) has purchased the assets of the hydraulic brake, power steering, and automotive electrical operations of Ruili Group Auto Parts. As a result of this acquisition, Sorl’s product offerings will expand to both commercial and passenger vehicles’ brake systems and other key safety-related auto parts. The company expects it will allow the company to streamline its management organization, as well as create efficiencies in production, R&D and its sales network. In addition, Sorl’s management expects the acquisition will be beneficial to the company’s revenues and earnings.

  Sorl paid 170 million yuan — or about $25 million — for the acquisition, and the company believes it will generate about $35 million in revenues and about $4 million in net income in 2011. In addition, Sorl expects the acquisition to generate incremental free cash flow in both 2010 and 2011.  SORL has outperformed earnings estimates for four consecutive quarters, and its stock price rose 71.7% over the past 12 months. 

  Now, the chairman and CEO of Sorl Auto,  Xiao Ping Zhang, is also the controlling shareholder of the Ruili Group. However, the price paid for the acquisition was based on a valuation of the purchased business performed by Asia’s leading appraisal company, DTZ Debenham Tie Leung — lessening the possibility of a conflict of interest with regards to the sale.

  Overall, I think this was a good purchase by Sorl. The acquisition will allow the company to offer its customers more high-quality products to fulfill their needs from one source. In addition, because both companies share similar visions, I expect the combination of their internal resources will create favorable economies-of-scale that will strengthen earnings and create shareholder value. Buy SORL under $10.

Prem Watsa’s Fourth Quarter: Adds RIMM, C, ORI, JNJ; Sells CNU, FPFC; Reduces DELL

Prem Watsa is renowned for his long track record of outstanding returns using Buffett-style value investing through his worldwide insurance and reinsurance company, Toronto-based Fairfax Financial Holdings. His five-year cumulative is 176.4%, compared to 12.2% for the S&P 500. Most recently, he made headlines for making a large contrarian bet on Research In Motion (RIMM) and joining its board in his first activist investing foray. In the fourth quarter, he added to this position. He also added to his positions in Citigroup Inc. (C), Old Republic Corp. (ORI) and Johnson & Johnson (JNJ) and dramatically reduced one of his largest holdings, Dell (DELL). As a Ben Graham devotee, Watsa looks past short-term fluctuations in price to the underlying strength of a business. His stance on the economy, as of September and October 2011, was that he believed the U.S. was showing Depression-level interest rates and deficits, but he still liked some stocks and would hedge his exposure, he told CFA Institute Magazine.

Fourth Quarter Adds

Citigroup (C)

Watsa first bought citigroup in the second quarter of 2010 at an average price of $41.50. He continued to add shares in subsequent quarters. Most recently, he added 5,000 in the third quarter of 2011 at an average price of $32.50, and 5,000 in the fourth quarter of 2011 at an average price of $28. At the end of the third quarter, his holding size is 20,000 shares.

Financials comprise the largest sector of Watsa's portfolio, at 28.6%. The next largest sector is health care, at 21.6%. This is a new occurrence. In the third quarter of 2010, he cut back financials to 10.5% of his portfolio, from 27.3% the previous quarter. He kept his weighting in financials small until the third quarter of 2011, when he nearly tripled his exposure to 24.4% of his portfolio.

Citigroup suffered from a difficult capital markets environment in the fourth quarter, which drove lower market activity. Its holdings assets declined $90 billion in 2011 to $26! 9 billion. As it continues to have the European sovereign debt crisis overhang, it wants to focus on cutting expenses in 2012. Its fourth quarter 2011 revenues dropped to $78.4 billion, compared to $86.6 billion the previous year, and net income increased slightly to $11.3 billion, compared to $10.6 billion the previous year. Revenues from retail banking increased 3% year over year, while revenue from Citi-branded cards fell 5% year over year. Revenue from retail banking for fiscal year 2011 declined 4% year over year, and revenue from Citi-branded cards for fiscal year 2011 declined 10% year over year.

