Tuesday, March 31, 2015

Why Websense Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Websense (NASDAQ: WBSN  ) were skyrocketing today, up as much as 29% after the web-security specialist agreed to be bought out for $907 million.

So what: Vista Equity Partners offered to take Websense private for $24.75 a share, or the equivalent of $907 million, all in cash. The Websense board said it had explored proposals from several potential acquirers, and the offer represents a 29% premium over Websense's closing price on Friday at $19.23. Websense has been in the process of converting from a web-screening and blocking service to one focused on Internet security.

Now what: Websense's share price today has come within pennies of Vista's offering price, indicating a high level of confidence that the deal will go through as agreed. The deal looks like a win for Websense shareholders, as the stock price is now double nearly what it was last fall. From here the question seems to be what implications the buyout has for other web-service companies.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

What's Wrong With Twitter's IPO?

This week, it seems like there is nothing to even discuss besides this company's new IPO. Of course there is, however, Alex Dumortier of The Motley Fool UK, feels just a bit more discussion, along with a brief look back, is a good way to avoid making the same mistakes of the past, or some brand new ones.

Twitter (TWTR) has priced its shares at $26 each, more than the $23-$25 range initially announced, due to high demand, making it the biggest market debut for a technology firm since Facebook (FB).

If you want any evidence that Facebook's botched May 2012 initial public offering was a traumatic event, just look at the following headlines regarding the most anticipated IPO since the Facebook fiasco, which I culled from Yahoo! Finance's homepage:

Challenges abound for Twitter heading into the IPO (Associated Press)

Success of Twitter's Business Model Questioned Ahead of IPO (Breakout/Yahoo! Finance)

As Twitter IPO prices, poll says it's not worth hype (CNBC.com)

Good News for Twitter IPO: Small Investors Are Skipping It (The Exchange/Yahoo! Finance)

But who, exactly, was traumatized? Investors or financial journalists? One headline tells a different story from those I just cited-one of enthusiasm, rather than skepticism: Twitter boosts IPO range amid strong investor demand (Reuters)

Although they maintained the size of the offering at 70 million shares, Twitter and its underwriters first raised the previous $17 to $20 pricing range for the stock to $20 to $25, before Thursday's $26 news. If the underwriters exercise the overallotment option for an additional ten million shares, Twitter will end up raising more than $2 billion at the top end of that range.

The truth is that this is a fantastic time for Twitter to go public: the stock market has had a great run this year, and growth-stock IPOs have been making eye-popping debuts (in the US, witness the shares of sandwich chain Potbelly (PBPB), which more than doubled on their first day of trading, and we all know the score with Royal Mail (LSS:RMG) by now). Finally, the most highly visible social networking stocks—Twitter's peer group—have outpaced the market, as the following performance graph of Facebook and LinkedIn (LNKD) illustrates:

chart

With those precedents in mind, should investors ignore the skeptical articles regarding Twitter and plow into the stock? My answer: no.

Where Facebook and LinkedIn are solidly profitable, Twitter isn't. In that regard, it's closer to local-business review site Yelp (YELP), which has yet to turn a quarterly profit (although that hasn't stopped the stock from gaining 241% this year.) Twitter is a fascinating platform, and it has already made a massive impact on business and popular culture, but as a business model, it's still finding its feet. Several ad buyers at major advertising firms recently told the Financial Times that the funds they allocate to Twitter come out of their experimental budgets.

I think the odds are excellent that Twitter's stock will post muscular gains once the shares begin trading, but whether it will prove an excellent long-term investment looks much more uncertain. Investors who are interested in buying the shares should first ask themselves what they expect to achieve, over what timeframe...and how much they are prepared to lose in an adverse scenario.

Read more from The Motley Fool UK here...

Sunday, March 29, 2015

3 Stocks That Blew the Market Away

Don't settle for ordinary quarterly reports.

I take a look at three companies that beat market expectations every week, since I believe that it's the biggest factor in a stock beating the market. Leaving Wall Street's pros with stunned expressions can be a good thing. It usually means that the companies have more in the tank than analysts figured. Capital appreciation typically follows.

Let's take a look at a few companies that humbled the pros over the past few trading days.

We can start with Yahoo! (NASDAQ: YHOO  ) . The dot-com pioneer keeps showing its bottom-line sizzle under CEO Marissa Mayer. Yahoo!'s quarterly profit of $0.38 a share obliterated the $0.24 a share that analysts were forecasting. Yahoo! has managed to beat profit estimates by double-digit percentage margins in each of the company's quarters under Mayer.

It's not all rosy at Yahoo!. Top-line growth remains stagnant, as display advertising contracts and the move to outsource its search business through Bing continue to show eroding market share. However, at least Yahoo! is delivering on the bottom line.

Intuitive Surgical (NASDAQ: ISRG  ) also bested the prognosticators. The company behind the da Vinci surgical robotic arm has been making operating rooms more efficient by providing more precise incisions on approved procedures and leaving surgeons less fatigued. Intuitive Surgical's net income of $4.56 a share for its latest quarter easily surpassed analysts that felt that the company would earn less than $4 a share.

Intuitive Surgical has routinely landed ahead of Mr. Market, but this is its widest margin of victory in more than two years.

Finally, we have Consumer Portfolio Services (NASDAQ: CPSS  ) driving past where the pros were parked. Consumer Portfolio Services provides indirect automobile financing, primarily to folks with dodgy credit histories buying late-model used cars. This is a risky niche when the economy's souring, but business is booming these days.

Consumer Portfolio Services saw its earnings per share pop sixfold to $0.12, just ahead of the $0.11 that Wall Street was forecasting. Revenue rose at a respectable 23% clip.

Moving in the right direction
It's important to keep watching the companies that surpass expectations. Over time, it will be a lucrative experience for investors as the market rewards the overachievers. That's the kind of surprise that we look for in the Rule Breakers newsletter service. Want in? Check out a 30-day trial subscription.

Recently, some investors have questioned Intuitive Surgical's future. However, Intuitive Surgical expert Karl Thiel believes a visible path to long-term growth persists. Will Intuitive capitalize, or be crushed by unforeseen pitfalls? His report highlights all of the key opportunities and risks facing the company -- and includes a full year of ongoing updates as key new hits -- so be sure to claim your copy by clicking here now.

