Costly Risk In New Oil Exploration

Over the past few years, the large Western oil majors have been plagued by projects running substantially over budget, and taking much longer to complete than initially estimated. These hurdles are part of the broader challenge facing oil companies -- how to cope with the end of the era of "easy oil." Let's take a closer look at one project -- the Kashagan oil field -- that epitomizes these challenges.

A primer on Kashagan
Kashagan is a vast untapped oil field in Kazakhstan with massive hydrocarbon potential. Yet, despite its operators -- a consortium of companies including ExxonMobil (NYSE: XOM  ) , Eni, and Royal Dutch Shell -- having plowed more than $30 billion into the project over the past decade, the field has yet to produce a single drop of oil. 

Exploration in the region first began in the early 1990s after the dissolution of the Soviet Union, and was led by companies including Eni, Exxon, Shell, Total SA, Statoil, BP (NYSE: BP  ) , and BG Group. While initial prospecting pointed to a potential 10-billion barrels of recoverable oil, it also made clear some of the most daunting challenges that drillers would have to overcome in order to exploit Kashagan's resources.

Technical and other challenges
For starters, the reservoir lies about 12,000 feet below the northeast Caspian Sea, which freezes for several months during the year. Since this tends to damage or destroy typical offshore drilling equipment, operators are forced to construct concrete drilling blocks, which don't come cheap. In addition to these weather-related challenges, Kashagan's development has been beset by difficult supply routes and clashes with local government officials.

Delays and other issues
As a result, its operators have repeatedly failed to meet deadlines and start-up dates. Last year, Eni said Kashagan would start up in March this year -- a deadline it later pushed back to June. But that target won't be panning out, either. Earlier this month, Eni pushed the deadline even further out to October this year.

According to a spokesman for the North Caspian Operating Company, the reason for Kashagan's numerous delays has to do with the overwhelming technical complexity of the project, as well as its operators' vigilant approach to development, which they've adopted to minimize problems like oil and gas leaks. 

Due to the delays, cost overruns, and uncertainties, one initial partner in the project, ConocoPhillips (NYSE: COP  ) , even decided to back out. The company recently announced that it is looking to sell its 8.4% stake in the venture, which Kazakhstan has the right to buy. The Kazakh government will decide by July 2 how it wishes to proceed. 

Kashagan's implications for oil companies
Kashagan highlights the grave difficulties facing the large Western oil companies in an era where fields of "easy oil" have already been tapped, or are zealously guarded by national oil companies.

As Steve Coll highlights in his excellent recent book, Private Empire: ExxonMobil and American Power, the resource nationalism that emerged among the large oil-producing states in the world over the past few decades has forced the Western oil majors to embark on challenging journeys to all corners of the globe in search of oil.

But, like Kashagan, most of these projects require massive amounts of upfront investment, yet provide no guarantee about future returns. The bottom line is that, despite the fact that ExxonMobil and some other integrated oil majors are exceptionally well managed, they're still operating in an environment fraught with risk. Clearly, BP -- still recovering from the Deepwater Horizon incident's fallout -- is a poster child for this harsh reality.

This inherent friction of balancing risk minimization with the need to explore for oil in some of the riskiest locales around the globe is one major reason why investors should be wary of the numerous countries these companies operate in, and the level of risk -- weather-related, cost-related, political, social, and otherwise -- that their operations pose.

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Nordic American Tankers Pumps Out New Dividend

Nordic American Tankers (NYSE: NAT  ) is presenting a calm sea to its stockholders by keeping its upcoming dividend level with the previous payout. The company has declared a distribution of $0.16 per share of its common stock for its Q1, which its expects to hand out "on or about" May 14. It expects that the record date will be April 30.

That preceding dividend was paid in late January. Before that, the company had disbursed $0.30 per share every quarter dating back to May 2011.

In the press release announcing the Q1 payout, the company seemed to address potential disappointment at the lack of an increase by writing: "the level of the declared dividend should be seen in the context of planned fleet expansion. Expansion is essentially the same as investing in the future."

