Will Best Buy Continue Its Recovery?

With shares of Best Buy (NYSE:BBY) trading around $26, is BBY an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Best Buy is a multinational retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances, and related services. The company operates retail stores and call centers, and conducts online retail operations under a range of brand names, such as Best Buy, Best Buy Mobile, The Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Pacific Sales, and The Phone House. Best Buy operates in two segments: Domestic and International. Electronic products hold the interest of consumers and companies worldwide and will continue to do so. As economies around the world develop, Best Buy is poised to provide the products and services consumers demand. However, in order for Best Buy to see huge success, it must be able to successfully compete against its online competitors.

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T = Technicals on the Stock Chart are Strong

Best Buy stock is seeing a powerful bounce after a few years of increased selling. The stock has more than doubled just this year and looks to continue this euphoric rise. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Best Buy is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Best Buy Options	69.54%	86%	84%

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

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

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

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

E = Earnings Are Mixed Quarter-Over-Quarter

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

	2012 Q4	2012 Q3	2012 Q2	2012 Q1
Earnings Growth (Y-O-Y)	75.35%	-107.14%	-91.49%	31.43%
Revenue Growth (Y-O-Y)	38.12%	-5.23%	-3.59%	-26.20%
Earnings Reaction	4.57%	-13.01%	-1.37%	1.59%

Best Buy has seen mixed earnings and revenue figures over the last four quarters. From these figures, the markets have been a bit confused with Best Buy’s recent earnings announcements.

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P = Excellent Relative Performance Versus Peers and Sector

How has Best Buy stock done relative to its peers, Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Wal-Mart (NYSE:WMT), and sector?

	Best Buy	Amazon	Apple	Wal-Mart	Sector
Year-to-Date Return	122.2%	6.89%	-19.04%	16.74%	23.25%

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

Conclusion

Best Buy provides highly demanded electronic products and services to consumers and growing companies worldwide. The stock is seeing an incredible bounce after a few years of significant selling pressure. Earnings and revenue figures are improving, but investors expect more from the company. Relative to its peers and sector, Best Buy has led by an extremely wide margin. Look for Best Buy to OUTPERFORM.

Ford's Fusion and F-150 Will Drive More Profit Gains

Ford's hot-selling Fusion should see even more sales gains this fall. Photo credit: Ford Motor.

This past week, Ford (NYSE: F  ) reported a second-quarter profit of $1.2 billion, a strong result powered by big sales in North America and improvements in all of its overseas regions. Further gains in Asia and Europe should give Ford even bigger profits in coming quarters, but Ford is also setting the stage for even more profits here in its home market.

Two of Ford's hottest products right now are the Fusion sedan (pictured) and the F-150 pickup. In this video, Fool contributor John Rosevear explains how the Fusion and the F-150 could boost Ford's profits even further as the second half of 2013 unfolds.

Ford's latest cars and trucks aren't doing well just in the United States. Its Focus has become one of China's best-sellers, and more Fords are climbing China's sales charts. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market," says that Ford is one of two global auto giants exceptionally well positioned to benefit from China's ongoing auto boom. You can read this report right now for free -- just click here for instant access.

If It's Good Enough for Quest Diagnostics and Affymetrix... (AFFX, CLRX, DGX)

What do Quest Diagnostics Inc. (NYSE:DGX) and Affymetrix, Inc. (NASDAQ:AFFX) know that the rest of the healthcare industry doesn't seem to know yet? In simplest terms, AFFX and DGX seem to have come to grips with the reality that there's so much information out there in the diagnostic and treatment world that caregivers are actually stumbling over it. The end result is not only care that's not better than it was in the recent past, but perhaps less effective than it used to be simply because of information overload and/or a lack of understanding of what to do with all sorts of data.

Enter CollabRx Inc. (NASDAQ:CLRX) - a provider of an overdue solution to the aforementioned problem.

In simplest terms, CLRX has built a website designed to be used doctors - oncologists in particular - who need to stay up-to-date on all the latest treatment options for cancer patients. And it's not just a list of the most apropos drugs that might be well-suited for a particular type of cancer [the kind of detailed diagnosis that genetic testing now allows] that the CollabRx app offers. The website, available by subscription, also suggests clinical trials that may be worth a shot if the patient is so inclined... or if the normal treatment regimens aren't working.

A needless tool? Not even close. There's a huge demand for the kind of service CollabRx Inc. is providing, even if doctors and caregivers don't know it yet.

Some of the numbers underscoring that idea are staggering. For instance, right now, there are over 500 cancer drugs in development, and they're being tested in over 10,000 different trials. Last year, more than 100,000 research reports on the topic of treating cancer were published, and that's all in addition to dozens of oncology drugs that are already on the market, but each with its own different set of cancers it's approved to treat. It's overwhelming to say the least, even for the best-read doctors.

But what do Quest Diagnostics and Affymetrix have to do with CLRX? Both have partnered with CollabRx in recent months, utilizing the focused information that only its unique website/tool can provide. Specifically, DGX will be attaching robust treatment-option data for a specific type of cancer to its diagnostic tests that indicate cancer is present for a particular patient. That data will come from the CollabRx site. As for Affymetrix, it will essentially be doing the same with a couple of its cancer-diagnostic assays.

As for what it all means to CollabRx and CLRX shareholders, the fact that much bigger and much more established names like Affymetrix and Quest Diagnostics want the service - and are paying for the service - validates that what CollabRx is doing is on target. From here, it's all just a mater of scale-up.

While it will be a couple of years before the recurring revenue hits a critical mass, there's a clear light at the end of the tunnel. Odds are pretty good the stock will start to reflect that light well before the revenue light is actually reached. 

For more on CollabRx, visit its corporate website here. Or, you can read the SCN research report here, or the SCN recommendation here.

2 Biotech Stocks Under $10 in Breakout Territory

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Rocket Stocks to Buy This Week

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>Side-Step the Selling With These 5 Big Trades

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside.

Onconova Therapeutics

Onconova Therapeutics (ONTX), a clinical-stage biopharmaceutical company, focuses on discovering and developing small molecule drug candidates to treat cancer. This stock closed up 2.6% to $6.16 a share in Tuesday's trading session.