Other business areas improved, however. Citi saw continued growth in its international consumer banking, and had its third consecutive quarter of sequential growth in North America Consumer Banking, and had solid treasury & trade services growth despite the low-rate environment. Some aspects of its balance sheet strengthened as well, including an increase in tangible book value to $49.81, and a Tier 1 Common ratio increase to 11.8%.

Citigroup announced in the first week of February that it would exit its mortgage brokerage business, which contributed less than 10% of the bank's $67.9 billion mortgages in 2011.

The bank also reached an agreement on February 9 with the United States and the Attorneys General for 49 states and the District of Columbia to settle investigations into residential loan servicing and origination practices. Citi's will be forced to pay $2.2 billion as their part of the settlement.

Research In Motion (RIMM)

Research In Motion is a wireless communications industry that invented the once-popular BlackBerry mobile device in 1999 and saw its stock fall nearly 78% over the last year. Prem Watsa bought RIM stock the first time in the third quarter of 2010, buying 2,065,000 shares at an average price of $50. He increased his stake by 6,308,300 shares in the second quarter of 2011 at an average price of $44, by 3,425,000 shares in the third quart! er of 201! 1 at an average price of $27, and by 1 million shares in the fourth quarter of 2011 at an average price of $19 per share (less than book value of $19.45 per share). At quarter end he owned a total of 12,798,300 shares.

RIM is facing numerous issues in the market but has strong financials. Revenue at the company has increased every year from $294 million in 2002 to a record $19.9 billion in 2011. Earnings likewise increased each year, reaching a record $3.4 billion in 2011, and free cash flow reached almost $3 billion in 2011, a record by far.

But RIM is facing fierce competition from Apple (AAPL) and companies who make devices using Google (GOOG)'s Android platform, which is eroding its market share. Attempts to promote new products have not helped. The price of RIM's flagship tablet dropped by more than half its original price in six months after its launch. The company took a $485 million charge against its revenues in the third quarter mainly for unsold PlayBooks (as well as $50 million due to a three-day network outage in mid-October).

The inability to know whether people will remain interested in BlackBerry devices concerned investor Bill Ackman. "We like businesses like the railroad business which aren't going to go away," he said in a public meeting in Toronto. "As much as I like my BlackBerry, there is some risk it's going to go away. And that's a risk we don't want to take with a billion and half dollars."

Watsa still sees plenty of value in the company. Fairfax told GuruFocus he liked that it is "trading at less than book, [has] 75 million subscribers and growing, $700 million free cash flow in last reported three months, $1.5 billion in cash, No. 1 smartphone in many large growing markets, genius founders invested in company and buying more stock, and a seasoned operator in [newly appointed CEO Thorsten] Heins."

RIM is also trading near historical low valuations, and its P/E was even lower in the third quarter, when Watsa bought:
RIM! M pe,ps,pb Interactive Chart

Old Republic Corp. (ORI)

Old Republic Corp, one of the 50 largest publicly held insurance organizations in the nation, engages primarily in commercial lines underwriting and has a client base of leading industrial and financial services companies.

Watsa has held Old Republic shares since prior to 2007. He has not added to his holding since the third quarter of 2008, and since then the stock rarely went higher than his first quarter 2008 purchase price of almost $14. The stock dropped to an average of $9 in the fourth quarter of 2011, and he bought 5,000 more shares, bringing his total holding to 35,000 shares.

For the full year 2011, Old Republic experienced a loss of $218.5 million, compared to $40.6 million in 2010, due to two factors. The company's general and title insurance segments turned positive for the first time since 2007, which was offset by the record-high operating losses due to dramatically increased claim costs. All of its gain in net income for the final quarter of the year was from substantially increased investment gains.

Johnson & Johnson (JNJ)

Prem Watsa has had Johnson & Johnson (JNJ) in his portfolio since prior to 2007, and it is his largest holding. Most recently, he purchased 763,000 shares in the fourth quarter of 2011 at an average of $64 per share.

Johnson & Johnson was founded in 1886 and today is one of the most comprehensive health care businesses in the world. It also has several impressive achievements that qualifies it as one of the nation's premier blue-chip stocks: 27 consecutive years of adjusted earnings increases, 49 consecutive years of dividend increases. Johnson & Johnson stock generated 4% total return for investors over the last 10 years, compared to 1.4% for the S&P 500.

