Report: Caterpillar avoided $2.4B in U.S. taxes

Construction machinery giant Caterpillar avoided $2.4 billion in U.S. taxes by negotiating a corporate deal with Switzerland and shifting profits to a wholly-owned Swiss subsidiary, according to a Senate report issued Monday.

The Peoria, Ill.-based company eased the tax bite through an agreement that transferred its international parts-distribution division to the subsidiary, the report by the staff of the Democratic majority of the Senate Permanent Subcommittee on Investigations showed.

Despite $8 billion profit shift, no Caterpillar personnel or business activities moved from the U.S. to Switzerland, and most of the firm's parts business remains in the U.S., said the report, issued as Americans prepare for the annual April 15 tax-filing deadline.

"Caterpillar is an American success story that produces phenomenal industrial machines, but it's also a member of the corporate profit-shifting club that has shifted billions of dollars of profits offshore to avoid paying U.S. taxes," said Sen. Carl Levin, D-Mich. who chairs the panel.

The subcommittee's reports typically are issued by the panel's top Democratic and Republican members. But in a sign of disagreement by Sen. John McCain, R-Ariz., the panel's ranking GOP member, the findings were issued as a report by staffers for the Democratic majority. McCain was scheduled to address the issue at a Tuesday hearing on Caterpillar's tax strategy.

Top 10 Energy Companies To Buy For 2014

Executives from Caterpillar and PricewaterhouseCoopers, the accounting giant that audits the manufacturer and was also paid approximately $55 million for working on the tax strategy, are scheduled to testify at the hearing.

In prepared written testimony, Julie Lagacy, a Caterpillar vice president, said the manufacturer "takes very seriously its obligation to comply with the tax laws enacted by the Congress, by the states" and other jurisdictions.

"Caterpillar's effective income tax rate averages about 29%," relatively high among U.S. firms, said Lagacy. The company has added about 13,000 U.S. jobs in the last 15 years and "is proud to pay its fair share of taxes right here in the United States," said Lagacy.

PwC said its advice "helped Caterpillar evaluate how best to organize its expanding global operations" and align them "with carefully considered U.S. tax policies." The firm said it "maintained our independence with respect to Caterpillar at all times" and complied with all oversight rules.

The report is the latest in which the panel spotlighted strategies that Apple, Microsoft, Hewlett-Packard and other well-known U.S. corporations used sophisticated strategies to transform what would otherwise be substantial tax bills into major savings.

Many members of Congress have argued that such tax issues arise more from problems with the U.S. tax code than from corporate America. Tax laws allow U.S.-based companies to defer taxes on reported foreign income until they bring the profits home. As a result, domestic corporations collectively holds trillions of dollars overseas.

The subcommittee began examining Caterpillar after learning of a 2009 federal lawsuit by Daniel Schlicksup, an attorney who had worked on the firm's tax strategy. He charged that Caterpillar used a "Swiss Tax Structure" to shift profits overseas and a "Bermuda Tax Structure" to bring them back to the U.S. After Schickslup raised questions, Caterpillar retaliated by forcing him into an unwanted transfer, the lawsuit charged.

Caterpillar denied all allegations in the case, which was settled in 2012.

Reaching some of the same conclusions as the lawsuit, the subcommittee report said Caterpillar negotiated an effective tax rate of 4% to 6% with Switzerland, and then created created a Swiss subsidiary called CSARL. New licensing deals enabled the subsidiary to sell Caterpillar's third-party manufactured replacement parts to non-U.S. dealers and ! customers! without showing the proceeds as U.S. income, the report concluded.

"Caterpillar is shifting its parts profits to Switzerland, even though most of its parts operations and work is done right here in the United States," said Levin, who argued the subsidiary deals might not represent arms-length transactions.

"Nothing changed in the real world," he said, "except Caterpillar's tax bill."

Separately, the manufacturer's annual report filed in February with the Securities and Exchange Commission disclosed that the IRS has issued preliminary notices that Caterpillar owes additional federal taxes involving "certain non-U.S. operations and foreign tax credits."

"We disagree with these proposed adjustments" and will "vigorously contest" them if the IRS finalizes the preliminary assessment, Caterpillar said.

