Advanced Micro Devices (AMD): Bernstein Research’s Much Ado About Nothing Concerns & More

Last week, we noted how Mad Money's Jim Cramer has fallen out of love with Advanced Micro Devices, Inc (NYSE: AMD) and back in love with an old flame known as Apple (see: Advanced Micro Devices (AMD) is Rising… Again (Thanks to NVDA or Jim Cramer?)) while this week, the latest important news surrounding the stock would be another swipe by Bernstein Research. However, I should also mention that we have had Advanced Micro Devices in our SmallCap Network Elite Opportunity (SCN EO) portfolio since last July and we have had an up and down ride – usually because of earnings reports (see: Advanced Micro Devices, Inc (AMD): When Warm Just Isn't Hot Enough and Time to be Bullish, Bearish or Just Realistic? Advanced Micro Devices' (AMD) Third Quarter Earnings Report). With that in mind, here is the latest AMD news for investors and traders alike to chew on, swallow or spit out:

Will a Big Payment to GlobalFoundries Really Impact AMD or Much Ado About Nothing? Bernstein Research's Stacy Rasgon believes that investors have failed to appreciate a huge payment Advanced Micro Devices will have to make to GlobalFoundries this quarter as it continues to feel the impact of weak PC microprocessor demand. Barron's quotes her latest research note as saying: 

The Q4 commitment due is, in fact, nothing short of astonishing. Given their purchases in the first three quarters of the year, to meet their total $1.15B commitment AMD is contractually obligated to take over $400M in wafers from GlobalFoundries in Q4, almost double the run-rate in the first three quarters of the year. AMD's purchases from GlobalFoundries in the first three quarters of the year totaled $269M, $255M, and $222M respectively, or $746M overall. 

In addition, there is an additional $250M wafer commitment due in Q1. However and if you read the comments on the Barron's article, some of them point out that the payment obligations have been known since earlier this year and that Bernstein is also shorting the stock. One commenter also posted the following note apparently sent by AMD investor relations regarding issue:

Thank you for your email. You are correct; our wafer purchase commitment to Global Foundries is ~$400M in Q4 2013. As we indicated on our October earnings call, we are on track to meet that commitment and indicated that our inventory levels in the 4th quarter would be flat from Q3 levels. We believe this inventory level is appropriate to support our business, as we've seen strength from our high-end A8/A10 APUs, our recently launched R7/R9 GPUs and the continued semi-custom production. We will also begin shipping Kaveri, our next-generation desktop APU in the 4th quarter.

Nevertheless, the AMD bears and shorts appear to have another talking point.

The Increased Importance of Video Game Consols to AMD. The Wall Street Journal has an article about how Advanced Micro Devices' future prospects have become closely tied to new videogame consoles hitting the market this month as Sony Corporation (NYSE: SNE) has said it sold one million units of its PlayStation 4 console in the US and Canada in the first 24 hours following its launch late last week while the Xbox One from Microsoft Corporation (NASDAQ: MSFT) goes on sale this Friday. Both the PlayStation 4 and the Xbox One use a customized version of AMD's Jaguar chip family which are not being made by or are covered by the agreement with Global Foundries. And while pent-up demand and the holiday season have sparked a big launch of gaming consols, the Wall Street Journal pointed out that sales are likely to ebb as 2014 progresses and that could be a problem for AMD as Wall Street forecasts its revenue will increase by 11% next year. Share Performance. Advanced Micro Devices is up 42.5% since the start of the year and up 40.7% over the past five year:

Finally, here is a look at the latest technical chart for AMD which reveals some bearish trend lines:

Given the above, it looks like investors in Advanced Micro Devices should brace for more choppy waters rather than smooth sailing – at least for the near term.  

SmallCap Network Elite Opportunity (SCN EO) has an open position in AMD. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.

Group files to bring back Eastern Airlines

A 1986 file photo of Eastern Airlines planes. A group would like to revive the airline.

NEW YORK (CNNMoney) Plans are underway to bring back Eastern Airlines, a once iconic airline that last flew in 1991.

Eastern Air Lines Group has filed an application with the Department of Transportation to start service once again. Approval from the department and Federal Aviation Administration is a drawn-out process that can take at least 12 months to complete.

But Ed Wegel. CEO of the group, said the airline hopes to start flights by December of this year. It expects to take delivery of its first plane, an Airbus A320, in August or September.

The airline will be based in Miami. Wegel said no decisions have been made on initial routes, but that the airline plans to restart as a provider of charter services initially, and then build into scheduled service at a yet-to-be-determined date.

Wegel said the group bought the rights to the Eastern name and logo out of bankruptcy court in 2009, but that it had to wait until now to find the investor support needed to restart the airline. Airlines have become more profitable in the last year or two, and airline stocks, traditionally poor performers, have been doing very well recently.

Wegel said it will take additional investor support, likely at least $100 million of capital, to move from charter to schedule service.

"When you look at history since '78, how many airlines started, how many didn't make it, it's not a business for the faint of heart," he said. "But we believe there are opportunities that will present themselves for us once we show we are a good airline operator."

According to the group's website, Eastern was founded in 1927 and adopted the name in 1930. It was a major carrier along the East Coast, pioneering the shuttle service from New York to Boston and Washington.

Wegel said there were years in the 1980s when Eastern had the most passengers of any U.S. airline due to the shuttle and its extensive Latin American route system. And he said it was once the largest employer in the Miami area, giving it strong name recognition in that market even though it has been nearly a quarter century since its last flight.

"We've done extensive surveys and polling on the name," he said. "It has 80% recognition in Miami, and overall it has very positive name recognition still."

But the airline was sold in 1986 and filed for ba! nkruptcy protection in 1989. Labor unrest and a drop-off in air traffic associated with the January 1991 Gulf War forced it out of business.

Top 10 Blue Chip Stocks To Watch Right Now

Eastern would face an industry that is more of an oligopoly than ever before, with American Airlines (AAL), United Continental (UAL, Fortune 500), Delta Air Lines (DAL, Fortune 500) and Southwest (LUV, Fortune 500) controlling more than 80% of U.S. air traffic between them. Those four companies have taken the place of 10 major carriers that existed at the start of last decade.

  Delta CEO: ATL flights every 45 secs

But there have been some start-ups able to take hold, including JetBlue Airways (JBLU, Fortune 500) and Spirit Airlines (SAVE). The Justice Department has tried give support to upstart carriers, requiring that US Airways and American Airlines give some of their gates and slots at the busiest airports to carriers such as JetBlue to win approval of their merger.

Wegel is a veteran of the airline industry. He was involved in the creation of Atlantic Coast Airlines, which operated a feeder carrier for United.

Schaeffer's Contrarian Trio

A number of equities have seen significant spikes in short interest during the most recent reporting period; here we look at three outperformers, all of which could benefit from this increase in skepticism, says technician Terri Stridsberg, in Schaeffer Investment Research.

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

It would take more than seven days to cover these shorted shares, at the stock's average pace of trading—more than enough sideline cash to fuel a short-covering rally.

Meanwhile, data shows a 10-day put/call volume ratio of 1.46 for Dollar Tree, Inc., confirming puts bought to open have outstripped calls during the last two weeks.

This ratio ranks higher than 96% of similar readings taken within the past year, meaning traders have been picking up puts over calls at a near-annual-high clip. An unwinding of these bearish bets could help propel the shares even higher from their current perch.

HCA Holdings Inc. (HCA) has also been a standout on the charts this year, boasting a 2013 advance of nearly 55%—and besting the broader S&P 500 Index (SPX) by roughly 17 percentage points during the most recent three-month time frame—to trade at $46.67.

However, skeptics remain undaunted, as short interest surged by 30% over the course of the last two weeks. With a respectable 3.5% of the security's float now sold short—the equivalent of 9.5 million shares—an exodus by the bears could trigger a short-squeeze situation.

Also of note, Schaeffer's put/call open interest ratio for HCA sits at 1.61, indicating puts outnumber calls among options scheduled to expire in the next three months.

This ratio registers in the 94th percentile of its annual range, signaling near-term traders have rarely been more put-focused toward the stock during the past 52 weeks.

If these bearish traders capitulate to HCA's positive price action, the unwinding of these near-term puts could provide an options-related boost.

Not to be outdone, Diana Shipping (DSX) has trekked 67.5% higher so far this year, and sports a 52-week gain of more than 72% to wink at the $12.20 level. Even so, the equity saw a 28.2% rise in short interest during the second half of September, and a 35.1% surge during the past two reporting periods.

Since these pessimistic bets now make up 4.8% of the stock's available float, a wave of future short-covering activity could serve as a tailwind for DSX down the road.