Currently, Johnson & Johnson, in partnership with Pfizer (PFE), is working on Bapineuzumab, what it calls the drug industry's "best chance" to delay Alzheimer's. They plan to release results! of the d! rug's Phase III data in the second half of this year.

Warren Buffett, in data released today from GuruFocus Real Time Picks, sold shares of Johnson & Johnson in the fourth quarter.

Sells and Reductions

Watsa sold two stocks in the fourth quarter: Continucare Corp. (CNU) and First Place Financial Corp. (FPFC). He reduced Dell (DELL), one of his largest holdings, but almost 60%.

The investor's top holdings include several extremely high-quality companies and some with more uncertain futures, meaning 2012 will be an interesting year to watch him.

See Prem Watsa's portfolio here. Also check out the Undervalued Stocks, Top Growth Companies, and High Yield stocks of Prem Watsa.

Top Stocks To Watch Right Now

Related links:RIMM pe,ps,pb Interactive ChartPrem WatsaThe largest sector of Watsa's portfolioFairfax told GuruFocusBill AckmanHe said in a public meeting in TorontoOld Republic experienced a loss of $2185 millionWarren BuffettGuruFocus Real Time PicksSee Prem Watsa's portfolio hereUndervalued StocksTop Growth CompaniesHigh Yield stocks

Should You Consider Eaton at These Prices?

With shares of Eaton (NYSE:ETN) trading around $68, is the stock an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Eaton operates as a diversified power management company worldwide. It provides electrical products, systems, and services for power quality, distribution, and control; power transmission, lighting, and wiring products; hydraulics components, systems, and services for industrial and mobile equipment; aerospace fuel, hydraulics, and pneumatic systems for commercial and military use; and truck and automotive drivetrain and powertrain systems for performance, fuel economy, and safety. The company operates through Electrical Americas, Electrical Rest of World, Cooper, Hydraulics, Aerospace, Truck, and Automotive segments. Its products are used in a wide range of growing industries worldwide that will fuel demand for the company. Look for Eaton to continue to profit as international companies and consumers grow at impressive rates.

T = Technicals on the Stock Chart are Strong

Eaton stock has seen a powerful move higher over the last few years. In fact, the stock is now trading at all-time high prices and sees no significant signs of slowing just yet. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Eaton is trading above its rising key averages, which signals neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

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	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Eaton Options	24.01%	30%	29%

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

	Put IV Skew	Call IV Skew
June Options	Flat	Average
July Options	Top 5 Clean Energy Stocks To Own For 2014 Flat	Average

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

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

E = Earnings Are Mixed Quarter-Over-Quarter

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

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	-13.19%	-56.53%	-4.67%	15.46%
Revenue Growth (Y-O-Y)	34.09%	7.44%	-4.20%	-0.54%
Earnings Reaction	2.77%	4.93%	5.01%	3.88%

Eaton has seen mixed earnings and revenue figures over the last four quarters. From these figures, the markets have been upbeat about Eaton’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Eaton stock done relative to its peers, ITT (NYSE:ITT), Johnson Controls (NYSE:JCI), Parker Hannifin (NYSE:PH), and the sector?

	Eaton	ITT	Johnson Controls	Parker Hannifin	Sector
Year-to-Date Return	26.75%	30.31%	24.10%	15.57%	19.34%

Eaton has been a relative performance leader, year-to-date.

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Conclusion

Eaton provides essential power management products and services to a wide variety of companies and industries around the world. The stock has seen a powerful run in recent years that has taken it to all-time high prices. Over the last four quarters, the company has seen mixed earnings and revenue numbers, regardless, investors have remained upbeat. Relative to its peers and sector, Eaton has been a year-to-date performance leader. Look for Eaton to continue to OUTPERFORM.

Using Index Futures To Predict The Future

An index futures contract binds the parties to an agreed value for the underlying index at a specified future date. For example, the September futures contract for the current year on the Standard & Poor's 500 Index reflects the expected value of that index at the close of business on the third Friday in September. Like any derivative, it's a zero-sum game: One party is long and the other short - and the loser must pay the winner the difference between the agreed index futures price and the index closing value at expiration.