It added that the upcoming distribution is to be its 63rd consecutive quarterly dividend payment, dating to the fall of 1997.

The dividend annualizes to $0.64 per share. That yields 6.9% at Nordic American's current stock price of $9.24.

iGATE Beats Up on Analysts Yet Again

iGATE (Nasdaq: IGTE  ) reported earnings on April 11. Here are the numbers you need to know.

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

Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share increased significantly. GAAP earnings per share grew significantly.

Gross margins dropped, operating margins expanded, net margins grew.

Revenue details
iGATE logged revenue of $274.9 million. The eight analysts polled by S&P Capital IQ predicted sales of $272.0 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

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

EPS details
EPS came in at $0.51. The eight earnings estimates compiled by S&P Capital IQ forecast $0.42 per share. Non-GAAP EPS of $0.51 for Q1 were 34% higher than the prior-year quarter's $0.38 per share. GAAP EPS of $0.34 for Q1 were 55% higher than the prior-year quarter's $0.22 per share.

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

Margin details
For the quarter, gross margin was 38.1%, 210 basis points worse than the prior-year quarter. Operating margin was 19.1%, 80 basis points better than the prior-year quarter. Net margin was 12.6%, 350 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $280.3 million. On the bottom line, the average EPS estimate is $0.36.

Next year's average estimate for revenue is $1.14 billion. The average EPS estimate is $1.65.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on iGATE is outperform, with an average price target of $21.57.

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Weekly 52-Week Highs Highlight

According to GuruFocus list of 52-week highs; Genuine Parts Co, Morgan Stanley Capital Trust IV, Brookfield Office Properties Inc, UnitedHealth Group Inc, and Crown Castle International Corp have all reached their 52-week highs.

Genuine Parts Co (GPC) Reached the 52-Week High of $88.55

Genuine Parts Company is a Georgia corporation incorporated on May 7, 1928. Genuine Parts Co has a market cap of $13.56 billion; its shares were traded at around $88.55 with a P/E ratio of 20.20 and P/S ratio of 0.93. The dividend yield of Genuine Parts Co stocks is 2.56%. Genuine Parts Co had an annual average earnings growth of 6.60% over the past 10 years. GuruFocus rated Genuine Parts Co the business predictability rank of 5-star.

Genuine Parts has released its second quarter results ended June 30, 2014. Sales during the quarter totaled $7.5 billion, which was 10% higher than in the prior year quarter. Net income for the quarter was $355.2 million compared to $360.7 million last year. Second quarter 2013 net income included a beneficial adjustment of $36 million. Without this adjustment, net income for the second quarter of 2014 was 9% higher than last year.

CEO Thomas Gallagher bought 5,000 shares of GPC stock on 08/13/2014 at the average price of $84.

Morgan Stanley Capital Trust IV (MWG) Reached the 52-Week High of $25.30

Morgan Stanley Capital Trust IV was originally incorporated under the laws of the State of Delaware in 1981, and its predecessor companies date back to 1924. Morgan Stanley Capital Trust Iv has a market cap of $13.33 billion; its shares were traded at around $25.30 with and P/S ratio of 35445.50. The dividend yield of Morgan Stanley Capital Trust Iv stocks is 1.54%.

Brookfield Office Properties Inc (BPO) Reached the 52-Week High of $20.52

Brookfield Office Properties Inc. was formed under the Canada Business Corporations Act on September 5, 1978 to continue the business of Canadian Arena Corporation which was incorporated in 1923 under the Quebec Companies Act, 1920. Brookfield Office Properties Inc has a market cap of $10.41 billion; its shares were traded at around $20.52 with a P/E ratio of 19.50 and P/S ratio of 4.56. The dividend yield of Brookfield Office Properties Inc stocks is 2.73%. Brookfield Office Properties Inc had an annual average earnings growth of 16.70% over the past 10 years.