Friday, March 27, 2015

Massive Changes in the Housing Market... What to Do

"Steve, I can't manage to buy a house," an attendee told me over the weekend in San Diego at Everbank's Global Currency Expo.   "The last house I tried to buy had 65 offers on it and sold well above asking price."   This guy was not alone...   Conference attendees from Florida to Phoenix told me similar stories. "The deals are gone," they said. So they're giving up.   But fear not, my friends! Market price – or even "above-market price" – on housing in America is still a fantastic deal today. Let me explain...   What's happened in real estate is nothing short of extraordinary...   We went from a market with tons of supply and no demand to a market with no supply and tons of demand.   Many people are giving up... They think the deals are gone... They think, "Why should we pay market price, or God forbid, above market price, for a house now?"   I have an answer for you...   A couple weeks ago, I explained exactly how high home prices should go. In short, house prices nationwide are around $180,000. But by our math, "fair value" is over $260,000 today – about 45% above today's prices.   How can our "fair value" be so high? One major reason is mortgage rates...   When it comes to mortgages, most people fail to understand the incredible power of "compound interest." To put it simply, it's about realizing how much money you pay in interest on a 30-year mortgage.   House prices today are at about the same levels they were in 1979/80 (adjusted for inflation). Back then, mortgage rates were 15%. At that rate, you'd pay $620,000 in interest over the life of that loan.   Inflation-Adjusted Median Home Prices   By comparison, at today's mortgage rates of 3.5%, you'd only pay $106,000 over the life of the loan.   That is crazy...   As regular readers know, I have been extremely optimistic on U.S. housing – more so than any other major analyst on the planet.   The market has been roaring back recently. The official statistics of home prices are always MONTHS old. But median existing home prices are up 12% over the most recent 12-month period (February 2012-February 2013). That's the largest 12-month increase we've seen since late 2005... near the top of the housing bubble.   And the big boom is happening right this second. We now have tons of buyers and not much supply. The downside of this situation is you're not going to find the same amazing deals you would have a year ago. The upside of this situation is Economics 101: With no supply and tons of demand, housing prices will continue to rocket higher.   Folks at the conference shared their frustrations with me. They feel like they've missed it... that they can't get the great deal anymore.   What most people don't realize is that MARKET PRICE today is still a fantastic deal... Most people don't understand compound interest and fair value. So most people today will back down... They won't pay full price or more because they don't really understand where we are now in housing.   In the grand scheme of things, full price today is still cheap. It takes a long time for house prices to reach fair value... They can't jump overnight like stock prices. Housing is still incredibly affordable thanks to low mortgage rates. Coupled with no supply and tons of demand, we have a recipe for much higher housing prices in the next couple years.   Yes, it's now much harder to get a good property dramatically below asking price. But buying at MARKET PRICE is still a bargain today.   I am confident that you will look back on today's prices in two years and wonder why the heck you didn't ACT.   The market has changed... but don't worry so much. Housing is in a new bull market. And it is just the beginning...   Our uptrend is finally here. And it could last for a few years... at least.   Good investing,   Steve



Monday, March 23, 2015

4 Stocks Under $10 Moving Sharply Higher

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

Must Read: Warren Buffett's Top 10 Dividend Stocks

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside.

Must Read: 10 Stocks George Soros Is Buying

Sizmek

Sizmek (SZMK) provides online advertising delivery and optimization services worldwide. This stock closed up 8.5% to $5.45 in Thursday's trading session.

Thursday's Range: $5.00-$5.64

52-Week Range: $4.85-$13.25

Thursday's Volume: 427,000

Three-Month Average Volume: 158,498

From a technical perspective, SZMK ripped sharply higher here right above its new 52-week low of $4.85 with above-average volume. This stock has been under heavy selling pressure over the last two months, with shares falling sharply lower from its high of $9.93 to its new 52-week low of $4.85. That downside volatility has increased notably over the last few trading sessions, with the stock gapping down from over $7 to $5.30 with heavy downside volume. That said, shares of SZMK have now started to rebound higher off that $4.85 low with strong upside volume flows. Market players should now look for a continuation move to the upside in the short-term if SZMK manages to take out Thursday's intraday high of $5.64 with strong volume.

Traders should now look for long-biased trades in SZMK as long as it's trending above Thursday's intraday low of $5 or above its 52-week low of $4.85 and then once it sustains a move or close above $5.64 with volume that hits near or above 158,498 shares. If that move begins soon, then SZMK will set up to re-test or possibly take out its next major overhead resistance level at its gap-down-day high of $6.20. Any high-volume move above $6.20 will then give SZMK a chance to re-fill some of that gap-down-day zone that started just above $7.

Must Read: Hedge Funds Love These 5 Stocks -- but Should You?

MagicJack VocalTec

MagicJack VocalTec (CALL), together with its subsidiaries, operates as a cloud-based communications company that provides voice-over-Internet-protocol services in the U.S. This stock closed up 6.3% to $9.17 in Thursday's trading session.

Thursday's Range: $8.52-$9.24

52-Week Range: $8.50-$25.37

Thursday's Volume: 448,000

Three-Month Average Volume: 505,289

From a technical perspective, CALL ripped sharply higher here right off its new 52-week low of $8.50 with decent upside volume flows. This stock has been decimated by the sellers over the last four months and change, with shares plunging lower from its high of $16.12 to its new 52-week low of $8.50. During that move, shares of CALL have been making mostly lower highs and lower lows, which is bearish technical price action. Over just the last month and change, shares of CALL have been nothing but a downside volatility nightmare, since the stock has trended lower on a closing basis for the majority of those trading sessions. That said, shares now look ready for a temporarily relief rally, since the stock broke out on Thursday above some near-term overhead resistance at $9.15. Market players should now look for a continuation move to the upside in the short-term if CALL manages to take out Thursday's intraday high of $9.24 to some more key near-term overhead resistance at $10.01 with high volume.

Traders should now look for long-biased trades in CALL as long as it's trending above its 52-week low of $8.50 and then once it sustains a move or close above $9.24 to $10.01 with volume that hits near or above 505,289 shares. If that move develops soon, then CALL will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $11.07 to $12, or even $12.70 a share.