EnerSys Passes This Key Test

There's no foolproof way to know the future for EnerSys (NYSE: ENS  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

A cloudy crystal ball
In this series, we use accounts receivable and days sales outstanding to judge a company's current health and future prospects. It's an important step in separating the pretenders from the market's best stocks. Alone, AR -- the amount of money owed the company -- and DSO -- the number of days' worth of sales owed to the company -- don't tell you much. However, by considering the trends in AR and DSO, you can sometimes get a window onto the future.

Sometimes, problems with AR or DSO simply indicate a change in the business (like an acquisition), or lax collections. However, AR that grows more quickly than revenue, or ballooning DSO, can, at times, suggest a desperate company that's trying to boost sales by giving its customers overly generous payment terms. Alternately, it can indicate that the company sprinted to book a load of sales at the end of the quarter, like used-car dealers on the 29th of the month. (Sometimes, companies do both.)

Why might an upstanding firm like EnerSys do this? For the same reason any other company might: to make the numbers. Investors don't like revenue shortfalls, and employees don't like reporting them to their superiors.

Is EnerSys sending any potential warning signs? Take a look at the chart below, which plots revenue growth against AR growth, and DSO:

Top 10 Heal Care Companies To Watch For 2014

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. FQ = fiscal quarter.

The standard way to calculate DSO uses average accounts receivable. I prefer to look at end-of-quarter receivables, but I've plotted both above.

Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars indicates a trend worth worrying about. EnerSys's latest average DSO stands at 76.2 days, and the end-of-quarter figure is 75.1 days. Differences in business models can generate variations in DSO, and business needs can require occasional fluctuations, but all things being equal, I like to see this figure stay steady. So, let's get back to our original question: Based on DSO and sales, does EnerSys look like it might miss its numbers in the next quarter or two?

I don't think so. AR and DSO look healthy. For the last fully reported fiscal quarter, EnerSys's year-over-year revenue shrank 2.9%, and its AR grew 1.4%. That looks OK. End-of-quarter DSO increased 4.4% over the prior-year quarter. It was down 3.2% versus the prior quarter. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.

If you're interested in companies like EnerSys, you might want to check out the jaw-dropping technology that's about to put 100 million Chinese factory workers out on the street – and the 3 companies that control it. We'll tell you all about them in "The Future is Made in America." Click here for instant access to this free report.

Add EnerSys to My Watchlist.

Despite Their Financial Power, Women Save Less Than Men: Merrill

Women tend to save less for retirement than men, despite the fact that women now enjoy more financial power than ever.  Thirty-six percent of all U.S. businesses are owned or led by women, according to newly released findings by Merrill Lynch.

Merrill cites a number of sources — including the National Women’s Business Council for the aforementioned statistic — to conclude that women should start saving more. Merrill also cites stats by The World Bank, which predicts that women’s earnings globally will reach $18 trillion by 2014.

According to the U.S. Census Bureau, the current life expectancy for a woman is 80.5 years, while it’s 75.5 years for a man, Merrill states. “While longevity continues to increase for both sexes, the U.S. government projects that the longevity gap between men and women will exist for the foreseeable future,” Merrill notes.

That longer life expectancy means that women may need more income than men do to last through their retirement years.

“Despite their growing economic might, women still have a more difficult road to a secure retirement than men,” notes Debra Greenberg, director of IRA product management at Bank of America Merrill Lynch.

Hurdles, she says, are that women still make 80 cents for every dollar earned by men and that they are much more likely to interrupt their careers to care for a child or a parent, which can result in a reduction in both wages and Social Security benefits.

Other retirement hurdles include divorce, which tends to have a bigger financial impact on women than on men.

Merrill cites a study by Duke University and Indiana University titled “Losers and Winners: The Financial Consequences of Separation and Divorce for Men,” which showed that in the wake of a divorce, women’s household income fell 26%, compared with 15% for men.

The good news: armed with an understanding of both your retirement needs and present opportunities to invest and save, there are a number of steps women can take to overcome these retirement challenges.

Living longer often means more medical bills: Merrill cites findings by The Employee Benefit Research Institute, which found that a female retiree of 65 may need an average of $242,000 in savings for health care, insurance and other health expenses (if she has no company, military or union plan).

“Many people assume that health insurance and Medicare will pay for assisted living or a nursing home, but that’s usually not the case,” states Merrill. “For that reason, it’s usually smart to consider purchasing long-term care insurance.”

