U.S. Consumer Confidence Slips on Jobs, Economy

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Joe Raedle/Getty Images WASHINGTON -- U.S. consumer confidence fell in April over concerns about hiring and business conditions, even though many people foresee a strengthening economy in the months ahead. The Conference Board said Tuesday that its confidence index dropped to 82.3 from a March reading of 83.9. Despite the decline, consumer sentiment for the past two months has been at its strongest levels since January 2008, when the Great Recession was just beginning. Concerns about the state of the economy fell for the first time since the federal government partially shut down in October. Jennifer Lee, senior economist at BMO Capital Markets, said consumer sentiment tailed off in April because the pace of hiring, while strengthening, "is still slow, and the tougher environment is hurting American confidence." Even though consumers are a bit more downbeat about existing economic conditions, their outlook for future growth held steady, noted Conference Board economist Lynn Franco. The expectations component of the index rose to an eight-month high in April. Consumer confidence is closely watched because consumer spending accounts for about 70 percent of the U.S. economy. The number of people who thought jobs were hard to get rose slightly to 32.5 percent from 31.4 percent in March. Economists expect sentiment about the job market to brighten if the pace of hiring quickens. Employers added 192,000 jobs in March and 197,000 jobs in February, after cold winter weather had caused hiring to stall in the prior months. The unemployment rate held steady at 6.7 percent last month despite the hiring because more Americans are seeking work. People without jobs are counted as unemployed only when they start looking for one. The Labor Department will release its April employment report Friday. Economists have forecast that 210,000 jobs will have been added this month, according to a survey by FactSet. The April consumer sentiment report showed that households with incomes of more than $125,000 continue to have the most confidence in the economy, as do people younger than 35. Plans to buy autos and appliances fell in April, while slightly more Americans are considering whether to buy a home, according to the report. Those purchases could be influenced by interest rates. The Federal Reserve has held rates near historic lows, though mortgage rates have increased over the past year. At its December, January and March meetings, the Fed trimmed its monthly bond purchases. The purchases have been intended to keep long-term rates low. The Fed has cut back on its bond buying because it deems the recovery to have strengthened.

Why Antero Resources (AR) Stock Finished Higher On Monday

NEW YORK (TheStreet) --Shares of Antero Resources Corp. (AR) finished higher 2.47% to $64.27 on Monday after the company's rating was re-initiated as a "buy" at UBS (UBS).

The firm said its rating was the result of the independent oil and natural gas company's production having been in line with estimates, and that pricing post hedging has been stronger than its previous forecast. 

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STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.  AR data by YCharts
STOCKS TO BUY: TheStreet's Stocks Under $10 has identified a handful of stocks that can potentially TRIPLE in the next 12-months.Learn more.

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Stock quotes in this article: AR 

Profiting From the Battle for the Future of Television: Part 2

As more and more people are cutting the cord when it comes to home entertainment, competition in the industry has never been more intense. Broadcast gave way to cable before satellite became an option, and now technology is driving the fight and offering an increasing number of choices. Four identifiable segments are beginning to emerge: cable and satellite, streaming video, TV enhancement, and advanced options.

In Part 1 of this series, I examined the traditional players -- including cable and satellite providers, as well as communications companies that have begun to get into the game. Today, I'll examine the various streaming video options. There is some overlap in certain cases, but by understanding each segment individually, you'll get a clearer picture of the overall industry.

The streaming video players
Netflix (NASDAQ: NFLX  ) : As the first mover in streaming video, Netflix has a clear advantage over its competitors. Netflix stock has taken investors on a roller-coaster ride over the past few years. In 2011, shares were trading just below $300 when the company announced the massive price increase and the bifurcation of the DVD business. Netflix stock became a case study in how to kill the golden goose, seeing the stock drop to just over $60 last fall. The stock is now knocking on $250 again.

As a first mover, Netflix has the ability to not only continue build a significant subscriber base but also to forge critical strategic partnerships and iron out glitches. Recently, Netflix announced user profiles that will allow as many as five users per account to customize recommendations and preferences. The company is working toward constantly improving the user experience.

What CEO Reed Hastings is really doing right, and another reason Netflix is strongly positioned among streaming video competitors, is producing original content. In the entertainment business, content is king. While some critics have observed that Netflix has had mixed success with its original shows, it's moving in the right direction. Furthermore, the move by Hastings indicates that the CEO understands the importance of content in the long-term success of streaming video.

Amazon.com (NASDAQ: AMZN  ) : Amazon Prime is currently the most significant competitor to Netflix in the streaming space, and this year saw the fight intensify. Not only did Amazon aggressively go after some of the licensing deals that had once belonged to Netflix -- remember, Amazon has a significantly larger balance sheet to play with -- but it has also ramped up its own original production effort. Amazon recently announced that it's putting six more pilots into production, most with a focus on kids' programming -- including a pilot aimed at 6- to 11-year-olds and a first-ever live action show.

According to a recent study from NPD Group, Amazon has made real inroads: In the first quarter of 2012, Netflix had 76% of single-subscription households; that number fell to 67% in the first quarter of 2013. The study also found that 10% of households now have subscriptions to both Netflix and Amazon Prime. Furthermore, Amazon has added 11,000 titles in 2013 to bring its library to roughly 41,000 titles.

One of the advantages for Amazon, and its customers, is that the $79-per-year membership gives you free two-day shipping on most Amazon products. This means that Amazon can appeal to consumers for reasons beyond home entertainment. When mixed with the depth of its wallet, Amazon is well positioned to push Netflix.

Redbox Instant: This joint venture between Outerwall (NASDAQ: OUTR  ) and Verizon (NYSE: VZ  ) is the newest addition to the streaming video battle. The new service gives you access to a distinct number of rentals at Redbox kiosks plus access to the 5,000 titles currently available. CEO Scott Di Valerio explains that where Redbox is the outer wall of old video stores (where new releases were displayed), the streaming service fills in the center of the store (older titles). While the service is in its infancy, one angle that could be a game-changer for Redbox Instant is mobile. With Verizon as a JV partner, you can imagine that Redbox Instant could be the first streaming video player to truly make the jump to mobile. Netflix, for example, is available on most mobile devices, but the data usage is significant. If Verizon chooses to offer Redbox Instant to its wireless customers, while giving them a break on data, this could change the landscape.

But how do you profit?
All three of these options offer a solid investment outlook and could be worth owning -- each for different reasons. Netflix is ahead of the pack, although the stock seems like it's getting pricey at current levels. Longer-term, however, it's adding subscribers, and that's the key. Amazon has the balance sheet to "steal" content from its competitors, so watching key licensing battles will be critical. Redbox Instant is still early in the game, but the Verizon angle has potential. Until a clear winner emerges, a balanced allocation to all three options is the most conservative approach. Long term, it will be key to watch the content issue to determine whether streaming video profits can hold up.

Please look soon for the next parts of this series that will focus on the other two segments, and then consider the industry as a whole.

As the battle for the future of television continues, you should learn all you can about each of the companies involved and how each differentiates itself. Beyond following this series, you may want to check out The Motley Fool's shocking video presentation that reveals the secret Steve Jobs took to his grave and explains why the only real winners are these three lesser-known power players that film your favorite shows. Click here to watch today!

PIMCO’s ‘New Normal’ Is Ending, PIMCO Says

The era of sluggish growth characterized by Pacific Investment Management Co. as the “new normal” is ending, according to one of the firm’s deputy chief investment officers.

“Our view is that what you’ll see in next the few years is we’re going to head back to a new destination,” Scott Mather, head of global fund management and one of PIMCO’s six deputy chief investment officers, said in a Bloomberg Surveillance interview with Tom Keene and Michael McKee. The firm’s forecast for U.S. growth has increased to the high 2% level, “which is better than sub-2% level of growth that we’ve experienced for several years,” Mather said.

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PIMCO, manager of the world’s largest bond fund, outlined the “new normal” scenario at its annual forum in May 2009 after the worst financial crisis since the Great Depression plunged the U.S. into recession. The Newport Beach, California- based firm’s co-founder and chief investment officer Bill Gross and the firm’s former Chief Executive Officer Mohamed El-Erian popularized the term and predicted the economy would expand at a below-average pace for the next three to five years as growth in developed countries slows and amid the “heavy hand of government.”

“We’ve already left the most intense period of deleveraging that really created all sorts of pressures and adjustments that needed to happen in the economy,” Mather said today.

Increasing Optimism

PIMCO has been moving toward a more optimistic view of the economy since at least the beginning of 2013. In a March outlook it forecast U.S. growth of between 2.5% and 3%, as public sector revenues increased, pressures from taxes eased and consumption improved.

