XY Stocks Market For 2013, Best Stocks For 2014: May 2014

Saturday, May 31, 2014

Here's Why Apple Isn't Cheap as You Think

Whenever there's a discussion about Apple (AAPL), it usually doesn't take very long for an expert to assess that the stock is "insanely" cheap.

There is little doubt that Apple's products are top quality and that the company is staffed with a talented and dedicated workforce, but I also think shareholders and potential buyers of the stock need to consider a couple of major reasons why the company's current valuation might not be that off the mark.

Apple's Product Refresh Cycle

The company seems addicted to an aggressive profit maximizing product refresh cycle. It seems Apple has pretty much instituted a new product upgrade launch on an annual basis.

For the iPhone it went something like an initial launch on June 2007 with upgrades July 2008, June 2009, June 2010, October 2011, and September 2012. For the iPad it was an initial launch April 2010 with upgrades in March 2011, March 2012, and November 2012.

While this pace of product refresh does extraordinary things for revenue growth and profitability, one has to question the long-term viability of such an aggressive revenue model. It is rare that a company, outside the fashion industry, can sustain growth via annual product upgrades for a significant period of time. The sustainability of such an upgrade cycle would seem to be even more difficult when incremental changes to the product become less and less vital.

Apple faces meaningful risk for a revenue growth slowdown or even revenue stagnation if an increasing number of those who have typically upgraded annually opt to stretch out their next purchase for an extra one or two cycles.

Apple's Reliance On iPhone Subsidies

Apple generates a significant share of revenue and profit from the iPhone. This is due to the extremely high revenue per unit generated and high level of unit demand. Both these factors could be attributed mainly to the current product subsidy by the carriers.

An iPhone would typically retail around $600 to $800 without carrier subsidy. Given current competitive product and pricing, it is a dubious contention that Apple's market share would be where it is if customers had to pay the unsubsidized price.

Because these subsidies are so onerous to the carrier's profitability, recent trends indicate that they are increasingly looking for ways to reduce or even eliminate them.

T-Mobile has recently announced that they will offer the iPhone but without subsidy and are looking at offering service via refurbished iPhones. AT&T and Verizon have increased their own marketing on lower subsidized Android and Windows based offerings. In China, Apple's target growth market, number-one carrier China Mobile has balked at the company's subsidy demand and China Unicom, Apple's first entry into China, has contemplated a subsidy change.

Up to now, the carriers have been at a significant disadvantage when dealing with Apple. They have taken poor deals due to the demand for Apple product and lack of serious competitive alternatives. This balance of power may be changing. I would expect that the carriers are watching and maybe waiting for any sign of Apple growth weakness to change the subsidy dynamics.

Any meaningful reduction of iPhone subsidies is a very significant risk. A reduction would seem to force Apple to consider either a sharp contraction in margin by reducing the revenue received per unit or risk sales volume by maintaining a much higher than competitive price for its product.

These business model risks seem to pose serious questions as to the sustainability of Apple's revenue growth and product margin over the long term. Given the maturation of the iPhone and the non-subsidy nature of the iPad, I believe that things won't be as beneficial for Apple over the next couple of years as they have been for the last couple.

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Review: Ducati Multistrada excels even in the rain

The Multistrada 1200 S Granturismo is Ducati's top of the line motorcycle for adventure touring.

Equipped with huge side cases (73-liter capacity each) and a 48-liter top case with passenger backrest, this 1198 cc, 150 hp beast is made to haul butt while hauling close to a week's worth of luggage.

I recently had the opportunity to test the Multistrada with a week-long ride topping 3,000 miles. I rode from just outside Baltimore to Key West, Fla., then back again with a few detours, including Fort Myers Beach, Fla., Savannah, Ga. and New Bern, N.C.

The bike is heavy at 540 pounds wet (luggage and tools easily puts it near 600 pounds.) and tall (regular seat height is 33.5 inches). Being a short rider, that made it fairly cumbersome for me to maneuver in a parking lot. At only 5-feet, 2-inches, I opted for the lowered seat, but even with that, I was on tip toes at a stop, which meant I had very little leverage to get the bike off its kickstand. I often had to stand next to the bike, push it off the stand, then try to hop on while keeping everything upright.

Once the bike got moving, it was as if there was almost nothing underneath me. Despite having a higher center of gravity because of the L-shape engine, which is only really noticeable when moving the bike around by foot, it is very well balanced and effortless to maneuver once on the road. There was plenty of clearance between the handlebars and the gas tank, so there was no obstruction when turning lock-to-lock, meaning U-turns and other tight maneuvers were a cinch.

The windscreen is easily adjustable by pinching two levers and sliding it up or down, and can be done while riding.

On my ride to Florida, I hit a rain band that stretched along Interstate 95. I rode five hours straight in the rain. The standard tires performed well and the bike felt nicely planted on the pavement at all times. Even during braking, the ABS rarely kicked in. The windscreen, fairings and hand guards also did a fine job protecting me from t! he elements, but in a steady rain like that, there really is no way to keep rain off. I did manage to stay dry thanks to my Alpinestars Stella New Land Gore-Tex jacket and pants. They were soaked on the outside, but not a drop penetrated through.

Ducati's top of the line adventure touring bike has 150 hp and 91.8 pound-foot of torque.(Photo: Ducati)

The LED headlights and auxiliary lights were super-bright. On the highway, the wide light spread easily lit up three lanes and the shoulder. Riding through Big Cypress National Preserve on U.S. 41 in the pitch black, I could see far enough into the surrounding swamp that I was not afraid of being surprised by wildlife. The downside of the brightness was that it seemed to have blinded a few on-coming cars as I was flashed numerous times. This could be fixed by adjusting the lamps to point down more, but I could only adjust them a bit with the tools carried while riding. Any more adjustment would require tools I didn't carry.

Ducati's electronic Ride-by-Wire system allows riders to switch between four riding modes while riding (as in, motor on, cruising down the road): Sport, touring, urban and enduro. Those modes can be further customized by the rider, but only when the bike is stopped. Suspension, throttle response and power output are among adjustable features. I kept it simple and stayed on touring mode, which offers a softer ride, gentler power delivery and more fuel efficiency.

The Skyhook suspension was a very pleasant surprise, performing much better than anticipated. It adjusts automatically to riding and road conditions, absorbing bumps and dips for a much smoother ride. For example, if you go over a speed bump, coming off the bump the suspension drastically reduc! es the bo! unce-back sensation. It worked just as well when I was riding as a passenger, automatically adjusting for the additional weight.

The backrest on the top case was a nice touch when I rode as passenger. The seating position was very upright, as well, which made it very comfortable and easy to hang on to the rider. There are even places to grip by hand. Any passenger who has ridden in aggressive, forward-leaning positions knows how uncomfortable it can get after a time, especially when you have to brace yourself on the gas tank when stopping so you don't slam into the rider.

The Multistrada had a few drawbacks. Most annoying was that the gas light comes on after about 130 to 150 miles. For a touring motorcycle, good range is key, and I would expect to get close to 180 miles before seeing the gas light.

When I got back home, I wanted to really push the fuel limits to see how far I can actually get. I kept a small can of fuel with me in the top case and rode the bike around until it quit. The Multistrada actually gets another 50 miles after the light comes on before running out of gas, putting the range closer to 200 miles. I also learned that the fuel light would start blinking when range was about 20 miles.

I had a few quibbles with the controls, which are not very intuitive. On the left handlebar, there is a top switch and a bottom switch. Each one controls separate menus, instead of being used to scroll up or down the same menu, which seems to make more sense.

Also, to turn the heated grips on, you have to hit the start button, which is also the kill switch. I always felt a bit of hesitation when hitting that button while riding, nervous it would shut off the engine. (That never happened.)

The Multistrada will do fine on dirt trails and gravel, but for me, it felt too heavy for serious off-roading. The standard tires are really better suited for pavement, anyway.

The bike is great for commuting, too. It's super nimble, especially if you take the panniers off. Th! ose cases! , even empty, are heavy and stick out so far to the side that it causes quite a bit of buffeting at higher speeds. With the cases off, the bike is a quick, slick machine.

As for style, Ducati nailed this one. It's tall, aggressive yet lithe looks garnered a lot of attention from passers by and several thumbs up from drivers.

In short, the Multi is a serious, comfortable touring motorcycle with plenty of power at the ready. You can easily navigate urban rides, long stretches of highway and even jump some curbs if you have to. Shorter riders may find the Multistrada a bit much to handle, though. I personally feel more comfortable on a shorter, lighter machine. Of course, doing so you may have compromise ground clearance, power and storage capacity, so it really depends on what you are looking to do.

The Multistrada 1200 S Granturismo starts at $22,295 and comes in red or grey. An optional GPS is available for $729. Sure, it's not cheap, but who ever thought keeping an athletic supermodel would be?

The Multistrada has plenty of luggage space.

The Ducati Multistrada has plenty of storage space in the side cases and the top case.(Photo: USA TODAY)

The Multistrada features four ride modes.

Ducati's Multistrada 1200 S Granturismo features four ride modes and Skyhook suspension.(Photo: Ducati)

The S Granturismo has two 73-liter side cases and a top case.(Photo: Ducati)

Sell These 5 Toxic Stocks Before It's Too Late

BALTIMORE (Stockpickr) -- Stocks have been steamrolling their way to new highs this week, finally breaking out of the sideways slump that's plagued markets since March. But while most investors pull out the champagne, not everything is headed for higher ground.

>>5 Stocks Under $10 Set to Soar

In fact, some big-name stocks look downright toxic as we head into June.

To make the most of the restarted rally in stocks, it's critical to unload the names that aren't working right now. So today, we'll take a closer technical look at five stocks that are starting to look toxic -- and exactly what conditions need to get hit for the sell signal to trigger.

