1 Reason General Dynamics Looks Weak

Margins matter. The more General Dynamics (NYSE: GD  ) keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new strategic plans, or (gasp!) distribute to shareholders. Healthy margins often separate pretenders from the best stocks in the market. That's why we check up on margins at least once a quarter in this series. I'm looking for the absolute numbers, so I can compare them to current and potential competitors, and any trend that may tell me how strong General Dynamics' competitive position could be.

Here's the current margin snapshot for General Dynamics over the trailing 12 months: Gross margin is 11.7%, while operating margin is 11.7% and net margin is 7.7%.

Unfortunately, a look at the most recent numbers doesn't tell us much about where General Dynamics has been, or where it's going. A company with rising gross and operating margins often fuels its growth by increasing demand for its products. If it sells more units while keeping costs in check, its profitability increases. Conversely, a company with gross margins that inch downward over time is often losing out to competition, and possibly engaging in a race to the bottom on prices. If it can't make up for this problem by cutting costs -- and most companies can't -- then both the business and its shares face a decidedly bleak outlook.

Of course, over the short term, the kind of economic shocks we recently experienced can drastically affect a company's profitability. That's why I like to look at five fiscal years' worth of margins, along with the results for the trailing 12 months, the last fiscal year, and last fiscal quarter (LFQ). You can't always reach a hard conclusion about your company's health, but you can better understand what to expect, and what to watch.

Here's the margin picture for General Dynamics over the past few years.

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Because of seasonality in some businesses, the numbers for the last period on the right -- the TTM figures -- aren't always comparable to the FY results preceding them. To compare quarterly margins to their prior-year levels, consult this chart.

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

Here's how the stats break down:

• Over the past five years, gross margin peaked at 18.3% and averaged 16.7%. Operating margin peaked at 12.5% and averaged 11.8%. Net margin peaked at 8.4% and averaged 7.9%.
• TTM gross margin is 11.7%, 500 basis points worse than the five-year average. TTM operating margin is 11.7%, 10 basis points worse than the five-year average. TTM net margin is 7.7%, 20 basis points worse than the five-year average.

With recent TTM operating margins below historical averages, General Dynamics has some work to do.

If you take the time to read past the headlines and crack a filing now and then, you're probably ahead of 95% of the market's individual investors. To stay ahead, learn more about how I use analysis like this to help me uncover the best returns in the stock market. Got an opinion on the margins at General Dynamics? Let us know in the comments below.

• Add General Dynamics to My Watchlist.

‘The Big Short’ Author Sued for Defamation

Michael Lewis, who wrote the best-seller “The Big Short: Inside the Doomsday Machine” about the mortgage meltdown, has become the target of a lawsuit by an asset manager he wrote about in the book. Lewis, his publisher, W. W. Norton & Co., and hedge fund manager Steven Eisman of FrontPoint Partners LLC in Connecticut were all named in the suit, filed in Manhattan federal court on Friday.

According to a Reuters report, Wing Chau and his firm Harding Advisory LLC allege in the suit, which was made public on Monday, that Lewis’ book made “false and defamatory statements” about Chau and his firm “and [that they] want to redress that wrong.”

The suit said in part, "In sharing the purported insider's view of the mortgage market meltdown, Lewis made false and defamatory statements about an experienced investment professional, Wing Chau, and his firm, Harding Advisory LLC." It also said that while Chau and other managers who used collateralized debt obligations (CDOs) were portrayed as “villains,” Eisman was depicted as “heroic.” The suit seeks unspecified damages from all parties, as well as punitive damages.

Drake McFeely, president and chairman of the publisher, said in the report, "Suits like this one are an unfortunate fact of life in our industry, particularly when a book is as successful as this one has been." He went on to say, "We stand by Mr. Lewis and his book The Big Short, and, assuming that Mr. Chau's suit has been filed, we expect that it will be dismissed."

Both the publisher and Lewis said the complaint had not yet been served upon them. Eisman said he had no notice of such a suit and had no comment. The book was published in March of 2010 and was No. 1 on The New York Times list of hardcover nonfiction bestsellers for six weeks.

State of the Union: 4 things to look for

NEW YORK (CNNMoney) -- When President Obama delivers his third, and possibly final, State of the Union address Tuesday, will the economy be issue no. 1?

Probably. If past speeches are any indication, the economy will be mentioned early and often.

Economic terms, including "tax," "spend" and "jobs" are among the most frequently used words in recent State of the Union speeches.

In 2009, Obama used the word "economy" a total of 23 times in his unofficial address. In 2010, that number dropped to 15, before falling to 7 mentions last year.

That may reflect the general pace of economic recovery.

In 2009, the economy was hemorrhaging more than 700,000 jobs a month. By early 2010, the economy was starting to add jobs -- a trend that would continue into 2011.

Of course, there is one big difference this time around: It's an election year, and that means nitty-gritty policy proposals might fall by the wayside in favor of lofty political rhetoric.

In anticipation of that eventuality, Republicans are already firing back.

House Speaker John Boehner said Sunday he has been reading a lot about what the president is expected to say Tuesday, and "it sounds to me like ... more spending, higher taxes, more regulations."

"If that's what the president is going to talk about Tuesday night," Boehner said, "I think it's pathetic."

Here's what we'll be listening for:

Income inequality

Late last year, Obama made a trip to Kansas, and presented Americans with a choice: a "fair shot" with him, or a return to "you're on your own economics."

The much ballyhooed speech was delivered in Osawatomie, the same town where Teddy Roosevelt made his case for "New Nationalism" -- a plan for broad social and economic reform -- more than 100 years ago.

In the speech, Obama firmly embraced the rhetoric of income inequality, and laid out a plan to rebuild the middle class.

One big idea: Fairness.

"I'm here to reaffirm my deep conviction that we are greater together than we are on our own," Obama said. "I believe that this country succeeds when everyone gets a fair shot, when everyone does their fair share, and when everyone plays by the same rules."

And in a video message e-mailed to supporters over the weekend, Obama hinted he would return to that theme.

"We can go in two directions" Obama said. "One is toward less opportunity and less fairness, or we can fight for where I think we need to go."

Look for more of that on Tuesday.

Debt

No issue confounded the White House more in 2011.

Battles with congressional Republicans over spending brought the United States government to the brink of shutdown, close to a possible default and contributed to the first-ever downgrade of the United States' credit rating.

And it's not over. The super committee, borne out of the debt ceiling debate, failed to complete its work.

Now, lawmakers have to find a way to avoid the $1.2 trillion in automatic spending cuts that are scheduled to hit the budget in 2013.

Lawmakers from both parties say they are determined to prevent those deep cuts to the defense budget.

Obama has told lawmakers he will veto any attempt to circumvent those automatic cuts, and could pressure them to find another way on Tuesday night.

Taxes

Late last year, Congress agreed to a two-month extension of the payroll tax holiday.

Watch for Obama to press Congress for another extension -- and clues on how he wants to pay for it.

Some in the GOP are wary the White House and Senate Democrats will try again to pass a surtax on millionaires -- something even some Democrats don't support -- as a way of painting the GOP as protectors of the rich.

It's also possible that Obama will bring up the "Buffett Rule."

A central theme in his debt-reduction proposal, the rule seeks to ensure that those making more than $1 million pay a higher percentage of their income in federal income and payroll taxes than those who make less.

Jobs plan

In September, Obama laid out a new jobs plan that was almost totally ignored by Congress.

What was in that plan? An infrastructure bank, $50 billion in immediate funding for highways, transit, rail and aviation, modernization of schools and vacant properties, subsidized jobs training and federal dollars for first responders, teachers and summer jobs.

While the economy appears to have improved since that speech was delivered, look for Obama to slip parts of his jobs plan into the State of the Union. 

The Significance Of Permanent Stickers For Products

A label can greatly influence the perception of the product and the eterprise making it. It can be compared to the clothing worn by people to get noticed and be praised for it. The same thing with labels, they must be created to attract and impress the targeted consumers. The packaging and label is the first facet that a customer notices before they even handle and scrutinize the product.

Commercial goods having quality labels will have better chances of success in a considerably cut-throat market. For example, goods with superbly designed permanent adhesive labels are more appealing than others which are completed hastily, hence setting up more competence and trust in the business.

It is a must that lables should be designed to suit the functions and purpose of a business. The types of materials need to be durable plus the print out must be detailed enough to obtain that professional look of the merchandise. The quality of the paper should be high and should withstand changes in temperature. Permanent adhesive labels can be the perfect choice since they don’t come off from too much touching or transporting. This way, your labeling is always in-place and the goods will still lend an expensive look once they’re displayed.

Developing an attractive, distinctive, and durable marking or labeling is a part of every marketing strategy. It is observed that a customer always prefer commercial goods with exceptional packaging and labeling. The colors and also the calligraphy are the essential factors which catch the attention of the consumers. Permanent adhesive labels are the commonly used materials given that they can be produced in a variety of ways, in different colors, and designs.

Choosing the suitable maker for your permanent adhesive labels is not easy because there are a lot out there, most of them can promise to deliver the best output for you. However the simplest way to do it is search the internet for the reliable firm who can supply just the right permanent adhesive labels for you. You just need to set your criteria and find the company who can meet the standards you will be setting in making the permanent adhesive labels to embellish your commercial goods.

Permanent adhesive labels may be the ideal option to your product appearance. You can find the right company to design and make these kinds of labeling for your business here.