Must Read: 5 Breakout Trades That Are Beating the Market's Slump

Molycorp

Molycorp (MCP) produces and sells rare earths and rare metal materials in the U.S. and internationally. This stock closed up 4.1% to $1.50 a share in Thursday's trading session.

Thursday's Range: $1.41-$1.54

52-Week Range: $1.14-$6.45

Thursday's Volume: 2.88 million

Three-Month Average Volume: 5.07 million

From a technical perspective, MCP trended sharply higher here right above some near-term support at $1.30 with lighter-than-average volume. This stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $1.14 to its recent high of $1.63. During that move, shares of MCP have been making mostly higher lows and higher highs, which is bullish technical price action. This spike to the upside on Thursday is now quickly pushing shares of MCP within range of triggering a big breakout trade. That trade will hit if MCP manages to take out some key near-term overhead resistance levels at $1.63 to its 50-day moving average of $1.64 with high volume.

Traders should now look for long-biased trades in MCP as long as it's trending above some key near-term support at $1.30 and then once it sustains a move or close above those breakout levels with volume that hits near or above 5.07 million shares. If that breakout develops soon, then MCP will set up to re-test or possibly take out its next major overhead resistance levels at $1.75 to $1.80, or even $1.90 to $2.

Must Read: 5 Hated Earnings Stocks You Should Love

Rubicon Project

Rubicon Project (RUBI) , a technology company, is engaged in automating the buying and selling of advertising. This stock closed up 3.6% to $9.98 a share in Thursday's trading session.

Thursday's Range: $9.50-$10.18

52-Week Range: $8.76-$23.20

Thursday's Volume: 369,000

Three-Month Average Volume: 321,062

From a technical perspective, RUBI bounced higher here with above-average volume. This spike to the upside on Thursday is quickly pushing shares of RUBI within range of triggering a near-term breakout trade. That trade will hit if RUBI manages to take out Thursday's intraday high of $10.18 to its 50-day moving average of $10.64 with high volume.

Traders should now look for long-biased trades in RUBI as long as it's trending above Thursday's intraday low of $9.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 321,062 shares. If that breakout begins soon, then RUBI will set up to re-test or possibly take out its next major overhead resistance levels at $12 to $12.63, or even $13.09.

-- Written by Roberto Pedone in Delafield, Wis.


RELATED LINKS:



>>How to Profit From October's Volatile Market



>>Must-See Charts: 5 Big Stocks to Buy for a Tumbling Market



>>5 Stocks Insiders Love Right Now

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com.

You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.


Thursday, March 19, 2015

When You're Right, You're Still Wrong

On October 26th, I made what was to be a highly contentious bearish call on the SPDR Gold Trust ETF (GLD) in my article GLD: Sell While You Still Have A Chance. As is often the case with negative outlooks for precious metals, the article was met with nearly unanimous opposition. Most of this uni-directional response came from readers with stated long positions in gold and its correlated assets, so I suppose it could be said that I should not have expected anything different. In an effort to be as specific as possible (something I feel is missing in most publications) I went on to offer exact price targets to the downside, as explained in my follow-up GLD: Bears Set Sights On 115. After nailing the cyclical top on October 26th (to the day),valuations in GLD dropped 12% in less than two months en route to this target, with very little to be seen in terms of upside correction.7dvTdXA0pdM5PFLIvQpuktkUdsXQ6QkRK3MkJokDClearly-Defined Bearish EnvironmentFrom a fundamental perspective, all of my scenarios played out exactly as expected. Demand in emerging markets has not been enough to counteract the oppositional effects of a strengthening U.S. Dollar, and GDP results have consistently surpassed consensus estimates. We have seen several examples of some of the market's biggest gold bugs (John Paulson (Trades, Portfolio), along with others) bailing out on their previously established outlooks, cutting their losses and reversing positions. The unfortunate reality for many investors with long positions in precious metals, however, has been much more difficult to accept. Costly (and completely avoidable) losses have come as a result, and the psychological forces that seem to govern the gold markets can only be described in one way: When you're right, you're still wrong if you are negative on precious metals. B! ut now we are seeing that this isn't the case.Fed Tapering Confirmed by Employment, GDP PerformancesOf course, markets never reward investments that are governed by emotion and psychological responses. In gold, investors will need to start accepting the fact that gold no longer holds the safe-haven, alternative store of value position it once had. The macroeconomic environment simply does not support the argument for sustainable gold prices at current levels. Those that have suggested the Fed will never be able to start tapering have already been proven wrong, and the bullish outlook for the broader economy is now being confirmed by the latest performances in U.S. GDP:h2k_IMc95QpMalfkmpiRvGXY5OLFYoAY6qWIyhfFDriven largely by surges in consumer spending, GDP growth for the third quarter is now seen expanding at a rate of 4.1%, which is its fastest rate in two years and well above the market's initial estimates. These improvements match the trajectory that is seen in labor markets as well (with the unemployment rate now on track to fall below 7%). Second quarter GDP came in at 2.5%, so the progress here is clear, as are the market's erroneous estimates discounting the true strength that is building in theU.S. economy. These figures help support the Fed's decision last week to begin tapering its quantitative easing stimulus programs -- in a move that was long overdue.Correlated Assets: Don't Forget the DollaruEY_yDqlCnypAnF6abbWecqB9_wAQr__TZG5wNG0These developments bode well for expected performances in the U.S. Dollar, and in assets like the PowerShares DB U.S. Dollar Index Bullish ETF (UUP). Of c! ourse, th! e opposite is then true for inversely-correlated assets like GLD. When we compare the relative GDP performance in the U.S. to what is seen elsewhere (for example, in Japan, the U.K., and in the eurozone), a clearly bullish scenario starts to emerge and support the argument for continued strength in the U.S. dollar.GLD: Chart PerspectivezXOoz4dXdNrXrf8Io2hKR68isJIGBKPFqQYFqamIAll of these factors will continue to weigh on gold into next year. I should say that I believe it is time to take profits on short positions in GLD, however, as the recent moves (since my bearish call on October 26th) have been forceful and we are in need of some short-term corrective retracement. Upside will remain limited, though, and a monthly close below 115 would signal a sea change in the precious metals markets. Long-term bulls should proceed with caution.About the author:RichardCoxRichard Cox is a university teacher in international trade and finance. Lecture halls of 80 to 120 students. Lessons in macroeconomics and price behavior in equity markets. Investing strategies in these articles are based on technical and fundamental analysis of all the major asset classes (stocks, commodities, currencies). Trade ideas are generally based on time horizons of one to six months. Follow me on Twitter: @Richard_A_Cox