Just to be clear, the companies I'm talking about today aren't exactly junk. By that, I mean they're not next up in line at bankruptcy court. But that's frankly irrelevant; from a technical analysis standpoint, sellers are shoving around these toxic stocks right now. For that reason, fundamental investors need to decide how long they're willing to take the pain if they want to hold onto these firms in the weeks and months ahead. And for investors looking to buy one of these positions, it makes sense to wait for more favorable technical conditions (and a lower share price) before piling in.

>>Warren Buffett Is Sick of These 4 Stocks

For the unfamiliar, technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.

So, without further ado, let's take a look at five "toxic" stocks you should be unloading.

Guess?

First up is apparel stock Guess? (GES), a name that's been no stranger to downside in the past year. In the last six months alone, GES has dropped more than 21%. The bad news for long-suffering shareholders is that the selling isn't likely over in Guess; this stock still looks toxic right now. Here's what to look for.

>>2 Oversold Stocks Ready to Bounce Higher

Guess is currently forming a descending triangle pattern, a bearish price setup that's formed by a horizontal support level below shares and downtrending resistance to the upside. Basically, as GES bounces in between those two levels, it's getting squeezed closer and closer to a breakdown below support at $26.50. When that happens, we've got a sell signal for this stock.

Relative strength adds some extra evidence for downside in GES. The relative strength line has been trending lower since last November, an indication that this stock isn't just dropping, it's also dramatically underperforming the rest of the broad market in the process. Since relative strength is statistically a very good predictor of price action on a rolling three-to-ten month time horizon, it's a red flag worth watching closely in June.

GES doesn't become a high-probability sell until $26.50 gets taken out.

Becton Dickinson

Medical device maker Becton Dickinson (BDX) hasn't been the kind of underperformer that Guess has been. In fact, BDX is actually up 16% in the last 12 months, keeping pace with an S&P 500 index that's been in rally mode. But now, Becton is showing signs of a conditional top.

>>4 Big Stocks on Traders' Radars

Becton is currently forming a double top, a bearish reversal pattern that looks just like it sounds. The double top is formed by a pair of swing highs that max out at approximately the same price level. The sell signal comes when the trough that separates the two highs gets violated. For BDX, that breakdown level is right at $112. If $112 gets taken out, it's time to be a seller.

What makes $112 matter? Whenever you're looking at any technical price pattern, it's critical to keep buyers and sellers in mind. Patterns like double tops are a good way to quickly describe what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.

That horizontal $112 level in Becton is the spot where there's previously been an excess of demand for shares; in other words, it's a price where buyers have been more eager to step in and buy shares at a lower price than sellers were to sell. That's what makes a breakdown below support so significant -- the move means that sellers are finally strong enough to absorb all of the excess demand at the at price level.

Teck Resources

Luckily, you don't need to be an expert technical trader to figure out what's going on in $13 billion resource stock Teck Resources (TCK). A quick glance at the chart should tell you everything you need to know. In short, Teck looks toxic right now.

>>5 Stocks Insiders Love Right Now

TCK is currently bouncing its way lower in a textbook downtrending channel. The setup is formed by a pair of parallel trend lines: a resistance line above shares, and a support line below them. Those two lines on the chart provide traders with the high-probability range for TCK's shares to stay within. When it comes to trend channels, up is good and down is bad; it's really as simple as that.

And as shares bounce off of trend line resistance for a seventh time in this short span, it makes sense to sell the bounce. For value investors, the setup in Teck is tough to watch. After all, as this stock works its way down the channel, it's becoming cheaper from a fundamental standpoint. But it's important not to try to buy shares "on the cheap" until trend line resistance gets taken out -- this stock could get a lot cheaper still.

United Continental Holdings

Airline stocks have been going strong for the last year and change, outperforming the rest of the broad market handily. But United Continental Holdings (UAL) has been the laggard of the group, failing to turn out the same performance that its peers have. And now, while the rest of the airline industry is still on fire in 2014, UAL is suffering from smoke in the cockpit.

Like Teck, UAL is currently forming a downtrending channel. The last time I highlighted the technicals in UAL, shares were looking bullish in the short-term -- but with the bullish breakout running its course this week, it makes sense to take gains here and sell the bounce off of trend line resistance.

Waiting for that move down before clicking "sell" is a critical part of risk management, for two big reasons: it's the spot where prices are the highest within the channel, and alternatively it's the spot where you'll get the first indication that the downtrend is ending.

Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, you're confirming that sellers are still in control before you unload shares of UAL.

American Express

Last up is American Express (AXP), the $97 billion financial firm. After rallying more than 21% in the last year, AmEx is starting to show signs of a top in shares. Here's how you should trade the sentiment shift:

American Express is currently forming a head and shoulders top, a setup that indicates exhaustion among buyers. The setup is formed by two swing highs that top out at approximately the same level (the shoulders), separated by a higher high (the head). The sell signal comes on a move through AXP's neckline, which is currently right at $84. If shares violate that price level, it makes sense to sell (or short) this financial giant.

Momentum, measured by 14-day RSI, provides some foreshadowing for the downside in AXP. While AmEx's price has been slowly moving higher, momentum has been making lower highs and bleeding off. That's a big red flag. Short sellers should keep a protective stop just above the 50-day moving average.

To see this week's trades in action, check out the Toxic Stocks portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

Friday, May 30, 2014

These Momentum Stocks Were Laggards Not All That Long Ago

Wall Street is a very fickle mistress. Analysts that work on Wall Street often cannot see the forest for the trees. They are more concerned about defending their reputation than actually doing the heavy lifting that can really help an investor find top stocks to buy before they make their move.

UBS regularly puts out a research report on overwriting options on specific stocks. The most recent edition did not hold any great surprises, as the analysts are reluctant to be too aggressive with the volatility index (VIX) running low, but were inline with the average for the year. However they did point out some names that specifically they suggested not to overwrite. They also made some interesting comments on laggards that had turned into momentum stocks.

Momentum stocks are typically the ones people buy strictly on the notion that, even if they buy high, shares will go higher. This works great in a bull market like we are in, not so great if the market turns down. Here is an interesting list of names from UBS that were lagging the field and turned hot.

Best Buy Co. (NYSE: BBY) was an old time big-box retailer thought to be left for dead. The founder was trying to make waves, and electronics stores as a whole, like Circuit City, were in the Wall Street graveyard. Best Buy revamped its inventory and sales focus, opened up the online sales effort and has totally blown away the short sellers. The Thomson/First Call estimate for the stock is $39, and investors are paid a 1.8% dividend.

Cree Inc. (NASDAQ: CREE) was buried as light emitting diode (LED) sales had stumbled due to overcapacity. The company also overproduced some radio frequency (RF) semiconductor parts and had to slow production at one point to almost a standstill. A resilient housing and automobile market turned the market around and the stock went on a tear. The consensus price target is posted at a stunning $70.

Facebook Inc. (NASDAQ: FB) is the epitome of the Wall Street research Titanic voyage. Beloved as the hottest stock ever before a botched IPO, analysts could not stand the stock as it sunk to its high teen lows. Now, at 52-week highs, everybody is a buyer. UBS concedes that despite the hot run, Facebook probably is still under-owned by institutions. The consensus target for the social media giant is $45.

Groupon Inc. (NASDAQ: GRPN) was totally left for dead, despite the fact that it dominated and innovated the entire online coupon industry. Many a struggling business resurrected their models by using Groupon to get consumers in the door. The stock has been off the charts hot. Up 10% in September and 120% over the past year, can it continue the hot streak? The consensus price target for the stock is at $11.50, close to yesterday’s close.

Fusion-io Inc. (NYSE: FIO) was busy going nowhere until Virident was bought by disc drive giant Western Digital Corp. (NASDAQ: WDC). Then all eyes on Wall Street started to focus on which company may be the next acquisition target. Many think the odds are good that Fusion-io is that candidate. The consensus price target is posted at $15. The high target on Wall Street is a staggering $29.

Mosaic Co. (NYSE: MOS) got absolutely crushed as the potash market went into a tailspin this year. The stock was down almost 50% and totally left for dead as the short sellers circled. The potash market has stabilized and the stock has rebounded solidly. The consensus target for this top name is $85, and investors are paid a 2.2% dividend. A move to the target from today’s trading level would be an almost 100% gain for investors.

Nuance Communications Inc. (NASDAQ: NUAN) is the company that brought you the Siri application that you can talk to on your iPhone. The stock also got crushed after an earnings miss this year. Mega-investor Carl Icahn has accumulated a 16.9% share of the company and may be looking for more. The consensus target for the stock sits at $22.

As September began, there were plenty of reasons to be careful about stocks, heading into what is typically the most challenging month of the year. Today will bring some resolution to the beginning of the Federal Reserve’s tapering program. All of the laggards turned momentum stocks are the least affected by the macro events, as many of them may have a binary event to drive them higher. That could prove big for investors.

Intercept Pharmaceuticals: Another Double?

Can a stock that has already more than tripled this year double from here? If it’s Intercept Pharmaceutcials (ICPT), then the answer could be yes, says Wedbush analyst Liana Moussatos.

Last night, Intercept reported that the FDA had granted fast-track status to its obeticholic acid, or OCA, for treating primary biliary cirrhosis, or PBC, in which the bile ducts in the liver are destroyed. Moussatos discusses the implications for Intercept Pharmaceuticals:

The FDA designates Fast-Track status to a therapy that treats a condition that has no current therapy or to a therapy that shows some advantage over available therapy, such as superior effectiveness or the ability to address an emerging or anticipated public health need. The company and we believe the designation signals that the FDA recognizes that OCA has the potential to address a significant unmet need. Currently, the only approved treatment for PBC is ursodiol, and about half of PBC patients who are unable to tolerate or have an inadequate response have no other treatment options except for liver transplant. With Fast-Track designation, Intercept is eligible for more frequent meetings and written communications with the FDA. Additionally, there is the potential for a faster review process (6 months vs. 10 months) for OCA.

