The Coca-Cola Company: 1925-1929

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This article is the second piece in a series reliving the story of the Coca-Cola Company (KO), and highlighting how it became the steward of the world's most valuable brand:

When we last left off (1924), the company had sold nearly 17.5 million gallons of syrup, an increase of 230% from the volume sold ten years earlier. In 1925, the upward trajectory continued, with sales at the company reaching a new plateau ($28.5 million, up 12% year over year and crossing 20 million gallons of syrup sold for the first time) despite a decrease in overhead expenses (COGS fell by $400,000 from 1924).

Robert Woodruff, who succeeded Mr. Candler as the company's President in 1923, had this to say about the years' results: "The development of both foreign and domestic subsidiaries has been satisfactory." Suffice it to say that Mr. Woodruff was being humble; the net profit for the year hit $7.9 million, an increase of more than 38% from the $5.7 million earned in 1924. For the year, the company paid $3.5 million in dividends to common stockholders, equal to a payout ratio of 44%.

In Charlie's speech (discussed in the first article of this series), he highlights the importance of creating a beverage that can be consumed morning, afternoon, and night on every corner of the globe; Coca-Cola talked about their ability to attract consumers regardless of climate in the 1925 report:

"From these two cities of such wide extremes — Montreal (12 million bottles sold in 1925), brisk metropolis of the great Dominion of the North, and Miami (9 million bottles sold), wonder city of sunny Florida—you get the whole story, the big story of Coca-Cola's tremendous popularity despite great variations in climate… It can be told of the hundreds of cities in between where the popularity of Coca- Cola continues through all four seasons—winter, spring, summer and fall. ! It's the story of the tremendous public demand for the fight product."

In 1926, the year of the company's fortieth anniversary, sales crossed $30 million for the first time (gallons sold increased 5.2%), and net profit increased to $8.4 million (up 6% from 1925).

Twelve months later, the company reported its fourth consecutive year of record sales ($32.5 million) and profits ($9.2 million); as noted in the annual report, the majority of this cash would be reinvested in the domestic and international operations to fuel future growth: "In considering the Company's future policies, your Directors have provided for the enlargement of the Company's already extensive program of broadening both domestic and foreign markets. The broadening of the Company's activities will undoubtedly lay a more stable and comprehensive basis for future business and earnings."

In 1928, Coca-Cola (yet again) hit record sales and profit figures; the company shipped more than 24 million gallons of syrup for the year and net profit crossed the $10 million mark, an increase of 125% from the reported bottom line just five years earlier. In addition, the company was in the early stage of developing a scale advantage over competitors, with cost per unit decreasing by nearly 20% since 1923.

With each passing year, management continues to subtly drop golden nuggets that suggest the global potential that this company might one day achieve: "Contrary to a generally prevalent belief, our experience in marketing Coca-Cola indicates that climatic, geographical, and racial factors exercise relatively small influence upon our sales over a reasonable period of time." As an example, management noted that the company's two largest bottling plants serving individual cities in that year were located in New Orleans (51 million bottles per annum) and Montreal (39 million bottles, up more than three-fold from the 1925 figure), two regions with drastically different climates. With this in mind, the company contin! ued their! unconstrained expansion to all corners of the globe, increasing product availability from 30 countries to 76 countries over the course of 24 months.

The first "per-capita" chart (which has become a visual representation of the company's opportunities in international markets) appeared the 1928 report, and showed that consumption had increased (in the U.S.) from an average of 18 bottles/glasses of Coca-Cola per person in 1922 to an average of 25 per annum in 1925; as we will see, that figure will continue to increase region by region across the globe (in 2010, per capita consumption was 394 servings in the U.S.).

Importantly, management was clear in letting shareholders now that expansion internationally would come with a cost in the short term; but for investors, the long term payout trumped the near-term expense: "The opening of foreign markets is a costly undertaking- and during the early years of development promises to parallel our domestic experiences with regard to the protection of our trade-mark and the development of consumer acceptance, with the manifold problems involved. Successful prosecution of these undertakings will require time, courage and patience, as well as large expenditures. Our experiences in Canada, where we operated for a number of years with annual losses, bear out this view."

Despite the market crash of 1929, sales and profit both increased for the year, at a rate of 13% and 25% respectively. In the annual report, Mr. Woodruff is again focused on the keys to strengthening the company's moat: increased advertising, a continually improving sales force, and continued development and expansion into foreign markets.

The Coca-Cola Company was firing on all cylinders; this would be critically importantly in the coming years as the longest and deepest depression of the 20th century would soon leave the economy ravished by widespread unemployment and a collapse in global trade.

Here is the continuation of the chart from the first article! depictin! g gallons sold per annum, with the most recent years discussed included:

YEAR	GALLONS SOLD
1886	25
1890	8,885
1895	76,244
1900	370,877
1905	1,549,866
1910	4,190,149
1915	7,521,833
1920	18,656,445
1924	17,496,764
1925	20,111,134
1926	21,158,450
1927	22,517,265
1928	24,212,519
1929	26,981,874

TRW Automotive Attains 52-Week High - Analyst Blog

Shares of TRW Automotive Holdings Corp. (TRW) hit new 52-week high of $68.93 on Jul 5, which is above its previous level of $68.38, and closed at $68.73 on the same day. The closing price represented a strong one-year return of 81.4% and year-to-date return of 25.0%.

TRW Automotive, headquartered in Michigan, is a leading manufacturer of advanced technology products and services for the automotive markets. The company operates in 27 countries through its subsidiaries. It has a market cap of $8.3 billion. Average volume of shares traded over the last three months stood at approximately 944.4K.

Shares of the company started escalating due to improving fundamentals in the automotive components supplying market. However, the company failed to impress investors with its first quarter results on Apr 30.

TRW posted earnings of $1.51 per share in the first quarter of 2013, topping the Zacks Consensus Estimate of $1.46. However, earnings fell 6.8% from $1.62 per share in the first quarter of 2012 due to lower operating income on the back of a higher mix of lower margin business and planned increases in costs to support future growth. Net earnings dipped 10.4% to $189 million from $211 million a year ago. All of them excluded special items.

Revenues in the quarter were almost flat at $4.2 billion as the impact of increasing demand for TRW's innovative technologies and higher vehicle production volumes in China were offset by significantly lower vehicle production in Europe.

U.S. auto sales continue to improve driven by continued macroeconomic recovery, aging vehicles on the U.S. roads and strong demand for commercial vehicles from businesses. Seasonally adjusted annual sales rate in June this year reached its highest level of 15.9 million units since November 2007.

Currently, shares of TRW retain a Zacks Rank #3, which translates to a short-term rating (1–3 months) of Hold. Some other stocks that are performing well in the industry include Visteon Corp. (VC! ) and Magna International Inc. (MGA), each with a Zacks Rank #1 (Strong Buy), and Meritor Inc. (MTOR) with a Zacks Rank #2 (Buy).

VIVUS Inks Deal on Spedra - Analyst Blog

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VIVUS, Inc. (VVUS) recently announced that it has entered into a license and commercialization in addition to a supply agreement for its erectile dysfunction (ED) drug, Spedra, with privately-held Italian pharmaceutical company, Menarini. Investors reacted positively to the news.

As per the terms of the agreement, Menarini will get the rights to Spedra in more than 40 European countries, apart from Australia and New Zealand. In exchange VIVUS will get an upfront payment of approximately $21 million and approximately $30 million in the first year. VIVUS will also be eligible to receive milestone and other payments of approximately $102 million, depending upon certain pre-specified criteria. Additionally, the company will get royalties on net sales of Spedra from Menarini.

VIVUS and Menarini also entered into a supply agreement for Spedra, according to which VIVUS will supply the product to the latter.

The partnership on Spedra, a phosphodiesterase type 5 (PDE5) inhibitor, will not only boost VIVUS' balance sheet but also go a long way in removing uncertainties related to the drug's launch in those territories.

We remind investors that the European Commission (EC) cleared Spedra, for ED, in the EU in Jun 2013. The approval did not come as a surprise as, in Apr 2013, the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) recommended the approval of the drug.

The approval came on the basis of promising data from three phase III trials, REVIVE, REVIVE-Diabetes and REVIVE-RP, and a year-long safety study.

We note that the US Food and Drug Administration (FDA) approved the drug under the trade name Stendra for ED in April last year. VIVUS is looking for a partner in the US to market the drug.

We note that a few days back VIVUS announced encouraging data from a multi-center, placebo-cont! rolled study (TA-501) evaluating the efficacy of Stendra in men suffering from ED.