Tuesday's Range: $5.95-$6.27

52-Week Range: $5.23-$31.13

Tuesday's Volume: 409,000

Three-Month Average Volume: 374,210

From a technical perspective, ONTX trended modestly higher here right off $6 with slightly above-average volume. This move is quickly pushing shares of ONTX within range of triggering a major breakout trade. That trade will hit if ONTX manages to take out some key near-term overhead resistance levels at $6.25 to Tuesday's intraday high of $6.27 and then once it clears more key resistance at $6.49 with high volume.

Traders should now look for long-biased trades in ONTX as long as it's trending above some key near-term support at $5.60 and then once it sustains a move or close above those breakout levels with volume that hits near or above 374,210 shares. If that breakout triggers soon, then ONTX will set up to re-test or possibly take out its next major overhead resistance levels $7 to $8, or even $8.50 to $9.34.

Geron

Geron (GERN), a clinical-stage biopharmaceutical company, develops a telomerase inhibitor, imetelstat, to treat hematologic myeloid malignancies. This stock closed up 14.6% to $2.19 in Tuesday's trading session.

Tuesday's Range: $1.89-$2.29

52-Week Range: $0.41-$2.75

Tuesday's Volume: 9.71 million

Three-Month Average Volume: 6.36 million

From a technical perspective, GERN exploded higher here right above some near-term support at $1.75 with strong upside volume. This move pushed shares of GERN into breakout territory, since the stock took out some near-term overhead resistance levels at $2.06 to $2.18. Market players should now look for a continuation move higher in the short-term if GERN manages to take out Tuesday's high of $2.29 to more near-term overhead resistance at $2.53 with high volume.

Traders should now look for long-biased trades in GERN as long as it's trending above $2 or above Tuesday's low of $1.89 and then once it sustains a move or close above $2.29 to $2.53 volume that hits near or above 6.36 million shares. If that move gets underway soon, then GERN will set up to re-fill some of its previous gap-down-day zone from March that started just above $4.50. Some possible upside targets if GERN gets into that gap with volume are $3 to $3.50.

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To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Hated Earnings Stocks You Should Love

>>4 Big-Volume Stocks to Trade for Breakouts

>>3 Big Stocks on Traders' Radars

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.

Why Energizer Is Poised to Keep Going

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, battery specialist Energizer Holdings (NYSE: ENR  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Energizer, and see what CAPS investors are saying about the stock right now.

Energizer facts

Headquarters (founded)	St. Louis, Mo. (1999)
Market Cap	$6.7 billion
Industry	Household products
Trailing-12-Month Revenue	$4.6 billion
Management	CEO Ward Klein (since 2005) CFO Daniel Sescleifer (since 2000)
Return on Equity (average, past 3 years)	16.4%
Cash / Debt	$850.7 million / $2.5 billion
Dividend Yield	1.5%
Competitors	Panasonic Procter & Gamble Spectrum Brands

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 339 members who have rated Energizer believe the stock will outperform the S&P 500 going forward.

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Just yesterday, one of those Fools, All-Star joryko, succinctly summed up the bull case for our community:

Simply put, Energizer has essentially become a Personal Care company. With 54% of its sales coming from its Personal Care segment, the company's diversification away from its battery operations has been truly amazing and effective.

Perhaps more importantly however, is that Energizer's line of personal care items have not only become the main source of revenues, but grew at a 17% clip in in 2012. Comprised of the Schick, Edge, Playtex, Skintex, Wet Ones, and Banana Boat brands -- just to name a few -- Energizer has assembled a strong and growing portfolio of big-name brands.

Facing a secular decline in battery sales, Energizer has begun scaling back on its battery operations, maintaining its profitability. Despite its decline, the Energizer Bunny still leads the way and is quietly profitable.

Throw in a 2% [dividend yield] and I am willing to hold this one far into the future. 5+ years.  

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong five-star rating, Energizer may not be your top choice.

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Universal Display: Why Now Might Be a Great Time to Buy

Shares of Universal Display (NASDAQ: OLED  ) have fallen more than 15% since the company reported disappointing earnings in May, but Mr. Market may have gotten this one wrong, says Fool contributor Steve Symington in the following interview with the Fool's Alison Southwick.

More specifically, considering this quarter will include Universal Display's twice-annual license payment from Samsung (which is set to rise by a third to $20 million), Steve thinks the now might be a great time for investors to open a long-term position.

But what do you think? Is Universal Display a good long-term buy? Watch the video to get Steve's take, and then weigh in using the comments section below.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged among the five kings of tech. Click here to keep reading.

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Why Ford's CEO Is Mad at Japan

Ford (NYSE: F  ) CEO Alan Mulally is a very reasonable guy -- but lately, he's been quoted in the business press with some very tough talk about Japan. Mulally says the Japanese government is manipulating its currency to give Japanese automakers an advantage -- part of the prime minister's efforts to jump-start Japan's slow economy.

Is Mulally right to be angry? In this video, Fool contributor John Rosevear looks at what's actually happening, and what's at stake for Ford -- and at why Alan Mulally might be right to be worried about Ford's Japanese rivals.

China is already the world's largest auto market – and it's set to grow even bigger in coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market," names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free – just click here for instant access.

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Kroger Beats on Earnings, Misses on Revenues

Cincinnati-based The Kroger Co. (NYSE: KR  ) shares suffered mightily in the wake of Q1 earnings results, released Thursday.

Kroger shares slumped 6.1% in Thursday trading (rebounding slightly in the after-hours). This was despite the company announcing that it had increased sales 3.4% to $30 billion in Q1, and grown its profits 18% in comparison to last year's Q1 numbers, to $0.92 per share. That profits number topped analyst estimates by $0.04. However, investors didn't seem to like the company's admission that sales missed the analyst target of $30.2 billion.

Going forward, the company promised to beat its own estimates once again -- for earnings, at least. New guidance for 2013 is $2.73 to $2.80 per share, up from the company's prior promise of $2.71 to $2.79. Even the new numbers, however, appear to only match what analysts were already expecting. Yahoo! Finance figures show the consensus among analysts following the stock is for Kroger to earn $2.77 per share this year -- right in the middle of the new targeted earnings range.

