Mecklai graph of the day: Widening Spanish - German Spreads

Spanish bonds have declined quite sharply since the past several days and the previous session was no exception either, as spread between the 10-year Spanish yields relative to benchmark German bunds widened the most since the Euro was created. The yield spread against 10-year German bunds widened to more than 500 basis points, a record high, as concerns grew that Spain's lenders will need additional financial support to weather Europe's debt crisis. Meanwhile, global risk aversion is pushing the German bunds to a record low, which in turn is adding more pressure on the yield spread to widen.

As long as the ongoing banking concerns in Spain persists, Spanish government securities are likely to continue weakening further while demand for the safest assets such as German bunds would pick up. This in turn could lead to further increase in spread between the securities of Euro zone's largest and 4th largest economy.

The below graph shows the spread of Spanish 10-year bond over German bund for the last 3 months

 

 

 

 

 

 

 

 

 

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Top 10 Tech Stocks For 2014

To read the full report click here

3 Important Numbers To Know About These Bonds

As the Federal Reserve gets set to end its massive multi-year stimulus program, emerging markets are shuddering. That's because the possibility of imminent Fed "tapering" is leading many investors to yank their money out of emerging-market stocks and bonds and placing them in higher-yielding U.S. bonds.

I recently wrote about the burgeoning appeal of emerging-market stocks, which are currently in turmoil but starting to look like deep value plays for long-term investors. Still, until these markets settle down and form a bottom, it's wiser to nibble than go whole hog.

 

Yet when it comes to emerging-market bonds, there is a different set of factors to consider. They are interrelated and can help determine which bonds are safe -- and which are potentially toxic. Those three factors: trade balances, foreign currency reserves and currency changes. Let's take a closer look.

Surplus Or Deficit?
A nation's trade balance is likely the single most important item you need to track as you assess emerging markets. A nation that runs a strong trade surplus is likely to retain a firm currency over a multi-year period. And countries that run trade deficits are extremely vulnerable, as they depend on global capital to help keep their economy and currency from collapsing.

For instance, India, which runs stubbornly large trade deficits, is currently seeing a massive run on both the rupee and its stock and bond markets. Global investors have already assumed that the Indian economy is headed for very tough times as capital grows scarce.

Looking at the 60 largest economies in the world, here's a look at the emerging-market countries running the largest trade deficits. (The U.S. is included for context.) Though the U.S. runs huge trade deficits, the global appeal of the U.S. dollar means we don't have to worry about trade balances wrecking our economy -- at least for now. A number of European countries also run trade deficits in excess of $30 billion, which is still much lower than the U.S. deficit as a percentage of GDP.

Large Trade Deficits

Sources: CIA World Factbook, United Nations

Note that many emerging-market economies have been home to some of the most dynamic growth rates in the past decade. It's increasingly clear that a high reliance on imports played a key role in that growth, and these countries must figure out ways to reduce imports and boost exports. (Those can be accomplished through currency weakness, which I'll note in a moment).

But what about economies that have been running trade surpluses? Although China leads the pack, with a $214 billion trade surplus in 2012, several Asian countries -- including Singapore, Taiwan, Hong Kong, Malaysia and South Korea -- show healthy trade balances. The key takeaway: Bonds from these countries have little to fear from the chaos caused by the Fed's moves.

1998 Redux?
So are emerging markets set for the same kind of meltdown we saw 15 years ago when the Thai baht and Russian ruble collapsed, leading to a global scare? That's quite unlikely, for the simple reason that many countries now hold a solid amount of foreign currency reserves, which can be used to shore up a currency if a crisis emerges.

Back in 1998, many central banks were not yet fully aware of the need to keep a sizable amount of foreign currency in the vaults. Here are the foreign currency reserves, as a percentage of their GDP, in the leading emerging economies.

Foreign Currency Reserves

Sources: CIA, U.N.

Here again, Asian nations heavily populate the list. It is notable that Brazil and India also maintain sizable amounts of foreign currency reserves, though global investors are likely concerned that those reserves are starting to erode as foreign direct investment (FDI) starts to wane in those countries.

The Currency Factor
Trade balances and foreign reserves need to also be viewed in the context of currency changes. In the past three to four months, Indonesia, India, Brazil, Australia and many others have seen their currencies rapidly weaken. As this article from Bloomberg notes a basket of key currencies, all of which had been rising in 2011 and 2012, have fallen all the way back to 2010 levels.

These currency moves are causing deep short-term pain, but they might be setting up profound long-term gains. In the near term, a weaker currency for any nation that runs trade deficits means that import prices are rising, and an upward move in inflation can lead central banks to raise interest rates to reverse the trend. That's a major negative for Brazil right now and could also become a trend in Indonesia, Turkey, India and elsewhere.

Yet over the long haul, weaker currencies boost the relative appeal of exports, and can lead to domestic displacement of imports. Countries like Brazil, Indonesia and Turkey are blessed with favorable demographics and sit among sizable regional trade blocs. But it's crucial that their economies expand to the point where domestic consumption can be met by domestic manufacturing output. A weaker currency helps.

Risks to Consider: We may not have seen the end of the emerging-market rout, which makes this a great time to brush up on these issues and proceed only when countries show relative health in terms of trade balances and foreign currency reserves.

Action to Take --> Across emerging markets, Asia remains as a notable bright spot, especially as fears of a deeper economic slowdown in China are starting to fade. That makes emerging-market bond ETFs increasingly appealing, as they are being sold off in tandem with truly vulnerable bonds issued elsewhere. The WisdomTree Asia Local Debt ETF (NYSE: ALD), for example, is touching 52-week lows after falling 10% since early May. The fund invests in "fixed-income securities issued by Asia ex-Japan governments, agencies and corporations denominated in the local currency," according to the ETF's prospectus.

Investors may also want to check out the SPDR Barclays Capital EM Local Bond ETF (Nasdaq: EBND). This isn't a pure play on Asia, as top bond holdings are held from Mexico (12% of the bond portfolio), Poland (9%), South Korea (8%), Malaysia (8%), Thailand (8%) and the Czech Republic (7%). Yet as these are government-issued bonds, backed by countries with solid foreign reserves, the default risk is minimal. And the current yield, which has moved above 5%, is hard to beat.

Though bonds likely hold a greater level of safety than stocks right now, top companies in leading emerging markets are becoming compelling bargains as well. Many of these companies focus on developed markets and have shown a lot of resiliency in the past. I recently discussed the appeal of the iShares MSCI Emerging Markets ETF (NYSE: EEM) and still think that its blue-chip portfolio is gong unappreciated by global investors.

P.S. -- Whether you're getting in on the ground floor of a promising new market, trend or technology, the profits that can follow can change your life forever. Andy Obermueller's Game-Changing Stocks is entirely devoted to finding the next big, life-changing investing idea. See his latest report for more groundbreaking investment plays.

Verizon Gets Aussie Police Contract - Analyst Blog

Top China Companies To Watch In Right Now

Leading wireless provider, Verizon Communications Inc. (VZ) has received a three-year contract from the Australian Federal Police. Under the deal, Verizon will provide Internet gateway service to aid the IT capabilities of the agency.

The system promises enhanced security and reliability along with efficiency. It will be equipped with intrusion detection and firewall management, anti-spam, and anti-virus management capabilities. The contract is worth AU$15 million ($14 million).

We believe that the company's expansion into markets like Australia would provide a significant opportunity to grow beyond the saturated U.S. wireless market. Previously, Verizon had a similar received a similar five-year contract from the Australian Department of Defense for AU$50 million ($46 million).

Other than Australia, the company is also making forays into cross border markets like Canada. Recently, there have been reports on the company proposing to acquire Canadian wireless provider Wind Mobile at an initial offer of $700 million. In addition, reports suggest that the company is in talks to buy Mobilicity, also a Canadian telecom company, representing a potential threat for tier one Canadian telecom carriers like TELUS Corporation (TU), BCE, Inc. (BCE) and Rogers Communications Inc. (RCI).

Apart from acquisition, Verizon is seeking new ways such as new pricing actions, FiOS Quantum, copper-to-fiber migration and cost-cutting measures to drive FiOS revenue growth and maximize profitability. The new FiOS pricing plans (set-top boxes and planned bundled changes) would accelerate consumer revenue growth for the next several quarters.

Verizon has also collaborated with Starz – a top-notch global media and entertainment company – to launch STARZ PLAY and ENCORE PLAY. We expect these combined efforts to lead to improved revenues, high operati! ng margins and greater market share.

Verizon, currently has a Zacks Rank #3 (Hold).

Is McDonald’s Ready for a Super-Sized 2013?

Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

The golden arches lost some of their luster in 2012 as McDonald's (NYSE:MCD) lagged behind the market by 25 percent. Recently though, it seems like McDonald's is regaining some traction. After disappointing sales numbers in January, February, and April, McDonald's announced a 2.6 percent increase in same-store sales, beating out analyst expectations. Will McDonald's positive momentum continue throughout the year or will competitors YUM! Brands (NYSE:YUM), Burger King (NYSE:BKW), and Wendy's (NASDAQ:WEN) catch up (no pun intended)? Let's use our CHEAT SHEET analysis to examine McDonald's current position in the marketplace.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

Catalysts

McDonald's same-store sales took off in May, increasing 2.6 percent. This rise in sales came after disappointing sales numbers in January, February, and April. How did the sales growth occur after four straight months of declining same-store sales? A combination of innovation and aggressive marketing tactics helped McDonald's get sales back on track.