Brookfield Office Properties Inc. has released its second quarter 2014 results. Net income attributable to shareholders was $768 million for the quarter compared to $441 million in the same quarter of 2013. Commercial property revenue was $597 million versus $569 million last year.

UnitedHealth Group Inc (UNH) Reached the 52-Week High of $88.18

UnitedHealth Group Incorporated is a Minnesota corporation incorporated in January 1977. Unitedhealth Group Inc has a market cap of $85.68 billion; its shares were traded at around $88.18 with a P/E ratio of 16.20 and P/S ratio of 0.70. The dividend yield of Unitedhealth Group Inc stocks is 1.49%. Unitedhealth Group Inc had an annual average earnings growth of 13.70% over the past 10 years. GuruFocus rated Unitedhealth Group Inc the business predictability rank of 4.5-star.

For its third quarter of 2014, the company reported revenues of $32.8 billion, up 7% year-over-year. Operating earnings were up 5% to $2 billion. Third quarter net earnings grew 7% to $1.63 per share. The company also reported cash flows from operations of $3.2 billion, which was double the level of net income for the quarter.

Director Richard T Burke sold 100,000 shares of UNH stock on 09/17/2014 at the average price of $87.03. Director Douglas W Leatherdale sold 15,800 shares of UNH stock on 09/16/2014 at the average price of $87.21.

Crown Castle International Corp (CCI) Reached the 52-Week High of $80.84

Crown Castle International Corp is incorporated in the State of Delaware. Crown Castle International Corp has a market cap of $26.99 billion; its shares were traded at around $80.84 with a P/E ratio of 206.80 and P/S ratio of 7.74. The dividend yield of Crown Castle International Corp stocks is 1.30%. Crown Castle International Corp had an annual average earnings growth of 24.10% over the past 10 years. GuruFocus rated Crown Castle International Corp the business predictability rank of 3.5-star.

The company reported second quarter net income of $23 million, including $45 million loss on redemption of debt, compared to income of $52 million for the same quarter last year.

Check out the complete list of 52-Week Highs.

Currently 0.00/512345 Rating: 0.0/5 (0 votes)

IRA Rollovers Face Scrutiny by ERISA Panel

The volume of retirement assets rolling out of defined contribution plans has gotten the Department of Labor’s ERISA Advisory Committee’s attention. 

IRAs, along with other investment vehicles that fall outside the jurisdiction of ERISA’s oversight, are growing more popular as boomers retire and move their retirement savings out of employer-sponsored plans. 

In response, the ERISA Advisory Council this week said it plans to examine some of “the factors leading participants to leave their assets in or move them out of a plan.” 

Its inquiry also will look into the habits of retirees moving out of defined benefit plans. IRAs often impose fees that are higher than those seen in 401(k) plans. 

The council’s notice suggests that the Department of Labor wants to know whether the existing regulatory structure governing employer-sponsored plans is affecting how retirement assets are rolled over. 

As part of its work, fees on assets, the range of investment options offered to enrollees, the ultimate extent of investors’ personal control, and the consequences of sponsors’ fiduciary obligations on investment decisions will all be explored, according to a statement from the Advisory Council. 

The council also wants to better understand how existing regulations affect asset movements when workers change jobs, and, ultimately, how the choice to liquidate employer-sponsored retirement plans is weighed by individuals.

Understanding when asset rollovers are in the best interest of individuals — and when they are not — will shed light on whether there are “positive steps that can be taken to further encourage individuals to stay in the system if it makes sense for them to do so,” the council said in its statement. 

The council said it will examine what employer are communicating to workers when they leave their jobs and “whether the quality of the participant’s decision-making can and should be enhanced by communication or other plan design features from the plan sponsor.”

“While the plan sponsors may (or may not) have an interest in keeping participants’ assets in the plan ...  they may be reluctant to provide meaningful communication to the departing participant out of concern for potential fiduciary liability,” it said.