This moved the firm more in line with other economists, who project U.S. gross domestic product expansion of 2.7% in 2014, according to the average estimate of 78 responses in a Bloomberg survey. The U.S. grew 1.9% last year after expanding 2.8% in 2012.

Americans are growing more upbeat about the economy as near-record stock prices, higher property values and lower unemployment help bolster household finances. Further strides in the labor market that generate bigger wage gains would provide additional impetus for the consumer spending that makes up almost 70% of the economy. Rising Yields

The yield on the 10-year U.S. Treasury should settle around 4% over the next few years, Mather said. Analysts forecast 3.72% by the third quarter of next year, according to the weighted average estimate of 50 analysts in a Bloomberg survey.

Benchmark 10-year note yields fell two basis points to 2.66% as of 11:57 a.m. in New York, according to Bloomberg Bond Trader prices. A rally in 30-year bonds has pushed returns past 10% in 2014, the best start to a year in at least two and a half decades.

Mather, who joined PIMCO in 1998 after trading mortgage- backed securities at Goldman Sachs Group Inc. in New York, has emerged as part of a new generation of top executives at PIMCO, the $1.9 trillion bond firm that revisited its leadership plans after the unexpected resignation of heir-apparent El-Erian.

Gross named Mather a deputy CIO in January, along with Andrew Balls, Dan Ivascyn, Mark Kiesel, Virginie Maisonneuve, and Mihir Worah as part of the biggest management shakeup in PIMCO’s history.

Gross Stumble

Gross has stumbled in the past year after building one of the best long-term track records in the industry during the bull market. Since the 70-year-old examined his legacy in an investment outlook a year ago titled “Man in the Mirror,” his $232 billion PIMCO Total Return Fund has trailed 90% of similar funds. Over the past five years, the fund is beating 56% of peers.

El-Erian this week reaffirmed the idea of a “new normal” economy in his first television interview since his departure in March, saying that the markets are in “secular stagnation.” While the U.S. economy is healing, Federal Reserve Chair Janet Yellen won’t raise interest rates for a while, he said.

FINRA Reverses Schwab Class Action Waiver Decision

The Financial Industry Regulatory Authority’s Board on Thursday found that Charles Schwab & Co. violated FINRA rules when the firm attempted to keep investors from participating in judicial class actions by adding waiver language to customer account agreements.

The ruling affirms in part and reverses in part an earlier FINRA Hearing Panel decision, in which the panel found that Schwab’s waiver violated FINRA rules that limit the language that firms may place in pre-dispute arbitration agreements but concluded that FINRA could not enforce those rules because they were in conflict with the Federal Arbitration Act (FAA).

The Board, FINRA said, overturned this finding and determined that the FAA does not preclude FINRA’s enforcement of its rules.

In addition, the Board upheld the Hearing Panel’s determination that Schwab’s attempt to prevent FINRA arbitrators from consolidating more than one party’s claims in a FINRA arbitration forum violated FINRA rules.

As FINRA explains, the Board decision would have remanded the case to the Hearing Panel for a determination of appropriate sanctions.

However, Schwab instead entered into a settlement, agreeing to pay a fine of $500,000 and to notify all of its customers that the Class Action Waiver requirement has been withdrawn from its customer account agreements and is no longer in effect. “This fully resolves the matter,” FINRA said.

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Schwab said in a statement that it is “pleased to resolve this dispute with FINRA, and to put to rest any client concerns on this issue. Over the last year, we heard clearly that a number of our clients and members of the general public have strong feelings about maintaining access to class action lawsuits. In a business like ours where our reputation and public trust are key to our success, we take perspectives like those very seriously.”

The Schwab statement said the company has “agreed with FINRA to remove the waiver from our account agreements, rather than seeking further legal appeals on the matter,” stating this “is in our clients’ and the company’s best interest.”

Schwab went on to say that the company “initially made the decision to require individual arbitration of disputes based on principled reasoning and careful analysis of how to provide clients with the best means of dispute resolution. We believed, and still believe, that FINRA arbitration is the best means for investors to resolve disputes with their brokerage firm, but we will maintain their access to class-action lawsuits should they prefer that option.”

In October 2011, Schwab sent amendments to its customer account agreement to more than 6.8 million investors. The amendments included waiver provisions that required customers to agree that any claims against Schwab be arbitrated solely on an individual basis and that arbitrators had no authority to consolidate more than one party's claims.

The North American Securities Administrators Association filed an amicus brief last May in support of FINRA. Former NASAA President Heath Abshure said at the time that “Charles Schwab’s attempt to unilaterally alter its account agreements to include the class-action waiver is an obvious attempt by the firm to insulate itself from liability to its own clients.”

NASAA said Thursday that Schwab’s decision to include class action waivers in the arbitration provisions of its customer contracts "is yet another example of the harmful effects of mandatory arbitration clauses and heightens the need to pass the Investor Choice Act (H.R. 2998)" introduced by Rep. Keith Ellison, D-Minn.

The legislation, which NASAA said now has 29 cosponsors, "would end the use of mandatory pre-dispute agreements by broker-dealers and investment advisors, and would guarantee class-action participation." These agreements, "especially when coupled with class-action waivers, effectively eliminate any reasonable chance for retail investors with small-dollar claims to have their claims heard in an unbiased and fair forum,” NASAA said.

FINRA’s Board of Governors may call for review and issue a decision involving a matter before the National Adjudicatory Council as was done in Schwab’s case. In February 2013, a FINRA Hearing Panel dismissed two of three causes from a February 2012 FINRA complaint. FINRA and Schwab both appealed this decision to the NAC in February 2013.

Advanced Micro Devices (AMD) Breaks an Earnings Loosing Streak (Plus Other Good News)

On the eve of Good Friday after the market had closed on Thursday, small cap chip stock Advanced Micro Devices, Inc (NYSE: AMD) did something unusual after its latest earnings report: It did not sink after its latest earnings reports. I should mention that we previously had an open position in Advanced Micro Devices in our SmallCap Network Elite Opportunity (SCN EO) portfolio from last summer up until late January when we locked in a small loss. We got out in part because while we believe in the company's potential over the long term, our SCN EO is a trading rather than a buy and hold portfolio plus AMD's shares sank yet again after the company reported earnings – a repeat of what happened after three previous earnings reports. However, the latest earnings report appears to have sent most of the bears (and many of the bashers who just hate this stock) into hibernation when you consider the following good news:

The AMD Earnings Report. On Thursday after the market closed, Advanced Micro Devices reported revenue of $1.40 billion for a 12% sequential decrease and a 28% year-over-year increase as sales at the company's solutions business (which supplies PCs) dropped 12% while the graphics and visual solutions unit's sales more than doubled to $734 million. In addition, AMD reported operating income of $49 million verses an operating loss of $98 million; non-GAAP operating income of $66 million verses an operating loss of $46 million; net loss of $20 million verses a net loss of $146 million; and a non-GAAP net income of $12 million verses a non-GAAP net loss of $94 million. Those results were better than analysts' expectations.

AMD an "Under the Radar" Transition Story. FBR Capital raised its price target on Advanced Micro Devices for to $6.00 from $5.50 and noted:

"We believe Advanced Micro Devices' 'under the radar' transition story is a key driver of value, although potentially messy. While structural PC headwinds are discouraging, we believe that AMD's non-PC segments will more than replace lost PC revenue over the next few years. Excluding another severe macro downturn, cash levels are now more than sufficient and net debt should be worked down for at least the next few years. In our view, the company has wisely directed its strategic focus away from the core PC market and toward gaming APUs, micro servers, and custom- embedded processors, areas its larger competitor is less focused on."

"Seeing Some Successes" in the Turnaround. Ascendiant Capital analyst Cody Acree was quoted in a Reuters article as saying:

"This is a company that's still in the midst of a very long-term turnaround but you're seeing some successes. None of this is a flip of a switch overnight. It's a plodding quarterly restructuring that really is going to change who AMD is."

Other Analysts Remain More Cautious. Not all analysts are excited about AMD's prospects as Nomura Equity Research's Romit Shah reiterated a Neutral rating along with a $4 price target and raised his 2014 estimates to $5.88 billion and 12 cents per share from a prior $5.67 billion and 6 cents per share. MKM Partners' Ian Ing also reiterated a Neutral rating and a $4.10 price target but he raised his 2014 estimates to $6.12 billion in revenue and 24 cents EPS from a prior $5.82 billion and 12 cents per share. Ing commented:

"We remain skeptical on ARM processors and micro-servers, and wary of potential PC share declines. Longer term AMD appears very much on track at building a sustained revenue stream of long-life designs (3-5 years or more) in adjacent computing areas. This could prove to be a better strategy than focusing on the highest volume PC and smartphone sockets with 9-12 month design cycles."