The study enrolled 440 patients with mild-to-severe ED with or without diabetes. Data from the study revealed that on an average Stendra was effective after 10 minutes and 12 minutes of taking the 200 mg and 100 mg formulation of the drug, respectively.

According to the company, ED therapies recorded combined sales of over $5.5 billion in 2012. The ED market is expected to grow further in the coming years.

Currently approved PDE5 inhibitors including Pfizer Inc.'s (PFE) Viagra and Eli Lilly and Company's (LLY) Cialis are recommended for ingestion one to two hours prior to sexual activity or daily. We believe Stendra's fast action could help the drug gain share once launched.

VIVUS currently carries a Zacks Rank #3 (Hold). Companies that currently look attractive include Santarus, Inc. (SNTS) with a Zacks Rank #1 (Strong Buy).

First Titan Corp. Works to Increase Oil & Gas Holdings in Booming Texas Market (OTCBB:FTTN, OTCMKTS:CLNO)

First Titan Corp. (FTTN)

Last Friday, FTTN previously surged (+3.81%) up +0.016 at $.431 with 45,040 shares in play at the close (ref. google finance June 28, 2013 – Close).

First Titan Corp. continues its determined pursuit of Texas oil and gas this week, targeting assets in Waller County for potential acquisition.

Last week, FTTN finalized a letter of intent to acquire a working interest in the property. The Lone Star State, long known for its energy assets, has been a major region of focus in FTTN's aggressive acquisitions strategy. In addition to its assets in Terrell County, the company is also negotiating the possible acquisition of producing assets in Hardin County with development upside.

Known as the Minns asset package, the Waller County project contains a multi-well production package located in the Brookshire Field. According to a reserve report conducted this year, the proved developed producing reserves for the project include over 8,500 barrels of oil.

Take a look at First Titan Corp (FTTN) 5 day chart:

Cleantech Transit, Inc. (CLNO)

Cleantech Transit, Inc. (OTCMKTS:CLNO) (www.cleantechtransit.net) through its Discovery Carbon subsidiary, develops emissions offset strategies for companies, municipalities, and countries. Last Friday CLNO had surged (+14.07%) up +0.037 at $.300 with 2,443,164 shares in play at the close (ref. google finance June 28, 2013 – Close). Earlier that same morning (June 28, 2013), this company hit as low as $.21 and as high as $.349. The fact that their is over a million shares in play for the last 3 weeks only ignites the excitement that CLNO brings to the table.

Last Friday (June 28) CLNO's daily range was at ($.349 – $.21) currently at $.300 would be considered a (+27172.72%) gain above the 52 wk low of $.0011. Eventhough CLNO has surged (+14.07%) up +0.037 at $.300 with 2,443,164 shares in play at the close (ref. google finance June 28, 2013 – Close), the stock is up +15689.47% since the concerning dates of December 31, 2013 – June 28, 2013. +15689.47% is the 6 month high and rightly so.

Earlier this month (June 3), CLNO acquired control of Discovery Carbon Environmental Securities Corporation ("Discovery"). The acquisition advances the strategy of developing significant market share in the alternative clean energy sector. Discovery's proprietary GreenTrees™ for renewable energy, and EvoCert™ environmental credits for offsetting business and individual carbon foot prints are some of the exciting products Discovery provides to clients throughout the world.

To view EQCO2 video click URL http://www.crwetube.com/media/billy-barnwell-ceo-of-eqco2-talks-about-the-compan

CLNO previously reported (June 21), that it has acquired 81% of the issued and outstanding shares of Discovery Carbon Environmental Securities Corporation ("Discovery"), a Nevada corporation. The acquisition advances the strategy of developing significant market share in the alternative clean energy sector. Discovery's proprietary GreenTrees™ for renewable energy, and EvoCert™ environmental credits for offsetting business and individual carbon foot prints are some of the exciting products Discovery provides to clients throughout the world.

The Exchange Agreement between the parties required that at least 80% of Discovery's issued and outstanding shares be exchanged for shares of the Company's common stock, in restricted form. The parties are now in the final stages of closing the transaction. As part of the closing of this acquisition, the Company has announced that it will be changing its name to EQCO2, Inc. as well as implementing a 1 for 5 forward stock split for its common stock.

To view CLNO video chart (June 24, 2013) brought to you by BlueHorseshoeStocks click URL http://www.youtube.com/watch?v=r8UJpn5IJ_c

Check out, Barchart.com detailed opinion about CLNO looks very enticing: URL http://www.barchart.com/opinions/stocks/CLNO

Keep in mind, (June 28) CLNO closed at $.30 with 2,443,164 in play (ref. google finance June 28, 2013 – Close). (June 27) CLNO closed at $.26 with 2,393,381 in play (ref. google finance June 27, 2013 – Close). (June 26) CLNO closed at $.19 with 2,657,859 in play (ref. google finance June 26, 2013 – Close). (June 25) CLNO closed at $.17 with 3,217,105 in play (ref. google finance June 25, 2013 – Close). (June 24) CLNO closed at $.16 with 1,006,552 in play (ref. google finance June 24, 2013 – Close). (June 21) CLNO closed at $.13 with 1,747,826 in play (ref. google finance June 21, 2013 – Close). (June 20) CLNO closed at $.10 with 1,644,340 in play (ref. google finance June 20, 2013 – Close). (June 19) CLNO closed at $.09 with 1,786,438 in play (ref. google finance June 19, 2013 – Close). (June 18) CLNO closed at $.08 with 1,224,685 in play (ref. google finance June 18, 2013 – Close). (June 17) CLNO closed at $.06 with 2,681,749 in play (ref. google finance June 17, 2013 – Close). (June 14) CLNO closed at $.09 with 4,923,706 in play (ref. google finance June 14, 2013 – Close). (June 13), CLNO closed at $.09 with 2,457,486 in play (ref. google finance June 13, 2013 – Close). (June 12) CLNO closed at $.07 with 2,067,313 in play (ref. google finance June 12, 2013 – Close). (June 11) CLNO closed at $.04 with 1,978,366 in play (ref. google finance June 11, 2013 – Close). (June 10) CLNO closed at $.03 with 1,134,672 in play (ref. google finance June 10, 2013 – Close).

Now take a look at the Cleantech Transit, Inc. (CLNO ) 5 day chart:

Fidelity Clearing Unit to Reorganize, Appoint New Leaders

In major news of a reorganization of its clearing unit, Fidelity Institutional announced on Wednesday that it would reorganize the business due to rapid changes in the financial advice industry and has tapped new leaders from within the company to lead the reorganization.

Boston-based Fidelity Institutional, which has more than $1.1 trillion in assets under administration, is the division of Fidelity Investments that provides clearing, custody and investment management products to registered investment advisors, banks, broker-dealers and family offices.

Fidelity Institutional President Gerard McGraw and the leaders of Fidelity’s custody and clearing units, Michael Durbin (right), president of Fidelity Institutional Wealth Services, and Sanjiv Mirchandani, president of National Financial, will oversee a new organizational structure that recognizes “the growing, emerging, and converging business models in the financial advice industry, while maintaining its commitment to the existing regional support model,” according to a news release.

The unit recognized that it could better serve the custody and clearing industry by leveraging its scale and breadth of expertise, McGraw said in a statement.

“We are a diverse company, and it’s important that we are aligned to consistently bring our clients both our broad industry perspective as well as our specific business model expertise,” he said. “We are committed to delivering against our clients’ immediate needs, but also looking ahead to help them navigate some of the challenges and opportunities we expect they will face in the future.”

Fidelity announced the following groups and leaders, all from within the company:

• Broker-Dealers — Bobbi Masiello, currently executive vice president and head of relationship management for Fidelity’s clearing business, will lead the group as insurance, independent and institutional broker-dealer firms evolve and increase their focus on more customized, advanced technology solutions.

• Banks — Michael Norton, currently senior vice president for client experience supporting Fidelity’s clearing clients, will lead the group. Banks are increasing their focus on growing their wealth management offerings, so Fidelity will dedicate a group to oversee banks’ converging product and technology needs in custody and clearing.

• The following groups will report to Fidelity Institutional Wealth Services President Michael Durbin:

— RIAs – Bob Oros, currently executive vice president of sales and relationship management in Fidelity’s custody business, will continue to head RIA sales and relationship management.

— Strategic acquirers and professional asset managers will comprise a separate team. Robert Evans, who has served as a regional senior vice president in the RIA custody unit for seven years, will lead this team and continue to report to Oros.

— Retirement advisors and administrators — With financial advisors and third-party administrators playing an increasing role in the 401(k) market, a new Fidelity team will promote the services of 401(k) retirement plan recordkeepers and engage with advisors who sell retirement plans. Meg Kelleher, currently executive vice president for sales and relationship management in Fidelity’s custody business will lead the group.