Further evidence of the doubt surrounding Diana Shipping Inc. lies in the fact that only three analysts have deemed the equity worthy of a strong buy endorsement, compared to five holds and two strong sell recommendations.

Adding insult to injury, Thomson Reuters shows an average 12-month price target of $11.48 for the shipping firm, denoting a discount to the stock's current price.

In other words, a round of upgrades and/or price-target hikes could be on the horizon for the security, which could add more fuel to DSX's contrarian tank.

Subscribe to Schaeffer's Investment Research here…

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This Week's Winners and Losers

AP, Showtime From a high-end apparel retailer making a down-market move to the leading video service adding to its growing library, here are the wonders and blunders of the week. Amazon.com (AMZN) -- Winner Apple (AAPL) may have hit the market with the new iPad Air on Friday, but it was Amazon making the most of the launch -- to promote its own platform. Amazon has spent most of the week pushing its new 8.9-inch Kindle Fire HDX tablet at the top of the popular e-tailer's home page, pitting it against the iPad Air. Amazon points out that its Kindle Fire HDX is 20 percent lighter, packs 950,000 more pixels, and will set shoppers back $120 less than the somewhat comparable iPad Air. You have to admire Amazon's moxie here. Apple just moved more than 14 million iPads in its latest quarter -- and that was the older models during a non-holiday quarter. Amazon's willing to butt heads with the top brand in tablets, and it's doing it on a site that it knows will be getting very busy in the coming weeks as holiday shoppers begin to research the best tablet to buy this season. Well played, Amazon. lululemon ahtletica (LULU) -- Blunder When it comes to selling high-end yoga clothing, no one does it as well as lululemon athletica. Sure, there was that embarrassing episode earlier this year where its black Luon yoga pants were too sheer, resulting in the departure of its head of merchandising. However, how do you justify filling that opening by bringing in Kmart's head of apparel to be your new chief products officer? Kmart has struggled with years of declining comps, and it's a lackluster discount department store chain. Even if she was more than qualified for the gig, investor -- and more dangerously customer -- perceptions may mark down lululemon's image. Pitney Bowes (PBI) -- Winner Metered mail may be a fading industry, but that didn't stop Pitney Bowes from hitting a fresh 52-week high this week after posting encouraging quarterly results. The key here is that Pitney Bowes has evolved from being merely a provider of metered mail in an era when folks just aren't mailing physical letters the way that they used to. Pitney Bowes has beefed up its digital commerce solutions business. That's actually growing, helping offset the logical decline on the mail front. The bottom line is that Pitney Bowes' bottom line trounced expectations. Nintendo (NTDOY) -- Blunder Nintendo used to be the video game industry's tastemaker, but these days it seems to be on the outside looking in. It posted its third consecutive quarterly loss this week, and it has only sold 450,000 Wii U consoles through the first six months of its fiscal year. Things won't get any easier this month as the Xbox One and PlayStation 4 hit the market. Nintendo is holding up better with its handheld platform, but it's hard to win a game if you keep reporting losses. Netflix (NFLX) -- Winner Showtime's "Dexter" recently concluded its eight-season run, and now it's returning to Netflix's widening digital vault. Netflix and Showtime parent CBS (CBS) struck a deal to get the entire serialized drama on the popular video service that now has more than 40 million subscribers worldwide. The first four seasons became available on Thursday, and the final four seasons will be accessible in two months. Netflix and its $7.99 monthly plan continues to be one of the best deals in video, and the catalog keeps getting bigger.

How income inequality hurts America

NEW YORK (CNNMoney) It's not just income inequality. It's lifespan inequality. And education inequality. And declining economic growth.

It's a well-established fact that the rich are getting richer, while the poor and middle class are falling behind.

"The 400 richest people in the United States have more wealth than the bottom 150 million put together," said Berkeley Professor and former Labor Secretary Robert Reich on a recent CNNMoney panel on inequality.

Meanwhile, the median wage earner in America took home 9% less last year than in 1999.

But the rising income gap is manifesting itself in American society in other ways too.

Social scientists have long said income inequality is bad for society. Yet popular measures of social stability -- crime rates, voter non-participation -- have been going down over the last couple of decades.

So how does inequality hurt?

Lifespans: Paychecks aren't the only things that are increasingly unequal. Rich people are actually living longer than poor people.

In the early 1980s, wealthy Americans lived 2.8 years longer than the poor, according to the Department of Health and Human Services. The wealthy and poor were defined as the top and bottom 10% on a number of different economic measures.

But by the late 1990s the rich were living 4.5 years longer, and the gap has only widened since then, HHS said.

The increasing disparity is a result of a variety of reasons including "material and social living conditions" as well as access to medical care, according to HHS.

Education: For Americans born in the early 1960s, 5% of poor people went to college and 35% of rich folks did, according to the Russell Sage Foundation. They defined rich and poor as top and bottom 25% for income.

Only o! ne generation later -- Americans born around 1980 -- the number of rich people going to college jumped by 20 percentage points. For poor people, it rose only 3 percentage points.

That further perpetuates the cycle of income inequality, as an increasing number of middle-class jobs favor the more educated.

While researchers stress that it's difficult to concretely link any of these measures with rising income inequality, the correlation is compelling.

"When income inequality goes up, you see more inequality in these other things," said Lane Kenworthy, a professor of sociology and political science at the University of Arizona.

Economic growth: Some economists have long argued that a widening income gap suppresses economic growth and job creation, and may be one reason this economic recovery doesn't feel like a recovery at all.

The theory is based on research showing middle-class people tend to spend more of their income than rich people. As their incomes and feelings of relative wealth decline, so does overall economic growth.

Since the recession ended, growth has averaged just 2.2%. That compares to the 3.3% historical average since the Great Depression.

"Our middle class is too weak to support the consumer spending that has historically driven our economic growth," Nobel Prize-winning Economist and Columbia Professor Joseph Stiglitz wrote in an editorial earlier this year.

"With inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream — a good life in exchange for hard work — is slowly dying."

  Who's to blame for income inequality?

What to do about it: Research shows Americans want the country to be more equ! al -- two! thirds say inequality is a problem according to Leslie McCall, a sociology and political science professor at Northwestern University.

The trouble is, Americans don't really know what to do about it. Strengthening unions, taxing the rich, raising the minimum wage and better job training are a few ideas.

But many view inequality as an unavoidable symptom of the free market -- a market that has, on a global scale, lifted hundreds of millions of people out of poverty and provided the wherewithal to boost living standards around the world.

"It's not clear that raising taxes will produce what people want -- which is better jobs and more pay," said McCall.

PIMCO’s El-Erian Sees Tiny Taper at Fed Meeting, Yellen as Frontrunner

PIMCO’s Mohamed El-Erian says that he expects a drop — or taper — of about $10 billion to $15 billion in the level of the government’s monthly asset purchases when the Federal Open Market Committee meets Tuesday and Wednesday.

The Fed’s current leader, Ben Bernanke, is expected to step down in January, when his second term as chairman expires. A top candidate for the job, Larry Summers, withdrew his name for the post on Sunday amid growing opposition among Democrats.

“Suddenly, Janet Yellen has regained her status as frontrunner; that signals to the market more policy continuity, which the market takes well,” El-Erian (left), PIMCO CEO and co-CIO, said on CNBC early Monday. “The yield curve gets anchored, you get a bull steepener, the front end does well, repression of volatility, the equity market, the credit market like that, and [what] you get is a broad-based rally, and that’s what we’re getting this morning.”

(Other names batted around, observers say, include former Fed Vice Chairman Donald Kohn and former Treasury Secretary Timothy Geithner.)

Investors may enjoy the Yellen rally, but whoever is ultimately chosen for the post “won’t have as much room for maneuver as people expect,” El-Erian noted.

Over the next 12 months, the market expert predicts three things to happen at the Fed with respect to quantitative easing.

“First, they will taper. They’ll taper small to begin with, but they will taper,” he said, coming down from the current $85 billion-a-month bond-buying level.

Second, the Fed is “likely to favor the mortgage market, which means they’ll taper more with Treasuries in proportional terms,” El-Erian noted.

Third, he believes, the Fed will give itself “quite a bit of wiggle room” due to future uncertainly. In addition, it will “strengthen the forward guidance in order to minimize the impact on markets of the taper.”

Once this process is over, the PIMCO executive said, “I don’t think you’re going to see an increase in interest rates, because the economy remains weak. We’re nowhere near escape velocity.”

This week’s expected taper is not related to any declared “victory on the economy,” El-Erian says. “It’s because they’re worried about what Mr. Bernanke has called the costs and risks, the collateral damage, if you like, of using such a blunt instrument to impact markets.