Tech Stocks: Tech stocks begin week with mild losses

SAN FRANCISCO (MarketWatch) � Tech stocks climbed in late trading Monday, but the overall sector still ended up putting in a mixed performance after the latest round of financial worries related to the euro-zone debt crisis.

Among leading tech stocks, gains came from Apple Inc. AAPL , Dell Inc. DELL , Microsoft Corp. MSFT and IBM Corp. IBM .

Click to Play Euro leaders aim to ward off future crises

WSJ's Stephen Fidler reports euro-zone leaders are proposing stiff rules and penalties at their summit in Brussels to prevent countries from becoming economically unstable. AP Photo/Petros Giannakouris

The tech-heavy Nasdaq Composite Index COMP �nearly erased all of its losses, but still closed down by 4.6 points at 2,811.94. The Philadelphia Semiconductor Index SOX �was off by 1.1%.

Decliners included Google Inc. GOOG , EMC Corp. EMC �and Juniper Networks Inc. JNPR �.�

Many chip stocks were on the decline, led by Rambus Inc. RMBS , which fell 46 cents a share, or 5.8%, to close at $7.51.

Rambus� shares took a hit following reports on Friday that said the U.S. Patent and Trademark Office invalidated a patent held by the chip-technology licensing company pertaining to memory chips used in PCs.

Other chip stocks in the red included Broadcom Corp. BRCM , Texas Instruments Inc. TXN �and Applied Materials Inc. AMAT .

The tech sector�s performance mirrored that of the broader market, which retreated on reports that Greece wouldn�t accept supervision of its budgetary decisions as one of the conditions for it to receive financial aid. The Greek financial situation is considered one of the most-damaging for the state of the euro. Read more about Greece and the euro crisis.

U.S. stock futures lower amid fresh Greece worries

MARKETWATCH FRONT PAGE

U.S. stock index futures fell on Monday, tracking losses in Asia and Europe as investors eyed a European Union summit amid fresh worries over Greece�s ability to sort out its financial difficulties. See full story.

Stocks to watch Monday: Thomas & Betts, US Airways

Investors assess various developments on the M&A front early Monday. See full story.

Greece, �firewalls� overshadow EU summit

Expectations for a breakthrough in the effort to resolve the euro-zone sovereign-debt crisis are low as European leaders gather for their first summit of 2012, with the event overshadowed by ongoing controversy over Greece and Germany�s reluctance to boost the region�s rescue funds. See full story.

Greece rebuffs budget commissioner reports

Finance minister dismisses German-backed idea for EU commissioner with veto over national government policies. See full story.

European countries revert to form

The most revealing feature of the European debt crisis is how all the different actors flaunt ever more brazenly national characteristics, writes David Marsh. See full story.

MARKETWATCH COMMENTARY

Instead of acknowledging that banks have become a part of government, we keep pretending they are private institutions, writes David Weidner. See full story.

MARKETWATCH PERSONAL FINANCE

What�s the State of Retirement in the U.S.? It�s plagued with problems involving Social Security, contribution rates and more that need fixing now. See full story.

Nonfarm Payrolls Before and After Recessions

I was pleased to see that Sunday’s Chart of the Week: A Broader Look at the U.S. Recovery generated a good deal of interest and discussion. While I have always been a card carrying Quadropheniac, truth be told, the only slice of the economy anyone is obsessing about these days is jobs. So with the weekly jobless claims numbers due out today and the February nonfarm payrolls slated for a week from Friday, this seems like an opportune time to revisit the employment situation.

Since last Sunday’s chart measured nonfarm payrolls from 12 months prior to 27 months following the preceding business cycle peak, I have elected to take a much longer view of employment and recessions. The two charts below show employment trend data for five (top) and ten (bottom) years before and after each business cycle since 1948.

Note that in the years leading up to the December 2007 business cycle peak, job growth was relatively flat compared to the historical mean (blue line). More importantly, the performance during the current ‘recovery’ is not only anemic compared to prior post-recession job creation efforts, there is still no concrete evidence of a bottom in employment. The current economic environment is behaving in stark contrast to prior recessions when the economy typically replaced all the jobs lost in the downturn by this stage and was already in a net positive job situation relative to the prior business cycle peak.

While I still anticipate that job growth will begin in the next few months, the longer this jobless recovery persists, the harder it will be to get the economy firing on all cylinders.

With $97.6 billion, Apple has more cash than ...

NEW YORK (CNNMoney) -- Apple has nearly $100 billion in cash. $97.6 billion to be precise. That is a lot of iDough. Even for Warren Buffett. Perhaps it's time for Apple to, I don't know, use some of it?

Unless Apple (AAPL, Fortune 500) is planning to build an army of Siri-voiced iBots, it's hard to defend why the company needs that much cash. Even company executives admit that it may soon have to deploy some of it.

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During the company's celebratory earnings conference call Tuesday, Apple CFO Peter Oppenheimer said the company "was not letting [the cash] burn a hole in our pockets."

Really? Apple's iMountain of money has nearly doubled since the end of fiscal 2010. But Apple doesn't pay a dividend. It doesn't make splashy acquisitions or buy back stock.

If Apple's cash keeps piling up, at this rate it won't just burn a hole in the company's pockets. It would be big enough to swallow up the entire universe.

Now one reason Apple is still hanging onto cash is because it doesn't want to pay a sizeable chunk of taxes to Uncle Sam if it used that money on something productive or shareholder friendly. Oppenheimer said Tuesday that $64 billion of its cash was offshore. It is "trapped" if you will.

Apple is a multinational company. So there is nothing legally wrong with keeping cash abroad. But it is apparently doing so to avoid having to pay the 35% tax rate on it if it were repatriated or brought back to the U.S.

Many companies are in the same boat. And that's why Apple, Cisco Systems (CSCO, Fortune 500), Google (GOOG, Fortune 500), Microsoft (MSFT, Fortune 500) and other cash-rich techs are urging Congress to enact a so-called tax holiday.

This group wants the tax rate on profits and cash held overseas to be temporarily lowered. They argue that doing so would help stimulate the economy. Lawmakers have yet to bite.

Apple passes Exxon in market cap again

But even if Apple wants to keep fighting the tax holiday fight, you can't ignore the fact that it has $33.6 billion in cash in the United States.

That still is a lot of money that Apple could use for a regular, steady dividend, a big one-time cash payout or stock buybacks. Heck, it could do all three. That would all be good for shareholders.

And Apple would still have plenty left over to keep investing in research and development. Keep in mind that Apple generated $17.5 billion in cash flow from operations in its last quarter alone!

Will Apple finally succumb to the pressure to part with some of its cash? Probably. It's really a matter of when as opposed to if. New CEO Tim Cook said during an earnings call in October that Apple was "not religious" about holding onto cash.

Cook didn't discuss the cash hoard Tuesday. But in response to a question from an analyst about it, Oppenheimer said that Apple's management team was "actively discussing the best uses of our cash balance."

But I wouldn't interpret that as a code for future acquisitions. While some talking heads are calling for Apple to make a splashy acquisition of one of its key partners -- voice recognition software firm Nuance (NUAN) and chip designer ARM Holdings (ARMH) are oft-mentioned targets -- I seriously doubt that will happen.

For one, Cook is not that different from his predecessor, the late Steve Jobs.

Under Jobs, Apple made small, opportunistic acquisitions instead of big multi-billion dollar ones. Based on their current market values. ARM and Nuance would both likely fetch more than $10 billion each if you factor in a juicy premium.

All Apple. All the time. Fortune's Apple 2.0 blog

Apple's most recent acquisition was of Israeli semiconductor company Anobit Technologies earlier this month. The price tag? $390 million.

I'd like to think that Cook and Oppenheimer will carry on the Jobs tradition of steering clear of bold "game changing" deals.

First off, Apple doesn't need to make a big strategic move when things are going this well. And Apple's execs are probably smart enough to realize that more big tech companies have difficulty successfully completing mergers (Cisco, HP (HPQ, Fortune 500), Yahoo (YHOO, Fortune 500), Microsoft, and former Time Warner (TWX, Fortune 500) brother-in-arms AOL (AOL) to name a few) than there are success stories. IBM (IBM, Fortune 500) and Oracle (ORCL, Fortune 500) are the notable exceptions.

So once Apple finally puts that cash to use, expect something that rewards shareholders -- a dividend and maybe share buybacks -- as opposed to something that could potentially destroy Apple's stock value in the future.

And hey. Just imagine how big a dividend might be if Apple and its Silicon Valley friends are ever able to successfully use their lobbying might to get a tax repatriation holiday.

Best of StockTwits and can you tell me how to get to Sesame Street? Forget about more cowbell. We need more Apple!

JayBWood: It's hard to explain to people that a $400 billion market cap company can be undervalued $AAPL

Amazing fact about Apple is that the "core" business is trading at less than 10 times fiscal 2012 earnings estimates if you subtract the cash.

phoenixtrader: $AAPL Battery life. If I had All that $$$$ I would improve batteries and a lot!

Ha! You would think that with $100 billion in cash they could make a device you didn't have to charge every night. Solar powered iPad anyone?

CreateCapital: Let's quantify the "unusual" media coverage for $AAPL last quarter: the equivalent of about $500m in free advertising.

Whoa. That's a bit crass and cynical. Even for me. But you are probably right that the death of Steve Jobs in October did lead to more publicity for all things Apple than normal.

manicakes: $AAPL $NVDA "Hard disk drive shortage" is starting to sound like a euphemism for "Apple is killing us"

Nvidia's (NVDA) warning does seem to be more proof that any company with big exposure to the Wintel-based PC market has a lot more to worry about than the flooding in Thailand.

