IIFCL's Rs 200cr tax free bonds issue to open on Monday

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According to the CBDT notification, the company proposed to raise upto Rs 10,000 crore through issue of bonds in the year 2012-13. Out of which, IIFCL already raised Rs 785 crore on a private placement basis in two tranches and Rs 2,883.88 crore through public issue of tax free secured redeemable non-convertible bonds of tranche I.

Coupon rate for retail investors, NRIs and HUFs (which are applying for an amount aggregating up to Rs 10 lakh across all series of bonds in each tranche issue) will be 7.36 percent in case of series I, 7.52 percent in series II and 7.58 percent in series III. Coupon rate for other investors will be 6.86 percent in series I, 7.02 percent in series II and 7.08 percent in series III.

Redemption of bonds will take place at the end of 10 years, 15 years and 20 years from the deemed date of allotment for series I, series II and series III, respectively. IIFCL will make interest payment on bonds on annual basis.

Bids can be made for minimum of 5 bonds across all series of bonds and in multiples of one bond thereafter. The issue will close on March 15, 2013.

Credit rating agencies namely Brickworks, ICRA and CARE assigned AAA (stable) rating for this debt programme.

Bonds are proposed to be listed on Bombay Stock Exchange.

The book running lead managers to the issue are SBI Capital Markets Limited, A K Capital Services Limited, Axis Capital Limited, ICICI Securities Limited and Kotak Mahindra Capital Company Limited.

Netflix Thriving on Partnerships - Analyst Blog

Reportedly, Netflix Inc (NFLX) has signed a partnership deal with Fox Television Studios to finance The Killing, a television crime drama, after its production was cancelled by AMC Networks (AMCX) in 2012.

Under the terms of the deal, Netflix will be able to stream the show in the U.S. and Canada just three months after the show premieres on AMC's network. Netflix can also get rights to stream the show overseas.

This is not the first time that Netflix has resurrected a canned show. The company had helped in reviving Emmy Award winner show Arrested Development and streamed all new episodes on a first run basis in May this year.

Netflix continues to forge partnerships with leading studios, publishers and production companies to boost its content library. The company recently extended a multi-year partnership deal with CBS Corp (CBS), which will enable Netflix to stream new titles such as L.A. Complex, 4400, and CSI: NY in addition to the existing shows.

Moreover, Netflix recently renewed an expanded deal with PBS Distribution. The deal will help the company to stream British murder mystery The Bletchley Circle, kids pre-school show Super Why!, children shows Wild Kratts, Caillou and Arthur, documentaries such as Prohibition and Central Park Five and past seasons of non-fiction series like Nova and Secrets of the Dead.

These partnerships have not only expanded Netflix's content portfolio but also helped it to target different sections of the audience. They have also helped Netflix to venture into different genres like comedy, political thrillers, autobiographies and horror.

Netflix's diversified offerings help it to stand out among other streaming content providers such as Amazon (AMZN), HBO and Hulu. This is evident from the fact that in the last-reported quarter, the company added 2.03 million subscribers in the domestic market and 1.02 million subscribers in the international market.

However, higher costs owing to international ventures and l! icensing fees and continued subscriber losses in its DVD business are near-term headwinds. Loss from the international business, due to higher content and marketing costs, is another concern in the near term.

Nonetheless, we believe that new content streaming deals and its original content portfolio should be able to attract new subscribers both in the U.S. and international markets.

Currently, Netflix has a Zacks Rank #3 (Hold).

Mosaic Intros CropNutrition.com - Analyst Blog

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Fertilizer giant The Mosaic Company (MOS) has launched a website CropNutrition.com. This educational digital hub will provide information on soil fertility resources to agricultural retailers, farmers and industry experts who are looking for better understanding of the yield-sensitive scientific aspects of soil.

This website is an integral part of Mosaic's CropNutrition initiative. Under this initiative, Mosaic has designed an integrated campaign to educate farmers and retailers about important issues and trends affecting soil fertility. The company hopes that farmers will understand that there are various scientific aspects vital to achieving maximum yield and 60% of yield depends on soil fertility.

Mosaic has used numerous vehicles to spread the expertise and agronomic knowledge that is required for understanding the soil better, growing stronger crops and drive higher yields.

Mosaic has combined its prior crop nutrition resource Back-to-Basics.net's best research and soil fertility resources with new information gathered from its global network of research partners in the CropNutrition.com website. In addition, CropNutrition.com provides research findings and insights from Mosaic's best agronomists.

The website features crop nutrition expertise in forms including dynamic videos, timely and topical blog posts, an Agronomy Resource Center, an interactive periodic table of essential crop nutrients, and an extensive, searchable library.

Mosaic's team of elite agronomists aims to enlighten the farmers and retailers about the impact of a balanced approach to crop nutrition that can have on yield.

Plymouth-based Mosaic, which is among the biggest fertilizer companies on the planet along with Agrium Inc. (AGU), CF Industries Holdings, Inc. (CF) and Potash Corp. of Saskatchewan, Inc.(POT), is a single-source provider of! phosphates, potash fertilizers and feed ingredients for the global agriculture industry.

Mosaic, which currently holds a Zacks Rank #3 (Hold), will release its fourth-quarter fiscal 2013 results before the market opens on Jul 16.

Investing During Uncertainty

Every day it seems like the world is getting smaller. If you watch any financial television station or read the newspaper, you are most likely aware of how events in one country seem to have an ever-increasing effect on other countries around the world. We are more interconnected now than at any other time in history. It goes without mention that globalization definitely has its positives, but when threats of financial crisis, war, global recession, trade imbalances, etc. do occur, it often leads to talk of moving money to safer investments and increasing government deficits. This rising uncertainty can confuse even the well-informed investor.