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Check out Fidelity Launches M&A Program for RIAs, Including Access to Financing.

American Axle Stays Neutral - Analyst Blog

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On Jul 4, we maintained our Neutral recommendation on American Axle and Manufacturing Inc. (AXL). Though we are bullish about the company's focus on diversification and geographic expansion, we are disappointed with the company's year-over-year decline in profits. We are also concerned about the weak SUV demand, high commodity costs and pricing pressure by OEMs.

Why the Reiteration?

On May 3, American Axle reported earnings of $18.6 million or 23 cents per share before debt refinancing and redemption costs in the first quarter, down 62.3% from 61 cents per share in the comparable quarter of 2012 (excluding special items). Nevertheless, earnings surpassed the Zacks Consensus Estimate of 15 cents.

Revenues of $755.6 million in the quarter were slightly higher compared with $751.5 million in the first quarter of 2012, but missed the Zacks Consensus Estimate of $757 million. The company's revenues reflect the adverse impact related to the labor strike at General Motors' Rayong plant in Thailand.

Following the release of the first quarter results, the Zacks Consensus Estimate for 2013 remained flat at $1.72 per share. However, the Zacks Consensus Estimate for 2014 went up 4.7% to $2.70 per share.

American Axle focuses on diversifying its customer base, which will boost revenue generation. The company supplies driveline systems and other components to different automakers and OEMs. In addition, the company is continuously developing its customer relationship with auto companies including Renault, Nissan Motor Co. (NSANY), Tata, Mahindra, Cherry, Brilliance and others.

In addition, the company will have favorable impacts from expansion in Asia, due to the rising demand for vehicles in the region. American Axle also plans to expand its manufacturing footprint in Brazil, China, India, Mexico, Poland and Thaila! nd.

However, we are worried about the constant pricing pressure from the major OEMs. In addition, the company is exposed to platforms, which faces maximum production cuts. Sales and output levels of RWD light truck and SUV in North America are declining over time, which occupies a substantial portion of the company's revenues.

Other Stocks to Consider

Some stocks that are performing well in the industry where American Axle operates include Gentherm Inc. (THRM) and Magna International Inc. (MGA). Both carry a Zacks Rank #1 (Strong Buy).

The Comprehensive Guide to REIT ETFs - ETF News And ...

These are unusual times for the U.S Real Estate Investment Trust (REIT) industry. After a remarkable run in the first four months of the year, the REIT industry has nosedived since May, and the volatility continues.

Prior to the recent uptrend in interest rates, the demand for these high-dividend-paying stocks remained sky high due to ultra-low interest rates. In 2012, the industry delivered a solid performance, beating the broader equity market for the 4th straight year. (Read: 3 Top Ranked ETFs for Earnings Season)

However, with the increasing yields on the U.S. Treasury 10-year note (2.72% as of July 5, 2013, compared with 1.68% at the end of April), investors are turning their focus away from REITs (primarily the mortgage REITs, commonly known as mREITs). Moreover, the rising interest-rate environment is a growing concern for REIT stocks as investors are concerned about the negative impact on book values and financing costs.

In May, on a total return basis, the FTSE NAREIT All REITs Index lost 6.56% and the FTSE NAREIT All Equity REITs Index lost 5.90% compared with the S&P 500 that gained 2.34%. (Read: 6 ETFs beating the market over the past year)

The June data looks disappointing as REITs were down 2.9%, according to the FTSE NAREIT U.S. REIT Index data. In the first half of the year, the total return from the FTSE NAREIT All Equity REITs Index was 5.8%, compared with the return of 13.2% from S&P 500.

Dividends Still Remain an Attraction

With the U.S. law requiring REITs to distribute 90% of their annual taxable income in the form of dividends to shareholders, yield-seeking investors continue to prefer these stocks. This has aided the industry to stand out and gain a strong foothold over the past 15-20 years.

As of May 31, the dividend yield of the FTSE NAREIT All REITs Index was 4.19%, and the dividend yield of the FTSE NAREIT All Equity REITs Index was 3.35%. Moreover, the dividend yield of the FTSE NAREIT Mortgage REITs Index was 12.5! 5% as of that date compared with 2.14% for the S&P 500. (Read: Buy these ETFs for brighter insurance sector outlook)

Capital Access

Accessibility to capital is a prime factor in the REIT Industry. After raising capital worth $51.3 billion in 2011 and a total of $73.3 billion in 2012, REITs raised $45.5 billion in the first six months of 2013.

During the latest downturn, REITs were able to acquire premium properties from highly leveraged investors at heavy discounts. Furthermore, REITs typically have a large unencumbered pool of assets, which could provide an additional avenue to raise cash during crisis. These assets, in turn, have provided the requisite wherewithal to the REIT industry to grow through strategic acquisitions over time.

Going Forward

For the sector as a whole, rising interest rates are a looming concern. High capital costs erode their profit level and hence trigger a fall in the dividend yield that the investors primarily look for while investing in REIT stocks.

Yet, though the macroeconomic issues and the political situation have been affecting the market, we believe that with the economic recovery gaining momentum, rents and occupancies would improve further.

Moving forward, limited supply of new construction coupled with the growing demand for premium properties bode well for the REITs, in particular for those that have assets in high barriers-to-entry markets.

Exploring the Sector through ETFs

Keeping that in mind, we believe this is the right time to explore the sector through ETFs so as to reap the benefits in a safer way amid the current volatility and the unusual market dynamics.

Therefore, with a low-cost investment choice, the prospects for return from dividend income and capital appreciation as well as focus on spreading out assets among various companies and reduce company specific risk, we have tracked the following REIT ETFs, which could be attractive picks:

Vanguard REIT ETF (VNQ)

L! aunched o! n Sep 23, 2004, VNQ tracks the performance of MSCI US REIT Index. The fund consists of 126 stocks, which acquire office buildings, hotels, and other real property. The top three holdings are Simon Property Group Inc. (SPG), Public Storage (PSA) and HCP Inc. (HCP).

It charges a low 10 basis points in annual fees and has managed to attract about $18 billion in assets under management so far.

iShares U.S. Real Estate ETF (IYR)

Launched on Jun 12, 2000, IYR follows the Dow Jones U.S. Real Estate Index.The fund comprises 96 stocks with top holdings including Simon Property Group Inc., American Tower Corporation (AMT) and Public Storage.

The fund's expense ratio is 0.45% and the 12-month yield is 3.80%. It has about $4 billion in assets under management.

SPDR Dow Jones REIT ETF (RWR)

Launched on Apr 23, 2001, RWR is an ETF that seeks investment results of the Dow Jones U.S. Select REIT Index. The fund consists of 86 stocks that have equity ownership and operate commercial real estate, with the top holdings being Simon Property Group Inc., Public Storage and HCP Inc.

The fund's expense ratio is 0.25% and it pays a dividend yield of 3.03%. RWR has about $2.2 billion in assets under management as of Jun 28, 2013.

Schwab US REIT ETF (SCHH)

This fund started on Jan 13, 2011 and tracks the total return of the Dow Jones U.S. Select REIT Index. The fund consists of 87 stocks that own and operate commercial real estates.

The top three holdings are Simon Property Group Inc., Public Storage and HCP Inc. It charges very low 7 basis points in fees, while the 12-month distribution yield is 2.30%.

SCHH currently has $553 million in assets under management.

First Trust S&P REIT Index Fund (FRI)

Launched on May 8, 2007, FRI is an ETF that seeks investment results of the S&P United States REIT Index. The fund comprises 129 stocks with the top holdings being Simon Property Group Inc., Public Storage and HCP Inc.

The fu! nd's ne! t expense ratio is 0.50% and the 12-month distribution rate is 2.07%. FRI has about $289 million in net assets under management.

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



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Here is how you can avoid ghost of trailing returns

He says, "It has been repeatedly proven that 90 percent of the returns which the portfolio generates is because of right asset allocation and within asset allocation, you need to have right balance between equity, fixed income and gold".

Below is a verbatim transcript of the interview:

Q: Retail investors normally tend to ride the tailwind of a good rally, be it any asset class even gold lately and this has been the undoing of many a retail investors. Now that stock indices have risen and stand 5-6 percent from their all-time highs how can you help make them take sensible investment decisions?

A: Most of the times we have seen retail individual investors are always trailing the returns and I call this ghost of trailing returns. In history, when gold touched Rs 30,000 per 10gm, most of the people started buying gold exchange traded funds (ETFs) at that point of time.

Right now, the phenomena is -- because last few months or a year fixed income return especially in the debt funds have been in double digits -- a lot of retail investors are going towards that and that reflects the collection of mutual funds.