Top 5 Performing Stocks For 2014

Merrill notes that if women think there’s a possibility that they may temporarily downscale or step away from the work force at some point, it may make sense to prepare for that well in advance. “If possible, make the maximum contribution to your workplace retirement plan. If you are eligible, funnel additional funds into a traditional or Roth IRA.”

Greenberg suggests that if a woman can’t contribute to a deductible IRA because of her income level or coverage by an employer-provided retirement plan, consider a nondeductible IRA. “You’ll have to fund it with after-tax dollars and potentially pay taxes on withdrawals in retirement,” she says. “Thanks to compounded growth, spending a little less while you’re younger can help to significantly boost your retirement stash. Go through your monthly bills and identify places where you can cut back. Almost everybody can find that extra $50 a month somewhere.”

Save of the Day: Stretch your dollar for dinner

In my continued search to save you time and money, today we celebrate a great way to get dinner on the table, on a dime.

As you probably know by now, I've made it my mission to hunt down your deal requests and recently we've added food to the mix.

Every week you nominate a different food group, item or ingredient and I find the deal. Today we explore Asia with a price drop on a top cooking kit.

If you overdo it on take-out (as I do), you might not be surprised to know the average person in our region spends about $1000 per year on take-out. If Chinese or Thai tops your wishlist, today you can make some of your favorite dishes on your own for a fraction of the price.

Top 10 Cheap Companies To Watch For 2014

Check out the video above for all the details on this delicious, and inexpensive, dinner idea.

Matt Granite is a consumer reporter with Gannett's WKYC station in Cleveland. His 'Save of the Day' report offers tips to consumers on how to save money and features daily deals.

We do not get any financial compensation for mentioning any of these deals or companies. The only purpose of this segment is to save you money.

Advanced Micro Devices (AMD) Preaches Collaboration and Other News (INTC & NVDA)

Chip stock Advanced Micro Devices (NYSE: AMD) has been busy announcing new partnerships along with other news as the company continues to compete with or differentiate itself from Intel Corporation (NASDAQ: INTC) and NVIDIA Corporation (NASDAQ: NVDA). I should note that recently had an open position in Advanced Micro Devices in our SmallCap Network Elite Opportunity (SCN EO) portfolio from roughly last summer up until late January when we locked in a small loss. Because the SCN EO is a trading rather than a buy and hold portfolio, we decided to get out when shares sank once more after AMD issued an earnings report – a repeat of the performance that occured after three previous earnings reports. However and if you are an investor or trader with a longer term horizon, you might want to consider the following news about AMD:

New Gaming Partnerships and Collaborations. Late last week, Advanced Micro Devices announced three new game developer partnerships with Rebellion Developments, Square Enix® and Xaviant in order to optimize PC games to make them look and run better for every gamer on AMD hardware plus the company announced another partnership with German video game developer Crytek to add native Mantle graphics API support to CRYENGINE®. Matt Skynner, the Corporate VP and GM of AMD's Graphics Business Unit, recently had a lengthy chat with a Forbes Contributor by first "preaching a message of open collaboration as opposed to competitor Nvidia"with the writer commenting: "How widely adopted Mantle becomes following this partnership is just speculation, but it's a bright spot for a technology still in its infancy." When asked about the appeal of Mantle to developers, Skynner commented:

"I think you're seeing it. Guys like Crytek, DICE, Oxide, seeing the value and supporting it. The names associated with Mantle tell the story. As general manager for AMD's graphics I'm pretty damn happy!"

Ascendiant Capital Initiates Coverage. Analyst Cody G. Acree from Ascendiant Capital has initiated coverage of AMD with a "buy" rating and a price target of $5. Acree wrote:

"While we are not expecting any singular dramatic near-term catalyst, we do see the company working through a methodic restructuring and repositioning that has already reduced spending and earned significant wins that are driving growth at Sony (SNE), Microsoft  (MSFT), Verizon  (VZ), Apple  (AAPL) and others."

Acree noted that AMD's restructuring reduced headcount by 15% and lowered operating expenses by 26% plus he believes the company's new APU chips can help it "regain a moderate share" of the consumer PC market. On the other hand, Acree commented that he does not expect "any singular dramatic near-term catalyst."

The Next Earnings Report. Advanced Micro Devices is scheduled to next report earnings for the fiscal first quarter ending March 29, on Thursday, April 17, after the market closes. There will be an audio webcast of the teleconference over the Internet on the company's website at ir.amd.com.