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link

You’d Be a Total Idiot to Pass Up TOT Stock

Popular Posts: 4 Stocks to Buy for Surging Petroleum Exports3 Energy Stocks for Colorado’s Hidden Shale PlayBuy American: 5 Best U.S. Oil Stocks to Buy Recent Posts: You’d Be a Total Idiot to Pass Up TOT Stock 4 Stocks to Buy for Surging Petroleum Exports 3 Energy Stocks for Colorado’s Hidden Shale Play View All Posts

Last year, the story for many of Europe's major integrated energy stocks wasn't that pleasant. Higher drilling costs and absolutely abysmal crack spreads on refining hurt profits and crimped share prices. From BP (BP) to Italy's ENI (E), many of the European majors suffered.

Yet in this suffering, investors can find some pretty tasty long-term bargains. In this case we're referring to French major Total (TOT).

Like rivals BP and E, Total didn't have a great 2013. However, there are plenty of catalysts that should help propel TOT stock into the future. For investors looking for beat-up bargain, TOT stock could be the key to a great total return in the energy sector.

A Terrible Year For TOT Stock

To say that 2013 was bad for many of Europe's major energy firms would be an understatement. Aside from Europe's slow-growing economy, many of the continent’s energy majors suffered hard at the expense of downstream and refining issues. Unlike many American refiners, most of the European majors have been forced to fight rising Brent crude oil prices. Those high prices managed to dent or obliterate refining margins.

Add in poor exploration and production numbers and it's easy to see how the European majors faired so poorly throughout the year. Overall, Total managed to see an 18% reduction in its full year profits, with upstream operations profits falling 13%.

In response to the terrible year, many of Europe's biggest energy firms have undergone a huge asset selling binge. Both ENI and Royal Dutch Shell (RDS.A) have begun selling everything but the kitchen sink as well as cutting capital expenditure on new projects. Shell — which had been the capex king – has reduced its planned spending by nearly 20% this year, while E has plans to reduce its spending over the next four years by 5%.

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And since both E & Shell saw falling production amounts last year as well, cutting capex spending on new upstream and downstream projects probably isn't a good idea for the long term.

However, here's where the outlook gets rosy for TOT stock. Total continues to open up its wallet. Last year, the firm increased its capex spending by 18% to reach $34.4 billion. And so far in 2014, the deals keep coming.

First, TOT has entered the potentially prolific play in Chinese shale. Total recently partnered with Sinopec (SNP) to begin fracking China's vast shale rock formations. Estimates peg China's shale reserves as the world's largest. The 1,500 square-mile region that Total and SNP are prospecting will yield around 10 billion cubic meters of natural gas by 2017.

Second, TOT continues to prospect in the deepwater off of the coast of Africa with great success. The firm has recently begun a massive offshore project in Angola. The Kaombo project will contain six oil fields, containing both heavy and light oil, across 59 wells. Once it is completed in 2017, the project will produce around 230,000 barrels per day or about 13% of Angola's total daily production.

Adding these two deals and projects to others — such as a new liquefied natural gas (LNG) facility in Russia and exposure to Brazil's Santos Basin — causes the longer-term production profile at Total to be quite sweet. Overall, the energy firm estimates that these projects will have it producing around 2.6 million barrels per day by 2015 and possibly 3 million per day by 2017.

Time To Buy TOT Stock

And despite that bullish spending and production profile, TOT stock is currently trading at a discount to its European peers — except for BP, which is still struggling under the weight of its legal woes.

On a forward price-to-earnings metric, TOT stock currently trades for a little more than 10 times earnings. While that is above its historic norm, it's still below rivals ENI & Shell. That duo currently trades for a forward P/E north 12. Total's discount versus its European rivals extends itself to its price-to-book and PEG ratios as well. Not to mention its gross profit margin of 28% is higher than the other two firms.

Even when looking across the pond here in America, TOT stock is actually cheaper on a forward P/E basis that majors like Exxon (XOM).

On the dividend front, Total's recent increase is another advantage. TOT stock is currently yielding 5.1%. That compares to only a 4.7% yield for both E & RDS.A. That dividend yield bests even America's major energy players.

Total offers a higher long-term production growth profile and bigger dividends at a much cheaper price than its rivals. TOT stock is a great example of what constitutes a great bargain. Over the long haul, its new ambitious projects will help drive returns and future increases. The cheaper metrics make those projects even better.

Given that scenario, TOT stock is an obvious buy for investors looking to add some European muscle to their energy portfolio.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.

John Mauldin's Outside the Box - Dare to Be Great II

Dare to Be Great II

John Mauldin

April 16, 2014

I can't tell you how many thousands of hours I have spent, over the years, thinking about, reading about, and talking about how to be a consistently successful investor; but I can tell you this: I'm still working at it. And once in a while – less frequently as the years pass, it seems – I come across investment advice that strikes me as fundamentally strong, innovative, and worth assimilating.

I feel that way about today's Outside the Box. It's a client memo sent last week by Howard Marks (Trades, Portfolio), founder and chairman of Oaktree Capital Management. He calls it "Dare to Be Great II," since it's a follow-up to the famous memo by that name he wrote in 2006.

The first thing we need if we're to become superior investors, says Howard, is an explicit investing creed. What do we believe in? What principles will underpin our process? He suggests that we ask ourselves questions like the following – and be willing and able to come to agreement on them with our colleagues.

Is the efficient market hypothesis relevant? Do efficient markets exist? Is it possible to "beat the market"? Which markets? To what extent? Will you emphasize risk control or return maximization as the primary route to success (or do you think it's possible to achieve both simultaneously)? Will you put your faith in macro forecasts and adjust your portfolio based on what they say? How do you think about risk? Is it volatility or the probability of permanent loss? Can it be predicted and quantified a priori? What's the best way to manage it? How reliably do you believe a disciplined process will produce the desired results? That is, how do you view the question of determinism versus randomness? Most importantly for the purposes of this memo, how will you define success, and what risks will you take to achieve it? In short, in trying to be right, are you willing to bear the inescapable risk of being wrong?

Now that's what I call a worthwhile list of questions.

If we're going to dare to be great, Howard asserts, we have to dare to be different.

Speaking of which, one of my personal heroines is Ayaan Hirsi Ali. Her courage in confronting the oppression of women at the risk of her own life is inspiring. In person she is a quiet, reserved, formidable force of nature. This last week she suffered an unjust, cowardly affront to her courage and her work dedicated to helping those who can't help themselves.