Bernstein Research's Stacy Rasgon reiterated an Underperform rating; but he raised his price target to $3 from $2.50 plus raised his 2014 estimate to $5.95 billion in revenue and 17 cents per share from a prior $5.72 billion and 6 cents per share. He also commented:

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"We admit, we were wrong on the trajectory of AMD's revenue profile in Q2; and (at least for the moment) the collapse of PC revenues that we have seen in recent quarters stabilized a bit (with revenue declines about in-line with the market)."

Credit Suisse's John Pitzer reiterated an Underperform rating and a $3 price target, commenting:

"while we do recognize and commend that the Company is making progress, we will continue to stay on the sidelines until we have conviction relative to AMD's earnings upside potential… To be clear, AMD is making good progress in Computing Solutions segment with operating margins close to break-even at revenue levels that historically generated large losses – unfortunately, we see near-term profitability upside limited from current levels."

Pitzer raised his estimates for this year to $5.95 billion and 12 cent per share from a prior $5.66 billion and 8 cents per share.

Share Performance. On Tuesday, Advanced Micro Devices rose 4.37% to $4.30 (AMD has a 52 week trading range of $2.43 to $4.65 a share) for a market cap of $3.12 billion plus the stock is up 11.7% since the start of the year, up 74.1% over the past year and up 20.8% over the past five years. However, the following performance chart does show AMD's volatility:

Finally, here is a look at the latest technical chart for AMD:

Given the above news, it might be time for the AMD bears and bashers to find another stock to short (or bash….)

SmallCap Network Elite Opportunity (SCN EO) has an open position in AMD. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.

Hot Insurance Stocks To Own For 2015

If you haven't bought health insurance yet, it's time to panic. You have less than a month to buy coverage or you may have to pay a penalty when you file your 2014 taxes next year.

The Affordable Care Act requires most everyone who can afford health insurance to be covered by April 1 or pay a penalty. That penalty could be a maximum of $285 for a family of four or up to 1 percent of the family income, whichever is greater.

If you want to buy a health plan through a broker or directly from a�health insurance�company, you have only until March 15 to do so. Buy a plan by then and your coverage will start April 1. If you buy health insurance anytime from March 16 to the 31 outside the government-run marketplaces, your coverage won't start until May 1.

Exchanges offer some breathing room
You have a little more breathing room if you buy your plan from the government-run marketplace in your state. If you buy a plan through the marketplace anytime between March 16 and 31, coverage won't start until May 1. But the Obama administration will let you slide. "Health and Human Services granted an extension for those enrolling in the marketplace but not for those enrolling outside the marketplace," says Carol Taylor, employee benefit advisor for D&S Agency in Roanoke, Va., a partner firm of United Benefit Advisors.

Hot Insurance Stocks To Own For 2015: Helvetia Holding AG (HELN)

Helvetia Holding AG is a Switzerland-based holding company of the Helvetia Group, an internationally active, all-lines insurance service group. The Company divides its activities into country markets Switzerland, Germany, Italy, Spain and Other insurance units, which include Austria, France and the global reinsurance business, as well as the Corporate segment, which includes all the Helvetia Group activities, as well as financing companies and the Company. Helvetia Holding AG classifies its activities as life business, non-life business and other activities. The life business offers life insurance, pension plans and annuities, among others. The non-life business includes property, motor vehicle, liability and transport policies, as well as health and accidental insurance coverage. The reinsurance business, among others, is included in Other activities business. The Company operates through its branch offices and subsidiaries. Advisors' Opinion:

• [By Tom Stoukas]

  Helvetia Holding AG (HELN) added 3.3 percent to 412 Swiss francs. Switzerland�� fourth-biggest insurer said first-half profit rose because of increased life-insurance sales and an acquisition in France. Net income climbed to 179.5 million Swiss francs ($192 million) in the six months through June, beating the average analyst estimate of 164.4 million francs.

Hot Insurance Stocks To Own For 2015: Principal Financial Group Inc(PFG)

Principal Financial Group, Inc. provides retirement savings, investment, and insurance products and services worldwide. The company?s Retirement and Investor Services segment provides retirement savings and related investment products and services, including a portfolio of asset accumulation products and services primarily to small and medium-sized businesses and individuals in the United States. This segment offers products and services to businesses for defined contribution pension plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, and employee stock ownership plan consulting services; and annuities, mutual funds, and bank products and services to the employees of its business customers and other individuals. Principal Financial Group?s Principal Global Investors segment offers a range of equity, fixed income, and real estate investments, as well as specialized overlay and advisory services to institutional inve stors. The company?s Principal International segment offers retirement products and services, annuities, mutual funds, institutional asset management, and life insurance accumulation products in Brazil, Chile, China, Hong Kong SAR, India, Indonesia, Malaysia, Mexico, Singapore, and Thailand. Principal Financial Group?s U.S. Insurance Solutions segment offers individual life insurance, as well as specialty benefits in the United States. Its individual life insurance products include universal and variable universal life insurance and traditional life insurance; and specialty benefit products comprise group dental and vision insurance, individual and group disability insurance, and group life insurance, as well as fee-for-service claims administration and wellness services. The company was founded in 1879 and is based in Des Moines, Iowa.

Advisors' Opinion:

• [By Michael Calia]

  Principal Financial Group Inc.(PFG) said its fourth-quarter earnings rose 8.6%, touting its strong results for the period amid continued economic concern.

• [By Patricio Kehoe] ts newest deal with private benefits company Liazon Corp., through which the firm will offer employer-sponsored group benefit plans to small and medium businesses. While the company already sells ancillary benefit plans, this deal will now also include dental, life insurance, disability insurance and critical illness coverage in an attempt to stay on top of the insurance industry. As an industry leader, Principal has over $466 billion in assets under management and 19 million customers, fragmented among small and medium-size businesses. Furthermore, its solid fourth quarter results have encouraged investment gurus like Paul Tudor Jones (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) to recently acquire large amounts of the company�� shares. So, let�� see what this insurer has in store for the future.

  Broadening Horizons

  Although Principal�� core business is in life insurance, the company has been pursuing a more diverse growth strategy lately, and is now focused on expanding its position in the retirement service and asset management segment. With almost 30,700 pension plans covering over 3.4 million customers, this business��growth rate has not only boosted overall profitability, marked by a 31% annual increase in operating earnings for fiscal 2013, but also helped offset the headwinds of low interest rates and volatility in the emerging markets. In fact, the fourth quarter showed a 65% boost in premium and fee income for the segmenta , consequence of the rollout of total retirement suite products.

  Moreover, Principal�� emphasis on retirement products and its use of capital salesforce for distribution has added on to the natural switching cost advantage in the insurance industry. Since plan sponsors provided with pension assets rarely switch providers, the company will likely benefit in the long term from its persistency, as seen in the quarterly 9% bump in recurring deposits.

  On another note, Principal�� fee-based b

Best Investments For 2015: Fairfax Financial Holdings Ltd (FRFHF.PK)

Fairfax Financial Holdings Limited (Fairfax) is a financial services holding company. The Company, through its subsidiaries, is principally engaged in property and casualty insurance and reinsurance and the associated investment management. The Company�� segments consist of Insurance, Reinsurance, Insurance and Reinsurance Other, Runoff, and Corporate and Other. On December 22, 2011, the Company completed the acquisition of 75% interests in Sporting Life Inc. On August 16, 2011, the Company acquired William Ashley China Corporation. On March 24, 2011, an indirect wholly owned subsidiary of Fairfax completed the acquisition of The Pacific Insurance Berhad. On February 9, 2011, an indirect wholly owned subsidiary of Fairfax completed the acquisition of First Mercury Financial Corporation. In October 2012, its RiverStone runoff subsidiary acquired all the outstanding shares of Brit Insurance Limited.

Advisors' Opinion:

• [By Infinity Group]

  With 515 million shares outstanding, this equates to 33% of all shares being shorted. It should also be noted that Prem Watsa's Fairfax Financial Holdings (FRFHF.PK) is holding 51.8 million BlackBerry shares. Prem Watsa stated at the annual FairFax shareholders meeting that Fairfax is holding a long position with BlackBerry and anticipates shareholder value increasing over the next 2-3 years. The cost basis for FairFax financial holdings is approximately $17 per BlackBerry share.