McDonald's currently has 140 items on its menus worldwide and 160 new offerings in the pipeline. To tackle the decline, management introduced several new products to the menu including chicken McWraps and the Egg White Delight sandwich. These products fared well with consumers and addressed growing concerns that McDonald's was planning on discontinuing some of its healthier menu items.

Additionally, McDonald's has focused on more direct marketing tactics, stressing its value to consumers. The fast food industry has taken a hit recently. Consumers have been eating out less due to economic uncertainty and decreases in their income through higher payroll tax rates. Going forward, McDonald's has shifted its focus toward offering nutritional and low-priced items to consumers who are becoming increasingly conscious about their health and their budgets.

Fundamentals

When deciding whether to invest in McDonald's, it is a useful exercise to look at its chief competitors, Burger King, Wendy's, and Yum! Brands. For those unfamiliar with Yum! Brands, the company owns Pizza Hut, KFC, Taco Bell and WingStreet restaurants.

No disrespect to Burger King, but McDonald's earns the title of 'king' when comparing dividend yields across the group. McDonald's yields an attractive 3.1 percent, the highest of the fast-food chains, and higher than the restaurant industry average of 2.5 percent. McDonald's most recent five-year dividend growth rate was also very good at 15.3 percent. McDonald's currently pays out 55 percent of its retained earnings to investors, which suggests that the company has the capacity to increase dividends in the future.

With a trailing price to earnings ratio of 18.52, McDonald's looks relatively cheap compared to the restaurant industry. However, we must be careful when interpreting this number. McDonald's and with Yum! Brands have riskier business operations than companies like Burger King and Wendy's due to their significant exposure to emerging markets. The higher price to earnings ratio of Burger King and the restaurant industry as a whole may be a result of investors being willing to pay more for the lower risk.

McDonald's growth estimate for 2013 is a modest 6.3 percent. This number doesn't look so bad sitting next to Yum! Brands’ projected -5.5 percent nosedive over the coming year. Both companies have big plans for overseas expansion, especially in China, but their sales have slid due to recent avian flu fears. The current decline in Chinese sales has not deterred McDonald's from aggressive expansion. McDonald's has plans to hire up to 75,000 workers in China this year and recently debuted a new menu containing rice offerings for Chinese consumers.

	MCD	BKW	YUM	WED	Industry
Trailing P/E	18.52	53.82	22.99	N/A	22.2
Growth Est. (2013)	6.3%	15.9%	-5.5%	20.0%	N/A
Dividend Yield	3.1%	1.2%	1.9%	2.7%	2.5%

Technicals 

McDonald's is currently trading at $99.75, slightly below its 50-day moving average of $100.07, but above its 200-day moving average of $96.27. We can see that McDonald's has experienced a longer-term uptrend since it is trading above its 200-day moving average. The share price has been more volatile over the last few months, with a high of 103.70 and a low of $96.42. Investors should watch closely to see if the stock can break through its 50-day moving average—a good sign that investor sentiment is positive.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

Conclusion

After a disappointing 2012, McDonald's looks like is has regained its footing in the marketplace. The company's renewed focus on innovative menu items and value-based marketing strategies should bolster same-store sales over the coming months. It remains to be seen whether these efforts will produce long-term success for McDonald's; it is a challenging time for fast-food restaurants. Still, McDonald's offers an attractive dividend—the best of the fast food giants. McDonald's also looks poised to capitalize on the emerging Chinese market.  Though Yum! Brands is an increasingly worthy competitor, McDonald's has the resources and the management experience to establish a strong presence in China.

UAE Central Bank Might Break

Top Casino Stocks To Invest In 2014

The UAE Central Bank has been in negotiations with the financial industry for eight months, however, for the most part, these negotiations have not produced any changes, but now one might finally be overdue, writes Gregor Stuart Hunter of The National.

The Central Bank is under pressure to break the regulatory impasse in its negotiations with the financial industry, after eight months with little to show for its latest efforts.

Rules tightening mortgage criteria and banks' exposure to government entities were postponed during the past year after resistance from the sector, while rules intended to help to sustain bank liquidity, and transition payment cards to chip and PIN security systems were also delayed.

The banks might argue that they are in a comfortable position, having been encouraged to build up large capital buffers since the global financial crisis, but the IMF said, in a report on the UAE economy last month, that regulation to protect against future asset bubbles was vital.

"The implementation of planned prudential regulations will help mitigate the risk of a build-up of banking sector vulnerabilities," the IMF said.

"Swift implementation of the planned new prudential regulations for mortgage lending and loan concentration would mitigate the risk of rapid credit expansion, and undue loan concentration to the real estate and GRE [government-related entities] sectors in the future."

The Central Bank and the Ministry of Finance spent more than Dh136 billion of public funding cleaning up banks' balance sheets, caused by the financial crisis of 2008 and 2009.

The problems with bad debts, which banks have struggled with, have now eased, allowing them to put aside increasingly less, as provision for missed payments, and lend more, according to research from the investment bank, EFG Hermes.

"Overall, the provisioning overhang, which has lasted for more than four years, is beginning to lift gradually," analysts wrote in a research note. That has given the Central Bank breathing room to redraw regulations.

But new lending, during the first five months of this year, has grown by more than during all of last year, according to the latest data from the Central Bank.

A new Financial Services Law, currently under review, the Central Bank's biggest operational shake-up since its creation in 1980, is expected to split the regulatory functions in two, utilizing a so-called "Twin Peaks" system.

While the Central Bank will continue its traditional role ensuring the stability of the financial system, the Securities and Commodities Authority will take charge of operational matters.

Having a separate macro-prudential regulator would free-up resources to speed the completion of the Central Bank's financial stability laws.

The Central Bank has negotiated with banks for more than a year over its exposure limits, intended to cap lending to government agencies and their commercial holding companies, such as Investment Corporation of Dubai or Abu Dhabi's Mubadala Development Company.

National Bank of Abu Dhabi, Emirates NBD, and Noor Islamic Bank have all stated that they are in breach of the limit. In some cases, their exposure is almost double their total levels of capital.

The UAE Banks Federation, the industry lobby group, last month submitted a final proposal excluding bonds, and sukuk, and requesting five years to comply, whereby the original legislation gave six months.

The lobby group is also pushing for the establishment of a "means and purpose" test.

"This is the single most important part of the regulations," said Tirad Mahmoud, the chief executive of Abu Dhabi Islamic Bank, which is not currently in breach of the proposed rule.

"We want to see if this recommendation has been perceived as a good solution," he said. With an ability to distinguish between entities that are financially dependent on the government and those that are standalone companies, the levels of excess exposures will shrink and "the grace periods that some of the banks have asked for are not needed in their entirety", Mr. Mahmoud said.

The Central Bank postponed implementation of the rules in December, but said it had approved amended exposure ratios at a board meeting this month. It has not disclosed the new limits, but made no mention of the UAE Banks Federation's alternative proposals.

At the same time as it tackles the sector's exposure to government debt, the Central Bank's cap on leverage for mortgage buyers has been resisted by the financial services sector.

The original plan, proposed eight months ago, would have imposed a mandatory 50% down payment on expatriates buying property for the first time, rising to 60% for subsequent purchases.

The banks' federation said in March it had submitted alternative proposals to the Central Bank, which it expects will finalize the law in the second half of this year.

In the meantime, average prices of villas sold in Dubai have risen by 50% in the 12 months to last month, according to data from Knight Frank.

But property agents have argued that the Central Bank is not targeting the major cause behind the rise in property prices this year, citing statistics indicating that cash buyers have accounted for some 80% of property purchases so far in 2013.

Read more from The National here…

BondDesk Sets All-Time Record for Muni Bond Trading Volume

Muni problems? What muni problems?

Their tax-exempt status is threatened, and the situation Detroit isn’t helping, but you wouldn’t know it from the brisk business at BondDesk.

The retail platform for municipal bond trading reported an all-time record of 11,590 municipal bond trades were done on Monday on the BondDesk ATS.

The record came on the heels of the largest three-day increase in yields since April 1987 and in the wake of last week’s Federal Reserve meeting.

John Bagley, president of BondDesk Trading, noted that interest in municipal bonds from retail investors has spiked over the past week along with the increase in yields.

“The municipal bond market has seen exceptionally large selling from institutions since the Fed meeting last Wednesday,” Bagley said in a statement. “This week, individual investors provided support for the market and drove yields down across the board by buying bonds at unprecedented levels. This buying was driven by an ability to buy 5.00% coupon bonds at par on a wide variety of quality municipal credits.”

Hot Clean Energy Stocks To Watch Right Now

The month-to-date fill rate for municipal bond orders placed against firm bids on the BondDesk ATS has been 98.8%, a remarkable fact given the market volatility during June, Bagley noted.