Uncertainty
Any time you put money at risk for the chance of profit, there is an inherent level of uncertainty. When new threats such as war or recession arise, the level of uncertainty increases significantly as companies can no longer accurately predict their future earnings. As a result, institutional investors will reduce their holdings in stocks considered unsafe and move the funds to other sources like precious metals, government bonds and money-market instruments. This sell-off, which occurs as large portfolios reposition themselves, can cause the stock market to depreciate.

Effects of Uncertainty
Uncertainty is the inability to forecast future events. People can't predict the extent of a possible recession, when it's going to start/end, how much it will cost, or what companies will be able to make it through unscathed. Most companies normally predict sales and production trends for the investing public to follow assuming normal market conditions, but increasing uncertainty levels can make these numbers significantly inaccurate.

Uncertainty itself can affect the economy on both the micro and macro levels. Uncertainty on a micro level focuses on the effect on individual companies within an economy faced with the threat of war or recession, whereas the view of uncertainty on a macro level looks at the economy as a whole:
From a micro-level, company-specific viewpoint, uncertainty provides a major concern for those that produce consumer goods every day. For example, consumption may fall on the threat of a recession as individuals refrain from purchasing new cars, computers and other non-essentials. This uncertainty may force the companies in certain sectors to lay off some of their employees to combat the impacts of lower sales. The level of uncertainty that surrounds a company's sales also extends into the stock market. Consequently, stock prices of companies that produce non-essential goods sometimes experience a sell-off when levels of uncertainty rise.

On a macro level, uncertainty is magnified if the countries at war are major suppliers or consumers of goods. A good example is a country that supplies a large portion of the world's oil. Should this country go to war, uncertainty regarding the level of the world's oil reserves would grow. Because the demand for oil would be high and the supply uncertain, a country unable to produce enough oil within its own borders would be required to ensure that enough oil was stored to cover operations. As a result, the price of oil would increase.
Another macro-level event that affects companies and investors is the flight of capital and devaluation of exchange rates. When a country faces the threat of war or recession, its economy is considered uncertain. Investors attempt to move their currency away from unstable sources to stable ones; the currency of a country under a threat of war is sold and the currencies from countries without the threat are bought. The average investor probably would not do this, but the large institutional investors and currency futures traders would. These actions translate into a devaluation of exchange rates. What's an Investor to Do?
When situations of heightened uncertainty arise, the best defense is to be as well-informed as possible. Keep updated by reading the newspaper and researching individual companies. Analyze which sectors have more to gain and lose in a crises, and decide on a long-term plan. Times of heightened uncertainty can lead to great opportunities for investors who position themselves to take advantage of it. Some investors might decide to be offensive and search for companies that provide goods or services that will lead to great returns when things turn around. It is difficult to commit capital during uncertain times, but it can often reap huge rewards in the long run. Those who want to mitigate uncertainty and risk might be content leaving their money where it is or perhaps moving it to safer securities.

Regardless of which strategy you decide to take (if any), you can't go wrong over the long term by keeping yourself well-informed and getting into a position so that you can take advantage of prices when things reverse.

Clients Are an Advisor’s Biggest Competition, Says Principal Survey

Advisors’ biggest competition comes not from other advisors but rather from their own clients’ human nature, which poses obstacles such as inertia, fear, overspending and undersaving, according to the results of a Principal Financial Group study released Monday.

Key findings in the Principal Financial Well Being Index show that for 80% of clients, their top financial dream is financial security in retirement, and for another 77%, the top dream is an overall sense of financial security. Good health, travel and living debt-free round out the top five financial dreams.

Yet advisors say that clients’ top financial blunders include living beyond their means, at 24%, and not saving enough, at 15%. A total of 616 financial advisors participated in the nationwide survey, which was conducted online by Harris Interactive in the second quarter.

“Financial planning doesn't have to be so hard. The most effective advisors help clients envision their financial future,” said Tim Minard, senior vice president of distribution at The Principal, in a statement. “They help clients reverse the financial lethargy that got them stuck in the first place. Even small actions can result in financial success over time, which is why it’s critical to engage an advisor and start financial conversations early and often.”

Advisors save clients from their worst instincts because they help both individuals and business owners develop plans to save for the long term, invest and grow their nest eggs, protect their assets and manage their income during retirement, Minard added.

Other key findings show that 65% percent of advisors say clients most often stretch the truth about living within their means, followed by 44% saying that clients fudge the facts on just how much debt they have.

As for advisors’ own practices, 51% of financial professionals reported that dealing with regulatory and compliance issues is the single greatest pain point in their business, followed by economic uncertainty, at 39%, and then market volatility, at 37%.

Over three-quarters of advisors rated themselves as “healthy” or “very healthy” when judging their own overall financial health, physical health and the financial health of their business, according to the Principal Financial Well-Being Index, which studied advisors’ recommendations for clients as well as the challenges that advisors themselves face.

Though the majority of advisors viewed their business as healthy, only 14% said they have had their business assessed for its value and only a third have created a succession plan.

The Principal, based in Des Moines, Iowa, had $456 billion under management at March 31. The firm offers retirement services, insurance and asset management to approximately 19 million customers in the U.S., Asia, Australia, Europe and Latin America.

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Read tax lawyers Robert Bloink and William Byrnes in Time Is Running Out for Social Security’s File and Suspend – Cash in Now at ThinkAdvisor.

Allocate 10% in gold during stock market uncertainty

Navlakhi is of the opinion that long-term government security funds are very good investment vehicles when interest rates are going downward. However, interest rates have continued to remain high. Therefore, it may make more sense for retail investors to be at the short end of the fund cycle on the debt side. Some short-term debt funds are probably better bets to invest money in.

Below is an edited transcript of his interview. Also watch the accompanying video.

Q: How do you see gold as an investment option?

A: In the last few years, gold has really done very well, and therefore, has attracted a lot of attention. We personally believe that gold is a part of an asset allocation strategy. In the normal course of time, when there is no uncertainty in the equity market, we recommend 5-7% allocation of your assets in gold.

