Has Ukraine Shot Itself in the Foot With Gas Pipeline Deal?

This article was written by Oilprice.com , the leading provider of energy news in the world. Also check out these recent articles: 

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Last week, Ukrainian Prime Minister Yatsenyuk pushed a bill through the Verkhovna Rada that would see his country's gas transportation system sold off to a group of international investors. The provisions of the law would permit the transit of natural gas to be blocked. This decision may hurt the fragile industrial recovery in Germany and finish off Ukraine's potential as a gas transit route to Europe.

Germany, which is the industrial heart of the European Union and a major creditor for its debtor nations, is facing the challenge of the double-edged consequences of its inverted Ostpolitik as it pertains to the trade in natural gas. Even the temporary transit risks ensuing from Kiev's decision to block the pipeline may cause a business slump.

The Nobel laureate Joseph Stiglitz offered an unnerving forecast for the German economy. The Columbia University professor, speaking at the conference in the southern German city of Lindau, described economic growth in the Eurozone as "sluggish." The German economy in particular failed to grow during the second quarter, threatening the EU's fragile industrial recovery.

In the years to come, coping with Kiev's attempts to jeopardize the gas-transit system and cut off Europe from its quintessential energy source in the east could become a real headache for Germany's foreign minister, Frank-Walter Steinmeier. The most vivid example of Ukraine's self-destructive policy that has the potential to affect European taxpayers is the recent sale of its gas transportation system.

The imminent agreement, with many conflicting political overtones, will allow sales of 49 percent of Ukraine's gas transportation system to a cobbled-together coalition of foreign shareholders.

First, the non-transparent deal -- sponsored by high-ranking government officials -- is a textbook case of restrictive practices that violate World Trade Organization rules. Secondly, the pipeline itself is anything but an attractive offer.

The major players in the European energy market are very well aware of the quality of the asset. They know that the pipeline is sorely in need of repair and is dependent on gas from a third party. According to some provisions of the law, the transit of natural gas through Ukraine can be blocked. If it really happens, the pipeline's price will immediately plummet to $2 to $3 billion.

Who would buy a broken-down car that can only run using your neighbor's gas?

That's why, in July, Prime Minister Yatsenyuk was so interested in pushing the bill through the Verkhovna Rada that he threatened deputies with his resignation. Last week Mr. Yatsenyuk finally succeeded in passing the buck.

For many years, Ukraine has argued that its gas transportation system is an asset of national importance that wasn't for sale. But the Euromaidan protests changed everything. Ukraine's new media reported that Chevron wants to buy into the country's transit company. While the official representatives of the corporation declined to comment on the "rumors," last year Chevron co-sponsored a conference, "Ukraine in Washington 2013," which starred the U.S. Assistant Secretary of State Victoria Nuland. Her deep involvement in Ukrainian politics, along with her unorthodox but honest vision of the EU, is generally well known.

In passing the new law, government officials in Kiev and the Verkhovna Rada (now dissolved) ignored the fact that the majority of business-savvy Ukrainian voters would never approve the all-Ukrainian referendum on the summertime sale of the country's last reasonably valuable asset. After all, the industrial region of Donbass has been irrevocably lost and the country needs to collect taxes.

The situation surrounding the pipeline deal is reminiscent of the tactics of the United Fruit Company in the mid and late 1960s. Radically right-wing governments were installed in Central and Latin America and that corporation gained control over those countries' main export, bananas.

In Eastern Europe, many countries are not ready to follow Ukraine's footsteps and renounce energy sovereignty. It's no longer fashionable to be a banana republic. The deep-seated crisis in Ukraine and the success story of Nord Stream have encouraged other EU countries, such as Hungary, to diversify their natural-gas supply routes. Hungary's secretary of state for public diplomacy and relations, Zoltán Kovács, recently quoted a statement from his country's prime minister, Viktor Orbán: "No one can question our sovereign right to guarantee our natural gas supplies." The leaders in Budapest are sure that no economic recovery is possible in Germany and EU without long-term natural-gas contracts. All EU members will benefit from stable regional trade patterns.

Events in Ukraine should not dominate the agenda of the whole continent. That would simply be dangerous. It has already become a cliché to compare the Ukrainian crisis with the Spanish Civil War. A couple of years ago, the total "Ukrainization" of EU policy would have been perceived as a bad joke. Today 300,000 jobs are at stake in Germany and it is high time for Berlin to step in and prevent the nationalist frenzy in Kiev from ruining decades of successful business cooperation. Heiko Lohmann, a German natural-gas expert, believes that a fundamental prerequisite for normalization is the continuity of energy relations.

Viewed from this perspective, Hungary's position looks much more "pro-European." Interestingly, the EU's official energy policy papers (the European Ten-Year Network Development Plan (TYNDP 2011-2020) and Energy Infrastructure Priorities for 2020 and Beyond) contradict the hardline political statements of the acting members of the European Commission. According to the published data, Brussels expects to increase natural gas imports from Russia up to 40 percent. Time will tell whether Ukraine's problem-plagued gas transportation system will play any role in these plans.

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Value Picks

Here are some stock picks from Morningstar in an overvalued market. Would these be great buys in a correction or market dip? Let's take a look:

HCP Inc. (HCP) is a self-administered REIT that acquires, develops, leases, manages and sells healthcare real estate and provides financing to healthcare providers. HCP has a current dividend of 5%, which is great. HCP currently trades at 1.83 times its book value and about 28 times its free cash flow. One alarming figure is the $8 billion in long term debt, which is of course the financing used to acquire properties. Investors should wait to buy this stock, but it could be a bargain if a correction occurs.

Enterprise Products Partners LP (EPD) is an energy pipeline company that provides services to producers and consumers of natural gas, natural gas liquids, crude oil and certain petrochemicals. They pay a 3.5% dividend. EPD has little cash, a large amount of receivables, and high current liabilities and $17 billion in long-term debt. Priced at almost 5 times its book value, and almost 70 times its free cash flow, EPD is overvalued and probably won't be a bargain in a market correction.

Enter through the 'Poor Door': Income 'segregation' in N.Y.

This building on New York's Upper West Side will have a separate entrance for low-income residents. NEW YORK (CNNMoney) It's a tale of two cities in Manhattan, as the city okayed plans for a luxury condominium with a separate door for low-income residents.

The 33-story complex will have 219 expensive condos for sale and 55 to rent cheap to low-income tenants.