“While Bid Wanteds on our platform are nearing historically high levels above 10,000 per day, a sign of major selling pressure, there were almost five investor buys for every sell this past week, indicating that retail investors are jumping into the market to take advantage of higher rates,” he concluded.

---

Check out What’s at Stake for Muni Bond Investors in Detroit Insolvency  on AdvisorOne.

Questar Corporation Delivers Promise Of Natural Gas: Buy At Fair Value

Questar Corporation (STR) is a natural gas holding company based in the Rockies, USA. The company operates three wholly-owned subsidiaries: Wexpro, Questar Pipeline, and Questar Gas. Wexpro is engaged in natural gas and oil E&P and in the past twelve months has produced ~58Bcf of natural gas and ~657,000BOE. It has an investment base of approximately $531M and enjoys the highest return on assets (ROA) among the three segments (~19%). Wexpro contributes the least in terms of revenue streams to the firm but provides more than half of Questar Gas's supply requirements. Questar Gas's share of total revenues attributable to the holding company approaches 80%. This subsidiary represents a gas-distribution utility that operates mainly in Utah, where 97% of its customers live. The company has been adding an average of 8.4K customers since 2008 and now approaches a customer base of one million people (the current number is about 931K). Questar Gas, according to the company's 2012 10-K, keeps its costs 30% below the national average partially because of Wexpro's dedicated and continuous production. Questar Pipeline provides natural gas-transportation and underground-storage services in three states: Utah, Wyoming, and Colorado. The company operates 2,638 miles of pipeline with a total daily capacity of 5,039K decatherms. In 2013, the company plans to add another 7.5K dth/d to the existing capacity. In 2012, Questar Corporation earned almost $1.1B in revenues and $568M in Adjusted EBITDA. Since 2008 the company has generated approximately $350M in Free Cash Flows. It offers a dividend of $0.72 per share with an effective yield 2.95%. Recently, the company has declared its 275th consecutive dividend payable on September 9th, 2013.

(click to enlarge)

(click to enlarge)

Current Price/Earnings ratio equals to ~20X and has remained on the rise since 2010. It falls within the 10-year range and has slightly climbed above 2003-04 levels. The historical EV/EBITDA multiple has been 12.0X on average for the past five years:

(click to enlarge)

In 2013Q2 presentation, the management has given the following guidance for the year:

(click to enlarge)

Historical Data and Margins

Questar Corporation has been growing EBITDA at a CAGR of 3.4% for the past 5 years, while revenues have been generally flat. Wexpro has the highest revenue growth at almost 7% CAGR for the same timeframe:

(click to enlarge)

Quarterly results are also supplied:

(click to enlarge)

The latest ROE metrics for the segments are available:

(click to enlarge)

Valuation

The following valuation method uses historical data and the most conservative assumptions in data projections. First of all, let us determine the current Enterprise Value and its compositions:

(click to enlarge)

At the current EV of ~$6B the effective multiple is 10.7X, eleven percent below the 5-year average. Market capitalization represents over 70% of the total firm value, while total financial debt is less than a quarter, at 22.5%. The rest goes to asset-retirement obligations and pension-related liabilities.

Important valuation Assumptions:

1. Long-term revenue growth rates for Wexpro, Questar Pipeline, and Questar Gas are 5%, 1.2%, and 1%, respectively.

2. Consolidated EBITDA margin remains at 50%

3. Terminal EV/EBITDA at the historical average of 12.0X

4. Discount rate at 5% (actual WACC is below 4% due to a significantly low beta of 0.47)

5. Interest Expense remains at $58M; tax rates are locked at 38%

6. CAPEX consumes 30% of revenues for the next 5 years with a one-time hike of $565M as per management's forecast

The output of the model is following:

(click to enlarge)

Adding valuable components such as the present value of dividend streams and effects of share repurchases, we obtain the following results:

(click to enlarge)

Now let us look for a moment at the distribution of value factors and analyze them:

(click to enlarge)

Important Observations

Terminal Value makes up four-fifths of the total value. This is the most sensitive value factor and, therefore, makes the investment more riskyDividends represent one-eleventh part of the fair value. Dividends are cash returns to investors and make up an important component of the total experienceShare buybacks have the smallest impact on the valuation, standing at 2% ! of per sh! are value. Management should consider using these funds to pay dividends. On the other hand, management's plans to repurchase 1 million shares annually also indicate that the stock is deemed undervaluedAdjusted Free Cash Flows (dividends subtracted from normal Free Cash Flows) are projected to be negative for the next 5 years because of the high capital investment levels (pipeline expansion, increase in investment base for Wexpro: more than $1B of development opportunities). As a result, there is a drag on the valuation. (click to enlarge)

Hot Gold Stocks To Watch For 2014

Technical Valuation

Buy and sell signals have been provided by Recognia Inc. through TD Waterhouse brokerage. Readers can see the output below:

(click to enlarge)

The readers can see medium-term resistance levels at around $24.90-$25.50, while support levels are as low as $22.50. Also, not pictured clearly on the graph, is the developing cup-and-handle pattern, which, if supported by the fundamentals, can indicate a medium-term rally.

Summary

At current price levels Questar Corporation is valued fairly, which means investors cannot exploit price inefficiencies. Nevertheless, investors may consider the ~3% dividend yield and an after-dividend ROE of about 8% (in other words, if P/E remains stable, the price will appreciate by 8% annually). The company seems to have weather the slump in natural gas futures pretty well during the past two-three years. This is an indicator that the firm is not extremely exposed to the futures market.

Conclusion

I issue a "HOLD" rating on this company. Potential investors should keep in mind th! at the st! ock offers razor-thin margin of error and remains at the middle of the fair value range.

Source: Questar Corporation Delivers Promise Of Natural Gas: Buy At Fair Value

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Nevsun Reveals 2Q Bisha Output - Analyst Blog

Canadian gold miner Nevsun Resources Ltd. (NSU) has unveiled second-quarter 2013 production results from its Bisha mine in Eritrea, East Africa. The company produced 34,900 ounces of gold in the quarter, at par with its expectations. Nevsun expects to produce 110,000 ounces of gold from the mine in 2013.

Nevsun mined 425,000 tons of ore during the second quarter. Waste mined was 1,647,000 tons. Moreover, Nevsun milled 455,000 tons of ore at 2.75 g/t (grams per ton) gold. The results include 56,000 tons of the transitional pyrite sand ore processed starting Jun 15, 2013.

During the quarter, an additional 2,700 ounces of gold and 277,000 ounces of silver were produced in concentrate starting June 15. Nevsun also achieved safety milestone at Bisha, clocking 12 million man hours without a lost time injury.

Nevsun is a high grade, low cost gold producer. The company has a 60% interest in the Bisha mine, which ranks as one of the highest grade open pit mines in the world.

Bisha produced 313,000 ounces of gold last year, exceeding the company's expectations. The mine is shifting to low cost copper/gold production this year. Nevsun invested $64 million in the copper phase expansion during 2012.

According to Nevsun, the copper expansion projected completed as planned and under budget. It expects to produce 30 million to 50 million pounds of copper in concentrate this year.

Nevsun, which currently retains a short-term Zacks Rank #3 (Hold), will report its full financial results in mid-August 2013.

Other companies in the mining industry with favorable Zacks Rank are Impala Platinum Holdings Ltd. (IMPUY), Stillwater Mining Co. (SWC) and Avalon Rare Metals Inc. (AVL). While Impala Platinum and Stillwater Mining hold a Zacks Rank #1 (Strong Buy), Avalon Rare Metals retains a Zacks Rank #2 (Buy).

Don't Make This Investment Choice Before Reading This First

When I first decided that these super-popular investments might have a place in my portfolio, I spent about six months learning about them and then another six months investing in them to determine how I wanted to use them in my portfolio.

I'm definitely not alone in looking into them. Thousands of Americans have asked themselves the same question I did, and many others are considering their answers right now.

But the reality is that it can be a little overwhelming to decide on your final answer. After all, your decision could mean moving away from an investment that's been the cornerstone of your portfolio -- as well as the portfolios of millions of other Americans -- for years.

So what's this burning question?

Mutual Funds Or Exchange-Traded Funds (ETFs)?
There are many different things to consider, such as tax treatment, costs and legal structure. Looking back at what I have learned, I have decided it comes down to three factors you should consider when deciding which one is right for you.

Let's look at each of these.

1.The Purpose Of Your Investment

First, understand the purpose of your investment. Is it a long-term core holding that you are not going to be trading out of? Is it a market play? Are you looking to just get in and get out? Is it a temporary allocation that you might want to adjust within the next year or two? How you answer these questions is crucial. And if you haven't answered them yet, then you should do so before you move on.