Share Performance. Advanced Micro Devices is up 5.2% since the start of the year, up 59.4% over the past year and up 51.7% over the past five years while here is a look at its long term performance verses that of Intel Corporation and NVIDIA Corporation:

Finally, here is a look at the latest technical charts for all three chip stocks:

 

SmallCap Network Elite Opportunity (SCN EO) had 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.

5 Hated Earning 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 Big Tech Stocks to Trade for Gains

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.

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.

>>5 Stocks Ready for Breakouts

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.

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

GameStop

My first earnings short-squeeze play is multichannel video game retailer GameStop (GME), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect GameStop to report revenue of $3.79 billion on earnings of $1.93 per share.

>>5 Toxic Stocks to Sell Now

The current short interest as a percentage of the float for GameStop is extremely high at 28.7%. That means that out of the 113.06 million shares in the tradable float, 32.58 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of GME could easily spike sharply higher post-earnings as the bears jump to cover some of their trades.

From a technical perspective, GME is currently trending above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has been uptrending a big for the last two months, with shares moving higher from its low of $32.82 to its recent high of $39.85 a share. During that move, shares of GME have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of GME within range of triggering a major breakout trade post-earnings.

If you're bullish on GME, 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 $39.85 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 4.29 million shares. If that breakout hits, then GME will set up to re-fill some of its previous gap-down-day zone from January that started at $45.45 a share. If that gap gets filled with strong volume, then GME could easily tag $50 a share.

I would simply avoid GME 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 levels at $36.76 to $36.51 a share high volume. If we get that move, then GME will set up to re-test or possibly take out its next major support levels at $32.82 to $30 a share.

Conns

Another potential earnings short-squeeze trade idea is specialty retailer of durable consumer goods Conns (CONN), which is set to release its numbers on Thursday before the market open. Wall Street analysts, on average, expect Conns to report revenue $362.63 million on earnings of 78 cents per share.

>>5 Stocks Under $10 Set to Soar

The current short interest as a percentage of the float for Conns is extremely high at 22.1%. That means that out of the 29.18 million shares in the tradable float, 6.46 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 17.4%, or by about 958,000 shares. If the bears get caught pressing their bets into a bullish quarter, then shares of CONN could easily surge sharply higher post-earnings as the shorts rush to cover some of their trades.

From a technical perspective, CONN is currently trending above its 50-day moving average and well below its 200-day moving average, which is neutral trendwise. This stock recently gapped down sharply from $58.34 to $31.88 a share with heavy downside volume. Following that move, shares of CONN have been trending sideways between $31.17 on the downside and $37.04 on the upside. Any high-volume move above the upper-end of its recent range post-earnings could trigger a big breakout trade for shares of CONN.

If you're in the bull camp on CONN, 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 $37.04 a share to its gap-down-day high of $38.52 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1.79 million shares. If that breakout hits, then CONN will set up to re-fill some of its previous gap-down-day zone from February that started at $58.34 a share.

I would simply avoid CONN or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day moving average of $33.23 a share to its 52-week low of $31.17 a share with high volume. If we get that move, then CONN will set up to enter new 52-week-low territory, which is bearish technical price action. Some possible downside targets if CONN prints new 52-week lows are $27 to $25 a share.

SFX Entertainment

Another potential earnings short-squeeze candidate is live events and electronic music culture entertainment player SFX Entertainment (SFXE), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect SFX Entertainment to report revenue of $112.85 million on earnings of 6 cents per share.

>>3 Stocks Rising on Big Volume

Top Financial Companies To Invest In Right Now

The current short interest as a percentage of the float for SFX Entertainment is extremely high at 34%. That means that out of the 26.18 million shares in the tradable float, 8.92 million shares are sold short by the bears. This is a high short interest low float situation. Any bullish earnings news could easily send shares of SFXE sharply higher post-earnings as the bears jump to cover some of their positions.

From a technical perspective, SFXE is currently trending below its 50-day moving average, which is bearish. This stock has been downtrending badly for the last three months, with shares moving lower from its high of $12.15 to its recent low of $7.60 a share. During that downtrend, shares of SFXE have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of SFXE have started to trend sideways over the last month and change and the stock is now moving within range of triggering a near-term breakout trade.

If you're bullish on SFXE, 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 $8.57 to $8.97 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 613,932 shares. If that breakout gets underway after earnings, then SFXE will set up to re-test or possibly take out its next major overhead resistance levels at $10 to $11 a share, or even $12 a share.