According to Boston-based research firm Cerulli Associates, $324 billion was rolled into IRAs last year, an increase of 17 percent over the previous year and up about 60 percent over the past decade.

IRAs today hold $6.5 trillion, more than the $5.9 trillion in 401(k)-style accounts.

A recent Bloomberg investigation found that former employees at major companies such as Palo Alto, California-based Hewlett-Packard Co. and United Parcel Service Inc., as well as AT&T, have complained that sales representatives lured them into rolling over their 401(k) nest eggs into unsuitable IRA investments. The investigation was based on interviews with retirees and brokers, confidential arbitration records and other documents, Bloomberg said.

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Related on ThinkAdvisor:

Don't Look Now, but BlackBerry Might Not Be Dead After All

Whenever the conversation in the financial media turns to BlackBerry Limited (NASDAQ: BBRY  ) an abundance of opinion inevitably follows. Depending on who you ask, BlackBerry is either a zombie company experiencing the death rattle of its final days, or a wondrous turnaround story on the brink of a magnificent comeback.

Critics contend that the company's hardware business is nonexistent, noting its dwindling market share. Indeed, it's true that the hardware side of the business is essentially a duopoly, controlled almost entirely by giants Apple (NASDAQ: AAPL  ) and Samsung (NASDAQOTH: SSNLF  ) .

But BlackBerry's loyal enthusiasts claim the company is making great strides in hardware internationally. And, the company is developing its services business, where it still has a competitive edge. Plus, a few billion in cash on the books doesn't hurt.

While those on each side of the BlackBerry debate are likely entrenched in their opinion, at least for one quarter, the bulls appear to be on top.

BlackBerry's less-than-awful quarter
When a company collapses as far and as quickly as BlackBerry did, it doesn't take much to inspire a short-covering rally. Putting up a quarterly performance that simply proves you haven't gone out of business is usually enough to see a knee-jerk rally.

To be sure, BlackBerry still posted a year-over-year decline in revenue, and lost money after excluding a debenture fair value adjustment and a sizable restructuring charge. Loss in terms of diluted earnings clocked in at $0.37 per share in the first quarter, which is more than double the loss from the same quarter one year ago.

But sequentially, BlackBerry improved. The company's net loss shrank versus the prior quarter. And, separately, BlackBerry is showing several signs of a turnaround.

Its cash position grew to $3.1 billion, up from $2.7 billion one quarter prior. Gross margin expanded five percentage points from the previous quarter, thanks to BlackBerry's massive cost cuts. The company has virtually cut costs to the bone, which is what's really driving the profit improvement. Management slashed operating expenses to $421 million last quarter, down 60% from over $1 billion in the fourth quarter.

Product mix and new markets to fuel BlackBerry's turnaround
BlackBerry's turnaround hopes are highly dependent on its product shift, and its growth in the emerging markets.

BlackBerry's hardware presence is shrinking rapidly, particularly at the consumer level. Technology tracking firm IDC expects that the Android and iOS operating systems will collectively control 95% of operating system market share this year. Clearly, Samsung and Apple are the major vendors contributing to this. By contrast, IDC projects BlackBerry's market share to be below 1%, at just 0.8%. And, by 2018, IDC estimates BlackBerry's share will dwindle further, to just 0.3%.

Fortunately, BlackBerry is building a strong presence in services, which actually comprises the majority of its revenue now. BlackBerry derived 54% of its revenue from services last quarter, compared to just 39% from hardware.

And, BlackBerry has ambitious plans to grow in new geographies. BlackBerry recently launched the new Z3 device in Indonesia, with eight additional countries to come. This fuels management's forecast to break-even on cash flow by the end of the fiscal year.

BlackBerry's turnaround is off the ground, but far from complete
BlackBerry has plenty of fans and critics alike. Those who contend the company is dead have plenty of ammunition for their argument. BlackBerry is still declining, as Samsung and Apple have basically devoured the smartphone industry.