2. How You Plan To Buy The Investment

This one is crucial as well. Are you using a lump sum to get in the market, or are you investing on a regular monthly basis? Additionally. are you going to reinvest any dividends, or do you just want the cash? Reinvesting dividends is a key part of the investment strategy for many investors, including my colleague Amy Calistri, editor of StreetAuthority's Daily Paycheck newsletter. After you know what the purpose is and how you are going to buy, then you can begin to narrow in on a decision. First thing to consider is liquidity issues. If you are investing in a thinly traded area such as an individual country investment, you might not have as much liquidity in an ETF as you would in a mutual fund. Because an ETF is traded like a stock, you will need to have someone on the other side to buy, thus when the market is down, it could be hard to find a buyer. Meanwhile, a mutual fund will typically have the cash on hand to buy your shares.

3. Costs

Costs can destroy your return, so you should evaluate every possibility. When looking at your two investment options, two fees come into p! lay: tran! saction fees to purchase and management fees. Using the information that you determined on your purpose and how you are going to buy, come up with an estimated cost per each type of transaction. For example: An ETF will have a transaction fee to buy the shares plus a management fee. This might look like $7.95 per trade plus 0.06% per year and a sales transaction fee of another $7.95. Meanwhile, your mutual fund might have no transaction fee and a management fee of 1.25%. Don't forget fees for reinvesting dividends and mutual fund loads. Both of these will cost you more money if you need to pay to reinvest the dividends or get hit with a sales fee. (The fee for reinvesting is different for every brokerage company, so ask.) Tally all the costs for each approach and select the cheapest long-term option. For example, if you are going to use a lump sum of money to add to your core index holdings that you will keep for at least 10 years, an ETF will allow you to pay one fee to get in with a much lower yearly management fee. That makes your costs less than a mutual fund's fees, which would have no upfront transaction fees but would come with a higher management rate over the long term. However, if you prefer to have your dividends automatically reinvested and your brokerage won't reinvest for free, then you might want to go with the index mutual fund that will automatically and for free reinvest the dividends.

Action to Take --> One final thought: I use the dividends from my ETF products to rebalance my portfolio; that way, I avoid automatic transaction fees. If I have to buy and sell to balance my portfolio, I transact two fees. However, if I use my dividends to change my allocations, I avoid the sales fee and just pay to buy.

This article originally appeared at InvestingAnswers.com
The Investing Question You're Probably Trying To Answer Right Now...

HSBC Exits South Korean Retail Banking - Analyst Blog

Best Biotech Companies To Invest In Right Now

HSBC Holdings plc (HBC) is exiting from its retail banking and wealth management businesses in South Korea. This comprises the closure of 10 banking units, subject to regulatory approval. The company, however, intends to retain the comparatively profitable global banking and markets unit for catering to client needs.

Let's dig a little deeper to find out the reasons for this divesture.

Dominance of Local Banks in South Korea

South Korea, one of the most prominent emerging G-20 economies, unfortunately did not add to HSBC's success. Since the inception of this wing in 1998, attempts to restructure and enhance South Korean retail banking remained as a subscale, inefficient business for the company.

Foreign banks find it difficult to establish in the fiercely competitive South Korean market, which is largely dominated by local banks. Standard Chartered PLC (SCBFF) faced a similar plight of failed operations in South Korea, due to decreasing profitability and rising debt.

Notably, KDB Financial Group, a government owned banking group in South Korea, wanted to acquire HSBC's South Korean Unit. However, negotiations failed as KDB did not agree to retain all the present employees after the merger.

Cost Saving Measures

The latest winding down announcement is part of HSBC's global strategic review to reduce costs and will reduce 230 employees. These staff may choose to accept a redundancy package or work with the bank till the winding down is complete.

Notably, HSBC has exited 52 businesses globally since May 2011, going by its global review plan. Further, on May 15, 2013, Stuart Gulliver, Chief Executive Officer (CEO) of HSBC, announced cost saving measures of $3.0 billion, which includes 14000 jobs cuts. Since Gulliver became the CEO, there have been 46,000 job cuts worldwide – resulting in annu! al cost savings of $4.0 billion.

Our Viewpoint

HSBC is striving to boost its profitability in the challenging market environment by disposing economically unprofitable business units. The company now intends to primarily focus on mature economies such as the U.S., Germany, France and emerging economies including China, Indonesia and Brazil. Moreover, it seeks to strengthen its home operations in the U.K. and Hong Kong.

We expect HSBC's new cost saving initiatives, diversified revenue sources, strong capital position and meaningful capital deployment activities to boost investors' confidence in the company. Nevertheless, weak revenue growth in its mature markets, the Eurozone crisis, litigation costs and regulatory restrictions remain matters of concern.

Currently, HSBC carries a Zacks Rank #3 (Hold). Some better performing foreign banks include Mitsubishi UFJ Financial Group, Inc. (MTU) and Sumitomo Mitsui Financial Group Inc. (SMFG), both holding a Zacks Rank #1 (Strong Buy).

Tesco Still Sells For Less Than What Buffett Paid

Tesco (TSCDY) has been selling well short of the price Warren Buffett paid last year. In November he paid some $18 a share and it now sells for less than $15 (a P/E less than 9). The remarkable thing is how unchanged the business is despite the sell-off. What catalyzed the sharp drop in price was comments by the CEO that earnings growth would be muted for 2012. But what I've discovered, as Warren Buffett certainly has, is that the company is an exceptional business selling at a very attractive price.

First the bad….

Tesco continues to tough out the challenging UK market and this has been the primary concern among investors. The company has been parachuting in some of their more talented managers from its foreign operations in order to fix their domestic troubles. Tesco announced it would create some 20,000 new jobs in the UK to improve upon its customer service which has lacked of late. The UK magazine The Grocer recently released a loyalty survey of British grocers. Tesco, the one-time leader in loyalty through its Clubcard program, came in at an abysmal 8 out of 10 for the loyalty ranking. The magazine wrote of Tesco:

"Tesco is neck-and-neck with Asda [a Wal-Mart subsidiary] on good quality at good prices, the leading loyalty metric. But it massively trailed its rival on 'low prices', with only 8% of shoppers saying this was the key factor that would make them recommend the store."

And then the growth segments…

Tesco has shed market share in grocery of late though it still holds a commanding 30% of that UK market. But where it struggles in brick-and-mortar it steamrolls online. The company captured some 48% of the online grocery market and is growing at 14%. It expects to double its £5.5 billion sales over the next five years. For Americans unfamiliar with the UK grocery market, the country is a couple steps ahead of us in term of online use as this video will show.

The UK grocery market:

[ Enlarge Image ]

Tesco International

As the company stumbles in the UK, its international operations have picked up the slack. Tesco gets 22% of its profits from international operations, up from 5% 10 years ago. And just as in the UK the company doesn't just make sales in foreign markets, it dominates those markets. Tesco is No. 1 in the UK grocery market, but it also ranks No. 1 or No. 2 in 9 international markets.

South Korea

Tesco's Homeplus operation was one of the Tesco's first foreign expansions and also one of the most successful. In one of the countries where both Wal-Mart and Carrefour had withdrawn, Tesco grew a joint venture with Samsung with all of two stores in 1999 to become the No. 2 retailer in the market today (Tesco has since bought out Samsung). Tom Brown, a director for Tesco Homeplus, credits the joint venture structure with the success of the South Korean operation. In an interview (a must-read for any Tesco investor) he notes that Tesco's best overseas businesses are ones where a local partner is involved. Further, he notes that Wal-Mart and Carrefour both perform poorly in terms of adapting to the local culture. In 2011 Tesco pulled down £300 million in profits from £5 billion in sales from Homeplus.

Thailand

Tesco recently launched a $600 million property fund in Thailand to finance the construction of malls in the country with Tesco Lotus as the anchor tenant. The fund is organized such that Tesco will turn around and lease back the property allowing the company to preserve capital that would've otherwise been spent on real estate and focus on its niche – selling goods and maintaining its No. 1 position in Thailand.

U.S.

The Fresh & Easy chain is not one of the dominant markets for Tesco, but it is set to break even sometime in 2012. The subsidiary has been one of the less profitable ones for Tesco, losing some $1.11 billion since 2007. Twelve underperforming stores have b! een close! d and Tesco's CEO has not ruled out either selling the chain or forming a joint venture.

Tesco tripled its earnings per share over the past decade and averaged returns to equity in excess of 15%. It is remarkable for a business like this to sell for less than a P/E of 9 especially given the overall company outlook. Sure the UK business is stagnating, but company-wide earnings continue to grow and the CEO himself expects this year's earnings to increase albeit modestly. I'm not going to be praying for a higher stock price though. If in a year's time Tesco continues to sell for $15, it just makes the job of finding sound investments that much easier.

Disclosure: Long Tesco (TSCDY)

How Summer Businesses Survive

Seasonal businesses are tasked with an unusual feat: make one season's revenues enough to sustain the business for an entire year. Some businesses have the advantage of being able to close in the off-season, while others remain open all year. Some businesses have cycles which coincide with actual seasons while others are heavily dependent on particular seasonal occasions such as tax deadlines, weddings or graduation. Let's examine some popular businesses that thrive during the summer and the challenges they face when the seasons change.