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Monday, March 16, 2015

Don’t Buy the Sucker’s Rally in 3D Printing Companies

Twitter Logo LinkedIn Logo Google Plus Logo RSS Logo Dan Burrows Popular Posts: Don't Tread on Me – 3 Great All-American Dividend Stocks to Buy3 Things That Could Get Amazon Stock Popping AgainThe Top 10 S&P 500 Dividend Stocks for March Recent Posts: Don’t Buy the Sucker’s Rally in 3D Printing Companies Spiking Oil Prices, Rising Energy Stocks Are Headed for a Fall Oracle Stock a Buy on the Dip After Earnings View All Posts Don’t Buy the Sucker’s Rally in 3D Printing Companies

Just when shares in 3D printing companies like 3D Systems (DDD), Stratasys (SSYS) and ExOne (XONE) looked like there was no bottom in sight, their stocks reversed trend — but these names are still very much losers on the year and remain speculative bets at best.

3DSystems185 Don't Buy the Sucker's Rally in 3D Printing Companies3D printing companies represent an exciting new technology — in its very early stages. That has names like DDD stock, XONE stock and SSYS stock running on momentum, where ever-accelerating revenue growth — and hope and hype — supports the share price more than the bottom line.

Profitability, if it exists at all, can be immaterial, and that’s not necessarily a bad thing. That’s how it goes sometimes with young and promising businesses. Amazon (AMZN), famously, didn’t earn a penny in profit for years — and still doesn’t in some surprising quarters — but it’s been a tremendous stock to own over the long haul.

The problem is that most young companies don’t go on to become Amazon, and that’s where things get dicey for shares in 3D printing companies.

A number of 3D printing companies have gone on hot runs recently, and that’s stoking renewed interest in DDD stock, XONE stock and SSYS stock, the biggest 3D printing companies by market cap.

Heck, in the last month alone, DDD stock is up more than 5%, SSYS stock gained 15% and XONE stock rallied 30%.

Part of the recently renewed euphoria for shares in 3D printing companies apparently was started by a client note from Pacific Crest Securities discussing pilot programs at Amazon and Wal-Mart (WMT) for 3D printed objects.

3D Printing Companies: A Bad Bet for a Late Bull Market

That’s nice, but not much to support an extended run. After all, shares in 3D printing companies are still big losers in 2014, and its not like the headwinds holding them back have disappeared.

Lengthen the time-frame on a stock chart and you’ll see that shares in the big 3D printing companies have been portfolio death in 2014. Here’s the carnage for the year-to-date:

SSYS stock: -17% DDD stock: -39% XONE stock: -41%

As we noted earlier, shares in these 3D printing companies became victims of their own success. 3D printing companies were favorites last year, propelling shares of some of the biggest names to some dizzying heights. SSYS stock rose 128% in 2013. DDD stock gained more than 160%. XONE stock saw its shares rise 68%.

But those kinds of hot runs will stretch the valuation of any stock, and 3D printing companies were no exception. When valuations get stretched to almost 300 times forward earnings (XONE stock today), anything that calls an accelerating growth trajectory into question is going to spark a selloff.

And that’s pretty much where we sit with shares in 3D printing companies. They’re crazy expensive, meaning they have to overdeliver time and time again — at just the wrong time in the market cycle.

This late bull market is rewarding defensive sectors like utilities, not momentum names. That makes the recent upturn in 3D printing companies look more like sucker’s rally than a lasting trend.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.

Microsoft Corporation (MSFT): An Expansive Path to FBR's $49 Target

Microsoft Corporation (NASDAQ:MSFT) shares are getting a helping hand from an upgrade today. Shares of the software giant are up more than 1.5% as we type thanks to a strong market and an upgrade from FBR Capital.

Analyst, Daniel H. Ives raised his recommendation to an "Outperform" from "Market Perform" rating. The analyst pinpoints a price-target of $49 with his updated outlook.

In case you don't know, Microsoft is engaged in developing, licensing and supporting a range of software products and services. The Company operates in five segments: Windows & Windows Live Division (Windows Division), Server and Tools, Online Services Division (OSD), Microsoft Business Division (MBD), and Entertainment and Devices Division (EDD).

[Related -Are Google And Others Looking To Make A Deal?]

Ives tells interested investors, "While the company has clearly missed opportunities to become a major player in the tablet, mobile, and search markets over the years, we believe now with Nadella at the helm, Microsoft is off to a golden start with his improved transparency and strategic focus on the mobile/cloud space. Coupled with a number of key strategic announcements Nadella has made as new CEO (Office on iPad, free Windows on certain mobile devices, Surface Pro 3, partnership with salesforce.com), we also believe Microsoft's disciplined spending leaves it poised for long-awaited growth in free cash flow (we estimate 5% year-over-year growth for FY15), representing a breath of fresh air for investors, in our view."

[Related -Microsoft Corporation (MSFT) Q3 Earnings Preview: Less XBOX and Surface is More]

He continued, "That said, given our checks from the field and recent results (March quarter), we believe Microsoft is experiencing accelerated traction in the cloud with its core cloud Office product (e.g., Office 365) showing good subscriber momentum, while its cloud services platform (e.g., Azure) is also growing rapidly on the heels of strong secular trends (e.g., cloud buildout). In a nutshell, while its mobile strategy (e.g., Surface, Nokia) remains a "prove me" situation, we believe Microsoft's intertwined focus with the cloud will help breathe new life into this software behemoth over the coming years."

Let's take a look at MSFT's recent price-to-sales (P/S) and price-to-earnings (P/E) ratios, and Wall Street's current consensus earnings and sales estimates to see what it will take to find FBR's $49.

For 2015, the street's top-line outlook for MSFT is $100.56 billion with $2.87 per share making it to the bottom-line.