In times of uncertainty, then you can increase your allocation to maybe 10%, but not more than that. It has done very well, but that doesn't mean that the sharp rise will continue.

Q: An investor wants to invest Rs 100,000 in lump sum in a debt fund for five years. Are these good funds to go with?

A: The long term plan of Birla Sun Life Government Securities Fund is a good choice. That fund essentially invests in government securities and bonds. But at this moment, this fund has more than 40% of its money in cash. So he is not really getting the benefit of being in a government security fund.

One basic rule for most investors is that long-term government security funds are very good investment vehicles when you expect to see rates going downward. While there are a lot of expectations in the last few months, it has happened in reality because of various reasons - inflation, supply side constraints etc. So interest rates have remained higher.

People who have invested in these G-sec type of funds may actually have lost money in the last one month or so or they are just about breakeven. Therefore, it may make more sense for retail investors to be at the short end of the fund cycle on the debt side. Some short-term debt funds are probably better bets to invest money in.

Even HDFC's Short Term Opportunities Fund is run more like a liquid fund. If its cash and it's a five year time horizon then I would put money in short-term funds. IDFC short-term Super Saver Income Short Term Plan and the Templeton India Short-Term Income Plan are better bets.

Q: Considering the tax efficiency as well of mutual funds, would these short-term opportunity funds be the best vehicle for someone who doesn't want equities or would PPF (Public Provident Fund) also be equally tax efficient? How do the various debt instruments compare?

A: When I compare debt instruments, the first thing to possibly look at is the time horizon. So PPF, for example, if I am starting now with a 15 year lock in, if I need money in five years, that is possibly ruled out.

On the other side, you have to look at the applicable tax rates. If you do not have any income, say a housewife invests some money then the initial Rs 2 lakh is exempt from tax. It can be invested in fixed deposits, which could be AAA type fixed deposits, which are otherwise taxable, but because you have no other income, it becomes a tax free sort of avenue. So factors like tax, return, liquidity and time horizon are to be taken into account before investing.

Q: An investor is looking forward to invest Rs 20,000 per month. His goal is to have a surplus of Rs 20-25 lakh after a span of 15 years? His company covers his insurance and he holds Systematic Investment Plan (SIP) of Rs 6,000 currently per month in equity?

A: With Rs 20,000 a month and a 15 year time horizon, he will actually invest Rs 36 lakhs. So pretty much he doesn't need to do anything if he needs only Rs 25 lakh. But I am sure he wants his money to grow. With a 15 year time horizon, he should look at a higher weightage in equity rather than a debt.

Assuming that he would get about 12-15% per annum in terms of his portfolio, he would get something like Rs 1.3-1.8 crore over the next 15 years. The idea would be with Rs 20,000 a month by way of SIP in equity funds, as he approaches the 8-10 year period, he can start reducing his equity exposure. He can pick again typically more large cap funds; maybe 50-60% in large cap and have 20-25% in the mid cap space and the balance in multi-cap. So my specific suggestions would be funds like DSP Blackrock Top 100 , ICICI Dynamic Plan , and HDFC Mid Cap Opportunity Fund .

Further, he says he has his company's insurance just needs to keep in mind that at some stage he may leave his company and then the new company either may have insurance or will take the insurance only after he joins, and if there is a gap, there could be an issue. So, he should look at having some insurance of his own.

Kimco Unveils 2Q Transaction Update - Analyst Blog

Kimco Realty Corp. (KIM) – a retail real estate investment trust (REIT) – recently unveiled its second-quarter 2013 transaction activities. During the quarter, the company's investments totaled to around $172 million, while the proceeds from divestitures amounted to about $307 million.

Acquisitions

During the quarter, Kimco bought 2 former joint venture (JV) properties namely 'The Marketplace at Factoria' and 'Canyon Square Plaza'. The assets spanning 607,000 square feet were acquired for $146.6 million.

Wash.-based shopping center, The Marketplace at Factoria is situated in the prosperous Seattle community of Bellevue. The property, which is 94% leased, boasts a cluster of retail giants such as Target Corp. (TGT), Nordstrom Inc. (JWN) and Wal-Mart Stores Inc. (WMT). On the other hand, Calif.-based Canyon Square Plaza is in the Los Angeles-Long Beach-Santa Ana MSA (Metropolitan Statistical Area). The property is a grocery-anchored center and occupied by a North American grocery company, Albertsons.

Moreover, during the quarter, Kimco increased its stake in 3 existing institutional JVs – Kimco-UBS ('KUBS'), Kimco Income Fund I ('KIF I') and Kimco Income REIT ('KIR') – for $133.3 million.

Divestitures

During second-quarter 2013, Kimco disposed 11 U.S. shopping centers for $71.6 million, of which the company's share was $36.9 million. Since the initiation of its asset-recycling program in 2010, Kimco has sold 121 properties spanning 11.9 million square feet, for $907.2 million. Of this, Kimco's share was $551.4 million.

In addition, the company sold 9 assets of its Mexican shopping center portfolio to a local real estate operator for 3.35 billion Mexican pesos ($274 million), of which company's share was $93 million.

Non-Retail Portfolio Update

In tune with the monetization of non-retail assets, Kimco reduced its non-retail investment portfolio by $177.9 million (46%) during second-quarter 2013. Notably! , the non-retail portfolio is presently at its lowest level, since 2010, and represents below 2% of gross assets.

Moreover, during the second quarter, Kimco and its JV partner – American Industries – decided to sell their interests in several trusts that hold Mexican industrial properties portfolio. The assets proposed for sale to Terrafina – a Mexican REIT – were valued at about $600 million.

Our Viewpoint

We remain impressed with Kimco's strategic move of restructuring the overall portfolio through divestiture of non-strategic assets and acquisition of high-quality properties. Moreover, acquiring interests in existing JVs go well with the company's core operating strategy. This augurs well for future earnings as the properties are positioned mostly in high-income, high-growth areas. Moreover, the high credit tenant retention limits the downside risks and provides a long-term steady source of rental income for the company.