Finally, all the Apple talk had me humming the following infectious tune from a Sesame Street video that Baby Buzz likes. "A is for Apple. Can you sing it with me? One two three. Apple!" I asked followers (now above 14K!) to name the band.

The winner is Tim G, who also has a 2-year old. He correctly noted that the band is the quirky indie group Tilly and the Wall. According to their website, they are from Omaha. I wonder if Buffett likes them? Or his secretary?

The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks. 

A SiriusXM Share Buyback?

When SiriusXM (SIRI) reports fourth quarter and full year results in less than two weeks I expect to see (as guided) that it generated more than $400 million in free cash flow (FCF) for the year. Assuming no other significant changes to the balance sheet, Sirius will have more than $800 million in cash. I also expect that Sirius will reiterate 2012 FCF guidance of $700 million, which would give it more than $1.5 billion by the end of the year. What will the company do with this pile of cash?

A year ago Sirius CEO Mel Karmazin stated that the company would rapidly be building cash and noted possible uses.

"So the obvious question that arises from this is what will we do with the cash that we accumulate over time. There are only three things a company can deal with a significant amount of excess cash, pay down debt, buy assets to grow the business or return capital to the shareholders. Our board of directors will consider all the alternatives and make the big decision that is in the best interest of our shareholders."

Karmazin went on further to say that he was comfortable with leverage at 3x and that the company saw no attractive acquisitions. So, if the cash would not be used to reduce debt and there are no attractive acquisitions, that left returning capital to shareholders. When questioned, Karmazin said:

"We have already had a discussion at the board level about what we should do with our free cash flow. No determination has been made. Historically, I've always believed that a share buyback is a more tax efficient way of returning capital to shareholders as compared to a dividend. But clearly, that's not anything that has been determined."

Since that time there have been many questions about the share buyback. Would Liberty Media (LMCA) participate? Not if you listened to comments by Liberty CEO Greg Maffei, who said that selling Liberty's shares of Sirius is not a logical option for Liberty. And if Liberty does not participate, then the Liberty percentage ownership would increase with a share buyback by Sirius.

But that's not the only thing working against a share buyback. A CNBC article titled Most Share Buybacks Don't Pay Off for Investors pointed to a recent Thompson Reuters report. As one can tell from the title, shareholders often don't benefit from share buybacks. A common perception is that companies will buy back stock because management believes share prices are undervalued. The statistics tell a different story. More often that not, the shares are purchased when the prices are high rather than low. Also interesting was that more companies saw poor returns rather than good returns after a buyback.

This is consistent with a prior study that found similar results. So why do companies persist with buybacks when results are likely to be less than stellar? The article has one very telling comment about the poor timing of buybacks:

"This may be partially explained by the need for officers of public companies to make some use of the cash on hand, including keeping less of it due to the possibility of being taken over."

As Sirius builds up cash, it makes it easier for Liberty to buy a majority using Sirius's own cash. Can Sirius avoid this by using the cash for other purposes? Not really. Liberty has wide ranging powers to veto many discretionary uses of cash, including paying a dividend. Will another company make an offer for Sirius to access that attractive FCF? It doesn't seem likely because of the 40% stake already owned by Liberty. There is, however, one use of cash that may appeal to both Sirius and Liberty.

There is a $550 million 7% Exchangeable Senior Subordinated Note due in August of 2014. Each $,1000 note is exchangeable for 533.3333 shares of common stock placing the price of the underlying shares at $1.875. Buying back these bonds would eliminate future share dilution, although the purchase of the bonds will require paying a substantial premium for several reasons, including the high coupon rate and the fact that the underlying shares are currently trading at levels significantly above the conversion price.

The shares underlying the bonds have caused some confusion in the past. If the price of the stock is over $1.875 at the end of the quarter, the price triggers a complex calculation that increases the diluted share count. This has occurred only once since the bonds were issued in August of 2008 -- at the end of the second quarter of 2011. Regardless, it would eliminate a potential 293 million share dilution.

Summary
As the release of earnings approaches and the cash continues to build, analysts are likely to be asking a lot of questions about the use of that cash. A share buyback, and even a dividend, seem to be unlikely uses of the cash. It could make for a very interesting Q&A session on the conference call.

Disclosure: I am long SIRI.

Why Tennis Rules

Associated Press

Novak Djokovic of Serbia celebrates after defeating Rafael Nadal of Spain during the men's singles final at the Australian Open tennis championship in Melbourne early Monday.

One of these days men's tennis is going to get boring again. There will be a fallow period. Greats will retire, get hurt, fatten up, open bad restaurants, babble on TV and buy vineyards. There will be a new, unremarkable No. 1. A murky two through 10. Maybe a U.S. player—a real-live U.S. player!—will crack the top five. Grand Slam finals will shrink to three uneventful sets. Tennis will return to that stale-aired foyer it got trapped in a while ago—dull, characterless, skippable.

That time isn't now. Men's professional tennis may be the most satisfying sport on the planet at the moment. There is no game with so much excellence currently swirling at its top, that so reliably delivers not just entertainment, but historic greatness. It isn't to be missed. Conventional superlatives fail. Once-a-lifetime? Symphony of brilliance? Wicked good? It all sounds cheesy, inadequate. But what's happening in the men's game is as close as sports gets to unadulterated joy, the kind of outrageous viewer experience that leaves the audience gasping, as if anaerobic, as it did Sunday morning, in the men's final of the Australian Open.

Q4 Earnings Impressive, And Indicative

Client: What would it take for you to change your view?

Me: Revenue growth.

- Conversation, December 2009

After reviewing 4th quarter earnings, the conclusion is undeniable: There has been a surge in business activity over the last six months which is reflected in companies' top and bottom lines.

Take a look at the following data for the S&P 500 as a whole:

Period / Operating EPS

4Q09 (88%)* $17.34

3Q09 $15.78

2Q09 $13.81

1Q09 $10.11

4Q08 -$00.09

3Q08 $15.96

2Q08 $17.02

1Q08 $16.62

4Q07 $15.22

3Q07 $20.87

2Q07 $24.06

1Q07 $22.39

Now take a look at the data from an index I created of four of the biggest tech companies in the world (Hewlett Packard (HPQ), Intel (INTC), Cisco (CSCO) and EMC (EMC)) with a combined market cap in excess of $400 billion:

Big Tech Index
Period	Revenues**	% Change	Net Income	% Change
4Q 2009	$45,046	14.1%	$8,795	56.3%
3Q 2009	$41,875	-11.5%	$7,216	-5.2%
2Q 2009	$37,112	-17.2%	$5,486	-17.9%
1Q 2009	$35,494	-20.5%	$4,827	-25.1%
4Q 2008	$39,477	-15.2%	$5,627	-26.1%
3Q 2008	$47,314	18.6%	$7,615	7.7%
2Q 2008	$44,798	23.9%	$6,678	13.4%
1Q 2008	$44,656	24.6%	$6,441	6.9%
4Q 2007	$46,564	28.2%	$7,609	28.4%
3Q 2007	$39,884	16.8%	$7,074	28.2%
2Q 2007	$36,152	16.4%	$5,889
1Q 2007	$35,830	12.3%	$6,026
4Q 2006	$36,314		$5,926
3Q 2006	$34,145		$5,517
2Q 2006	$31,069
1Q 2006	$31,908

5 Stocks That Could Be Takeover Targets

February is traditionally the month when lovers work up the courage to make overtures to their heart's desire. While February might not see it happen, some companies could be thinking of pairing up in the not too distant future.

Seizing the Opportunity

The retail property sector, on the back of retail recovery, has outstripped other property sectors by a healthy margin over the last two years. Granted, those properties need to be located strategically, as is the case with Retail Opportunity Investments Corp. (ROIC).

Since its initial public offering in 2009, Retail Opportunity was able to enter the market and select choice properties at a time when values were low. It has the added benefit that it was unburdened by any loss making assets or high vacancies. Opting for community and neighborhood retail centers with strong grocery anchor tenants on the West Coast, Retail Opportunity operates with an extraordinary vacancy rate of less than 5%.

The suitor

Kimco Realty Corporation (KIM) has interests in 940 shopping centers across 44 states, Canada, Puerto Rico, and South America. Its portfolio comprises neighborhood and community shopping centers whose numbers it continually seeks to swell with choice properties like those Retail Opportunity has assembled.

Kimco is a cash buyer and it currently holds $180.2 million in cash and equivalents, which will go some way toward Retail Opportunity's $497.39 million market capitalization and $489.13 million enterprise value. Retail Opportunity's investors are yet to see their investment return full value - its dividend yield is 4% in a sector where double digit dividend yields are commonplace - and the deal might need to be sweetened for them. We could see an offer of around $550 million or $12.85 per share.

Playing catch-up

A provider of commercial real estate and capital markets services to the U.S. commercial real estate industry, HFF, Inc. (HF) is a mid cap player in an ultra-competitive market, with a market capitalization of $502.7 million and current share price around $14.

The suitor

Jones Lang Lasalle, Inc. (JLL) plays second fiddle to CBRE Group, Inc. (CBG) with $3.30 billion revenues TTM to CBRE's $5.79 billion. While CBRE Group has favored major international expansion - the merger with Trammel Crow which formed the group in 2006 being an example - Jones Lang Lasalle has merged with two smaller agencies in the last 12 months, King Sturge in the U.K. and Pacific Real Estate Partners in the Pacific Northwest.