Fair Value of an Index Future
Although index futures are closely correlated to the underlying index, they are not identical. An investor in index futures does not receive (if long) or owe (if short) dividends on the stocks in the index, unlike an investor who buys or sells short the component stocks or an exchange-traded fund that tracks the index.

Index futures trade on margin, too: An investor who buys $100,000 worth of futures must put up around 5% of the principal amount ($5,000) at the outset, whereas an investor in the stock components or an ETF must put up the full $100,000.

The index futures price must equal the underlying index value only at expiration. At any other time, the futures contract has a fair value relative to the index, which reflects the expected dividends forgone (a deduction from the index value) and the financing cost for the difference between the initial margin and the principal amount of the contract (an addition) between the trade date and expiration. When interest rates are low, the dividend adjustment outweighs the financing cost, so fair value for index futures is typically lower than the index value.

Index Futures Arbitrage
Just because index futures have a fair value doesn't mean they trade at that price. Market participants use index futures for many different purposes, including hedging; adjusting asset allocation through index futures overlay programs or transition management; or outright speculation on market direction. Index futures are more liquid than the market in the index's individual components, so investors in a hurry to alter their equity exposure trade index futures - even if the price isn't equal to fair value.

Whenever the index futures price moves away from fair value, it creates a trading opportunity called index arbitrage. The major banks and securities houses maintain computer models that track the ex-dividend calendar for the index components, and factor in the firms' borrowing costs to compute fair value for the index in real time. As soon as the index futures price premium, or discount to fair value, covers their transaction costs (clearing, settlement, commissions and expected market impact) plus a small profit margin, the computers jump in, either selling index futures and buying the underlying stocks if futures trade at a premium, or the reverse if futures trade at a discount.

Index Futures Trading Hours
Index arbitrage keeps the index futures price close to fair value, but only when both index futures and the underlying stocks are trading at the same time. While the stock market opens at 9:30am and closes at 4pm, index futures trade 24/7 on platforms like Globex, an electronic trading system run by CME Group. Liquidity in index futures drops outside stock exchange trading hours because the index arbitrage players can no longer ply their trade. If the futures price gets out of whack, they cannot hedge an index futures purchase or sale through an offsetting sale or purchase of the underlying stocks. But other market participants are still active.

Index Futures Predict the Opening Direction
Suppose good news comes out abroad overnight - the ECB cuts interest rates, or China reports stronger than expected growth in GDP. The local equity markets will probably rise, and investors may anticipate a stronger U.S. market, too. If they buy index futures, the price will go up. And with index arbitrageurs on the sidelines until the U.S. stock market opens, nobody will counteract the buying pressure even if the futures price exceeds fair value. As soon as New York opens, though, the index arbitrageurs will execute whatever trades are needed to bring the index futures price back in line - in this example, by buying the component stocks and selling index futures.

Investors cannot just check whether the futures price is above or below its closing value on the previous day, though. The dividend adjustments to index futures fair value change overnight (they are constant during each day), and the indicated market direction depends on the price of index futures relative to fair value regardless of the preceding close. Ex-dividend dates are not evenly spread over the calendar, either; they tend to cluster around certain dates. On a day when several big index constituents go ex-dividend, index futures may trade above the prior close but still imply a lower opening.

… In the Short-Term
Index futures prices are often an excellent indicator of opening market direction, but the signal works for only a brief period. Trading is typically volatile at the opening, which accounts for a disproportionate amount of total trading volume. If an institutional investor weighs in with a large buy or sell program in multiple stocks, the market impact can overwhelm whatever price movement the index futures indicate. Institutional traders do watch futures prices, of course, but the bigger the orders they have to execute, the less important the index futures direction signal becomes.

Late openings can also disrupt index arbitrage activity. Although the market opens at 9:30am, not every stock starts to trade at once. The opening price is set through an auction procedure, and if the bids and offers do not overlap, the stock remains closed until matching orders come in. Index arbitrage players won't step in until they can execute both sides of their trades, which means the largest - and preferably all - stocks in an index must have opened. The longer index arbitrageurs stay on the sidelines, the greater the chances that other market activity will negate the index futures direction signal.