Since 2009, Microsoft has traded with a P/S range of 2.91 to 4.99 while averaging 3.64 times sales. At the half-decade average P/S ratio, MSFT would price out at $44.31. Ives' $49 requires investors to pay 4.02 times 2015's consensus or sales need to reach $111.2 billion using the five-year average P/S ratio.

As for earnings, MSFT's average P/E ratio in the last five-years was 13.34 with a min of 8.85 and a max of 20.39. Forty-nine bucks demands investors pay 17.07 times earnings. At 2015's consensus earnings estimate with the average P/E, Microsoft shares would trade at $38.29.

Overall: Microsoft Corporation (NASDAQ:MSFT) will need to trade at the upper levels of its historical P/S and P/E ratios to hit FBR Capital's $49 target. In all likelihood, Ives will have to be right regarding accelerating growth for $49 to happen. 

Thursday, March 12, 2015

Car deals abound on big holiday sales weekend

This is a great weekend to be a car dealer.

Strong Memorial Day sales are expected at dealers across the country, a reflection of a stronger economy and pent-up demand from a dreadful winter when consumers put off buying new cars until the snow finally melted.

So what are the best deals?

If cash back is your goal, look at the Chrysler 300, with $3,250 off its list price of $31,890; Ford Expedition with $5,000 off its $43,170 list and Fiat 500 with $2,000 off its $18,300 list, according to Kelley Blue Book.

If you plan to lease, KBB says take a look at the Nissan Altima or Ford Flex at $189 a month; Ram 1500 Quad Cab at $229 a month or Infiniti Q60 at $299 a month.

New-car sales this month are expected to come in at 1.3 million this month, up 4% from a year ago, according to J.D. Power and LMC Automotive. Dealers are helped by a quirk in the calendar: this May has five weekends, instead of the usual four.

J.D. Power estimates that consumers will spend more than $37 billion on new cars this month. That would beat the previous May high of $34.3 billion set in 2004. Power says May is the eighth consecutive month that consumer spending on new vehicles has increased compared to last year.

One reason: Consumers want more options and are spending more on the cars they buy. Power expects them to pay an average of $29,600 for a new vehicle, up about $800 from last year.

Tuesday, March 10, 2015

Anheuser Busch Inbev SA Buys South Korean Brewery for $5.8B (BUD)

On Tuesday, Belgium-based Anheuser Busch Inbev SA (BUD) finished its $5.8 billion purchase of Oriental Brewery, which BUD previously sold in 2009.

Anheuser Busch Inbev sold Oriental Brewery for $1.8 billion to KKR & Co. and Affinity Equity Partners in 2009, when the company needed cash to help pay off debts incurred when purchasing Anheuser Busch in 2008 for $52 billion. BUD plans to promote Oriental Brewery outside of South Korea, and also stated that the brewery will be the official sponsor of 2014′s World Cup in Brazil.

BUD’s chief executive, Carlos Brito, had the following to say about the purchase: ”We are excited to welcome the Oriental Brewery team back to the AB InBev family. We look forward to re-integrating OB into our global platform, as we endeavor to strengthen our position in the Asia Pacific region and continue growing our brands and providing additional consumer choice in South Korea.”

Anheuser Busch Inbev stock was down 61 cents, or 0.58%, in pre-market trading. YTD, the company’s stock is up 1.69%.

BUD Dividend Snapshot

As of 8:15am on April 1, 2014


WMT dividend yield annual payout payout ratio dividend growth

Click here to see the complete history of BUD dividends.

Monday, March 9, 2015

How To Create A Model Bucket Portfolio For Your Retirement

By Christine Benz

Here's your assignment: Gather up all of your retirement accounts and shape them into a portfolio that will supply you with the income you'll need during your retirement years.

Oh, and one other tiny to-do: You'll  also need to make sure you never run out of money, even though you don't know exactly how long you'll need it.

In the past, one simple and elegant solution to the above problem was to buy an immediate annuity that would pay you a stream of income for the rest of your life. But many investors don't like the loss of control that accompanies annuities. A more temporal problem is that today's ultra-low interest rates mean payouts from such annuities are lousy right now.

One other intuitively appealing idea is to sink your portfolio into income-producing investments, such as bonds and dividend-paying stocks, and live off whatever yield they generate. That way you might never have to tap your principal at all. The big drawback, however, is that you're buffeted around by whatever the interest-rate gods serve up. When yields are up, you're living high off the hog; when they're miserly, as they have been for the better part of a decade, you have the unappetizing choice of scaling your spending way back or venturing into riskier income-producing securities to get the yield you need.

Given that each of those approaches has become more challenging in the current low-interest-rate environment, it's no wonder that so many retirees and pre-retirees have been receptive to another strategy: "bucketing" their portfolio for retirement. Originally conceived by financial-planning guru Harold Evensky, bucketing is a total-return approach in which you segment your portfolio based on when you expect to need your money. Money for near-term income needs is parked in cash and short-term bonds, while money needed for longer-range income needs remains in bonds and stocks.

Why has bucketing become so popular? First, it bows to reality by acknowledging that all but very wealthy investors will need to tap their principal during retirement; second, it provides a sensible and easy-to-use framework for doing so. And given that many retirees will live for 25 or more years in retirement, the bucket approach provides a necessary dose of long-term growth potential, enabling a retiree to hold stocks as well as safer securities for nearer-term income needs.

Bucketing also helps address some of retirees' key psychological roadblocks. By carving out a cash position in their portfolios and automating withdrawals from that account, a retiree can receive a steady paycheck, month in and month out, just like they received when they were still working. Knowing that a predictable stream of income is coming in the door can provide great peace of mind.

Moreover, holding a cash component (Bucket 1) can help retirees ride out periodic downturns in their long-term portfolios without panicking. If they know their near-term income needs are covered in the cash bucket—and, in a worst-case scenario, in their bond bucket as the next-line reserve—they're likely to be less rattled the next time stocks plunge.

Bucketing also helps retirees get away from the income-only mindset, which may not lead to an optimal outcome. Many retired investors make a strict distinction between their principal and the interest it kicks off. The former is sacrosanct, never to be touched and, ideally, left to heirs. The latter is what they must rely on to meet their living expenses. Yet never touching principal might lead a retiree to underspend, forsaking quality-of-life considerations and leaving more to heirs than would be optimal.