A merger with HFF would expand Jones Lang Lasalle's U.S. operations, adding 17 offices and 400 employees to its operations and create substantial upside through synergy for both firms. An offer above HFF's enterprise value of $485.95 million, between $525 million and $550 million or $14.60 to $15.30 per share could be welcomed.

Already dancing together

The semiconductor industry is another highly competitive sector where any technological or strategic advantage needs to be exploited to survive and thrive. Entropic Communications (ENTR) are behind the "connected home" technology on which Multi-Room DVRs from companies like DIRECTV Group, Inc. (DTV) and Time Warner, Inc. (TWX) run. In this sector it is up against two big players: Qualcomm, Inc. (QCOM) and Broadcom Corp (BRCM).

The suitor

When Broadcom acquired NetLogic Microsytems, Inc. (NETL) last year, it made Entropic's independent existence more and more unlikely. Three weeks ago it announced that it was collaborating with Qualcomm to "offer MoCA-to-Wi-Fi solutions to home networking." Methinks it is only a matter of time before the collaboration becomes a more permanent arrangement.

Entropic shares have traded lower since September on the back of slowing revenue growth and it is currently trading around $6 and a trailing price earnings ratio of 7. Despite predicted earnings trailing off, an offer would have to come at a significant premium to be acceptable to shareholders. A likely offer could be between $9 and $9.25.

On-again, off-again romance

Getting off the ground in the pharmaceutical industry is hard work - and then it might not be enough, as AVEO Pharmaceuticals, Inc. (AVEO) is experiencing. The company is a specialist cancer drug maker whose most prominent product, Tivozanib, is undergoing late clinical trials as stand-alone renal cell carcinoma treatment. It is a market worth approximately $600 million per year, but competition is severe with a seventh drug recently approved by the FDA for the treatment of advanced kidney cancer.

The suitor

Merck & Co., Inc. (MRK) held development and commercialization rights to AV-299, another cancer drug that Aveo is developing, but decided to return the rights in 2010. If Aveo emerges with FDA approval for Tivozanib, Merck might try to reignite their relationship. And Aveo, which holds $45 million in cash, would welcome the move rather than having to approach shareholders for more funding.

Depending on the outcome of the clinical trials, Tivozanib could emerge as an also-ran or as a possible market leader. I tend to favor the upside as initial reports were positive. An offer could range between $800 million and $900 million, translating to $18.56 and $20.88 per share. Aveo currently trades around $13 and has a market capitalization of $567.63 million.

Wild card entry

A family-controlled life insurance company from Texas, National Western Life Insurance Company (NWLI), is being run like the family treasure it is with strong share growth over the years to show for it. Not only does the Moody family control National Western, it also owns a large percentage of its stock. Being an illiquid stock, it trades well below book value. In fact, its price to book value is 0.41.

The suitor

Private equity might find National Western's stability alluring, but would then really need to make it worthwhile for the Moody family to sell their shares. Currently trading at around $140 per share, perhaps they can be enticed to part company with their holdings nearer book value. Upward of $200 - $220 per share could be sufficient premium to enable a transaction.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Existing Home Sales Plunge - Further Evidence Housing Resurgence Is Stalling

The National Association of Realtors® announced Friday that existing home sales dropped a hefty 7% in January, adding further evidence that the resurgence of the housing sector is stalling. Wednesday, we saw a very soft new home sales number. Now, we see more softness in existing home sales as well.

Their press release stated:

Existing-home sales fell in January but are above year-ago levels, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – dropped 7.2 percent to a seasonally adjusted annual rate1 of 5.05 million units in January from a revised 5.44 million in December, but remain 11.5 percent above the 4.53 million-unit level in January 2009.

Lawrence Yun, NAR chief economist, said there is still some delay between shopping and closing that affected current sales. “Most of the completed deals in January were based on contracts in November and December. People who got into the market after the home buyer tax credit was extended in November have only recently started to offer contracts, so it will take a couple months to close those sales,” he said. “Still, the latest monthly sales decline is not encouraging, and raises concern about the strength of a recovery.”

Total housing inventory at the end of January fell 0.5 percent to 3.27 million existing homes available for sale, which represents a 7.8-month supply2 at the current sales pace, up from a 7.2-month supply in December. Raw unsold inventory is 9.6 percent below a year ago, and is at the lowest level since March 2006.

While you often get the feeling that the NAR likes to put a positive spin on things, it is undeniable that raw unsold inventory has declined. And that’s positive from a home seller’s perspective.

Nevertheless, the drop in existing home sales is based on contracts signed in late 2009. Despite the NAR’s spin on tax credits, there are no indications that sales have picked up significantly since then. In fact, the snowy weather in February would suggest sales for this month, at a a minimum, will be very weak. Let’s wait and see.

Moreover, I should point out that the canaries in the coalmine in California indicate that most sales are now being done out of distress.

Marilyn Kalfus at the O.C. Register writes:

Nearly three-fourths of sellers were concerned about the buyers’ abilities to get a home loan, an increase from 54 % in 2008.

63% of homes fell out of escrow prior to closing. Nearly 70% of sellers cited “buyer could not get an acceptable mortgage” and more than 60% said “buyer backed out” as the main reasons the home fell out of escrow. Other reasons included: Buyer’s remorse (26%); “lender withdrew and did not fund” (24%); and “home prices continued to decline” (18%).

Once the home did sell, half of sellers reported escrow did not close on time in 2009, compared with 36% in 2008.

On average, homes sold for $20,958 less than the original asking price in 2009, while the median difference between the selling and listing price was $32,315.

The list-to-sold-price ratio was significantly larger between first-time sellers ($30,000 below list price) and sellers who had previously sold a home ($8,000 below list price).

The percentage of first-time sellers grew to nearly half of all sellers (44%) in 2009, a 33% increase from 2008, and nearly three times the 2007 percentage of 15%.

In fact, she explains that a recent survey by the California Association of Realtors has shown that 67% of California home sellers who sold last year could not pay their mortgages. That’s enormous. Given the impending resets in Option ARM mortgages, it seems reasonable to conclude that distressed sales will continue to drive this market. On the buyer side, transactions in California in particular seem to be driven by a combination of low interest rates and a re-entry of professional and speculative investors. See my post “House flipping back in vogue in North County San Diego.”

My conclusion is that, while the housing sector has stabilized, the fundamentals are still poor. The present 8 months inventory of existing homes is a large number by historical standards. Price-to-rent and price-to-income ratios are still well above the long-term median in most of the previous bubble markets. And finally, the sector is being propped up by a combination of low interest rates and federal reserve intervention in the mortgage markets. In my view, the risk is still to the downside – both for home sales and prices and for the share prices which depend on them.

A Way to Play the Unrest in the Middle East

I am not one for short-term trading based on the current events of the day; however, in many cases these events are the beginning of a longer term trend. If you believe the events taking place in the Middle East will continue and even spread to other countries, you could benefit with an investment in the right assets. Two obvious choices are oil -- due to the possible disruption -- and precious metals as a flight to safety. In staying with that theme, Sprott Resource Corp. (SCPZF.PK) may be a good way to play a long-term rise in both oil and gold prices.

Sprott Resource Corp. is an investment holding company located in Canada that is managed by Sprott Consulting Limited Partnership, of which Sprott, Inc. is the sole limited partner. This arrangement is similar to that of how a hedge fund would be managed. The assets of SRC are primarily deployed in the areas of energy, agriculture and precious metals. Below I summarize the company’s primary investments.

1. Energy

Orion Oil & Gas Corporation (OIPZF.PK) is a publicly-traded Canadian oil and gas exploration and development company. SRC currently owns 78.9% of the outstanding shares of Orion and has invested a total of C$105.1 million since October of 2009. The oil and gas assets of Orion are all currently located in the Kaybob, Bigstone, and Redwater fields of Alberta, Canada. However, Orion states clearly that it intends to look for opportunities across the globe. In January of 2011, Orion announced a 34% increase in proved plus probable reserves (2P). The company also stated 48% of its 2P reserves were oil and liquids, which bodes well in a time when oil prices are on the rise.

Waseca Energy Inc. is a Canadian-based privately-held company in which SRC owns 81.3%. SRC has invested C$44.2 million in Waseca since October 2008. Waseca has over 45,000 acres of exploration lands, mostly in Alberta and Saskatchewan. At the end of 2010, production was over 1000 boe/d. Waseca plans to continue to push forward with its effort to increase production and had C$24 million in cash on the balance sheet at the end of the third quarter 2010 to use toward that goal.

One Earth Oil & Gas is a privately-held oil and gas exploration and development company 91% owned by SRC. The objective of OEOG is to develop oil and gas properties in partnership with the First Nations. According to SRC’s third quarter report, it has finalized locations with the Ermineskin First Nation and submitted an application for drilling three wells through Indian Oil and Gas Canada, which manages and regulates oil and gas resources on First Nation reserve lands. In addition, OEOG finalized farm-in terms with a private company in central Alberta to drill two wells on its lands to earn a 60% interest in six sections of land. A farm-in joint venture in Northern Montana was also finalized, whereby the company will earn a 50% interest in six and nine sections with the drilling of Shaunavon and Bakken test wells, respectively. Drilling has commenced on these lands.

VA Uranium Holdings, Inc. is the sole shareholder of Virginia Uranium, Inc., which owns and operates the Coles Hill Uranium Project in Virginia. In November 2010, SRC agreed to acquire a 19.9% interest in VA Uranium Holdings, Inc.