This building's approved "poor door" is new, but the issue isn't.

There are a number of similar buildings across the city that restrict some residents from fancy amenities -- think gyms, playrooms and rooftops.

The plans for the latest development at 40 Riverside on Manhattan's Riverside Drive were approved as part of the Inclusionary Housing Program, an effort to mitigate inequality by offering affordable housing in nice areas.

The program, enacted in 2009 under former New York City Mayor Michael Bloomberg, gives developers tax breaks and more space in exchange for building affordable housing either in the building itself or close by.

Until 2009, when you had moderate and affordable housing in the same complex, both projects had to be integrated. But the change allows developers to create a building within a building, with separate entrances, elevators and electrical wiring.

In theory, the Inclusionary Housing Program gives families who couldn't afford to live in the city an opportunity to live in good school districts and new buildings. But in practice, advocates say it's leading to a new kind of separate but equal.

"It's treating low- and moderate-income tenants like second-class citizens. It's de facto segregation," said Public Advocate Leitia James, who has filed a human rights complaint against developers who try to limit access to building amenities.

She said that she has seen a number of buildings exclude low-income tenants in different ways.

James filed a complaint on behalf of residents of Stonehenge Village, another complex on the Upper West side managed by Stonehenge Partners, which built a new gym that would only be available to market-rate tenants.

Stonehenge Partners did not respond to requests for comment.

Other developers have also come under fire for similar practices. Another Upper West Side building, the Windermere, allegedly kept affordable-housing residents away from the once-pu! blic roof and playroom, according to The New York Daily News.

The Windmere's management company Stellar Management did not respond to requests for comment.

It's not a situation unique to Manhattan. Residents at Northside Piers in Brooklyn are separated into two separate buildings.

The buildings have completely separate entrances and rental residents are not permitted to use the amenities in condo buildings.

David von Spreckelsen, president of Toll Brothers City Living Division which developed Northside Piers, said the buildings operate on two completely different systems, not because of income level but because they keep owners and renters separate.

Mayor Bill de Blasio's office said while it's too late to do anything about 40 Riverside, since 6-stories were already built by the time he walked into City Hall, his administration is committed to changing the zoning code.

"The previous administration changed the law to enable this kind of development," said Wiley Norvell, City Hall spokesperson. "We fundamentally disagree with that approach...and want to make sure future affordable housing projects treat all families equitably."

40 Riverside's developer, Extell Development, did not return requests for comment.

Sony's PS4 Speeds Ahead as Microsoft's XBox Stumbles

Johannes Eisele/AFP/Getty Images The top dog in this generation of video game consoles continues to pad its lead. Sony (SNE) revealed last week that it has sold 10 million PlayStation 4 systems since hitting the market nine months ago. Microsoft (MSFT) has yet to respond, but the latest data out of industry tracker NPD shows that the PS4 was once again the country's best selling system in July. The last time we got comparable data it wasn't even close. Ahead of June's E3 gamer conference, Sony announced that it had sold 7 million PS4s. Microsoft countered by revealing that it had sold 5 million Xbox One consoles to retailers. This wasn't a difference of 2 million boxes. Sony's figure was for devices that had made it all the way into the hands of gamers, while Microsoft's tally included all of the systems collecting dust on store shelves. Technology blog Extreme Tech estimates that Microsoft has sold just half as many of the current generation consoles to consumers as Sony at this point. Add it up, and it's not too shabby. Few figured that the Xbox One and PS4 -- released just a week apart last November -- would have sold a combined 15 million right now. And 5 million XBox Ones is nothing to sneeze at. This doesn't mean that Microsoft can rest easy. It's in a bind. History hasn't been kind to former market leaders that fail to keep up in future generations. If you need proof, just think about what Atari, 3DO and Sega are doing on the console front these days. Gamers are noticing the shift in dominance. Investors will have to follow suit. There Are No Cheat Codes "History has shown us that the first company to reach 10 million in console sales wins the generation battle," is a quote that may come to haunt Microsoft. Those words were spoekn in 2008 by then-Xbox head Don Mattrick when the Xbox 360 beat the PS4 to that meaty milestone. It should be said that the Xbox 360 came out a year before the PS4. It also didn't help that the PS3 hit the market as the priciest of the three systems at the time, setting gamers back as much as $599 in its 2006 debut. Sony learned its lesson. It made sure that it hit the market at a lower price than Microsoft this round. When Microsoft announced last year that it would hit the market at $499, Sony revealed that it would price its device at $399. When Microsoft infuriated gamers by suggesting that it would incorporate some software protective features, Sony cashed in by poking fun of the measures that Microsoft eventually abandoned. The same Sony that gamers hated two years ago when its online gaming network was hacked has suddenly become the rock star in the eyes and controller-clutching grips of diehard gamers. Investors thought that this would be a close race, but folks who play the games and follow the industry knew that PS4 was going to have the early lead in this generation. Microsoft's losing, and it doesn't have a lot of time to catch up. Game On Microsoft has gone from trying to please software developers last summer to trying to woo players this summer. It rolled out a new Xbox One that matches the PS4 at its $399 price point, forgoing the Kinect motion-based camera controller. This upset developers that were making games under the assumption that Kinect would be available to all players, but the gamble seemed to initially pay off when Microsoft announced that Xbox One sales tripled after the pricing move. However, as long as Sony has the lead -- and NPD's data shows that PS4's lead is only widening this summer -- this could lead to bigger headaches for Microsoft. A console needs developers, and game makers aren't going to spend as much time working on titles to serve an estimated 5 million Xbox One players when that same time and effort can be used to target Sony's much larger audience of PS4 owners. Microsoft has several games that are exclusive to the Xbox One, but it's also not a surprise to see that last month's best-selling game -- "The Last of Us Remastered" -- is a PlayStation exclusive. Sony is making sure that it doesn't take anything for granted. At E3 two months ago, it introduced a cloud-based game streaming service called PlayStation Now and entered the set-top media player market with PlayStation TV. Microsoft, on the other hand, continues to reel backwards. Last year's dreams of making the Xbox One the centerpiece of today's home theater haven't played out, and now it's closing the entertainment studio that was going to deliver original video streaming content. Microsoft is back to trying to market its Xbox One as a machine for gamers, but with 10 million early adopters already choosing its longtime rival, it's not going to be easy to stand out. More from Rick Aristotle Munarriz
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Allergan: Expect Takeover Sooner Rather Than Later, Citigroup Says

Earlier today, the Wall Street Journal reported that Allergan (AGN) had discussed taking over Salix Pharmaceuticals (SLXP), as it attempts to keep Valeant Pharmaceuticals International (VRX) at bay.