Future Focus

While the Fed succeeded in “buying time for the system,” El-Erian explains, its approach has become increasingly ineffective: “You cannot repress interest rates forever in a modern market system without causing damage, and I think the Fed realizes that. That’s why it’s likely to engage on the taper.”

Bernanke’s replacement will have to wrestle with the question of rising interest rates and related matters in the medium term, experts say.

Sen. Sherrod Brown, D-Ohio, began circulating a letter in late July calling on President Barack Obama to appoint Yellen. It was signed by 20 Senate Democrats. More than half of the Democratic women in the U.S. House signed a separate letter requesting Yellen’s nomination.

On Sunday, a group of more than 450 economists sent a letter to Obama supporting Yellen in a campaign organized by the Institute for Women’s Policy Research. The list included Robert Shiller of Yale, Alan Blinder of Princeton, Lawrence Kotlikoff of Boston University, Alice Rivlin of Brookings, Christina and David Romer of UC Berkeley, and Joseph Stiglitz of Columbia.

A week ago, it was reported that Lael Brainard, under secretary for international affairs at the Treasury Department, is under consideration for a vacancy at the Federal Reserve.

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Check out these related stories on ThinkAdvisor:

Advice On Using A Financial Advisor

Sergei Fedorov is generally regarded as the greatest defensive forward in the history of the National Hockey League.  He led the Detroit Red Wings to Stanley Cup championships in 1997, 1998, and 2002, and won a Hart Trophy as the league's most valuable player in 1994.

But like many high-profile athletes, it appears that Fedorov has been the victim of an unscrupulous financial advisor.  In 2009, Fedorov sued financial advisor Joseph P. Zada, of Grosse Pointe, Michigan.   Zada did not answer the Complaint, and the Wayne County Circuit Court entered a default judgment exceeding $60 million in Fedorov's favor against Zada.   Court records evince vigorous effort to collect the judgment in the four years since it was entered.  According to the Detroit Free Press nothing has been collected on it.

$60 million represents Fedorov's annual player's salary at the height of his playing career, $10 million, for six years.  Fedorov is 43 years of age and retired as a player.  It is unlikely that he will make the kind of money in his post-playing career that he did as a player.  That train has passed.

How garbage can boost U.S. economy

New York's decision last November to ban food waste from dumping grounds may turn out to be one of the city's smartest decisions ever. Massachusetts, Connecticut and Vermont are already doing the same, as are Seattle, San Francisco and Portland. The United States could finally be waking up to the benefit of the "circular economy," or taking what you throw away and finding as much value in it as possible.

Do you throw away clothes you no longer wear? They can be used to create insulation or upholstery stuffing, or simply recycled into yarn to make fabrics that save raw materials. The United States is already exporting used clothing worth over $12 billion per year. That could grow much higher, as currently only 15% of clothing is being collected.

What have you done with your old iPhone 4? Each smartphone we throw away holds $100 worth of materials we could easily use again. Right now only 20% of this material is being recycled globally, which means $100 billion worth of material is lost to the ground just a year after purchase. The cost of manufacturing mobile phones could be halved if industry made them easier to take apart, so new phones could come from the refurbishment of outdated phones. Given the speed at which we now upgrade our phones, one can easily do the math.

The basic idea behind the circular economy is to derive the maximum value out of any used goods that can be partially reused — from food waste and iPhones to paper and clothing. But that's just recycling — right? In fact, it's several streets ahead. In a circular economy, instead of assuming that products will be thrown away, companies think at the design stage about how parts of new products could eventually be extracted and used again.

Once that happens, the rest of the supply chain will respond to the potential value of reuse and recycling. Renault has a remanufacturing business that is already earning $300 million in revenue, and boasts the highest profit margin in the group.

The near-tripling o! f commodity prices in the last decade has already sharpened the incentive for businesses to reduce cost and manage risk by rethinking their material inputs. With the global population expected to grow by 2 billion before 2030, that incentive will only increase.

Other regions are much more advanced in developing the circular economy. In Europe, job creation in the recycling sector has been growing at more than twice the industrial average. China's recycling sector is so lucrative that one of its industry leaders reportedly says he wants to buy TheNew York Times. The overall economic opportunity could be as large as $1 trillion per year globally by 2025.

The United States is lagging far behind Europe and Asia in recovering resources. It recovers about 8% of all plastics (Europe recovers almost twice as much), 15% of textiles (the United Kingdom's rate is four times higher) and 20% of aluminium (Japan recovers 98% of its metals).

But the United States has the potential to catch up. Disassembling parts from products including motor vehicles, IT and medical devices already earns $43 billion in revenue and employs close to 200,000 Americans. Growth in the remanufacturing sector is outstripping growth in gross domestic product.

The United States has also already pioneered the concept of a "sharing economy," illustrated by Zipcar, a membership-based car sharing company, and Airbnb, which allows people to rent out assets when they're not using it. The sharing economy now encompasses a plethora of start-ups in everything from sharing video games to running errands. It is a great example of circular business, as people realize that paying for usage of something they need for only a limited time can make more sense than outright ownership.

Inevitably, unlocking the potential of the circular economy will require collaboration among government and companies. Governments can shape behavior through initiatives like New York's on food waste, while companies can work together to establish c! ommon sta! ndards for reusable materials, along the lines of the PET numbers you see on plastics bottles to help recyclers to sort them.

In this endeavor, the World Economic Forum's Annual Meeting in Davos this week will rally political and corporate leaders to align incentives behind the circular economy revolution – a new industrial revolution which will also be good for the environment.

This revolution will require rethinking the way we live, eat and work. But as shown by Zipcar's sale last year to the Avis Budget Group for $500 million in cash, the rewards for figuring out new circular economy business models are vast.

Richard Samans is managing director and member of the Managing Board of the World Economic Forum. He is formerly director-general of the Global Green Growth Institute, an international organization headquartered in Asia, and special assistant to the president for international economic policy during the Clinton Administration.

Can AT&T Benefit from a Potential Acquisition?

With shares of AT&T (NYSE:T) trading around $33, is T 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

AT&T is a provider of telecommunications services in the United States and worldwide. Services offered include wireless communications, local exchange services, and long-distance services. AT&T operates in four segments: Wireless, Wireline, Advertising Solutions, and Other. The communications products offered through AT&T's segments reach audiences using just about every widely adopted medium: Internet, voice, television, and mobile. As consumers continue to adopt this technology, giant providers like AT&T stand to see rising profits.

AT&T is reportedly interested in buying whatever assets remain of Vodafone (NASDAQ:VOD) after the British wireless carrier sells its 45 percent stake in Verizon Wireless to Verizon Communications (NYSE:VZ), Bloomberg reports. AT&T has been interested in buying assets in Europe for some time. People familiar with the matter who spoke to Bloomberg said that AT&T is only interested in buying wireless assets and would not pursue the deal if Vodafone chooses to expand into cable or fixed-line businesses.

T = Technicals on the Stock Chart Are Weak

AT&T stock has struggled for most of the last couple years. The stock is currently trading near a lower support level established just last year. 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, AT&T is trading below its key averages which signal neutral to bearish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
AT&T Options	21.27%	96%	95%

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
September Options	Steep	Average
October Options	Steep	Average

As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish 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 bearish over the next two months.

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

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on AT&T’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for AT&T look like and more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	7.58%	11.67%	-39.59%	3.28%
Revenue Growth (Y-O-Y)	1.58%	-1.46%	Hot Medical Companies For 2014 0.23%	-0.06%
Earnings Reaction	-1.14%	-5.02%	0.80%	-0.82%

AT&T has seen rising earnings and mixed revenue figures over the last four quarters. From these numbers, the markets have not been satisfied with AT&T’s recent earnings announcements.

P = Weak Relative Performance Versus Peers and Sector

How has AT&T stock done relative to its peers Verizon (NYSE:VZ), Sprint (NYSE:S), T-Mobile (NASDAQ:TMUS), and sector?

	AT&T	Verizon	Sprint	T-Mobile	Sector
Year-to-Date Return	0.03%	9.63%	17.81%	17.28%	10.24%

AT&T has been a poor relative performer, year-to-date.

Conclusion

AT&T is a communications and entertainment company that operates around the world. The company is reportedly interested in acquiring the remaining portion of Vodafone if the Verizon deal goes through. The stock has struggled in recent years and is now trading near lows not seen since last year. Over the last four quarters, investors in the company have not been satisfied with recent earnings announcements as earnings have been rising while revenues have been mixed. Relative to its peers and sector, AT&T has been a weak year-to-date performer. WAIT AND SEE what AT&T does this coming quarter.