Moussatos expects a third-quarter trial update to be the next catalyst for Intercept Pharma’s stock, which she says has an acquisition value of $493.

Shares of Intercept Pharmaceuticals have gained 2.9% to $240.73 at 10:17 a.m. today.

Thursday, May 29, 2014

Documents show another delayed GM recall

DETROIT — General Motors recalled a small number of Pontiac G6 midsize cars to fix a faulty brake light system in 2009, yet waited more than five years to call back over 2 million other cars with the same system, according to company documents filed with federal safety regulators.

The documents, filed Thursday, show that GM recalled about 8,000 Pontiacs from the 2005 and 2006 model years because the brake lights might not work when the driver stepped on the brake pedal. But the company didn't recall later-model G6s or the Chevrolet Malibu and Saturn Aura until three weeks ago. The cars are nearly identical.

GM says the problem has caused 13 accidents and 2 injuries. GM thought the addition of a lubricant would fix the problem in newer cars, but it proved insufficient. Dealers were made aware of the problem, but car owners weren't told directly. As a result, a potential safety problem went uncorrected for years.

The company waited to recall the other cars until this year because the problem didn't happen as frequently as it did in the 2005 and 2006 G6 models, spokesman Alan Adler said. "We were monitoring these vehicles and looking to see what was happening with them all along," he said. "We made a decision that we thought was appropriate."

In addition, the National Highway Traffic Safety Administration didn't pressure GM to recall the newer cars. It even closed an investigation into the matter in 2009 after GM announced the initial G6 recall.

The company says it has changed its criteria for recalling cars. It now issues recalls based on the severity of a safety problem rather than the number of warranty claims or complaints, Adler said.

It's another example of how GM previously resisted recalling cars and trucks to fix safety problems.

The company is facing investigations from Congress and the Justice Department over why it waited at least a decade to recall about 2.6 million older small cars to fix an ignition switch problem. The company says that prob! lem is linked to crashes that killed 13 people, but trial lawyers say the death toll is at least 60.

The problem can affect some of a car's other functions. If the cruise control is on, drivers may have to push harder on the brake pedal to get it to disengage, and the cars could be shifted out of "park" without the driver having a foot on the brake. Also, the cars' traction control, electronic stability control and panic braking assist features, all designed to prevent crashes or lessen their severity, could become disabled.

In total, the brake light recall covers 2.4 million G6, Malibu, Malibu Maxx and Aura models spanning model years 2004 through 2012, according to the documents.

GM has been checking into past safety issues and recalling cars with potential problems. The review has led to the recall of 13.8 million cars and trucks so far this year. That beats the full-year record of 10.75 million in 2004.

European Stocks Mixed Ahead of U.S. GDP

LONDON (The Deal) -- European stock indices were mixed on Thursday ahead of news from the U.S. that is expected to show the economy contracted in the first quarter.

Some European stock markets were closed for Ascension Day, and much of the continent, including France and Germany, has a public holiday.

Revised U.S. GDP data and the weekly jobless numbers are due out at 8.30 a.m. EDT. Analysts expect the economy to have contracted by as much as 0.6% quarter-on-quarter in the first quarter, partly because of the harsh winter, compared with the government's initial estimate for growth of 0.1%.

In London the FTSE 100 was up 0.22% at 6,866.09. In Frankfurt the DAX slipped 0.10% to 9,929.43 and in Paris the CAC 40 fell 0.21% to 4,521.90. In London, medical devices maker Smith & Nephew made further gains after closing up 4.3% on Wednesday following a Financial Times report of bid interest from Stryker (SYK). The Kalamazoo, Mich., company issued a statement on Wednesday declaring it didn't intend to make a bid but the FT on Thursday cited Stryker's CEO confirming he had been evaluating making an offer. The announcement on Wednesday ties Stryker's hands for six months under most circumstances, under the U.K. Takeover Code, but Stryker was careful to reserve the right to use the limited leeway it has during that period to "announce or participate in an offer." Hedge fund manager Man Group was up more than 4% after confirming it is in talks about buying Boston-based Numeric Holdings. But home-improvement retailer Kingfisher plunged after first-quarter operating profit fell short of expectations. Sales figures, which included a 6.1% rise in same-store sales, were strong. Saga, the provider of travel, financial and other services for the over-50s, edged higher after full dealing in the stock began following last week's IPO, which was priced at a bottom-of-the-range 185 pence per share. The stock was trading at 187.11 pence by mid-morning. Australian e-tailer MySale Group, which is 25% owned by the Shelton Capital Ltd. vehicle of the family of Top Shop owner Philip Green, became the latest of a long line of companies to announce plans for an IPO in London. In Paris cable company Numericable Group, which is buying Vivendi's wireless services provider, rose after Citigroup Inc. lifted its recommendation to buy from neutral. In Japan the Nikkei 225 closed up 0.07% at 14,681.72. SoftBank edged higher after its CEO and founder talked up the prospects for 34%-owned Chinese e-commerce company Alibaba Group, which is planning a New York IPO that is expected to value the business at well over $100 billion. Government data showed Japan's retail sales dropped 13.7% month-on-month in April after the first increase in the country's sales tax in 14 years. In Hong Kong the Hang Seng closed down 0.30% at 23,010.14.

Wednesday, May 28, 2014

Top 10 Restaurant Stocks To Buy For 2015

Once again its possible to witness the huge skill-set owned by managers hired by 3G, the private equity firm backed by the Brazilian trio who controls AB-InBev (BUD): Lemann, Sicupira and Telles. This time, the trio is outperforming the market with their investment in Burger King Worldwide (BKW), which has returned 40% to its owners since its IPO in June 2012. This more than triples McDonald's (MCD) performance during the same period.

Third Quarter Results

After an aggressive reorganization process that re-franchised most of its restaurant locations, Burger King has finished this quarter with just 74 company-owned restaurants, down by 521 restaurants year-over-year. Thanks to its cost-cutting strategies and its successful re-franchising strategy (which lowers Capex in an extraordinary way) the company was able to post stunning results: If you exclude amortization and other special items, Earnings Per Share (EPS) were up by more than 35%, while operating cash-flow grew by 17%.

Top 10 Restaurant Stocks To Buy For 2015: Richoux Group PLC (RIC)

Richoux Group plc is a United Kingdom-based company engaged in the operation of restaurants. The Company has three segments: Richoux, Villagio Zippers and Dean�� Diner. Richoux restaurants operate in the areas of central London. The restaurants are open all day for breakfast, lunch, afternoon tea and dinner. The restaurants also offers patisserie. Zippers is a spacious, stylish and contemporary restaurant with a relaxed ambience. Dean's Diner offers a range of freshly prepared dishes. Villagio is a modern local Italian restaurant with a menu suitable for the whole family. The Company�� subsidiaries include Newultra Limited and Richoux Limited. Advisors' Opinion:

[By Sally Jones]

Richmont Mines Inc. (RIC)
Down 70% over 12 months, Richmont Mines Inc. has a market cap of $56.23 billion, and trades with a P/B of 0.60.
[By Roberto Pedone]
Richmont Mines (RIC) engages in the mining, exploration and development of mining properties, principally gold in Canada. This stock closed up 2.4% to $1.68 in Tuesday's trading session.

Tuesday's Range: $1.61-$1.68

52-Week Range: $1.31-$5.50

Tuesday's Volume: 76,000

Three-Month Average Volume: 101,786

From a technical perspective, RIC bounced higher here right off its 50-day moving average of $1.59 with decent upside volume. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $1.31 to its recent high of $1.71. During that move, shares of RIC have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of RIC within range of triggering a near-term breakout trade. That trade will hit if RIC manages to take out some near-term overhead resistance at $1.71 to $1.80 with high volume.

Traders should now look for long-biased trades in RIC as long as it's trending above its 50-day at $1.59 or above more near-term support levels at $1.50 to $1.44 and then once it sustains a move or close above those breakout levels with volume that hits near or above 101,786 shares. If that breakout triggers soon, then RIC will set up to re-test or possibly take out its next major overhead resistance levels at $2.10 to $2.20. Any high-volume move above those levels will then give RIC a chance to tag its 200-day moving average at $2.48.

Top 10 Restaurant Stocks To Buy For 2015: Planet Platinum Ltd (PPN)

Planet Platinum Limited is an Australia-based company engaged in the operation of Showgirls Bar 20 and the on-going rental of property in Elsternwick. The Company operates in two segments: hospitality and entertainment and property rental businesses. The Company�� hospitality and entertainment segment comprises operations of Showgirls Bar 20 in Melbourne and is engaged in the nightclub through the provision of beverages and adult entertainment. Property segment comprise maintaining of rental property at Home Street, Elsternwick. The Company continues to receive lease rentals from its Home Street property. The investment property is located at 12 Home Street, Elsternwick Victoria. Advisors' Opinion:

[By Tabitha Jean Naylor]
Americans consume a lot of chicken. It estimated that Americans consume about 81 pounds of poultry per year, per capita. With there being upwards of 310 million people living in the United States, it is no wonder why poultry production is big business. Two of the biggest names in poultry production are Tyson Foods (NYSE: TSN) and Pilgrim's Pride (NASDAQ: PPN).