IN PICTURES: 6 Ways To Save Money This Summer

Ice Cream and Summer Treats
During the summer, people are always looking for ways to beat the heat. As a result, ice cream shops see a nice bump in business. Rita's Italian Ice is an ice cream franchise which ranked #121 on Entrepreneur.com's 2013 Franchise 500 Rankings. Ice cream businesses are often risky because winter months tend to be slower; therefore, warm locations or seasonal hours are an integral part of the business model to find the recipe for success.

Generally, most locations in colder climates are only open the months of March through September, but there are also several locations and businesses like Rita's, which are open year-round. However, most of them are located in states where the weather is warm all year. According to the company website, Rita's is the top Italian Ice franchise in the United States.

Theme Parks
Once school lets out, the rush is on for families to take vacations and for parents to find ways to occupy their kids. Most theme parks are open between late spring and early fall to accommodate the rush. Six Flags is the world's largest theme park company, with 21 parks across North America and one destination in Dubai.

Some locations are able to stay open year-round because of their moderate to warm weather locations, but others such as The Great Escape & Splashwater Kingdom in New York are only open in the summer months. (We break down some of the U.S.'s most popular amusement parks to find out which one provides the best value.)

In recent years, Six Flags hit hard times, but the company reemerged from Chapter 11 restructuring in May 2010. As an example of the seasonal nature of the business, in the last 3-month period of October 2009 through January of 2010, revenue amounted to $102 million while in July through September of the same year it was $457 million.

Tour Guides
Aside from the major holidays, summer marks the peak season for travel, and hence tourism. Destination-based tour guides stay in one location and let the tourists come to them. Many offer tours on foot or by way of bus and even boat.

One such boat line, the Maid of the Mist, has been granting tourists an up-close and personal view of Niagara Falls since 1846. For less than $15 per person, passengers can depart from either side (American or Canadian) of Niagara Falls and ride into the water at the base of the falls. Depending upon the weather, the fleet operates from April to October.

As with the aforementioned businesses, tour guide companies must generate enough cash flows during their time of operation to justify their operations. (If flying to an exotic locale isn't in the cards this year, check out these cheaper vacation alternatives.)

Landscaping
Depending on what region the business is located in, the revenues for landscaping firms may dry up with the shrubbery.

Lawn Doctor, the largest "automated lawn care franchise" in the United States, boasts an average annual gross profit margin of 68% for locations that have been open for at least two years. Even though summer is the season most often associated with yard maintenance, the company provides services year round. Their website provides "Lawn Care Tips By Season" and their services include assessments and periodic visits to maintain each customer's yard, thus providing potential for a revenue stream beyond summer's end.

Seasonal Business Challenges
The bills don't stop - while it is true that many costs will decrease when the business is not operating, some large obligations will remain constant. For example, any business with leased space will be responsible for paying the bank every month regardless of the season. Other constant bills which may apply include insurance, utilities and security costs.

For businesses with weather sensitive equipment, arrangements must be made to protect valuables. Finding storage or weatherizing equipment and locations for the off-season can also produce new costs.

Each year the business is responsible for reaching out to old employees and/or recruiting new ones. Hiring takes time, money and other resources since prospective employees have to be interviewed, screened and trained before the business opens.

Unlike business that remain open all year long, seasonal businesses must survive each year on the cash flow generated over the course of a few months. While the business is open, it is important to maximize profits as they will be needed to cover any costs that linger year round.

The Bottom Line
Even though summer sales may cease after a certain date, the responsibilities of a seasonal business owner will continue throughout the year. Maintaining a watchful eye over cash management, equipment and personnel all year long can improve the chances of a seasonal business making it successfully from one season to the next.

Will Time Warner Continue This Bullish Run?

With shares of Time Warner (NYSE:TWX) trading around $60, is TWX 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

Time Warner is a media and entertainment company. The company operates in three reporting segments: Networks, Film, and TV Entertainment and Publishing. Networks consist of television networks and premium pay and basic tier television services and digital media properties. Film and TV Entertainment consists of feature film, television, home video, and videogame production and distribution while Publishing consists of magazine publishing. Through its segments, Time Warner is able to move audiences around the world. With such a large and growing audience, look for Time Warner to continue to drive profits through its media and entertainment.

T = Technicals on the Stock Chart are Strong

Time Warner stock has just about tripled in price since early 2009. Currently, the stock is trading near a multi-year resistance level but any successful clearance of this level can send it soaring higher. 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, Time Warner is trading slightly above its rising key averages which signal neutral to bullish price action in the near-term.

Best Safest Companies To Buy For 2014

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Time Warner Options	22%	56%	52%

What does this mean? This means that investors or traders are buying a 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 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 Increasing 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 Time Warner’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Time Warner look like and more importantly, how did the markets like these numbers?

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	27.12%	57.94%	10.26%	-25.42%
Revenue Growth (Y-O-Y)	-0.57%	-0.35%	-3.20%	-4.07%
Earnings Reaction	-0.5%	4.1%	4.17%	1.22%

Time Warner has seen increasing earnings and decreasing revenue figures over the last four quarters. From these figures, the markets have generally been pleased with Time Warner’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has Time Warner stock done relative to its peers, News Corporation (NASDAQ:NWS), Walt Disney (NYSE:DIS), Comcast (NASDAQ:CMCSA), and sector?

	Time Warner	News Corp.	Walt Disney	Comcast	Sector
Year-to-Date Return	25.44%	27.36%	33.60%	11.83%	19.85%

Time Warner has been an average performer, year-to-date.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

Conclusion

Time Warner provides media and entertainment through a variety of mediums to consumers and businesses all around the world. The stock has tripled its prices in the last four years but is currently trading near a multi-year selling price level. Earnings have been increasing while revenue has decreased over the last four quarters which has kept investors happy. Relative to its strong peers and sector, Time Warner has been an average year-to-date performer. Look for Time Warner to OUTPERFORM.

A Small-Cap Dividend Strategy

When these growth companies are also dividend growers, the potential for outperformance is off the charts; as such, I'm intrigued by this new, specialty ETF, says Tyler Laundon in Daily Profit.

In fact, 30 years of data show that dividend-growth stocks trounce other stocks. By far, small-cap dividend growth stocks are the best performers.

According to Ned Davis Research, the average annual returns for small-cap dividend growth stocks are around 20%. You can't beat that performance with large or mid-caps. As an added bonus, Ned Davis Research also shows that dividend growth stocks tend to be less volatile than their counterparts.

The WisdomTree Small-Cap Dividend Growth ETF (DGRS) is part of a slew of new specialty ETFs.

This brand new fund takes WisdomTree's own Dividend Growth ETF (DGRW) and makes it better by cutting out the largest 300 companies, then taking only the smallest 25% of the companies that are left.

The result is a fund of 169 companies that resembles a dividend growth strategy on caffeine, and which capitalizes on three of the best performing stock attributes over the long-term; small companies, earnings growth, and dividend growth.

Around 50% of the fund's portfolio is allocated evenly to consumer discretionary and industrial stocks, while another 25% is split between technology and materials stocks.

Delving in to the fund's top ten holdings you'll see that Questcor Pharmaceuticals (QCOR) is the largest holding, with a weight of 3.6%, and which pays a dividend yield of 2.0%.

Questcor only recently initiated its dividend, and has paid just four dividends in its short history. But clearly the fund manager sees potential here, supported by a recent 25% hike in the dividend.

Publishing company Meredith Corporation (MDP), which yields 3.4%, is also among the top ten holdings. This company has a long history of dividend growth dating back to the mid-1990s and is a perfect fit for the DGRS.

And The GEO Group (GEO) is yet another compelling holding that most investors haven't heard of. The company operates correctional and detention facilities for various governments.

I might not like the fact that for-profit prisons exist, but growth and stability in the sector is too hard for income investors to ignore. The specialty-REIT offers a 5.6% yield, and the dividend more than doubled in 2013 to $0.50 a quarter.

No one stock is going to make or break this fund's performance. So investors need to be on board with the broader strategy of small-cap dividend growth, and to some degree, not worry about the movements of any particular holding.

The attraction of an ETF like the DGRS is the one-stop-shopping efficiency that the fund's strategy offers to investors. Concerning oneself with any single stock, in many ways, defeats the purpose.

This is an entirely new fund, so don't jump in with both feet. At the latest reading, DGRS has a net asset value of $2.5 million. Given the infancy for the fund and the unique strategy, I would expect that to grow in 2013.

I recommend dollar cost average into the ETF to gradually achieve your desired position size. This will make you far more comfortable investing in this brand new fund than an all-in, all-at-once strategy.

Subscribe to Daily Profit here…

More from MoneyShow.com:

Best Bets among ETFs

Spinning Profits from Spin-Offs

ETF Expert Eyes Water, Industrials

Regression Basics For Business Analysis

Top Companies To Buy Right Now

If you've ever wondered how two or more things relate to each other, or if you've ever had your boss ask you to create a forecast or analyze relationships between variables, then learning regression would be worth your time. In this article, you'll learn the basics of simple linear regression - a tool commonly used in forecasting and financial analysis. We will begin by learning the core principles of regression, first learning about covariance and correlation, and then move on to building and interpreting a regression output. A lot of software such as Microsoft Excel can do all the regression calculations and outputs for you, but it is still important to learn the underlying mechanics.