The Bottom Line
If the futures price suggests the market will rise on the opening, investors who wish to sell that day may want to wait until after the market opens before entering their order, or set a higher price limit. Buyers may want to hold off when index futures predict a lower opening, too. Nothing is guaranteed, however; index futures do predict the opening market direction most of the time, but even the best soothsayers are not always right.

Investors can monitor futures prices and fair values on websites like CNBC or CNN Money, both of which also show pre-market indications for individual stocks (a less reliable indicator due to poor liquidity).

The FTSE's Worst Day of the Year!

LONDON -- Oh, how the headlines change!

For weeks we've had pronouncements like "FTSE highest for 13 years." And then today, it's suddenly all "FTSE has its worse day in a year!"

Sure, that's factually correct, after the FTSE 100 (FTSEINDICES: ^FTSE  ) dropped 143 points yesterday for a 2.1% fall to 6,697 -- down from that 13-year highest close of 6,840. But after the year it's had, such gloomy headlines are a bit like complaining that your big lottery win is 2% smaller than you had thought it would be!

Over the past 12 months, the index of the U.K.'s biggest public companies has risen by a stunning 25%, even after having fallen further to 6,665 points by midday today. And that's without dividends; there's an average yield of 3% to add to it.

And what of the FTSE's best individual performers?

Look at the size of these!
If you had bought shares in Lloyds Banking Group (LSE: LLOY  ) a year ago, you'd have more than doubled your money by today. Despite the shares having dropped 5% over the past two days to a current price of 60 pence, they're still up more than 120% as the bailed-out bank eases itself back into profitability.

How about chip designer ARM Holdings (LSE: ARM  ) ? ARM's share price has plunged by a massive 10.7% over the past week to 980 pence as I write. But even after that fall, it has still doubled since this time last year. And the demand for mobile-computer processors escalates year after year, ARM shares have more than 10-bagged since the start of 2009.

Look at budget airline easyJet (LSE: EZJ  ) , which is snapping up landing slots at Gatwick while rivals are feeling the pinch. The share price has fallen 2.7% to 1,250 pence over the past two days. But over the full 12 months, it has provided the biggest gain of the companies we're looking at here, up more than 150%.

And even our humble utilities companies are having a great time of it -- just look at water supplier United Utilities (LSE: UU  ) . It's generally considered a cash cow with dividend yields of close to 5%, but shareholders have also enjoyed a 23% rise in the share price to 787 pence, with the price reaching a five-year high this week.

Worst day of the year? We've never had it so good!

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PayPal and Apple Want to Kill Your Password

PayPal is eBay's (NASDAQ: EBAY  ) growth star these days. Total payments volume was up 21% last quarter, with revenue jumping 18%. In dollar terms, that's still less than the core marketplace business, but it's growing much faster. With that rising payments volume comes increasing responsibility over account security, particularly since payments are quickly shifting toward mobile platforms.

To that end, PayPal is hoping that Apple (NASDAQ: AAPL  ) will play a part in bolstering its security. PayPal wants Apple's help in killing all security passwords.

Rest in peace
Nowadays, a short string of alphanumeric characters interspersed with exclamation points and ampersands is all it takes for unscrupulous types to get access to all your digits. There have been a string of high-profile security breaches in recent memory. Wired's Mat Honan had his digital life erased in just one hour, in part due to password security flaws at Apple and Amazon.com that allowed a hacker to remotely wipe all of his gadgets. Honan is now advocating killing the password, arguing that short strings of characters can't cut it anymore.

PayPal's chief information security officer, Michael Barrett, concurs, outlining the death of the password at the recent Interop IT conference in Vegas, according to CIO. Barrett notes, "Passwords, when used ubiquitously everywhere at Internet scale are starting to fail us."

Since many users tend to lazily reuse the same password for a wide range of accounts, one security compromise can lead to a domino effect whereby a person's security is effectively downgraded to the lowest common denominator: "That has the effect of reducing the security of their most secure account to the security of the least secure place they visit on the Internet."