5 Best Japanese Stocks To Buy Right Now: Arcos Dorados Holdings Inc (ARCO)

Arcos Dorados Holdings Inc., incorporated on December 9, 2010, is a McDonald�� franchisee. As of December 31, 2010, the Company operated or franchised 1,755 McDonald��-branded restaurants, which represented 6.7% of McDonald�� total franchised restaurants globally. It operates McDonald��-branded restaurants under two different operating formats, Company-operated restaurants and franchised restaurants. As of December 31, 2010, of its 1,755 McDonald��-branded restaurants in the territories, 1,292 (or 74%) were Company-operated restaurants and 463 (or 26%) were franchised restaurants. It generates revenues from two sources: sales by Company-operated restaurants and revenues from franchised restaurants, which consist of rental income, which is based on the greater of a flat fee or a percentage of sales reported by franchised restaurants. As of December 31, 2010, it owned the land for 510 of its restaurants (totaling approximately 1.2 million square meters) and the buildings for all but 12 of its restaurants. It divides its operations into four geographical divisions: Brazil; the Caribbean division, consisting of Aruba, Curacao, French Guiana, Guadeloupe, Martinique, Puerto Rico and the United States Virgin Islands of St. Croix and St. Thomas; North Latin America division (NOLAD), consisting of Costa Rica, Mexico and Panama, and South Latin America division (SLAD), consisting of Argentina, Chile, Colombia, Ecuador, Peru, Uruguay and Venezuela. As of December 31, 2010, 35.1% of its restaurants were located in Brazil, 29.7% in SLAD, 27.1% in NOLAD and 8.1% in the Caribbean division. The Company conducts its business through its indirect, wholly owned subsidiary Arcos Dorados B.V.

Company-Operated and Franchised Restaurants

The Company operates its McDonald��-branded restaurants under two basic structures: Company-operated restaurants operated by the Company and franchised restaurants operated by franchisees. Under both operating alternatives the real estate location may ! either be owned or leased by the Company. It owns, fully manages and operates the Company-operated restaurants and retains any operating profits generated by such restaurants, after paying operating expenses and the franchise and other fees owed to McDonald�� under the Master Franchise Agreements (MFAs). In Company-operated restaurants, it assumes the capital expenditures for the building and equipment of the restaurant and, if it owns the real estate location, for the land as well. Under its franchise arrangements, franchisees provide a portion of the capital required by initially investing in the equipment, signs, seating and decor of their restaurants, and by reinvesting in the business over time. It is required by the MFAs to own the real estate or to secure long-term leases for franchised restaurant sites. It subsequently leases or subleases the property to franchisees.

In exchange for the lease and services, franchisees pay a monthly rent to the Company, based on the greater of a fixed rent or a certain percentage of gross sales. In addition to this monthly rent, it collects the monthly continuing franchise fee, which generally is 5% of the United States dollar equivalent of the restaurant�� gross sales, and pays these fees to McDonald�� pursuant to the MFAs. However, if a franchisee fails to pay its monthly continuing franchise fee, it remains liable for payment in full of these fees to McDonald��. As of December 31, 2010, it was engaged in several joint ventures, which collectively owned 24 restaurants, in Argentina, Chile and Colombia.

Restaurant Categories

The Company classifies its restaurants into one of four categories: freestanding, food court, in-store and mall stores. Freestanding restaurants are the type of restaurant, which have ample indoor seating and include a drive-through area. Food court restaurants are located in malls and consist of a front counter and kitchen and do not have their own seating area. In-store restaurants are part ! of a larg! er building and resemble freestanding restaurants, except for the lack of a drive-through area. Mall stores are located in malls like food court restaurants, but have their own seating areas. As of December 31, 2010, 808 (or 46.2%) of its restaurants were freestanding, 359 (or 20.5%) were food court, 265 (or 15.1%) were in-stores and 319 (or 18.2%) were mall stores. In addition, it has four non-traditional stores, such as food carts.

Reimaging

As of December 31, 2010, the Company had completed the reimaging of 308 of 1,569 restaurants. Many of the reimaging projects include the addition of McCafe locations to the restaurant. It has developed system-wide guidelines for the interior and exterior design of reimaged restaurants.

McCafe Locations and Dessert Centers

McCafe locations are stylish, separate areas within restaurants where customers can purchase a range of customizable beverages, including lattes, cappuccinos, mochas, hot and iced premium coffees and hot chocolate. As of December 31, 2010, there were 267 McCafe locations in the Territories, of which 12% were operated by franchisees. Argentina, with 71 locations, has McCafe locations, followed by Brazil, with 67 locations. In addition to McCafe locations, it has Dessert Centers. Dessert Centers operate from existing restaurants, but depend on them for supplies and operational support. As of December 31, 2010, there were 1,306 Dessert Centers in the Territories.

Product Offerings

The Company�� menus feature three tiers of products: affordable entry-level options, such as its Big Pleasures, Small Prices or Combo del Dia (Daily Extra Value Meal) offerings, core menu options, such as the Big Mac, Happy Meal and Quarter Pounder, and premium options, such as Big Tasty or Angus premium hamburgers and chicken sandwiches and low-calorie or low-sodium products, which are marketed through common platforms rather than as individual items. These platforms can be based on the ty! pe of pro! ducts, such as beef, chicken, salads or desserts, or on the type of customer targeted, such as the children�� menu.

Advisors' Opinion:

[By Brian Pacampara]
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Arcos Dorados Holdings (NYSE: ARCO ) , which operates McDonald's (NYSE: MCD ) franchises in Latin America, has earned a coveted five-star ranking.
[By Rich Duprey]
Latin American McDonald's franchisee�Arcos Dorados (NYSE: ARCO ) announced today its second-quarter dividend of $0.0596�per share on its Class A and Class B stock, slightly lower than the steady rate of $0.0597 per share it's paid since 2011.

Top 10 Restaurant Stocks To Buy For 2015: Country Style Cooking Restaurant Chain Co Ltd (CCSC)

Country Style Cooking Restaurant Chain Co., Ltd. (CSC Cayman), incorporated on August 14, 2007, is a quick service restaurant chain in China. The Company offers delicious, everyday Chinese food. The Company conducts all of its restaurant operations through CSC China and its subsidiaries. As of June 30, 2012, it had 256 restaurants, including 124 restaurants in Chongqing municipality and 85 restaurants in Sichuan province.

Chongqing municipality and Sichuan province cover a region of 110 million people in Southwest China. CSC Cayman directly operates all of its restaurants. Its standard menu features its main dishes prepared in the Sichuan style, as well as a selection of other dishes, appetizers, desserts and beverages. The Company periodically offers new dishes and seasonal menu selections.

The Company competes with McDonald��, KFC and Yoshinoya.

Advisors' Opinion:

[By CRWE]
Country Style Cooking Restaurant Chain Co., Ltd (NYSE:CCSC), a fast-growing quick service restaurant chain in China, plans to release its unaudited second quarter 2012 financial results on Tuesday, August 14, 2012, after the market closes.

Top 10 Restaurant Stocks To Buy For 2015: Ignite Restaurant Group Inc (IRG)

Ignite Restaurant Group, Inc., incorporated on February 4, 2002, operates two restaurant brands, Joe's Crab Shack (Joe's) and Brick House Tavern + Tap (Brick House). The Company�� Joe's Crab Shack and Brick House Tavern + Tap operate in a diverse set of markets across the United States. Joe's Crab Shack is a national chain of casual seafood restaurants serving a variety of seafood items, with an emphasis on crab. Brick House Tavern + Tap is a casual restaurant brand that provides guests a gastro pub experience by offering a blend of menu items. As of December 31, 2012, the Company owned and operated 144 restaurants in 33 states. In September 2013, Ignite Restaurant Group Inc announced the opening of its newest Joe's Crab Shack restaurant, located in Newark, New Jersey.

Joe's Crab Shack

The Company�� Joe's Crab Shack offers an outdoor patio for guests to enjoy eating and drinking and a children's playground. Joe's also has many locations that are located on waterfront property. Interior design elements include a nautical, vacation theme to invoke memories of beach vacations and a genuine crab shack experience. Joe's Crab Shack restaurants have over 200 seats. Many of the Company�� restaurants also include a small gift shop where guests can purchase souvenirs to commemorate their dining experience. Joe's Crab Shack also leverages its crab-forward menu with other crab items, including Made-From-Scratch Crab Cakes, Crab Nachos and Crazy-Good Crab Dip. In addition to its core crab-focused menu, Joe's also offers a range of entrees featuring a variety of seafood, including the Get Stuffed Snapper, Surf 'N Turf Burger and The Big Hook Up, as well as a range of traditional seafood entrees like the Fisherman's Platter. Joe's also offers several out of water options, such as Pan Fried Cheesy Chicken and Whiskey Smoked Ribs. In addition, alcoholic beverages include the Shark Bite, Category 5 Hurricane and Mason Jar cocktails emerging as guests' top choices. Joe's menu inc! ludes more than 29 items made with either Queen, Snow, Dungeness or King Crabs sourced from government regulated and sustainable fisheries. Its menu offers 14 appetizers, including Made-From-Scratch Crab Cakes, Crab Nachos and Crazy-Good Crab Dip, and over 50 entrees, including Steampots, Crab in a Bucket, Skillet Paella, Stuffed Snapper and out of water options like Whiskey Smoked Ribs.

Brick House Tavern + Tap

The Company�� Brick House's interior decor includes custom lighting, dark mahogany woods, open sight lines, high definition television (HD TVs), and an inviting fireplace. In addition to a traditional dining room and bar area, Brick House also offers large communal tables and a section of leather recliners positioned in front of large HD TVs, where guests receive their own TV tray for dining. Outdoor seating is also available on the patio or around an open fire pit at nearly all locations. Both food and beverages are served by personable and engaging service staff. The typical Brick House restaurant is approximately 8,500 square feet and averages approximately 250 seats, which includes both traditional tables and seating options. Brick House offers its guests a selection of contemporary tavern food. Brick House's menu includes 17 appetizers and over 53 entrees. Handcrafted appetizers include Deviled Eggs, Meatloaf Sliders, Brick Pizza, Meat and Cheese Board and Fried Stuffed Olives. Brick House offers an array of burgers, including The Kobe, which is hand formed from American Wagyu beef. Guests can also choose from a selection of homemade entrees, such as Drunken Chops, BBQ Baby Backs, Chicken & Waffles, and its Prime Rib Sandwich. In addition, Brick House's Brick Burgers, include the Gun Show Burger and the Black & Bleu Burger. Brick House's beverage selection includes imported and domestic beers along with hand-pulled cask beer. All Brick House restaurants have a bar that supports a variety of liquor drinks, wine and beer cocktails like the Shandy and Bee Sting, a! s well as! specialty cocktails like the Dark & Stormy, Moscow Mule and The Zombie.