Overall industry also has a problem in terms of pushing the product which sells the most, which is always like driving looking in a rear-view mirror.

So the ideal thing that needs to happen when most of the investors are planning their asset allocation is to have a goal. I have been coming to your show for the last few weeks and every time I come, I say, goal is a very important because as soon as one sets a goal, one puts a time horizon and the amount of money needed in that particular time horizon. With that one works backward and gets the asset allocation right.

It has been repeatedly proven that 90 percent of the returns which the portfolio generates is because of right asset allocation and within asset allocation, one needs to have right balance between equity, fixed income and gold otherwise for the investor to generate an optimal return, which is nothing but a risk-adjusted return over a long period of time is almost impossible.

So simple tip, get a financial plan, within that have your goals very well articulated, get the right asset allocation and follow it with discipline otherwise you will keep getting struck by this ghost of trailing returns.

Q: Is your advise that we remain completely insensitive or blind to what is the price of gold, its trend, what is the Sensex, what is its trend, the levels yearly, monthly, quarterly should not bother the investor at all, he should remain insensitive to it and just invest according to a systematic investment plan (SIP) and then asset allocation?

A: For an individual investor, for a retail investor, that is not his job. His job is to get his goals achieved in life and his job is to get right asset allocation. It is for the fund managers, for the experts like us to go and understand what is happening day-to-day and try and see because of these movements do we need to change asset allocation or not. Stay put is something which is very difficult and that exactly what one needs to do in order to make money out of any kind of market especially if you are an individual investor.

Q: Ramesh Kumar, businessman from Yamuna Nagar wants to invest Rs 20,000 per month with minimal market risk for about 5-10 years and he wants to know where he should be investing? We do not know his age. What would you tell him to do?

A: For me, it is a completely wrong question. He should not be asking about investing for 5-10 years with minimal risk because risk and returns go hand-in-hand in terms of investments.

The question should have been articulated as, "I have got 5-10 years long goal, my goal is this amount of money, I need to generate for children's education, what should I do to get it right?" You should get the right goal. You should ask yourself the right question. I think everything else will flow from that.

I will articulate a goal for him and say, you want to plan your retirement in 10 years, you have Rs 15,000 surplus, what should you do? So at a very base level without any data, I will say, you should invest 70 percent in equity, 20 percent in fixed income and 10 percent in goal. Within equities, you should look at a mix of largecap diversified funds and some midcap funds. I am not giving names because we do not understand but some names like Birla Sun Life or DSP BlackRock are good funds and rest in fixed income funds with long-term income funds and gold ETFs. You should get this portfolio right, keep having a regular discipline for 10 years and get a financial planner who will stand between you and market emotions.

Hot Warren Buffett Companies To Buy Right Now

Familiarity can serve as a great starting point when searching for stocks. Products we use on a daily basis -- like now during the dog days of summer -- can provide inspiration for identifying possible investment opportunities. In fact, investing greats Peter Lynch and Warren Buffett have made tons of money in the market by buying what they know.

Let's look at three summertime stocks that are worth a closer look.

Lowe's (NYSE: LOW  )

Source: Wikimedia Commons.

We all want to spruce up our lawns, get that new barbecue grill, and have the pool looking good. For any home and garden need you might have this summer, Lowe's is there to help. Without a doubt, Lowe's is enjoying a housing recovery tailwind. But Lowe's pending acquisition of Orchard Supply Hardware (NASDAQ: OSH  ) may unlock even more value for shareholders. Lowe's anticipates operating the West Coast chain as a standalone business and might offer Sears b (NASDAQ: SHLD  ) rands, such as Craftsman and Kenmore, at Orchard Supply stores (as OSH stores currently do).

Hot Warren Buffett Companies To Buy Right Now: Nuveen Insured New York Select Tax-Free Income Portfolio(NXN)

Nuveen New York Select Tax-Free Income Portfolio is a closed-ended fixed income mutual fund launched by Nuveen Investments Inc. It is managed by Nuveen Asset Management. The fund invests in the fixed income markets of United States. It invests in the securities of companies that operate across diversified sectors. The fund primarily invests in municipal bonds with an average credit quality of Baa/BBB or better. It employs fundamental analysis to create its portfolio. The fund benchmarks the performance of its portfolio against Barclays Capital New York Municipal Bond Index and S&P New York Municipal Bond Index. Nuveen New York Select Tax-Free Income Portfolio was formed on June 19, 1992 and is domiciled in the United States.

Hot Warren Buffett Companies To Buy Right Now: Shire plc (SHPGY)

Shire plc, a specialty biopharmaceutical company, engages in the research and development, manufacture, sale, and distribution of pharmaceutical products. It operates in two segments, Specialty Pharmaceuticals and Human Genetic Therapies. The Specialty Pharmaceuticals segment offers products for the treatment of attention deficit and hyperactivity disorder, including VYVANSE, a pro-drug stimulant; INTUNIV, an alpha-2A receptor; EQUASYM; and ADDERALL XR. It also produces PENTASA and LIALDA/MEZAVANT for the treatment of active ulcerative colitis; and RESOLOR, which is 5-HT4 receptor agonist that stimulates gastrointestinal motility. In addition, this segment provides FOSRENOL for use in end-stage renal failure patients receiving dialysis; CALCICHEW, a range of calcium and calcium/vitamin D3 supplements; CARBATROL, an anti-convulsant for individuals with epilepsy; REMINYL/REMINYL XL for the symptomatic treatment of dementia of the Alzheimer type; and XAGRID for the reduction of elevated platelet counts, as well as for the treatment of thrombocythemia. The Human Genetic Therapies segment offers REPLAGAL for Fabry disease; ELAPRASE for the treatment of hunter syndrome; FIRAZYR for hereditary angioedema; and VPRIV for the treatment of type 1 Gaucher disease. The company also licenses its patented antiviral products for human immunodeficiency virus and Hepatitis B. In addition, it is developing various products in the areas of attention deficit hyperactivity disorder, human genetic therapies, and gastrointestinal diseases, as well as in other therapeutic areas. The company markets its products through distributors in North America, the Republic of Ireland, the United Kingdom, and internationally. It has collaboration agreements with Santaris Pharma A/S, Renovo Limited, and Acceleron Pharma, Inc. Shire plc was founded in 1986 and is based in Dublin, Ireland.

Hot Biotech Stocks To Own Right Now: Lon & Assoc Props(LAS.L)

London & Associated Properties PLC, along with its subsidiaries, engages in the property investment and development in the United Kingdom. It holds a portfolio of retail properties, including Antiquarius and Chenil House in Chelsea; King Edward Court, a shopping centre in Windsor; Kings square in west Bromwich; Market Row and Brixton Village in London; Orchard Square shopping centre in Sheffield; Saxon Square, a medium sized building with residential upper parts to the rear of shopping centre; and the Mall and adjacent buildings in Islington. The company is based in London, the United Kingdom.

Hot Warren Buffett Companies To Buy Right Now: Under Armour Inc.(UA)

Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States, Canada, and internationally. It offers products made from moisture-wicking synthetic fabrics designed to regulate body temperature and enhance performance regardless of weather conditions. The company provides its products in three fit types: compression (tight fitting), fitted (athletic cut), and loose (relaxed) extending across the sporting goods, outdoor, and active lifestyle markets. Its footwear offerings comprise football, baseball, lacrosse, softball, and soccer cleats; slides; performance training footwear; and running footwear. The company also provides baseball batting, football, golf, and running gloves, as well as licenses bags, socks, headwear, custom-molded mouth guards, and eyewear that are designed to be used and worn before, during, and after competition. Under Armour sells its products through retai l stores, as well as directly to consumers through its own retail outlets and specialty stores, Website, and catalogs. The company was founded in 1996 and is headquartered in Baltimore, Maryland.

Advisors' Opinion:

• [By Glenn]  

  Current Price: $27.27 12-month target: $37

  I see potential in opportunities for new product adjacencies, and expanding distribution worldwide. Footwear growth will continue to increase. Revenues for these products have increased over 69% in 2009. Adding to this I still see growth in Under Armour’s apparel sales, which are up 8%. Under Armor had yet to even break into the international market, which offers a plethora of new opportunities for this growing brand. I believe sales will rise drastically in 2010 driven by international sales, new women’s clothing line, and expansion within their own footwear line.
• [By Victor Mora]

  Under Armour provides athletic apparel, footwear, and accessories to a growing health and wellness, athletic, and fitness enthusiast population around the world. The stock has been on a powerful move towards higher prices that has led to it trading at all-time highs. Earnings and revenue figures have increased over most of the last four quarters which has led to excited investors. Relative to its peers and sector, Under Armour has led in year-to-date performance by a wide margin. Look for Under Armour to OUTPERFORM.