Reuters Allergan Chief Executive David Pyott

Citigroup’s Liav Abraham thinks Allergan will make a move sooner rather than later:

It is unclear whether Salix is a willing seller ahead of its pending acquisition of Cosmo (a tax inversion transaction), which is expected to close in 4Q14. If Allergan is indeed interested in Salix, we believe that an attempt to acquire the company will be made prior to closure of the Salix-Cosmo transaction, as we do not believe that Allergan is likely to pursue a tax inversion transaction over the near term due to the associated requirement to issue stock, which would in turn require a shareholder vote, thereby delaying, and potentially complicating, the acquisition process.

The Wall Street Journal also said Allergan had approached another, unnamed company. Abraham makes his best guess:

The other company referred to could be Actelion, in our view, due to Actelion's presence in high-growth specialty areas (cardiovascular/respiratory), with Opsumit in its launch phase selexipag recently de-risked following positive Phase III headline results. We note that Actelion management has indicated its intent to remain independent.

Shares of Allergan gained 4% to $161.82 today, while Salix Pharmaceuticals surged 16% to $160.80 and Valeant Pharmaceuticals advanced 3.6% to $113.72.

Cybersecurity startups to bank $788 million

NEW YORK (CNNMoney) Online privacy is on the tips of everyone's tongues these days, and investors are rushing to pour money into cybersecurity startups.

Venture capital firms are expected to funnel $788 million into early-stage cybersecurity startups this year.

That's a 74% increase from last year's $452 million, according to PrivCo, a financial data provider on privately-held companies. In 2011, VC firms invested just $160 million in cybersecurity startups.

PrivCo estimates the funding will be dispersed among about 40 cybersecurity startups in the early stages of funding.

Particularly hot right now? Companies offering protection against mobile malware.

"Employees' mobile phones have become the biggest soft targets for cybercriminals, and the venture capital dollars are following," said PrivCo CEO Sam Hamadeh.

Security breeches at companies like eBay (EBAY, Tech30) and Target (TGT) have made companies more willing to try new products from new firms, especially since it's difficult for cyberdefense powerhouses like Cisco (CSCO, Tech30) and Symantec (SYMC, Tech30) to innovate, according to Aaref Hilaly, partner at Sequoia Capital. From developing comprehensive cloud security to "botwalls," startups are hoping to fill the gap.

"Large companies rely on small companies for innovation," said Hilaly. "The radical new ideas come from small businesses. That's across the board in tech -- not just security."

Hamadeh said Sequoia Capital is one of the most active venture capital investors in the security space.

Hilaly said they've had a consistent strategy: Look for companies that innovate around "architectural shifts" in computing that happen about once every five years -- like the turn toward mobile or the growth of the cloud.

One company they've invested in, Skyhigh Networks (which closed a $40 million round of financing in June), was early to anticipate the move toward the cloud.

Rajiv Gupta, CEO of Skyhigh Networks, and his two cofounders created a product to help companies evaluate the risk of using the cloud and analyze employee cloud behaviors. They officially launched in February 2013 with about 30 employees. Today, they employ about 130 people and service 220 enterpri! se customers, including some of the world's largest banks.

Gupta used to work for Cisco, which has since employed Skyhigh's product to understand their employees' need for cloud services, assess and reduce risks of using the cloud and ultimately improve the firm's productivity.

"We're addressing a need that [big cybersecurity firms] aren't addressing," explained Gupta. "We've chosen to partner with them as opposed to compete with them."

Shape Security also raised $40 million this year.

Sumit Agarwal and his two co-founders developed technology that protects against malware and bots (which can cause spam and hijacked accounts). Unlike existing software that protects based on past attacks, their "botwall" proactively transforms code on every webpage so cybercriminals can't latch onto the code.

The company publicly announced their anti-automation product in January. Agarwal said they work with major Fortune 500 companies that span the financial services, health care and ecommerce industries. The team went from six employees in 2012 to more than 100 employees today and Agarwal doesn't expect growth to slow.

"Everyone with a website is an eventual future customer of ours," explained Agarwal.

How Berkshire Hathaway Soared to $200,000 a Share

Nati Harnik/AP There are all sorts of exclusive clubs on Wall Street -- and then there's Warren Buffett's Berkshire Hathaway (BRK-A). On Thursday, it became the only member of the $200,000-a-share club. That's right: A single share of its Class A stock is trading for more than $200,000. And Berkshire is likely to remain the sole member of that club for a very long time. The next-highest priced stock is Tower Properties (TPRP), a real estate holding company that trades over the counter for $10,500 a share. Some critics have argued for years that Berkshire is overvalued, but it has marched steadily higher year after year. According to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, Berkshire has delivered an annual return of 22.6 percent (including reinvested dividends) ever since the stock topped $100 a share back in 1977. That's a record of consistently outstanding performance unmatched by any other Wall Street guru. $1,000 to $2 Million That means, if you invested $1,000 in Berkshire stock in May of 1977 and let it ride, your investment would be worth $2 million today. The stock is up 13 percent so far this year, well ahead of the 5.6 percent gain for the S&P 500 (^GSPC). Berkshire Hathaway is basically a mutual fund of Buffett's investments, including dozens of companies that he's bought and operated, as well as huge stakes in other publicly traded stocks. The company's biggest stock holdings are in Wells Fargo (WFC) (more than $23 billion worth of stock) and in Coca-Cola (KO) (more than $16- billion). Buffett has also placed big bets on financial companies American Express (AXP) and Goldman Sachs (GS), energy giants Exxon Mobil (XOM) and ConocoPhillips (COP), DirecTV (DTV), DaVita Healthcare (DVA), and many others. Buy and Hold Buffett has long preached a buy-and-hold investment strategy, and he's maintained investments in many of these companies for several decades. In addition to those stock market investments, Berkshire also owns a long list of insurance, railroad, energy and consumer business. Among the best-known brands are Geico, Burlington Northern Santa Fe, Fruit of the Loom, Dairy Queen and Mars. Last year, Berkshire acquired H.J. Heinz. But unlike most other big-time buyout specialists, Buffett and partner Charlie Munger usually keep the existing management and staff of the companies being bought. Just like his stock market strategy, he buys with a long-term view, not so worried about the quarter-to-quarter gyrations that dominate Wall Street trading. Pilgrimages to Omaha Buffett is widely considered an investment genius, and his nickname of the "Oracle of Omaha" reflects that he still lives in that same Nebraska city where he was born. Each year, tens of thousand of Berkshire Hathaway investors flock to Omaha for the company's annual Investor Day activities, hoping that some of Buffett's wisdom will rub off on them. Buffett, who turns 84 later this month, was ranked as the world's richest person back in 2008, before he started giving billions of his vast fortune, primarily through the Bill & Melinda Gates Foundation. Unlike most companies, Berkshire has refused to split its stock to make it more affordable for investors. Buffett believes the high price encourages investors to be more like him -- willing to place long-term bets on the American economy. More from Drew Trachtenberg
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This Week's Winners and Losers: Monster Deals, Cisco Reels