• [By Alex Jordon]

  There's talk that Prem Watsa, head of Fairfax Financial Holdings (FRFHF.PK), could possibly be involved in a privatization bid for the company. Consider:

Hot Insurance Stocks To Own For 2015: Cincinnati Financial Corporation(CINF)

Cincinnati Financial Corporation engages in the property casualty insurance business in the United States. Its Commercial Lines Property Casualty Insurance segment provides coverage for commercial casualty, commercial property, commercial auto, and workers? compensation. It also offers specialty packages, including coverages for property, liability, and business interruption for specific industry classes, such as artisan contractors, dentists, or street businesses. In addition, this segment provides contract and commercial surety bonds, fidelity bonds, and director and officer liability insurance, as well as machinery and equipment coverage. The company?s Personal Lines Property Casualty Insurance segment offers coverage for personal auto and homeowners, as well as other insurance products, such as dwelling fire, inland marine, personal umbrella liability, and watercraft coverages to individuals. Cincinnati Financial?s Excess and Surplus Lines Property Casualty Insurance s egment offers commercial casualty insurance that covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations, including products and completed operations; and commercial property insurance, which insures loss or damage to buildings, inventory, equipment, and business income from causes of loss, such as fire, wind, hail, water, theft, and vandalism. The company?s Life Insurance segment provides term insurance; universal life insurance; whole life insurance; and worksite products, which include term, whole life, universal life, and disability insurance offered to employees through their employer. This segment also markets disability income insurance, deferred annuities, and immediate annuities. Its Investment segment invests in fixed-maturity investments, equity investments, and short-term investments. Cincinnati also offers commercial leasing and financing services. The company was founded in 1950 and is headquarte red in Fairfield, Ohio.

Advisors' Opinion:

• [By Charles Carlson]

  If you are new to DRIP investing, treat yourself to a few DRIPs this holiday season. Trust me��t'll change your life.

  American Water Works (AWK)��ielding 2.7% with a DRIP minimum of $100
  
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  CVS Caremark (CVS)��ielding 1.4% with a DRIP minimum of $100
  
  Dominion Resources (D)��ielding 3.4% with a DRIP minimum of $40
  
  Domino's Pizza (DPZ)��ielding 1.2% with a DRIP minimum of $65
  
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  Tim Hortons (THI)��ielding 1.7% with a DRIP minimum of $25
  
  

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Hot Insurance Stocks To Own For 2015: Muenchener Rueckversicherungs Gesellschaft AG in Muenchen (MUV2)

Muenchener Rueckversicherungs Gesellschaft AG in Muenchen is a Germany-based holding company engaged in reinsurance and insurance business fields. The Company diversifies its operations into reinsurance, primary insurance, Munich Health and Asset management. The Reinsurance business comprises five divisions: Life; Europe and Latin America; Germany, Asia Pacific and Africa; Special and Financial Risks, and Global Clients and North America. The business covers a range of products from traditional reinsurance products to solutions for risk assumption. The Company's primary insurance activities are combined into the ERGO Insurance Group (ERGO) and offers direct insurance, life, property-casualty, health, legal expenses and travel insurance products. It covers the Company's international health reinsurance business and health primary insurance outside Germany and engages the risk management services. The Asset management business handles the investment activities of Munich Re and ERGO. Advisors' Opinion:

• [By Jonathan Morgan]

  Munich Re (MUV2), the world�� biggest reinsurer, dropped 4.9 percent to 145.25 euros after it said second-quarter profit fell 35 percent, missing analysts��estimates, as claims arising from natural disasters rose. Net income dropped to 529 million euros from 808 million euros a year earlier, trailing the 557.1 million-euro average estimate of analysts surveyed by Bloomberg.

Hot Insurance Stocks To Own For 2015: ING Groep NV (INGA)

ING Groep N.V. (ING) is a global financial institution offering banking, investments, life insurance and retirement services to meet the needs of the customers. The Company�� segments include banking and insurance. Banking segment includes retail Netherlands, retail Belgium, ING direct, retail central Europe (CE), retail Asia, commercial banking (excluding real estate), ING real estate and corporate line banking. Insurance segment includes insurance Benelux, insurance central and rest of Europe (CRE), insurance United States (US), Insurance US closed block VA, insurance Asia/Pacific, ING investment management (IM) and corporate line insurance. In November 2013, the Company completed the sale of ING Hipotecaria to Banco Santander (Mexico), S.A. In December 2013, the Company completed the sale of its 33.3% interest in China Merchants Fund to its joint venture partners China Merchants Bank Co Ltd and China Merchants Securities Co Ltd, and divested ING Life Korea to MBK Partners. Advisors' Opinion:

• [By Sofia Horta e Costa]

  ING (INGA), which received a 10 billion-euro government bailout in 2008, gained 5.1 percent to 8.26 euros. Underlying pretax profit for the banking unit rose 14 percent to 1.15 billion euros in the second quarter as the interest margin improved and cost cuts paid off, the biggest Dutch financial-services company said.

Hot Insurance Stocks To Own For 2015: Aviva PLC (AVV)

Aviva plc (Aviva) is an insurance group engaged in provision of products and services, such as long-term insurance and savings, fund management and general insurance. Aviva provides long-term insurance and savings, general and health insurance, and fund management products and services. Its business is managed on four geographic regions: United Kingdom, Europe, North America and Asia Pacific. The four regions, together with Aviva Investors, function as six operating segments. The UK region is split into the UK Life and UK General Insurance segments, which undertake long-term insurance and savings business and general insurance, respectively. In April 2013, it transferred its holding in Spanish joint venture Aseval to Bankia. In October 2013, Aviva sold Aviva USA Corporation to Athene Holding Ltd. Effective December 12, 2013, Redefine International Plc, a unit of Redefine Properties Ltd, acquired Weston Favell Shopping Centre from Aviva Commercial Finance Ltd, a unit of Aviva plc. Advisors' Opinion:

• [By Namitha Jagadeesh]

  Kabel Deutschland Holding AG rose to a record after getting an offer from Liberty Global Plc. Aveva Group Plc (AVV) jumped 5.4 percent as Citigroup Inc. upgraded the shares. Danske Bank A/S (DANSKE) dropped 6.1 percent after Denmark�� financial regulator ordered it to increase its risk-weighted assets. Royal Imtech NV fell to the lowest price since 2004 after posting a first-quarter loss on costs relating to a fraud investigation.

Hot Insurance Stocks To Own For 2015: Allstate Corp (ALL)

The Allstate Corporation (Allstate), November 5, 1992, is a holding company for Allstate Insurance Company. The Company�� business is conducted principally through Allstate Insurance Company, Allstate Life Insurance Company and their affiliates. It is engaged, principally in the United States, in the property-liability insurance, life insurance, retirement and investment product business. Allstate's primary business is the sale of private passenger auto and homeowners insurance. The Company also sells several other personal property and casualty insurance products, select commercial property and casualty coverages, life insurance, annuities, voluntary accident and health insurance and funding agreements. Allstate primarily distributes its products through exclusive agencies, financial specialists, independent agencies, call centers and the Internet. It conducts its business primarily in the United States. Allstate has four business segments: Allstate Protection, Allstate Financial, Discontinued Lines and Coverages and Corporate and Other. The Company is a personal lines insurer in the United States. Customers can access Allstate products and services, such as auto insurance and homeowners insurance through nearly 12,000 exclusive Allstate agencies and financial representatives in the United States and Canada. In October 2011, the Company acquired Esurance and Answer Financial from White Mountains Insurance Group.

ALLSTATE PROTECTION SEGMENT

In this segment, the Company principally sells private passenger auto and homeowners insurance through agencies and directly through call centers and the Internet. These products are marketed under the Allstate, Encompass and Esurance brand names. The Allstate Protection segment also includes a separate organization called Emerging Businesses, which comprises Business Insurance (commercial products for small business owners), Consumer Household (specialty products including motorcycle, boat, renters and condominium insurance policies), A! llstate Dealer Services (insurance and non-insurance products sold primarily to auto dealers), Allstate Roadside Services (retail and wholesale roadside assistance products) and Ivantage (insurance agency). The Company also participates in the involuntary or shared private passenger auto insurance business in order to maintain its licenses to do business in many states. In some states, Allstate exclusive agencies offer non-proprietary property insurance products. Allstate brand auto and homeowners insurance products are sold primarily through Allstate exclusive agencies and serve customers who prefer local personal advice and service and are brand-sensitive. In most states, customers can also purchase certain Allstate brand personal insurance products, and obtain service, directly through call centers and the Internet.