Six Steps To Bucketing Your Retirement

Perhaps even more significantly, as yields on safe securities have shrunk to lower than 2% to 3% during the past few years, income-only investors have found themselves with a stark choice: Either stick with cash and high-quality bonds and reduce their standard of living, or venture into securities that promise a higher payout with higher volatility to boot.

Instead of relying on dividends and bond income to supply living expenses, a retiree using a bucket approach can be unrestrictive about how he replenishes the cash in Bucket 1 once it becomes depleted. Such a retiree could rely on bond and dividend income from his portfolio to fulfill some of his living expenses, but also use rebalancing proceeds, tax-loss harvesting proceeds, and so forth.

Finally, bucketing is compelling because it's flexible. A bucket portfolio can incorporate many of a retiree or pre-retiree's existing holdings, and a bucket plan can be readily customized to suit a retiree's own specifications.

For example, an older retiree with an expected 10-year time horizon might have just two buckets—one for very short-term needs and another bucket earmarked for the medium term. A younger retiree with a longer time horizon, meanwhile, might have similarly positioned short- and intermediate-term buckets as well as a sizable equity bucket for long-term growth.

Sunday, March 8, 2015

New Era for Uranium

One in every ten light bulbs in the US gets its power from Russian fuel. It's been that way ever since 1993, when the "Megatons to Megawatts" program began, explains energy sector expert Peter Krauth in Money Morning.

Under this agreement, highly-enriched uranium, contained in ex-Soviet nuclear weapons, was converted into nuclear fuel. But, by the end of December, that deal will end and about 13% of the global uranium supply will simply dry up.

That's a serious challenge to replace. America's nuclear plants, all 104 of them, consume a whopping 43 million pounds of uranium every year.

There are 435 nuclear reactors in the world, with another 66 under construction. That's 15% more than are currently operating. By some estimates, 408 more will be added in the next couple of decades.

The outlook is simple. We're going to need to produce more uranium. The question is: Can this uranium be produced cost-effectively?

Through all of this, uranium prices—both spot and long-term—have been struggling since early 2011.

But here's what you need to know about the uranium price: although the spot price (currently $36/lb) is the one most often quoted, as much as 85% of all uranium is sold under long-term, multi-year contracts (currently averaging about $50/lb).

The other salient point is that, according to some experts, it actually costs $85/lb to produce. So, the average miner is losing about $50 on every pound of uranium sold at spot, and $35 for each pound sold on a long-term basis. How long do you figure that can last, really?

There's little doubt nuclear will remain a cornerstone of the world's future energy mix. And uranium producers won't keep losing money indefinitely. The price simply has to rise, and here's how we can benefit.

Uranium Participation Corp. (TSX:U) is a physically-backed uranium ETF. The fund's manager simply buys uranium oxide and uranium hexafluoride, with the purpose of selling those holdings in the future.

According to their most recent statement of investment, Uranium Participation Corp. holds about 5.75 million pounds of uranium oxide and about 4.85 million pounds of uranium hexafluoride.

While there's no leverage like that, which comes with uranium miners, Uranium Participation also carries little more than uranium price risk.

And right now, spot uranium is changing hands at a 60% discount to the cost to produce it—never mind turning a profit.

Current low prices are a disincentive way to build new supply, as well as to expand mine output. The "Megatons to Megawatts" program is over and about 13% of global supply, 24 million pounds of high-grade uranium, is about to be erased.

This situation cannot last. Uranium prices must rise—which makes Uranium Participation Corp. the best uranium play there is.

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Saturday, March 7, 2015

Automating Your Finances to Increase Wealth

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The financial options and tools available today can be staggering. Many people are either overwhelmed or overworked by the choices they face. That’s clear from both the feedback I receive from people and studies I read. When people are overwhelmed and uncertain, they procrastinate. We need to prevent procrastination in financial matters. It’s too expensive.

One of my goals is to simplify your financial life. One reason is that simplification reduces procrastination. I also don’t want you to have to work full-time on your finances. The point of financial security is to be able to spend time doing the things you really enjoy. It’s a means to an end, not an end in itself. That’s why I constantly am searching for ways to simplify financial matters, and the best ways to do that are to consolidate and automate as much of your financial affairs as feasible.

You start by having as few financial service providers as you can. The simplest structure is to have a discount broker where you keep all your investment accounts (taxable accounts and IRAs), checking account, and safety funds. Many brokers now have an affiliated bank so the accounts are managed seamlessly and even issue credit and debit cards.

An alternative is to do all or most of your financial business through the same mutual fund firm. I’m less partial to this solution these days because no fund firm meets all our investment needs. We have a broader scope than straight stock and bond funds.

Some of the larger fund firms have a brokerage arm that gives access to many funds from other groups and might offer limited checking account-type services. But the discount brokers tend to have a broader range of offerings and lower expenses for many services.

A third alternative, which is becoming more attractive because of technological changes, is to have your financial accounts at different firms but the information is aggregated in a central location. You can do this through either a web site or computer-based software. I’m more partial to aggregation now. It allows you to invest directly in funds that don’t have good substitutes at the major fund families, such as DoubleLine Total Return Bond, Hussman Strategic Growth, and MainStay Marketfield, and avoid the trading fees charged by brokers and fund company brokers. Yet, at the same time the aggregation lets you view all the holdings as though they are in one portfolio or account.

That makes it easier to see how your portfolio is positioned and decide which actions to take. The disadvantage of aggregation compared to concentrating at a discount broker is you still have to contact each investment provider separately, either through the web or telephone, to make portfolio changes. There also is likely to be an extra cost for aggregation.

Don’t stop with consolidation. There are other steps to simplifying and automating your finances.

Many bills now can be paid automatically, and that’s a good idea for recurring, regular payments such as utilities. You can have the provider draft the amount automatically from your checking or other account. An alternative is to have it charged automatically to a credit or debit card. When the amount is the same each month, you can set up automatic payments through your checking account or through personal finance software such as Quicken. A potential advantage of automatic payment through your checking account or personal finance software is you might find it easier to cancel or change the payment amount at any time.