Brandeis University decided to offer Ayaan an honorary doctorate for her efforts on behalf of women in Muslim societies. When the decision was announced, a group of students, faculty members, and the usual politically correct pressure groups campaigned to have the university withdraw the honor. Brandeis president Frederick Lawrence quickly capitulated. Not even bothering to sign his own notice, he offered that Ayaan's story is "compelling," whatever that means. But, he added, "That said, we cannot overlook certain of her past statements that are inconsistent with Brandeis University's core values. For all concerned, we regret that we were not aware of the statements earlier."

That is simply Academic Bullshit. First of all, no one requested or forced Brandeis to offer the degree in the first place; it was their own clear choice. Secondly, after two best-selling books and hundreds of public appearances, Ayaan has made her views well-known. That she has criticized certain aspects of Islamic culture is no secret. For the Brandeis administration to say that they were unaware of her views stretches one's sense of credulity beyond the limit. In Texas we would simply call it a lie.

I would be interested in the views of those who opposed her. Precisely which of the practices she condemns would they like to see maintained? Female genital mutilation, honor killings, forced marriage, or Sharia law? Perhaps treating women as property is deemed appropriate by some people.

The simple fact is, there is a portion of the academic community that is so politically correct that they are socially useless. In the name of being tolerant they tolerate acts so despicable as to be worthy of shunning. They have the discernment of a fruitfly. And that is probably an insult to fruitfly-kind.

Even more interesting is that just a few years ago Brandeis awarded an honorary degree to playwright Tony Kushner, who had been quoted as saying, "The biggest supporters of Israel are the most repulsive members of the Jewish community." At the time the Brandeis president justified the award saying, "Just as Brandeis does not inquire into the political opinions and beliefs of faculty or staff before appointing them, or students before offering admission, so too the University does not select honorary degree recipients on the basis of their political beliefs or opinions." So which is it, President Lawrence? Or is it just that women cannot hold strong beliefs?

If I were Brandeis graduate, I would be profoundly embarrassed. But a good way to voice your displeasure might be to write a check to Ayaan's foundation at http://theahafoundation.org/, send a copy of it to President Lawrence, and say that until he personally apologizes for his cowardly behavior and ungentlemanly conduct in disparaging the character of a person so courageous as Ayaan Hirsi Ali, no more checks to Brandeis will be forthcoming. This whole distasteful event is especially galling when you realize that Brandeis was founded as a nonsectarian Jewish coeducational institution to counter oppression and a lack of tolerance.

The rest of my readers may also want to click on the link and make donations. There are tens of thousands of young girls around the world who face severe oppression that is justified in the name of culture and religion. Someone has to stand up and say no more. Ayaan does that, and perhaps we should stand with her. Think of your daughters and granddaughters and decide what kind of world you want them to grow up in.

I am back in Dallas and enjoying being home and next to my gym. I was not in the gym enough in South Africa, and I can feel it. I'm going to have to get better at scheduling workout time when I'm on the road. Have yourself a great week, and really sit and think through some of the questions that Howard Marks (Trades, Portfolio) challenges us with. They are at the heart of the investing portion of our lives. Without clear answers to them, we are wandering aimlessly and can expect unsatisfying results.

Continue reading here.

About the author:Grass Hopper

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Facebook Inc (FB): You Might Not Like It Today, But You’ll Like It Tomorrow

Do you honestly want to invest in stocks right now? It sure looks like the bull market is at least on spring break, if not over. But, if you are interested in putting some money to work just in case the pivot higher is right around the corner, then two firms say buy Facebook Inc (NASDAQ:FB).

Cantor Fitzgerald and Pivotal Research upgraded the social site leader to "Buy" from "Hold" recommendations. Both research teams set a price-target of $72, which is not a coincidence as they are both written by the same guy.

For the few who may not know, Facebook, Inc. (Facebook) is engaged in building products to create utility for users, developers, and advertisers. People use Facebook to stay connected with their friends and family, to discover what is going on in the world around them, and to share and express what matters to them to the people they care about. Developers can use the Facebook Platform to build applications and Websites that integrate with Facebook to reach its global network of users and to build personalized and social products. It offers advertisers a combination of reach, relevance, social context and engagement.

[Related -Can Twitter Inc (TWTR) Fix The MAU Issue?]

The two-time analyst, Brian Wieser tells interested FB investors, "We are upgrading Facebook to Buy from Hold, reflecting both our revision in costs of capital for the company (and others among our coverage universe), and the only-partially warranted sell-off for the stock following the WhatsApp and Oculus acquisition announcements. Although the stock posted strong gains yesterday, we think there is more room for the stock to run ahead of and probably after the company's 1Q14 earnings. While consensus estimates appear to be in-line with our estimates for the current quarter, we think estimates for later in the year are probably under-stated."

[Related -WhatsApp With That?]

Wieser adds, "Core big brand segment of marketers should generally continue to expand their budgets with Facebook this year," In detail, he is calling for ad revenue growth to "exceed 50% each quarter this year until the fourth quarter (with advertising growth of 65% during 1Q14 specifically."

So, Cantor/ Pivotal call is earnings based with the anticipation that FB will pound Wall Street's consensus estimate. Considering the post-earnings-drift phenomenon, (stocks tend to outperform in the direction of earnings surprises), it's a good bet for both firms if Wieser has made the correct call.

Top 5 Financial Stocks To Buy Right Now

Minus Facebook's first quarter as a publicly traded company, EPS exceeded Wall Street's consensus outlook by an average of 8.41%. Things have improved a lot in the last four quarters with an average bullish surprise of 20.74%.

As is it now, the street believes Facebook will earn $1.26 for 2014. I few apply the average surprises outlined above, then we can create hypothetical earnings estimates of $1.37 and $1.52, respectively.

Since IPOing and turning a profit, the internet information provider traded with a minimum price-to-earnings (P/E) ratio of 59.38. Using our supposed EPS estimates, Facebook shares would trade between $81.35 and $90.60.

Now, iStock prefers a P/E that matches earnings per share growth. The current consensus projects a year-over-year (YoY) increase of 43.2%. Using that as our P/E with our hypothetical numbers, we get price-targets of $59.18 and $65.66.