2. Precious Metals

SRC began investing in gold bullion in 2008 and currently holds 73,971 ounces at an average price of C$1019.32 per ounce. Based on SRC comments, it expects demand for gold to remain high through 2011, so I would expect it to hold this asset until it believes the long-term prospects for gold have changed or it finds a better area to allocate the funds in which it would expect a higher return.

3. Agriculture

One Earth Farms Corp. aims to be one of the largest farming operations in North America by working in partnership with First Nations. SRC owns 80% of OEFC on a fully diluted basis. Operations include both crops and cattle ranching. OEFC is currently in lease negotiations with 25 First Nations in Saskatchewan, Alberta and Manitoba. OEFC is focused on expanding its geographic presence in order to mitigate weather risk. According to the third quarter report, harvesting operations began in both Saskatchewan and Alberta. The quality of the crop was lower than expected, but was partially offset by strong agricultural commodity prices. In December 2010, SRC announced it will be investing an additional C$30 million in OEFC to fund the 2011 operating plan to allow OEFC to become Canada’s largest operating crop and cattle farm in 2011.

Stonegate Agricom Ltd. (SNRCF) is a publicly-traded Canadian company in which SRC currently owns 54.3%. Stonegate’s primary assets are two phosphate deposits in Peru, South America and Idaho, United States. Phosphate is a key ingredient in fertilizer, which is experiencing rising demand to meet the growing appetite for crops throughout the world. SRC recently announced a secondary offering where the underwriters have agreed to purchase 25 million commons shares of Stonegate from SRC at a purchase price of $1.75 per share for gross proceeds of $43.75 million. SRC also granted an over-allotment option exercisable for 30 days from closing to purchase an additional maximum 3.75 million common shares. After the offering, not including the over-allotment, SRC will maintain a 36% interest in Stonegate on an undiluted basis. SRC’s original investment over a period from 2007 through 2009 was $26 million.

Conclusion

While I do believe gold and oil offer both short- and long-term investment opportunities, I am not depending on the problems in the Middle East alone to move prices higher. Governments continue to print money, which should support gold prices for the foreseeable future, and there seems to be no end in sight for the world's thirst for oil.

It is important to note that many of the investments of SRC are still in their early stages of development, which provides a degree of risk. Other opportunities do exist to gain direct access to gold, oil, and agriculture. Those interested in gold could simply buy shares of the SPDR Gold Shares (GLD). Exposure to energy could be achieved by buying shares of a major oil company like Exxon Mobil (XOM) or a more direct oil play like Rosetta Resources (ROSE). Lastly, you may consider the PowerShares DB Agriculture Fund (DBA) or the ELEMENTS ETN linked to the Rogers International Commodity Index – Agriculture Total Return (RJA) -- for exposure to agriculture. However, I like the unique investment opportunity that SRC presents. SRC gives you diversified exposure to key commodities with a skilled management team making the entry and exit decisions on your behalf.

Disclosure: I am long SCPZF.PK.

Futures Rise on European Confidence, Flood of Earnings

Sentiment about Europe continued to improve on Tuesday, after U.S. indexes climbed back on Monday from a weak opening. Late on Monday, 25 out of 27 nations signed a deal agreeing to the outlines of a deal meant to tackle their debt problems and hold the union together. European stocks made solid gains, with the French CAC 40 up 1.5%.

Dow futures rose 47 points to 12,649; S&P 500 futures rose 5.3 points to 1,314.2.

Exxon Mobil (XOM) fell 1% in pre-market action after beating Street earnings estimates and announcing fourth quarter production fell 9%. Pfizer (PFE) fell 0.6% on a mixed earnings report. UPS (UPS) beat earnings expectations and shares rose 1.2%. Eli Lilly (LLY) rose 2.8% after earnings.

Marvell: Deutsche Bank Ups Rating To Buy; Sets $28 Target

Marvell (MRVL) shares are trading slightly higher this morning after Deutsche Bank analyst Sukhi Nagesh upgraded the shares to Buy from Hold, with a new price target of $28, up from $18.

“Over the last few quarters we were more constructive on MRVL stock and now have increased confidence in the company’s growth prospects especially in the storage and mobile segments,” Nagesh writes in a research note. “We believe the company is well positioned to outperform the overall semiconductor industry and its peers this year and next.”

Nagesh now sees EPS for the January 2011 fiscal year of $1.24, up from $1.15.

MRVL this morning is up 13 cents, or 0.6%, to $21.97.

Small-cap Superstar Stock Opnext Soars more than 33%

Opnext Inc. (NASDAQ: OPXT) shares are soaring after the company announced a narrower third-quarter loss and provided an upbeat outlook for the fourth quarter.

After market close on Thursday, Opnext said that its third-quarter loss narrowed due to higher sales and lower research and development expenses. Opnext reported a net loss of $10.2 million, or $0.11 per share for its third quarter, compared with a loss of $18.6 million, or $0.21 per share reported for the same period in the previous year.

Opnext�s third-quarter revenue climbed 28% to $97 million. Analysts had forecast the company to report third-quarter revenue of $90 million. The company�s research and development expenses came in its $13.7 million for the quarter, compared with $17.5 million reported for the same period in the previous year.

Opnext also provided guidance for the fourth quarter of fiscal year 2011. The company said that it anticipates fourth-quarter revenue to come in between $97 million and $102 million. Analysts forecast the company to reported fourth-quarter revenue of $92.5 million.

Following the announcement of strong quarterly results and upbeat outlook, shares of Opnext are seeing a huge rally in today�s trading. The small cap stock reached a 52-week high of $2.91 in early trading, and at last check, it was up 29.15% to $2.57, with volume up from daily average of 514,145 to 904,277.

The small cap stock of Opnext has a 52-week range of $1.29-$2.91. The stock is currently trading above its 50-day and 200-day moving averages. In the last one year, Opnext shares gained 44.74%.

Fremont, California-based Opnext is engaged in designing and manufacturing of optical components, modules, and subsystems for communications uses.

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Top Stocks To Buy For 2012-2-1-4

INX Inc (NASDAQ:INXI) achieved its new 52 week high price of $8.63 where it was opened at $8.61 UP 0.01 points or +0.12% by closing at $8.61. INXI transacted shares during the day were over 11,892 shares however it has an average volume of 156,805 shares.

INXI has a market capitalization $83.64 billion and an enterprise value at $137.71 billion. Trailing twelve months price to sales ratio of the stock was 0.24 while price to book ratio in most recent quarter was 2.02. In profitability ratios, net profit margin in past twelve months appeared at -0.41% whereas operating profit margin for the same period at 0.18%.

The company made a return on asset of 0.31% in past twelve months and return on equity of -3.54% for similar period. In the period of trailing 12 months it generated revenue amounted to $353.74 million gaining $37.30 revenue per share. Its year over year, quarterly growth of revenue was 39.10% holding -90.80% quarterly earnings growth.

According to preceding quarter balance sheet results, the company had $8.03 million cash in hand making cash per share at 0.83. The total of $62.19 million debt was there putting a total debt to equity ratio 150.40. Moreover its current ratio according to same quarter results was 1.22 and book value per share was 4.27.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 3.38% where the stock current price exhibited up beat from its 50 day moving average price $7.59 and remained above from its 200 Day Moving Average price $7.02.

INXI holds 9.71 million outstanding shares with 6.24 million floating shares where insider possessed 37.28% and institutions kept 6.20%.

What Percent of Apple’s Stock Is Apple TV?

Apple (NASDAQ:AAPL) launched Apple TV in early 2007 and has only sold about 10 million Apple TV units to date. In comparison, the company has sold more than 40 million iPhones since the launch of the device in mid-2007.

What percent of Apple’s value do you think comes from Apple TV?

A. 0.5%

B. 2%

C. 7%

D. 16%

E. 24%

Make a selection above to see the answer.

A Clue: Key metrics for the iPhone compared to Apple TV

We estimate that iPhones constitute more than 50% of Apple’s stock. Below we highlight some of our key 2010 forecasts for the iPhone business and compare them to our forecasts for Apple TV.

• Units Sold: 42 million iPhones vs. 8 million Apple TVs
• Pricing: About $530 per iPhone vs. about $215 for Apple TV
• Gross Profit Margins: 48% for iPhone vs about 22% for Apple TV

For additional analysis and forecasts, here is our complete model for Apple’s stock.

Disclosure: No position

Top Stocks For 2012-2-1-5

 

CHULA VISTA, Calif.–(CRWENEWSWIRE)– First PacTrust Bancorp, Inc. (NASDAQ:FPTB), the holding company for Pacific Trust Bank (the �Bank�), today announced that it has received an investment of $32.0 million in the Company�s preferred stock from the United States Department of the Treasury under the Small Business Lending Fund (the �SBLF�). The SBLF is a $30 billion voluntary program intended to encourage small business lending by providing capital to qualified community banks at favorable rates.

�We are pleased to have completed the SBLF capital infusion in support of our small business lending operations,� commented Gregory A. Mitchell, President and CEO. Mr. Mitchell added, �We believe our participation in the SBLF program is a great opportunity for the Company and the Bank to continue to meet the credit needs of the small business community and also to benefit our stockholders.�

As of June 30, 2011, the Company had consolidated total assets of $882.3 million and stockholders� equity of $160.5 million. The Company�s book value per share was $13.91 as of June 30, 2011, based upon 11,520,067 shares of common stock outstanding as of that date.

