Top 10 Warren Buffett Companies To Buy Right Now

In the investing world, knowing what not to buy may be equally as important as knowing what to buy.

After around 70 years of investing, Warren Buffett has undoubtedly emerged as one of the great investors all of time, but also one of the pickiest. Unlike some money managers that jump in and out of investments at breakneck speeds, Buffett's portfolio at Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) continues to exemplify the notion of buy and hold... forever.

Most Buffett fans, us here at the Fool included, love to play the game of trying to predict Buffett's next target for a big acquisition or investment. However, if we look at some companies that the Oracle of Omaha wouldn't touch with a ten-foot pole, there may be some lessons learned.

1. Apple (NASDAQ: AAPL  ) If Buffett were to invest in Apple, such an investment would likely shatter the record for most tweets per second on Twitter and cause a CNBC commentator to simply explode. But rest assured, I do not believe Warren Buffett will make an investment in Apple. Despite the company's enormous pile of cash and track record of generating fat margins, Buffett views companies with a time horizon that can span well beyond 20 years. Although the iPhone-maker commands the best margins in the industry today, Buffett realizes the likelihood that the technology hardware landscape will change over the next several years is huge compared to a shift in the landscape of say, banking.

Top 10 Warren Buffett Companies To Buy Right Now: Ladenburg Thalmann Financial Services Inc (LTS)

Ladenburg Thalmann Financial Services Inc., an investment bank, through its subsidiaries, provides independent brokerage and advisory services primarily to corporate and institutional clients, and high net-worth individuals in the United States. Its independent brokerage and advisory services include securities brokerage and advisory services for mutual funds, variable annuities, and advisor managed accounts packaged products; and asset management products and services comprise asset management program, investment consulting services, alternative strategies fund, private investment management program, retirement plan sponsor services, alternative investments, architect program, and third-party advisory services. The company�s brokerage support services comprise access to stock and options execution; products, such as insurance, mutual funds, unit trusts, and investment advisory programs; and research, compliance, supervision, accounting, and related services. The company also provides trust administration services consisting of personal and retirement accounts, estate and financial planning, wealth management, and custody services. In addition, it offers investment banking services, such as corporate finance, and strategic and financial advisory, and securities underwriting services; engages in institutional sales and trading operation; and provides research services, including reviewing and analyzing general market conditions and other industry groups, issuing written reports on companies, furnishing information to retail and institutional customers, and responding to inquires from customers and account executives. Further, the company is involved in purchasing, selling, and holding securities for use in investment activities. Ladenburg Thalmann Financial Services Inc. was founded in 1876 and is headquartered in Miami, Florida.

Top 10 Warren Buffett Companies To Buy Right Now: First Capital Bancorp Inc.(VA)

First Capital Bancorp, Inc. operates as the holding company for First Capital Bank that offers a range of banking and related financial services to small and medium-sized businesses, professionals, and individuals in Richmond, Virginia metropolitan area. The company?s deposit products include checking, individual retirement, negotiable order of withdrawal, and savings accounts, as well as other time deposits of various types, ranging from daily money market accounts to longer-term certificates of deposit. Its loan portfolio comprises short-to-medium term commercial loans, such as secured and unsecured loans for working capital, business expansion, and purchase of equipment and machinery; and consumer loans comprising secured and unsecured loans for financing automobiles, home improvements, education, and personal investments. The company also originates fixed and floating-rate mortgage, and real estate construction and acquisition loans. In addition, it offers safe deposi t boxes, cash management services, traveler?s checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, online banking services, small and medium-sized businesses courier services, and automated teller machine services. As of May 10, 2011, the company operated seven branches. First Capital Bancorp, Inc. is headquartered in Glen Allen, Virginia.

10 Best Heal Care Stocks To Own Right Now: Hanmi Financial Corporation(HAFC)

Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides general business banking products and services in the United States. Its deposit product line comprises business and personal checking accounts, savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. The company?s loan portfolio includes real estate loans, such as commercial property, construction, and residential property loans; commercial and industrial loans comprising commercial term loans, commercial lines of credit, small business administration loans, and international trade finance; and consumer loans consisting of automobile loans, secured and unsecured personal loans, home improvement loans, home equity lines of credit, overdraft protection loans, and unsecured lines of credit and credit cards. It also offers various insurance products, such as life, commercial, automobile, health, and property and casualty. The company serves the Korean-American community, as well as other communities in the multi-ethnic populations of Los Angeles County, Orange County, San Bernardino County, San Diego County, the San Francisco Bay area, and the Silicon Valley area in Santa Clara County. As of December 31, 2010, it operates a branch network of 27 full-service branch offices in California and one loan production office in Washington. Hanmi Financial Corporation was founded in 1981 and is headquartered in Los Angeles, California.

Top 10 Warren Buffett Companies To Buy Right Now: Aberdeen International Inc (AAB.TO)

Aberdeen International Inc. operates as an investment and merchant banking company focusing on small capitalization companies in the resource sector. It intends to acquire equity participation in pre-IPO and early stage public resource companies with undeveloped or undervalued resources. The company also offers various merchant banking services, including short-term investments, bridge financing, and advisory works, as well as listing vehicles, such as shell companies. In addition, it invests in mineral properties, primarily gold. The company was formerly known as International Catalyst Ventures Inc. and changed its name to Aberdeen International Inc. in November 2001. Aberdeen International Inc. was incorporated in 1987 and is headquartered in Toronto, Canada.

Top 10 Warren Buffett Companies To Buy Right Now: Masimo Corporation(MASI)

Masimo Corporation, a medical technology company, develops, manufactures, and markets noninvasive patient monitoring products worldwide. The company offers Masimo Signal Extraction Technology (SET), which provides the capabilities of measure-through motion and low perfusion pulse oximetry to address the primary limitations of conventional pulse oximetry; and Masimo rainbow SET products that monitor multiple blood measurements, including oxygen content, carboxyhemoglobin, methemoglobin, hemoglobin, pleth variability index, respiration rate, Halo Index, and In Vivo Adjustment. It develops, manufactures, and markets a family of patient monitoring solutions comprising circuit boards, monitors and devices, sensors, and cables; Masimo SafetyNet, a remote monitoring and clinician notification system; and software for Rainbow measurements, as well as other future measurements or features. The company sells its products to hospitals and the emergency medical response organizations through its direct sales force and distributors, as well as to original equipment manufacturer partners in the United States, Europe, the Middle East, Asia, Latin America, Canada, and Australia. Masimo Corporation was founded in 1989 and is headquartered in Irvine, California.

Top 10 Warren Buffett Companies To Buy Right Now: Silgan Holdings Inc.(SLGN)

Silgan Holdings Inc. and its subsidiaries engage in the manufacture and sale of rigid packaging for consumer goods products worldwide. It offers steel and aluminum containers for human and pet food, and general line products; metal, composite, and plastic vacuum closures for food and beverage products, and plastic closures for the dairy and juice markets; and custom designed plastic containers, tubes, and closures for personal care, health care, pharmaceutical, household and industrial chemical, food, pet care, agricultural chemical, automotive, and marine chemical products. The company sells its products through direct sales force, as well as through a network of distributors. Silgan Holdings Inc. was founded in 1987 and is headquartered in Stamford, Connecticut.