Is Wal-Mart Still a Steady Winner?

With shares of Wal-Mart Stores Inc. (NYSE:WMT) trading at around $77.40, is WMT an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

Positives for Wal-Mart include strong cash flow, a generous 2.40 percent yield, consistent share buybacks, stock resiliency in bear markets, consistent stock performance, steadily increasing revenue on an annual basis, international sales growth, and fair valuation – the stock is currently trading at 15 times earnings.

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Q1 EPS came in at $1.14, which was a 4.6 percent increase year-over-year. Wal-Mart's Q1 comps declined 1.4 percent. The following reasons were given for the comps decline:

Delay in tax refund checks Challenging weather conditions Less grocery inflation than expected Payroll tax increase

CEO Mike Duke stated:

“In a quarter marked by considerable headwinds to top line sales, Walmart delivered solid EPS growth of 4.6 percent. Walmart’s mission is simple and focused — to help people save money so they can live better. When we simplify and focus our execution against this mission, it’s easy for our associates to prioritize what they have to do to serve our customers.

I’m confident about our long-term strategy and the direction Walmart is headed. Our expectations about our U.S. businesses’ performance, coupled with more discipline in International, will allow us to improve our performance throughout the year.

There is no doubt that our company is making the right investments in e-commerce to differentiate ourselves and become a better Walmart. And with our sales growth in the first quarter, we believe our investments are paying off.”

Q2 EPS is expected to come in between $1.22 and $1.27 compared to $1.18 for Q2 in 2012. Q2 comps for Wal-Mart are expected to be flat to 2 percent. Q2 comps for Sam's Club are expected to come in between 1 percent and 3 percent.

Wal-Mart is attempting to increase its online presence. According to Alexa.com, it currently has a global traffic rank of 181, and a United States traffic rank of 41. Over the past three months, pageviews-per-user has declined 12.32 percent, time-on-site has declined 11 percent, and the bounce rate (only one page per view) has increased 12 percent. Needless to say, Wal-Mart needs to make online improvements.

Below is a chart comparing fundamentals for Wal-Mart, Costco Wholesale Corporation (NASDAQ:COST), and Target Corp. (NYSE:TGT).

	WMT	COST	TGT
Trailing P/E	15.24	25.26	15.67
Forward P/E	13.17	22.32	12.79
Profit Margin	3.62%	1.90%	4.09%
ROE	23.62%	17.33%	18.52%
Operating Cash Flow	25.05B	3.34B	5.32B
Dividend Yield	2.40%	1.10%	2.00%
Short Position	1.70%	1.30%	2.90%

Let's take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Mixed

Wal-Mart has underperformed its peers over the past year. However, investors aren’t looking for substantial gains in Wal-Mart. They’re looking for slow and steady while also collecting dividends.

At $77.40, Wal-Mart is trading below its 50-day SMA, but above its 200-day SMA.

	1 Month	Year-To-Date	1 Year	3 Year
WMT	-0.40%	15.02%	27.08%	62.87%
COST	8.55%	15.15%	48.11%	121.8%
TGT	3.07%	20.95%	30.54%	43.06%

50-Day SMA	78.03
200-Day SMA	72.68

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Wal-Mart is close to the industry average of 0.70.

	Debt-To-Equity	Cash	Long-Term Debt
WMT	0.75	8.86B	57.08B
COST	0.47	5.65B	4.87B
TGT	1.07	788.00M	17.65B

E = Earnings Are Steady

Earnings and revenue have consistently improved on an annual basis.

Q1 EPS was $1.14 on $114.2 billion in revenue. Both were year-over-year improvements.

Fiscal Year	2009	2010	2011	2012	2013
Revenue ($) in millions	405,607	408,214	421,849	446,950	469,162
Diluted EPS ($)	3.39	3.70	4.47	4.52	5.02

Quarter	Apr. 30, 2012	Jul. 31, 2012	Oct. 31, 2012	Jan. 31, 2013
Revenue ($) in millions	113,018	114,296	113,929	127,919
Diluted EPS ($)	1.09	1.18	1.08	1.67

Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Support the Industry                         

Wal-Mart is always well-positioned. Those loyal to Wal-Mart will shop there in any economic environment. When the consumer weakens, many middle-income consumers will switch to Wal-Mart. This has been proven in the past. While online retailers are a threat, the biggest threat is the dollar store.

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Conclusion

Many stocks have recently been rated OUTPERFORM here due to momentum. However, many of those trends aren't sustainable. Wal-Mart, on the other hand, is a long-term OUTPERFORM.

Is Disney a Buy?

With shares of Disney (NYSE:DIS) trading around $64, is DIS an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Disney is a diversified worldwide entertainment company. The company operates in five business segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive. Disney offers entertainment that sends smiles to consumers across a range of countries around the world. It's movies and shows, theme parks, and products have remained a main attraction for many years and will continue well into the future.

Disney chairman and Chief Executive Officer, Robert Iger, will remain head of the company for longer than some had previously expected, as his contract has been changed to leave him at the helm of the company for another three years. A president or a chief operating officer has never been named so his successor is still unknown. As Disney continues to provide excellent entertainment, look for the company to remain a leader in the industry.

T = Technicals on the Stock Chart are Strong

Disney stock has been on an explosive surge higher over the last several years. The stock has pulled-back from all-time highs so it may need time before it continues a move higher. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Disney is trading between its rising key averages which signal neutral price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Disney Options	25.35%	76%	73%

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

	Put IV Skew	Call IV Skew
July Options	Flat	Average
August Options	Flat	Average

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

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

E = Earnings Are Increasing Quarter-Over-Quarter

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

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	36.21%	-3.75%	17.34%	31.17%
Revenue Growth (Y-O-Y)	9.89%	5.21%	3.42%	3.87%
Earnings Reaction	-0.12%	0.42%	-5.95%	1.36%

Disney has seen increasing earnings and revenue figures over most of the last four quarters. From these numbers, the markets have been optimistic about Disney’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Disney stock done relative to its peers, Time Warner (NYSE:TWX), Dreamworks (NASDAQ:DWA), News Corp. (NASDAQ:NWSA), and sector?

	Disney	Time Warner	Dreamworks	News Corp.	5 Best Safest Stocks To Own Right Now Sector
Year-to-Date Return	28.62%	24.27%	56.13%	-32.25%	22.67%

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

Conclusion

Disney provides entertainment through multiple channels to a growing worldwide audience. The current CEO, Robert Iger, has extended his contract for another three years. The stock has been on an explosive move higher, in recent years, but is now digesting gains from this run so it may need more time before its next leg higher. Over the last four quarters, investors in the company have been optimistic as earnings and revenue figures have been rising. Relative to its peers and sector, Disney has been a year-to-date performance leader. Look for Disney to OUTPERFORM.

Improve the Productivity of Your Dividend Growth Portfolio with Technology

10 Best Warren Buffett Stocks To Invest In 2014

Introduction and General Observations of the Information Technology Sector

Dividend growth investors seeking quality dividend growth stocks to fund their retirement portfolios have not historically looked to the information technology sector. Traditionally, the information technology sector has been associated with higher growth and higher risk. However, in addition to higher growth, many technology companies are also very cyclical in nature. Another common attribute for tech companies is how they have traditionally utilized their capital. In order to finance their high-growth needs, the majority of information technology companies have traditionally not paid dividends. Instead, they used their capital to fund future growth. However, another contributing factor to the no dividend policy of information technology companies was the nascent nature of this industry.

But with the passing of time, the information technology sector has matured. Today, we find an eclectic mix of large and mature companies, mixed in with younger and smaller enterprises. Moreover, information technology has become an integral and ubiquitous part of virtually every other sector. In other words, no matter what industry or sector a business operates in, today they are all using technology to make their businesses more efficient, productive and more profitable. Therefore, as information technology has evolved and matured, the way investors relate to this industry needs to evolve and mature along with them.

Nevertheless, and with the above said, many of the old attributes associated with information technology continue to persist. On the other hand, the characteristics' of companies within the information technology sector remains fragmented and diverse. Because one aspect of the information technology sector that has not changed, is the dynamic nature and evoluti! on of technology itself. Inventiveness remains a key trait of the information technology sector. Amazingly, Moore's law continues to be relevant to computing hardware, the Internet continues to evolve (The Cloud), and technological advances continue to pop up at dizzying and mind-boggling rates.