If we use the growth rates our iEstimates suggest, then we get potential 1 for 1 P/Es of 55.67 and 72.72. Once again, we do some multiplying and calculate stock prices of $76.27 (fairly close to Wieser) and $110.53.

Overall: Facebook Inc (NASDAQ:FB) could become a highly attractive buy if the market continues to tank. Based on FB's recent history of bypassing the street's profit view, odds are the company will earn more than $1.26 for 2014. To hit $72, as Brian Wieser is calling for, would probably require YoY earnings growth of 50% or more – a no brainer if FB continues to produce bullish earnings surprises. 

Hot or Not? Three (Promoted) Small Cap Stocks: BANJ, AMZZ & GRDH

Small cap stocks Banjo & Matilda, Inc (OTCMKTS: BANJ), Amazonica Corp (OTCBB: AMZZ) and Guardian 8 Holdings (OTCMKTS: GRDH) have been getting some extra attention in various investment newsletters or email alerts. Of course, there is nothing wrong with properly disclosed promotion or investor relations type of activities but they can cause problems for unwary investors and traders alike. So how hot are these three small cap stocks? Here is a closer look and a reality check:

Banjo & Matilda, Inc (OTCMKTS: BANJ) Was Recently Acquired

Small cap Banjo & Matilda, Inc recently acquired 100% of the issued and outstanding capital stock of Banjo & Matilda - a designer, retailer and wholesaler of contemporary luxury knitwear that draws its inspiration from Australian heritage and beach lifestyle. On Monday, Banjo & Matilda, Inc rose 17.11% to at $0.410 for a market cap of $9.46 million plus BANJ is down 59% over the past year and up 2.5% since February 2013 according to Google Finance.

What's the Catch With Banjo & Matilda, Inc? According to various disclosures, a transaction or transactions of $5k have or will occur to mention Banjo & Matilda, Inc in various investment newsletters. Back in November when the listed entity was still known as Eastern World Solutions, there was a Share Exchange Agreement with Banjo & Matilda Pty Ltd - a corporation organized under the laws of Australia and the shareholders of Banjo & Matilda. In addition, there was an agreement made between the company and Brendan Macpherson who will be the CEO with a base salary of $125,000. Then last Monday, Banjo & Matilda, Inc issued a welcome letter from the CEO which noted:

As we celebrate our public listing and welcome new investors into the Banjo & Matilda family, it's important to note that I believe that this is just the beginning. We have a solid record of constant growth and very manageable debt. Our funding efforts will be targeted on expansion and growth, to position us to benefit from current and future opportunities, not to pay off past due debt loads.

A quick look on Yahoo! Finance reveals the latest posted financials date from the end of last September – before Banjo & Matilda, Inc acquired the listed entity, meaning investors might want to wait for some updated financials to appear that reflect the change in direction.

Amazonica Corp (OTCBB: AMZZ) Recently Got Out of Brazilian Hardwood Flooring and Into Pure Hydrogen

Small cap Amazonica Corp is developing a breakthrough, low cost technology to make 99.999% pure hydrogen. On Monday, Amazonica Corp fell 7.62% to $0.0388 for a market cap of $8.34 million plus AMZZ is down 96% since last June according to Yahoo! Finance.

What's the Catch With Amazonica Corp? According to various disclosures, transactions of $1.5k, $2k, $4k, $25k and $50k have or will occur to mention Amazonica Corp in various investment newsletters. At the end of last August, Amazonica Corp had a complete change in management and discontinued the distribution of Brazilian hardwood flooring to concentrate completely on the development of pure hydrogen for commercial applications. Last Tuesday, Amazonica Corp announced the filing of a combustion mixture patent for its ultra-pure hydrogen production technology – the third patent filed by the company based on ongoing research and development work led by Dr. Gennadiy Petrovich Glazunov, a "world renowned" scientist at the Institute of Plasma Physics of the National Science Center of the National Academy of Science, located within the Kharkov Institute of Physics and Technology in the Ukraine. A day earlier, Amazonica Corp announced that it had recently added an upgrade to a previously submitted patent application for the manufacture of ultra-pure hydrogen while in early April, the company had announced it had completed the filing of a second patent for its ultra-pure hydrogen production technology. A quick look at Amazonica Corp's financials reveals no revenues; net losses of $111k (most recent reported quarter), $48k, $7k and $2k for the past four reported quarters; and $10k in cash to cover $56k in current liabilities and $325k in long term debt at the end of last January. So maybe investors should wait for more financials that show pure hydrogen is a better business than Brazilian hardwood flooring.

Guardian 8 Holdings (OTCMKTS: GRDH) Has Something Better Than a Gun

Small cap Guardian 8 Holdings through its wholly owned operating subsidiary, Guardian 8 Corporation, is the developer and manufacturer of the G8 Pro V2, a unique and innovative product which combines eight non-lethal technologies designed to prevent and protect an individual from aggressors and assailants, while notifying law enforcement or others of the situation. On Monday, Guardian 8 Holdings closed at $0.510 for a market cap of $19.80 million plus GRDH is up 27.5% over the past year and down 15% since October 2011 according to Google Finance.

What's the Catch With Guardian 8 Holdings? According to various disclosures, a transaction of $3k has or will occur to mention Guardian 8 Holdings in various investment newsletters. At the beginning of last week, Zacks Small Cap Research issued a detailed press release summarizing its research report on Guardian 8 Holdings. This came after the company made its Form 10-K/A filing containing end of the year financials. Then in early April, Guardian 8 Holdings announced it had received a positive account of a documented use of its Pro V2 enhanced non-lethal device by security personnel in a hospital setting after a violent patient threatened hospital staff. Otherwise and at the end of March, Guardian 8 Holdings announced it will showcase an enhanced ProV2 non-lethal device and how it addresses the risks and liabilities associated with hospital security response during the International Association of Hospital & Safety (IAHSS) 2014 Annual General Meeting, which is scheduled for May 18-21 at the Hyatt Regency La Jolla in San Diego. A quick look at Guardian 8 Holdings' financials reveals revenues of $18k (most recent reported quarter), $23k, $3k and zero for the past four reported quarters and net losses of $1,465k (most recent reported quarter), $878k, $702k and $580k. At the end of last December, Guardian 8 Holdings had $306k in cash to cover $1,409k in current liabilities. So maybe investors and especially traders should keep an eye on the stock as it heads to the IAHSS meeting.