Top 10 Warren Buffett Companies To Buy Right Now: Los Andes Copper Ltd. (LA.V)

Los Andes Copper Ltd. engages in the identification, acquisition, exploration, and development of mineral properties in Latin America. It focuses on the Vizcachitas porphyry copper�molybdenum project located 120 kilometers north of Santiago, Region V, Chile. The company is headquartered in Vancouver, Canada.

Top 10 Warren Buffett Companies To Buy Right Now: Biomedical Technology Solutions Holdings Inc. (BMTL.OB)

Biomedical Technology Solutions Holdings, Inc., an environmental technology company, markets and sells infectious waste treatment systems primarily in the United States. It provides the Demolizero II System, a tabletop device that converts infectious biomedical waste into non-biohazardous material. The company offers consumable sharps and red bag waste collectors, and replacement filter cartridges, as well as supplies, such as labels and wall mounting brackets. In addition, it develops a portable product for home care providers and individuals who require safe and convenient disposal of their personal biomedical waste. The company offers its products for various markets and applications, such as patient care markets, including medical offices, dental offices, urgent care centers, nursing homes, and assisted living facilities; and veterinary care market, which include veterinary hospitals, emergency veterinary care, livestock medicine, equine medicine, zoos, and sanctuaries . It also provides its products for school health clinics, public health facilities, first aid stations, home health care, pharmacies, and military, as well as for airports, cruise ships, train stations, and sports and entertainment arenas. The company was founded in 2005 and is headquartered in Englewood, Colorado.

Top 10 Warren Buffett Companies To Buy Right Now: Hornbeck Offshore Services(HOS)

Hornbeck Offshore Services, Inc., through its subsidiaries, operates offshore supply vessels (OSVs), multi-purpose support vessels, and a shore-base to provide logistics support and specialty services to the offshore oil and gas exploration and production industry primarily in the United States and Gulf of Mexico. It operates in two segments, Upstream and Downstream. The Upstream segment owns and operates fleets of the U.S.-flagged OSVs that support deepwater and ultra-deepwater exploration, development, production, construction, installation, maintenance, repair, and enhanced oil recovery requirements of the oil and gas industry. This segment also owns conventional OSVs, work class ROVs, and a shore-base facility located in Port Fourchon, Louisiana. In addition, it provides vessel management services for other vessels owners, which include crewing, daily operational management, and maintenance activities. The Downstream segment owns and operates a fleet of ocean-going tug s and tank barges that transport petroleum products, primarily in the northeastern United States, the Gulf of Mexico, the Great Lakes, and Puerto Rico. These tugs and tank barges provide coastwise transportation of refined and bunker grade petroleum products, as well as offer other services, including the support of deepwater well testing and other applications for refining, marketing, and trading companies. As of December 31, 2009, Hornbeck Offshore Services owned and operated a fleet of 47 new generation OSVs, and 9 double-hulled barges and 10 ocean-going tugs. The company was founded in 1997 and is headquartered in Covington, Louisiana.

Top 10 Warren Buffett Companies To Buy Right Now: Eastern Platinum Com Npv (ELR.TO)

Eastern Platinum Limited engages in the acquisition, exploration, development, and production of platinum group metal deposits in South Africa. The company�s primary operating assets include the Crocodile River Mine located on the western limb of the Bushveld Complex; and the non-producing Kennedy�s Vale project located on the eastern limb of the Bushveld Complex. It also has an 87% interest in the Mareesburg project located on the southern part of the eastern limb of the Bushveld Complex; and a 93.4% interest in the Spitzkop project located on the eastern limb of the Bushveld Complex. The company was founded in 1989 and is headquartered in Vancouver, Canada.

5 Hated Earnings Stocks You Should Love

DELAFIELD, Wis. (Stockpickr) -- Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.

>>5 Rocket Stocks to Buy as Mr. Market Climbs

This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns -- the gains become so outsized in such a short time frame that your profits add up quickly.

That said, let's not forget that stocks are heavily shorted for a reason, so you have to use trading discipline and sound money management when playing earnings short-squeeze candidates. It's important that you don't go betting the farm on these plays and that you manage your risk accordingly. Sometimes the best play is to wait for the stock to break out following the report before you jump in to profit off a short squeeze. This way, you're letting the trend emerge after the market has digested all of the news.

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Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move by waiting. That's why it can be worth betting prior to the report -- but only if the stock is acting technically very bullish and you have a very strong conviction that it is going to rip higher. Just remember that even when you have that conviction and have done your due diligence, the stock can still get hammered if The Street doesn't like the numbers or guidance.

If you do decide to bet ahead of a quarter, then you might want to use options to limit your capital exposure. Heavily shorted stocks are usually the names that make the biggest post-earnings moves and have the most volatility. I personally prefer to wait until all the earnings-related news is out for a heavily shorted stock and then jump in and trade the prevailing trend.

>>5 Stocks With Big Insider Buying

With that in mind, here's a look at several stocks that could experience big short squeezes when they report earnings this week.

FactSet Research Systems

My first earnings short-squeeze trade idea is integrated financial information and analytical applications provider FactSet Research Systems (FDS), which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect FactSet Research Systems to report revenue of $218.93 million on earnings of $1.21 per share.

The current short interest as a percentage of the float FactSet Research Systems is pretty high at 15.7%. That means that out of the 40.10 million shares in the tradable float, 6.31 million shares are sold short by the bears. This is a high short interest on a stock with a relatively low float. Any bullish earnings news could easily spark a sharp short covering rally for shares of FDS post-earnings.

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From a technical perspective, FDS is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last few weeks, with shares ripping higher from its low of $101.07 to its intraday high of $112.89 a share. During that move, shares of FDS have been consistently making higher lows and higher highs, which is bullish technical price action.

If you're bullish on FDS, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 52-week high at $112.90 a share (or its intraday high on Monday if greater) with high volume. Look for volume on that move that registers near or above its three-month average action of 397,438 shares. If that breakout hits, then FDS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $120 to $125 a share.

I would simply avoid FDS or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support level $110 a share with high volume. If we get that move, then FDS will set up to re-test or possibly take out its next major support levels at its 50-day moving average of $107.72 a share to $101.07 a share.

Apogee Enterprises

Another potential earnings short-squeeze play is Apogee Enterprises (APOG), a designer and developer of value-added glass products, services and systems, which is set to release its numbers on Wednesday after the market close. Wall Street analysts, on average, expect Apogee Enterprises to report revenue of $187 million on earnings of 23 cents per share.

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The current short interest as a percentage of the float for Apogee Enterprises is pretty high at 4.1%. That means that out of the 26.40 million shares in the tradable float, 1.16 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 10.3%, or by 107,864 shares. If the bears are caught pressing their bets into a strong quarter, then shares of APOG could jump sharply higher post-earnings as the bears rush to cover some of their bets.

From a technical perspective, APOG is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last two months and change, with shares moving higher from its low of $22.13 a share to its high of $29.42 a share. During that uptrend, shares of APOG have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of APOG within range of triggering a near-term breakout trade.

If you're in the bull camp on APOG, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance at $29.42 a share to its 52-week high at $30.26 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 196,572 shares. If that breakout hits, then APOG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $35 to $40 a share.