The continuous evolution of the information technology sector brings with it both great risk and great opportunity. Consequently, the information technology sector presents both a great challenge and a great opportunity at the same time for investors seeking above-average total returns and even a growing dividend income stream. More simply stated, I believe that the dividend growth investor should not make the mistake of ignoring this exciting and dynamic sector, but at the same time extreme caution and continuous monitoring are warranted. But I believe the opportunities to turbo-charge a dividend growth portfolio are potentially extraordinary, and worth the additional risks.

Part of my reasoning behind strategically adding select information technology dividend paying growth stocks to a dividend growth portfolio is supported by the omnipresent need and demand that every company in every industry must make use of technology today in order to remain competitive. Moreover, the sheer size of information technology today brings with it the necessity for large players within the industry. For technology to remain relevant, it requires the size and scale that only large companies can deliver in order to support the seamless integration of technology across all industries and boundaries. In other words, technological standards and protocols must be universally implemented and applied.

Although innovation remains the lifeblood of the information technology sector, it has been increasingly common to see startups offering breakthrough technologies turn to larger established technology stalwarts to provide the scale and marketing depth required for success. Supporting that process is the need that ! larger es! tablished technology companies have to look to innovative startups as sources of their future growth.

I believe this symbiotic relationship will continue, notwithstanding the occasional emergence of companies offering revolutionary and disruptive technologies capable of completely rewriting the very nature of the Information Technology sector itself. Names like Google, Facebook and Twitter come to mind. But so does the rapidly progressing mobile technologies, cloud computing, nanotechnology and other potentially disruptive technologies too numerous to mention. Herein rests one of the greatest risks of investing in technology.

But as fascinating as the rapidly-changing face of technology is, it has been equally as fascinating to watch how the capital structures of many of the most renowned technology companies have morphed from pure growth stocks, to perhaps becoming the Dividend Champions or Dividend Aristocrats of tomorrow. Later in the article, I will review several examples.

The Information Technology Sector

This is the ninth in a series of articles designed to find value in today's stock market environment. However, it is the eighth of 10 articles covering the 10 major general sectors. In my first article, I laid the foundation that represents the two primary underlying ideas supporting the need to publish such a treatise. First and foremost, that it is not a stock market; rather it is a market of stocks. Second, regardless of the level of the general market, there will always be overvalued, undervalued and fairly valued individual stocks to be found.

My first article was titled "Searching For Value Sector By Sector," my second article was titled "Finding Great Value In The Energy Sector." My third article was titled "Finding Value In The Materials Sector Is A Material Thing." My fourth article was titled "The Industrial Sector Offers A Lot Of Value, Dividend Growth And Income." My fifth article was titled Beware The Valuations On The Best Consumer Discretionary D! ividend G! rowth Stocks, and my sixth article was titled, Are Blue-Chip Consumer Staples Worth Today's Premium Valuations?, my seventh article For A Healthier Portfolio - Look Here and my eighth article Is The Financial Crisis Over For Financial Stocks?

As a refresher, my focus in this and all subsequent articles will be on identifying fairly valued dividend growth stocks within each of the 10 general sectors that can be utilized to fund and support retirement portfolios. Therefore, when I am finished, the individual investor interested in designing their own retirement portfolio should find an ample number of selections to properly diversify a dividend growth portfolio with.

This article will look for undervalued and fairly valued individual companies within the general sector 45-Information Technology. Within this general sector, there are several subsectors, which I list as follows:

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Conservative Information Technology Candidates

The following comprises my list of conservative dividend paying information technology stocks, they might also be considered the blue-chip stalwarts of this industry. Most of the names are obvious and well-recognized companies. Some of these candidates have been paying and growing their dividends for many years, while others are dividend paying newbies. As previously stated, perhaps the most interesting attribute among this group of information technology companies is how many are morphing from traditional pure growth stocks to becoming more like traditional dividend paying companies within other sectors.

Although most of these companies are still expected to grow at above-average rates, most of them are not expected to grow at the same rate they historically have. H! owever, t! he majority are expected to grow at rates greater than the average dividend paying company found in other sectors. Moreover, the majority of these candidates also offer above-market dividend yields and below-market average valuations. Automatic Data Processing (ADT) is an exception and only included because it has historically been priced at a premium valuation to its earnings growth.

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A Picture Is Worth 1,000 Words

On the notion that a picture is worth 1,000 words, and in order to spare the reader from enduring the same, I will let the F.A.S.T. Graphs™ research tool on each featured company speak for itself. For those who are not familiar with how these earnings and price correlated graphs are designed and function, I provide the following link: The Interpretation of The Earnings and Price Correlated F.A.S.T. Graphs™ Made Simple.

With the above said, I will suggest that the reader take note of some key facts on each graph. First and foremost, notice how price follows earnings. Next, focus on the earnings growth rate that each of these companies has historically achieved. Then check out the performance that this growth has provided to the company's shareholders in comparison to the Standard & Poor's 500 over the same timeframe.

Next, note that the estimated earnings and return calculator or forecasting graph will, in most cases, represent a growth rate that is different than what is found on the historical graphs. Any buy, sell or hold decisions should be made with more attention given to the forecasting graphs than on the historical graphs. On the other hand, the historical graphs tell a lot about how well each of the companies you are reviewing has historically been managed and performed.

Finally, compare the growth rates, track records and future potential of each of these companies in contrast to the expectations of ! the avera! ge dividend growth stock. To be clear, the average blue-chip dividend growth stock will possess historical and forecast growth rates within the range of 7% to 10% per annum. Therefore, as you review these companies I recommend asking yourself whether you believe the growth rates of these companies are worth the risk. Moreover, ask yourself how much additional risk, if any, these icons of technology really represent.

Accenture (ACN) Historical Graph

"Accenture is a global management consulting, technology services and outsourcing company, with 261,000 people serving clients in more than 120 countries."

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Accenture Performance Graph

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Accenture Forecasting Graph

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Oracle Corp (ORCL) Historical Graph

"Oracle Corp, incorporated in 2005, is a provider of enterprise software and computer hardware products and services. The Company's software, hardware systems, and services businesses develops, manufactures, markets, hosts and supports database and middleware software, applications software, and hardware systems, with the latter consisting primarily of computer server and storage products."

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Oracle Performance Graph

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Oracle Forecasting Graph

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Qualcomm Incorporated (QCOM)

Since most of the companies on this conservative list are highly recognized names in technology, I have assumed that the reader is more likely than not familiar with each of them. However, I did want to call out one featured dividend growth stock in the Information Technology sector that I felt might be most appealing.

"ABOUT QUALCOMM INCORPORATED
Qualcomm Incorporated (NASDAQ: QCOM) is the world leader in 3G, 4G and next-generation wireless technologies. Qualcomm Incorporated includes Qualcomm's licensing business, QTL, and the vast majority of its patent portfolio. Qualcomm Technologies, Inc., a wholly-owned subsidiary of Qualcomm Incorporated, operates, along with its subsidiaries, substantially all of Qualcomm's engineering, research and development functions, and substantially all of its products and services businesses, including its semiconductor business, QCT. For more than 25 years, Qualcomm ideas and inventions have driven the evolution of digital communications, linking people everywhere more closely to information, entertainment and each other."

Qualcomm Historical Graph

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Qualcomm Performance Graph

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Qualcomm Forecasting Graph

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Aggressive Information Technology Candidates

I am not sure that it is appropriate for me to call the following candidates aggressive because many of my conservative selections are expected to offer higher growth than some of these. Therefore, I offer this large list of candidates because they may be unfamiliar information technology companies to many re! aders. Mo! reover, I might add that any company from this following list would require extensive and comprehensive research prior to investment. Since this series of articles is focused on pre-screened but not comprehensively researched companies in numerous sectors, it is important to point out the necessity for further due diligence.

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Broadridge Financial Solutions (BR) Historical Graph

"Broadridge Financial Solutions Inc is the leading provider of investor communications and technology-driven solutions for broker-dealers, banks, mutual funds and corporate issuers globally."

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Broadridge Financial Solutions Performance Graph

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Broadridge Financial Solutions Forecasting Graph

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j2 Global Inc. (JCOM)

One company that many readers may not be familiar with is j2 Global Inc. My purpose in featuring this aggressive candidate was to offer an example of a historically pure growth technology company that appears to be morphing into a dividend growth stock. But before I show that, I offer the following slide that provides an overview of j2 Global's business.

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A quick glance at the earnings and price correlated FAST Graphs™ on j2 Global provides an excellent example of the benefit of stacking the light blue shaded dividend area on top of the orange earnings justified valuation line. Instantly it is revealed that the company paid their first dividend in 2012.

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One interesting aspect of the performance history of j2 Global is how their dividend closely matches the dividends derived from the S&P 500 even though they have only paid a dividend since 2012 (first dividend paid on Dec. 20, 2011).