How Long Does It Take to Make a Buck at Ruth's Hospitality Group?

It takes money to make money. Most investors know that, but with business media so focused on the "how much," very few investors bother to ask, "How fast?"

When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to Ruth's Hospitality Group (Nasdaq: RUTH  ) .

Let's break this down
In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.

Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.

To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better. The CCC figure for Ruth's Hospitality Group for the trailing 12 months is 7.2.

For younger, fast-growth companies, the CCC can give you valuable insight into the sustainability of that growth. A company that's taking longer to make cash may need to tap financing to keep its momentum. For older, mature companies, the CCC can tell you how well the company is managed. Firms that begin to lose control of the CCC may be losing their clout with their suppliers (who might be demanding stricter payment terms) and customers (who might be demanding more generous terms). This can sometimes be an important signal of future distress -- one most investors are likely to miss.

In this series, I'm most interested in comparing a company's CCC to its prior performance. Here's where I believe all investors need to become trend-watchers. Sure, there may be legitimate reasons for an increase in the CCC, but all things being equal, I want to see this number stay steady or move downward over time.

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Because of the seasonality in some businesses, the CCC for the TTM period may not be strictly comparable to the fiscal-year periods shown in the chart. Even the steadiest-looking businesses on an annual basis will experience some quarterly fluctuations in the CCC. To get an understanding of the usual ebb and flow at Ruth's Hospitality Group, consult the quarterly-period chart below.

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

On a 12-month basis, the trend at Ruth's Hospitality Group looks OK. At 7.2 days, it is 1.0 days worse than the five-year average of 6.2 days. The biggest contributor to that degradation was DPO, which worsened 1.4 days when compared to the five-year average.

Considering the numbers on a quarterly basis, the CCC trend at Ruth's Hospitality Group looks good. At 3.8 days, it is 2.9 days better than the average of the past eight quarters. With quarterly CCC doing better than average and the latest 12-month CCC coming in worse, Ruth's Hospitality Group gets a mixed review in this cash-conversion checkup.

Though the CCC can take a little work to calculate, it's definitely worth watching every quarter. You'll be better informed about potential problems, and you'll improve your odds of finding underappreciated home run stocks.

Does Ruth's Hospitality Group have what it takes to execute internationally? Take a look at some American restaurant concepts that are generating profits in all over the globe in, "3 American Companies Set to Dominate the World." It's free for a limited time. Click here for instant access to this free report.

Add Ruth's Hospitality Group to My Watchlist.

Apple Has No Idea How Streaming Music Works

PORTLAND, Ore. (TheStreet) -- Apple (AAPL) is watching its iTunes Radio streaming service flounder because it doesn't understand the most fundamental truth about streaming music customers.

We're not listening to streaming music services so we can find the next song to buy. We're listening and subscribing to them so we don't have to buy songs anymore.

That is what nobody in the industry wants to talk about. Regardless of whether Pandora  (P) manages to keep pace with competitors like Beats Music and Spotify, the streaming music subscription model is out there and isn't going away anytime soon. Oh, and it's making the a la carte, $1.25-a-song download model look foolish by comparison.

As Billboard noted earlier this week, only 1% to 2% of iTunes Radio listeners have hit the "buy" button to download the song they've been listening to since the service launched in September. At the same time, the number of music downloads has declined by more than 15%. That's a big problem when Apple's iTunes controls almost 90% of the U.S. music download market, but is the third-largest pure music streaming service after Pandora and iHeartRadio, according to Edison Research. That means that last year's slight downtick in digital album sales, the first of its kind, and 8% drop in digital track sales recorded by Nielsen Soundscan fell squarely on Apple's shoulders. Meanwhile, the 32% jump in music streams (not including Pandora) went to AOL (AOL), Cricket, Medianet, Rdio, Rhapsody, Slacker, Spotify, YouTube (owned by Google (GOOG)), Vevo (a joint venture in which Google has an stake), Zune and a whole lot of platforms not named iTunes. Though iTunes sales grew 25% its 2013 fiscal year to $16.1 billion, making up 9.4% of Apple's overall revenue, iTunes' music sales have cratered, according to estimates from mobile industry research group Asymco. It hasn't gotten any better in 2014, as Nielsen notes digital track sales dropped 12.5% in the first quarter from 2013 and digital album sales dove 14.2% over the same span. That's roughly the rate at which music lovers have been abandoning the compact disc each year since 2007. This isn't a Pandora issue or a digital radio issue: It's a straight subscription streaming issue. Interactive streaming like that offered by Spotify, Deezer and Beats Music increased volume to 34.28 billion streams in the first quarter of the year from 25.44 billion streams during the same period in 2013. With music executives putting 1,500 streams at the equivalent of a full digital album, streaming equivalent albums have increased by 10.1 million units so far this year as download sales dropped by roughly 9 million units, according to Nielsen.

Stock quotes in this article: AAPL, P, AOL, GOOG 

Simply put, music fans are swapping pay-as-you-go downloads for streaming subscriptions that let them listen to anything they want without having to pay each time they fall in love with a song. Bob Lefsetz over at The Big Picture did his best to grab Apple and the music industry at large by the collar and shake it into consciousness last year by noting that music's future isn't in sales -- unless you're really into vinyl -- but in streaming spins. Imagine Dragons didn't get to the Grammys on album sales and airplay and Calvin Harris didn't become one of the biggest DJs in the world by waiting for iTunes preorders. The metrics have changed, but so has the listening public.

Best India Stocks To Buy Right Now

If the recent slumping download numbers haven't made it clear, let us spell it out for you: It's been a long time since the older segments of the music marketplace got their first iPods. It's been more than a decade since iTunes started doling out downloads and just about as long since crafting playlists was something anyone but the most patient of party hosts or wedding planners took joy in doing. A device or iTunes library stocked with thousands of songs isn't a point of pride anymore: It's an onerous chore.