About the Company

First PacTrust Bancorp, Inc. is the parent holding company of Pacific Trust Bank and is headquartered in Chula Vista, California. The Bank currently operates through 11 banking offices serving primarily San Diego and Riverside Counties in California. The Bank provides customers with the convenience of banking at more than 4,300 branch locations throughout the United States as part of the CU Services Network and 28,000 fee-free ATM locations through the CO-OP ATM Network.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are necessarily subject to risk and uncertainty and actual results could differ materially from those anticipated due to various factors, including those set forth from time to time in the Company’s filings with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements and the Company undertakes no obligation to update any such statements to reflect circumstances or events that occur after the dates on which the forward-looking statements are made.

Source: First PacTrust Bancorp, Inc.

Contact:

First PacTrust Bancorp, Inc.
Gregory A. Mitchell, President and CEO
(619) 691-1519, ext. 4474

 

 

THIS IS NOT A RECOMMENDATION TO BUY OR SELL ANY SECURITY!

Europe Stocks Rise

European stock markets registered strong gains Wednesday, due to a slew of solid economic readings around the globe and well-received German and Portuguese debt auctions, which combined to buoy market sentiment.

The mood was lifted early Wednesday after the release of China's official manufacturing Purchasing Managers' Index, which rose to 50.5 in January from 50.3 in December, and was higher than the 49.5 forecast by economists.

Sentiment was further propped up by euro-zone manufacturing PMI rising to 48.8 from 46.9 in December, and the U.K. manufacturing PMI jumping to 52.1, against expectations for a reading of 49.7.

And in the U.S., the Institute for Supply Management's manufacturing PMI increased to 54.1 in January from a revised 53.1 in December, first reported as 53.9, indicating the country's manufacturing sector's expansion stayed on track in January.

The strong manufacturing readings indicate that a global recession can be averted, said Angus Campbell, head of sales at Capital Spreads, noting that if the recovery in the global economy can be sustained, this would prove to be a good time to buy stocks.

"Investors are becoming more and more optimistic that the major threat to growth, the European sovereign debt crisis, is slowly but surely being eradicated as central banks continue to flood the system with liquidity. So far this action has managed to avert a credit crunch, brought the yields on government bonds down and helped to boost confidence," added Mr. Campbell.

Late in Europe, the Stoxx Europe 600 index ended up 2% at 259.51. The U.K.'s FTSE 100 index ended up 1.9% at 5790.72, Germany's DAX rose 2.4% to 6616.64 and France's CAC-40 index finished up 2.1% at 3367.46.

European equities have had their best start to the year since 1998 and U.S. stocks managed to record their largest January gains in 15 years. Deutsche Bank's strategists noted that the Stoxx Europe 600 index has generated a total return of more than 4% during January, the best January return since 1998. "Earnings momentum has bottomed, the global economy is firmer and the three-year longer-term refinancing operation is positive for banks," they added.

Indeed, banks were the standout gainers Wednesday, amid growing expectations that Greece will conclude its talks with private-sector bondholders on the restructuring of its debt. The Stoxx Europe 600 banks index was up 3.8%. Banco Popular Espanol gained 4.6% after posting a 10% rise in fourth-quarter net profit. In London, Lloyds Banking Group rose 5.2% after announcing a restructure of its management team.

Debt auctions were in focus Wednesday. Germany sold €4.093 billion of 10-year bunds. The auction "went relatively well, showing good interest for the paper," said Newedge.

Meanwhile, Portugal sold the maximum targeted €1.5 billion of three- and six-month treasury bills.

"The lower accepted yields are a positive, albeit with the gloss on this taken off somewhat by the softening of demand," said Rabobank.

"From a 'restructuring contagion' perspective, these sales will do nothing to add to recent concerns but, then again, neither will they provide any safeguard against fears ratcheting up once again should, as seems perhaps likely, the market returns to fretting over the possibility Greece's restructuring will prove to be a template rather than a one-off solution," it added.

Other economic data helped support the bullish tone in the market. Earlier, data showed inflation in the euro zone held steady at 2.7% in January, in line with expectations.

In the U.S., the ADP employment report suggested the country gained 170,000 new private-sector jobs in January, in line with economists' expectations, while construction spending jumped 1.5% in December, better than expectations for a 0.5% rise. Late in Europe, the Dow Jones Industrial Average climbed 1.1% to 12767, while the Standard & Poor's 500-stock index rose 1.0% to 1326.

In currency markets, the euro gained ground against the dollar on the bullish tone in stock markets, although investors are still waiting for an agreement between Greece and its private-sector creditors. By late European trade, the single currency was fetching $1.3191 from $1.3083 late Tuesday in New York. The dollar was at ¥76.12 from ¥76.27.

Among commodities, light, sweet crude for March delivery was up two cents at $98.50 on the New York Mercantile Exchange. Gold for February delivery was up $11.70 at $1,752.10 per troy ounce late in Europe on the Comex division of Nymex.

Write to Ishaq Siddiqi at Ishaq.Siddiqi@dowjones.com

Buy J.C. Penney: The Turnaround (And Rally) Has Only Just Begun

For many, the most exciting thing in retail right now is Ron Johnson's push to modernize and reinvigorate JC Penney (JCP). Given his achievements at Apple (AAPL) as well as Target (TGT), many assume that his efforts at JC Penney will be equally fruitful. After hearing his remarks at the JC Penney analyst day, and the unveiling of his new initiatives, we are confident that both JC Penney's business, and stock, are headed for a turnaround.

It is true that since JC Penney appointed Ron Johnson as CEO on June 14, 2011, its stock has soared, up almost 37%, compared to a 4.5% rise in the S&P 500.

click to enlarge

Many have taken this run, especially the huge rally on the back of the company's analyst day, as a sign that the stock is done going up. But it is important to keep in mind where the stock has come from. Over the past 5 years, JC Penney has lost nearly half its value, as mismanagement tarnished the brand and cost the company dearly.

But now that Ron Johnson is in JC Penney's corner office, things are going to change. Investors might ask why we, and Wall Street, are placing so much faith in the abilities of Ron Johnson. The reason is quite simple. At Apple, Ron Johnson built and oversaw the most profitable retail chain in the world. Investors are expecting the same sort of magic at JC Penney. And we think that Johnson will deliver. Below we provide a quick overview of JC Penney's financials. Afterwards, we will delve into Johnson's strategic vision.

JC Penney Financial Results

	Q3 2011	Q2 2011	Q1 2011	Q4 2010	Q3 2010
Revenue	$3.986 Billion	$3.906 Billion	$3.943 Billion	$5.703 Billion	$4.189 Billion
EPS	-$0.67	$0.07	$0.28	$1.13	$0.19
Gross Margin	37.36%	38.33%	40.45%	37.58%	39.03%
Stockholder's Equity	$4.555 Billion	$4.703 Billion	$4.751 Billion	$5.460 Billion	$4.941 Billion

JC Penney's financial results in the past were, much like its stores before the arrival of Ron Johnson, mediocre at best. While certainly nowhere near the weakness faced by Sears (SHLD), these results are weak when compared to the consistent execution of JC Penney's competitors, such as Macy's (M) and Kohl's (KSS). These results are a microcosm of the old JC Penney. The business was just plodding along, posting profits, but unimpressive ones (the loss in Q3 2011 was due to one-time management and restructuring charges, adjusted for those, EPS came in at 11 cents per share). For the holiday quarter, management expects same store sales to be slightly above last year, and adjusted EPS of $1.05 to $1.15 (64-74 cents on a GAAP basis). But these results are in the past. All of the excitement over Ron Johnson is due to hopes that results like these will be a thing of the past. Below, we delve into his plans for JC Penney.

Pricing & Promotions

Nearly every department store has some sort of sale going on every single day, marking down merchandise for 40-50% off. These are not true sales, however. They are mean to create the illusion of value all while marking down merchandise from wildly inflated prices. JC Penney, from now on, will be departing from this trend. Their new "fair and square" pricing policy eliminates such gimmicks. JC Penney will have 3 pricing policies going forward. First, are everyday prices. Second, are month-long bargains that are marked down for the entire month. And the third are "best prices" that appear on the first and third Fridays of every month. JC Penney chose those days because most Americans are paid on the first and third Fridays of the month. This clever strategy is designed to target the highest sales days.

As for promotions, JC Penney is stopping the endless flood of coupons and catalogs that customers are inundated with. In addition to benefiting customers, JC Penney is saving millions in advertising costs. Compared to Macy's and Kohl's (its most direct competitors), JC Penney spends 6% of sales on advertising, versus 4% for Macy's and 5% for Kohl's.

Cutting advertising down to a more manageable level is an improvement for both customers and JC Penney's bottom line. The company will save a great deal by switching to monthly booklets from the usual deluge of ads.

The Retail Experience

By most accounts, Apple stores are the model of what a retail store should be. Customers want to visit an Apple store, not only to buy product, but because it is an experience on its own. As the creator of those stores, we think Ron Johnson knows what it takes to translate the concepts that make Apple such a successful retailer and apply them to JC Penney.

For starters, JC Penney is revamping its return policy. The most successful retailers are those who do the most to not simply bring customers in the door today, but ensure that they want to come back tomorrow. Nordstrom (JWN) and Costco (COST) lead the retail industry in terms of their return policies. At those stores, returns are simple. If you do not like a product or it does not work, bring it back for a refund. And now, JC Penney's return policy is the same. Customer service is what defines a retailer, and JC Penney is positioning itself to be among the leaders of the retail industry in how it treats customers.