During the year ended December 31, 2011, total Allstate Protection premiums written were $25.98 billion. Its broad-based network of approximately 10,000 Allstate exclusive agencies in approximately 9,700 locations in the United States produced approximately 86% of the Allstate Protection segment's written premiums in 2011. It provides personal property and casualty insurance products through independent agencies in the United States. Additionally, Allstate distribution, through brokering arrangements, offers non-proprietary products to consumers when an Allstate product is not available.

ALLSTATE FINANCIAL SEGMENT

Allstate Financial segment provides life insurance, retirement and investment products, and voluntary accident and health insurance products. Its principal products are interest-sensitive, traditional and variable life insurance; fixed annuities, including deferred and immediate; and voluntary accident and health insurance. Its institutional products consist of funding agreements sold to unaffiliated trusts that use them to back medium-term notes issued to institutional and individual investors. Banking products and services were offered to! customer! s through the Allstate Bank through September 2011. In 2011, after receiving regulatory approval to voluntarily dissolve, Allstate Bank ceased operations.

The Company sells Allstate Financial products to individuals through multiple intermediary distribution channels, including Allstate exclusive agencies and exclusive financial specialists, independent agents, specialized structured settlement brokers and directly through call centers and the Internet. The Company sells products through independent agents affiliated with approximately 125 master brokerage agencies. Independent workplace enrolling agents and Allstate exclusive agencies also sell its voluntary accident and health insurance products primarily to employees of unaffiliated businesses. Its mortgage loan portfolio, which is primarily held in the Allstate Financial portfolio, totaled $7.14 billion as of December 31, 2011

Allstate Financial, through several companies, is authorized to sell life insurance and retirement products in all 50 states, the District of Columbia, Puerto Rico, the United States, Virgin Islands and Guam. Allstate Financial distributes its products to individuals through multiple distribution channels, including Allstate exclusive agencies and exclusive financial specialists, independent agents (including master brokerage agencies and workplace enrolling agents), specialized structured settlement brokers and directly through call centers and the Internet.

OTHER BUSINESS SEGMENTS

The Company�� Corporate and Other segment consistsof holding company activities and certain non-insurance operations. It�� Discontinued Lines and Coverages segment includes results from insurance coverage that it no longer writes and results for certain commercial and other businesses in run-off. Its exposure to asbestos, environmental and other discontinued lines claims is presented in the segment. The segment also includes the historical results of the commercial and reinsurance businesses ! sold in 1! 996.

Advisors' Opinion:

• [By Russ Krull]

  Allstate (NYSE: ALL  ) put $1.25 billion in its good hands with $1 billion split between 10- and 30-year notes and another $250 million of perpetual preferred shares. The money is going to help fund a $2.2 billion tender offer for nine series of notes, all with higher rates than the new notes and most with higher rates than the new preferred shares.

• [By Dan Caplinger]

  What's been up with Cincinnati Financial lately?
  Property and casualty insurance companies have seen some major ups and downs over the past few years, as a series of major catastrophic events have led to extremely bad losses. But, while industry giants Allstate (NYSE: ALL  ) and Travelers (NYSE: TRV  ) posted losses related to Hurricane Sandy of more than $1 billion each, Cincinnati Financial largely dodged Sandy's bullet, with losses of only $30 million. Yet, players throughout the industry have seen the long-term benefit from those events of stronger pricing power at policy-renewal time and, if the bad loss experience finally comes to an end, that will mean even bigger profits for Cincinnati Financial and its peers.

Hot Insurance Stocks To Own For 2015: AIA Group Ltd (AAIGF.PK)

AIA Group Limited is an investment holding company. The Company and its subsidiaries are engaged in provision of products and services to individuals and businesses for their insurance, protection, savings, investment and retirement needs. The Company operates life insurance business, providing life, pensions, and accident and health products to customers in its local market, and distributes related investment and other financial services products. The Company serves more than 100,000 corporate clients with more than 13 million group insurance scheme members. It has operations in Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Indonesia, Vietnam, India, Australia, Taiwan, New Zealand, Macau and Brunei. As of November 30, 2012, its subsidiaries included American International Assurance Company, Limited (AIA Co.), American International Assurance Company (Bermuda) Limited (AIA-B), AIA Australia Limited and PT AIA Financial, among others. Advisors' Opinion:

• [By Holly LaFon]

  Berkowitz�� top holdings continue to be: American International Group Inc. (AIG), AIA Group Ltd. (AAIGF.PK), Sears Holdings Corp. (SHLD), Berkshire Hathaway Inc. (BRK.B) and Brookfield Asset Management Inc. (BAM).

5 of Last Week's Biggest Winners

What's better than momentum? Mo' momentum. Let's take a closer look at five of this past week's biggest scorchers.

Company

July 5

Weekly Gain

Celldex Therapeutics (NASDAQ: CLDX  )	$21.27	36%
Novavax (NASDAQ: NVAX  )	$2.62	28%
Zynga (NASDAQ: ZNGA  )	$3.45	23%
Glu Mobile (NASDAQ: GLUU  )	$2.55	15%
Tesla Motors (NASDAQ: TSLA  )	$120.09	12%

Source: Barron's.

Let's start with Celldex Therapeutics. The biotech kicked off the week by announcing a pilot study in treating dense deposit disease, but then the fireworks started when Mad Money's Jim Cramer made bullish comments about the company during Monday night's show. Guggenheim followed, initiating coverage of Celldex with a "buy" rating and a $24 price target.

Novavax surged on encouraging news for a treatment that's still early in the regulatory approval process. Positive top-line safety and immunogenicity data for its promising respiratory syncytial virus vaccine in elderly adults sent the stock higher, but we're still in the first phase of the clinical trials process.

Zynga soared after tapping Xbox boss Don Mattrick as its new CEO. Founder Mark Pincus will stick around as board chairman and chief products Ooficer, but having a prolific new CEO step in is impressive.

Zynga has been a disaster since going public at $10 in late 2011. Executives began bolting last year as the stock price tanked and bookings weakened. Mattrick's arrival won't change that overnight, but the perception of the leading player in social and casual games certainly improves.

Glu Mobile moved 15% higher on the week. The maker of mobile games introduced a new title on Wednesday. Tons of Guns is a free-to-play first-person shooter in which players have to reclaim their armories through a series of battles.

However, clearly Glu's pop doesn't materialize if it wasn't for the news at Zynga. Mattrick's arrival signals validation for the entire niche of social and casual gaming.

Finally, we have Tesla Motors accelerating to yet another all-time high. The darling among electric-car makers impressed investors by announcing that it has received hundreds of orders for its Model S sedan in China, even though the fast-growing automaker has yet to even announce pricing for the vehicle in the world's most populous country.

Don't stop here -- check out three more winners
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Google Wants to Keep More for Itself

There are plenty of reasons wireless carriers tend to prefer Google (NASDAQ: GOOG  ) Android over Apple (NASDAQ: AAPL  ) iOS. There's more hardware competition within the Android ecosystem, putting downward pressure on pricing -- and device subsidies. Carriers are able to pre-install their own bloatware in an effort to promote their own services, and frequently get branding on the devices.

On top of all that, Google has always generously shared app revenue generated from Google Play, and before that the Android Market, with the service providers. Those days may be numbered, though, as Big G reportedly now wants to keep more for itself.

The current arrangement entails splitting 70% of revenue with developers and 25% with carriers, while only 5% goes to Google. Macquarie analysts Eugene Jung and Ben Schachter believe that Google is negotiating a higher cut of Google Play revenue, hoping to keep upwards of 15% of content sales. The search giant is supposedly in negotiations with South Korean carriers, but Schachter thinks the same is true in other countries.

The analyst estimates that Google Play generated approximately $350 million in gross revenue last month, based on data from app analytics specialist Distimo. Distimo's latest public report is here (link opens a PDF). That translates into just a $17.5 million cut at the current 5% rate. The higher rate would triple that figure to $52.5 million. Schachter believes the change could result in roughly $500 million in Google Play profits next year.

For now, Apple still dominates the global app economy, with ABI Research separately estimating that the Mac maker will grab $18 billion of the $27 billion market this year. Developers get the same 70% cut on either platform, but iOS users have demonstrated a higher propensity to pay for apps as a whole.

While Google has never disclosed Android-related revenue directly, investors have always figured it wasn't a major profit center, since the operating system is open source and Google also shares search and ad revenue with its partners (much like the traffic acquisitions costs it pays for distribution on the desktop). That's particularly true when considering Apple's claim that it operates the App Store near breakeven. If a 30% cut just covers operating expenses, what can a 5% cut pay for?