The Company competes with Red Lobster, Bonefish Grill, Landry's Seafood, Bubba Gump Shrimp Company, BJ's Restaurants, Yard House, Cheesecake Factory, Bravo Brio and Buffalo Wild Wings, Applebee's, Chili's, T.G.I. Friday's, Texas Roadhouse and Outback Steakhouse.

Advisors' Opinion:

[By Seth Jayson]
Margins matter. The more Ignite Restaurant Group (Nasdaq: IRG ) keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new strategic plans, or (gasp!) distribute to shareholders. Healthy margins often separate pretenders from the best stocks in the market. That's why we check up on margins at least once a quarter in this series. I'm looking for the absolute numbers, so I can compare them to current and potential competitors, and any trend that may tell me how strong Ignite Restaurant Group's competitive position could be.
[By Victor Selva]
The firm is currently Zacks Rank # 3 - Hold, and it also has a longer-term recommendation of ��nderperfom.��For investors looking for a Zacks Rank # 1 ��Strong Buy, Ignite Restaurant Group Inc. (IRG) and The Wendy's Company (WEN) could be the options.

Top 10 Restaurant Stocks To Buy For 2015: Noodles & Co (NDLS)

Noodles & Company, incorporated on December 19, 2002, is a casual restaurant concept offering lunch and dinner. The Company offers noodle and pasta dishes, staples of many cuisines, with the goal of delivering fresh ingredients and flavors globally under one roof from Pad Thai to Mac & Cheese. The Company�� globally inspired menu includes a variety of cooked-to-order dishes, including noodles and pasta, soups, salads and sandwiches, which are served on china by its friendly team members.

As of May 28, 2013, including the 16 Company owned restaurants and one franchise restaurant opened in 2013. The Company opened 39 new company owned restaurants and six franchise restaurants. In 2012, the Company began using Your World Kitchen to describe the breadth of its offering and its customers' dining experience.

Advisors' Opinion:

[By Chris Hill]
Noodles & Company's (NASDAQ: NDLS ) stock continues to rise. Westport Innovations (NASDAQ: WPRT ) experiences a pullback. Southwest Airlines (NYSE: LUV ) and DISH Network (NASDAQ: DISH ) team up to offer live TV to passengers. And it was a bad day for anyone who thinks Amazon.com (NASDAQ: AMZN ) is overvalued. In this installment of Investor Beat, Jason and Matt discuss four stocks making big moves today.

Top 10 Restaurant Stocks To Buy For 2015: Popeyes Louisiana Kitchen Inc (PLKI)

Popeyes Louisiana Kitchen Inc, formerly AFC Enterprises, Inc. incorporated on July 27, 1992, develops, operates, and franchises quick-service restaurants (QSRs or restaurants) under the trade names Popeyes Chicken & Biscuits and Popeyes Louisiana Kitchen (collectively Popeyes). Within Popeyes, it manages two business segments: franchise operations and ompany-operated restaurants. Within the QSR industry, Popeyes distinguishes itself with a Louisiana style menu, which features spicy chicken, chicken sandwiches, chicken tenders, fried shrimp and other seafood, red beans and rice and other regional items. As of December 25, 2012, the Company operated and franchised 2,104 Popeyes restaurants in 47 states, the District of Columbia, Puerto Rico, Guam, the Cayman Islands and 26 foreign countries. As of December 25, 2012, of its 1,634 domestic franchised restaurants, approximately 70% were concentrated in Texas, California, Louisiana, Florida, Illinois, Maryland, New York, Georgia, Virginia and Mississippi. Of its 425 international franchised restaurants, approximately 60% were located in Korea, Canada, and Turkey. Of its 45 Company-operated restaurants, approximately 80% were concentrated in Louisiana and Tennessee. In November 2012, the Company acquired 27 restaurants in Minnesota and California.

As of December 25, 2012, the Company had 340 franchisees operating restaurants within the Popeyes system. During the fiscal year ended December 25, 2012 (fiscal 2012), the Popeyes system opened 141 restaurants, which included 75 domestic and 65 international restaurants. During fiscal 2011, the Popeyes system permanently closed 75 restaurants, resulting in 66 net restaurant openings, compared to 65 net openings. As of December 25, 2012, it leased 12 restaurants and subleased 44 restaurants to franchisees. In addition, it leased three properties to unrelated third parties. Of the restaurants leased or subleased to franchisees, 29 were located in Texas and 16 were located in Georgia. On November 7, 2012,! the Company entered into a new agreement with the King Features Syndicate Division of Hearst Holdings, Inc., licensor of the Popeye the Sailorman and associated cartoon characters.

Advisors' Opinion:

[By Sue Chang]
Popeyes Louisiana Kitchen Inc. (PLKI) �is expected to report first-quarter earnings of 45 cents a share.
[By Rick Aristotle Munarriz]
Alamy Fried chicken and waffles is a staple menu item at countless soul food and comfort food restaurants, but that's not stopping Burger King (BKW) from trying to give the meal a fast-food spin. Burger King is testing a new sandwich in the Northeast that takes the breaded chicken patty used in its Classic Crispy Chicken Sandwich from its King Deals Value Menu and replaces the bun with a split waffle. Burger King's Chicken & Waffle Sandwich isn't as hearty as the meal that it's based on. It's selling for as little as $2.29. But the chain's latest attempt to turn heads with a unique menu item will at least attract curious nibblers if it does decide to broaden the offering across the country. Waffling About Burger King isn't the first popular chain to attempt to reinvent this classic dish. As Nation's Restaurant News points out, last summer, Popeyes Louisiana Kitchen (PLKI) offered Chicken Waffle Tenders -- consisting of chicken tenders dipped in a vanilla maple-scented waffle batter, served with a honey maple dipping sauce. DineEquity's (DIN) IHOP did it three years ago by combining its chicken strips with Belgian waffle quarters. Yum! Brands (YUM) tried to breathe new life into its breakfast business last summer by testing a Waffle Taco -- an egg, sausage, and waffle breakfast sandwich. Even if it doesn't succeed -- and some of the early taste tests haven't been very flattering to the chain's new sandwich -- it's at least comforting to see that Burger King isn't just copying McDonald's (MCD) the way that it has for the past couple of years. Burger King followed McDonald's in offering fancy coffee drinks, fresh fruit smoothies, and popcorn chicken. It has gone on to roll out doppelgangers of the Egg McMuffin and McRib sandwiches. In November, it introduced the Big King, which any patron will quickly recognize as a body double to the Big Mac. Then again, it's not as if following McDonald's lead is such a clever idea right now. The world's largest re

Top 10 Restaurant Stocks To Buy For 2015: DineEquity Inc (DIN)

DineEquity, Inc., incorporated on May 07, 1976, owns franchise and operate two restaurant concepts: Applebee's Neighborhood Grill & Bar, (Applebee's), in the bar and grill segment of the casual dining category of the restaurant industry, and International House of Pancakes (IHOP), in the family dining category of the restaurant industry. As of December 31, 2012, the franchise operations segment consisted of 2,011 restaurants operated by Applebee's franchisees in the United States, one United States territory and 15 foreign countries and 1,569 restaurants operated by IHOP franchisees and area licensees in the United States, two United States territories and five foreign countries. As of December 31, 2012, the Company restaurant operations segment consisted of 23 Applebee's Company-operated restaurants, 10 IHOP Company-operated restaurants and two IHOP restaurants reacquired from franchisees and operated by IHOP on a temporary basis until refranchised. Financing operations revenue primarily consists of interest income from the financing of franchise fees and equipment leases, as well as sales of equipment associated with refranchised IHOP restaurants and a portion of franchise fees for restaurants taken back from franchisees not allocated to IHOP intellectual property. In October 2012, it completed the refranchising program and completed the transitioning to a 99% franchised restaurant system.

Applebee's

The Company develops, franchises and operates restaurants in the bar and grill segment of the casual dining category of the restaurant industry under the name Applebee's Neighborhood Grill & Bar. As of December 31, 2012, 68 franchise groups operated 2,011 of these restaurants and 23 restaurants were Company-operated. The restaurants were located in 49 states, one United States territory and 15 countries outside of the United States. During the year ended December 31, 2012, 20 domestic franchise restaurants opened, six domestic franchise restaurants closed. 154 Company-operated! restaurants were franchised. The number of restaurants held by an individual franchisee ranges from one to 438 restaurants. As of December 31, 2012, it is focusing on international franchising primarily in Canada, Mexico, Central and South America, and the Mediterranean/Middle East. As of December 31, 2012, there were 149 international Applebee's franchise restaurants. During 2012, 14 international franchise restaurants opened and 13 international franchise restaurants closed.

IHOP

The Company develops franchises and operates restaurants in the family dining category of the restaurant industry under the names IHOP and International House of Pancakes. As of December 31, 2012 there were a total of 1,581 IHOP restaurants of which 1,404 were subject to franchise agreements, 165 were subject to area license agreements, 10 were Company-operated restaurants and two restaurants were reacquired from franchisees and operated by IHOP on a temporary basis. The Company owns and operates 10 IHOP restaurants in the Cincinnati market area primarily to test new remodel programs, operating procedures, products, technology, cooking platforms and service models. IHOP restaurants are located in all 50 states of the United States, the District of Columbia, Puerto Rico and the United States Virgin Islands and internationally in Canada, the Dominican Republic, Guatemala, Mexico and the United Arab Emirates. As of December 31, 2012, the area licensee for the state of Florida and certain counties in Georgia operated or sub-franchised a total of 152 IHOP restaurants, and the area licensees for the province of British Columbia, Canada operated or sub-franchised a total of 13 IHOP restaurants. As of December 31, 2012, the Company had signed commitments and options from franchisees to build 245 IHOP restaurants over the next 17 years, comprised of 5 restaurants under single-restaurant or non-traditional development agreements, 120 restaurants under multi-restaurant development agreements and 63 restaurants! under in! ternational development agreements. As of December 31, 2012, there were 1,525 domestic IHOP franchise and area license restaurants. During 2012, its franchisees and area licensees opened 40 domestic franchise restaurants and 17 domestic franchise and area license restaurants were closed. As of December 31, 2012, there were 44 international IHOP franchise and area license restaurants. During 2012, its franchisees opened eight international franchise restaurants and no restaurants were closed.