Paul Morris/Bloomberg/Getty Images There were plenty of winners and losers this week, with a fast food chain's attempt to offer healthier fare falling short and the world's largest networking equipment company letting pink slips fly. Here's a rundown of the week's smartest moves and biggest blunders. Satisfries -- Loser Burger King Worldwide (BKW) is giving up on trying to woo calorie counters. The burger chain is discontinuing Satisfies -- the crinkle-cut fries that contain 40 percent less fat and 30 percent fewer calories than McDonald's (MCD) signature spud sticks -- at most restaurants. Some franchisees will keep offering Satisfries, but the item didn't stick on its menu for much more than a year. Burger King claims that the item didn't sell well despite clearing roughly 100 million orders for the slightly less unhealthy fries. One can argue that Satisfries were doomed because of Burger King chose to charge more for an order than its traditional fries. Fast food joints are magnetic to folks looking to save money. Plus Burger King isn't a big draw to folks on a diet despite following rivals into salads. Monster Beverage (MNST) -- Winner Coca-Cola (KO) has struggled to make a dent in the energy drink market dominated by Red Bull and Monster, so it's betting on a winner. Coca-Cola is investing $2.15 billion to buy a 16.7 percent stake in Monster Beverage. It's a smart move for Coca-Cola as it continues to diversify from carbonated drinks that have fallen out of favor with consumers. However, it's a bigger deal for Monster Beverage. The stock jumped on the news, and rightfully so. Green Mountain Coffee Roasters (GMCR) has soared since Coca-Cola made a similar investment earlier this year. Cisco (CSCO) -- Loser It's another round of pink slips at Cisco. The networking gear giant announced that it that it will be dismissing 6,000 workers or 8 percent of its staff. It's a big number, but the market shouldn't be surprised. This is the fourth summer in a row that it has announced layoffs. Cisco has seen better days. It was the country's most valuable company for a little while at the peak of the dot-com boom. It's been harder to find growth on this end of the dot-com bubble as failed acquisitions and competitive challenges have weighed on results. If these summer layoffs continue, it won't be long before employee morale is a bigger concern than opportunities for growth. MannKind (MNKD) -- Winner MannKind has a game-changing drug on its hands, and now it has a financially strong partner to help market it. Afrezza -- an inhaled insulin that was approved by the Food and Drug Administration earlier this summer -- could be a godsend to folks with diabetes who are weary of needle pricks. Now MannKind is teaming up with Sanofi (SNY) to help get it to market in time for next year's launch. MannKind isn't flush with cash or seasoned with experience, and that's why many upstart biotechs and drug makers team up with larger partners. Some of the warnings associated with Afrezza could have scared off potential partners, but the far-reaching potential of Afrezza was too tempting for Sanofi to pass up here. SeaWorld Entertainment (SEAS) -- Loser It's been a great summer for theme park operators, unless you happen to be SeaWorld. Shares of the company behind the namesake marine life attractions, Busch Gardens and a few water parks plunged after posting disappointing quarterly results. Revenue fell when analysts were holding out for growth. With the Easter holiday and good weather in its favor, it seemed as if this would be a rare winning quarter for SeaWorld. It wasn't. SeaWorld can't seem to shake the negative consumer sentiment that has been brewing since last summer's release of the "Blackfish" documentary that takes the park to task for having orcas in captivity. It's not just the seasonally potent summer quarter that's not working out for SeaWorld. It's hosing down its guidance for the entire year. More from Rick Aristotle Munarriz
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3 Machinery Stocks to Buy Now

Popular Posts: 13 “Triple A” Stocks to Buy5 Pharmaceutical Stocks to Buy Now9 Biotechnology Stocks to Buy Now Recent Posts: 3 Durable Goods Stocks to Buy Now 3 Machinery Stocks to Buy Now 3 Chemicals Stocks to Buy Now View All Posts 3 Machinery Stocks to Buy Now

Three machinery stocks are moving up in their overall rating this week, according to the Portfolio Grader database. Every one of these is graded an “A” (“strong buy”) or “B” overall (“buy”).

Luxfer Holdings PLC Sponsored ADR (LXFR) is progressing from last week’s rating of B (“buy”) as the company improves to an A (“strong buy”) this week. Luxfer Holdings, a materials technology company, engages in the design, manufacture, and supply of materials, components, and gas cylinders. In Portfolio Grader’s specific subcategory of Equity, LXFR also gets an A. For more information, get Portfolio Grader’s complete analysis of LXFR stock.

American Railcar Industries, Inc. (ARII) ups its rating to a B (“buy”) this week after earning a C (“hold”) in the week before. American Railcar Industries designs, manufactures, and sells hopper and tank railcars in North America. For more information, get Portfolio Grader’s complete analysis of ARII stock.

WABCO Holdings (WBC) earns a B this week, jumping up from last week’s grade of C. Wabco Holdings manufactures and sells control systems, including advanced braking, stability, suspension, transmission control and air compressing and processing systems, that improve vehicle performance and safety and reduce overall vehicle operating costs. For more information, get Portfolio Grader’s complete analysis of WBC stock.