Hot Tech Stocks To Invest In Right Now

With shares of Sony (NYSE:SNE) trading around $22, is SNE an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let�� analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Sony is involved in�the electronics, games, entertainment, and financial businesses. The company operates in several different segments: Consumer Products Services, Professional Device Solutions, Movie, Music, Finance, Mobile, and Other. Through its segments, Sony is able to provide a wide range of products and services.

These products include televisions, cameras, personal computers, game consoles, navigation systems, audio and video equipment, software, phones, and media platforms. The company�bring�new technologies to the hands of your average Joe, as well as professional users. Look for Sony to continue to be a top choice for avid technology adopters worldwide.

Sony electronics division made a profit in the second quarter for the first time in two years, but the company is still forecasting difficulties for its electronics ventures in the future. The uncertainty surrounding Sony�� ability to compete in the electronics market has increased pressure on the board to consider activist investor Daniel Loeb�� suggestion that the company split in two, creating separate businesses for electronics and Sony�� much more profitable entertainment arm.

Hot Tech Stocks To Invest In Right Now: Chyron Corporation(CHYR)

Chyron Corporation supplies graphics hardware, software, and workflow solutions for multimedia outlets; government agencies; telecommunications and corporate customers; and educational, health, and religious institutions. It offers AXIS Graphics online content creation software, HD/SD switchable on-air graphics systems, clip servers, channel branding and telestration systems, graphic asset management and XMP integration solutions, and the WAPSTR mobile phone newsgathering application. The company?s graphics products provide broadcast-quality, real-time, HD/SD, 2D/3D, graphics creation and playout for television stations, networks, video production, and post-production markets. Its hardware products include Graphics System/CG Family for television graphics applications; Channel Box systems for branding applications; XClyps/XClyps SAN/MicroClyps for control over graphics playout; CodiStrator HD/SD Telestration Systems that enable commentators to illustrate in real time over live video; and platforms and board sets for third-party developers. The company also provides AXIS Graphics suite of Web-based services and applications; and AXIS order management systems. In addition, it offers Software Products, such as Lyric, an advanced graphics creation and playback application; the Lyric Enhancement Interface Framework, an application programming interface for developing custom programs; and Chyron Application Library, an API that can be used to real time broadcast graphics applications. Further, it provides newsroom integration and asset management products comprising Chyron Asset Management InterOperability; iRB, an intelligent rundown builder; iSQ, an intelligent sequencer; and mobile suite, as well as graphic design, technical, and support and training services. Chyron Corporation was formerly known as The Computer Exchange, Inc. and changed its name to Chyron Corporation in November 1975. The company was founded in 1966 and is headquartered in M elville, New York.

Hot Tech Stocks To Invest In Right Now: Alvarion Ltd.(ALVR)

Alvarion Ltd. supplies top-tier carriers, Internet service providers (ISPs), and private network operators with solutions based on the worldwide interoperability for Microwave Access (WiMAX) standard, as well as other wireless broadband solutions. The company provides WiMAX and non-WiMAX wireless broadband systems, and launched 250 commercial WiMAX deployments worldwide. Its solutions are designed to cover a range of frequency bands with fixed, portable, and mobile applications to enable the delivery of personal broadband services, business and residential broadband access, corporate virtual private network (VPN), toll quality telephony, mobile base station feeding, hotspot coverage extension, and services for various vertical markets, such as municipalities, public safety, mining, utilities, video surveillance, and border control. The company?s business mainly focuses on solutions, based on the WiMAX standard, that are used for primary wireless broadband access. In addit ion, Alvarion sells its non-WiMAX products, which address point-to-point and point-to-multipoint architectures for various end-user profiles, including residential, small office/home office, small/medium enterprises, multi-tenant/multi-dwelling units, and large enterprises, as well as provides network management solutions for its wireless solutions. Its solutions provide high-speed wireless ?last mile? connection to the Internet for homes and businesses in both developed and emerging markets. The company was formerly known as BreezeCOM Ltd. and changed its name to Alvarion Ltd. as result of merger with Floware Wireless Systems Ltd. in August 2001. Alvarion Ltd. was founded in 1992 and is headquartered in Tel Aviv, Israel.

Advisors' Opinion:

• [By Eric Volkman]

  Alvarion (NASDAQ: ALVR  ) is now on the hunt for a new chief executive. Hezi Lapid has resigned as CEO, although he will stay in the position until "such time that a smooth transition is completed," the company said in a press release announcing the move.

10 Best Biotech Stocks To Invest In Right Now: Dot Hill Systems Corporation(HILL)

Dot Hill Systems Corp. designs, manufactures, and markets a range of software and hardware storage systems for the entry and midrange storage markets worldwide. Its storage solutions consist of integrated hardware, firmware, and software products employing a modular system that allows end-users to add various protocol, performance, capacity, or data protection schemes. The company offers AssuredSAN products, a flexible line of networked data storage solutions for open systems environments, including fiber channel, Internet small computer systems interface, and serial attached small computer systems interface, or SAS storage markets. Its AssuredSAN product lines range from approximately 146 gigabyte to 192 terabyte storage systems. The company also provides RAID software for industry standard Windows and Linux servers, as well as storage management applications, which manage its storage system configurations. In addition, it sells DMS software products comprising AssuredSna p, AssuredCopy, AssuredRemote, and RAIDar. Further, the company offers standalone storage software products, such as AssuredUVS, a unified virtual storage appliance product; and AssuredVRA. It sells its products through original equipment manufacturers, systems integrators, distributors, and value added resellers. The company was founded in 1988 and is headquartered in Longmont, Colorado.

Advisors' Opinion:

• [By John Udovich]

  Small cap storage stock Dot Hill Systems Corp (NASDAQ: HILL) is up 193.4% since the start of the year for a much better performance than its larger cap peers Western Digital Corp (NASDAQ: WDC) and SanDisk Corporation (NASDAQ: SNDK), which are 55.5% and 35.3%, respectively, since the start of the year. So why has this relatively unknown small cap storage stock been a better performer than its better known storage stock peers?

• [By John Udovich]

  On Monday, small cap storage stock Violin Memory Inc (NYSE: VMEM) surged 21.56% after booting out its CEO in the wake of disappointing earnings and IPO, meaning its time to take a closer look at the stock along with the performance of potential or better known storage peers like large caps SanDisk Corporation (NASDAQ: SNDK) and Western Digital Corp (NASDAQ: WDC) plus small cap Dot Hill Systems Corp (NASDAQ: HILL).

Hot Tech Stocks To Invest In Right Now: AVG Technologies NV (AVG)

AVG Technologies N.V. (AVG), incorporated on March 3, 2011, provides software and online services. The Company is primarily engaged in the development and sale of Internet security software and online service solutions branded under the AVG name. The Company�� solutions include software and online services, include security, personal computer (PC) management, online backup and other products. As of December 31, 2011, the Company had approximately 15 million subscription users. AVG�� portfolio consists of Anti-Virus suite, Internet Security suite, Premium Security suite, AVG Mobilation, AVG Threatlabs, Family Safety, TuneUp Utilities and PC Tuneup, LiveKive and MultiMi. On January 4, 2011, the Company acquired DroidSecurity Ltd. On March 3, 2011, the Company established AVG Holding Cooperatief U.A. On May 18, 2011, the Company acquired iMedix Web Technologies Ltd. In August 2011, it acquired TuneUp Software GmbH. On August 19, 2011, AVG Technologies GER GmbH acquired TuneUp Software GmbH. On October 31, 2011, AVG Technologies Holdings B.V. acquired AVG Distribution Switzerland AG. In November 2011, the Company acquired Bsecure Solutions, Inc. On January 13, 2012, AVG Technologies USA, Inc. acquired OpenInstall, Inc. In May 2013, AVG Technologies NV acquired online privacy organisation PrivacyChoice.

The Company�� products include AVG Internet Security, AVG Anti-Virus, AVG Email Server Edition, AVG File Server Edition, AVG Linux Server Edition, AVG Rescue CD and AVG Remote Administration. The Company�� subsidiaries include AVG Technologies USA Inc., AVG Technologies CZ, s.r.o., AVG Technologies UK Ltd, AVG Exploit Prevention Labs, Inc., AVG Technologies GER, GmbH, AVG Technologies FRA SAS, AVG Technologies HK, Limited, AVG (Beijing) Internet Security Technologies Company Limited, AVG Mobile Technologies Ltd, AVG Netherlands B.V., AVG Ecommerce CY Ltd, AVG Technologies Holding B.V., TuneUp Software GmbH, TuneUp Distribution GmbH, TuneUp Corporation and AVG Distribution Switzerland AG! .