Our libraries of digital music are looking as neglected as big Case Logic binders full of CDs, with iTunes users listening to only 19% of their more than 5,000-song libraries as recently as 2011. Older music listeners don't want to play curator anymore and a younger generation that's grown up with streaming music never had to. That decline in downloads and continued slide in CD sales suggests they'll never have to.

"The a-la-carte consumption model is 11 years old and at this point the decline in the U.S. download sales seems unstoppable; it doesn't seem like the store is refreshable," said one record label about the once-indispensable iTunes. And that's how Apple, of the dancing iPod silhouettes and indie-rock jingles, got caught sleeping after the aughts ended. The company that was once well ahead of the music industry suddenly became part of it and contracted its various illnesses: Hubris, adamance, greed. As great a force as Apple was in driving the last great music format change away from CDs and to lower-quality digital files, it now joins the labels in being dragged toward the subscription streaming future. -- Written by Jason Notte in Portland, Ore. >To contact the writer of this article, click here: Jason Notte. >To follow the writer on Twitter, go to http://twitter.com/notteham. >To submit a news tip, send an email to: tips@thestreet.com. RELATED STORIES: >>Why I'm Not Going To The Rock And Roll Hall Of Fame Induction Ceremony >>Our Early Record Store Day Shopping List >>Sorry Cadillac, We're Not Ready For Jerks Yet

Stock quotes in this article: AAPL, P, AOL, GOOG  Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.

Is Weatherford International Ltd Hiding Something?

Weatherford International (NYSE: WFT  ) is going through an identity crisis of sorts that I'm surprised hasn't raised some legal red flags or caused more concern on Wall Street. The company maintains its main operational office in Houston, was formerly legally based in Bermuda, moved to Switzerland in 2009, and now seeks the greener pastures of Ireland to operate at lower costs and further attract top talent. What's going on here? Is Weatherford gaming the system, or is it possibly hiding something? One thing's for sure, this is perfectly legal but something sure doesn't smell right since tax shelters are increasingly being vilified in political circles here in the United States. Ireland has also been under pressure to make its tax structures harder to abuse by multinational corporations. 

The oil services player has been looking to capitalize on the favorable tax structure that the Swiss have benefited for years and years. With greater international scrutiny of Swiss tax laws as well as top executive and board member pay, Weatherford is now hoping to incorporate in Ireland while maintaining its tax domicile in Switzerland. Keep in mind that tech companies like Apple, Google, and even Facebook all take advantage of Ireland's favorable tax rate environment. That doesn't make it right for Weatherford to follow the same path. 

Shareholders will be asked to approve of the move by Weatherford in June. It's one thing to be lean naturally, but it's another thing to take a quick pill to achieve success; that usually backfires without a proper diet. Considering that the company has a massive debt load ($13.7 billion as per the company's latest 10K) and is already divesting non-core assets such as its piping/specialty service to Baker Hughes (NYSE: BHI  ) , the planned move to shelter financials should be cause for investor concern. This view is only amplified by increased competition from larger peers. 

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Why the Dollar's Soaring and What It Means for You

The U.S. dollar has been climbing sharply lately, igniting concerns about a potential currency war among the world's major economic powers. But what does a rising dollar mean for investors like you?

In the following video, Fool markets analyst Mike Klesta talks with Fool contributor Dan Caplinger about the currency markets and the impact that recent events have had on exchange rates. Going beyond the recent slide in the Japanese yen, Dan discusses a number of other countries that have seen currency weakness in comparison to the U.S. dollar. Mike and Dan give a number of different ways to invest in light of these currency moves, ranging from direct currency plays to indirect investing strategies that focus on the economic impact that the dollar's strength will have.

To learn more about a few ETFs that have great promise for delivering profits to shareholders, check out The Motley Fool's special free report "3 ETFs Set to Soar." Just click here to access it now.

Crude Oil Inventories Dip as Inputs Rise

U.S. crude oil supplies fell 600,000 barrels for the week ending May 10, according to an Energy Information Administration report (link opens in PDF) released today. That's a dip of about 0.15%.

While imports remained virtually unchanged from the previous week, a slight increase in refinery input pushed overall supply to 394.9 million barrels. After rising 200,000 barrels the previous week to hit record highs for the second week in a row, this latest news is a welcome downturn in inventories. However, the report notes that inventories continue to remain "well above the upper limit of the average range for this time of year."

Top 10 Logistics Companies To Own In Right Now

Source: eia.gov.

Total motor gasoline inventories increased 2.6 million barrels, pushing supply out of the middle ground and into the upper half of its seasonally adjusted range. Gasoline demand remains weak, even as pump prices headed higher for the second straight week. The national average hit $3.603 per gallon on May 13, up $0.065 from the previous week but $0.151 below the average last May.

Source: eia.gov.

Distillate fuel inventories also expanded, up 2.6 million barrels. While supplies remain in the lower half of their average range, overall demand remains weak.

Source: eia.gov.

link

You can deduct that regardless of your income

With time running out to file your 2013 tax return, you want to make sure you're on top of the available deductions to maximize your tax savings.

Taxpayers may be aware of numerous tax breaks, but depending on your income, many deductions may no longer be as valuable—or you may be ineligible entirely.

Due to recent tax-law changes, anyone with an adjusted gross income above $250,000—for a married couple filing jointly, it's $300,000—will face a limit on itemized deductions that could thus limit their potential tax savings for the 2013 tax year. In addition, many upper-middle-income taxpayers who face the Alternative Minimum Tax—a higher tax than their regular income tax—will not be able to claim deductions that may be allowed on a regular tax return, according to tax analyst Mark Luscombe of CCH, part of Wolters Kluwer.

Still, there are money-saving tax deductions and other strategies that you may be able to take advantage of, no matter how much you make. Here are eight ways to save:

1. Moving-expense deduction.

If you moved to take a new job due to a change in your job or business location—and paid for the move out of pocket—you may be able to deduct your moving expenses.

"Local moves don't apply. If you just moved to the other side of town, you won't be eligible" for this tax break, Luscombe said. If it's your first job, your new workplace must be at least 50 miles away from your old home to qualify. Other time and distance tests are required if you are moving to a new job.

2. Capital loss deduction.

The stock market had a very strong year in 2013, but some of your investments may not have fared as well. If your capital losses were more than your capital gains, you can claim a capital loss deduction of your total net loss up to $3,000, reducing your income dollar-for-dollar.