I would avoid SFXE 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 levels at $7.92 to $7.60 a share and then once it takes out its all-time low of $7.53 a share with high volume. If we get that move, then SFXE will set up to enter new all-time-low territory, which is bearish technical price action. Some possible downside targets off that move are $6 to $5.50 a share.

Winnebago Industries

Another earnings short-squeeze prospect is recreation vehicle maker Winnebago Industries (WGO), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Winnebago Industries to report revenue of $199.57 million on earnings of 30 cents per share.

>>5 Rocket Stocks to Buy This Week

The current short interest as a percentage of the float for Winnebago Industries is notable at 4%. That means that out of the 27.32 million shares in the tradable float, 1.09 million shares are sold short by the bears. This isn't a huge short interest, but it's more than enough to spark a decent short-covering rally post-earnings if the bulls get the earnings news they're looking for.

From a technical perspective, WGO is currently trending below its 50-day moving average and just above its 200-day moving average, which is neutral trendwise. This stock has been uptrending over the last two months, with shares moving higher from its low of $23.18 to its recent high of $28.90 a share. During that move, shares of WGO have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of WGO within range of triggering a near-term breakout trade post-earnings.

If you're bullish on WGO, then I would wait until after its report and look for long-biased trades if this stock manages to break out above it 50-day moving average of $27.75 a share and then once it takes out some more near-term overhead resistance at $28.90 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 280,628 shares. If that breakout hits, then WGO will set up to re-test or possibly take out its next major overhead resistance levels at $33 to $40 a share.

I would simply avoid WGO 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 levels at $26.69 a share to its 200-day moving average of $25.88 a share with high volume. If we get that move, then WGO will set up to re-test or possibly take out its next major support levels at $23.18 to $20 a share.

Finish Line

My final earnings short-squeeze play is mall-based specialty retailer Finish Line (FINL), which is set to release numbers on Friday before the market open. Wall Street analysts, on average, expect Finish Line to report revenue of $529.35 million on earnings of 85 cents per share.

The current short interest as a percentage of the float for Finish Line is notable at 7%. That means that out of the 47.88 million shares in the tradable float, 3.39 million shares are sold short by the bears. This is far from a huge short interest, but it's more than enough to spark a sharp short-covering rally post-earnings if the bears get squeezed off any bullish earnings news.

From a technical perspective, FINL is currently trending above both is 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last two months, with shares moving higher from its low of $22.92 to its recent high of $28.69 a share. During that uptrend, shares of FINL have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of FINL within range of triggering a near-term breakout trade post-earnings.

If you're in the bull camp on FINL, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some key near-term overhead resistance levels at $28.69 a share to its 52-week high at $28.86 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 637,637 shares. If that breakout hits, then FINL 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 avoid FINL 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 levels at its 50-day moving average of $27.53 a share to more support at $26.13 a share with high volume. If we get that move, then FINL will set up to re-test or possibly take out its next major support levels at its 200-day moving average of $24.27 to $22.92 a share, or even $20 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 Stocks Insiders Love Right Now

>>Hedge Funds Are Selling These 5 Stocks -- Should You?

>>4 Unusual-Volume Stocks in Breakout Territory

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.

AK Steel Stock a Turnaround Story for Investors

It wasn't long ago when steel stocks were a guaranteed way to lose money in the market. This sector is famously sensitive to the world economy. Steel is the backbone of products that generally fit into the durables space or construction. When the economy stalls, individuals, corporations and governments don't make investments in this space, thereby hurting worldwide steel demand.

Now add the glut of cheap Chinese steel supply into the equation and the deck is stacked against you. That's exactly what steelmaker AK Steel (AKS) had to deal with. As a result, last year's numbers were ugly, very ugly. In fact, last year AK Steel stock lost 24 cents per share.

Well the past is the past and this year AKS  looks like a bona fide turnaround story for the ages. Estimates for this year call for AK to make between 30 cents and $1 per share. Analysts have been so bullish on AK Steel stock that in the last 60 days ten different analysts raised their estimate for the current year, and seven raised estimates for next year.

The story has been so good recently that AK Steel has surprised earnings to the upside by an average of 57% over the last 4 quarters. Early this week, news came that AK's lenders decided to extend its $1.1 billion credit facility through March 2018, when it had been set to expire in April 2016. These are all signs that things are going well over at AK Steel.