I would simply avoid APOG or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support at $28 a share to its 50-day moving average at $27.41 a share with high volume. If we get that move, then APOG will set up to re-test or possibly take out its 200-day moving average at $25.89 a share.

Cracker Barrel Old Country Store

One potential earnings short-squeeze candidate is Cracker Barrel Old Country Store (CBRL), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Cracker Barrel Old Country Store to report revenue of $668.68 million on earnings of $1.35 per share.

Just recently, Wunderlich initiated coverage of Cracker Barrel Old Country Store with a hold rating and a $106 per share price target.

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The current short interest as a percentage of the float for Cracker Barrel Old Country Store is notable at 4.6%. That means that out of the 18.46 million shares in the tradable float, 1.08 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 10.3%, or by 100,000 shares. If the bears are caught pressing their bets into a bullish quarter, then shares of CBRL could rip sharply higher post-earnings as the bears rush to cover some of their bets.

From a technical perspective, CBRL is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last six months and changes, with shares moving higher from its low of $78.33 to its intraday high of $106.65 a share. During that uptrend, shares of CBRL have been making mostly higher lows and higher highs, which is bullish technical price action.

If you're bullish on CBRL, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 52-week high at $106.65 a share (or its intraday high on Tuesday if greater) with high volume. Look for volume on that move that hits near or above its three-month average action of 141,938 shares. If that breakout triggers, then CBRL will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $110 to $115, or even $120 a share.

I would avoid CBRL or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some key near-term support at $102 a share with high volume. If we get that move, then CBRL will set up to re-test or possibly take out its 50-day moving average of $99.62 a share to more near-term support levels at $96.32 to $94.85 a share.

Clarcor

Another earnings short-squeeze prospect is Clarcor (CLC), a provider of filtration products, filtration systems and services, which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Clarcor to report revenue of $298.74 million on earnings of 66 cents per share.

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The current short interest as a percentage of the float for Clarcor sits at 3.1%. That means that out of the 49.90 million shares in the tradable float, 1.56 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 14.1%, or by about 192,000 shares. If the bears are caught pressing their bets into a solid quarter, then shares of CLC could soar sharply higher post-earnings as the bears jump to cover some of those short positions.

From a technical perspective, CLC is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending for the last few weeks, with shares moving higher from its low of $52.29 to its intraday high of $57.07 a share. During that uptrend, shares of CLC have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CLC within range of triggering a major breakout trade.

If you're bullish on CLC, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $56.75 to its 52-week high at $57.31 a share (or its intraday high on Wednesday if greater) with high volume. Look for volume on that move that hits near or above its three-month average action of 170,683 shares. If that breakout triggers, then CLC will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $60 to $65 a share, or even $70 a share.

I would avoid CLC or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some near-term support at $56 to its 50-day moving average of $55.24 share with high volume. If we get that move, then CLC will set up to re-test or possibly take out its next major support levels at $54 to $53 a share, or even its 200-day moving average at $51.90 a share.

Tower Group International

My final earnings short-squeeze play today is property and casualty insurance player Tower Group International (TWPG), which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect Tower Group International to report revenue of $421.10 million on a loss of 52 cents per share.

The current short interest as a percentage of the float for Tower Group International is pretty high at 7.9%. That means that out of the 53.23 million shares in the tradable float, 2.90 million shares are sold short by the bears. This is a decent short interest on a stock with a relatively low float. If the bulls get the earnings news they're looking for, then this stock could easily spike sharply higher post-earnings as the bears rush to cover some of their bets.

From a technical perspective, TWGP is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last month and change, with shares plunging from its high of $22.04 a share to its 52-week low of $13.39 a share. During that move, shares of TWGP have been consistently making lower highs and lower lows, which is bearish technical price action. That move also saw shares of TWGP gap down sharply from around $21.50 to $16 a share. This action has pushed shares of TWGP into oversold territory, since the stock's current relative strength reading is 25.38.

If you're in the bull camp on TWGP, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $13.39 to $14.36 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 568,536 shares. If that breakout triggers, then TWGP will set up to re-test or possibly take out its next major overhead resistance levels at $16.59 to its 50-day moving average at $17.77 a share.

I would avoid TWGP or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 52-week low at $13.39 a share with high volume. If we get that move, then TWGP will set up to enter new 52-week-low territory, which is bearish technical price action. Some possible targets off that move are $12 to $11 a share.

To see more potential earnings short squeeze plays, check out the Earnings Short Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

5 Best High Tech Stocks To Own Right Now

>>5 REITs That Call Bernanke's Bluff

>>5 Stocks Ready for Breakouts

>>Why Wall Street Got Apple Wrong

Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

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

New iPhone Launched: Ghost of Steve Jobs Finally Leaves Apple

Steve Jobs’s ghost has lingered at Apple Inc. (NASDAQ: AAPL) for nearly two years, as the legacy of his products has been passed from one version of the iPhone version to the next, from iPad to iPad. The bumbling introduction of the new iPhone 5S and iPhone 5C, each a product barely better than its predecessor, shows that whatever product plans Jobs left behind have been exhausted. Even if he imagined the not-yet-launched iWatch, his passion for getting brand new products to the market first has perished, too.

Nearly everyone who saw or read about the release of the new products felt the same. Nothing was nifty about the latest versions of Apple’s once truly revolutionary smartphone, itself close to seven years old. The question has been asked repeatedly whether Jobs might have improved the product more, or changed it entirely. No matter how that question gets answered, a smartphone with a little bit better camera, a little bit better processor and the kind of fingerprint security from a Batman movie did not impress.

Analysts ask what Apple might have done with the new phone. There are a few answers, based on features that were not improved.

One of the last things Jobs spent much time on, according to people who claim to know, was Siri. He considered it a first, a least for a smartphone that priced at $500 or so. It has not been improved much. It has not become a voice recognition device that can answer really complex questions. It cannot take a voice version of a Ph.D. thesis, type it, correct grammar and spelling of any word in the world in any language, and check and add sources of facts. Such technology is in middle stages elsewhere, but not at Apple.

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The new iPhone does not have a much stronger case or screen. Either can be broken almost as easily as a glass, when dropped from an even modest height. The fumbled fingered can find their fumbling expensive. Again, accessory makers have built products to protect the delicate iPhone. Apple has not even tried to make its flagship product physically invincible.

Of course, there is the battery. The iPhone’s does not last as long without a charge as others in the market. Apple could have invented a battery that had a life several times as long as any other. The new iPhone’s battery life is no better than the one in its predecessor.

The guesswork about what the iPhone might have been can go on and on. So can the game of whether another product should have been invented to begin to supplant it. Jobs liked to disintermediate his own creations. There is no evidence of that in the iPhone 5S or 5C. One was created because Apple needed to keep a product cycle to sell new smartphones. The other was built to help Apple in China.

Apple finally and permanently has been turned over to Jobs’s lieutenants. His pictures can be taken off the walls at Apple headquarters. There is nothing of him left.

The Worst Month for Stocks is Not October

Thanks to two major crashes, October usually is pegged as the worst month for stocks - but that's not the case.

It's actually the current month that has delivered the worst performance, leading to the question: Why do stocks fall in September?

Going back to 1929, the S&P 500 averages a 1.1% decline in September. It's the only month to drop more than 50% of the time, according to Standard & Poor's research. All other months have positive returns 60% of the time.