The Company competes with Microsoft, Google, Apple, Qihoo, Tencent, Facebook, UniBlue, Symantec, Trend Micro, Avast!, Avira, Symantec, Carbonite, Dropbox, Intel Corporation, Trend Micro, Eset, Kaspersky Labs, Panda Software, Sophos, Rising, Kingsoft, Check Point and F-Secure.

Advisors' Opinion:

• [By MONEYMORNING.COM]

  For instance, in the March 15 Private Briefing report, "Double Your Money With this Cyber-Hacking of America Stock," we recommended AVG Technologies NV (NYSE: AVG), an Amsterdam-based cybersecurity whose shares we believed were good for a 100% gain in a year.

• [By Seth Jayson]

  AVG Technologies (NYSE: AVG  ) reported earnings on April 24. Here are the numbers you need to know.

  The 10-second takeaway
  For the quarter ended March 31 (Q1), AVG Technologies beat expectations on revenues and crushed expectations on earnings per share.

• [By Igor Novgorodtsev]

  InterActiveCorp (IACI) bought Ask.com for $1.85 billion in 2005. The new Perion will be worth only about 40% of that. After the merger, Perion will leapfrog its much larger rivals: Babylon and AVG (AVG). Finally, Perion should be able to increase its operating margins as it can spread its SG&A costs over a much larger base (Conduit EBITDA margin is 32% vs. Perion's 23%). Perion will keep its senior management team intact: Josef Mandelbaum will remain its CEO and Yacov Kaufman its CFO. Perion has successfully orchestrated a roll-up acquisitions of privately-held Sweetpacks and Smilebox, so I have high confidence that they know how to integrate a new business.

Hot Tech Stocks To Invest In Right Now: NVIDIA Corporation(NVDA)

NVIDIA Corporation provides visual computing, high performance computing, and mobile computing solutions that generate interactive graphics on various devices ranging from tablets and smart phones to notebooks and workstations. It operates in three segments: Graphic Processing Unit (GPU), Professional Solutions Business (PSB), and Consumer Products Business (CPB). The GPU segment offers GeForce discrete and chipset products, which support desktop and notebook personal computers plus memory products. The PSB segment provides its Quadro professional workstation products and other professional graphics products, including its NVIDIA Tesla high-performance computing products used in the manufacturing, entertainment, medical, science, and aerospace industries. The CPB segment offers Tegra mobile products, which support tablets, smartphones, personal media players, Internet television, automotive navigation, and other similar devices. This segment also licenses video game consol es and other digital consumer electronics devices. The company sells its products to original equipment manufacturers, original design manufacturers, add-in-card manufacturers, consumer electronics companies, and system builders worldwide that utilize its processors as a core component of their entertainment, business, and professional solutions. NVIDIA Corporation was founded in 1993 and is headquartered in Santa Clara, California.

Advisors' Opinion:

• [By John Udovich]

  Its been about two weeks since the latest earnings report from Advanced Micro Devices, Inc (NYSE: AMD) which sent the stock lower yet again. I should mention that we have�had AMD in our SmallCap Network Elite Opportunity (SCN EO) portfolio since mid-July and its been a rollercoaster ride for the past few months because the summer earnings report (which appeared on the same day as some other disappointing earnings reports) erased our gains, which we then made back���only to have�those gains�erased again with the latest earnings report (See my previous article: Time to be Bullish, Bearish or Just Realistic? Advanced Micro Devices��(AMD) Third Quarter Earnings Report). Nevertheless, we still think the company represents a�good value opportunity as it continues to transition away from dependence on the PC and into mobility and gaming consoles. With that in mind, here is the latest important news about AMD for investors and traders to hit the newswires since earnings:

  The New AMD Radeon R9 290X Graphics Card is Launched. Last Thursday, Advanced Micro Devices announced the launch of the�AMD Radeon��R9 290X graphics card and already there are some good reviews with Vlad Savov writing one for TheVerge.com�under the headline:���MD's latest graphics card is a steal at $549�� Should You Buy An AMD R9 290X Or Nvidia GTX 780? On Monday, Forbes contributor Jason Evangelho wrote a lengthy piece comparing NVIDIA Corporation�� (NASDAQ: NVDA) GTX 780 with AMD�� R9 290x where he noted that 24 hours ago, his�results would have led to a dramatically different conclusion:

  Buy AMD�� 290x since it�� $100 cheaper and offers comparable, if not superior, performance to its closest competitor. With this morning�� aggressive price cut, however, Nvidia may be causing droves of tech journalists to revisit their 290x reviews. As things stand now, Nvidia�� GTX 780 is $499, while AMD�� R9 290x is $549. Make no mistake: both cards are a steal at these pricep

• [By Adam Levine-Weinberg]

  AMD is also entering a significant product launch cycle, and management believes it can retake share from Intel, particularly for entry-level PCs. The management team is also bullish about its ability to regain share in GPUs from NVIDIA (NASDAQ: NVDA  ) following new product launches later this year. However, the big long-term goal seems to be gaining embedded and semi-custom design wins, and AMD has made progress here by winning the slots for Nintendo's new Wii U, the PlayStation 4, and (reportedly) the new Xbox.

Hot Tech Stocks To Invest In Right Now: Sage Grp(SGE.L)

The Sage Group plc, together with its subsidiaries, engages in the development, distribution, and support of business management software and related products and services for small and medium-sized enterprises worldwide. The company provides products and services in the areas of accounting, payroll, customer relationship management, financial forecasting, payment processing, job costing, human resources, business intelligence, taxation and other products for accountants, business stationery, development platforms, e-business, and enterprise resource planning, as well as offers solutions for various industries. The Sage Group plc was founded in 1981 and is based in Newcastle Upon Tyne, the United Kingdom.

Hot Tech Stocks To Invest In Right Now: American Software Inc (AMSWA.O)

American Software, Inc. (American Software), incorporated in 1970, develops, markets and supports a portfolio of software and services that delivers enterprise management and collaborative supply chain solutions to the global marketplace. American Software operates three business segments: Supply Chain Management (SCM), Enterprise Resource Planning (ERP) and Information Technology (IT) Consulting. The SCM segment consists of Logility, Inc. (Logility), which provides collaborative supply chain solutions for forecasting, production, distribution and management of products between trading partners. The ERP segment consists of American Software ERP, which provides purchasing and materials management, customer order processing, financial, e-commerce, flow manufacturing and manufacturing solutions, and New Generation Computing (NGC), which provides business software to both retailers and manufacturers in the apparel, sewn products and furniture industries. The IT Consulting s egment consists of The Proven Method, Inc., an IT staffing and consulting services firm. The Company also provides support for its software products, such as software enhancements, documentation, updates, customer education, consulting, systems integration services, and maintenance.

Supply Chain Management

The Company�� wholly owned subsidiary Logility provides SCM solutions, an integrated set of supply chain planning, inventory optimization, manufacturing, and transportation and logistics solutions. Logility provides SCM solutions to streamline and optimize the market planning, management, production, and distribution of products for manufacturers, suppliers, distributors, and retailers. As of April 30, 2011, Logility�� customer base is approximately 1,250 companies located in more than 74 countries. Logility markets and sells the Demand Solutions product line to the global small and midsize enterprise (SME) market through the global VAR distri bution network of Demand Management, Inc. (DMI). Logility ! al! so offers the Logility Voyager Solutions suite.

Logility Voyager Solutions is an integrated software suite that provides SCM, including collaborative planning, strategic network design, multi-echelon inventory optimization, optimized supply sourcing, production management, warehouse management, and collaborative logistics capabilities. Logility Voyager Solutions incorporates performance management analytics for decision support for processes, such as demand management, inventory and supply optimization, manufacturing planning and scheduling, transportation planning and management and sales and operations planning (S&OP).

The Logility Voyager Solutions software suite is modular and scalable to meet the management requirements of global organizations involving products with manufacturing or distribution networks. In addition, the Logility Voyager Solutions suite interfaces with a range of existing enterprise applications deployed on a range of technic al platforms. Logility Voyager Solutions accelerates S&OP, as well as strategic partner collaboration. Voyager Sales and Operations Planning enables companies to streamline and accelerate the entire S&OP process. Voyager Collaborate enables companies to communicate across their organizations and share supply chain information with external trading partners.

Voyager Fashion Forecasting helps improve profits with capabilities that address the collection launches for fashion-driven businesses. Voyager Demand Planning helps reconcile differences between business planning and detailed product forecasting. Voyager Life Cycle Planning provides control to model each phase in a product�� sunrise-to-sunset lifecycle, including introduction, maturity, replacement, substitution and retirement. Voyager Event Planning integrates marketing strategies with forecasting, distribution and logistics planning to calculate the impact of promotional plans and demand shaping strategi es, such as price discounts, coupons, advertising, spe! cial p! a! ckaging ! and product placement.