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

Scared About Social Security's Future? Take These Steps Now

Alamy For millions of Americans, the idea of retirement without Social Security is unthinkable. According to the Social Security Administration, about 41 million retirees and dependents receive retirement benefits from Social Security, with disabled workers and their dependents making up nearly 11 million more recipients and 6.2 million survivors relying on Social Security benefits as well. Yet with the $863 billion that the SSA anticipates paying out in benefits this year making up almost a quarter of federal spending , concerns about the long-term financial sustainability of Social Security have made many younger Americans nervous that they'll never see benefits at all. Before you panic about the uncertainty over Social Security's future, though, it's important to take stock of the program's full condition. In addition, there are steps you can take to shore up your own financial situation to ensure that no matter what happens to Social Security, you'll be in the best position possible to take care of your own money needs in retirement. Will Social Security Be There for You? A recent survey from the Transamerica Center for Retirement Studies looked at attitudes among adults aged 18 to 35 about Social Security and other economic and political issues. More than 80 percent said they were concerned that Social Security was unlikely to be there for them by the time they retired. And two-thirds expect to get most of their retirement income not from Social Security but rather than their own savings and investments, either inside or outside of specific retirement-savings vehicles like individual retirement accounts and employer-sponsored 401(k) plans. Of course, millennials have the benefit of one of the most valuable resources in investing: time. With 30 years or more before they expect to retire, millennials have the most flexibility in tailoring their finances to balance current financial needs and wishes against future money issues. But even if you don't have that long a time horizon, you can still handle the uncertainty about Social Security. 1. Know the Worst-Case Scenarios Despite the survey's revelations about our fears, the reality is that it's unlikely that Social Security will disappear entirely. Even once the Social Security Trust Fund runs out of money, which is currently projected to happen in 2034, ongoing payroll taxes are expected to provide the program with enough income to pay more than three-quarters of scheduled Social Security benefits. So at this point, what many see as the potential worst-case Social Security scenario is that, then the Trust Fund is exhausted, benefits will have to be cut by around 25 percent to keep the program stable. A trim of that size to the average monthly benefit -- currently around $1,300 -- means you'll be losing about $350 of the monthly income you could have expected. You'll either need to replace that money with your own investments, or tighten your belt. 2. Get Smarter About Investing for Retirement One of the most impressive findings of the Transamerica survey was the extent to which millennials are taking action sooner rather than later. An estimated 70 percent of millennials have already started saving for retirement, and they typically began saving at 22. More than 75 percent have discussed saving, investing and retirement planning with family members, friends and other respected peers. That's encouraging -- and a wise choice whatever your age. Moreover, taking advantage of opportunities to save for retirement through work has become essential. The typical millennial contributes 10 percent of their annual pay to a 401(k) plan, taking full advantage of company matches and using vehicles like target-date funds or strategic allocation funds to get age-appropriate diversified exposure to a variety of different investments. 3. Keep Your Job Skills Competitive One of the most discouraging aspects of the recent economic downturn was that high unemployment rates lasted for a long time even after the recovery began. More recently, job growth has started to pick up somewhat, and that has put Americans in better position to provide for their financial futures. Nevertheless, it's more important than ever to remain valuable as a worker. For many who are close to retirement age, the best way to make sure their limited resources last through retirement is to work for a few extra years. But in today's sharply competitive labor market, getting the opportunity to stay in your job isn't a given. So for workers nearing retirement age, consistently demonstrating your value to your employer is essential if you are to remain employed as long as you choose. Somewhat younger workers have even more at stake to stay at the top of their game to reduce the chance of an early layoff, and looking at educational opportunities to bulk up your skills can be a smart way to protect against a drop in eventual Social Security retirement income. Fixing Social Security's long-term financial woes will require either raising taxes, raising the retirement age, modifying how benefits are paid, or some combination of those -- none of which are politically feasible in the current environment, so repairs aren't likely to happen soon. Your best bet for getting financial security you desire is to take matters into your own hands by boosting your own savings and investing. That way, Social Security can be less of a necessity and more of a welcome supplement by the time you retire. More from Dan Caplinger
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David Kelly Debunks Market ‘Misperceptions’

Speaking at LPL’s annual gathering in San Diego, JPMorgan’s chief global strategist Dr. David Kelly seemed to apply some Southern California sunlight to disperse the cloud of gloom in consensus thinking about the economy and markets.

“I think there’s a misperception about where we are,” said Kelly, long a popular speaker on the advisor lecture circuit.

Citing survey data showing that just shy of half of all Americans think we’re in a recession and another large chunk are unsure, Kelly lamented: “We’re in the sixth year of expansion but people still think we’re in recession.”

The strategist noted that with unemployment down to 6.2%, a hair above the 6.1% average of the past half-century, “We’re much closer to full employment than most people realize.”

And not only is the economy stronger than most realize, but he views the stock market as less scary than is commonly perceived today.

Indeed, JPMorgan is “cautiously overweight” U.S. equities; though he doesn’t expect the next five years to match the past five years, Kelly thinks stocks can make the mid-single digits over that period, on average.

“This is a climate in which earnings are rising; operational earnings will be at an all-time record high,” he told the LPL Focus break-out session.

“People say: How can this lousy economy produce profits?”

The Irishman answered with a comparison to his native country:

“It always rains, everything is always green. You need a mild damp climate for growth. [Similarly, this economic] environment allows profits to grow.”

Kelly estimated average U.S. equity price-to-earnings ratios at 15.1—less than their long-term average of 15.6; this despite a perception that U.S. stocks are overvalued.

“That’s a fair value in absolute terms and a good value relative to fixed-income,” which he is underweighting, viewing bonds as vulnerable to interest rate hikes he expects next year—potentially as early as March.

It is the persistent sense of gloom that has accompanied the five-year economic recovery that makes Kelly’s economic and market forecast as positive as it is since the slow progress just lengthens and slows the post-recession rebound.

“People and companies are hoarding cash. As it leaks into the financial system, it fuels equities’ rise,” Kelly said, adding: “I know it doesn’t feel good, but invest not on how you feel but by how you think.”

The market strategist urged advisors to help their clients see the risk of inaction.

“People want to hang out in cash and time this thing,” he said.

“You can’t make money by saving, only by investing. When cash pays you nothing, get invested in something!” he urged. “Cash is still paying you nothing and it’s time to get invested in something.”

While Kelly was bullish on the U.S. economy in the short-term, in the longer term he believes that 2% GDP growth will be the new 3%, the old trend growth rate which he expects will give way to demographic changes. That shift should occur once the U.S. gets to full employment sometime in the next two to three years.

Labor force growth has been growing at a crawl till now—at a rate of two-tenths of one percent over the past few years.

Once again, Kelly argues the common narrative one hears of people giving up looking for work is based on misperception. Rather, what’s really going on he says is “a demographic gale of baby boomers eligible for Medicare and leaving the labor force,” he said.