September performance for the Dow Jones Industrial Average is also dismal.

The Dow has lost an average 1.09% in September since the index started in 1896. That compares to the 0.75% gain in all other months.

So what is behind September's bad showing for the stock market?

Why September Is Bad for Stocks

Here are five reasons why stocks tend to fall in September:

In September, moods change as people again focus on portfolios instead of vacations. Investors are more inclined than in the previous summer months to take action and dump losers. "Psychologically, when the leaves turn in the fall, vacations end and the days are getting shorter, there is this kind of negative vibe out there that tends to accentuate any negative events," Dan Seiver, a finance professor at San Diego University, explained to the Associated Press. Tax refunds and bonuses are received in the first few months and often go into IRA accounts or toward maxing 401(k) contributions, so less capital flows into investments in the second half of the year. Mutual funds frequently do some "window dressing." Scores of funds end their fiscal year in September, and they sell their losers and buy the best-performing stocks ahead of presenting their year-end portfolios and fund performances to shareholders. Investors often do a reality check in September. Record stock market rallies have pushed the Dow up some 14.55%, the S&P 500 up 16.64%, and the Nasdaq up 23.74% year to date. Investors want to take a piece of the robust gains before volatility hits. September has seen the highest number of banking crisis events. According to an International Monetary Fund (IMF) working paper, 24 of the 147 global banking calamities since 1970 have occurred in September. Will This September Be Bad for Stocks?

Even without the historical trend, there are factors pointing to increased volatility this month, like these four developments:

Geopolitical risks in Syria and Egypt remain a threat. That means the following: crude oil prices are expected to move sharply higher (higher oil prices leave consumers with less disposable income), and money is shifting from equities into safe-haven assets like gold and silver. The Bank of Japan releases its interest rate decision on Sept. 5. Its benchmark interest rate was last recorded at 0%. The zero interest rate policy is part of a controversial move from Japan's government aimed at expanding the Asian nation's economy and end nearly two decades of deflation. From 1972 until 2013, the rate average was 3.22%. Any rate change from the world's third-largest economy could rattle global markets. The Federal Open Market Committee (FOMC) meets Sept. 17-18, and the big question on everyone's minds is will the central bank taper or not taper its $85 billion monthly bond-buying program. Minutes from the U.S. Federal Reserve's July meeting showed broad support for a scaling back, but a spate of weak economic data may give the Fed reason to pause. Ever since the first mention of a taper, stocks have sold off. Even if the Fed keeps the same course for now, fear of a QE taper could slam stocks before the meeting. We find out who will become Germany's next chancellor on Sept. 18. Analysts expect a victory for Angela Merkel and her ruling collation in September general elections. But there are some who would like to see more active engagement from the country and for the leading Eurozone nation to take on more global responsibility, which Chancellor Merkel has steered clear of. The latest polls have Merkel ahead by 41%. In order to garner the majority of votes, Merkel may have to take a tougher line on banks, push up spending, and raise taxes on high earners - moves that could rattle markets.

As investors, you should be prepared for a busy month. But no matter what happens to stocks, we have you covered with the info you need now.

Here are a couple of stories (in case you missed them the first time) that will prepare you for what's ahead:

As Money Morning Chief Investment Strategist Keith Fitz-Gerald has explained, this is the most unloved bull market in history - and it has gone on for 11 months longer than the average bull market run since 1953. That means you should know how to prepare for a correction; here are some options. With all the "crash talk" floating around markets, there's really only one indicator you should take seriously. Fitz-Gerald spells it out for investors - with four things to do now - in this analysis, "The Only "Crash Talk" Worth Trading." If we do have a volatile September, it will bring about great buying opportunities. Go here to learn from Fitz-Gerald what you should be shopping for: "How To Invest In Today's Volatile Market."

Related Articles:

Associated Press:
September Is Actually Worst Month for Stocks International Business Times:
Why September Is the Worst Month of the Year: Stocks Tank; Banks Fail U.S. News & World Report:
For the Market's Cruel September, a Surprise Ending?

SunEdison Chip Spin-Off Could Be Copied by Solar Peers

SunEdison Inc. (NYSE: SUNE), the company formerly known as MEMC Electronics, announced Thursday morning that it would spin off its semiconductor unit in an initial public offering (IPO) tentatively scheduled for early next year. The company plans to file documents with the U.S. Securities and Exchange Commission in the current quarter. The IPO is, of course, subject to market conditions.

SunEdison currently operates in two divisions: semiconductor materials and solar energy. By shedding the semiconductor business, the company expects to generate more shareholder value:

This new structure will allow each independent company to pursue its shareholder value generating strategies, focus on key markets and customers, optimize capital structures, and enhance access to growth capital for each company in the years ahead. Given the significant accomplishments of the businesses to date, it is the right time for this transaction which we believe maximizes value to our investors while benefiting our customers and employees.

Could this be the beginning of trend in the solar sector? First Solar Inc. (NASDAQ: FSLR) does not use silicon in its solar panels, so there is no chance that it will follow suit. Its recent acquisition of cadmium telluride (CdTe) intellectual property from General Electric Co. (NYSE: GE) gives it essentially total control over its technology.

SunPower Corp. (NASDAQ: SPWR) does use silicon in manufacturing its solar cells and modules, but the silicon is supplied by third-party vendors. SunPower has chosen to enter the downstream end of the business — designing and installing solar projects — rather than getting involved in the wafer-making end of the solar market.

Chinese solar companies are a different story. Many manufacture their own silicon wafers and sell silicon to other makers. Trina Solar Ltd. (NYSE: TSL), LDK Solar Co. Ltd. (NYSE: LDK), JA Solar Holdings Co. Ltd. (NASDAQ: JASO) and Canadian Solar Inc. (NASDAQ: CSIQ) all manufacture and sell solar ingots, wafers or cells.

While it might make sense to spin off the wafer-making part of these Chinese firms, it may take some time for that to happen. One issue will be whether the government will support a consolidation of the wafer-making industry. Another is how the companies' management will react to spinning off a portion of their business. If a spin-off is viewed as a defeat, achieving any sort of consolidation in China's silicon industry will be a difficult sale.

SunEdison is one of a kind among U.S.-based solar companies, and spinning off a minority stake in its wafer business makes a lot of sense. It is a model that its Chinese peers could choose to follow because it would make sense for some of them as well. But with the government's thumb on the scale, one never knows what to expect.

Shares of SunEdison are up more than 14% in premarket trading Thursday morning, at $7.80 in a 52-week range of $2.15 to $10.47.

Five Years Later, Obama Pulls Punches in Financial Crisis Accountability

NEW YORK (TheStreet) -- Five years after Lehman Brothers' collapse, President Obama reminded Americans of the various reforms his administration has implemented, but stopped well short of placing blame on any of the people or institutions who were party to the worst U.S. financial crisis since the Great Depression.

Speaking from the White House's South Court Auditorium, the president said that since 2008, the country has managed to save the U.S. auto industry, stabilize its economy, reverse rising unemployment rates, enforce new rules on big banks and implement health care reform. [Read: Fall of the Bank Titans]

Top 5 Penny Companies To Watch In Right Now

"All of this happened because of the resiliency and grit of the American people," Obama said. The president did manage to tweak the Republicans, stating that economic growth and job creation would be stronger if not for the House-led sequester.