Logility Voyager Solutions enables enterprises to set inventory targets at each node of a multi-echelon distribution network to match strategic inventory goals and service levels. Voyager Inventory Optimization optimizes inventory investments across multi-echelon manufacturing and distribution networks to meet business and service level objectives for supply chains with multiple stages of inventory. Logility Voyager Inventory Planning allows enterprises to measure the tradeoff of inventory investment and desired customer service levels.

Logility Voyager Solutions optimizes material, inventory, production and distribution assets by synchronizing supply and demand. Voyager Supply Planning optimizes sourcing and production decisions to balance supply, manufacturing and distribution constraints based on corporate goals. Voyager Replenishment Planning provides visibility of future customer demand, corresponding product and materia l requirements, and the actions needed to satisfy those demands. Voyager Manufacturing Planning creates optimized constraint-based manufacturing schedules and compares multiple schedule scenarios to determine the optimal trade-off between manufacturing efficiencies, inventory investments and greenhouse gas emissions.

Logility Voyager Solutions provides capabilities for optimizing both warehouse and transportation operations. Voyager WarehousePRO provides shipping and inventory accuracy by optimizing the flow of materials and information through distribution centers. Voyager Transportation Planning and Management provide a multi-modal solution for savings of time, effort and money. It enables automated shipment planning, shipment execution and freight accounting. Demand Solution�� supply chain software provides a transition from spreadsheet management to robust reporting and tracking. Demand Solutions offers two separate product suites: traditional and DSX. The Demand Solutions application suite predict futur! e demand ! an! d make in! formed decisions to optimize inventory turns, customer service levels and profitability. Demand Solutions Forecast Management provides a demand planning solution that fits virtually any industry and deploys. Demand Solutions Requirements Planning incorporates collaborative planning capabilities to streamline supply activities from the production line through delivery.

Demand Solutions Collaboration offers a certified collaborative planning, forecasting and replenishment (CPFR) compliant collaborative planning solution that streamlines communications between a company and its customers and suppliers. Demand Solutions Sales & Operations Planning automates and continually analyzes the annual business planning process. Demand Solutions Advanced Planning and Scheduling is a production scheduling solution that supports both the process and discrete enterprise environment and produces accurate schedules taking into account machines, personnel, tooling and inventory co nstraints. Demand Solutions View (DS View) extends the value of Demand Solutions, empowering users to aggregate, rotate, filter, sort and otherwise manipulate large volumes of data into meaningful information. Demand Solutions Retail Planning enables manufacturers, distributors and retailers to collaboratively produce, ship and replenish product based on point-of-sale (POS) data.

Enterprise Resource Planning

The Company�� enterprise solutions are global solutions that link critical functions throughout an enterprise. The e-Intelliprise solution is a Web-based ERP system that a customer can run over the Internet, Intranet or Extranet utilizing the IBM iSeries servers. This allows functions within the ERP system to be deployed over the Internet using a Webpage capability. The e-Intelliprise solution is a global system, capable of operating in multiple languages and logistical organizations. Its e-applications are solutions for conducting business on the Internet that can Web-enable specific b! usiness f! unction! s through! integration with existing ERP or legacy systems. The e-applications are available for the applications, which include e-procurement, e-store, e-expenses, e-forms, e-payables, e-receivables, Purchase Order Tracking and Vendor Collaboration, Requisition Tracking, Shipment Tracking, e-process management and e-connect a seamless, XML-enabled data exchange.

The Company�� product line consists of software and services that operate on three strategic computer platforms, which includes IBM System z Mainframe or compatible, IBM System i (AS/400), and Intel-based servers and clients that operate Windows 2000, 2003, XP and Vista. It has written its products in various standard programming languages used for business application software, including ANSI COBOL, Micro Focus COBOL, C, C++, Visual Basic, JAVA, JAVA2 and other programming languages. Many have both on-line and batch capabilities.

IT Consulting

The Proven Method, Inc., the Company�� wholly owned subsidiary, is a technology services firm that specializes in assisting customer base to solve business issues with technology solutions. The solutions the Company provides ranges from Web applications to complex Business Intelligence applications and solutions. Business Intelligence consists of the development and implementation of a reporting process for dealing with data and multiple business entities/components. Its customers are Internet savvy and knowledgeable in wireless solutions, social networking and channeling implementations, server and desktop virtualization, and deployment of interactive applications. The Proven Method has customers, such as Aon, IBM, UPS, Norfolk Southern, Xerox, SunTrust Bank, Coca-Cola Enterprises, Kubota Manufacturing of North America, The Home Depot, AT&T, State of Georgia, CompuCom, Zep Inc, Chick-fil-A, Global Payments, Verizon, Catlin Group Ltd, Federal Home Loan Bank of Atlanta, Fulton Paper, Aaron Rents, AutoTrader.com, Nalco Chemical, Georgia Tech Research Ins! titute an! d numerous! other cu! stomers throughout the United States.

The Company competes with SAP, Oracle, Infor, JDA Software and Red Prairie.

Hot Tech Stocks To Invest In Right Now: Csr Ord 0.1p(CSR.L)

CSR plc, a fabless semiconductor company, designs and develops semiconductors and software based solutions in the United Kingdom, rest of Europe, the Americas, and Asia. It offers multifunction semiconductor platforms for the auto, camera, low energy connectivity, document imaging, and wireless voice and music markets; and semiconductors for the handset and other consumer electronics markets. The company?s technology portfolio comprises Bluetooth and Bluetooth SMART; global positioning system (GPS) and global navigation satellite systems location products; frequency modulated radio; Wi-Fi or wireless fidelity; audio and associated codec; near-field communication, a short range wireless technology that enables the transfer of data and secure transactions between devices; and imaging and video processing technologies. Its technologies have applications in a range of mobile consumer devices, such as handsets, tablets, automotive infotainments systems, personal navigation dev ices, wireless headsets, wireless audio systems, personal computers, GPS recreational devices, tracking and logistics management systems, digital cameras, printers, digital televisions, and gaming devices. The company markets its products to original equipment manufacturers and original design manufacturers primarily through its direct sales force and sales representatives, as well as through a network of distributors. It has operations in the United Kingdom, the United States, China, Taiwan, South Korea, Israel, Japan, and Singapore. CSR plc was founded in 1999 and is headquartered in Cambridge, the United Kingdom.

Healthcare Coverage Still Strongly Linked to Employment, Despite Declines

The rate at which employees are offered healthcare benefits—and the rate at which they enroll—are both in decline, according to a report released in July by the Employee Benefit Research Institute.

Although fewer workers are offered and enrolled in employer-sponsored health benefits, EBRI noted that the link between health coverage and employment is still strong. Over 58% of people under age 65 are covered by a health plan through their job. That included 68% of workers and 35% of nonworkers.

“Because of the linkage between employment and access to health coverage, the likelihood of a worker being uninsured is tied to the strength of the economy and the unemployment rate,” Paul Fronstin, author of the report, wrote.

The percentage of people covered by health plans through their employer stayed relatively steady between 1996 and 2007, bouncing between just under 60% and to almost 62% in that time period. After the recession began, coverage fell from 60% to 57% in May 2008. Employment-based coverage continued to decline even after the recession technically ended and recovery began. By October 2011, 55% of workers were enrolled in employer-sponsored health plans.

The percentage of workers covered as dependents also fell, EBRI found. After increasing in the late '90s, then fell steadily from 18% in 2000 to between 16% and 17% by the end of 2007. It remained relatively stable between 2007 and July 2009, wavering between 16.6% and 17.9%.

“It appeared that the increase in dependent coverage during this period offset the decline in coverage that workers received through their own jobs,” Fronstin wrote. “During the post-August 2009 period, when coverage through workers’ own jobs appeared be starting to recover, the percentage of workers with coverage as dependents declined, slipping to 17% by December 2009 before increasing slightly to 17.9% by September 2011.”

Fronstin attributed the growth in dependent coverage prior to 2011 to the decrease in workers’ own coverage.

Most uninsured workers cited cost as their reason for not enrolling. Since 2009, the percentage of uninsured workers who don’t enroll in health insurance plans because they are too expensive has remained near 90%.

In 2001, about 40% of workers said they weren’t offered insurance benefits at work. By the end of 2011, that percentage fell to 22%. Less than 10% of workers said they are ineligible for workplace benefits because they don’t work enough hours or were recently hired, or simply declined because they didn’t think they needed it.

This Discount Retailer Continues to Impress

There are dramatic differences of opinion in which way the economy is truly headed. This leads to many investors being skeptical about potential investments. The good news for the company discussed in this article is that it doesn't matter what happens throughout the broader economy.