Automatic payments mean you spend less time on your finances. You don’t sit down with your bills, sift through them, and pay them. Instead, others do that work. You review things. You determine if the bills are accurate and compare the bills received to your checking account statement (either on paper or online).

Another way to simplify finances is to put all other expenditures on a debit or credit card. Or you can use different cards for different types of expenses. Expenditures to consider for this treatment are groceries, restaurants, gas, clothing, travel, and entertainment. The advantages are you make only one payment per month (or none if you use debit cards) and can see where all your money went. You’re likely to avoid any late payment penalties and interest charges. You also can have the credit card bill automatically drafted from your checking account if you want.

There are other advantages to making payments on a credit card. You might earn points in a reward program. You also receive some consumer protection, because a credit card company intervenes in disputes with merchants.

When you’re still working, have saving and investment decisions made automatically to the extent you can. Amounts should be deducted regularly from your paycheck or checking account to be invested in your 401(k), IRA, and taxable account. Most people have automatic 401(k) contributions, but not the others. It’s better to have investments made automatically instead of waiting for you to find the time to transfer money from checking to the investment accounts.

When money is transferred to your investment accounts, it should be invested right away according to instructions you set in advance, not kept in a money market account waiting for you to make changes. Most fund families and brokers let you set up automatic investing. You always can change automatic investing plan on short notice or move money after it is invested.

Automating your finances doesn’t mean ignoring them. It means having most of the routine moves performed in the background by others. That frees your time to focus on reviewing, planning, and making changes.

Procrastination is reduced when you set up automatic alerts or reminders about actions that need to be taken. You can do this the old-fashioned way by making notations on your calendar. Web sites or software usually allow you to set alerts that are either e-mails or alerts that pop up on the screen when you open the program or log on to the site.

You should have reminders to review your accounts in the middle and at the end of the month.

You want to review the checking account to be sure all the money flowed as planned and mistakes weren’t made. You also want to be sure there’s enough in there to cover upcoming expenses and outflows.

Review your investment accounts for several points. See what your asset allocation is and be sure it isn’t too far from your targets. When part of the portfolio is too far from the target, it’s time to rebalance.

For the portion of your portfolio that is not buy-and-hold, you want to consider whether changes should be made. Are there investments that are overvalued and should be reduced or eliminated? Are some investments looking more attractive because of lower prices or shifts in the economy?

These last two actions, rebalancing and tactical portfolio shifts, are the best uses of your time. These actions increase returns and reduce risk. Too many people spend the time they have for their finances on the routine actions of moving money between accounts, paying bills, and determining how their portfolios are invested. They don’t have enough time or energy left to analyze their finances and make high-level decisions.

I recommend automating and simplifying your finances. Once the process is completed, you’ll have more time to analyze your spending and investing and increase your wealth.

Thursday, March 5, 2015

James Barrow's BHMS 3Q BHMS Fixed Income Commentary

3Q13 MARKET REVIEW: After the Federal Reserve 'balked' in its September 17th decision NOT to reduce quantitative easing (QE), the fixed income market enjoyed a reprieve from negative returns sparked by the 'Taper Tantrum' of May, June, and July. Armed with new evidence of stilltepid growth in both jobs and GDP, the Fed elected to maintain the current pace of its $85B per month U.S. Treasury and Agency MBS purchase program. The announcement ignited a strong bond market rally. The 10yr Treasury yield, having reached a year-to-date high of 3.00% on September 5, quickly declined and finished 3Q13 at 2.64%. Despite the late quarter rally, the 10yr yield remained 101 basis points (bps) above its 1.63% YTD low set on May 1, and 12 bps higher than the 2.52% of June 30. The 30yr Treasury also rose 19bps to close 3Q13 at 3.68%, resulting in a steeper yield curve. The other sectors of the U.S. fixed income market participated in the rally as well, with spreads narrowing across all sectors in the last two weeks of September.

The Barclays Aggregate Index rose by 0.57% in 3Q13, having stood at a loss of -0.36% the day before the FOMC's declaration to not slow QE. Despite the bounce, the Index remains in negative territory YTD and for the trailing 12-months at -1.77% and -1.68%, respectively. In stark contrast to 2Q13, Investment Grade (IG) corporate spreads tightened 10bps during 3Q13, producing a positive nominal return of 0.82% and an excess return of 0.92%. The respective YTD total returns in IG remain a disappointing -2.62%, but excess returns are still positive at 0.61% YTD. The 1-Yr results for IG Credit now fall to a nominal -1.58%, but 1.79% in excess of Treasuries.

The Financial sector was the best performer in the Barclays Aggregate Index during 3Q13, generating nominal and excess returns of 1.54% and 1.40%, respectively. Spreads in High Yield (HY) issues tightened substantially, propelling Ba/B credits to a 2.07% nominal and 1.74% excess return. Mortgage Backed Securities (MBS) also reacted ! positively to the Fed decision, as Agency MBS outperformed comparable duration Treasuries with a 1.03% nominal and 0.95% excess return. Commercial Mortgage Backed Securities (CMBS) were resilient as well, finishing 1.02% higher in nominal terms and 0.66% excess in 3Q13. Non-Corporate Credit issues fared positively in 3Q13, but with a relatively weaker 0.37% nominal and 0.41% excess return.

In the absence of a dramatic rally in 4Q13, the Barclays Aggregate Index is on pace for the worst calendar year for U.S. fixed income assets in 40-plus years. In stark contrast to the 20% YTD return of the S&P 500, bonds look set to suffer their first negative annual return since 1999, and only the second negative year since 1994. In both of those years, the Federal Reserve tightened monetary policy. Consequently, investors may soon wonder whether an inevitable transition toward higher interest rates will not only end the 30-year bull market in bonds, but also the 4-year bull market in stocks. Higher yields may make fixed income strategies more competitive on a risk-adjusted basis.