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An extra $500 million in annual profit wouldn't move the needle -- the Motorola subsidiary would blow through that in operating losses in less than two quarters at the current run rate.

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

Samsung slugs it out with Apple for consumers

SEOUL — In the South Korean industrial town of Gumi, about a 45-minute helicopter ride southeast of here, Samsung Electronics factory workers, nearly all of them young women, are methodically applying the finishing touches on Galaxy S5s.

The launch of Samsung's newest flagship smartphone on April 11 was a little over a week away, and though most of the Galaxy S5 manufacturing process in the factory is automated, workers on this day were putting the backs of AT&T Galaxy S5 phones on or manually removing the stickers on certain tiny components.

Not far away on the Gumi campus, Samsung's very first mobile phone, the SH-100, is on display. A monstrously large and heavy contraption compared to today's models, it launched during the 1988 Seoul Olympics. Samsung pays homage to its remarkable mobile past at Gumi, where walls of about 1,800 phones introduced by the Korean electronics giant are encased behind glass and displayed by year.

Could 2014 be the year Samsung KOs rival Apple in its dogged pursuit of the mantle as top consumer-tech brand? Silicon Valley's marquee heavyweight bout is all the buzz in tech.

In this escalating slugfest, Samsung has become tech's Joe Frazier to Apple's Muhammad Ali, less flashy but tenacious in battering its opponent with a flurry of new products. Apple's product arsenal remains select — by design.

They compete on the airwaves, with clever take-downs of each other's products. They trade legal barbs in courtrooms, over complicated legal patent disputes. They were principal combatants after a record-breaking selfie from Ellen DeGeneres. But they mostly compete in showrooms, where nothing less than the $300 billion worldwide smartphone industry is at stake. Samsung sold 314 million smartphones last year — twice that of Apple. But iPhone and iPad remain dominant in the U.S., cultural icons that many consumers are reluctant to abandon.

It won't be easy. Apple still commands the loyalty of its customers who re-buy its highly regar! ded products at an industry-high rate, and it still can make or break a market with one product. (See iPhone, iPad and — perhaps? — iWatch.) Innovation remains a hotly contested battleground, in markets and in court, between Apple and Samsung.

"Apple's approach is much more sustainable," says Ben Bajarin, an analyst at Creative Strategies. "IPhone is still dominant in the U.S.; Apple's hardware and software are highly differentiated from what else is in the market; and it has incredible brand loyalty."

What the Korean electronics giant is attempting to do is nothing short of a sea change in tech: upend the competitive and innovative landscape, and displace Apple as the go-to choice for consumer-electronics devices.

Apple may be the main event, but it's also worth watching to see how Samsung contends with other tech heavyweights, notably longtime Android partner Google. On its newest smartwatch, Samsung dumped Android in favor of the software it has its own vested interest in called Tizen. But Samsung has also pledged support for Android Wear, Google's own emerging new wearable computing initiative.

The launch of the S5 and three new wearable devices underscores Samsung's relentless pursuit of not just consumers and big business but the most coveted of commodities in Silicon Valley: attention.

It has spent the better part of two years flooding the market with cereal spoon-dropping gadgets and blitzing the airwaves with ads in an audacious bid to cajole consumers weaned in the age of iPhone and iPad. Samsung has stolen market share from Apple in smartphone and tablet sales, both worldwide and in the U.S.

At the same time, it is climbing Fortune's annual Most Admired Companies list, and is now No. 21, still far off from Apple, which has topped Fortune's list for seven straight years.

Going where Apple is absent

Samsung's stated goal is to hit revenues of $400 billion by 2020, up from $217 billion, and be a top-five global brand by then. By any measure, Sa! msung is ! already an international powerhouse, a status Chairman Lee Kun-Hee set in motion as far back as 1993, when he declared that Samsung would have to "change everything except your wife and children."

This month, the company offered USA TODAY unfettered, behind-the-scenes access to its testing and design labs here. It outlined its product plans and a glimpse into its highly regimented business culture. (USA TODAY paid for airfare and hotel.)

It's nearly lunchtime at Samsung's sprawling Digital City headquarters in Suwon, outside Seoul. The spacious Delacourt (Delicious & Delightful Court) cafeteria is teeming with employees. A sign on the wall, in English, reads "Eat Love Work." The atmosphere is collegial.

Some employees skip the food: They're swimming in a gigantic indoor pool, jogging along an indoor track or exercising in a health club facility. Someone explains the hours are restricted during the day. Folks are expected back at work.

Samsung has out-flanked Apple by venturing to parts of the market where the Silicon Valley company is absent — with larger phones, larger tablet displays, smartwatches and aggressive pricing — says Charles King, principal analyst at Pund-IT.

The strategy has worked swimmingly. Between 50% and 60% of all Android phones branded worldwide are Samsung. "There was a jump ball (a few years ago) for which hardware manufacturer would compete with Apple: Nokia, BlackBerry, Motorola and HTC," says Gene Munster, senior analyst at investment bank Piper Jaffray. "Samsung was not part of the discussion then. Now, it is a ball hog."

"When we introduced the Galaxy Note in 2011, we raised some eyebrows, but we knew the larger screen would enhance the consumer's experience," says Gregory Lee, CEO of Samsung North America. "We won consumers over with the large-screen smartphone and ultimately started the trend for other manufacturers to follow."

The Next Big Thing (and bet)

Samsung's Sisyphean quest to unseat Apple rests, in par! t, on the! success or failure of its latest flagship, the Galaxy S5. That will be among the biggest story lines of the intensifying rivalry this year. So will Samsung's deeper push into wearable technology, with the Gear Fit, Gear 2 and Gear 2 Neo smartwatches that arrived just as the new phone did, and ahead of whatever Apple has up its sleeve in the wearable computing category. Samsung's first smartwatch was a dud.

Samsung competes in other areas where Apple is a mere bystander, notably household appliances such as refrigerators and washer-dryers. It envisions health and medical equipment as an area of future growth.

But the fuller narrative is about how the Korean electronics giant cultivates its relationship with consumers worldwide. The products are there, but is a loyal, long-standing audience, asks Munster. He points to 90% repeat buy-rates for Apple products.

Samsung invests heavily in R&D, to the tune of $13.6 billion or about 6.3% of annual sales last year. Indeed, more than 69,000 Samsung employees globally, a fourth of its workforce, are dedicated to R&D or focused on future products.

"There is a philosophy in Samsung that says we start from the consumer and incorporate the future in (them)," Samsung Executive Vice President Donghoon Chang said in an interview in Seoul.

Shifting its center of gravity

What Samsung also intends to offer consumers is a new business wrinkle. The company is making a "lifestyle play," as it did when Academy Awards host DeGeneres crashed Twitter with a selfie that was retweeted a record 3.4 million times. (To be fair, DeGeneres tweeted from an iPhone backstage.)

So-called "organic moments" as those not only highlight Samsung products — a Note 3 phone in Ellen's case — but resonate with consumers, says Todd Pendleton, chief marketing officer of Samsung Telecommunications America.

"The Ellen selfie was one of those moments you can't plan or orchestrate," Pendleton says. "It was a true moment of capturing joy among ! some of t! he most famous people in the world."

Apple under Steve Jobs famously chose the products it thought best for the customer. Samsung takes a near polar opposite approach, relying heavily on customer input and market research.

Apple, which has been noticeably quiet this year, declined to comment for this report.

Analysts say Apple's silence merely masks an ambitious new product lineup in the works, led by the long-rumored iWatch, larger-screen iPhone 6, iPad Air 2 and Apple TV.

Apple's possible product road map highlights the impact Samsung has had on it and the rest of the tech industry.

The technological showdown comes against a backdrop of legal jousting. While Samsung says it received 4,676 patents in the U.S. in 2013 — second only to IBM — Apple and Samsung resumed their patent battle in federal court in San Jose, Calif., this month, with claims and counter-claims of ripping off smartphone and tablet designs and features.

The court contretemps adds to a battle that could linger for years, given the size and market prowess of each company.

On a cool April afternoon, a Samsung helicopter lands in Gumi on Samsung's Smart City campus. Inside an assembly plant, the room is well lit. A wall adjacent to the factory floor shows pictures of workers who found time to volunteer their time — it is labeled the Corridor of Volunteer Activity. But it's all business now. The women are laser-focused on the delicate tasks at hand.

In the slug fest against Apple and others, there is apparently still too much to be done at Samsung.

Baig reported from Seoul, Swartz from San Francisco.

Drug Rejected! Let's Rejoice?

AVEO Pharmaceuticals' (NASDAQ: AVEO  ) announced yesterday that the Food and Drug Administration rejected its kidney cancer drug tivozanib.