Leading by example
Dollar General (NYSE: DG  ) is the largest discount retailer in the United States when measured by store count -- currently 10,866. More importantly, Dollar General opened 375 new stores in the first half of the year while only closing 15 locations. This is telling.

In the current economic environment, with a cautious consumer negatively impacting sales, many retailers are looking toward divestments as a way to cut costs and grow the bottom line. It's extremely rare to see a retailer open this many more stores than it closes. 

The point here is that Dollar General is clearly confident in its future potential, and this makes sense. If the economy recovers, Dollar General will still attract low-income, middle-income, and fixed-income consumers. If the economy suffers, then Dollar General might attract even more consumers, especially middle-income consumers who are looking for better values than where they currently shop.

Dollar General recently noted that the 2% payroll tax increase, as well as government cuts over the next several years, could impact results, but this is likely more about Dollar General hedging its own potential.

If you look at this from a logical perspective, people need to shop for goods, especially consumables. That being the case, consumers who are required to budget more than in the past are likely to opt for a dollar store to shop for those consumables. And Dollar General is looking to grow in the consumables area since it's seeing higher demand for consumables than in its other product areas. While consumables have lower margins, this increased demand should help the top line.

A glance behind and a look ahead
In addition to Dollar General opening 375 new stores in the first half of the year, it also remodeled and relocated 377 stores. By updating and moving under-performing stores, margins are likely to improve.

To increase traffic, transaction amount, and sales per square foot, Dollar General has undertaken several initiatives:

Optimize space in mature stores Improve merchandise in-stock levels Offer more coolers for refrigerated and frozen foods Add tobacco products Expand roll-out of beer and wine

As far as traffic and transaction amount, these initiatives would lead to further improvement. In the second quarter, comps jumped 5.1% year-over-year, primarily due to improved increased traffic and increased average transaction amount.

The shiniest dollar
Many investors and analysts like to debate which dollar store offers the best investment opportunity. The truth is that Dollar General, Dollar Tree Stores (NASDAQ: DLTR  ) , and Family Dollar Stores (NYSE: FDO  ) are all likely to be quality long-term investments.

All three companies benefited from the Great Recession, when consumers became more value-conscious. These consumers are likely to remain loyal to the dollar stores, even with the upcoming threat of Wal-Mart's small-store roll-out.

Put simply, people don't like change unless it's necessary. While Wal-Mart's small-box stores have the potential to steal market share away from neighboring dollar stores, it's too early to consider these stores to be a considerable threat.

Getting back to dollar-store comparisons, let's take a look at top-line performance for the three aforementioned companies over the past five years:

Dollar Tree revenue trailing-12 months data by YCharts

And bottom-line performance over the past five years:

Dollar Tree EPS diluted trailing-12 months data by YCharts

Though these three companies tend to perform similarly, Dollar General looks impressive. It's also trading at 15 times forward earnings, versus 17 and 18 times earnings for Dollar Tree and Family Dollar, respectively. However, some other key metrics favor Dollar Tree:

 

Net Margin

ROE

Dividend Yield

Debt-to-Equity Ratio

Dollar General	5.90%	19.73%	N/A	0.55
Dollar Tree	8.35%	38.35%	N/A	0.15
Family Dollar	4.12%	29.81%	1.40%	0.48

Dollar Tree turns the most revenue and investor dollars into profit, and its debt management is superior to Dollar General and Family Dollar. However, this isn't to say that any of these companies have debt concerns. They all generate enough cash to cover debt obligations. And Family Dollar's halfway decent yield is a bonus if you're looking for dividend payments. All of that said, Dollar General is still solid across the board.

Checkout
If you're looking for an investment in a company that's capable of growing in all economic environments, consider Dollar General, or one of its peers. The only concerns for Dollar General are higher demand for lower-margin products (consumables) and Wal-Mart's roll-out of small-box stores, which are specifically designed to steal market share from the dollar stores.

Most Dollar General customers, however, are likely to remain loyal. For Dollar General, as well as its peers, upside potential outweighs downside risk.

Other high-potential investments
The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of 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.

FRT Develops Residential Property - Analyst Blog

Federal Realty Investment Trust (FRT) completed the development of a residential complex – Chelsea Place – in its shopping center 'Chelsea Commons' that is situated near downtown Boston. The move was in line with the company's plan of effectively utilizing underutilized land parcels.

Property Details

The four-storied Chelsea Place, comprising 57 units, has 2 and 2-plus bedroom units ranging from about 700 to 1,100 square feet. The complex includes all necessary and luxurious amenities such as a fitness center, in-unit laundry, and 42 covered and uncovered parking lots each.

Moreover, the property has earned an LEED Silver certification and will contain solar panels on the roof. It is developed by Oaktree Development, Keiser Homes and Tocci Building companies. The residential complex was constructed on a plot within the Chelsea Commons.

Advantageously positioned at the intersection of Route 1 and Revere Beach Parkway, in Suffolk County, Chelsea Commons was acquired by Federal Realty in 2006 and spans 222,000 square feet. It boasts several renowned retail giants such as The Home Depot, Inc. (HD), CVS Caremark Corporation (CVS), McDonald's Corp. (MCD) and Gamestop. Notably, the area has a population of approximately 250,531 in a 3-mile radius, with an average household income of $65,599.

In Conclusion

We view the above-mentioned development as a strategic fit for Federal Realty. Given the solid demographics of the area, this premium property is expected to offer the company strong upside potential. It would also boost the strong housing market of Chelsea.

Currently, Federal Realty carries a Zacks Rank #3 (Hold).

Why It’s Time to Pay Attention to Europe Again

Top 5 Penny Stocks To Own Right Now

It has been almost a year since European Central Bank (ECB) President Mario Draghi brought temporary respite to Europe's debt crisis by pledging to do "whatever it takes" to save the euro.

Since then, the situation in Europe has improved. Draghi's efforts helped reduce the financial risks associated with a breakdown of the European banking system and a breakup of the euro. In addition, over the past year, European governments have made some progress in bringing their budgets in line and in achieving some modest structural reforms .

But while the region's situation is better than it was a year ago, Europe is not out of the woods. Much of the job of restructuring European economies remains unfinished, fiscal deficit targets have slipped and there has been little progress on broader supranational issues such as banking integration or the pooling of sovereign debt. In short, the ECB's actions were palliative and not a cure.

So what does this mean for global investors? Here are three reasons to pay attention to Europe now: 

1. Concerns over the region's financial situation can still disrupt global markets. This was evident during the March crisis in Cyprus and recent coalition government wobbles in Greece and Portugal have already, at least temporarily, pushed up European bond yields. Worsening political instability in these two countries, or elsewhere in the region, could still hurt the 2013 rally .

2. Europe is unlikely to help foster global growth in the near term. Growth in Europe continues to contract, albeit at a slower pace than a year ago, with unemployment around a record high. While I expect European growth to improve somewhat by year's end, a region representing roughly 20% of the global economy stuck in neutral means global growth will continue to be soft for the foreseeable future.

3. US growth – ! particularly for the export sector – will continue to be negatively impacted by Europe. One big reason why US manufacturing has been slow lately is that Europe is buying fewer US exports. Unfortunately, the European political calendar, including important German elections in September, suggests that few of the region's issues will be tackled this year .

And until Europe either turns the economic corner or addresses its lingering structural problems, I remain cautious on the region's stocks even though they are cheap by most metrics and offer some long-term value. For now, I believe there are better near-term investing opportunities in other developed markets such as the United States and Japan.

Russ Koesterich, CFA, is the iShares Global Chief Investment Strategist and a regular contributor to theiShares Blog.  You can find more of his posts here.

Is Zynga Undervalued at These Prices?

With shares of Zynga (NASDAQ:ZNGA) trading around $3, is ZNGA 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

Zynga is a provider of social gaming services, with 240 million average monthly active users in over 175 countries. The company develops, markets, and operates online social games as live services played over the Internet, and on social networking sites and mobile platforms. Zynga's games are accessible on Facebook (NASDAQ:FB), as well as other social networks and mobile platforms, to players globally — wherever and whenever they want. It operates its games as live services, and they are all free to play. However, it does generate revenue through the in-game sale of virtual goods and advertising.

A few weeks ago, Zynga shares rose after the company confirmed that Microsoft (NASDAQ:MSFT) Xbox chief Don Mattrick would be replacing founder Mark Pincus as Chief Executive Officer of the gaming company. Zynga has been facing some major struggles lately, but investors hope that the person who gave Microsoft the Xbox will be able to create similarly innovative technology to save it from failure. Recently, Zynga beat earnings and revenue estimates, but the company announced that it would not be pursuing real money gambling, news that has not sat well with investors.