"Weak growth and higher bond yields are not a great cocktail for stocks." -- Barclays

'Unless things get better, we taper later.' –Ethan Harris, Bank of America

THE ECONOMY, INTEREST RATES & THE FED: The September Surprise! To the surprise of all but a minority of investors, the Federal Reserve 'whiffed' on the opportunity to launch the much anticipated transition toward 'normalizing' interest rates at the September 17-18 FOMC meeting. The foregone conclusion of 'tapering' in the $85B monthly security purchase program ($45B in U.S. Treasuries and $40B in agency MBS) was not only postponed, but Chairman Bernanke's post-committee commentary hinted at an even more 'dovish' tone about the prospects for future rate action. Though the Fed has attempted to calm markets with reassurances that tapering would not indicate 'tightening', Bernanke went even further in muting fears of higher interest rates, redefining the thres! holds for! the end of ultra-accommodation. The Fed's new guidance targeted no tightening until unemployment is "considerably below" the 6.5% benchmark, or as long as inflation "remains below 2% for some time".

While the foregone conclusion had favored at least a modest reduction of the Fed's purchase program, many had also come to believe that tapering was justified to ensure better alignment of supply and demand in the Treasury and MBS markets. New issue Treasury auction supply in 2014 is expected to diminish (20% by some estimates) with the sharp narrowing in the budget deficit. The smaller deficit stems from the ~$150B in incremental annual receipts from this year's tax increases and an improving economy, coupled with the $85B sequestration spending cuts. Otherwise, the current pace of Fed purchases will rise from ~90% of net Treasury duration to above 100%. A small amount of Fed 'tapering' was seen as necessary to simply prevent an INCREASE in Fed accommodation.

3Q13 BHMS BOND COMMENTARY

There were also concerns that the Agency MBS market has become too dependent upon Fed purchases. Higher interest rates and the modest growth environment have already negatively impacted new MBS originations. The sharp rate rise since May's initial 'taper- talk' virtually halted mortgage refinance volumes, and new originations were suppressed by the slow growth in jobs and new household formation. As a result, a possible 100% Fed ownership of net new MBS supply favored at least some reduction in MBS purchases. The extent of a pullback was uncertain, as many deemed the underlying strength of the housing market still insufficient to be self-sustaining.

BOTTOM LINE: The Fed's unexpected "U-turn" decision created a sense of confusion and uncertainty, but possibly also reveals their concern about the underlying strength of the economy, and perhaps even the validity of their own metrics. The inaction may have acknowledged that the official U-3 measure of labor strength is both artificial and inappropriate, an! d current! conditions reflect structural, as much as cyclical, headwinds. In fact, the Fed's decision to postpone tapering was confirmed by their downgraded assessment of second-half 2013 growth. The latest Fed forecast of 2013 GDP growth was revised to 2.0-2.3%, from June's 2.3-2.6%. The 2014 forecast was lowered to 2.9-3.1% ,from 3.0-3.5%. The Bloomberg composite survey projects 2013 GDP growth at a mere 1.6%. The bipartisan Congressional Budget Office estimates growth in U.S. GDP will remain below potential until 2017 (WSJ 9/9/13). Bernanke's post-meeting comments suggest the Fed's forward guidance now projects a more benign path for rates. Removing the unprecedented accommodation, much less tightening, is becoming more difficult as the economy remains stuck in stall-speed. While the inevitable long-term path for interest rates is still upward, the horizon over which the rise will occur is likely extended.

Continue reading the commentary here.


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Wednesday, March 4, 2015

The Day After Black Friday: Cyber Monday

What has become the largest day for online sales in any given year is nearly upon us again. Cyber Monday, the first Monday after the long Thanksgiving weekend, is right around the corner, and if history is any guide, it should be another record day for online sales.

Last year, online shoppers spent $1.46 billion on Cyber Monday according to data from comScore Inc. (NASDAQ: SCOR) and the research firm is projecting that total online spending for the 2013 holiday season will rise from $144 billion a year ago to $164 billion this year. That total includes only desktop PC shopping, and does not take into account traffic and sales from mobile devices like tablets and smartphones.

comScore's projected 14% rise in holiday sales this year would translate into a 14% rise in Cyber Monday sales, and a total of $1.66 billion. Whether that growth actually happens or not depends to a large extent on the outcome of Black Friday sales both in brick-and-mortar stores and online.

Nielsen reports that 88% of consumers plan to use their computers to shop on Cyber Monday. Some 37% of consumers will be using tablets and 27% will be using smartphones. Even more interesting, perhaps, is that 85% Nielsen's respondents said they would not be shopping in retail stores on Black Friday and 46% do plan to shop online on Cyber Monday. Retailers have some work to do to overcome those numbers.

Best Buy Co. Inc. (NYSE: BBY), for example, is taking on online behemoth Amazon.com Inc. (NASDAQ: AMZN) by offering many items at prices very close to Amazon's and has concocted a price-matching guarantee as well. To combat such forays, Amazon has been offering Black Friday deals all week and is teasing its Cyber Monday offerings as yet another full week of special deals.

Have all the special deals and prices done nothing more than pull sales forward? We won't know the answer to that until the holiday shopping season is behind us, but there's a good chance that could be happening. The period between Thanksgiving and Christmas this year is six days shorter than it was last year, and retailers need to pull sales forward if they are going to have a successful year. Overall the season might turn out better than expected, but big sales now, online and off, could mean a tapering as Christmas gets nearer.

Amazon, which received nearly 110 million unique visitors in October, is the sixth-ranked of the Top 50 web properties according to comScore and the leading traditional retailer is Wal-Mart Stores Inc. (NYSE: WMT), with almost 40 million unique visitors. Walmart has lowered its free shipping minimum to $35, matching Amazon's raise from $25 to $35. Last year's Cyber Monday sales were the best in Walmart's history, and the president of the company's U.S. website said that more than two-thirds of Black Friday shoppers at Walmart stores say they plan to shop again on Cyber Monday.

Walmart will also invite customers who use its mobile app, are Facebook fans, or are subscribers to company emails to a pre-Cyber Monday shopping event on Sunday. The company is not planning to leave any stone unturned if it can pull its sales forward and guarantee a winning holiday shopping season early.

The heightened competition for sales this holiday season is good for consumers looking to stretch their gift-giving budgets. They're also getting some help from lower gasoline prices. But that doesn't mean that sales through Christmas will follow a smooth upward trajectory. There's likely to be a plateau and fairly soon given the vigor with which retailers have pumped up this opening weekend.