But the past quarter did show signs of progress that need to be acknowledged. BlackBerry's results came in much better than expected. The company is doing well in services and is set to embark on an ambitious growth strategy in new markets.

Whether BlackBerry's comeback is for real remains to be seen. Its performance in the past quarter may turn out to be a flash in the pan, but for now, BlackBerry still has a pulse.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Will the Bob Evans Farms (BOBE) Earnings Report Quiet Shareholder Activists? CBRL, DENN & DIN

The Q4 2014 earnings report for restaurant stock Bob Evans Farms Inc (NASDAQ: BOBE), a potential peer of Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL), Denny's Corporation (NASDAQ: DENN) and DineEquity Inc (NYSE: DIN), is scheduled for after the market closes on Tuesday. Aside from the Bob Evans Farms report, it should be said that Cracker Barrel Old Country Store, Inc reported Q3 2014 earnings on May 28th (revenues and profit rose on lower expenses); Denny's Corporation reported Q1 2014 earnings on April 28th (they had their strongest quarter of same-store sales at company restaurants in over seven years); and DineEquity Inc reported Q1 2014 on May 1st (earnings rose on stronger sales). However, Bob Evans Farms recently replaced three board members with new independent directors after facing criticism from shareholder Sandell Asset Management Corp.

What Should You Watch Out for With the Bob Evans Farms Inc Earnings Report?

First, here is a quick recap of Bob Evans Farms' recent earnings history from Yahoo! Finance:

Earnings HistoryApr 13Jul 13Oct 13Jan 14

EPS Est	0.64	0.57	0.55	0.57
EPS Actual	0.71	0.58	0.35	0.30
Difference	0.07	0.01	-0.20	-0.27
Surprise %	10.90%	1.80%	-36.40%	-47.40%

 

Back in early March, Bob Evans Farms Inc's shares sank after the company's third quarter results trailed expectations and after it lowered its fiscal 2014 profit view for the second time this year. The weather impacted same-store sales of -1.8% plus the company estimated a sustained and severe winter weather impact of approximately 3%. However, its 47 core restaurants located in Florida achieved same-store sales of 4.4% - benefiting from "the Farm Fresh Refresh program, value sales layers, and the absence of severe winter weather." The Chairman/CEO commented:

"The third quarter of fiscal 2014 was especially challenging due to a number of factors, including: sustained and severe winter weather of a magnitude not seen in many years, particularly in our core Midwest markets; continued higher than projected sow costs; and higher than projected fiscal 2014 startup inefficiencies following the expansion of the BEF Foods' Sulphur Springs, Texas, plant. However, we expect these issues will be confined to fiscal 2014, and as such will not impact fiscal 2015 results."

This time around and according to the Yahoo! Finance analyst estimates page, the consensus expects revenue of $333.31M and EPS of $0.41 - down from the consensus EPS of $0.42 seven days ago, $0.43 thirty days ago, $0.44 sixty days ago and $0.45 ninety days ago.

On the news front and in late April, Sandell Asset Management Corp, the beneficial owner of approximately 1.7 million shares or 6.8% of Bob Evans Farms, released a public letter to the shareholders of the Company to discus its slate of eight independent candidates for BOBE's Board of Directors. The letter noted:

Bob Evans has dramatically under-performed its own selected peer group over a 1-year, 3-year, 5-year, and 10-year time period, as well as other peers. We believe this unacceptable track record is the direct result of the failed policies and a wasteful culture sanctioned by a stale and entrenched Board of Directors that in our view has been unable to exert effective management oversight.

Bob Evans Farms did replace three board members, but that has not satisfied Sandell Asset Management Corp's CEO who stated:

"We believe that today's announcement is a half measure taken as a knee-jerk reactionary step once the Company felt the pressure of shareholders and the spotlight of public opinion trained on them following the announcement of Sandell's highly-qualified and experienced independent slate of Directors. In our view, this is yet another cynical attempt by the Board of Directors of Bob Evans to pose as a Company that embraces good governance after forcing shareholders to suffer years of under-performance under the supervision of what we view as a stale and entrenched Board. We would remind shareholders that this is the second time in recent months that even basic change has occurred only after outside actions put pressure on the Board to react."