Variables
At the center of regression is the relationship between two variables, called the dependent and independent variables. For instance, suppose you want to forecast sales for your company and you've concluded that your company's sales go up and down depending on changes in GDP. The sales you are forecasting would be the dependent variable because their value "depends" on the value of GDP, and the GDP would be the independent variable. You would then need to determine the strength of the relationship between these two variables in order to forecast sales. If GDP increases/decreases by 1%, how much will your sales increase or decrease?

Covariance

The formula to calculate the relationship between two variables is called covariance. This calculation shows you the direction of the relationship as well as its relative strength. If one variable increases and the other variable tends to also increase, the covariance would be positive. If one variable goes up and the other tends to go down, then the covariance would be negative. The actual number you get from calculating this can be hard to interpret because it isn't standardized. A covariance of five, for instance, can be interpreted as a positive relationship, but the strength of the relationship can only be said to be stronger than if the number was four or weaker than if the number was six.


Correlation Coefficient



We need to standardize the covariance in order to allow us to better interpret and use it in forecasting, and the result is the correlation calculation. The correlation calculation simply takes the covariance and divides it by the product of the standard deviation of the two variables. This will bound the correlation between a value of -1 and +1. A correlation of +1 can be interpreted to suggest that both variables move perfectly positively with each other, and a -1 implies they are perfectly negatively correlated. In our previous example, if the correlation is +1 and the GDP increases by 1%, then sales would increase by 1%. If the correlation is -1, a 1% increase in GDP would result in a 1% decrease in sales - the exact opposite.

Regression Equation
Now that we know how the relative relationship between the two variables is calculated, we can develop a regression equation to forecast or predict the variable we desire. Below is the formula for a simple linear regression. The "y" is the value we are trying to forecast, the "b" is the slope of the regression, the "x" is the value of our independent value, and the "a" represents the y-intercept. The regression equation simply describes the relationship between the dependent variable (y) and the independent variable (x).


The intercept, or "a", is the value of y (dependent variable) if the value of x (independent variable) is zero. So if there was no change in GDP, your company would still make some sales - this value, when the change in GDP is zero, is the intercept. Take a look at the graph below to see a graphical depiction of a regression equation. In this graph, there are only five data points represented by the five dots on the graph. Linear regression attempts to estimate a line that best fits the data, and the equation of that line results in the regression equation.

Figure 1: Line of best fit

Source: Investopedia, 2009.

Excel
Now that you understand some of the background that goes into regression analysis, let's do a simple example using Excel's regression tools. We'll build on the previous example of trying to forecast next year's sales based on changes in GDP. The next table lists some artificial data points, but these numbers can be easily accessible in real life.

Year	Sales	GDP
2005	100	1.00%
2006	250	1.90%
2007	275	2.40%
2008	200	2.60%
2009	300	2.90%

Just eyeballing the table, you can see that there is going to be a positive correlation between sales and GDP. Both tend to go up together. Using Excel, all you have to do is click the Tools drop-down menu, select Data Analysis, and from there choose Regression. The popup box is easy to fill in from there; your Input Y Range is your "Sales" column and your Input X Range is the change in GDP column; choose the output range for where you want the data to show up on your spreadsheet and press OK. You should see something similar to what is given in the table below

Regression Statistics		Coefficients
Multiple R	0.8292243	Intercept	34.58409
R Square	0.687613	GDP	88.15552
Adjusted R Square	0.583484	-	-
Standard Error	51.021807	-	-
Observations	5	-	-

Interpretation
The major outputs you need to be concerned about for simple linear regression are the R-squared, the intercept and the GDP coefficient. The R-squared number in this example is 68.7% - this shows how well our model predicts or forecasts the future sales. Next we have an intercept of 34.58, which tells us that if the change in GDP was forecasted to be zero, our sales would be about 35 units. And lastly, the GDP correlation coefficient of 88.15 tells us that if GDP increases by 1%, sales will likely go up by about 88 units.

So how would you use this simple model in your business? Well if your research leads you to believe that the next GDP change will be a certain percentage, you can plug that percentage into the model and generate a sales forecast. This can help you develop a more objective plan and budget for the upcoming year. Of course this is just a simple regression and there are models that you can build that use several independent variables called multiple linear regressions. But multiple linear regressions are more complicated and have several issues that would need another article to discuss.

5 Best Clean Energy Stocks To Invest In 2014

LONDON -- Management can make all the difference to a company's success and thus its share price.

The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I'm assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today, I am looking at�Serco� (LSE: SRP  ) , the outsourcing group.

Here are the key directors:

Director Position

Alastair Lyons	(non-exec) Chairman
Christopher Hyman	Chief Executive
Andrew Jenner	Finance Director

Alastair Lyons was appointed chairman in 2010. He is also chairman of FTSE 100 insurer�Admiral�and deputy chairman of FTSE 250 house builder�Bovis.

5 Best Clean Energy Stocks To Invest In 2014: Stereotaxis Inc.(STXS)

Stereotaxis, Inc. designs, manufactures, and markets cardiology instrument control systems for use in a hospital?s interventional surgical suite or interventional lab for the treatment of arrhythmias and coronary artery diseases in the United States and internationally. The company provides Niobe system, which includes Niobe Magnetic Navigation System that navigates catheters, guidewires, and other delivery devices through complex paths in the blood vessels and chambers of the heart to carry out treatment; Navigant, a user interface or physician control center, which physicians use to visualize and track procedures and to provide instrument control commands that govern the motion of the working tip of the catheter, guidewire, or other interventional device; Cardiodrive, a catheter advancement system to remotely advance and retract the catheter in the patient?s heart. It also offers Odyssey enterprise solutions, which provides information solutions to manage, control, rec ord, and share procedures across networks; acquires remote view of the lab capturing synchronized procedure data for review of important events during cases; and review recorded cases and create snapshots following procedures for clinical reporting, auditing, and presentation. In addition, the company provides disposable interventional devices comprising automated catheters, coronary guidewires, and navigation and ablation systems. It markets its products through its direct sales force, distributors, and sales agents. The company was founded in 1990 and is headquartered in St. Louis, Missouri.

5 Best Clean Energy Stocks To Invest In 2014: Oceaneering International Inc.(OII)

Oceaneering International, Inc., together with its subsidiaries, provides engineered products and services primarily to the offshore oil and gas industry with a focus on deepwater applications. The company?s Remotely Operated Vehicles segment provides submersible vehicles operated from the surface to support offshore oil and gas exploration, production, and construction activities. Its Subsea Products segment supplies various built-to-order specialty subsea hardware products. The company?s Subsea Projects segment provides multiservice vessels, oilfield diving, and support vessel operations, which are used primarily in inspection, repair, and maintenance and installation activities; and mobile offshore production systems. Its Inspection segment offers customers with a range of third-party inspection services to satisfy contractual structural specifications, internal safety standards, and regulatory requirements. The company?s Advanced Technologies segment offers project management, and engineering services and equipment for applications in non-oilfield markets. Oceaneering International, Inc. also serves defense and aerospace industries. It operates primarily in west Africa, Norway, the United Kingdom, Asia, Australia, Brazil, and the United States. The company was founded in 1965 and is based in Houston, Texas.

Top Cheap Companies To Invest In 2014: Liquidity Services Inc.(LQDT)

Liquidity Services, Inc. operates various online auction marketplaces for surplus and salvage assets in the United States. Its auction marketplaces include liquidation.com, which enables corporations and selected government agencies located in the United States to sell surplus and salvage consumer goods and capital assets; govliquidation.com that enables government agencies to sell surplus and scrap assets; govdeals.com, which enables local and state government entities, including city, county, and state agencies, as well as school boards and public utilities located in the United States to sell surplus and salvage assets. The company also operates secondipity.com that provides consumers a source of products and a socially conscious online experience through donating a portion of the proceeds of every sale to charity; and truckcenter.com, a marketplace for the sale of idle, surplus, and used fleet and transportation equipment. Its marketplaces provide professional buyers a ccess to supply of surplus and salvage assets presented with customer focused information, including digital images and other relevant product information along with services to complete the transaction; and enable corporate and government sellers to enhance their financial return on excess assets by providing liquid marketplaces and value-added services that integrate sales and marketing, logistics, and transaction settlement. The company offers approximately 500 products organized into various categories, including consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, energy equipment, industrial capital assets, fleet and transportation equipment, and specialty equipment. Liquidity Services, Inc. was founded in 1999 and is headquartered in Washington, District of Columbia.