Barrett is also the president of the Fast IDentity Online, or FIDO, alliance, which was formed last summer and hopes to set new open security standards by developing and promoting alternative authentication methods that can be widely adopted.

Where does Apple come in? Barrett suggested that the iPhone maker would adopt FIDO protocols, which could do wonders in catalyzing the industry forward:

It's widely rumored that a large technology provider in Cupertino, Calif., will come out with a phone later this year that has a fingerprint reader on it. There is going to be a fingerprint enabled phone on the market later this year. Not just one, multiple.

Apple is certainly integrating a fingerprint sensor into future iPhones to know who you are, leveraging the AuthenTec acquisition from last year. Combined with some type of mobile payments solution (which would inevitably compete directly with PayPal), killing the password could be Apple's killer feature of 2013.

There's a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

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3 FTSE 100 Shares for the Week Ahead: Land Securities, Aviva, and Antofagasta

LONDON -- We've already had a look at three FTSE 100 companies scheduled to bring us news next week. But we're heading into a busy period for companies with quarters ending in March, and we quite have a few more to come during the month. Here are three more companies from the top-tier index due to report next week:

Land Securities Group
We've seen that British Land Company is set to reveal its full-year results next Tuesday, and fellow Real-Estate Investment Trust Land Securities Group  (LSE: LAND  )  is due to do the same on Wednesday. Land Securities shares are up nearly 25% over the past 12 months, having been on a bit of a surge since the beginning of April.

Expectations are modest, with a small fall in earnings predicted -- and with a current price of 920p, the shares are on a relatively lofty price-to-earnings (P/E) ratio of around 25. But forecasts for the following two years suggest rises in earnings, and the current valuation of the shares is surely based on expectations for longer term gains in property prices.

Aviva
Thursday will bring us a first-quarter statement from Aviva  (LSE: AV  ) (NYSE: AV  ) , a constituent of the Fool's Beginners' Portfolio. The insurance firm's dividend was famously slashed for the year to December 2012, from unsustainable yields of more than 8%, and that led to a big dip in the share price.

But even after the fall, analysts are still forecasting a dividend yield for the year to December 2013 of around 4.5%, based on the current share price of 325 pence. And that's not bad, especially as it should be well covered.

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And after recent falls, the shares are on a forward P/E of under 8. Does that sound like a bargain to you? Hopefully we'll have more insight next week.

Antofagasta
It's no secret that mining shares have been suffering this year, and Antofagasta (LSE: ANTO) has had a particularly tough time -- since 2 January, the share price has slumped by a third to today's 940 pence, although it has blipped up a bit over the past week or so.

We had an update from the copper miner on 1 May, telling us that production of the metal was up nearly 13% to 183,000 tonnes during the first quarter, and we'll get full figures for the period next Thursday.

Forecasts are currently suggesting a fall in earnings of about 15% to 75 pence per share, valuing the shares at 12.4 times earnings, and there should be a dividend yield of around 3%. That may not look a screaming bargain right now, but metal prices are depressed at the moment, and a return to worldwide economic growth can't be too far ahead -- can it?

Finally, dividends can add nicely to your investment returns -- they can be spent or reinvested according to your needs. Whether investing for income or growth, good old cash is always welcome.

And that's why I recommend the BRAND-NEW Fool report, "The Motley Fool's Top Income Share for 2013," in which our top analysts identify a share that they believe will provide handsome dividend income for years to come.

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Bank of America Takes Its Foe Down to the Wire

A New York state judge ruled against summary judgment, so the battle between Bank of America (NYSE: BAC  ) and MBIA (NYSE: MBI  ) will continue. The dispute centers around which company is liable for losses stemming from mortgage-backed securities containing loans originated by Countrywide, the embattled mortgage company B of A ultimately acquired.

In this video, Motley Fool banking analysts David Hanson and Matt Koppenheffer give their takes on what it means for investors in these companies and who may have the upper hand during settlement talks.

Any steam left?