A look at AK Steel’s stock price and consensus chart details the turnaround story. From 2009 to 2013, estimates were continually slashed for AK, helping send the stock on a rocky downward trajectory. It does appear, however, that the story is changing and growth is finding its way back into the AKS picture. If the earnings picture stays positive, this $6 stock could see double digits in a heart-beat.

The technical picture is setting up nicely for those that can be patient. The chart screams momentum as this was a $3 stock a short year ago. Since then we have seen a furious rally all the way up above $8 before settling down in the trading range just above $6 this year. The 25 day moving average shifted to the right by 5 (25×5 SMA) provided support throughout the entire bull run off the bottom. Recently price has found itself under this 25×5 SMA and has had a tough time rallying above it.

Currently AK Steel stock is hanging around the 38.2% Fibonacci retracement level from the lows last April to the high in late December. This is a good sign for the stock as it shows there are plenty of buyers camped out above $5.

Any day now, you could see a break above the 25×5 on heavy volume which would give you a technical buy signal on AK Steel  stock with sound fundamentals.

AK STEEL HLDG (AKS): Free Stock Analysis Report

To read this article on Zacks.com click here.

3 Companies Betting Big on Themselves

A company's move to buy back substantial amounts of its own stock can create a lot of value for long-term shareholders. Apple (NASDAQ: AAPL  ) , Viacom (NASDAQ: VIAB  ) , and Yahoo! are doing just that, which will aid earnings-per-share growth by lowering the outstanding share count. Companies that bet heavily on their own stock tend to be good investments, as management -- which very likely has better information about the operation than outside investors -- is showing confidence in the organization.

Leading investors favor buybacks over cash dividends, due to their tax-advantaged status. Warren Buffett stated the following in his 1984 annual report:

When companies with outstanding businesses and comfortable financial positions find their shares selling far below intrinsic value in the marketplace, no alternative action can benefit shareholders as surely as repurchases.

Apple uses its massive cash balance
Apple's (NASDAQ: AAPL  ) shares have been depressed for a while now, and the stock price took another hit when the company declared earnings last quarter. In the last quarter, Apple bought $5 billion of stock at an average price of $523.51 per share. The tech giant still had $32.1 billion left from its massive $60 billion share repurchase program at the end of the December quarter. So Apple will  eventually buy back close to 7% of its outstanding shares based on its market cap of $475 billion.

CEO Tim Cook has stated on numerous occasions that he believes that Apple stock is undervalued. He told The Wall Street Journal that his company bought $14 billion worth of stock in two weeks after Apple's stock price dipped after quarterly results. As the company's current share repurchase authorization is used up, Apple will almost certainly increase its buyback program.

The company is trying to grow its user base in large, underpenetrated markets such as China. Apple's management team has stated that it has great products in their pipeline; if that is the case, Apple will generate a lot of value for shareholders down the road. Buying a lot of stock at a reasonably cheap valuation will give its earnings per share a healthy boost. 

Yahoo! is creating value through buybacks
Internet heavyweight Yahoo! has been doing a great job of ramping up its user base to more than 800 million users, including 400 million mobile users. But monetization of its various Internet properties has been lackluster. Yahoo! has put the cash it received from its partial sale of Alibaba shares to good use, repurchasing more than $5.5 billion worth of stock in the last two years and dramatically bringing down its outstanding share count. 

In the most recent earnings call, Yahoo! disclosed that its management authorized another $5 billion in stock buybacks. Once Yahoo! manages to close the gap between users and monetization, and Alibaba hits the public equity markets, the company's fundamentals will improve significantly from current levels. Yahoo!'s plan to buy back roughly 13% of its outstanding shares will boost earnings per share going forward and drive the stock price higher.

Viacom is rapidly reducing share count
Last year, media and entertainment giant Viacom  (NASDAQ: VIAB  ) announced that it would increase its stock buyback program from $10 billion to $20 billion. After its last earnings report, $8.9 billion of that repurchase program remains, which amounts 23% of the company's market cap. Viacom 10Q

Viacom's diluted EPS grew 30% in the last quarter, driven by a combination of organic earnings growth and the impact of its large share repurchase program. The company's major earnings driver is the media networks business which makes up almost 80% of its revenue. The media segment made up all of Viacom's operating income in the last quarter, as the company's filmed entertainment business suffered a loss.