In a speech last week to the Economic Club of New York, former Treasury Secretary Henry Paulson credited the George W. Bush and Obama administrations, Federal Reserve Chairman Ben Bernanke and others for taking the right steps to save the United States from falling into a depression. And while a recent Gallup poll showed U.S. consumers share more positive views of the U.S. economy and the job market, their spending and confidence in the jobs they hold remain below pre-Lehman levels. [Read: Microsoft Fails In Mocking Apple] "We're not where we need to be," Obama said. The president's speech focused on the still evident hardships face by middle- and lower-income Americans, small-business owners as well as homeowners but failed to answer the question on the lips of millions of struggling citizens: Who created this situation in the first place? -- Written by Joe Deaux in New York. >Contact by Email. Follow @JoeDeaux

5 Stocks Rising on Unusual Volume

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

>>5 Stocks Insiders Love Right Now

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

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

>>5 Stocks Set to Soar on Bullish Earnings

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

Shenandoah Telecommunications

Shenandoah Telecommunications (SHEN), with its subsidiaries, provides integrated voice, video and data communications services to end-user customers and other communications providers. This stock closed up 3.9% at $19.81 in Wednesday's trading session.

Wednesday's Volume: 245,000

Three-Month Average Volume: 64,788

Volume % Change: 300%

>>5 Stocks Under $10 Set to Soar

From a technical perspective, SHEN jumped higher here right off its 50-day moving average of $18.97 with strong upside volume. This stock has been uptrending strong for the last month, with shares moving higher from its low of $17.06 to its intraday high of $19.85. During that move, shares of SHEN have been consistently making higher lows and higher highs, which is bullish technical price action. That move is starting to push shares of SHEN within range of triggering a near-term breakout trade. That trade will hit if SHEN manages to take out some near-term overhead resistance levels at $20.26 to its 52-week high at $21 with high volume.

Traders should now look for long-biased trades in SHEN as long as it's trending above its 50-day at $18.97 or above more support at $18.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 64,788 shares. If that breakout hits soon, then SHEN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $24 to $25.

AMC Network

AMC Network (AMCX) owns and operates several popular and award-winning brands in cable television, including AMC, IFC, Sundance Channel, WE tv and IFC Films. This stock closed up 1.3% at $66.41 in Wednesday's trading session.

Wednesday's Volume: 814,000

Three-Month Average Volume: 445,048

Volume % Change: 120%

>>5 Stocks Ready for Breakouts

From a technical perspective, AMCX trended modestly higher here back above its 50-day moving average of $66.06 with above-average volume. This stock recently pulled back sharply from its August high of $72.46 to its recent low of $61.05. Shares of AMCX found some buying interest right above its 200-day, and the stock has now rebounded sharply back above its 50-day. That move is now pushing shares of AMCX within range of triggering a near-term breakout trade. That trade will hit if AMCX manages to take out some near-term overhead resistance at Wednesday's high of $67.25 to more resistance at $68.41 with high volume.

Traders should now look for long-biased trades in AMCX as long as it's trending above $65 or $64.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 445,048 shares. If that breakout hits soon, then AMCX will set up to re-test or possibly take out its 52-weeek high at $72.46.

Alamos Gold

Alamos Gold (AGI), a gold mining company, engages in the development, exploration, mining, and extraction of precious metals, primarily gold in Mexico and Turkey. This stock closed up 7.7% at $16.89 in Wednesday's trading session.

Wednesday's Volume: 517,000

Three-Month Average Volume: 90,013

Volume % Change: 571%

>>5 Rocket Stocks to Buy as Mr. Market Climbs

From a technical perspective, AGI spiked sharply higher here right off its 50-day moving average of $15.13 with heavy upside volume. This marked the third day in a row that shares of AGI have seen strong upside volume flows. Shares of AGI are now quickly moving within range of triggering a major breakout trade. That trade will hit if AGI manage to take out Wednesday's high of $17 to $17.04 with high volume.

Traders should now look for long-biased trades in AGI as long as it's trending above its 50-day at $15.13 or above its 200-day at $14.50, and then once it sustains a move or close above those breakout levels with volume that's near or above 90,013 shares. If that breakout hits soon, then AGI will set up to re-test or possibly take out its next major overhead resistance levels at $19.79 to $20.61.

Xcel Energy

Xcel Energy (XEL) is engaged in the generation, purchase, transmission, distribution and sale of electricity and in the purchase, transportation, distribution and sale of natural gas. This stock closed up 3.1% at $27.94 in Wednesday's trading session.

Wednesday's Volume: 9.37 million

Three-Month Average Volume: 3.45 million

Volume % Change: 305%

>>5 Hated Earnings Stocks You Should Love

From a technical perspective, XEL bounced notably higher here right above some previous support at $26.86 with monster upside volume. This move pushed shares of XEL into breakout territory, since the stock took out some near-term overhead resistance levels at $27.87 to $27.81. Shares of XEL are now trending within range of triggering another big breakout trade. That trade will hit if XEL manages to take out both its 200-day moving average at $28.15 and its 50-day moving average of $28.46 with high volume.

Traders should now look for long-biased trades in XEL as long as it's trending above some key near-term support at $26.86 and then once it sustains a move or close above those breakout levels with volume that's near or above 3.45 million shares. If that breakout hits soon, then XEL will set up to re-test or possibly take out its next major overhead resistance levels at $29.75 to $30.

AngloGold Ashanti

AngloGold Ashanti (AU), a gold exploration, mining and marketing company, holds a portfolio of operations and projects on four continents. This stock closed up 8.9% at $14.30 in Wednesday's trading session.

Wednesday's Volume: 10.26 million

Three-Month Average Volume: 4.11 million

Volume % Change: 325%

>>5 Stocks Under $10 in Breakout Territory

From a technical perspective, AU exploded higher here back above its 50-day moving average of $13.41 with monster upside volume. This stock recently formed a double bottom chart pattern at $12.69 to $12.50. Following that bottom, shares of AU have started to rebound sharply higher and move within range of triggering a big breakout trade. That trade will hit if AU manages to take out some near-term overhead resistance levels at $14.95 to $15.23 with high volume.

Traders should now look for long-biased trades in AU as long as it's trending above its 50-day at $13.41 or above more support at $12.50 and then once it sustains a move or close above those breakout levels with volume that's near or above 4.11 million shares. If that breakout hits soon, then AU will set up to re-test or possibly take out its next major overhead resistance levels at $17 to $18, or even $19.

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

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Stocks Under $10 Making Big Moves

>>Why Wall Street Got Apple Wrong

>>5 Breakout Trades to Take

Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

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

Best Penny Companies To Own In Right Now

Jamba (NASDAQ: JMBA  ) investors had better not get too excited when they pull up a stock quote on Monday.

The shares may be trading in the low to mid teens, but it doesn't mean that the smoothie chain operator has come through with a fivefold pop in value. The Jamba Juice parent is simply the latest company to execute a reverse split.

After today's close, Jamba will complete a 1-for-5 reverse split. Every five shares will be exchanged for a single share worth five times as much. In theory, the move should prop up Jamba's share price from $3 to $15, but the value of the company will remain the same. It's a zero-sum game.

Executing a reverse split does have negative connotations, but that's not entirely fair.