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U.K.’s FTSE 100 Retreats as U.S. Employers Add Fewer Jobs

U.K. stocks fell for the first time in five days, trimming the benchmark FTSE 100 Index (UKX)'s weekly advance, after a report showed U.S. employers added fewer jobs in July than forecast.

Royal Bank of Scotland Group Plc sank 3.3 percent after reporting results and naming the head of its U.K. consumer unit as chief executive officer. William Hill Plc (WMH) dropped the most in four years after the bookmaker posted earnings that missed analysts' projections. International Consolidated Airlines Group SA (IAG) rose to a five-year high as the parent of British Airways reported an operating profit in the second quarter.

The FTSE 100 slid 34.11 points, or 0.5 percent, to 6,647.87 at the close in London. The gauge has still gained 1.4 percent this week as a report showed the U.S. economy, the world's largest, grew more than projected in the second quarter and the Federal Reserve said it will maintain its bond-buying program.

"The headlines from the report look disappointing," Stewart Richardson, who helps oversee about $100 million at RMG Wealth Management LLP in London, said by telephone. "It goes slightly against the grain compared with the other U.S. data we saw this week. People are reappraising their positions."

The volume of shares changing hands in FTSE 100 companies today was 1.8 percent lower than the 30-day average, data compiled by Bloomberg show. The broader FTSE All-Share Index fell 0.4 percent today, while Ireland's ISEQ Index (ISEQ) increased 0.8 percent, extending the highest level since 2008.

Jobs Data

U.S. employers added a 162,000 workers in July, after hiring a revised 188,000 in the previous month, the Labor Department's payrolls report showed today. That fell short of the median estimate of 185,000 jobs in a Bloomberg survey. The jobless rate fell to 7.4 percent. Economists had predicted an unemployment rate of 7.5 percent.

The FTSE 100 earlier rose as much as 0.2 percent as U.K. construction growth accelerated to the fastest in three years in July. An index of activity rose to 57 from 51 in June, Markit Economics and the Chartered Institute of Purchasing and Supply said today. Reading above 50 indicate expansion.

Britain's economy will grow faster than previously forecast as consumers increase spending, according to the National Institute of Economic and Social Research. Gross domestic product will expand 1.2 percent this year and 1.8 percent in 2014, compared with predictions in May of 0.9 percent and 1.5 percent, respectively, the institute said today.

RBS Retreats

RBS (RBS) sank 3.3 percent to 322.5 pence. Britain's biggest publicly owned lender said Ross McEwan will replace Stephen Hester as CEO on Oct. 1. First-half net income was 535 million pounds ($808 million), compared with a 2 billion-pound loss a year earlier. That missed the 605 million-pound estimate of Mark Phin, an analyst at Keefe, Bruyette & Woods Ltd.

William Hill fell 7.3 percent, the most since August 2009, to 458.5. The operator of more than 2,300 betting shops said first-half pretax profit was 143.6 million pounds, trailing the average analyst estimate of 152.3 million pounds.

Smiths Group Plc (SMIN) tumbled 5.5 percent to 1,320 pence. The U.K. producer of security scanners said talks with a potential buyer for the sale of its medical division have ended after failing to reach an agreement on terms.

IAG jumped 6.7 percent to 317 pence, the highest since February 2008. Profit before one-time items was 245 million euros ($324 million) in the second quarter, compared with a 4 million-euro loss in the year-earlier period.

Weir Gains

Weir Group Plc (WEIR) added 1.6 percent to 2,239 pence, the highest price in almost two months. The U.K.'s largest supplier of pressure pumps was raised to buy from hold at Berenberg Bank.

Inchcape Plc (INCH) surged 9.9 percent to 645 pence, the highest level since June 2008. The largest publicly traded U.K. car retailer and wholesaler reported first-half adjusted pretax earnings increased 11 percent. The company also announced share buybacks of 100 million pounds in the next year.

Man Group Plc advanced 9.5 percent, the most in three months, to 91.5 pence. The world's biggest publicly traded hedge-fund manager posted first-half earnings that surpassed analysts' estimates, helped by higher performance fees at its GLG Partners unit.

Best Cheap Stocks For 2016

Best Cheap Stocks For 2016