In early May, it was announced that Paul F. DeSantis, the Bob Evans Farms' Chief Financial Officer and Treasurer, had resigned to accept a position with another company.

What do the Bob Evans Farms Inc Charts Say?

The latest technical chart for Bob Evans Farms shows a downward trend since late last year:

Moreover, its easy to see why investors are unhappy with Bob Evans Farms' performance as Cracker Barrel Old Country Store, Inc, Denny's Corporation and DineEquity Inc have outperformed it:

Cracker Barrel Old Country Store, Inc has recently produced a multiple bottom on the technical charts while Denny's Corporation has been trending downward since December and DineEquity Inc has been bouncing around the $80 per share level:

What Should Be Your Next Move?

With activist shareholders breathing down the necks of Bob Evans Farms' management, the coming earnings report will be interesting to watch to see if there are signs that current management is doing something to turn things around. If not, we can expect more demands for more radical changes – something that would probably be a good thing for shareholders over the long term.  

Alpha Natural Resources & Walter Energy: Two Coal Miners, Two Different Directions

Consol Energy (CNX) isn’t the only coal miner that can beat earnings, as Alpha Natural Resources (ANR) managed that feat today. Walter Energy (WLT), however has fallen after missing badly.

Shares of Alpha Natural Resources have gained 4.3% to $4.49 at 11:43 a.m., while Walter Energy has slid 5.1% to $6.83. Consol Energy has risen 2.1% a day after it released its own earnings, while Arch Coal (ACI) has jumped 2.6% to $4.70 and Peabody Energy (BTU) has dipped 0.1% to $18.99.

Alpha Natural Resources reported a profit of 7 cents a share, beating forecasts for a loss 58 cents. Sterne Agee’s Michael S. Dudas and Satyadeep Jain explain why positives went beyond earnings:

We are pleased to see more industry met supply rationalization; Alpha lowered 2014 met guidance by 1-2 MT. Management is constructive on thermal markets, expects met markets to tighten 2015. Stockpiles for all regions are below normal now; Alpha getting proposals for term business for Central Appalachian coals (CAPP) as well. We would add to or introduce positions at current levels for risk-tolerant investors.

Walter Energy reported a loss of $1.50, well below forecasts for a loss of $1.21. Cowen’s Daniel Scott and Bryan Bergin explain why it’s not just Walter Energy’s earnings that disappointed:

With the Canadian ops shutting down, the outlook for [Walter Energy] comes down to operating performance at Mine No. 4/7 and maintaining liquidity until seaborne met pricing recovers. While the lack of asset sales commentary may disappoint investors, we are not surprised given the current global met environment.

JPMorgan’s John Bridges and Anant Inani were impressed by Consol Energy’s earnings, which were released yesterday. They explain why:

Consol reported strong cost performance in Q1 on higher production as well as cost reduction efforts that have now started to pay off. Its cost profile should improve further now that the BMX ramp up is complete. Although Consol noted that Q1 typically has better cost performance as no maintenance or worker holidays are built in…

Consol has sold $125m of non-core assets year to date and it expects to add to this with plans to monetize mid-stream assets this year. Additionally, it is expecting to receive $115m in tax refunds related to its sale of NAPP mines to Murray Energy as well as about $200m in Noble "carry" assuming the gas price stays over $4/mmbtu.

Despite today’s gain, shares of Alpha Natural Resources have shed 37% this year, while Walter Energy has plunged 59%. Consol Energy is up 19%, Peabody Energy has dipped 2.8% and Arch Coal is up 6% in 2014.

3 Stocks Spiking on Big Volume

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

>>5 Stocks With Big Insider Buying

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

>>5 Hated Earnings Stocks You Should Love

With that in mind, let's take a look at several stocks rising on unusual volume recently.