A lot of companies going this route are fading companies that have seen their share prices fall below the $1 mark. These penny stocks go through reverse splits to maintain exchange listing requirements, but the fundamentals are still a mess.

Best Penny Companies To Own In Right Now: Tutor Perini Corporation(TPC)

Tutor Perini Corporation, together with its subsidiaries, provides diversified general contracting, construction management, and design-build services to private clients and public agencies worldwide. It operates in three segments: Civil, Building, and Management Services. The Civil segment involves in public works construction, and the repair, replacement, and reconstruction of infrastructure. This segment?s civil contracting services include construction and rehabilitation of highways, bridges, mass transit systems, and wastewater treatment facilities. The Building segment provides services to various specialized building markets for private and public works clients, such as the hospitality and gaming, transportation, healthcare, municipal offices, sports and entertainment, education, correctional facilities, biotech, pharmaceutical, industrial and high-tech markets, electrical and mechanical, plumbing, and HVAC services. The Management Services Segment offers diversifie d construction and design-build services to the United States military and government agencies, surety companies, and multi-national corporations in the United States and internationally. This segment also provides rapid response and contract completion services; and management or general contracting services to fulfill the contractual and financial obligations of the surety on notification from the surety of a contractor bond default. The company was founded in 1894 and is headquartered in Sylmar, California.

Best Penny Companies To Own In Right Now: Psychemedics Corporation(PMD)

Psychemedics Corporation provides testing services for the detection of abused substances through the analysis of hair samples primarily in the United States. The company provides commercial testing and confirmation by mass spectrometry using various practices for cocaine; marijuana; PCP; methamphetamine, including Ecstasy; and opiates comprising heroin, hydrocodone, hydromorphone, and oxycodone. Its tests provide information that indicates the approximate amount of drug ingested, as well as historical data, which shows a pattern of individual drug used over a period of time. The company offers its services to employers for applicant and employee testing, as well as to physicians, treatment professionals, law enforcement agencies, school administrators, parents concerned about their children?s drug use, and other individuals or entities engaged in business where drug use or potential drug use is an issue. Psychemedics markets its corporate drug testing services primarily t hrough its own sales force; and home drug testing service, PDT-90, through the Internet and retail distributors. The company was founded in 1985 and is based in Acton, Massachusetts.

Top 5 Financial Companies To Watch In Right Now: Penson Worldwide Inc.(PNSN)

Penson Worldwide, Inc., through its subsidiaries, provides various critical securities and futures processing infrastructure products and services to the financial services industry. Its products and services include securities and futures clearing and execution, clearing and custody services, trade settlement, technology services, risk management services, and customer account processing and customized data processing services, as well as financing and cash management technology and other related products. The company also participates in margin lending, securities borrowing, and lending transactions, primarily to facilitate clearing and financing activities, as well as provides tools and services to support trading in multiple markets, asset classes, and currencies. In addition, it offers Internet account portfolio information, holding and safeguarding securities and cash deposits, securities lending and borrowing, proprietary trading, futures products, and institutional and active retail front-end trading software products and services, as well as technology and data product offerings, including customizable front-end trading platforms, options and futures trade data, and order-management services. It serves online, direct access, and traditional retail brokers, as well as banks, institutional brokers, financial technology companies, and securities exchanges in the United States, Canada, Europe, and Asia. The company?s securities and futures processing infrastructure products and services are marketed principally under the Penson name. Penson Worldwide, Inc. was founded in 1995 and is headquartered in Dallas, Texas.

Best Penny Companies To Own In Right Now: Wireless Telecom Group Inc.(WTT)

Wireless Telecom Group, Inc., together with its subsidiaries, engages in the design, manufacture, and supply of noise source products, electronic testing and measurement instruments, and passive components to commercial customers, the U.S. Government, and prime defense contractors. The company offers a range of noise source products, including components and instruments that are primarily used as a method of testing to determine if communications systems are capable of receiving the information being transmitted; and a line of broadband test equipment to cable television and cable modem industries for measuring CATV equipment, data-over-cables, and digital TVs. Its noise source products are used as a reference standard in test instruments that measure unwanted noise and interference in devices and components utilized in various communications equipment; coupled with other electronic devices for use as a means of jamming, blocking, and disturbing enemy radar and other commu nications; and used in radar systems as part of built-in test equipment to monitor the radar receiver and in satellite communications. The company also designs and produces electronic testing and measuring instruments, including power meters; passive inter modulation test equipment for cellular transmission signals; voltmeters; capacitance meters; audio and modulation meters; and accessory products. In addition, it designs and manufactures passive microwave components for the wireless infrastructure market and for other commercial, aerospace, and military markets. The company?s passive components are used in microwave systems, UMTS, PCS and cellular communications base stations, television transmitters, avionic systems, and medical electronics. It markets its products through its in-house sales people, as well as through manufacturers? representatives and distributors worldwide. Wireless Telecom Group, Inc. was founded in 1985 and is headquartered in Parsippany, New Jersey.< /p>

Best Penny Companies To Own In Right Now: Telular Corporation(WRLS)

Telular Corporation designs, develops, and distributes products and services that utilize wireless networks to provide data and voice connectivity among people and machines primarily in the United States and internationally. It provides machine-to-machine and event monitoring services, including Telguard that comprises a specialized terminal unit, which interfaces with commercial security control panels and communicates with event processing servers to provide real-time transport of alarm signals from residential and commercial locations to an alarm company?s central monitoring station; and TankLink solution that combines a cellular communicator, wireless data services, and a Web-based application into a single offering, which allows end-users to monitor the product level in a given tank vessel. The company also offers fixed cellular terminals for voice, fax, and Internet access over the wireless networks. It sells its products to security equipment distributors, cellular carriers, and value added resellers. The company was founded in 1986 and is headquartered in Chicago, Illinois.

Best Penny Companies To Own In Right Now: Casual Male Retail Group Inc.(CMRG)

Casual Male Retail Group, Inc., together with its subsidiaries, operates as a specialty retailer of men?s apparel in the United States, Canada, and Europe. It operates its stores under the Casual Male XL, Casual Male XL Outlets, Destination XL, Rochester Clothing, B & T Factory Direct, Shoes XL, and Living XL trade names. The company?s retail stores offer a range of basic sportswear, casual apparel, and dress wear and accessories, as well as a line of its private label collections, such as Harbor Bay, 626 Blue-Vintage Surplus, Synrgy, Oak Hill, and True Nation; casual clothing for the big and tall customers; loungewear, dress shirts, suits, and jeans wear; and luxury-oriented menswear. As of July 25, 2011, it operated 454 Casual Male XL retail and outlet stores, 15 Rochester Clothing stores, and 5 Destination XL stores. The company also operates a direct business, Shoes XL, which includes the shoesXL.com selling men?s footwear; livingxl.com and Living XL catalogs, speciali zing in selling select lifestyle products, such as chairs, outdoor accessories, and travel accessories, as well as bed and bath, and fitness equipment; and online stores for Casual Male XL and Rochester Clothing brands in the European countries, including the U.K., Germany, France, Italy, Spain, Finland, Sweden, Denmark, and the Netherlands. In addition, it offers a selection of apparel, from branded manufacturers, such as Polo Ralph Lauren, Robert Graham, Calvin Klein, Michael Kors, Ermenegildo Zegna, Cutter and Buck, Tommy Bahama, and Paul & Shark. The company was formerly known as Designs, Inc. and changed its name to Casual Male Retail Group, Inc. in August 2002 as a result of the acquisition of Casual Male business from Casual Male Corp. Casual Male Retail Group, Inc. was founded in 1976 and is headquartered in Canton, Massachusetts.