Kimco is scheduled to release second-quarter 2013 results on Jul 30, after the closing bell. The Zacks Consensus Estimate for second-quarter funds from operations (FFO) is currently pegged at 33 cents per share.

Kimco has an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of 0.00% for the second quarter. This, along with its Zacks Rank #3 (Hold), reduces the chances of a positive earnings surprise.

Note: FFO, a widely accepted and reported measure of the performance of REITs is derived by adding depreciation, amortization and other non-cash expenses to net income.

Bear of the Day: Intuitive Surgical (ISRG) - Bear of the Day

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Despite concerns over sweeping healthcare law changes, the medical sector has actually been a solid performer so far this year. In fact, the main ETF for the space, the Health Care Select Sector SPDR (XLV) has easily outperformed the S&P 500 in the first half of 2013, trouncing the broad market by over 700 basis points.

However, some corners of the market could be facing troubles—especially in the medical device and equipment space—as concerns over healthcare spending are starting to take their toll on a number of companies in the space, as many are forgoing new purchases of equipment, or are buying less. One such company that has been the poster child of this trend and has seen its stock price suffer as a result is certainly Intuitive Surgical (ISRG).

ISRG's Troubles in Focus

ISRG is probably best known for its da Vinci Surgical System which helps surgeons to perform operations with increased precision and control. The basis of the system uses robotics, while there are also HD 3D vision systems, and proprietary instrument technologies as well.

Sales of this innovative device rose pretty much across the globe, though they struggled in the American market, according the preliminary Q2 earnings. Their key product saw only 90 sales in the U.S. market, compared to 124 a year ago, highlighting a very sluggish sales market (also read Medical Device ETFs Slump on Intuitive Surgical Crash).

ISRG Outlook

This was especially troubling because the company pinned the lower sales on the difficult environment in the U.S., and the lack of hospital dollars for new technologies. This bearish outlook is driving the stock sharply lower, with prices for ISRG collapsing by about 14% in the past month alone.

And with the poor outlook from company management, many analysts seemed to have no choice but to slash their ex! pectations for the company in the near term. In the past week, eight estimates have been cut for the current and next quarters, as well as the current and next year periods as well.

The magnitude of the cuts has also been severe, with estimates for next quarter slumping from $4.25/share down to just $4.00/share. And with growth now projected to be below the industry average for the next five years, there is also some concern that the firm is now making the difficult transition from a growth company to a value one, meaning there could definitely be some pain ahead for ISRG.

Thanks to this bearishness from pretty much every analyst covering the company, ISRG has earned itself a Zacks Rank #5 (Strong Sell). This means that we are looking for the firm to continue to underperform, and experience more losses relative to other stocks in the next few months.

Better Picks

Currently, there aren't any companies that are top ranked stocks in the medical instruments industry. However, there are a few companies that have earned themselves Zacks Ranks of 2 or Buy and could be solid choices if you want to stay in the medical instrument sector.

Some buy ranked names in this space include Cepheid (CPHD) and Globus Medical (GMED), two firms that surprised last quarter and have seen their ranks jump from 3 to 2 in the past week alone, suggesting that they could be strong choices now as well. So consider these, or a few of the other better ranked firms in the space, over the in-trouble ISRG which could face more weakness if the market for their key product doesn't improve in the U.S. soon.

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IRFC raises Rs 5,350 cr through tax-free bond issue

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As against an offer of one crore tax-free bonds (in the nature of secured redeemable non-convertible debentures), it received bids for 5.38 crore bonds. While 2.82 crore bids came in for series 1 (carries 7.38 per cent interest with 10-year tenor), another 2.56 crore bids for series 2 (7.43 per cent interest with 15-year tenor).

The bonds are proposed to be listed on the BSE and the NSE

With this, the company has mobilised close to Rs 6,500 crore this fiscal, as it had already raised Rs 1,100 crore through a private placement.

In the last two days of the issue, it raised about Rs 2,500 crore. IRFC had also raised Rs 1,650 crore through external commercial borrowings for a five-year tenure, at 3.417 per cent.

Falling short

IRFC has a budgeted target of raising Rs 15,000 crore fund in current fiscal.

It will have to mobilise about Rs 6,800 crore, unless the Indian Railways lowers the borrowing target for the firm. Of this, IRFC still has a tax-free window of about Rs 3,500 crore, for which it can enter the market again. "We will use options like term loans and external commercial borrowing window to raise the requisite amount. That will not be difficult," said Rajiv Datt, Managing Director.

IRFC funds are primarily used to buy rolling stock, such as locomotives, wagons and coaches.

Till date, it has acquired 6,073 locomotives, 36,613 passenger coaches and 162,238 freight wagons for the Railways, which are valued at Rs 82,447 crore.

This ensures that the loans are securitised against rolling stock, allowing IRFC to raise funds at a lower cost.

In fiscal 2011-12, the company funded the acquisition of 506 locomotives, 2,757 passenger coaches and 13,208 freight wagons, valued at Rs 12,604 crore. This was the highest ever funding of rolling stock by IRFC.

TeleTech Expands to Texas - Analyst Blog

TeleTech Holdings Inc. (TTEC) recently announced its plans to expand operations to Ennis, Texas, to serve the company's ever increasing healthcare clients. The company currently intends to create 400 new healthcare-related sales and service jobs. Additionally, TeleTech also plans to create 250 similar jobs at its new sister concern's office in Melbourne, FL.

For the healthcare related sales jobs in Texas, TeleTech plans to hire 150 candidates. All candidates having a state health insurance sales license of Texas are ideally suitable for the positions. However, TeleTech is also open to hiring unlicensed candidates whom it will provide training and help them secure license under TeleTech's Healthcare Insurance Career Development Program. The company will be bearing the entire costs of training to equip the new hires with a valuable certification.