The Company competes with Chili's, T.G.I. Friday's, Ruby Tuesday's, Denny's, Cracker Barrel Old Country Store and Bob Evans Restaurants.

Advisors' Opinion:

[By Rick Aristotle Munarriz]
AP/Jae C. Hong For all the talk about drones replacing parcel carriers or self-driving cars disrupting the taxi industry, there's a bigger tech revolution happening in the restaurant industry right now that may displace workers far sooner than anything futurists foresee in those other industries. The arrival of tablets and smartphone apps that detail menu items, take orders, and let you settle up your tab at the en of the meal will be a big theme among casual dining chains and even a few independent foodie haunts this year. Brinker International's (EAT) Chili's, DineEquity's (DIN) Applebee's, and a handful of San Francisco fine dining establishments are leading the push to add the technology, which will make waiters and waitresses less necessary. None of the chains have said that these tech initiatives will lead them to reduce waitstaff headcount -- but it doesn't take a lot of foresight to connect the dots. If folks are using table-side tablets to place orders and ask for drink refills, or firing up a smartphone app to pay at the end of a meal, that naturally translates into fewer front-of-house employees needed to keep an eatery going. Order Up In fact, some industry leaders outright deny that mobile tech will displace staff. "This really isn't a labor play," DineEquity CEO Julia Stewart said on CNBC late last year, explaining Applebee's move to deploy 100,000 tablets this year -- one at every table. "It's not about saving labor. This is really about creating an opportunity to talk to our guest, have an interactive conversation with our guest, and give our guest a lot more opportunities." At first, a waitstaff will be instrumental in assisting customers as they use the tablets to place orders or pay their bills. There will also be patrons who are apprehensive about embracing the technology, and Applebee's will still have waiters taking orders the old-fashioned way for people who prefer talking to a person. Chili's is going with a less-comprehensive table
[By Rick Aristotle Munarriz]
Alamy Companies can make brilliant moves, but there are also times when things don't work out quite as planned. From an automaker committing to add thousands of high-paying jobs in the new year to a home craft icon's payroll going the other way, here's a rundown of the week's most interesting moves in the business world. Sysco (SYY) -- Winner Leave it to a food company to eat the competition. Sysco is the country's largest food service company, providing restaurants, schools, and other institutions with their edibles. It's about to get bigger. Sysco kicked off the week by announcing a deal valued at $3.5 billion in cash and stock for its nearest competitor, US Foods. There isn't likely to be a lot of regulatory hassle over the combination. This is a highly fragmented sector, with Sysco commanding just 18 percent of the overall market. It will be 27 percent after completing the deal. Given the nature of the business, there are advantages of being big, and Sysco is about to get substantially bigger at a reasonable price relative to its own valuation. lululemon athletica (LULU) -- Loser Shares of Lululemon stumbled 12 percent on Thursday after the retailer of high-end yoga apparel offered up a gloomy outlook for the holiday quarter. The Canadian chain spooked investors by forecasting flat comparable-store sales for the period. Its profit guidance also fell short of expectations. For a hot growth stock like Lululemon, proving ordinary after years of heady store-level sales growth isn't enough. Ford (F) -- Winner Things have been going well for automakers, and things are about to get even better for Ford. The popular automaker revealed in a presentation on Thursday that it plans to hire 3,000 salaried workers in 2014 -- and we're not talking about low-paying jobs here. Most of these new jobs will be in engineering and product development. Ford is also opening three plants overseas, but the stateside job creation will be significant. Martha Stewart Living Om
[By Ben Levisohn]
Shares of Ruby Tuesday have gained 4.8% to $7.59 this morning, making it the third-best performer in the S&P 1500 and outpacing other restaurant stocks. Jack in the Box (JACK) has dropped 0.8% to $38.76, DineEquity (DIN), which operates Applebee’s and IHOP, has gained 0.1%% to 66.12, Denny’s (DENN) has fallen 0.2% to $6.06 and recent-IPO Potbelly (PBPB) has gained 1.7% to $30.73.

Top 10 Restaurant Stocks To Buy For 2015: Einstein Noah Restaurant Group Inc (BAGL)

Einstein Noah Restaurant Group, Inc. (ENRGI), incorporated on October 21, 1992, is an owner/operator, franchisor and licensor of bagel specialty restaurants in the United States. ENRGI operates under the Einstein Bros. Bagels (Einstein Bros.), Noah�� New York Bagels (Noah��) and Manhattan Bagel Company (Manhattan Bagel) brands. ENRGI operates in three business segments: the Company-owned restaurants segment, the manufacturing and commissary segment, and the franchise and license segment. The Company-owned restaurants segment includes the restaurants that it owns. The manufacturing and commissary segment produces and distributes bagel dough and other products to its Company-owned restaurants, licensees and franchisees and other third parties. The franchise and license segment earns royalties and other fees from the use of trademarks and operating systems developed for the Einstein Bros., Noah�� and Manhattan Bagel brands.

During the fiscal year ended January 1, 2013 (fiscal 2012), ENRGI acquired eight restaurants and opened an additional 15 Company-owned restaurants. It closed one Company-owned restaurant during fiscal 2012. On January 31, 2012, the Company sold a Company-owned restaurant. As of January 1, 2013, it had 816 restaurants in 39 states and in the District of Columbia. In January 2013, the Company opened an Einstein Bros. franchise in Montana. Its product offerings include fresh-baked bagels and other bakery items baked onsite, ma de-to-order breakfast and lunch sandwiches on a range of bagels, breads or wraps, gourmet soups and salads, assorted pastries, premium coffees and an assortment of snacks. Its manufacturing and independent distribution network delivers ingredients that are delivered fresh to its restaurants.

Company-owned restaurants

Einstein Bros. offers a menu that provides food for breakfast and lunch, including fresh-baked bagels and hot breakfast sandwiches, freshly prepared lunch sandwiches, cream cheese and other spreads, specia! lty coffees and teas, soups, salads and other menu offerings. Noah�� is a neighborhood-based bakery/deli restaurant that serves fresh-baked bagels, hot breakfast sandwiches, made-to-order deli-style sandwiches, cream cheese and other spreads, specialty coffees and teas, soups, salads and other menu offerings. Manhattan Bagel provides a traditional New York style boil and baked bagel. Manhattan Bagel also serves a range of grilled sandwiches, freshly made deli sandwiches, freshly prepared breakfast sandwiches, soups, and a range of other fresh-baked sweets. Similar to Einstein Bros. and Noah��, Manhattan Bagel also features a line of fresh brewed coffees and specialty coffee/espresso beverages. During fiscal 2012, ENRGI generated approximately 90% of its total revenue from restaurant sales at its Company-owned restaurants.

Manufacturing and Commissaries

ENRGI operates a bagel dough manufacturing facility in Whittier, California and has contracts with two suppliers to produce bagel dough and sweets to the specifications. These facilities provide frozen dough, partially-baked frozen bagels and fully baked sweets for its Company-owned restaurants, franchisees and licensees. These operations provide the restaurants with food products, such as sliced meats, cheeses, and/or certain salad ingredients. It has recipes and production processes for the bagel dough, cream cheese and coffee. Frozen, or partially baked and frozen, bagel dough is shipped to all of its Company-owned, franchised and licensed restaurants where the dough is then baked onsite. Its purchases other ingredients used in the restaurants, such as meat, lettuce, tomatoes and condiments, from a select group of third party suppliers.

Franchise and Licensing

ENRGI offers Einstein Bros. franchises to qualified area developers. As of January 1, 2013, the Company was registered to offer Einstein Bros. franchises in 49 states and the District of Columbia. It also has a franchise base in the Manhatt! an Bagel ! brand. Its licensees are located primarily in colleges and universities, hospitals, airports and military bases. As of February 25, 2013, it had 28 development agreements in place for 136 total restaurants, 34 of which have already opened. During fiscal 2012, it opened 13 franchised locations and 27 licensed locations. During fiscal 2012, approximately 3% of its total revenue was generated by the Company�� franchise and license operations.

Advisors' Opinion:

[By John Udovich]
At the end of last week, small cap sandwich stock Potbelly Corp (NASDAQ: PBPB) had a delicious surge of 120% for its IPO��meaning its probably a good idea to see whether its still worth getting in on the action plus take a look at the performance of peers�Cosi Inc (NASDAQ: COSI), Panera Bread Co (NASDAQ: PNRA) and Einstein Noah Restaurant Group, Inc (NASDAQ: BAGL) as Subway remains private. I should mention that competing with Subway in the sandwich business is a tall order as they have 40,229 restaurants in 102 countries and territories as of early September��making them the�largest single-brand restaurant chain and the largest restaurant operator globally. However, Potbelly Corp and its peers Cosi Inc, Panera Bread Co and Einstein Noah Restaurant Group aren�� slugging it out directly with Subway.