5 Best Clean Energy Stocks To Invest In 2014: Wintrust Financial Corporation(WTFC)

Wintrust Financial Corporation, through its subsidiaries, engages in community banking, specialty finance, and wealth management operations. Its Community Banking segment offers banking and financial services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional customers. This segment?s products and services include deposit products, such as demand, negotiable order of withdrawal, money market, savings, and time deposit accounts; home equity, home mortgage, consumer, real estate, and commercial loans; safe deposit facilities; automated teller machines (ATMs); and Internet banking services. The company?s Specialty Finance segment offers financing for the payment of commercial insurance premiums to businesses and individuals; short-term accounts receivable financing; and out-sourced administrative services, including data processing of payrolls, billing, and cash management services to customers in the temporary staffing indu stry, as well as engages in the origination and purchase of residential mortgages for sale into the secondary market and provides the document preparation and other loan closing services to a network of mortgage brokers. This segment markets its products primarily through insurance agents and brokers. Its Wealth Management segment provides trust and investment services, asset management, and securities brokerage services, which are marketed primarily under the Wayne Hummer name. As of December 31, 2009, the company operated through 78 banking facilities, as well as owned 123 ATMs. Wintrust Financial Corporation was founded in 1992 and is based in Lake Forest, Illinois.

5 Best Clean Energy Stocks To Invest In 2014: Electronics for Imaging Inc.(EFII)

Electronics For Imaging, Inc. provides color digital print controllers, digital inkjet printers, and business process automation solutions. The company?s Fiery products consist of stand-alone print controllers and servers connected to digital copiers and other peripheral devices; embedded and design-licensed solutions used in digital copiers and multi-functional devices; optional software integrated into controller solutions that include Fiery Central and MicroPress; Entrac, a self-service and payment solution; PrintMe, a mobile printing application; and stand-alone software-based solutions, such as proofing and scanning solutions, including ColorProof XF, Fiery XF, ColorProof eXpress, and Xflow. It also offers industrial inkjet products, including VUTEk super-wide format digital industrial inkjet printers and inks used by billboard graphics printers, commercial photo labs, sign shops, graphic screen printers, specialty commercial printers, and digital graphics providers; Rastek hybrid and flatbed entry level production UV wide format inkjet printers; and Jetrion label and packaging digital inkjet printers, integration solutions, and specialty digital UV inks for primary and secondary label applications, and industrial label or flexible packaging markets. In addition, the company provides advanced professional print software products consisting of print production workflow and management information software, including Monarch, PSI, Logic, PrintSmith, and PrintFlow; Pace, a cloud-based business process automation software; and cloud-based order entry and order management systems, which comprise Digital StoreFront, PrinterSite, and PrintSmith Site. Electronics For Imaging, Inc. offers its products through sales force and distribution arrangements primarily in the Americas, Europe, the Middle East, Africa, and Japan. The company was founded in 1988 and is headquartered in Foster City, California.

Advisors' Opinion:

• [By Kathy Kristof]

  Headquarters: Foster City, Cal.
  
  52-Week High: $18.28
  
  52-Week Low: $12.81
  
  Annual Sales: $591.6 mill.
  
  Projected Earnings Growth: 13% annually over the next five years 
  
  
  Electronics for Imaging is a 25-year-old company that makes controllers for color printers, as well as printing software. Although not a household name, the company has many things going for it. 
  
  It sports a record of double-digit growth in both sales and earnings. For the first half of the year, the company reported a 40% rise in earnings. And sales, up 15% in the first half, are likely to keep rising at a high single-digit pace for the foreseeable future, says John Barr, manager of the Needham Aggressive Growth Fund. 
  
  Also, the company is about to reap a windfall from the sale of its headquarters building to Gilead Sciences. The $180 million deal is set to be completed in October.

Not All Acquisitions Go as Planned

Freeport-McMoRan (NYSE: FCX  ) announced that it would be spending $9 billion to acquire Plains Exploration & Production (NYSE: PXP  ) , along with McMoRan Exploration (NYSE: MMR  ) last December. Neither deal has closed, and the subsequent drop in Freeport's stock price has left many Plains investors wondering if the original deal is sweet enough. 

A vote on Monday will decide the near-term fate of these two companies. It is unlikely that Freeport will boost its offer, but it seems that Plains would need to be part of the deal for it to make sense to Freeport. McMoRan Exploration is the more risky of the two due to the unclear future of its Davy Jones well in the Gulf of Mexico. The deal makes sense from a diversification standpoint, but is it worth added capital?

After putting together a blockbuster deal to expand into the oil and natural gas industry, Freeport-McMoRan will have plenty on its plate as it tries to adapt to the new industry, as expanding into oil and gas carries plenty of inherent volatility. FCX had a profitable copper business, and on top of this foray into a new industry, it still has to contend with mining industry bellwether BHP Billiton. To help investors determine if Freeport-McMoRan is a buy or a sell, The Motley Fool has compiled a premium research report on the company. Simply click here now to access your copy today.

 

3 Hot Stocks to Trade (or Not)

BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.

From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. It's a concept that's known as "crowdsourcing," and it uses the masses to identify emerging trends in the market.

Crowdsourcing has long been a popular tool for the advertising industry, but it also makes a lot of sense as an investment tool. After all, the market is completely driven by the supply and demand, so it can be valuable to see what names are trending among the crowd.

While some fund managers are already trying to leverage social media resources like Twitter to find algorithmic trading opportunities, for most investors, crowdsourcing works best as a starting point for investors who want a starting point in their analysis. Today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market today.

These "most active" names are the most heavily-traded names on the market -- and often, uber-active names have some sort of a technical or fundamental catalyst driving investors' attention on shares. That's especially true now that earnings season is officially underway. And when there's a big catalyst, there's often a trading opportunity.

Without further ado, here's a look at today's stocks.

Potash

Nearest Resistance: $37

Nearest Support: $29

Catalyst: Industry Insanity

It's been quite a week for Potash (POT). Shares of the $26 billion firm are up 1% on high volume today after dropping more than 20% from Monday's open. The whole fertilizer industry is getting shaken up after Russia-based Uralkali ended a joint venture with Belaruskali that controlled around 43% of the potash market. With lower potash prices looking imminent, the whole industry is getting shellacked this week. POT is just one of the more high profile movers.

Today, shares of POT are trying to establish support on high trading volume. That level looks pretty strong at $29. With support so near by, and resistance well overhead and $37, August could be a good time to start building a position in POT. I'd recommend waiting for a more meaningful move off of $29 first.

Sprint

Nearest Resistance: $6.80

Nearest Support: $5.60

Catalyst: Earnings

Sprint (S) is getting a 6% shot in the arm this afternoon, following earnings numbers that forecast a return to subscriber growth after losing names for the last seven months straight. Despite taking a big hit from winding down its Nextel unit during the quarter, Sprint is looking stronger now that Japan's Softbank owns 78% of shares. Wall Street's reaction to the earnings release is evidence of that.

From a technical standpoint, there are probably more questions than answers on Sprint's chart. Shares are currently sitting in between resistance at $6.80 and support down at $5.60. Despite today's big boost, shares are still trading in the middle of that range. Until Sprint can resolve a direction, I'd recommend staying away.

J.C. Penney

Nearest Resistance: $16

Nearest Support: $14

Catalyst: Credit Rebuttal

Shares of retail giant J.C. Penney (JCP) are finding some buoyancy again after dropping double digits in yesterday's session. The trigger was news that commercial lender CIT Group was starting to cut off credit to some of Penney's suppliers -- a major vote of concern for JCP's ability to pay its bills. Management refuted the claims today, boosting shares by 2.5%. This stock is still down considerably on the week.

Best Stocks To Watch Right Now

Penney's drop is less concerning than it would be if shares had dropped below an important technical level. Instead, $14 still looks like strong support in JCP. That's not to say that shares look especially bullish from here -- the stock is still in a downtrend since its May highs. Even so, it doesn't look like the floor is going to fall out from here.

To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.



-- Written by Jonas Elmerraji in Baltimore.

Top 10 Financial Stocks To Invest In Right Now

On this day in economic and business history...

The United States celebrates its independence on July 4, but the worlds of business and finance don't shut down simply because much of the nation would rather watch fireworks and grill hamburgers. Several key events in American business history took place on the same day that its Founding Fathers signed their names to a set of self-evident truths. The first of these would have a lasting impact on the financial markets of the young nation...

Central banking goes public
The First Bank of the United States held an initial public offering on July 4, 1791, several months after it was chartered by federal legislation. It was not the country's first IPO -- that honor belongs to the Bank of North America -- but it dwarfed all other public debuts in the young nation's history and, indeed, may be the largest IPO of all time. Many prominent citizens swarmed Wall Street to buy shares in the $8 million offering, which in our time corresponds�to an amount equal to $615 billion in present-day economic power. The final $2 million of the bank's $10 million total market cap�remained in government hands. The new central bank was worth almost 5% of America's GDP�in 1791, a truly staggering scale for a largely privately owned bank, that is unlikely to ever be matched again -- at least in market cap.

Top 10 Financial Stocks To Invest In Right Now: Pound/Canadian(PW)

Power REIT is an independent equity infrastructure real estate investment trust. It invests in the real estate markets of the United States. The firm develops, manages, and invests in embedded real-estate in transportation and energy infrastructure. Power REIT was formed in 1916 and is based in West Babylon, New York.