In other words, growth in employment is masked by the 33% jump from 2010 to 2012 in people turning 65.

Another among the cherished views Kelly sought to debunk is the notion that the rising housing market is running out of steam.

After plunging in 2007 from a level of 2.3 million housing starts and slowly rising from its nadir up to the current 850,000 housing starts, Kelly thinks housing will need to roar back closer to the 1.4 million starts the sector has averaged over the last 55 years.

“We are not in equilibrium position,” he said.

Why not?

“It’s almost a conspiracy,” the JPMorgan strategist said, referencing the “collective actions of the federal government and Federal Reserve which are suppressing housing."

"The federal government is engaged in a witch hunt against the banking sector; it’s a stick-up job,” he added.

The banks, he said, were guilty of some poor lending practices but because of disproportionately heavy fines, the banks have reacted by withholding lending from all but buyers with the best credit in order to avoid future liability.

And the Federal Reserve was engaged in “price-fixing; it is completely manipulating the mortgage market,” he said, explaining that if 30-year rates average 4.25% but the Fed is targeting a Federal Funds rate of 3.75%, banks will conclude that the resulting 50-point spread is insufficient to earn a profit, so lending is weak.

While the pent up demand for housing, automobiles and the like should keep the U.S. economy cranking for the next two to three years, a rosier scenario than many expect (“people fear the U.S. is going bankrupt—it’s not.”), Kelly argues that the world economy as a whole, not just the U.S., is in growth mode.

“People say: ‘Are you kidding?’ because they think the rest of the world is in flames,” he says, citing troubles in the Middle East and Ukraine. “It isn’t; good money is to be made in boring places.”

Kelly was particularly bullish about Europe, which, having suffered two recessions, is now only in the “first inning” of growth compared to the U.S.

“There’s a lot of room for cyclical expansion,” he said, adding: “People need to invest in emerging markets and Europe for the long-run because of cyclical growth and secular growth.”

U.S. Stocks Turn Red; 21st Century Fox Shares Surge On Upbeat Results

Related BZSUM U.S. Stocks Reverse; Cheetah Mobile Back In Google App Store Rankings Markets Open Higher; Brinker Profit Misses Estimates

Midway through trading Thursday, the Dow traded down 0.32 percent to 16,391.07 while the NASDAQ declined 0.14 percent to 4,348.92. The S&P also fell, dropping 0.35 percent to 1,913.61.

Leading and Lagging Sectors

Utilities shares surged around 0.57 percent in today’s trading. Meanwhile, top gainers in the sector included Empresa Distribuidora y Comercializadora Norte S.A. (NYSE: EDN), up 2.9 percent, and PNM Resources (NYSE: PNM), up 1.7 percent.

In trading on Thursday, healthcare shares were relative laggards, down on the day by about 0.62 percent. Meanwhile, top decliners in the sector included Thoratec (NASDAQ: THOR), down 28.4 percent, and PhotoMedex (NASDAQ: PHMD), off 14.6 percent.

Top Headline

Brinker International (NYSE: EAT) reported a drop in its fourth-quarter profit. However, the company's revenue topped analysts' estimates.

The Dallas, Texas-based company posted a quarterly profit of $28.8 million, or $0.43 per share, versus a year-ago profit of $46.4 million, or $0.64 per share. Excluding items, its earnings climbed 10.4% to $0.85 per share from $0.77 per share.

Its total revenue gained 3.9% to $758.7 million. However, analysts were expecting earnings of $0.86 per share on revenue of $749.7 million.

Equities Trading UP

Lehigh Gas Partners LP (NYSE: LGP) shares shot up 24.13 percent to $32.25 after CST Brands (NYSE: CST) announced its plans to acquire Lehigh Gas GP LLC, the general partner of Lehigh Gas Partners LP. Lehigh Gas Partners also reported its financial results for the second quarter.

Shares of Twenty-First Century Fox (NASDAQ: FOXA) got a boost, shooting up 6.53 percent to $34.44 after the company reported upbeat fourth-quarter results. Cowen & Company upgraded 21st Century Fox from Underperform to Market Perform and raised the price target from $29.00 to $35.00.

Stratasys (NASDAQ: SSYS) shares were also up, gaining 17.72 percent to $116.44 after the company reported better-than-expected quarterly results and lifted its forecast.

Equities Trading DOWN

Shares of Thoratec (NASDAQ: THOR) were down 28.46 percent to $23.30 after the company reported downbeat second-quarter sales and issued a disappointing 2014 earnings outlook.

Atmel (NASDAQ: ATML) shares tumbled 7.50 percent to $7.96 after the company reported in-line Q2 earnings. Bank of America downgraded Atmel from Buy to Neutral.

Melco Crown Entertainment (NASDAQ: MPEL) was down, falling 3.25 percent to $29.04 after the company reported downbeat quarterly results.

Commodities

In commodity news, oil traded down 0.20 percent to $96.73, while gold traded down 0.02 percent to $1,308.00.

Silver traded down 0.39 percent Thursday to $19.95, while copper rose 0.36 percent to $3.18.

Eurozone

European shares were lower today. The eurozone’s STOXX 600 fell 0.71 percent, the Spanish Ibex Index dropped 1.79 percent, while Italy’s FTSE MIB Index tumbled 2.10 percent. Meanwhile, the German DAX fell 0.99 percent and the French CAC 40 declined 1.40 percent while UK shares dipped 0.65 percent.

Economics

US initial jobless claims declined 14,000 to 289,000 in the week ended August 2. However, economists were expecting claims to reach 304,000 in the week.

Natural-gas supplies climbed 82 billion cubic feet in the week ended August 4, the Energy Information Administration reported. However, analysts were estimating a rise of 81 bcf to 85 bcf.

Data on consumer credit for June will be released at 3:00 p.m. ET.

Data on money supply will be released at 4:30 p.m. ET.