Walgreen Shifting Workers to Private Health Care Exchanges

Wendy Maeda/The Boston Globe via Getty Images NEW YORK -- Walgreen is moving 120,000 employees to a private health insurance exchange from coverage provided directly from carriers, the company will announce Wednesday. The pharmacy chain will join 17 other large employers on the Aon Hewitt Corporate Health Exchange as part of a growing movement to offer employees fixed dollar amounts to purchase their own plans on such exchanges. The end-cost to employees depends on the plan chosen, but they typically get more options than under traditional arrangements. Private exchanges mimic the coverage mandated as part of the Affordable Care Act. Enrollment in the public exchanges starts Oct. 1. "What happens to employer contributions over time? Will they put in as much as they put in the past? These are unanswered questions but potential negatives," says Paul Fronstin, a senior research associate with the Employee Benefit Research Institute. The benefit to Walgreen and other employers is unknown at this point, as their cost-savings aren't clear. Of the 180,000 Walgreen (WAG) employees eligible for health care insurance, 120,000 opted for coverage for themselves and 40,000 family members. Another 60,000 employees, many of them working part-time, weren't eligible for health insurance. Aon Hewitt (AON) says other participants in its program include retailer Sears Holding (SHLD) and Darden Restaurants (DRI). These new additions raise enrollment to 330,000 from 100,000 last year, and Aon Hewitt estimates enrollment will jump to 600,000 next year, a fivefold increase from 2012. By 2017, nearly 20 percent of employees nationwide could get their health insurance through a private exchange, according to Accenture Research (ACN). A recent report by the National Business Group on Health said that 30 percent of large employers are considering moving active employees to exchanges by 2015. Other major providers of private exchanges include Mercer, a division of Marsh & McLennan Cos. (MMC), and Towers Watson & Co. (TW). Mercer said this summer that it had five major employers enrolled but didn't name them. Towers Watson is in the process of launching an exchange. Smaller companies, including Buck Consultants, Willis North America and regional players, are also starting exchanges. There are also separate exchanges just for retirees. IBM (IBM), Time Warner (TWX) and General Electric (GE) recently announced they were moving retirees to exchanges for those not yet Medicare-eligible and other exchanges for those who are. Changes in Coverage The five plan choices in Aon Hewitt's private exchange carry names used across the sector -- bronze, bronze plus, silver, gold and platinum -- and costs are based on the amount of coverage, says Ken Sperling, Aon Hewitt's national health exchange strategy leader. Bronze and silver plans typically have high individual deductibles -- $1,250 or more -- meaning that they don't kick in until a participant's out-of-pockets costs exceed the amount of the deductible. Gold and platinum plans have lower deductibles and offer more coverage. Health care premiums for these plans rose about 5 percent last year, consistent with the industry average recently calculated by the National Business Group on Health. For some employees the exchanges could offer more choice. Walgreen employees eligible for health care coverage were asked in the past three years to choose between two plans, both with high deductibles. Those plans were managed by Blue Cross Blue Shield or United Healthcare (UNH), depending on the area of the country. Walgreen's offering last year matched the silver plan on Aon's exchange, so there are two options that are less expensive and two that are more expensive. Based on Aon Hewitt's data collected so far, about 42 percent of participants choose a plan less expensive than they had previously used, while 26 percent choose a higher-cost plan and 32 percent stay at the same level. Tom Sondergeld, senior director of health and well being for Walgreen, said Walgreen joined a private health exchange to offer its employees more choice, while still supporting a generous pharmacy benefit he said was central to the company's mission. Walgreen isn't planning any other major benefit changes for 2014, which starts in late October, Sondergeld said. The company will continue its reward-based wellness programs and a smoking surcharge of roughly $600. It won't change coverage for spouses, as United Parcel Service (UPS) recently announced.

Sterne Agee Sees More Book Value Risks for High-Yield Dividend MBS REITs

The analyst team at Sterne Agee has updated its book value estimates for the high-yield mortgage-backed securities (MBS) real estate investment trust (REIT) sector. The move is based on rising interest rates that keep adding pressure on MBS asset prices, even while the option-adjusted spreads have remained relatively stable or narrowed. The problem for investors seeking the double-digit dividend yields here is that book value models have continued to decline since the end of the last quarter.

Since the end of the last quarter, the 10-year Treasury yield increased 30 basis points and the low coupons and higher duration 30-year mortgage securities are underperforming higher coupon mortgage securities. The net result is a modest decline in non-agency MBS values. Sterne Agee shows that its models suggest a decline of 1.4% or so this quarter. In the June quarter, the firm’s models suggested an average decline of 10% to 12% and the actual book values declined on average about 15%.

So here is the thing to consider. These MBS REITS have been plummeting in price as high-yield dividend buyers know that they have to worry about the effects of rising interest rates. A 1% or 2% drop in book value does not seem enough on the surface to bother with a report of this length. That is just on the surface. Where this gets complicated is that drop is after only one month, and it is on top of significant losses already. imagine what happens to these book values if interest rates really start to rise, say another 100 or 200 basis points.

Hot Growth Stocks To Watch For 2014

MFA Financial Inc. (NYSE: MFA) has an estimated $0.20 decline in book value. This is partially attributable to the company’s recent special dividend declaration. For the third quarter, Sterne Agee sees MFA with a core earnings per share of $0.19, yet the dividend of $0.50 is a combined $0.22 estimated and $0.28 special.

Sterne Agee’s team said, “We continue to prefer credit risk oriented Mortgage REITs over their Agency-only focused counterparts. Among the larger cap names in our coverage, our top picks are MFA Financial, Inc. (NYSE: MFA) and PennyMac Mortgage Investment Trust (NYSE: PMT).”

MFA’s target price is $8.25, versus $7.28 recently, and we did not see PennyMac’s price target in the full research report. Other companies in the high-yield dividend MBS REITS covered are as follows:

American Capital Agency Corp. (NASDAQ: AGNC) with a neutral rating. The firm’s price target is $22.00, and that is slightly under the current $22.80 price in the report. Last quarter’s book value was $25.53, and Sterne Agee is projecting a book value of $25.31.

Annaly Capital Management Inc. (NYSE: NLY) is considered king of the MBS REITs. Sterne Agee only rates it as Neutral with a $10.75 price target against a recent price of $11.60. The book value last quarter was $13.03, and Sterne Agee sees the book value as $12.64 by the end of August.

Dynex Capital Inc. (NYSE: DX) is rated as Buy, with a price target of $9.00, versus a recent price of $8.02. The book value was $8.94 at the end of last quarter and was projected to be $8.91 by the end of August.

Ag Mortgage Investment Trust (NYSE: MITT) also has a Buy rating, with a target of $19.00, versus a recent price of $17.45. The last book value was $19.78, and the end of August projected book value was $19.58.