The company controlled by media mogul Sumner Redstone has been creating compelling TV and film content for a long time. Its popular media networks, including MTV, VH1, Nickelodeon, and Comedy Central, reach more than 700 million households in more than 160 countries. Viacom does have a durable competitive advantage as a result of its widespread reach, strong content, and growing earnings power. Its share repurchase program will bolster its EPS substantially, and propel the stock price higher as a result.

The takeaway
Companies that have stellar competitive positions and adequate financial resources can generate a lot of value for shareholders by buying back their own stock. But companies that repurchase their own shares at very high prices destroy a lot of shareholder value. So buybacks should be analyzed carefully before being a part of an investor's thesis.

Here's a stock Motley Fool employees are investing in
Opportunities to get wealthy from a single investment don't come around often, but they do exist, and our chief technology officer believes he's found one. In this free report, Jeremy Phillips shares the single company that he believes could transform not only your portfolio, but your entire life. To learn the identity of this stock for free and see why Jeremy is putting more than $100,000 of his own money into it, all you have to do is click here now.

Existing home sales stay in winter slump

Existing-home sales slowed again in February, falling to their weakest pace in 19 months.

Last month's seasonally adjusted annual sales rate was 4.6 million, down 0.4% from the previous month, the National Association of Realtors said. January's sales rate was down 5.1% from December.

Cold weather, limited supplies of homes on the market and higher interest rates than a year ago have held back the real estate market over the fall and winter months.

The sales rate has been trending lower since last July, when it peaked for last year at 5.38 million.

Sales of single-family homes also are lower. Last month, they fell 0.2% from January's level and 6.9% from a year ago.

The harsh winter's impact showed in last month's sales by region. The annualized rate of sales fell 11.3% in the Northeast and 3.8% in the Midwest, but rose 5.9% in the West and 1.5% in the South.

NAR said higher prices and restrictive mortgage lending standards are also affecting the sales. Many first-time buyers have been priced out of the market. They accounted for 28% of February's sales, down from 30% a year ago, 32% in 2012 and 34% in 2011.

Top Long Term Stocks To Own For 2014

"Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year," said NAR chief economist Lawrence Yun.

Tight supplies of homes for sale are contributing to higher prices and quicker decisions by buyers. The median existing-home price in February was $189,000 — 9.1% above February 2013, NAR said. Thirty-four percent of the homes sold last month were on the market for less than a month compared with 31% in January.

The supply of existing homes for sale improved in February but remained low. At 2 million homes, that represents a 5.2 month supply at last month's sales pace, up fr! om 4.9 months in January. A six-month supply is considered a balanced market between buyers and sellers.

NAR's existing-home sales figures include single-family homes, townhomes, condominiums and co-ops.

Top 5 High Tech Companies To Buy For 2014

Top 5 High Tech Companies To Buy For 2014: NL Industries Inc (NL)

NL Industries, Inc. (NL) is a holding company. The Company operates in the component products industry through NL's majority-owned subsidiary, CompX International Inc. The Company operates in the chemicals industry through its non-controlling interest in Kronos Worldwide, Inc. As of December 31, 2011, it owned 87% interest in CompX International Inc and 30% interest in Kronos Worldwide, Inc. The Company also owns 100% of EWI RE, Inc., an insurance brokerage and risk management services company. In July of 2011, CompX completed the acquisition of an ergonomic component products business.

Component Products-Compx International Inc.

Through the Company's subsidiary, CompX, it manufactures components that are sold to a variety of industries including office furniture, recreational transportation (including boats), mailboxes, toolboxes, home appliances, banking equipment, vending equipment and computer-related equipment. CompX's Security Products business, with one manufacturing facility in South Carolina and one in Illinois shared with the Marine Components business, manufactures mechanical and electronic cabinet locks and other locking mechanisms used in a variety of applications including ignition systems, mailboxes, file cabinets, desk drawers, tool storage cabinets, vending and gaming machines, high security medical cabinetry, electrical circuit panels, storage compartments and gas station security. These products include disc tumbler locks, pin tumbler locking mechanisms, and eLock and Stealthlock electronic locks.