Top 10 Financial Stocks To Invest In Right Now: Gramercy Capital Corp (GKK)

Gramercy Capital Corp. operates as an integrated commercial real estate investment and asset management company in the United States. Its Gramercy Realty division manages commercial properties leased primarily to regulated financial institutions and affiliated users. The company�s Gramercy Finance division manages whole loans, bridge loans, subordinate interests in whole loans, mezzanine loans, preferred equity, commercial mortgage-backed securities, and other real estate securities, which are financed through three non-recourse collateralized debt obligations. Its portfolio consists of 2 sub-portfolios, including the core portfolio comprising 67 assets located in 10 states; and the held-for-sale portfolio comprising 48 assets located in 13 states. Gramercy Capital Corp. has elected to be taxed as a real estate investment trust under the Internal Revenue Code of 1986. As a result, it would not be subject to corporate income tax on that portion of its net income that is di stributed to shareholders. The company was founded in 2004 and is headquartered in New York, New York.

Top 5 Growth Stocks To Watch Right Now: Entertainment Properties Trust (EPR)

EPR Properties, a real estate investment trust (REIT), develops, owns, leases, and finances entertainment and related properties in the United States and Canada. Its properties include megaplex theatres, entertainment retail centers, and destination recreational and specialty properties. As of December 31, 2007, the company had a real estate portfolio of 79 megaplex theatre properties located in 26 states in the U.S. and Ontario, Canada; 1 additional theatre property under development; 8 entertainment retail centers located in Westminster, Colorado, New Rochelle, New York, White Plains, New York, Burbank, California, and Ontario, Canada; and 1 additional entertainment retail center under development and land parcels leased to restaurant and retail operators. EPR Properties qualifies as a REIT under the Internal Revenue Code and would not be subject to federal income tax to the extent that it distributes at least 90% of its taxable income to its shareholders. The company wa s founded in 1997 and is based in Kansas City, Missouri.

Top 10 Financial Stocks To Invest In Right Now: 1st Source Corporation(SRCE)

1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services to individuals and businesses in the United States. Its consumer banking services include checking accounts, online and telephone banking, savings programs, installment and real estate loans, home equity loans, lines of credit, drive-through and night deposit services, safe deposit facilities, automated teller machines, debit and credit card services, financial literacy seminars, and brokerage services. The company also offers commercial, small business, agricultural, and real estate loans for various general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and acquisition; and commercial leasing and cash management services. In addition, it provides a range of trust, investment, agency, and custodial services comprising administration of estates and personal tru sts, as well as the management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease finance products for auto and light trucks, environmental equipment, medium and heavy duty trucks, new and used aircraft, and construction equipment; and leases construction equipment, medium and heavy duty trucks, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services to individuals and businesses; and investment advisory services to trust and investment clients. As of December 31, 2011, the company operated through 75 banking center locations in 17 counties in Indiana and Michigan; and 23 locations of its Specialty Finance Group in the United States. 1st Source Corporation was founded in 1962 and is headquartered in South Bend, Indiana.

Top 10 Financial Stocks To Invest In Right Now: Horace Mann Educators Corporation(HMN)

Horace Mann Educators Corporation, through its subsidiaries, operates as a multiline insurance company in the United States. The company underwrites and markets personal lines of property and casualty insurance, retirement annuity, and life insurance products. Its products include private passenger automobile and homeowner?s insurance coverage; tax-qualified individual and group annuities in fixed account and combination contracts; and individual and joint whole and term life insurance products. The company offers its products primarily to K-12 teachers, school administrators, education support personnel, and other employees of public schools and their families. It markets its products through its sales force, as well as through independent agents. Horace Mann Educators Corporation was founded in 1945 and is based in Springfield, Illinois.

Advisors' Opinion:

• [By Chris Stuart]

  Horace Mann Educators(HMN), which provides car and homeowners insurance for teachers and other educators, recently lowered its full-year profit forecast because of a spike in tornado- and storm-related disasters during April and May. Management reduced 2011 EPS guidance to $1.10-$1.30 from a previous $1.75-$1.95.

  With the shares down 10% over the past three months, investors might want to consider the recent dislocation as a buying opportunity. At the midrange of restated guidance, the shares are trading for 12.8 times fiscal 2011 estimates and, more importantly, at just 0.7 times book value. TheStreet Ratings has a $20 price target on Horace Mann.

Top 10 Financial Stocks To Invest In Right Now: 1st Century Bancshares Inc(FCTY)

1st Century Bancshares, Inc. operates as the holding company for 1st Century Bank, National Association that provides commercial banking services to family and closely held middle market businesses, professional service firms, high net worth individuals, real estate investors, entrepreneurs, and local residential community in Los Angeles area, California. The company accepts various deposit products, including business and personal checking accounts, money market accounts, certificates of deposits, attorney-client trust accounts, and trust accounts. Its loan portfolio comprises business and personal lines of credit and term loans; tenant improvement and equipment financing; bridge and/or specific purpose loans; commercial, industrial, and multi-family real estate lending; personal home equity loans and lines of credit; and credit cards for business and personal use. The company also offers cash management and on-line banking services, as well as debit cards. It operates th rough a branch office and private banking center at Los Angeles. The company was founded in 2003 and is based in Los Angeles, California.

Top 10 Financial Stocks To Invest In Right Now: Wayne Savings Bancshares Inc.(WAYN)

Wayne Savings Bancshares, Inc. operates as the holding company for Wayne Savings Community Bank, a community-oriented institution that provides consumer and business financial services in northeast Ohio. It accepts various consumer and commercial deposits, which include checking accounts, savings accounts, money market accounts, term certificate of deposit accounts, commercial repurchase agreements, and individual retirement accounts. The company originates one-to four-family residential, multi-family residential, construction, non-residential real estate and land, commercial business, and consumer loans. It also invests in mortgage-backed securities issued or guaranteed by the United States government or agencies. The company offers its services to individuals, business, and other organizations through its main banking office located in Wooster, and other 10 additional full service branch offices in Wayne, Holmes, Ashland, Medina, and Stark counties, as well as the surrou nding localities in northeastern Ohio. Wayne Savings Bancshares, Inc. was founded in 1899 and is headquartered in Wooster, Ohio.

Top 10 Financial Stocks To Invest In Right Now: StellarOne Corporation(STEL)

StellarOne Corporation operates as the bank holding company for StellarOne Bank that provides various retail and small business banking, commercial banking, consumer lending, mortgage banking, and wealth management services to individuals, and small and middle-market businesses in Virginia. It generates various deposit products, including demand and time deposit accounts, money market accounts, checking accounts, certificates of deposit, and savings accounts. The company?s loan portfolio comprises consumer and commercial real estate loans, real estate and construction loans, commercial lines of credit, commercial term loans, home equity loans, consumer loans, and commercial, financial, and agricultural loans. It also provides credit cards, automated teller machine networks, and telephone and Internet banking, and online bill payment services. In addition, the company provides various wealth management and personal trust services, including estate administration and employ ee benefit plan administration, and planning specifically addressing the investment and financial management needs of its customers. As of December 31, 2009, StellarOne Corporation operated 56 financial centers, 1 loan production office, and approximately 60 automated teller machines in New River Valley, Roanoke Valley, Shenandoah Valley, and central and north central Virginia. The company was formerly known as Virginia Financial Group, Inc. and changed its name to StellarOne Corporation in February 2008. StellarOne Corporation was founded in 1911 and is headquartered in Charlottesville, Virginia.

Top 10 Financial Stocks To Invest In Right Now: Virginia Commerce Bancorp(VCBI)

Virginia Commerce Bancorp, Inc. operates as the bank holding company for Virginia Commerce Bank that provides business and consumer banking services. The company accepts various deposit products comprising demand deposits, savings and money market accounts, and time deposits. It also originates commercial loans, commercial real estate loans, lines of credit, equipment financing, construction loans, letters of credit, residential mortgages, personal loans, auto loans, and home equity loans and lines of credit. In addition, the company offers merchant bankcard, electronic funds transfer, lock-box, remote deposit capture, online banking, investment, safe deposit boxes, and other customary banking services. It serves small-to-medium sized businesses, including firms that have contracts with the U.S. government, associations, retailers, industrial businesses, professionals and their firms, business executives, investors, and consumers. The company serves the Northern Virginia s uburbs of Washington, D.C. consisting of Arlington, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania, and Stafford Counties; the cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park; and the Washington, D.C., as well as the nearby Maryland counties of Montgomery and Prince Georges. It operates through 28 branch offices, 1 residential mortgage office, and 1 investment services office. The company was founded in 1988 and is headquartered in Arlington, Virginia.

Top 10 Financial Stocks To Invest In Right Now: Urstadt Biddle Properties Inc. (UBA)

Urstadt Biddle Properties, Inc., a real estate investment trust (REIT), engages in the acquisition, ownership, and management of commercial real estate properties in the United States. Its properties primarily consist of neighborhood and community shopping centers, office buildings, and industrial properties in Fairfield County, Connecticut; Westchester and Putnam Counties, New York; and Bergen County, New Jersey. As of October 31, 2007, the company owned or had an equity interest in 39 properties containing approximately 3.7 million square feet of gross leasable area. As a REIT, it is not subject to federal income tax to the extent that it distributes at least 90% of its REIT taxable income to its stockholders. The company was founded in 1969 and is headquartered in Fairfield County, Connecticut.