TeleTech plans to fill the remaining vacancies in Texas by hiring unlicensed candidates for service-related customer support jobs. Moreover, of the total 400 positions, TeleTech plans to fill two-thirds of them by hiring seasonal employees under the Medicare Open Enrollment ramp. However, the remaining positions will be full time.

TeleTech intends to continue adding employees in the long run, till the Texas site reaches its full capacity of 700+ employees.

TeleTech provides technology-enabled solution to its customers, which helps its client companies to maximize their revenue, transform customer experience and build an optimum business model. The company serves more than 250 clients in sectors like automotive, broadband, communications, financial services, government, healthcare, logistics, media and entertainment, retail.

TeleTech currently carries a Zacks Rank #3 (Hold). Better positioned stocks within the industry worth considering include Sykes Enterprises, Incorporated ( ">SYKE ), Portfolio Recovery Associates Inc. (PRAA) and Genpact Ltd. (G). While Sykes carries a Zacks Rank #1 (Strong Buy), Portfolio Recove! ry and Genpact carry a Zacks Rank #2 (Buy).

Is Hewlett-Packard a Great Stock for today's Dividend Investor?

It's no secret that Hewlett-Packard (NYSE: HPQ  ) is in trouble. The inveterate computing giant suffers from the waning PC market like many other sector titans, but that downtrend came at a particularly bad time for this company. HP is still reeling from the revolving-door management policy since ex-CEO Mark Hurd left the company in shambles, and current leader Meg Whitman admits that putting the pieces back together is both difficult and time-consuming.

Sales are shrinking. GAAP earnings have turned negative. Share prices are down 47% in the last three trouble years, taking 168 points off the Dow Jones Industrial Average (DJINDICES: ^DJI  ) in the process. The market capitalization has dwindled from more than $100 billion to the third-smallest cap on the Dow.

HPQ Market Cap data by YCharts.

So the storm clouds are building on HP's immediate horizon. But all is not lost -- not yet.

With all of these standard metrics collapsing at once, it's easy to overlook HP's bright spots. In particular, the free-falling share price and last year's huge earnings writedown combine to mask the fact that cash flows took a sharp turn in the right direction.

HPQ Free Cash Flow TTM data by YCharts.

HP generated $9.9 billion in free cash flow over the last four quarters. That's a middling performance among the elite companies on the Dow (16 out of 30, to be exact) but a stellar result in relation to the wider market. HP's free cash machine places in the top 5% of the S&P 500, for example.

Pair this fountain of cash with an admittedly not-so-buoyant history of dividend increases, and you'll see that HP spent just 10.7% of its free cash to fuel that 2.4% dividend yield. That's the third-lowest cash-payout ratio on the Dow, where financial specialists are always rolling in piles of fresh cash. The lowest cash ratio, for reference, goes to Bank of America (NYSE: BAC  ) -- a paltry 6.8% of its free cash flows go to income investors. But the megabank is still waiting for government approval to raise its payouts, and most of its business takes place below the free-cash-flow line on its enormously complicated financial statements. It's a very different situation at HP, where cash flows form the most important bottom line of all, and no regulator is keeping its dividend policies back.

Dividend investors might wonder what would happen if HP's board authorized a more generous set of increases, given all that cash-based headroom. In fact, Whitman and other recent HP chiefs have supported that strategy, while Mark Hurd largely left it untouched. Dividend payouts have jumped 82% in three years after flatlining for years.

HPQ Dividend data by YCharts.

So HP's cash flows are surging, largely ignored, with plenty of headroom to increase dividend payouts even further. This moderate yield could -- and arguably should -- spike, even if the turnaround story doesn't play out. That makes HP an intriguing pick for dividend investors with their eyes on the Dow 30.

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP is rapidly shifting its strategy under the leadership of CEO Meg Whitman. But does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor detour on its road to irrelevance? The Motley Fool's technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now to get your copy today.

Top Small Cap Companies For 2014

Three Companies Reporting $100,000 CEO Buys

The following three companies reported the largest CEO buys in terms of transaction amount over the past week. A common idea regarding insider buying is that an insider wouldn't spend their own money investing unless they expected the price to rise. Which leads to the importance of CEO buys. CEO insider transactions are important to note because as the leader of a company CEOs are typically thought of to have the most insight into the inner workings of a company.

Invesco Mortgage Capital (IVR)

President and CEO of Invesco Richard King reported a rather notable insider buy on Aug. 5. The CEO purchased 6,500 shares of company stock at an average price of $15.41 per share. This purchase cost King a total of $100,165. Since this buy, the share price has increased a minor 0.13%. King now holds on to at least 56,545 shares of Invesco Mortgage stock.



King's buy comes as the company's price has recently dwindled down to nearly its 2-year low price of $14.13. His buy is also the first insider buy reported since May. Since the last purchase reported in May, the share price has dropped -21.32%.

Invesco Mortgage Capital is a REIT that acquires, finances, and manages residential and commercial mortgage-backed securities and mortgage loans. The company's portfolio contains: residential mortgage-backed securities for which a U.S. Government agency or federally chartered corporation guarantees payment of principal and interest, residential mortgage-backed securities that are not issued or guaranteed, commercial mortgage-backed securities and residential and commercial mortgage loans.

Invesco's historical price, revenue and net income:

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The company's second quarter financials reported:

· Net income of $140.3 million, or $1.03 per common share.
· Core e! arnings of $79.8 million, or $0.59 per common share.
· Book value of $17.88 per common share.
· Maintained a $0.65 per share dividend

Invesco Mortgage Capital has a market cap of $2.09 billion. Its shares are currently trading at around $15.43 with a P/E ratio of 5.60, a P/S ratio of 4.80 and a P/B ratio of 0.80. The dividend yield for Invesco stocks is 16.90%.