Top 10 Restaurant Stocks To Buy For 2015: Brinker International Inc (EAT)

Brinker International, Inc. (Brinker), incorporated on September 30, 1983, owns, develops, operates and franchises the Chili�� Grill & Bar (Chili��) and Maggiano�� Little Italy (Maggiano��) restaurant brands. As of June 27, 2013 (fiscal 2013), the Company's system of Company-owned and franchised restaurants included 1,591 restaurants located in 50 states, and Washington, D.C. It also has restaurants in the Bahrain, Brazil, Canada, Columbia, Costa Rica, Dominican Republic, Ecuador, Egypt, El Salvador, Germany, Guatemala, Honduras, India, Indonesia, Japan, Jordan, Kuwait, Lebanon, Malaysia, Mexico, Oman, Peru, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Korea, Syria, Taiwan, United Arab Emirates and Venezuela.

Chili�� Grill & Bar

Chili�� operates in the Bar and Grill category of casual dining. The Company has operations worldwide, with locations in 32 foreign countries and two United States territories. Chili�� menu features items, such as Baby Back Ribs smoked in-house, Big Mouth Burgers, Sizzling Fajitas, hand-battered Chicken Crispers and house-made Chips and Salsa. The all-day menu offers a range of appetizers, entrees and desserts. A special lunch section is available on weekdays. In addition to its flavorful food, Chili�� offers a line of alcoholic beverages available from the bar, including Margaritas and draft beer. During fiscal 2013, food and non-alcoholic beverage sales constituted approximately 86.1% of Chili�� total restaurant revenues, with alcoholic beverage sales accounted for the remaining 13.9%.

Maggiano�� Little Italy

Maggiano�� is a full-service, casual dining Italian restaurant brand. Its Maggiano�� restaurants feature individual and family-style menus, and its restaurants also have banquet facilities designed to host party business or social events. It has lunch and dinner menu offering chef-prepared, classic Italian-American fare in the form of appetizers, entrees with portions of pasta, ch! icken, seafood, veal and prime steaks, and desserts. The Company�� Maggiano�� restaurants also offer a range of alcoholic beverages, including wines. In addition, Maggiano�� offers a full carryout menu, as well as local delivery services. During fiscal 2013, food and non-alcoholic beverage sales constituted approximately 83.0% of Maggiano�� total restaurant revenues, with alcoholic beverage sales accounted for the remaining 17.0%.

Advisors' Opinion:

[By Abba's Aces]
On a financial basis, the things I look for are the dividend payouts, return on assets, equity and investment. The company pays a dividend of 1.74% with a payout ratio of 65% of trailing 12-month earnings while sporting return on assets, equity and investment values of 4.1%, 37.7% and 8.2%, respectively, which are all respectable values. The really high return on equity value (37.7%) is an important financial metric for purposes of comparing the profitability which is generated with the money shareholders have invested in the company to that of other companies in the same industry. For comparison, Dunkin' has the third highest ROE out of 12 companies in the mid-cap restaurants industry. It is behind Brinker International (EAT) which has a value of 71.4% and Bloomin' Brands (BLMN) which has a value of 43.5%. Because I believe the market may get a bit choppy here and would like a safety play, I don't believe the 1.74% yield of this company is good enough for me to take shelter in for the time being if I were to initiate a new position.
[By Victor Selva]
As we can see, the firm has a higher ROE than Wendy麓s and Buffalo Wild Wings, Inc. (BWLD), but far less than the ones from Dunkin Brands Group Inc (DNKN) and Brinker International, Inc. (EAT).

This Metric Says Kinder Morgan Energy Partners Is Cheap Right Now

Master limited partnerships are not like other stocks, and the metrics we use to compare an MLP to its peers differ from the metrics we use to compare regular companies. For example, instead of the traditional P/E ratio, we emphasize MLP-specific metrics like distribution coverage ratio and today's focus: price to distributable cash flow (P/DCF). I'll use Enterprise Products Partners (NYSE: EPD ) , Kinder Morgan Energy Partners (NYSE: KMP ) , and Buckeye Partners (NYSE: BPL ) to illustrate the concept.

Why this metric?
Price to distributable cash flow is the MLP metric that comes closest to the P/E ratio most investors know and love. Like any good ratio, it allows you to compare MLPs on a relative basis, regardless of size.

Distributable cash flow per unit replaces earnings per unit in these relative valuations because MLPs pass almost all of their cash to unit holders. Distributable cash flow drives distribution growth, which in turn drives unit prices. That's really what investors care about the most with MLPs, and that's why analysts and management never discuss earnings per share for their MLPs; it's all about distributable cash flow.

How the metric works
To calculate P/DCF, you take the market cap of your MLP and divide it by a full year of distributable cash flow.

Let's use Enterprise Products Partners as our first example. We'll use distributable cash flow numbers from the four most recent quarters. The numbers shake out like this:

Q1 2014

Q4 2013

Q3 2013

Q2 2013

Total

$1,069

$1,021

$908

$925

$3,922

Source: MLPData.com, Yahoo! Finance. Dollar figures are in millions.

Now we'll divide the partnership's market cap by its distributable cash flow total of $3.9 billion to derive our P/DCF multiple:

Market Cap

DCF

P/DCF

$68.1

$3.9

17.4x

Source: MLPData.com, Yahoo! Finance. Dollar figures are in billions

A multiple of 17.4 is a tad high, but we'll get to that in a minute. The whole point of this exercise is relative valuation, so let's see how Enterprise's multiple compares to that of some of its peers.

The DCF numbers for Kinder Morgan Energy Partners and Buckeye Partners come from the same four quarters that we used for Enterprise.

MLP

Market Cap

DCF

P/DCF

EPD	$68.10	$3.9	17.4x
KMP	$34.45	$2.4	14.4x
BPL	$9.04	$0.5	20.0x

Source: Company releases, Google Finance. Dollar figures are in billions.

Enterprise falls right in the middle here. Given its recent trading history, it's not that big of a surprise to see Kinder Morgan posting the best multiple of the group. Its shares have vastly underperformed its two peers over the past year. Kinder Morgan is down more than 13%, while Enterprise and Buckeye Partners are up 19% and 16%, respectively.

But what is the benchmark for this cash flow multiple anyway? Most investors have heard that a P/E ratio greater than 15 is high, and the further it floats above that magic number the more overvalued the stock is. According to analysts at Morgan Stanley and Wells Fargo, the average multiple for large cap MLPs like today's group has been between 15 and 16 times price to distributable cash flow.

By this standard, Kinder Morgan is the only MLP here that is "cheap." But again, the P/DCF ratio is useful for relative valuations, but by no means would you want to base your entire investing thesis on this one metric -- or any one metric -- alone. Rather, it serves as a starting point for further research.

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Tuesday, May 27, 2014

30 Best Paying College Majors: 2014

With college graduation season upon us, it’s again time to take a look at which majors garner the most pay.

For all of the jobs in the Top 30, starting pay was up over last year. Engineering and science occupations continued their stranglehold on the top third of the rankings. For the record, still coming in dead last is Child and Family Studies with a starting salary of $30,300 and a mid-career salary (15 years in) of $37,200.

In 2012, we looked at which degrees were paying the most. This year, as we did in 2013, we drilled down into specific majors using data from payscale.com. Payscale lists 129 majors on its site.

(Check out: 15 Cheapest Colleges With Best Job Value on ThinkAdvisor)

The rankings below are based on data collected from 1,000 universities and include graduates with bachelor’s degrees only. The universities surveyed include 88% of U.S. schools with an enrollment of more than 5,000.

Take a look at the 30 Best Paying College Majors for 2014:

Information Technology

30. Mathematics

Starting Salary: $49,400

Mid-Career Salary: $88,800 (22nd, tie)

29. Information Technology

Starting Salary: $49,900

Mid-Career Salary: $84,100 (30th, tie)

Occupational Health and Safety

28. Economics

Starting Salary: $50,100

Mid-Career Salary: $96,700 (15th)

27. Occupational Health and Safety

Starting Salary: $50,500

Mid-Career Salary: $80,300 (40th)

Computer Information Systems

26 (tie). Computer Information Systems

Starting Salary: $50,800

Mid-Career Salary: $87,400 (25th)

26 (tie). Industrial Technology

Salary: $50,800

Mid-Career Salary: $81,500 (37th)

Construction Management

24. Construction Management

Starting Salary: $51,500

Mid-Career Salary: $88,800 (22nd, tie)

23. Information Systems

Starting Salary: $51,900

Mid-Career Salary: $87,200 (26th)

Statistics

22. Statistics

Starting Salary: $52,500

Mid-Career Salary: $98,900 (13th)

21 (tie). Applied Mathematics

Starting Salary: $52,800

Mid-Career Salary: $96,200 (16th)

Physics

21 (tie). Supply Chain Management

Starting Salary: $52,800

Mid-Career Salary: $83,700 (34th , tie)

19. Physics

Starting Salary: $53,100

Mid-Career Salary: $101,100 (9th)

Mechanical Engineering Technology

18. Management Information Systems

Starting Salary: $53,800

Mid-Career Salary: $92,200 (18th)

17. Mechanical Engineering Technology

Starting Salary: $54,100

Mid-Career Salary: $84,000 (32nd, tie)

Nursing

16. Civil Engineering

Starting Salary: $54,300

Mid-Career Salary: $91,100 (20th)

15. Nursing

Starting Salary: $55,400

Mid-Career Salary: $71,100 (57th)

Electrical Engineering Technology

14. Electrical Engineering Technology

Starting Salary: $57,900

Mid-Career Salary: $87,600 (24th)

13. Actuarial Mathematics

Starting Salary: $58,700

Mid-Career Salary: $120,000 (2th)

Biomedical Engineering

12. Biomedical Engineering

Starting Salary: $59,000

Mid-Career Salary: $91,700 (19th)

11. Computer Science

Starting Salary: $59,800

Mid-Career Salary: $102,000 (8th)

Software Engineering

10. Software Engineering

Starting Salary: $60,500

Mid-Career Salary: $99,300 (12th)

9. Mechanical Engineering

Starting Salary: $60,900

Mid-Career Salary: $99,700 (10th)

Industrial Engineering

8. Industrial Engineering

Starting Salary: $61,100

Mid-Career Salary: $94,400 (17th)

7. Materials Science & Engineering

Starting Salary: $62,700

Mid-Career Salary: $99,500 (11th)

Aerospace Engineering

6. Aerospace Engineering

Starting Salary: $62,800

Mid-Career Salary: $109,000 (5th)

5. Electrical Engineering

Starting Salary: $64,300

Mid-Career Salary: $106,000 (6th, tie)

Nuclear Engineering

4. Computer Engineering

Starting Salary: $65,300

Mid-Career Salary: $106,000 (6th, tie)

3. Nuclear Engineering

Starting Salary: $67,600

Mid-Career Salary: $117,000 (3rd)

Petroleum Engineering

2. Chemical Engineering

Starting Salary: $68,200

Mid-Career Salary: $115,000 (4th)

1. Petroleum Engineering

Starting Salary: $103,000

Mid-Career Salary: $160,000 (1st)

-- Related ThinkAdvisor stories:

5 Stocks Poised for Breakouts

DELAFIELD, Wis. (Stockpickr) -- Trading stocks that trigger major breakouts can lead to massive profits. Once a stock trends to a new high or takes out a prior overhead resistance point, then it's free to find new buyers and momentum players who can ultimately push the stock significantly higher.