No surprise there. The briefing documents for the advisory panel meeting expressed the FDA reviewers' negative opinion, and tivozanib's fate was sealed when the committee voted 13-1, recommending against approving the drug.

What is a little surprising is that shares of AVEO jumped 8% on the news and are up another 6% today.

But only a little.

Call it a "cover the short on the news." Not as catchy as "sell the news," but it works in the other direction as well. After the advisory committee meeting, AVEO stock continued to fall, and the bump over the last two days puts it about where it traded after the meeting.

I certainly didn't see anything in the rejection announcement nor today's conference call  that would make AVEO worth more after the rejection. To get tivozanib approved for kidney cancer, the FDA wants a new clinical trial since the overall survival data was confounded -- to say the least -- by patients crossing over from the control group to take tivozanib as well.

But AVEO and its partner Astellas don't plan to fund any further trials in kidney cancer. Tivozanib is dead as a treatment for kidney cancer.

Long road
AVEO is currently trading substantially below the $192 million in cash and equivalents it had at the end of the first quarter because investors know AVEO has a long road ahead. It's going to burn through all of that cash and probably substantially more before tivozanib is approved.

The drug is in two phase 2 clinical trials, one for colon cancer and another for breast cancer. The colon cancer data is due next year but is a bit of a long shot since tivozanib inhibits VEGF pathway, which hasn't been a particularly good target in colon cancer.

More promising is the potential to treat triple negative breast cancer patients who are missing the estrogen receptor, progesterone receptor, and don't overexpress HER2. It's a small chunk of the breast cancer market, but there's an unmet need, so a small gain would be meaningful. Data from that trial aren't expected until the end of next year.

Confounding choices
There's an investment lesson here: Make sure your company is running the correct clinical trial.

AVEO's mistake seems to have been going head to head against the second-best drug for kidney cancer, Nexavar sold by Onyx Pharmaceuticals (NASDAQ: ONXX  ) and Bayer, rather than top-selling Sutent sold by Pfizer (NYSE: PFE  ) . While progression-free survival was longer for the group taking tivozanib, once patients progressed, they wanted another drug. Lots of patients taking Nexavar crossed over to take tivozanib. Essentially some patients got two drugs while other only got one, confounding the overall survival data.

The most obvious solution would have been for AVEO to have gone after second-line patients that have already failed Sutent, like Pfizer did with its second-line drug Inlyta. In that scenario, comparison to placebo probably would have been sufficient, although the choice would have shrunk the potential market.

AVEO looks like it made better choices with its colon and breast cancer trials, but investors have awhile to wait to see if the better design results in better data.

While you can certainly make huge gains in biotech and pharmaceuticals, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

S&P 500’s weekly gain is best since July 2013

NEW YORK (MarketWatch) — U.S. stocks ended the holiday-shortened week with solid gains, after four straight days of increases on the S&P 500 index and Nasdaq Composite.

The benchmark index traded sideways on Thursday as investors weighed a mixed bag of earnings results and generally positive economic data. U.S. markets are closed Friday for the Good Friday holiday.

Thursday had one of the busiest schedules in the earnings season, as 25 companies on the S&P 500 reported quarterly results, according to FactSet.

The S&P 500 (SPX)  ended the day 2.54 points, or 0.1%, higher at 1,864.85 and gained 2.7% over the past four days. The weekly gain was the best since July 2013.

The Dow Jones Industrial Average (DJIA)  closed 16.31 points, or 0.1%, lower at 16,408.54. The blue-chip index gained 2.4% over the past four days, recouping all of the losses from the previous week.

The Nasdaq Composite (COMP)  added 9.29 points, or 0.2%, to 4,095.52 and gained 2.4% over the past four days.

/quotes/zigman/3870025/realtime SPX 1,864.85, +2.54, +0.14%

Read the recap of MarketWatch's live blog of today's stock-market action .

"We expect today's trading to be quiet, as a lot of investors are probably consolidating ahead of the long weekend," said Jim Russell, senior equity strategist at U.S. Bank Wealth Management.

"It appears the investing community will give somewhat of a free pass to companies this quarter, as the cold-weather excuse for lower profits is legitimate. This will not be the case in the next quarter," he added.

In economic news, two separate reports pointed to more evidence that softening in the economy was largely weather related.

The number of people who applied for unemployment-insurance benefits increased less than expected, a slight increase from the lowest level since 2007, signaling that employers are maintaining a slow pace of layoffs, according to government data released Thursday.

A reading of manufacturing sentiment in the Philadelphia region improved in April, according to data released Thursday, contradicting a disappointing regional index from the New York Fed released earlier in the week.

Google, IBM sink after disappointing results; Goldman, Morgan Stanley rise Earnings Wall

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Discuss key earnings announcements before and after results come in. Learn more

Is Medicare enough?

If you're considering getting supplement insurance, or Medigap, sign up within six months of enrolling in Medicare.

NEW YORK (Money Magazine) My father just went on Medicare. Should he buy Medigap insurance? Which policy is best? -- Joe, Houston.

If your dad isn't insured by a former employer, he should buy supplement insurance, or Medigap, which pays for some costs not covered by Medicare.

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And, says Bonnie Burns, a policy specialist with California Health Advocates, he should sign up within six months of enrolling in Medicare, when he can't be rejected for health reasons (some states let you qualify later on for a similar six-month window if your employer plan is canceled).

Since switching policies later may involve a physical, your dad's best plan is one that suits him over time, not just one that meets his needs cheaply now.

All policies must match one of Medicare's 10 standardized plans -- from basic coinsurance to coverage of skilled nursing. Learn more at Medicare.gov.

1 Chart Showing the Stunning Reversal of America’s Energy Future

It wasn't all that long ago that we were worried about peak oil. Those fears have largely vanished thanks to booming American oil production. It's a stunning reversal that's perfectly captured in the following chart detailing the change in America's proved oil reserves over the past 30 years.

Source: U.S. Energy Information Agency 

America began turning around its reserve picture about five years ago. This is when energy companies like EOG Resources (NYSE: EOG  ) and Continental Resources (NYSE: CLR  ) discovered that we actually could economically produce oil out of the Eagle Ford and Bakken Shale plays. The ensuing boom now has America's proved oil reserves at the highest level since 1976.

Drilling down into our proved reserves
Last week the U.S. Energy Information Agency released its latest proved reserve data for 2012. Proved reserves are the energy resources that the industry is reasonably certain can be produced with current technology and economics. While the data is a bit behind, it still shows the remarkable growth experienced by America's energy industry over the past few years. What it shows is that 2012 was simply a remarkable year for the energy industry. Overall, energy companies boosted in proved oil reserves by 4.5 billion barrels to a total of 33 billion barrels of oil. It was the largest reserve boost since 1970 and represented a 15% surge in proved oil reserves.

Texas led the way with nearly 3 billion barrels of reserve additions as companies like EOG Resources and Pioneer Natural Resources  (NYSE: PXD  )  fueled capital into developing and exploring the oil-rich Eagle Ford Shale and Permian Basin. Texas was followed by North Dakota, which added more than a billion barrels of oil thanks to the hard work of companies like Continental Resources. As the following map shows, those two states really stood alone in driving oil reserve growth in America.

Source: U.S. Energy Information Agency

New data is actually pretty dated
As remarkable as these numbers are it still represents the very beginning of the oil boom. Last year saw energy companies focus on spacing wells closer together, testing new hydrocarbon producing zones and improving overall efficiencies. That suggests that there's a lot more reserve additions to come as the industry becomes more certain that it can produce the energy found in the rocks underneath our nation. In fact, most energy producers believe that shale plays like the Bakken, Eagle Ford, and Permian Basin each hold more oil potential than our nation's total current proved reserves.

For example, Continental Resources CEO Harold Hamm believes that new technology will ultimately enable producers to unlock more than 45 billion barrels of oil from the Bakken Shale. That's still a small fraction of the estimated 900 billion barrels of oil trapped within the rocks below North Dakota. Meanwhile, we're seeing companies like EOG Resources continue to revise Eagle Ford Shale oil recovery estimates higher. EOG Resources has revised its Eagle Ford estimate upward by 250% over the past few years and now believes it will ultimately recovery 3.2 billion barrels of oil equivalent from this Texas shale play.

Meanwhile, producers are using the combination of horizontal drilling and hydraulic fracturing that was the key to these two shale plays in new areas all across the country. In the Permian Basin, for example, Pioneer Natural Resources sees this combination being the key to unlocking upward of 75 billion barrels of oil equivalent, which is 25 billion barrels of oil equivalent more than the company thought the industry would recover just last year. As the following slide shows, Pioneer Natural Resources believes that it's sitting atop the second largest oilfield in the world.