Jim Simons and Jeremy Grantham maintain holdings in IVR.

Swift Energy Company (SFY)

During the past week CEO and Chairman of Swift Energy Company, Terry Swift, reported the first insider transaction reported in the company since February.

On Aug. 5 Swift added 20,000 shares to his stake in the company. The CEO purchased these shares at an average price of $11.85 per share, costing him a total of $237,000. Since his buy, the price per share has increased a minor 0.34%. Swift currently holds the most shares of any insider with a total of 408,655 shares of company stock.



Swift's buy come as the price has hit a 3-year low.

Swift Energy Company is an independent U.S.-based oil and natural gas company with three core areas of operation in Louisiana and Texas.

Swift Energy's historical price, revenue and net income:

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The company's second quarter financials reported:

· Earnings of $6.7 million, or $0.15 per diluted share, up 122% from the second quarter financials.
· Adjusted cash flow of $72.8 million, or $1.67 per diluted share, compared to $72.7 million, or $1.69 per diluted share in 2012.
· Produced 2.78 million barrels of oil equivalent, a 5% decrease from second quarter 2012 production.
· Total revenues increased 6% to $142.5 million.

The Peter Lynch Chart shows that Swift Energy currently appears to be overvalued:

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Swift Energy has a market cap of $517.1 million. Its shares are currently trading at around $11.92 with a P/E ratio of 18.10, a P/S ratio of 0.90 and a P/B ratio of 0.50.

There are currently four gurus that maintain a position in SFY. Click here to see their holding histories.

Signature Group Holdings (SGGH)

Over the past week, two insiders have made significant buys of Signature Group Holdings.

On Aug. 2, Director Peter Bynoe purchased 125,000 shares at an average price of $1.19 per share. Bynoe spent a total of $148,750 on this transaction. Since his buy, the share price has increased an additional 15.97%. The director now holds 125,000 shares of company stock.

CEO Craig Bouchard added 100,000 shares to his holdings on Aug. 5. The CEO purchased these shares at an average price of $1.22 per share. This transaction cost him a total of $122,000. Since this buy, the price per share has increased approximately 13.11%. Bouchard now owns 1,070,866 shares of company stock.



These insider buys come as the share price has recently shot up to a 5-year high.

Signature Group Holdings is a diversified enterprise with current principal activities in industrial supply and special situations finance.

The company's historical price, revenue and net income:

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The company's second quarter financials reported:

· $1.8 million operating profit from continuing operations.
· Net loss of $1.9 million, or $0.02 per share, up from a net loss of $3.9 million, or $0.04 during the second quarter 2012.
· Operating revenues were $14.9 million, compared to $9.3 million last year.

Signature Group Holdings has a market cap of $167.9 million. Its shares are currently trading at around ! $1.38 wit! h a P/S ratio of 4.60 and a P/B ratio of 2.90.

There are currently no gurus that maintain a position in SGGH.

You can view all CEO buys and sells here. Also, check out the new Canadian Insider Trade Page.

Try a free 7-day Premium Membership Trial here.

Related links:Click here to see their holding historiesBuys and sells here Also, check out the newCanadian Insider Trade PageTry a free 7-day Premium Membership Trial here

3 High Beta Utilities with the Highest Dividend Yield Ratio

Utilities are necessary within the economy but they have huge problems to increase prices for utility products. Utility stocks normally have a lower volatility because of its stable revenue streams and income focused stakeholder structure. They are less risky than a high growth momentum stock with a highly priced business model that works only in the best dreams.

In today's screen about the utilities with the highest beta ratio are only nine stocks with a higher correlation to the broad market. This shows the real investment profile of utilities. Low growth, low risk and high debt as you might know it from real estate trusts.

Below the results are seven stocks with a buy or better rating. Only two big companies with a market capitalization over $10 billion are part of the results. Three are mid-capitalized.

Here are the highest yielding high beta dividend utilities:

Otter Tail (OTTR) has a market capitalization of $1.13 billion. The company employs 2,286 people, generates revenue of $859.24 million and has a net income of $38.97 million. Otter Tail's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $142.22 million. The EBITDA margin is 16.55 percent (the operating margin is 8.02 percent and the net profit margin 4.54 percent).

Financial Analysis: The total debt represents 26.33 percent of Otter Tail's assets and the total debt in relation to the equity amounts to 78.49 percent. Due to the financial situation, a return on equity of 6.99 percent was realized by Otter Tail. Twelve trailing months earnings per share reached a value of $1.18. Last fiscal year, Otter Tail paid $1.19 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 26.34, the P/S ratio is 1.32 and the P/B ratio is finally 2.16. The dividend yield amounts to 3.81 percent and the beta ratio has a value of 1.19.

Transportadora de Gas Del Sur S.A. (TGS) has a market capitalization of $308.! 26 million. The company employs 829 people, generates revenue of $466.44 million and has a net income of $43.33 million. Transportadora de Gas Del Sur's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $170.33 million. The EBITDA margin is 36.52 percent (the operating margin is 27.41 percent and the net profit margin 9.29 percent).

Financial Analysis: The total debt represents 33.71 percent of Transportadora de Gas Del Sur's assets and the total debt in relation to the equity amounts to 91.84 percent. Due to the financial situation, a return on equity of 11.97 percent was realized by Transportadora de Gas Del Sur. Twelve trailing months earnings per share reached a value of $0.31. Last fiscal year, Transportadora de Gas Del Sur paid $0.00 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 6.24, the P/S ratio is 0.47 and the P/B ratio is finally 0.83. The dividend yield amounts to 17.13 percent and the beta ratio has a value of 1.10.

Atlas Energy (ATLS) has a market capitalization of $2.72 billion. The company employs 832 people, generates revenue of $1.521 billion and has a net income of $-16.88 million. Atlas Energy's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $212.91 million. The EBITDA margin is 13.99 percent (the operating margin is 2.42 percent and the net profit margin -1.11 percent).