MEI Pharma

MEI Pharma (MEIP), a development-stage oncology company, focuses on the clinical development of therapeutics for the treatment of cancer. This stock closed up 3% at $10 in Wednesday's trading session.

Wednesday's Volume: 190,000

Three-Month Average Volume: 136,021

Volume % Change: 50%

From a technical perspective, MEIP spiked notably higher here with above-average volume. This stock recently pulled back from its high of $11.63 to its low of $9.15. That low corresponded with MEIP's 50-day moving average and since that pullback shares of MEIP have started to rebound a bit. That rebound is starting to push shares of MEIP within range of triggering a near-term breakout trade. That trade will hit if MEIP manages to take out some near-term overhead resistance levels at $10.53 to $10.75 with high volume.

Traders should now look for long-biased trades in MEIP as long as it's trending above $9.50 or above its 50-day moving average of $9.05 and then once it sustains a move or close above those breakout levels with volume that hits near or above 136,021 shares. If that breakout hits soon, then MEIP will set up to re-test or possibly take out its next major overhead resistance levels at $11.63 to its 52-week high of $12.45.

Netflix

Netflix (NFLX) provides Internet television network service that enables subscribers to stream TV shows and movies directly on TVs, computers and mobile devices in the U.S. and internationally. This stock closed up 0.39% to $372.28 in Wednesday's trading session.

Wednesday's Volume: 3.47 million

Three-Month Average Volume: 2.92 million

Volume % Change: 50%

From a technical perspective, NFLX bounced modestly higher here right above its recent low of $365.75 with above-average volume. This stock has been absolutely destroyed by the sellers over the last few weeks, with shares plunging sharply lower from its high of $458 to its low of $365.75. During that move, shares of NFLX have been consistently making lower highs and lower lows, which is bearish technical price action. That move has now pushed shares of NFLX into oversold territory, since its current relative strength index reading is 24. Oversold can always get more oversold, but it's also an area where a stock can rebound sharply higher from.

Traders should now look for long-biased trades in NFLX as long as it's trending above its recent low of $365.75 and then once it sustains a move or close above Wednesday's high of $377.45 to more resistance at $384.93 with volume that hits near or above 2.92 million shares. If we get that move soon, then NFLX could rebound higher towards $400 or even its 50-day moving average of $412.07.

Baxter International

Baxter International (BAX) develops, manufactures and markets products for people with hemophilia, immune disorders, infectious diseases, kidney diseases, trauma and other chronic and acute medical conditions. This stock closed up 2.4% at $70.08 in Wednesday's trading session.

Wednesday's Volume: 8.16 million

Three-Month Average Volume: 3.11 million

Volume % Change: 146%

From a technical perspective, BAX ripped higher here right above its 200-day moving average of $68.12 with heavy upside volume. This spike pushed shares of BAX into breakout territory, after the stock took out some near-term overhead resistance levels at $68.64 to $69.65. Shares of BAX also flirted with some more resistance at $70.24 before the stock closed just below that level at $70.08. Market players should now look for a continuation move higher in the short-term if BAX manages to take out Wednesday's high of $70.75 with strong volume.

Traders should now look for long-biased trades in BAX as long as it's trending above Wednesday's low of $68.39 or above its 50-day at $68.09 and then once it sustains a move or close above $70.75 with volume that's near or above 3.11 million shares. If we get that move soon, then BAX will set up to re-test or possibly take out its next major overhead resistance levels at $72 to $73.01, or even its 52-week high at $74.60. Any high-volume move above $74.60 will then give BAX a chance to tag $80.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>3 Hot Stocks to Trade (or Not)

>>Beat the S&P With the Stocks Everyone Else Hates

>>5 Big Tech Stocks to Trade for Gains

Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

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

FHA to pull back on big mortgages

NEW YORK (CNNMoney) The Federal Housing Administration has announced plans to reduce its stake in the market, an indication it sees some signs of strength in real estate.