3. Medical, dental expense deductions.

Guidelines for tax-deductible medical expenses changed because of the Affordable Care Act. Your unreimbursed medical ! expenses must exceed 10% of your adjusted gross income to qualify for a deduction. That's up from 7.5% in the 2012 tax year.

However, the lower 7.5% threshold still applies for people age 65 and older until the end of 2016. Typical expenses may include unreimbursed medical and dental bills, equipment costs and medical supplies and devices.

4. Health savings account.

If you're covered by a high-deductible health plan, you may be able to set up a health savings account by April 15 and contribute up to $3,250 if you're single and $6,450 for families to the account. Contributions to the HSA will lower your taxable income dollar-for-dollar. Plus, contributions, earnings and withdrawals are tax-free when used to pay for qualified medical expenses.

If you have a small business or are self-employed, you have even more ways to reduce your tax bill.

5. SEP IRA.

If you're a sole proprietor, business owner or earn self-employment income, you also have until April 15 to set up and contribute to a SEP IRA for the 2013 tax year. You can contribute up to 25% of your compensation—or 20% of self-employment income—up to $51,000 in this account.

Like a traditional IRA, "if the SEP-IRA contribution is made before the filing due date of your return, it is deductible on your 2013 tax return," said Elda Di Re, a tax expert for Ernst & Young.

6. Home-office deduction.

If you're self-employed and work out of your home, there's a new option for claiming a deduction for a home office. Your deduction is based on the size of your home office, using a simple calculation: Deduct $5 for every square foot of work space used—up to a maximum of 300 square feet. So the maximum deduction is $1,500.

You can still calculate the home-office deduction the old way, figuring related expenses and how they may apply over the course of the year to a home office, but the new way is a lot simpler.

7. Health insurance premium deductions for self-employed.

Business owners ! and self-! employed taxpayers may be able to deduct health insurance premiums, as long as they aren't already covered under their employer's or spouse's employer's plan.

8. Business-expense tax deductions.

If you're self-employed, a contractor or sole proprietor, you may be able to deduct qualified business expenses related to your work. Also, "if you are expending monies which are not reimbursed by the partnership, you can take those business expenses directly against your partnership income," Di Re said.

The IRS requires eligible business expenses be "ordinary" (something common and acceptable in that particular business) as well as "necessary" (something appropriate and helpful to the business). But Luscombe noted that taxpayers should keep in mind that "business expense deductions can only be taken once, either on your individual income-tax return or a separate business tax return—but not on both."

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Are Ashland's Earnings Worse Than They Look?

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Ashland (NYSE: ASH  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Ashland generated $225.0 million cash while it booked net income of $31.0 million. That means it turned 2.8% of its revenue into FCF. That doesn't sound so great.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Ashland look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

5 Best Bank Stocks To Own Right Now

With 56.6% of operating cash flow coming from questionable sources, Ashland investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, other operating activities (which can include deferred income taxes, pension charges, and other one-off items) provided the biggest boost, at 62.7% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 58.5% of cash from operations.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Looking for alternatives to Ashland? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add Ashland to My Watchlist.

What Netflix Has in Common With Pandora

Netflix (NASDAQ: NFLX  ) followed up on last week's fantastic earnings report by outlining the long-term future of digital media.

In this video, Fool contributor Anders Bylund zooms in on one actionable tidbit from that white paper. Giving users a personalized media experience is key to winning in the digital marketplace. In the video space, nobody can challenge Netflix's deep and refined viewership data and recommendation algorithms. That gives it a competitive advantage against all comers, much the same way that Pandora Media (NYSE: P  ) forged a moat from its Music Genome database.

The Motley Fool has released a premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so make sure to click here and claim a copy today.

SP500 ETF Trading Strategies & Plan of Attack for This Week

Index ETF Trading Strategies: Stocks have kick started this week with a 0.85% pop in price but the big question is if the market can hold up. Last week stocks repeatedly gap higher and sold off with strong volume telling us that institutions are slowing phasing out of stocks (distribution selling) unloading shares into strength and passing them onto the a average investor to be left holding bag.

I want to show you a couple charts which show the price action, volume and money flow of the SP500 so you have a visual of what I am talking about.

30 Minute Intraday SP500 Chart – ETF Trading Strategies

In the chart below you can see the price gaps followed by selling. Why is this important? It is important because during a down trend the market makers and big money plays who have the money and tools to manipulate the markets will allow the market drift higher or they will run price up in overnight or premarket trading when volume is light. Once the 9:30am ET opening bell rings volume and liquidity spike which allows the big money player to sell remaining long positions and or add to short positions they have.

If you look at the blue on balance volume line at the bottom of the chart you can clearly see that more contracts are being sold than bought which is typically an early warning sign that the market is about to fall farther.

Automated Trading System – 30 Minute ES Futures Chart

Below is a marked up screen shot of my automated trading system which I use for timing both futures and ETF trading strategies. The color coded bars tell you the market trend along with the strength of buyers and sellers.

When you couple market cycles, trends, volume/money flow, along with chart patterns we can forecast and trade markets with a high degree of accuracy in terms of market direction and timing. Ross Clark & I talk about cycle analysis, market stages etc… which you can listen to live here:http://talkdigitalnetwork.com/2014/03/this-week-in-money-129/

My Index ETF Trading Strategies Conclusion:

Just to be clear on the current market trend and my overall outlook let me explain a little more. Overall, the broad stock market remains in an uptrend. Thursday and Friday of last week we started getting orange bars on the chart telling us that cycles, volume, and momentum are now neutral. It's 50/50 on which way the market will go from here, so until the market internals (cycles, volume, breadth) push the odds in our favor enough for a short sell trade or a new long entry we will not add new positions to our portfolio.

It is important to understand that nearly 75% of stocks/investments move with the broad market. So we don't want to add more long positions when the odds are not in favor of higher prices. Trading in general is not hard to do, but creating, following, executing properly money and position management is. If you have trouble with following or creating an ETF trading strategy you can have my ETF trading system for rising, falling and sideways markets traded automatically in your trading account.

Learn more here about my Automated Trading Systems

Chris Vermeulen
www.TheGoldAndOilGuy.com
www.AlgoTrades.net