Financial Analysis: The total debt represents 33.51 percent of Atlas Energy's assets and the total debt in relation to the equity amounts to 330.64 percent. Due to the financial situation, a return on equity of -9.98 percent was realized by Atlas Energy. Twelve trailing months earnings per share reached a value of $-0.91. Last fiscal year, Atlas Energy paid $1.03 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is not calculable, the P/S ratio is 1.79 and the P/B ra! tio is fi! nally 5.84. The dividend yield amounts to 3.32 percent and the beta ratio has a value of 2.91.

Take a closer look at the full list of high beta dividend paying utilities. The average P/E ratio amounts to 20.49 and forward P/E ratio is 15.92. The dividend yield has a value of 2.56 percent. Price to book ratio is 2.66 and price to sales ratio 1.53. The operating margin amounts to 14.48 percent and the beta ratio is 1.43. Stocks from the list have an average debt to equity ratio of 1.90.

Take a closer look at the full list of high beta dividend paying utilities. The average P/E ratio amounts to 20.49 and forward P/E ratio is 15.92. The dividend yield has a value of 2.56 percent. Price to book ratio is 2.66 and price to sales ratio 1.53. The operating margin amounts to 14.48 percent and the beta ratio is 1.43. Stocks from the list have an average debt to equity ratio of 1.90.

Do you like this article? If yes, please support us and hit the button for a Facebook Like, make a tweet or post a comment in the Dividend Yield community! Thank you so much, we really appreciate it.

Related Stock Ticker Symbols:
OTTR, TGS, ATLS, OKE, SBS, CWCO, MDU, AES, ORA

Selected Articles:
· 8 Utility Dividend Stocks With The Highest Float Short Ratio
· 20 Cheapest Utility Dividend Stocks
· Best Utility Dividend Stock Picks For 2013
· The Best Performing Utilities And Which Of Them Are Still Cheap
· 20 Of The Safest Utilities With Best Dividend Yields

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Amazon and Overstock's Crazy Price War's a Win for Book Lovers

Getty Images Usually when companies fight each other, it's consumers who get the worst of it. But right now, we're witnessing a business battle that's actually benefiting consumers in a big way. In this corner: Amazon (AMZN). In that corner: Overstock.com. At stake: Which site gets to claim it has the lowest prices on books. For years, Amazon has had sole possession of those bragging rights. But Overstock, a discounter not as widely known for its book offerings, is trying to make a splash in the book game by beating Amazon on price. Starting July 22, the site began offering to match Amazon's prices on hundreds of thousands of books, and then lower the price by another 10 percent. Overstock is applying the program to 360,000 of its titles. Not to be outdone, Amazon is going through its list and discounting its books to beat those prices -- which is causing Overstock's computers to respond by lowering their own prices again. The result is a race to the bottom, with the book-buying public realizing huge discounts on even the most popular books. Gillian Flynn's "Gone Girl," for instance, is a bestseller that came out in June and has a list price of $25. It's currently $12.84 at Amazon, but Overstock has it for just $10.63. The Amazon price history of the book shows that the price started dipping shortly after Overstock's price-match program went into effect. The price war is largely being fought by the two e-tailers' computers, which are programmed to periodically check the competition's prices and beat them.

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While algorithms of this sort have gone a little screwy in the past -- consider the case of the biology textbook that wound up priced at $23 million -- we're guessing there a fail-safes in place here to make sure the prices don't go too low. That's probably why we aren't seeing books selling for pennies on either site right now, and likely won't. Still, Overstock pledged Thursday that it would keep up the promotion for at least another week. So if there's a book you're looking to buy, now is the time to do it. Check the prices on both sites, see where you're getting the better shipping deal, and then click "buy" before the two companies declare a cease-fire.

3 Health Care Stocks Rising 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.

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.

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

Mako Surgical

Mako Surgical (MAKO) is a medical device company that markets its advanced robotic arm solution, joint specific applications for the knee and hip, and orthopedic implants for orthopedic procedures. This stock closed up 12.9% to $14.04 in Wednesday's trading session.

Wednesday's Volume: 5.98 million

Three-Month Average Volume: 847,228

Volume % Change: 698%

From a technical perspective, MAKO gapped sharply higher here right off its 50-day and 200-day moving averages with heavy upside volume. This move pushed shares of MAKO into breakout territory, since the stock cleared or flirted with some past overhead resistance levels at $13.45 to $14.18. At last check, MAKO closed at $14.04 with volume that was dramatically above its three-month average action of 847,228 shares.

Traders should now look for long-biased trades in MAKO as long as it's trending above Wednesday's low of $13.51 and then once it sustains a move or close above Wednesday's high of $14.77 to $15 with volume that hits near or above 847,228 shares. If we get that move soon, then MAKO will set up to re-test or possibly take out its next major overhead resistance levels at $16.28 to $18.

Acadia Healthcare

Acadia Healthcare (ACHC) develops and operates a network of behavioral health facilities, providing premier psychiatric and chemical dependency services to its patients. This stock closed up 6.5% at $36.87 in Wednesday's trading session.

Wednesday's Volume: 792,000

Three-Month Average Volume: 360,986

Volume % Change: 124%

From a technical perspective, ACHC soared higher here right above its 50-day moving average at $34.12 with strong upside volume. This move pushed shares of ACHC into breakout territory, since the stock took out its former 52-week high at $36. Shares of ACHC have been uptrending strong over the last six months, with shares soaring higher from its low of $24.93 to its intraday high of $37. During that move, shares of ACHC have been making mostly higher lows and higher highs, which is bullish technical price action.

Traders should now look for long-biased trades in ACHC as long as it's trending above its 50-day at $34.12 and then once it sustains a move or close above Wednesday's high of $37 with volume that's near or above 360,986 shares. If we get that move soon, then ACHC will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45.