Posted-In: Earnings News Guidance Upgrades Eurozone Futures Price Target Commodities

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Most Popular Morgan Stanley Dissects FireEye's 'Complex' Second Quarter Results Exclusive: Tibco CEO Vivek Ranadive Talks Valuation; Takeout Rumor Swirling Tesla Gets More Love From Morgan Stanley Macau Casino Stocks Down On Weaker Revenue Outlook Morgan Stanley Defends Walgreen Despite Inversion Decision Earnings Scheduled For August 6, 2014 Related Articles (ATML + BZSUM) Atmel Matches Q2 Earnings Estimates, Revenues Rise Y/Y S&P 500 Falls To Two-Month Low, Dow Drifts Further Away From The 17,000 Mark U.S. Stocks Reverse; Cheetah Mobile Back In Google App Store Rankings U.S. Stocks Turn Red; 21st Century Fox Shares Surge On Upbeat Results

A Few Reasons To Consider Tyson Foods for the Long Run

The world's second-largest meat processor, Tyson Foods (TSN), released impressive results for the third quarter. The company reported fantastic growth in its top line and its results came in line with expectations. Greater demand for chicken and pork products were the main growth drivers for the company. There are many key points Tyson Foods is counting on, which can take its growth to a new level. With rising demand for meat products and the proposed selling of Latin American chicken operations, Tyson Foods is expected to get better in the future.

Doing well

Tyson is seeing a strong fiscal year so far. Its quarterly revenue improved by 11% to $9.63 billion. This topped analysts' estimates. Consensus had been modeling revenue of $9.5 billion. Chicken and pork products were the best sellers for Tyson, and they resulted in a solid improvement in its earnings. The earnings of the company grew by 9%, reporting EPS of $0.75 per share, which was more than $0.69 per share from last year's same quarter.

Tyson Foods, having delivered a commendable performance in the third quarter, is all set to accelerate to new highs. Management is optimistic about its growth prospects. Tyson is focusing on important growth drivers, and is planning to sell some of its less preferred units such as the Latin American chicken operations. Though it is performing well, Tyson thinks that company can even perform better without it so it plans to sell this operation to JBS.

Besides, Tyson is also focusing on its home market. It is selling off its international operations and plans to use the money to pay off the acquisition charges of Jimmy Dean sausage maker Hillshire Brands Co.

Making the business efficient

Further, it has confirmed the shutdown of three of its plants. With this, Tyson Foods is aiming at restructuring its utilities and becoming more focused about its operational excellence. However, this shutdown of the plants will result in $49 million as impairment charges, but the company isn't worried about this as the shutdown will ultimately improve its operational performance. This will lead to better revenue in the future. Moreover, in the long run, these initiatives are expected to drive better sales, as it will allow Tyson to shift its production units to better capacities.

Also, under its expansion moves, the acquisition of Hillshire is expected to help Tyson in expanding its area of operation, adding more customers to it. Also, with such a combination, management thinks that Tyson will reap benefits in terms of improvements in operations, purchasing, and distribution. In addition, management has also taken a strict decision to maintain a cost-efficient structure to improve its profit margins.

Beyond the weakness

Tyson did see some temporary disruptions as a result of a fire which broke out at one of its fully cooked processing plants. But now, the plant is back to its operations with new equipment installed. The company did face some unexpected loss as a result, and is expecting this event to impact its fourth quarter results by a small margin. But, Tyson sees better demand for beef and pork, which will lead to an improved performance going forward.

Seeing the growth momentum, management has come up with a strong guidance for fiscal 2015. Tyson is expecting overall growth to improve 10%. On the revenue front, the company is expecting its top line to improve by 11%.

Conclusion

Looking at the financials, Tyson Foods looks impressive and reasonable with a decent trailing P/E of 15.04. Management is also expecting synergies to come its way with the acquisition of Tyson and Hillshire by 2015, which will help the company grow. Taking a look at its earnings growth for the next five years, an impressive growth in Tyson's earnings by a CAGR of 19% is visible. So Tyson Foods is a good bet for the long run.

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Making bulletproof vests for police dogs

  Bulletproof vests for canine cops Johnson City and Binghamton, NY (CNNMoney) Nobody wants to see a police dog get hurt.

That's why a Michigan manufacturer makes ballistic vests for K-9 dogs, as well as for the people who serve in the police and military.

But getting cash-strapped taxpayers to foot the bill for dog vests, which run about $1,000 a piece, isn't easy.

"In the K-9 unit, you sometimes feel like the redheaded stepdaughter," said Sgt. Garret Wing of the Miami Police Department.

Armor Express, based in Central Lake, Mich., has produced 2,000 vests for dogs and donated 50 of them to local K-9 units. Its biggest customer for the doggie vests is a non-profit called Vested Interest in K-9, founded in 2009 by dog lover Sandy Marcal, an accountant from Taunton, Mass.

"There are 30,000 K-9s in the U.S., and our goal is to vest them all," she said.

Marcal said her organization, which is backed in part by flea and tick medicine maker PetArmor, has donated 1,050 K-9 vests to police departments around the country. A recent fundraiser commemorating Rocco, a K-9 stabbed to death in Pittsburgh in January, raised enough money to buy another 175 vests.

Miami PD's Wing said that only two of the 17 dogs in his city's K-9 unit have vests, but they're about to get a dozen more from Vested Interest.

Armor Express CEO Matt Davis employs 135 workers and has sold 265,000 vests (mostly for humans) since the company's inception in 2005. He's so confident in his vests that he actually shoots himself while wearing one in several YouTube videos to demonstrate how effective they are.

Cops from Binghamton, New York and neighboring Johnson City rely entirely on Vested Interest for their dog armor. Johnson City patrolman Brian Berdine said a vest protected his Dutch Shepherd CJ when the K-9 was attacked last year at a college football game that erupted into a drunken riot.

"A glass bottle smashed on his side, but it didn't hurt him," he said.

Officers who work with K-9s view them as equals, worthy of the same status as humans. But not everyone agrees. Miami's Sgt. Wing said a convict who shot a K-9 back in 2000 was sentenced to life in prison for attempting to murder a huma! n cop, but only got five years for killing the dog.

"I think it's inexcusable that a violent criminal would only get a five-year sentence for purposefully shooting and killing a police K-9 dog," he said. "Of course I am biased because I love my K-9 partner Thor as if he was my human son."

7 Internet and Web Service Stocks to Buy Now

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The grades of seven internet and web service stocks are better this week, according to the Portfolio Grader database. Every one of these stocks has an “A” (“strong buy”) or “B” overall (“buy”) rating.

Commtouch Software Ltd’s (CTCH) grade is moving up to a B (“buy”) this week from last week’s C (“hold”). Commtouch Software provides messaging, antivirus, and Web security solutions to OEM customers, enterprises, and service providers primarily in Israel, North America, Europe, and Asia. In Portfolio Grader’s specific subcategory of Sales Growth, CTCH also gets an A. For more information, get Portfolio Grader’s complete analysis of CTCH stock.