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Since this company has only recently been paying a dividend, I offer the following slide where management has provided 2013 guidance. This is important because future dividends will most assuredly depend on the company's future revenues.

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The following FUN Graph (fundamental underlying numbers) shows that revenue guidance (sales) for 2013 represent a substantial increase over 2012. Therefore, it appears the company will have ample ability to continue paying and perhaps increasing their future dividends.

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At this point one can only speculate that j2 Global's board of directors will continue with their dividend policy. However, since the company's most recent financial report bragged about their ninth consecutive dividend payment, this may not be an unrealistic assumption. Moreover, the following FUN Graph shows that cash flow per shar! e (cflps)! and free cash flow per share (fcflps) suggest that the company is at least capable of continuing to pay and possibly increase their dividend in the future. Note: FUN Graphs calculates free cash flow after dividends have been paid.

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David Fish Challengers

For additional insight into the dividend paying prospects of the Information Technology sector, I thought it would be interesting to show the following companies on David Fish's Challenger's list. These are companies that have raised their dividend consecutively for at least five to nine straight years. Only two companies on this list failed to make my cut. Altera Corp (ALTR) was rejected due to recent inconsistency in their earnings and high valuation. Visa did not meet my minimum dividend yield threshold. Otherwise, the remaining companies were included in my conservative and aggressive candidates.

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Visa Inc. (V)

Even though Visa did not make my cut, I thought it would be interesting to showcase their phenomenal record. Therefore, dividend growth investors interested in total return might want to take a closer look at Visa.

Visa Inc Historical Graph

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Visa Inc. Performance Graph

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Visa Inc. Forecasting Graph

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Summary and Conclusions

I believe it would be naïve to believe that large technology beh! emoths su! ch as Microsoft, Cisco, Intel, Apple or IBM, etc., are destined to becoming and remaining blue-chip dividend paying stalwarts like Procter & Gamble or Johnson & Johnson. However, I further believe that their size and scale are needed to provide the solid infrastructure and foundation that the Information Technology sector needs to fulfill its inevitable destinies and even promise. Therefore, I also don't believe it's prudent to rule out the relevancy of our largest icons of technology. True, it is imperative that they continue to evolve and adapt. But it is also true that their scale and size provide powerful moats potentially ensuring their survival and growth potential.

Consequently, I suggest that investors seeking more total return from their dividend growth portfolios should not overlook the opportunities available in the Information Technology sector. One of the oldest doctrines for prudent investing suggests that higher risk should only be assumed when there's an expectation for higher returns. As a general statement, most of the dividend growth stocks presented in this article are forecast to offer higher future earnings growth rates than most blue-chip dividend paying stocks found in the other sectors. I believe it is safe to assume that higher earnings growth rates should also deliver higher dividend growth rates. As a result, many dividend paying Information Technology companies hold the promise of offering the dividend growth investor not only higher total returns, but a greater level of cumulative dividend income as well.

Dividend paying Information Technology stocks may not suit the most prudent or cautious dividend growth investor. On the other hand, for those with a greater appetite for risk, or perhaps a longer timeframe, it might be wise to prudently include some high-tech for higher total returns. But if they do, the prudent dividend growth investor will simultaneously realize that a constant monitoring of their Information Technology holdings is a necessity.
My next! article will cover the Telecommunication Services sector.

Disclosure: Long ACN, ORCL and QCOM at the time of writing.

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.

Tiffany's Gem of a Quarter

The following video is from Tuesday's Investor Beat, in which host Chris Hill and analysts Jason Moser and Matt Koppenheffer dissect the hardest-hitting investing stories of the day.

Shares of Tiffany shine after the jeweler reports higher-than-expected quarterly earnings. Same-store sales were up 20% in Japan and 8% overall. Shares of the luxury retailer hit an all-time high on the news. Should investors be excited? In this installment of Investor Beat, our analysts discuss this story, as well as four stocks that made big moves on Tuesday's market and two stocks they will be watching with great interest this week.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of the last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.

Donaldson Misses on the Top and Bottom Lines

Donaldson (NYSE: DCI  ) reported earnings on May 17. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 30 (Q3), Donaldson missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped. GAAP earnings per share didn't change.

Margins grew across the board.

Revenue details
Donaldson logged revenue of $619.4 million. The nine analysts polled by S&P Capital IQ expected revenue of $659.5 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.46. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.49 per share. GAAP EPS of $0.46 were the same as the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 35.8%, 50 basis points better than the prior-year quarter. Operating margin was 15.9%, 70 basis points better than the prior-year quarter. Net margin was 11.3%, 30 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $636.4 million. On the bottom line, the average EPS estimate is $0.50.

Next year's average estimate for revenue is $2.50 billion. The average EPS estimate is $1.67.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Donaldson is hold, with an average price target of $36.00.

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Add Donaldson to My Watchlist.

3 Earnings Reports That Caught My Attention Last Week

As we enter the heart of second-quarter earnings reports, I can't help but point out that the majority we've covered over the past year have been better than expected. With so many companies reporting during the weeks that comprise earnings season, it's easy for some earnings reports to fall through the cracks.

Each week for the past year, I've taken a look at three companies that could be worth further research after either beating or missing their profit expectations. Today, we'll take a gander at three more companies that reported earnings last week. They may have slid under your radar, but they deserve a look.

Company

Consensus EPS

Reported EPS

Surprise

NVIDIA (NASDAQ: NVDA  )	$0.10	$0.13	30%
Onyx Pharmaceuticals (NASDAQ: ONXX  )	($0.47)	($0.19)	60%
Monster Beverage (NASDAQ: MNST  )	$0.46	$0.37	-20%

Source: Yahoo! Finance.

NVIDIA
Investors certainly haven't been giving NVIDIA much credit lately, as its legacy graphics business has been hurt by weakening PC demand and its entry into the mobile and tablet chip market is bound to be difficult with plenty of established competition. Yet, NVIDIA proved the doubters wrong yet again with its first-quarter results last week.

For the quarter, revenue rose 3% to nearly $955 million as EPS expanded to $0.13 from $0.10 in the year-ago period. What's really to note was that its Tegra chip sales for tablets and smartphones dropped 22% as the company transitions from Tegra 3 to its all-new Tegra 4 chips. Despite the drop-off in sales, NVIDIA still managed to expand gross margin by 4 percentage points to 54% and delivered a nice boost in graphic chip sales despite weakness in the PC industry.

Furthermore, Project Shield, the company's handheld gaming device, is poised to ship in the upcoming fiscal quarter. Although gaming hasn't exactly been a top performer over the past couple of years due to the commoditization and digitization of the industry, combining NVIDIA's graphics and processing capabilities should allow it to set itself apart from the field. The other interesting aspect of this expected launch is that it comes on the heels of the expected debut of Microsoft's new Xbox and Sony's PlayStation in the second half of the year.

As I stated last month, there's nothing graphic about NVIDIA's potential, and you'd be foolish not to have this company firmly planted on your Watchlist.

Onyx Pharmaceuticals
In September of last year I exclaimed that biopharmaceutical company Onyx would be heading to $100. It appears that its first-quarter report, while still in the red, could help this rapidly growing and innovative company hurdle that mark.

For its most recent quarter, Onyx delivered a doubling in revenue to $145.5 million from $72 million in the previous year, with practically all of the gains coming from multiple myeloma drug Kyprolis. Sales of Kyprolis totaled $64 million this quarter, which is phenomenal for a drug that was only approved in July. Nexavar sales were a bit disappointing, falling 2% from the previous year to $70.3 million. However, Nexavar, which is already approved to treat the most common form of kidney and liver cancer, looks poised to gain the additional indication of metastatic thyroid cancer if trial data keeps working in its favor. 

Kyprolis won't have a completely clear path to success in spite of its rapid sales ascent due to the accelerated approval of Celgene's (NASDAQ: CELG  ) Pomalyst in February. Kyprolis delivered a slightly better median duration of response at 7.8 months versus 7.4 months, yet Pomalyst combined with a low-dose dexamethasone produced a higher overall response rate of 29.2% as compared to 23% for Kyprolis. I feel that the multiple myeloma market is certainly big enough, and in need of any help it can get, that both drugs will be accommodated.

With a loss that was significantly narrower than expected and $739 million in cash and cash equivalents, Onyx still represents an intriguing buyout candidate for a big pharmaceutical company itching for a growing pipeline of products.

Monster Beverage
Whether or not you want to believe it, the time has probably come to sound the alarm of concern if you're a shareholder in energy-drink maker Monster Beverage. Things are an absolute mess despite the company reporting a 6.5% increase in quarterly revenue to $484.2 million, with multiple other metrics headed in the wrong direction.