JC Penney is also revamping its stores. It is cutting the number of brands it sells from 400 to 80-100 to lessen the clutter of its stores. Furthermore, taking a page from Apple, Ron Johnson is redesigning the stores to highlight what he calls the "Town Square," which will be at the center of each store, designed to improve the shopping experience for every customer. JC Penney is also revamping the brands it is keeping, and expects to have over 30 new or updated brands in time for the fall 2012 shopping season.

Financial Outlook

The initiatives being undertaken by CEO Ron Johnson are not just to make JC Penney a more pleasant place to shop. They are also designed to make JC Penney a much more profitable company in the long run and increase shareholder value. JC Penney expects the entire transformation to be complete by 2015.

In 2012, JC Penney will spend $800 million to revamp its stores, and the company is using existing cash flows to fund renovations. On the cost side, JC Penney is cutting expenses by $900 million over the next 2 years, driving expenses below 30% of sales in the next 2 years. The savings are coming from 3 categories: stores, advertising, and the "home office," JC Penney's term for its management and headquarters. $400 million is coming from cost cuts in stores, $300 million from reduced advertising expenses, and $200 million from management streamlining.

In terms of guidance, JC Penney expects EPS in 2012 to meet or exceed 2010 levels of $2.16 in non-GAAP EPS and $1.59 in GAAP EPS. As part of its revamped strategy, JC Penney will no longer be reporting monthly sales or giving quarterly guidance. However, COO Mike Kramer is improving transparency by beginning to host face-to-face (in addition to conference calls) meetings with analysts after each quarterly earnings release.

JC Penney is targeting gross margins of above 40% in the long run, SG&A expenses that are no more than 27% of sales, and contribution margins of around 13%. These are all great improvements from where JC Penney currently operates, and while the changes will take time, we believe that they will indeed happen.

We recommend that at this time, investors add to or initiate positions in JC Penney. The shares may trade at around 54 times trailing earnings (and 32 times forward earnings), but this is reasonable, for JC Penney's past earnings are in no way a reflection of its future earnings potential (it traded at around 32 times earnings before Ron Johnson was appointed CEO). Furthermore, forward earnings are based on estimates, and most analysts have yet to revise their estimates and price targets on JC Penney. However, analysts who have revised their models have been impressed with JC Penney's plan. Argus, in raising its price target from $39 to $48 (representing upside of over 16%), noted that "Ron Johnson has the right experience, the right incentives, the right vision, and the right team, and the right energy level to transform JC Penney and to generate attractive returns for shareholders." Piper Jaffray also upgraded the shares, from Neutral to Overweight, and nearly doubled its price target, from $29 to $50 based on Johnson's turnaround plan. We think that the Reuters average price target of $39.71 has ample room to rise, as more analysts re-evaluate their positions on JC Penney. JC Penney's dividend, currently set at 20 cents per share (for a yield of 1.93%), should provide some incentive for investors to wait as Ron Johnson executes his turnaround plan.

Conclusions

Few executives have as much credibility in their business as Ron Johnson. His work at Apple, where he created the world's most profitable retailer, has proven that he knows how to sell product in a way that is efficient, profitable, and encourages customers to return time and time again. We think that investors who buy the stock at these levels will be rewarded for their faith. Few companies are able to execute their turnaround plans perfectly, but the ones that are able to almost invariably lead to great returns for their shareholders. We think that JC Penney will be able to turn its business around. Ron Johnson has articulated a clear strategic vision for his company, and we think that investors who buy in at these levels will be greatly rewarded.

Disclosure: I am long JCP, AAPL, COST, TIF.

The Nonsensical Political Rhetoric on Greece

Can someone explain to me why and how politicians seem to be particularly susceptible to getting the issue with Greek credit default swaps completely backwards? And why reporters simply parrot their nonsense, rather than calling them on it?

Exhibit A is Carolyn Maloney — my very own representative in Congress, whose district covers all of the big Wall Street firms in Midtown — as reported in the FT:

Ms Maloney compared the use of credit default swaps in the Greek situation to the “activities that brought down American International Group”, referring to the US insurer that collapsed and was bailed out in September 2008.

Er, no, Carolyn. The activity which brought down AIG (AIG) was the fact that AIG sold a lot of credit default swaps on subprime mortgage bonds — essentially insuring those bonds against default. When they defaulted, AIG became insolvent. Greece, by contrast, has never written any credit default swaps on anybody. If there’s any issue with CDS in Greece at all, then it’s with people buying CDS on Greece — insuring themselves against the risk that Greece defaults. There’s no “shocking echo”, to use Maloney’s words, of AIG in Greece at all, except if you don’t understand the first thing about how credit default swaps work.

Exhibit B is German financial watchdog BaFin, as reported by Reuters:

Germany has taken steps to identify speculators in Greek debt to try to prevent them from profiting unduly from any bailout of the ailing euro zone economy, a source with direct knowledge of the matter told Reuters…

“It would be bad if it were to emerge after a rescue that the money had gone into the pockets of speculators,” the source told Reuters.

“The result of the ‘Greek tragedy’ is that the political environment has become such that the Credit Default Swap (debt insurance) problem has come to the fore.”

Again, this makes no sense, since if there’s a problem here it’s with people using the CDS market to bet against Greece. If and when Greece gets bailed out by Germany, the bailout will enable Greece to pay its debts, and anybody who’s short Greece will lose money. What’s more, the CDS market is a derivatives market, which references Greek debt but which sees none of the cashflows from it. Any money flowing from Germany to Greece will end up in the pockets of Greece’s bondholders, where it belongs — there’s really no mechanism at all whereby it can end up in the CDS market.

So how could these evil speculators profit “unduly” from a German bailout of Greece? That key question is never asked, or answered. Yes, it’s possible that somehow they’re betting on volatility in Greek debt, rather than making big directional bets, and that activity in the CDS market has increased that volatility. But even then a German bailout would almost certainly reduce volatility, and therefore the profits on their trade.

But of course it doesn’t matter that these political actors are making no sense: it’s all a big Kabuki, wherein anybody bashing banks in general, and Goldman Sachs in particular, gets automatic political brownie points. And there are no points at all, it seems, for basic financial literacy.

The Attractive Benefits Of Payroll Debit Cards:

Payroll debit cards, also called Paycards, function in the same way as prepaid cards. These electronic prepaid cards provide nifty payroll solutions that can prove immensely beneficial for small businesses having employee strength of 50-500 employees.

Payroll services involving debit cards can provide huge benefits to both the employers as well as the employees of the company. With the assistance of a debit card payroll system, employers can easily send money to the centralized payroll account in the bank handling the entire payroll service. The employees then with the help of their debit cards can collect their salaries from their account.

A well-structured debit card payroll system can contribute heavily in cutting down the overhead costs of the business. As a debit card payroll system works independent of paychecks, it also helps the companies to lower the administrative expenses.

Besides, a debit card payroll service can be a very useful too for the business consisting of overseas employees. With a debit card payroll service, employees working overseas can receive money by visiting the nearest ATM center.

Employees are not required to have bank account in order to receive money. Thus, these cards can prove beneficial for seasonal employees or employees that do not have a bank account.

A payroll debit cards operates in the same manner as a prepaid credit card, such as Visa or MasterCard. Thus payroll debit cards can be used by the employees when shopping.

Employees can also utilize these cards to pay their bills and children’s school fees. Furthermore, they can also make use of these cards to gain tax refunds and security benefits.

Owing to their innate features, payroll debit cards are proving to be highly beneficial not only to the employers but also to the company’s employees. Several small businesses in Singapore, Europe, Brazil and Malaysia have started realizing the benefits of debit card payroll services.

Smaller companies worldwide have reaped immense benefits from payroll debit cards which function similarly as prepaid cards Also published at The Attractive Benefits Of Payroll Debit Cards:.

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Security Spending to Lag IT Budget Rebound

Security spending will lag a rebound in information technology budgets in 2010. Microsoft (MSFT) gets some end-point security looks, but not if you have to pay for Forefront. And there’s strong demand for security as a service.

Those are the high-level takeaways from an IT security survey by Citi Investment Research. The survey of 50 chief information security officers, conducted in late January and early February, shows a few interesting cross currents.

First, the spending breakdown. Security spending for 2010 will be largely flat, while IT budgets are expected to rebound roughly 2 percent, according to Citi.

However, Citi analyst Walter Pritchard notes that security spending held up well in the downturn. As a result, there’s little pressure to consolidate the industry via mergers and acquisitions. Here’s a look at the key findings:

• Security execs are sticking with brand names like Cisco (CSCO) and Microsoft—even though those two companies aren’t driving increased spending. The security usage is more about add-on features.
• 26 percent of companies plan to refresh their network security assets.
• End-point security remains a duopoly with McAfee (MFE) and Symantec (SYMC), but Microsoft is making a move. Pritchard was surprised by those results and added that the software giant’s security pricing (free) and the fact some execs may allocate some operating system upgrade spending to the security budget. Meanwhile, the Citi survey found that few security execs were interested in Microsoft’s Forefront Client Security. Only 18 percent of those surveyed are actively using, deploying selectively or testing Forefront.

• And finally 70 percent of respondents are using email security and anti-spam as a service and the majority of execs are looking at on-demand offerings for Web filtering, vulnerability scanning and policy enforcement.

Original post

Why Is Soros Buying Gold if It’s in a Bubble?

A lot of media outlets have noticed that, despite George Soros’ protestations about the rise in gold prices being excessive, Soros Fund Management have invested a lot more money in gold after he made his apparently gold-bearish calls. What gives?

Apparently, Soros is a market-timing momentum investor because his comments in the Australian demonstrate that he is investing in gold exactly because he believe it is a bubble.