Best Defense Companies To Watch In Right Now

Source: Pioneer Natural Resources Investor Presentation (Link opens a PDF)

Needless to say, as big as 2012's proved reserve additions were, it's likely only the beginning of surging reserve additions in America.

Investor takeaway
We're still in the very early innings of America's energy boom. The energy industry is just beginning to hit its stride, while continuing to find additional qualities of oil resources. Not only is that changing the game for our nation but it is opening the door for investors to enjoy potentially game-changing returns. 

The $600 billion problem holding back the energy boom
America's oil boom in creating a major opportunity for investors like you. It is an opportunity that even the IRS doesn't want you to miss. That is why it is offering you a special tax advantage to invest in the companies we need to fix the $600 billion problem with getting American energy out of the ground and on to the market. To learn more about the energy companies using a small IRS "loophole" to help line investor pockets be sure to check out our special report "The IRS Is Daring You To Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Telecom Giant Keeps Opening Key Doors to Success

Top 10 Internet Companies To Invest In Right Now

As well as a diversified business, having an extensive footprint in many different regions allows companies to avoid leaving their success subject to the economic and political swings of one country. This compelling strategy has been properly understood and carried out by telecommunications leader Orange ADR (ORAN). Based in France, the company has expanded its services onto 32 other countries, serving a total of 236 million customers. Hence, it has become one of the world's largest telecommunications carriers and the third largest wireless operator in Europe.

The firm provides local phone, domestic and international long distance, wireless data communications, Internet access, multimedia, broadcast and cable TV services. Its business arm, Orange Business Services, accounts for 15.9% of the company's sales and is one of the leading providers of communications services to multinational companies.

A Healthy Management

In order to counter the aggressive pricing strategy from wireless new entrant Iliad SA (ILD) in France, Orange was forced to reduce prices. Thus, the firm has continued to add wireless subscribers but at a lower average revenue per user, mainly through its low-end Sosh brand.

Further, its existing contract base keeps rolling into lower priced plans. As a result, the company's revenue has plunged, in spite of which the firm has managed to improve its bottom line year over year in 2013.

Management's efficiency is also evidenced by its decision to reduce its non-core assets in order to concentrate on its most profitable businesses. Consequently, almost nine months after its initial tender, Orange divested its Dominican unit to Luxemburg-based Altice SA (ATC) for $1.4 billion last week.

The news boosted its stock price, which climbed 2.31% on the NYSE last Wednesday. This operation provides the company with significant cash volume to reduce its debt burden and invest in Europe and other emerging markets.

Growth Drivers

The company is accelerating infrastructural developments to drive 4G LTE expansion in order to support wireless growth in France and other key regions across Europe. In 2013, it captured 40% of the French population with 4,200 sites and it also reached 0.5 million customers and 30% of its network coverage in Spain. Noteworthily, LTE network expansion will foster long-term growth in the company's mobile data business.

Apart from its dominant position in France, Orange is also Poland's incumbent telecom operator. Its leadership in both countries has allowed the firm to spread its costs over a larger customer base and also to benefit from greater power to negotiate pricing when buying equipment.

Furthermore, the company is enjoying substantial growth in Africa and the Middle East, where it boasts 106.1 million wireless users, almost one third of its total customer base. In most of these countries the firm is the first or second operator by number of subscribers, thereby benefiting from the same scale advantages it has in France. Put together, all these operations play a significant role in the company's economic moat and in its revenue and cash generation.

Valuation

All the aforementioned traits and strategies support a positive outlook on the firm's prospects and have earned it an Outperform recommendation from Zacks.

Orange stock trades at 15.50 its trailing earnings, a discount compared to its peers' average of 16.80. And although its 7.69% return on equity is lower than its competitors' average of 12.39%, it has been following an upward trend since January 2013.

Its dividend yield and payout ratio are higher, delivering 4.04 and 0.62, respectively, against its competitors' 3.76 and 0.58. Investment guru Joel Greenblatt (Trades, Portfolio) recently incorporated Orange to its portfolio in accordance with my bullish feeling about the firm's ability to keep itself on the growth trajectory.

Disclosure: Patricio Kehoe holds no position in any stocks mentioned.

About the author:Patricio KehoeA fundamental analyst at Lone Tree Analytics

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Why Abercrombie's Earnings Came Up Too Short

Abercrombie & Fitch (NYSE: ANF  ) just saw a first quarter that came up too short for investors. Overall sales are down 8.9% and the company's stock price plummeted 8% immediately following its earnings release.

A dismal quarterly report almost seems like karma for Abercrombie -- it not only comes on the heels of the resurfacing of CEO Mike Jeffries' controversial 2006 comments about only wanting good-looking clientele, but also after news that Abercrombie refuses to produce clothing above a size 10. While the controversies may not have affected Abercrombie's sales this quarter, there are several reasons behind the first-quarter backslide. Let's take a look at the nitty-gritty of this struggling retailer.

Inventory
According to Jeffries, Abercrombie's first-quarter decrease in sales was largely due to a lack of merchandise. The CEO cited "more significant inventory shortage issues than anticipated," which included lags in deliveries for the company's spring 2013 line of clothing.

This incident is a complete reversal of fortune from Abercrombie's 2012, during which the company had far too much inventory on its hands and had to majorly mark down items. Jeffries believes the company is through the worst of the clothing shortage, though, saying, "with the inventory headwinds largely behind us, we expect to see continued sequential improvement in the second quarter."

Changing tastes of American teens
Abercrombie isn't the only trendy retailer that has just had a depressing quarter. One of its closest rivals, clothier Aeropostale (NYSE: ARO  ) , is also suffering. Aeropostale's stock sank 10%, even lower than Abercrombie's, following its earnings call, which revealed a 9% drop in revenue and a 14% decline in comparable-store sales. Seeing both companies suffer so similarly may lead some to wonder if teen tastes are starting to turn elsewhere.

This wouldn't be wholly surprising. In the past, companies like Abercrombie, Aeropostale, and even Urban Outfitters have excelled at capitalizing on the tastes of the American teenager. At its best, this demographic is a wildly profitable one, and at its worst, it is incredibly volatile, with no guarantee of continued brand loyalty.

Throwing millions of dollars into research and development can pay off in the short term, but inevitably these customers grow up, and so do their tastes. While this makes way for a new crop of teens (and thus fresh revenue), there's no way to predict with 100% accuracy what these new consumers will like, much less whether it will be at all similar to the previous generation's tastes. For the moment at least, stores like Abercrombie appear to be suffering at the wrong side of this gamble.

So what does it mean?  Abercrombie isn't necessarily drowning, but its latest earning call might suggest that long-term investing in teen culture is a highly risky choice. If you can't tell whether the company will have its same customer base in 10 years, or even if its products will maintain their appeal in 10 years, you probably shouldn't trust it a chunk of your portfolio to it.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.

Evensky, Friedman, Mellan at Think Retirement Income Conference

If you’re known by the company you keep, as an advisor you couldn’t be in better company than the fellow advisors and industry gurus who will gather in Boston starting Thursday morning, Oct. 10 for the Think Retirement Income conference. While we can’t pretend to be objective, Investment Advisor Editor-in-Chief John Sullivan has put together a dynamite program whose intent is to help advisors solve the retirement income puzzle, in large measure by learning from your peers. 

The programming for this retirement planning conference with a difference was devised with the help of an all-star advisory board that includes folks like Harold Evensky, Greg Friedman, Charlie Farrell, Michael Kitces, Rob Francais and—well, the complete list is here. Many of these luminaries will sit on interactive roundtables during the show,  that runs through midday Friday, Oct. 11, with other successful RIAs.

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(Some seats are still available for the conference, being held at the Hyatt Regency Boston. You can register online here.) 

The conference will be bookended by opening day keynote speaker Charles Ellis, the management consultant and author, who will share his thoughts on What It Takes: Seven Secrets of Success from the World’s Greatest Professional Firms, with the closing keynote delivered by the always enthusiastic and inspirational Tim Noonan of Russell Investments. 

A number of other regular contributors to Investment Advisor and Research magazines and ThinkAdvisor will also be presenting, including Olivia Mellan, Ben Warwick, Philip Palaveev, Matt Greenwald, Bob Seawright, Gavin Morrissey, Ron DeLegge and Friedman. 

Look for more preview coverage now and onsite coverage on ThinkAdvisor; the Twitter hashtag for the event will be #ThinkRetirement.

View the complete agenda here, and register for the conference here.