The agency, which insures low down-payment mortgages, is reducing the upper limits of what it will backstop in areas where home prices are high.

Starting in the new year, the biggest cap in these areas will drop to $625,500 from $729,750. Limits will be set lower in about 650 counties as a result, the agency said.

The FHA will maintain current limits in areas where home prices are lower and said the move will allow it to refocus on less wealthy homebuyers.

The agency stepped in amid the housing market meltdown -- which was at the core of the 2008 financial crisis -- and raised limits so it could help more homebuyers. The FHA said the program quadrupled its activity "as the private market retreated."

But by doing so, it took also significant hits from defaults, and the agency has been trying to right its own balance sheet.

The agency was forced to ask Congress for $1.7 billion in late September, and has hiked premiums. Several years earlier, the government took over housing giants Fannie Mae and Freddie Mac.

FHA Commissioner Carol Galante said the new changes are "an important and appropriate step as private capital returns to portions of the market and enables FHA to concentrate on those borrowers that are still underserved."

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The agency does not make home loans, but insures lenders against losses, allowing buyers who can afford as little as a 3.5% down payment to receive a mortgage.

The FHA says it currently has nearly 5 million mortgages in its portfolio.

Dow, S&P 500 Fall For Fourth Straight Session

U.S. stocks finished mostly lower Wednesday, giving back earlier gains, with the Dow and the S&P 500 both extending their losing streak to a fourth day.

The Dow Jones Industrial Average fell 25 points, or 0.15% to close at 15,890. The S&P 500 index lost two points, or 0.12%, to end at 1,793.

The Nasdaq Composite, however, managed to buck the trend, though not by much. The index rose one point, or 0.02% to close at 4,038.

It was a choppy market. The big indices all moved into positive territory on news about progress towards a U.S. budget deal. Those gains disappeared as the day progressed.

What happened? Upbeat economic reports reinforced fears that later this month the Federal Reserve could start to taper the bond-buying program that has supported equities.

Data from ADP showed more private-sector jobs were created in November than economists had forecast. The report is viewed as a preview of the Labor Department's November employment report, due Friday, which investors are watching closely for hints as when the Fed will take action.

New home sales were higher than forecast in October, rising to an annual rate of 444,000, on expectations of a rise to 426,000. And the Fed's Beige Book described improving economic conditions around the country.

A report about the service sector of the U.S. economy disappointed. The Institute for Supply Management's nonmanufacturing purchasing managers index declined by more than expected in November, falling to 53.9 from October's 55.4. It was forecast to slip to 55.

Yields on the 10-year U.S. Treasury note rose to 2.836%, its highest close since Friday. Bond yields move inversely to bond prices.

Crude oil prices rose 1.17% to $97.16 per barrel. Gold prices rose as well, up 1.78% to $1,242.50 per pounce.

In corporate news: Express (EXPR) fell 23% to $19 after the teen clothing retailer cut its full-year outlook.

J.C. Penney (JCP) fell 4.45% to $9.66 as investors appeared disappointed by the 10.1% same-store sales growth reported for November.

Deere (DE) rose 3.2% to $85.38 after the equipment maker expanded its share repurchase.

CF Industries (CF) rose 10.7% to $237 after the fertilizer maker said its evaluating its dividend payment.

General Motors (GM) rose 1.54% to $38.71 on news that hedge fund Hayman Capital has taken a stake in the automobile maker and says the stock could rise more than 40% in the next 12 to 18 months after the U.S. Treasury sells its stake in the company.

And Intuitive Surgical (ISRG) fell 0.6% to $370.68 following news from the FDA that the firm warned customers last month of problems with certain instruments in its da Vinci surgical robots.

After the closing bell, Walt Disney (DIS) rose 0.7% to $70.47 after announcing a 15% dividend hike. And teen retailer Aeropostale (ARO) fell 3.8% $9 after reporting fiscal third-quarter financial results.