Amedisys

Amedisys (AMED) is a health care company engaged in delivering personalized health care services to patients and their families. This stock closed up 8.8% at $12.51 in Wednesday's trading session.

Wednesday's Volume: 1.44 million

Three-Month Average Volume: 446,646

Volume % Change: 230%

From a technical perspective, AMED gapped sharply higher here right off its 200-day moving average at $11.38 and back above its 50-day moving average at $11.99 with heavy upside volume. This move also pushed shares of AMED into breakout territory, since the stock took out some near-term overhead resistance at $11.95 to $12.40. Shares of AMED are now quickly moving within range of triggering another major breakout trade. That trade will hit if AMED manages to take out some near-term overhead resistance levels at $13.30 to $14.89 with high volume.

Traders should now look for long-biased trades in AMED as long as it's trending above its 50-day at $11.99 and then once it sustains a move or close above those breakout levels with volume that's near or above 446,646 shares. If we get that breakout soon, then AMED will set up to re-test or possibly take out its next major overhead resistance levels at $15.95 to $18.20. Keep in mind that any move above $15.95 will also push shares of AMED into new 52-week-high territory, which is bullish technical price action.

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.

The Role of Food in Company Culture

In the video below, we hear from Fedele Bauccio, founder and CEO of Bon Appetit Management. His company has built its reputation on locally sourced, seasonal, healthy foods, and is actively involved in sustainability issues affecting every aspect of the food industry.

We discuss the current interest among tech companies such as Google (NASDAQ: GOOG  ) and Twitter in providing healthy low-cost or even free food as a way of building company culture and promoting health and innovation among their employees.

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Isaac Pino: Just before our discussion, you were sharing some of your stories around the culture of Silicon Valley and some of the companies that you work with currently. At the beginning, perhaps companies were not necessarily buying into the idea of, "We need to feed our employees sustainable, healthy food and make it available for lunch."

What were some companies that started to tip that balance, how did that progress, and where are we today, at least around Silicon Valley? I thought you had some interesting things to share.

Fedele Bauccio: When we first started out in Silicon Valley, companies wanted...

The first interesting story was at Oracle (NASDAQ: ORCL  ) . Larry Ellison wanted us to create in his first building a paninoteca, which is like a little Italian sandwich shop that you would find in Milan.

I said, "I can do that; I'm Italian," so we created this little paninoteca, but realizing as he was starting to grow the company -- if you've ever been out at Oracle, there's a lake and then there's a number of buildings -- we created different concepts. We have a Japanese noodle bar, we have a Mediterranean marketplace, we have an Indian curry house.

We have all these different concepts in each building, so employees never have to leave. They wanted to be more productive, and so forth.

From that showcase, everybody wanted to have something unique and different, so we customize these locations. We have no menu cycles or recipe boxes or anything. Everything is like a small little cafe or restaurant.

At that time, the idea of having food service for corporations was to retain talent. It also was to make sure that they were productive -- they never left campus to go have three martinis at lunch -- that was the idea.

There was also some idea of breaking bread together, as you do a couple of times a week here. It creates a culture. We eat together, and we create culture.

Nowadays, if I took you to Google or Twitter, or some of the other locations that we serve, it's free food. They spend a lot of money on free food. The objective is to create healthy, really good food.

The word "health" is really important, and there is a connection between agriculture and health -- a huge connection. That's another whole story.

How do we create healthy food for our employees, so that they're healthy at work? Yes, they're productive, but it creates innovation.

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I really believe the trends are, in corporate America, the days of these big cafes where they feed 400 people and they're all lined up like an army barracks, are gone. Because if you go to Silicon Valley it's kind of like... You guys remind me of Google in here, except I don't see the bouncing balls.

Isaac Pino: We have a few of those.

Bauccio: Maybe there's a few. There's no offices there, just like there is here. In some cases, like at Twitter, there's not even any cubes. There's living room kinds of spaces, with couches and bouncy balls that they sit on. You and I have a meeting someplace, and then we go to another place and have a meeting.

Our job is to create these small, little pop-up restaurants, or small, little places that people can eat, and eat all day long. Sometimes they're there at night and they sleep in these places, and they bring their dogs in, and we feed them all night long.

The idea is to create food that's affordable, or free in some cases, but food that is healthy and still brings a sense of community to that culture of that company. It's taken off like crazy. Yahoo! (NASDAQ: YHOO  ) is now free, since Marissa got there as CEO. Twitter is now free. LinkedIn (NYSE: LNKD  ) is going to be free. Google is free.

There's a whole different trend here, of how do we bring food that's healthy, and that works for the culture of the company? That's what's going on.

Charting Acacia Research's Latest Earnings Release

Acacia Research (Nasdaq: ACTG  ) reported earnings on April 18. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Acacia Research crushed expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue shrank significantly. Non-GAAP earnings per share dropped significantly. GAAP earnings per share contracted significantly.

Margins contracted across the board.

Revenue details
Acacia Research logged revenue of $76.9 million. The six analysts polled by S&P Capital IQ hoped for revenue of $55.2 million on the same basis. GAAP reported sales were 22% lower than the prior-year quarter's $99.0 million.

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 $0.47. The five earnings estimates compiled by S&P Capital IQ anticipated $0.50 per share. Non-GAAP EPS of $0.47 for Q1 were 57% lower than the prior-year quarter's $1.09 per share. GAAP EPS of $0.11 for Q1 were 90% lower than the prior-year quarter's $1.09 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 76.0%, much worse than the prior-year quarter. Operating margin was 9.2%, much worse than the prior-year quarter. Net margin was 6.7%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $56.8 million. On the bottom line, the average EPS estimate is $0.52.

Next year's average estimate for revenue is $269.7 million. The average EPS estimate is $2.37.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 135 members out of 155 rating the stock outperform, and 20 members rating it underperform. Among 31 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 28 give Acacia Research a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Acacia Research is buy, with an average price target of $44.25.

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