>>5 Toxic Stocks to Sell Now

One example of a recent successful breakout trade is medical application and equipment player Arrhythmia Research Technology (HRT), which I featured in May 9's "5 Stocks Ready for Breakouts" at around $5.20 share. I mentioned in that piece that shares of Arrhythmia Research Technology were gapping up sharply higher back above its 50-day moving average with strong upside volume. That spike was quickly pushing shares of HRT within range of triggering a big breakout trade above some near-term overhead resistance levels at $5.30 to $5.48 a share.

Guess what happened? Shares of HRT didn't wait long to trigger that breakout, since the stock ripped higher above those key resistance levels on May 13 with above-average volume. Shares of HRT tag an intraday high on last Friday of $6.46 a share, which represents a sharp gain of 25% from my original article. Shares of HRT are starting to enter overbought territory, since its relative strength index reading is now 80. That said, the stock looks likely to re-test or possibly take out its 52-week high of $6.98 a share in the very near future.

>>3 Huge Stocks on Traders' Radars

Breakout candidates are something that I tweet about on a daily basis. I frequently tweet out high-probability setups, breakout plays and stocks that are acting technically bullish. These are the stocks that often go on to make monster moves to the upside. What's great about breakout trading is that you focus on trend, price and volume. You don't have to concern yourself with anything else. The charts do all the talking.

Trading breakouts is not a new game on Wall Street. This strategy has been mastered by legendary traders such as William O'Neal, Stan Weinstein and Nicolas Darvas. These pros know that once a stock starts to break out above past resistance levels and hold above those breakout prices, then it can easily trend significantly higher.

>>5 Stocks Under $10 Set to Soar

With that in mind, here's a look at five stocks that are setting up to break out and trade higher from current levels.

ImmunoCellular Therapeutics

One small-cap biotechnology player that's starting to move within range of triggering a major breakout trade is ImmunoCellular Therapeutics (IMUC), which develops immune-based therapies for the treatment of brain and ovarian cancers. This stock is off to a hot start in 2014, with shares up sharply by 41%.

>>5 Big Stocks to Trade for Flat-Market Gains

If you take a look at the chart for ImmunoCellular Therapeutics, you'll notice that this stock has been trending inside of a large range for the last four months, with shares moving between $1.05 on the downside and $1.58 on the upside. Shares of IMUC have now started to rebound off its recent $1.05 low and it's crossed back above its 50-day moving average of $1.23 a share. Shares of IMUC are now starting to spike higher off its 50-day moving average and it's quickly moving within range of triggering a major breakout trade.

Traders should now look for long-biased trades in IMUC if it manages to break out above some near-term overhead resistance at $1.34 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 1.12 million shares. If that breakout materializes soon, then IMUC will set up to re-test or possibly take out its next major overhead resistance levels at $1.46 to $1.52 a share. Any high-volume move above those levels and above more resistance at $1.58 a share will then give IMUC a chance to re-fill some of its previous gap-down-day zone from last December that started near $3 a share.

Traders can look to buy IMUC off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $1.23 a share or around more near-term support at $1.15 a share. One can also buy IMUC off strength once it starts to clear $1.34 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

World Wrestling Entertainment

A leading entertainment and media player that's starting to trend within range of triggering a big breakout trade is World Wrestling Entertainment (WWE), which is engaged in the sports entertainment business worldwide. This stock has been slammed hard by the short-sellers so far in 2014, with shares down sharply by 32%.

>>5 Dividend Stocks Ready to Pay You More in 2014

If you take a look at the chart for World Wrestling Entertainment, you'll notice that this stock gapped down huge recently from over $20 to $10.55 a share with massive downside volume. Following that move, shares of WWE have started to trend sideways a bit and so far the stock has held that recent low of $10.55 a share. Shares of WWE are now starting to spike higher off that $10.55 low and it's quickly moving within range of triggering a major breakout trade that could take the stock back into its massive gap.

Traders should now look for long-biased trades in WWE if it manages to break out above its gap-down-day high of $11.93 a share with high volume. Look for a sustained move or close above that level with volume that registers near or above its three-month average action of 2.64 million shares. If that breakout gets underway soon, then WWE will set up to re-fill some of its previous gap-down-day zone that started just above $20 a share. Shares of WWE could easily make an explosive move higher into that gap since the stock has been beaten-down into extremely oversold territory. The current relative strength index reading for WWE is 24.6, which indicates an extreme oversold reading.

Traders can look to buy WWE off weakness to anticipate that breakout and simply use a stop that sits right below its recent low of $10.55 a share. One could also buy WWE off strength once it busts above $11.93 a share with strong volume and then simply use a stop that sits a comfortable percentage from your entry point.

Ikanos Communications

Another communication player that's starting to move within range of triggering a near-term breakout trade is Ikanos Communications (IKAN), which designs, develops, markets and sells semiconductors and integrated firmware products for the digital home worldwide. This stock has been destroyed by the sellers over the last six months, with shares down sharply by 61%.

>>5 Stocks Insiders Love Right Now

If you take a glance at the chart for Ikanos Communications, you'll notice that this stock has been downtrending badly for the last six months, with shares falling from over $1.30 to its recent low of 41 cents per share. During that downtrend, shares of IKAN have been consistently making lower highs and lower lows, which is bearish technical price action. That huge beat-down and recent gap-down has now pushed shares of IKAN into extremely oversold territory, since its current relative strength index reading is 31.3. Oversold can always get more oversold, but it's also an area where a stock can experience a powerful rebound higher from.

Traders should now look for long-biased trades in IKAN if it manages to break out above some near-term overhead resistance levels at 47 to 51 cents per share with high volume. Watch for a sustained move or close above those levels with volume that registers near or above its three-month average action of 296,969 shares. If that breakout starts soon, then IKAN could set up for a powerful bounce higher that takes this stock back towards 65 cents per share or even its 50-day moving average of 73 cents per share.

Traders can look to buy IKAN off weakness to anticipate that breakout and simply use a stop that sits right below its recent 52-week low of 41 cents per share. One can also buy IKAN off strength once it starts takes out those breakout levels share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

InterMune

Another biotechnology player that's starting to move within range of triggering a major breakout trade is InterMune (ITMN), which focuses on the research, development, and commercialization of therapies for pulmonology and orphan fibrotic diseases in North America and Europe. This stock has been absolutely on fire so far in 2014, with shares up gigantic by 171%.

>>4 Stocks Under $10 Making Big Moves

If you look at the chart for InterMune, you'll notice that this stock has been uptrending strong for the last month and change, with shares moving higher from its low of $24.27 to its new 52-week high of $40.13 a share. That new 52-week high was made on an intraday basis last Friday, and shares of ITMN pulled back slightly from that high to close at $39.98 a share. This strong technical action could be signaling that ITMN is in the early stages of triggering a major breakout trade.

Traders should now look for long-biased trades in ITMN if it manages to break out above its new 52-week high of $40.13 a share with high volume. Look for a sustained move or close above that level with volume that registers near or above its three-month average volume of 3.77 million shares. If that breakout kicks off soon, then ITMN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $50 to $60 a share.

Traders can look to buy ITMN off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $37.50 a share, or right around its uptrend line support just above $35 a share. One can also buy ITMN off strength once it busts into new 52-week-high territory above $40.13 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Town Sports International

My final breakout trading prospect is sporting activities player Town Sports International (CLUB), which owns and operates fitness clubs in the Northeast and Mid-Atlantic regions of the U.S. This stock has been crushed by the bears so far in 2014, with shares down a whopping 59%.

If you look at the chart for Clown Sports International, you'll see that this stock has been downtrending badly for the last six months, with shares sliding lower from over $14 a share to its recent 52-week low of $5.65 a share. During that downtrend, shares of CLUB have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of CLUB have now started to form a potential bottoming chart pattern at around $5.65 to $5.90 a share. Shares of CLUB have now started to bounce off those levels and it's quickly moving within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in CLUB if it manages to break out above some near-term overhead resistance levels at $6.25 to $6.50 a share and then once it clears more key resistance at $6.75 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 161,444 shares. If that breakout starts soon, then CLUB will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $7.49 a share to around $8.50 a share. Any high-volume move above $8.50 will then give CLUB a chance to tag its next major overhead resistance levels at $9.36 to its 200-day at $10.55 a share.

Traders can look to buy CLUB off weakness to anticipate that breakout and simply use a stop that sits right below its recent 52-week low of $5.65 a share. One can also buy CLUB off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a conformable percentage from your entry point.

To see more breakout candidates, check out the Breakout Stocks of the Week portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.