To begin with, every imaginable expense rose from the year-ago period. Distribution costs as a percentage of sales jumped to 4.6% from 4.3%. General and administrative expenses saw an even bigger jump, from 8.7% of sales to 11.8% of sales. Selling expenses also rose to 13.5% of sales from 12.3% last year.

If rising costs aren't worrisome enough, unfavorable currency translation took $4.7 million off profits, distributor-terminated contracts lopped off another $8.3 million, and the company spent $3 million on what are bound to be ongoing legal fees associated with defending its Monster Energy drinks against allegations that they aren't safe. You don't have to be a math major to see that this is a Monster-size problem!

The allure of energy drink companies is their rapid growth prospects relative to existing sparkling and still beverages. With Monster's sales growth sinking rapidly and a cloud hanging over its operations with regard to the safety of its drinks, I feel you'd be wise to keep a very safe distance from this company.

Foolish roundup
Sometimes an earnings beat or miss isn't as cut-and-dried as it appears. I've given my two cents on what's next for each of these companies -- now it's your turn to sound off. Share your thoughts in the comments section below and consider adding these stocks to your free and personalized watchlist.

Add NVIDIA to My Watchlist. Add Onyx Pharmaceuticals to My Watchlist. Add Monster Beverage to My Watchlist.

Is this "high-energy" stock still worth the risk?
The stakes are high for Monster Beverage these days. The stock had been nothing short of a rocket, but recent developments have sent shares spiraling downward. Health scares sparked a number of investigations at the state and federal level into the energy drink's role in several fatalities. With the company's value slashed in half, investors are wondering whether Monster Beverage is a value or a bust in the fast-growing energy drink category. Find out now in our premium research report, which details all you need to know about Monster Beverage. Click here now to claim your copy and start reading today.

5 Ways to Cut the Cost of Allergy Relief

Shutterstock, tomsza

Looking for allergy relief? Prescriptions, rather than OTC remedies, are often more effective and cheaper in the long run.

1. Avoiding treatment can be costly

Nearly a third of adults have allergies. Suffer through the symptoms, and you could pay the price at work. During allergy attacks, one study found, employees lost more than two hours of productivity a day.

If you regularly take over-the-counter pills, get tested to pinpoint your allergens and fine-tune treatment.

The common skin-prick test is faster than a blood test and may save you a second office trip, says North Aurora, Ill., allergist Sakina Bajowala.

2. A prescription pays in more than one way

What your doctor prescribes may be more effective. For example, steroidal nasal sprays like Flonase beat OTC sprays, which shouldn't be used for more than a few days because they're habit forming, says Richard Madden, a physician in Belen, N.M.

Even when an OTC drug like Claritin or Zyrtec works fine for you, ask for a prescription anyway. That way, you can pay for the pills with the pretax dollars in your flexible spending account.

3. Shots pay off over time

Your doctor may suggest immunotherapy -- shots one or two times a week for up to eight months, tapering down to monthly over three to five years. A recent study in the Journal of Allergy and Clinical Immunology found that immunotherapy patients saw 38% lower treatment costs owing to fewer overall doctor visits and drugs.

"You put in your work and expense upfront and get all the benefit down the road," says Bajowala.

4. An alternative treatment is on you

Acupuncture, biofeedback, hypnosis, and even eating local honey are touted as treatments, but there's little clinical data to prove widespread effectiveness over the long term. While your insurance may pay for a $100 acupuncture session for back pain, allergies are less likely to be covered.

One homebrew that gets a thumbs-up from doctors: nasal irrigation. No need to spring for a $100 contraption -- a $20 drugstore variety with distilled water is fine for most.

5. For gear, there's no need to splurge

The best air purifier is your air conditioner, says Gaithersburg, Md., allergist Jacqueline Eghrari-Sabet. Just add a HEPA filter to trap pollen, dust, and mold spores. With no AC, a basic $50 HEPA air purifier works fine, especially in small rooms.

When you're allergic to heavier allergens that settle quickly -- like dust mites and cat hair -- air purifiers may not help much, though. Get a HEPA filter for your vacuum and clean often. More from CNNMoney The Internet's most dangerous sites 6 greenest cars made in America Fitness gadgets: Cheaper than a personal trainer

Late Gains Lead Dow, S&P To New Highs

Stocks overcame early pessimism to end higher Friday, another day of records.

The Dow Jones Industrial Average gained 30.34 points, or 0.2%, to 15,658.36, topping yesterday's all-time high of 15,628.02.

The Nasdaq rose 13.84 points, or 0.4% to 3,689.59, another new 52-week high.

The S&P 500 added 2.8 points, or 0.2% to 1,709.44, edging out its previous 1,706.87 high.

Bucking the trend, the Russell 2000, which logged a record close yesterday, fell a fraction of a point.

It's the second day in a row of record closings, although Thursday's moves were much bigger. For the week, the Dow is up 0.6%, the Nasdaq climbed 2.1%, and the S&P added 1.1%.

For the Dow, it was its longest winning streak since the week ending August 17, 2012, when the market rose for six straight weeks.

Stocks shrugged off early concerns about a disappointing jobs report. Still, most big news makers were in the red.

Top 10 Cheap Companies To Watch For 2014

Chevron (CVX) lost ground on its second-quarter report, as did Alpha Natural Resources (ANR).

J.C. Penney (JCP) ended lower despite reports that CIT had lifted its credit restrictions, while Weight Watchers (WTW) sank on its disappointing guidance and the departure of its CEO.

How Powerball and Psychology Can Make You a Better Investor

If you weren't the lucky jackpot winner this weekend, don't be too upset. Sure, the Powerball lottery reached a whopping $600 million, the second-largest payout in U.S. lottery history. However, the odds of winning this record pot were about 1 in 175 million. With such a slim probability of winning, it's a wonder that anyone played at all. Yet thousands of people stood in line to purchase Powerball tickets ahead of the weekend draw -- buying around 80% of all possible lotto combinations, according to lottery officials.

With a record Powerball weekend now behind us, let's take a closer look at how understanding the lottery and psychology can make you a better investor.

Behavioral Finance 101
When investing in the stock market, the idea is to buy low and sell high. Yet our psychological biases can derail this truism -- making it harder for us to make smart investment decisions. In John R. Nofsinger's book The Psychology of Investing, the author explains how to identify and avoid such mistakes. Listed below are three of the most common psychological factors that can affect our financial decisions.

1. Overconfidence
Investors who are overconfident tend to trade their positions more frequently and thus underperform the market. "Interestingly, people are more overconfident when they feel they have control over the outcome -- even when this is clearly not the case," according to Nofsinger..

Consider this: Psychologists have found that "people who choose their own lottery numbers believe they have a better chance of winning than people who have numbers given to them at random" says Nofsinger. This means that choice can also give investors the illusion of having control, which in turn leads to overconfidence.

Top 10 Performing Stocks To Watch For 2014

This is important to keep in mind, particularly if you're like me and invest using an online stockbroker, such as TD AMERITRADE. AMERITRADE and other discount brokers are great because they save you loads of money on otherwise costly commission and transaction fees. However, Nofsinger argues that it's easy to become overconfident when using online brokers since you're making your own decisions as to which stocks to buy and sell and when to do so.

2. Anchoring
This is a mistake made by both rookie investors and veterans alike. Too often investors "anchor" their perceived value of a stock to its past trading price -- and as a result missing out on future gains because they were waiting to buy in at the arbitrary price that they first anchored to. Fool analyst Dan Caplinger clearly explains the pits of anchoring in his article "The Huge Mistake Apple Investors are Making."

In the article, he cautions investors to "remember that fundamental events rather than arbitrary milestones are responsible for changes in the intrinsic value of the companies you invest in." Ultimately, investors should focus less on daily movements in stock price and more on the underlying business of the company in question.

3. Risk aversion
The rules of traditional finance have long said that people make rational decisions and are risk-averse. However, buying a lottery ticket directly contradicts this assumption. In fact, if you participated in the latest Powerball festivities, then you took on a risk-to-reward ratio of 1 to more than 175 million -- quite the opposite of risk-averse, if you ask me.

The level of risk you can handle often depends on your past investing experiences. Interestingly, studies show that investors are more likely to buy high-risk stocks after cashing out of a successful position. However, this doesn't make your gamble in the riskier stock more likely to earn you a return.

Why psychology matters
Understanding how these factors influence your investing can help you avoid making careless mistakes in the future. Sure, you may not get a sudden influx of millions of dollars like you would by beating the 1 in 175 million Powerball odds. However, your chances of generating market--beating returns for years on end are firmly within your reach. I'll take those odds any day.

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