IntraLinks Holdings, Inc. (IL) shows solid improvement this week. The company’s rating rises from a C to a B. IntraLinks Holdings provides Software-as-a-Service solutions for managing content, exchanging business information and collaborating within and among organizations. For more information, get Portfolio Grader’s complete analysis of IL stock.

The rating of Gogo Inc. (GOGO) moves up this week, rising from a C to a B. For more information, get Portfolio Grader’s complete analysis of GOGO stock.

Akamai Technologies, Inc.’s (AKAM) ratings are looking better this week, moving up to a B from last week’s C. Akamai Technologies provides services for accelerating and improving the delivery of content and applications over the Internet. Shares of the stock have been changing hands at an unusually rapid pace, four times the rate of the week prior. For more information, get Portfolio Grader’s complete analysis of AKAM stock.

OpenTable, Inc. (OPEN) boosts its rating from a C to a B this week. OpenTable provides free, real-time online restaurant reservations for diners through an online booking service. For more information, get Portfolio Grader’s complete analysis of OPEN stock.

Jiayuan.com International Ltd. Sponsored ADR (DATE) earns a B this week, jumping up from last week’s grade of C. Jiayuan. com International is an online Chinese dating company. For more information, get Portfolio Grader’s complete analysis of DATE stock.

Sohu.com, Inc. (SOHU) shows solid improvement this week. The company’s rating rises from a C to a B. Sohu.com is an Internet media company that serves as a daily source of information, communication and entertainment for millions of Chinese consumers. For more information, get Portfolio Grader’s complete analysis of SOHU stock.

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

Buy Cognizant Now and Hold On for Big Upside

Popular Posts: Trade of the Day: MGM Resorts (MGM)Buy Cognizant Now and Hold On for Big UpsideBest Stocks Update: EMES Continues to Shine Recent Posts: Buy Cognizant Now and Hold On for Big Upside Trade of the Day: MGM Resorts (MGM) Trade of the Day: Halliburton (HAL) View All Posts Buy Cognizant Now and Hold On for Big Upside

Usually I am pretty short-term oriented, but occasionally I lift my eyes to the horizon and think about the long term. You know, like, three months to 12 months out — what we would call “buy and hold” investing at Trader's Advantage.

My editors asked me for a one-year idea at the start of 2014, and my suggestion was Emerge Energy Services (EMES), which mines a special sort of sand used in shale “fracking” by energy producers. It’s up about 160% so far, so I am ready to put that in the “win” column and move on.

The cool thing about EMES at the time was that it stood at the front of a major business trend, it was a recent IPO that no one really knew anything about, and it was an MLP that yielded a rather juicy 5.5% annualized dividend. That is a nice combination of factors — and it worked out.

For a stock to hold for a quarter, I decided to look for a more mature company with a rock-solid record over the past five years of performing well from Aug. 1 through Nov. 1. (By "well," I mean up every one of the past five tumultuous years in that span — and this one fits the bill, including four years with growth of at least 10%.) I also wanted a company that will benefit from the surprise improvement in emerging markets, as that is an unappreciated story at this time.

In particular, I wanted a stock that could benefit, if possible, from a tidal improvement in India, which was bombed-out last year financially but has rebounded already quite a bit this year on the prospect that a new business-friendly government would take the reins. And finally the stock needed to be ranked a 9 or better in my StockScouter rating system and to have an intrinsic value at least 50% higher than the current quote.

When I put all of that in the blender, the top-rated idea was Cognizant Technology Solutions (CTSH), which provides info-tech consulting and business process services to a wide range of companies out of its dual bases in Teaneck, N.J., and Mumbai, India.

Since its start as a division of Dun & Bradstreet more than 25 years ago, Cognizant has developed into a wide-ranging consultancy powerhouse, helping  companies in the financial services, healthcare, manufacturing, utility and retail industries manage its data and information systems more efficiently.

Its customer list is incredibly diversified, which helps Cognizant avoid reliance on any one industry. The company’s financial services programs are among its main draws, accounting for around 40% of revenues. Healthcare customers account for another 25% of revenue, as Cognizant consultants help drug and medical device makers corral their IT costs. Most of the rest of its business comes from telecom, media and entertainment industries.

Though Cognizant recently experienced a couple short-term setbacks in its U.S. business due to a profit squeeze from competitors, its eurozone and Asian business picked up the slack. Indeed, installations at European countries grew 35% in the past year, while its American business only grew 16%. Helping most was the need for eurozone countries to deal with recent economic and weather disruptions.

The Affordable Care Act has had a big impact on Cognizant; the company has had to radically adjust the way it helps its healthcare customers — a transition that temporarily hurt margins in the last quarter and created a rare buying opportunity in the shares. Also looming on the horizon is the risk of immigration legislation in Congress that could restrict Cognizant from employing foreign-born workers. Under one version of the bill, Cognizant could suffer an impact of close to 7% of revenue. This is another overhang that has slightly depressed the price in the near term but should be resolved in coming months.

In the past quarter, the company’s outsourcing growth was quite a bit lower than its consulting business growth, which was up 24% year over year. But management expects improvement during the remainder of 2014 as a result of an aggressive hiring plan.

Despite these minor setbacks, Cognizant continues to grow at a much more robust pace than competitors. A shift toward a global delivery model has served it well, especially when backed by its recent acquisitions of companies C1 and Equinox. Furthermore, its stable prices and margins show that it is fending off competitors.

Cognizant shares have performed well outside of the broad bear markets since going public in 1998, rising an amazing 21,000% since going public in June 1998 — a pace unmatched by all but the best stocks of our era, such as Apple (AAPL). The S&P 500 is only up 105% in the same span. Amazon.com (AMZN), which went public around the same time, is up only a third as much, at +7,000%.

No wonder Cognizant placed on Fortune‘s “100 Fasted-Growing Companies” list for 10 consecutive years from 2003 to 2012, and it also has been among the Fortune 500 since 2011. At that same time, Fortune also named it the third-most admired IT services company behind only Accenture (ACN) and IBM (IBM).

Cognizant reports Q2 earnings on Aug. 6. Since it is cheap and largely oversold, shares are likely to rise into the report and could very well get back on their upward path. Buy CTSH now and hold for target $87.

Jon Markman operates the investment firm Markman Capital Insights. He also offers a daily trading advisory service, Trader's Advantage, and CounterPoint Options, a service that helps individual traders make steady, consistent profits with volatility-related instruments.