The Australian says:

The "market fundamentalist" belief prevailing in the US that markets correct their own excesses was wrong, Mr. Soros said, criticising former Federal Reserve chairman Alan Greenspan for taking that line.

Mr. Soros, who said he manages around $US27 billion ($30bn), gave his own investment decisions as an example.

"When I see a bubble, I buy that bubble, because that’s how I make money," the outspoken investor said.

Mr. Soros doubled his bet on gold at the end of 2009 amid rising prices, a filing showed this month, a few weeks after Mr. Soros made comments calling gold the new asset bubble.

For those of you of a bullish mindset, also see Why You Should Dig Newmont Mining in Barron’s. Personally, I see the gold play as less compelling given the run-up we had to over $1200 an ounce late last year. However, longer-term I am a lot more bullish than Mr. Soros seems to be.

Source

China better than Barack Obama in handling the global financial crisis, says George Soros – The Australian

$34,000 in debt, wants to start a business

(MONEY Magazine) -- We spoke to five families who face challenges that could keep them from meeting their financial goals. With a few tweaks to their game plan, they can get back on course. Here, Heyward's story -- and the recommended financial fixes.

Michele Heyward has a big heart. When friends or family struggle financially, she is always there to help with a mortgage or car payment or clothes for the kids. Recently she has been spending more than $1,800 a month on others.

"You can't take money with you," she says. "It feels really good to help people out."

The trouble is, those added expenses have put Heyward in a tough spot, even though she pulls in $112,000 a year as a construction engineer for URS Corp. (URS, Fortune 500) (She travels full-time, and about a third of her earnings is from unused per diem expenses.)

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She has $15,000 in credit card debt, on top of $19,000 in student loans. She'd also like to start her own business as an engineering consultant. "It's risky, but more rewarding than working for somebody else," Heyward says.

Adding to her poor balance sheet: a house in Pittsburgh that may not be worth more than her $83,000 mortgage.

Her finances

• Income: $112,000
• Assets: $70,000 in a 401(k); $2,000 in cash
• Goals: Start her own consulting business, retire at 59

The problem

Bottom line: Heyward's generosity has her living beyond her means, says financial planner Laura Scharr-Bykowsky of Columbia, S.C. "If you are trying to rescue someone who is drowning and you're not a good swimmer, you're both going to go down," she says.

The advice

Learn to just say no. Heyward has already followed Scharr-Bykowsky's recommendation to let her family and friends know things will be different in 2012. "I know there has to be a limit," she says.

About 70% of the resulting savings should be put toward her high-interest credit cards and 30% to building up her cash reserves. Within a year she can be debt-free and also have an emergency fund of some $10,000. She should continue to fund her 401(k), which offers a 6% match.

Diversify the portfolio. Heyward's portfolio is too concentrated in large U.S. stocks, especially because she works for a large company. She should add some mid- and small-cap equities.

Ditch the home. The Pittsburgh property should be sold as soon as Heyward can do it without having to spend money to close the deal. That's fine: "I'm tired of getting calls from tenants about repairs," she says.

Supercharge savings. Since Heyward has no business plan yet, Scharr-Bykowsky recommends that she amass at least three years' worth of living expenses, or some $120,000, before starting her own business. She can keep the money in a short-term bond fund to maximize return.

Heyward says that she'll start consulting part-time before quitting her day job, so two years of living expenses may be enough. "I want my name on the door," she says, "and to be in control of my own destiny."

MONEY magazine is researching an article on ways to reduce the financial pain of college. We're looking for families that can talk about new and creative ways that they're raising cash for college and cutting costs while they're there. Sound like you? Tell us your story and you might even get your picture in the magazine! E-mail Beth_Braverman@moneymail.com 

Top Stocks For 2012-2-1-17

Delta Apparel, Inc. (NYSE Amex: DLA) reported financial results for its fourth quarter and fiscal year ended July 2, 2011.

Fourth Quarter Highlights

Net sales increased 9.1% to a record $137.6 million from $126.2 in the prior year period
Gross margins improved 340 basis points to 27.3%
Net income increased 50.6% to $8.5 million from $5.7 million in the prior year
Diluted EPS increased 51.6% to $0.97 from $0.64 in the prior year period

Fiscal 2011 Highlights

Net sales increased 12.0% to a record $475.2 million from $424.4 million in the prior year
Gross margins improved 80 basis points to 24.5%
Net income increased 42.2% to $17.3 million from $12.2 million in fiscal year 2010
Diluted EPS increased 41.4% to $1.98 compared to $1.40 last fiscal year

On August 17, 2011, the Company�s Board of Directors approved a $5 million increase in the Company�s Stock Repurchase Program, bringing the total authorization to $20 million. This marked the fourth increase since the program began in November 2000. Since inception, the Company has spent approximately $12.1 million under the Stock Repurchase Program, buying back approximately 1.2 million shares at an average price of $9.81. In fiscal year 2011, the Company spent $2.5 million repurchasing 177 thousand shares at an average of $14.18 per share. Approximately $8.0 million remains available for future stock repurchases pursuant to the Stock Repurchase Program.

Delta Apparel, Inc., along with its operating subsidiaries, M. J. Soffe, LLC, Junkfood Clothing Company, To The Game, LLC, Art Gun, LLC and TCX, LLC, is an international design, marketing, manufacturing, and sourcing company that features a diverse portfolio of lifestyle branded activewear apparel and headwear, and high quality private label programs. The Company specializes in selling casual and athletic products across distribution tiers and in most store types, including specialty stores, boutiques, department stores, mid-tier and mass chains. From a niche distribution standpoint, the Company also has strong distribution at college bookstores and the U.S. military. The Company�s products are made available direct-to-consumer on its websites at www.soffe.com, www.junkfoodclothing.com, www.saltlife.com and www.deltaapparel.com. Additional products can be viewed at www.2thegame.com and www.thecottonexchange.com. The Company’s operations are located throughout the United States, Honduras, El Salvador, and Mexico, and it employs approximately 7,200 people worldwide.

Additional information about the Company is available at www.deltaapparelinc.com.

One of the biggest advantages of using biomass is the fact that it is a renewable energy source. Making use of biomass energy means that the carbon emissions usually associated with burning fossil fuels are drastically reduced, thereby diminishing the carbon �footprint� left behind. This also means that it can contribute to reducing the so-called greenhouse effect, as well as the production of the so-called greenhouse gasses. All of this in turn helps to prevent and minimize global warming.

Cleantech Transit, Inc. (CLNO.OB) is pleased to announce it has met its funding requirement to secure the Company�s ability to earn in 25% of the 500KW Merced Project.

The Company is in the final stages of closing its initial interest in the Merced Project and is currently working on completing the necessary documentation and expects closing the transaction soon. As previously announced Cleantech has the option to earn up to 40% of the Merced Project and the Company plans to continue to work towards increasing its interest in the Merced Project as they move ahead.

A huge percentage of the world�s fossil fuels come from the world�s most volatile places. By reducing your use of oil derivatives, you reduce dependence on foreign energy sources, increasing the country�s energy security.

Cleantech Transit Inc. was founded to capitalize on technology advances and manufacturing opportunities in the growing clean energy public transportation sector. Cleantech Transit Inc has expanded its focus to invest directly in specific green projects that could maximize shareholder value. Recognizing the many economic and operational advances of converting wood waste into renewable sources of energy, Cleantech Transit Inc. has selected to invest in Phoenix Energy (www.phoenixenergy.net). This project could benefit the Company�s manufacturing clients worldwide.

To discover more about CLNO, Please visit: http://www.cleantechtransitinc.com/

SuccessFactors, Inc. (NYSE:SFSF) announced that the company’s executives will present at the following upcoming investor conferences: Thursday, Sept. 1, 2011 at 11:45 a.m. PT: Chief Financial Officer, Bruce Felt, will present at the 2011 Caris & Company Technology Bus Tour at SuccessFactors� offices in San Mateo, CA. Wednesday, Sept. 7, 2011 at 2:20 p.m. ET: Chief Financial Officer, Bruce Felt, will present at the 2011 Citi Technology Conference in New York. Wednesday, Sept. 14, 2011 at 9:00 a.m. ET: Chief Integration Officer, Paul Sparta, will present at the Think Equity Eighth Annual Growth Conference in New York. Thursday, Sept. 15, 2011 at 1:35 p.m. PT: Chief Financial Officer, Bruce Felt, will present at the 2011 Deutsche Bank Technology conference in Las Vegas, Nev. Live audio webcasts of the presentations will be available on SuccessFactors’ Investor Relations website at http://www.successfactors.com/investor.

SuccessFactors, Inc. provides cloud-based business execution software solutions that enable organizations to bridge the gap between business strategy and results worldwide.

Stage Stores Inc. (NYSE:SSI) announced that its Board of Directors has declared a quarterly cash dividend of nine cents per share on the Company�s common stock, payable on September 21, 2011 to shareholders of record at the close of business on September 6, 2011.

Stage Stores, Inc. brings nationally recognized brand name apparel, accessories, cosmetics and footwear for the entire family to small and mid-size towns and communities through 799 stores located in 39 states.

The Marcus Corporation (NYSE:MCS) announced that Bill Reynolds has joined the company as senior managing director of MHR Capital. MHR Capital is a newly formed hotel investment business formed by The Marcus Corporation to act as an investment fund sponsor, joint venture partner or sole investor for hotel and resort properties.

The Marcus Corporation, together with its subsidiaries, owns and operates theatres, and hotels and resorts.