T = Technicals on the Stock Chart are Mixed

Zynga stock has been struggling over the last several years. The stock is now breaking lower after a negative earnings report. Analyzing the price trend and its strength can be done using key simple moving averages.

What are the key moving averages? They are the 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Zynga is trading between its 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 Zynga options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Zynga Options	61.51%	0%	0%

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

	Put IV Skew	Call IV Skew
August Options	Steep	Average
September Options	Steep	Average

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

On the next page, let’s take a look at the earnings and revenue growth rates, and what that means for Zynga’s stock.

E = Earnings Are Improving Quarter-Over-Quarter

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

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	75.00%	100.00%	94.40%	-700.00%
Revenue Growth (Y-O-Y)	-30.60%	-17.88%	5 Best Growth Stocks To Invest In 2014 -0.02%	3.20%
Earnings Reaction	-14.71%*	-6.56%	9.12%	12.20%

Zynga has seen improving earnings and decreasing revenue figures over the last four quarters. From these numbers, it seems the markets have not been pleased with Zynga’s recent earnings announcements.

* As of this writing

P = Weak Relative Performance Versus Peers and Sector

How has Zynga stock done relative to its peers, Electronic Arts (NASDAQ:EA), Activision Blizzard (NASDAQ:ATVI), Facebook (NASDAQ:FB), and the overall sector?

	Zynga	Electronic Arts	Activision Blizzard	Facebook	Sector
Year-to-Date Return	23.73%	76.17%	62.43%	29.00%	35.46%

Zynga has been a weak relative performer, year-to-date.

Conclusion

Zynga provides an interactive gaming experience to consumers worldwide. In a recent earnings report, the company announced that it will not be pursuing real money gambling, which has sent the stock much lower. Over the last four quarters, investors in the company have not been too happy, as earnings have been improving, while revenue figures have been decreasing. Relative to its peers and sector, Zynga has been a weak year-to-date performer. WAIT AND SEE what Zynga does this coming quarter.

The Best Way to Compound Your 2013 Gains

With the exceptional, unpredictable year that was 2013, we have a one-time opportunity to "mine" its insights... and make even more money in 2014.

The trick, as you'll see, is to block out the noise, stay invested, and focus on three key numbers...

No. 1
The S&P 500's Double-Digit Earnings Growth

2013 was one for the record books. The S&P 500 Index had its best year since the bull market of 1997, vaulting nearly 30%, while the Dow put in its best showing since 1995, spiking 26.5%. Both major indices finished the year at record highs, but the real winning market segment was the Nasdaq Composite. The tech-heavy index still is well below its "irrationally exuberant" all-time high, but its gains far outshined the other major indices in 2013, with a tremendous bull move of more than 38% during the year.

The stellar year in equities took place during a year fraught with all sorts of exogenous threats, concerns, and issues that stimulated the fear mechanism inside the lizard brains of many on Wall Street.

This year's biggest boogeyman was fear over the Federal Reserve and its decision to "taper" its massive and unprecedented $85 billion per month bond-buying program.

Though the Fed's next move was the biggest point of concern among market watchers, there were other threats that kept many otherwise intelligent investors from participating in the broad market gains.

Earlier in the year there was the debt ceiling debate, and then renewed debt default fears in European hot spots such as Cyprus, and then the China growth-rate slowdown. Then late in the year there was the government shutdown.

Each of these circumstances caused a lot of noise that bears seized upon.

What flew quietly under the radar was that the Dow Jones Industrial Average's aggregate earnings rose more than 16% from $901 to $1,045 in 2013.

This metric was really the only thing that truly mattered last year, and it was the fundamental force that moved the Dow Jones, the S&P 500, and the Nasdaq.

Although we won't get readings on Q4 earnings for a few more weeks, we did see very strong earnings for the third quarter.

Moreover, macroeconomic data - such as the upward revision to a relatively robust 4.1% Q3 growth in GDP - bodes well for both earnings and stock market performance in 2014.

So ignore the noise, focus on earnings, and stay invested until the earnings picture changes.

No. 2
The 10-Year Treasury Yield

For more than three decades - and with just a few exceptions - we witnessed a steady decline in the cost of borrowing. Short-term interest rates dropped from 15% in 1981 to their current level of near zero early last year.

Debt securities, such as Treasury bonds, which move in the inverse direction of interest rates, enjoyed a generation-long bull market, but in 2013 that party finally started to come to an end.

The Fed's mid-year taper hint, and the aggressive action traders took to move away from long-maturity Treasury debt, caused the value of many bonds to sink in 2013. For example, the iShares Barclays 20+ Yr Treasury Bond (ETF) (NYSEArca: TLT), an exchange-traded fund that tracks U.S. Treasury bonds with remaining maturities greater than 20 years, tumbled nearly 14% in 2013, a record outperformance of stocks over bonds.

Yet, because the bull market in bonds was so long, many investors had virtually forgotten that rates can rise and bond values can go down. As the economy improves, and as the Fed removes itself from the bond-buying equation via tapering, interest rates are likely to continue to move higher in 2014.

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In short, when considering fixed incomes, remember rising rates are back in the mix and will impact your returns this upcoming year.

No. 3
The Price of Gold

Picking a bottom in a sector is something that traders and investors try to do for understandable reasons. It follows the old adage, buy low, sell high; If you can get in on a market sector while it's at the bottom, there's virtually no other way to go but up.

In 2013, many investors tried to pick the bottom in gold, and the result was they found themselves riding the yellow metal down, down, down. In fact, in 2013 gold prices plunged 28%, the biggest drop in 32 years and its first down year in 12 years.

Gold deserves a permanent place in most balanced portfolios, of course, but when it comes to a year when gold could move lower still, it's best to focus on total return.

Wells Fargo's Earnings Propelled by Lower Provisions for Credit Losses

The headline figure is impressive: On a year-over-year basis, Wells Fargo's (NYSE: WFC  ) net income increased by a 19%. However, a closer examination under the hood reveals a more nuanced picture.

The biggest question this quarter revolved around the impact of the recent surge in interest rates following comments by the Federal Reserve at the end of May. Since then, the rate on the 10-year Treasury shot up from below 2% to nearly 2.6% at the end of the second quarter. And mortgage rates skyrocketed; the 30-year fixed-rate mortgage went from below 3.5% to over 4.5% today. Just to be clear, these are massive moves, and particularly over such a short time period.

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In terms of banks, and Wells Fargo in particular, the concern was twofold. First, that it would cause a large unrealized loss to the securities in its massive portfolio, as interest rates and the value of fixed-income securities move inversely. And second, that it would put a damper on Wells Fargo's bread and butter: its mortgage origination and servicing operations.

We now know that both of these concerns were well founded. For the three months ended June 30, Wells Fargo reported a net unrealized loss on its available-for-sale securities portfolio of $6.1 billion. The silver lining is that, thanks to the magnitude of the bank's net income, it didn't considerably decrease book value. For the quarter, Wells Fargo noted that its book value per share, which is the primary metric by which banks are valued, decreased sequentially by only $0.01, going from $28.27 in the first quarter to $28.26 last quarter.

And a similar trend can be seen in mortgage banking. On a year-over-year basis, noninterest income stemming from the origination and servicing of mortgages declined by 3%. Much of this was the result of the anticipated slowdown in mortgage demand, as Wells Fargo underwrote only $112 billion in mortgages last quarter compared to the $131 billion that it originated in the second quarter of 2012. Now, to be fair, this is still a staggeringly high number, accounting for more than a quarter of all mortgages originated nationwide -- click here to see a list of the nation's largest mortgage originators.

At this point, in turn, you may be wondering how Wells Fargo was able to grow its net income at all, much less by nearly 20%. To answer this question, we have to look at the top of the bank's income statement, where revenue from interest income is located.

While it's true, as the bank points out in its earnings release (link opens PDF), that net interest income increased in the quarter by 9%, all of the increase came from a drop in loan-loss provisions as opposed to an improved yield from its earning assets. And, in fact, its net interest margin, which is the difference between its yield on earning assets and its cost of funds, actually declined on a year-over-year basis, albeit by a relatively small margin (and not to get too deep into it here, it declined for a good reason: deposit growth).

So, what's the takeaway? Wells Fargo CEO John Stumpf began the earnings release by saying that "Wells Fargo achieved outstanding results for the second quarter." I would agree, with a caveat. There's simply no disputing the bank's success. It dominates the mortgage market. The quality of its assets continues to improve. And it's making more money than ever. But it's still mortal and subject to the same market forces as every other bank. We should see more of this in the upcoming quarters as the higher long-term interest rates settle in and take a firmer hold.

The one stock Warren Buffet wishes he could buy
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