Two Harbors Investment Corp. (NYSE: TWO) has a Neutral rating with a $11.50 price target, but a $9.59 recent price in the report. Its book value was $10.48 at the end of the quarter and was projected to be $10.39 at the end of August.

Again, the drop of 1% or 2% in book value doesn’t sound bad on the surface. The issue is that this drop was in just one or two months. Imagine what happens if or when interest rates rise another 100 basis points or more. Stay tuned.

Powerball Lottery Now Over $200 Million: What to Do and Not to Do If You Win

Somehow and some way the new Pennsylvania Lottery Powerball jackpot already has crossed back above the $200 million mark for the winning lottery pool. Because 24/7 Wall St. is so concerned with the nation’s personal finances and financial matters for the public, we wanted to take the opportunity again to tell you about what to do and what not to do if you are one of the few luckiest people on earth who happen to win a lottery of this size. This also pertains to anyone who wins a huge legal judgment or who suddenly comes into unexpected wealth.

The current Powerball is up to $203 million for the Saturday, September 7, drawing. Two Powerball tickets worth $1 million each from the September 4 drawing also were winners. This guide is meant for those winners as well. These tickets won individual prizes of $1 million, less the 25% federal withholding. More than 53,700 other Pennsylvania Lottery Powerball players also won prizes in the September 4 drawing.

As far as the $203 million is concerned, this comes to a value through time as an estimated annuity value of $203 million. It comes to a sum of roughly $115.5 million in the cash value for a lump sum, which is still king-maker money for the bulk of the population. The problem is that there are way too many people who win the lottery or a major judgment who actually end up bankrupt. That just isn’t right.

Top Gold Stocks To Watch For 2014

24/7 Wall St. has a full list of what to do, and specifically what not to do, if you are ever one of these lucky souls who hold the winning lotto ticket. Some of the actions are simple, but then there are mandatory things such as shielding yourself from poachers, getting very reputable tax and financial professionals, keeping your expectations within check and more.

Here are 12 things to do and not to do if you happen to win the $203 million lottery this weekend, or any other great lottery sum in the future.

Is Novartis a Buy after Earnings?

With shares of Novartis (NYSE:NVS) trading around $73, is NVS 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

Novartis engages in the research, development, manufacture, and marketing of a range of healthcare products worldwide. Its portfolio includes medicines, eye care, cost-saving generic pharmaceuticals, preventive vaccines and diagnostic tools, over-the-counter drugs, and animal health products. The company operates in five business segments: Pharmaceuticals, Alcon, Sandoz, Vaccines and Diagnostics, and Consumer Health. Its core products and services include prescription medicines; surgical, ophthalmic pharmaceutical, and vision care products; generic pharmaceuticals,  human vaccines, and blood-testing diagnostics; as well as over-the-counter medicines and animal health. In a growing healthcare field, Novartis provides key products and services.

Recently, Novartis has raised its full-year outlook, after finding out a generic version of its best-selling blood pressure medication Diovan would be delayed. Second-quarter income and revenue for the company beat analyst estimates, but earnings per share fell short. However, Novartis is also being cautious about 2014, as the generic version of Diovan may be available by then.

T = Technicals on the Stock Chart are Strong

Novartis stock has been on a bullish run over the last several months. The stock is now consolidating near all-time high prices, and it may need a little time before its next move. Analyzing the price trend and its strength can be done using key simple moving averages.

What are the key moving averages? They are the 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Novartis is trading slightly above its rising key averages, which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Novartis Options	16.76%	0%	0%

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

	Put IV Skew	Call IV Skew
August Options	Flat	Average
September Options	Flat	Average

As of today, there is average demand from call buyers or sellers, and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very small 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 what that means for Novartis’s stock.

E = Earnings Are Mixed Quarter-Over-Quarter

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

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	5.80%	5.43%	73.16%	-0.99%
Revenue Growth (Y-O-Y)	-0.36%	2.11%	0.48%	-6.62%
Earnings Reaction	-0.52%*	-1.02%	3.38%	-0.42%

Novartis has seen improving earnings and mixed revenue figures over the last four quarters. From these numbers, the markets have expected a little more from Novartis’s recent earnings announcements.

* As of this writing

P = Average Relative Performance Versus Peers and Sector

How has Novartis stock done relative to its peers, Pfizer (NYSE:PFE), Merck  (NYSE:MRK), GlaxoSmithKline (NYSE:GSK), and the overall sector?

	Novartis	Pfizer	Merck	GlaxoSmithKline	Sector
Year-to-Date Return	15.45%	14.48%	18.20%	19.58%	16.78%

Novartis has been an average relative performer, year-to-date.

Conclusion

Novartis is a healthcare company that provides a number of healthcare products and services to consumers and companies worldwide. Just recently, the company issued a positive earnings report, and offered good news for the rest of the year. The stock has been on a strong run, and is now consolidating near all-time high prices. Over the last four quarters, earnings have been improving, while revenue figures have been mixed, which has resulted in confused investors. Relative to its peers and sector, Novartis has been an average year-to-date performer. Look for Novartis to OUTPERFORM.

What’s at Stake for Muni Bond Investors in Detroit Insolvency

In what may be the most severe case of credit distress since the Great Depression, the city of Detroit is charting new territory in negotiations with creditors to avert a Chapter 9 bankruptcy filing.

What emerges from those talks that emergency manager Kevyn Orr is holding with the city’s creditors reaches far beyond whether the city will sell some of its museum’s Van Gogh masterworks or repair the 40% of its streetlights that are not functioning.

That is because Orr is proposing to treat its general obligation bonds no differently than its pension obligations despite longstanding contractual provisions that allow the government’s unlimited tax authority to back up its obligations to the former.

To assist our readers in understanding the implications for advisors and clients with municipal bond holdings in their portfolios, AdvisorOne spoke with Elizabeth Foos (left), municipal credit analyst with Morningstar and author of a new 9-page report on Detroit’s unfolding debt drama.

Tell us about the general obligation unlimited tax (GOULT) bonds that are at issue in these negotiations.

GOULT bonds are considered very strong. They have to be voter approved. They give the munipality the right and obligation to levy taxes to pay that debt service back through a dedicated unlimited revenue stream. They were assumed to be a pretty low risk and have worked fine over many decades.

Because [Detroit has] gotten quite stressed over the years, the state also pledged a direct payment of distributable state aid to several series of GOULT bonds to make them more attractive to the market and a little bit more secure.

Also, a significant part of that debt is wrapped by municipal bond insurance.

How important is debt issuance to Detroit’s day-to-day functioning?

Moving forward, the city will be hard pressed to perform efficiently without access to the [muni] market for everything from cash-flow liquidity needs to capital needs such as police vehicle stock and IT systems.

What does the emergency manager’s proposal mean for muni investors?

It highlights the need for investors to do their due diligence in credit analysis and really understand what security they own and how far down the road toward fiscal distress that issuer is.

Most likely this is going to be an opportunity for the emergency manager in a fiscally distressed situation to negotiate with creditors. The interesting part of his proposal is really the treatment of different securities as either secured or unsecured.

By calling general obligation bonds unsecured debt he puts it on par with pension liabilities and retiree health care. That begs the question of how much risk is really associated with general obligation unlimited tax debt in the state of Michigan.

If this is approved by the state, in a time of fiscal distress, the assumed strength of GOULT might not be as strong as you thought.