CompX's Furniture Components business, with facilities in Canada and Taiwan, manufactures a line of ball bearing slides and computer keyboard, monitor and central processing unit (CPU) support systems for use in applications, such as file cabinets, desks, computer server racks, w! all mounted computer applications, home appliances, tool storage cabinets, imaging equipment, automated tell er machines and other applications. These products include I! ntegrated Slide Lock, Ball Lock, Self-Closing Slide, articulating computer keyboard support arms along with the LeverLock keyboard arm, CPU storage devices, flat panel computer monitor support systems and keyboard, monitor and CPU wall mounts.

CompX's Marine Components business, with a facility in Wisconsin and a facility shared with the Security Products business in Illinois, manufactures and distributes stainless steel exhaust components, gauges, throttle controls, hardware and accessories primarily for performance and ski/wakeboard boats. These products include original equipment and aftermarket stainless steel exhaust headers, exhaust pipes, mufflers and other exhaust components; gauges, such as global positioning system (GPS) speedometers and tachometers; controls, throttles, steering wheels and other billet aluminum accessories, and dash panels, light emitting diode (LED) lighting, rigging and other accessories. CompX operated five manufacturing facilit ies, as of December 31, 2011, including one facility in Grayslake, Illinois that housed operations relating to Security Products and Marine Components.

Chemicals-Kronos Worldwide, Inc.

Kronos is a global producer and marketer of titanium dioxide pigments (TiO2), a base industrial product used in a range of applications. Kronos, along with its distributors and agents, sells and provides technical services for NL's products to over 4,000 customers in approximately 100 countries with the majority of sales in Europe and North America. TiO2 is a white inorganic pigment used in a range of products. Kronos offers customers a portfolio of products that include over 40 different TiO2 pigment grades. Kronos' major customers include domestic and international paint, plastics, decorative laminate and paper manufacturers. Kronos ships TiO2 to cust! omers in ! either a powder or slurry form via rail, truck or ocean carrier. Kronos and its agents and distributors pr imarily sell and provide technical services for Kronos' pr! oducts in! three markets: coatings, plastics and paper.

Kronos' TiO2 is also found in food products, such as candy and confectionaries and in pet foods. In pharmaceuticals, TiO2 is used commonly as a colorant in pill and capsule coatings, as well as in liquid medicines. Kronos owns and operates two ilmenite mines in Norway. Kronos manufactures and sells iron-based chemicals, which are co-products and processed co-products of the sulfate and chloride process TiO2 pigment production. These co-product chemicals are marketed through Kronos' Ecochem division and are primarily used as treatment and conditioning agents for industrial effluents and municipal wastewater, as well as for the manufacture of iron pigments, cement and agricultural products. Kronos manufactures and sells titanium oxychloride and titanyl sulfate. Kronos produces TiO2 in two crystalline forms: rutile and anatase. Rutile TiO2 is manufactured using both a chloride production process and a sulfate produc tion process, whereas anatase TiO2 is only produced using a sulfate production process.

The chloride process is a continuous process, in which chlorine is used to extract rutile TiO2. The sulfate process is a batch process, in which sulfuric acid is used to extract the TiO2 from ilmenite or titanium slag. Kronos operates four TiO2 plants in Europe, which includes one in each of Leverkusen, Germany; Nordenham, Germany; Langerbrugge, Belgium, and Fredrikstad, Norway. In North America, Kronos has a TiO2 plant in Varennes, Quebec, Canada. Kronos produced 550,000 metric tons of TiO, during the year ended December 31, 2011. Kronos and a subsidiary of Huntsman Corporation each hold a 50% interest in a manufacturing joint venture, Louisiana Pigment Company, L.P. (LPC). LPC owns and operates a chloride process TiO2 facility located in Lake Charles,! Louisian! a.

The Company competes with E.I. du Pont de Nemours & Co., National Titanium Dioxide Company Ltd., Hu ntsman Corporation, Tronox Incorporated and Sachtleben Chemi! e GmbH. Advisors' Opinion:

• [By John Udovich]

  Dallas billionaire Harold Simmons died over the weekend with investors sending shares of some of his publically traded companies like Valhi, Inc (NYSE: VHI), Kronos Worldwide, Inc (NYSE: KRO), NL Industries, Inc (NYSE: NL) and CompX International Inc (NYSEMKT: CIX)to higher levels as they anticipate changes – such as asset sales or spin offs. Harold Simmons was the embodiment of the American dream because he was born during the depths of the Great Depression in Golden, Texas to schoolteacher parents and he spent his early years living without indoor plumbing or electricity. However and by recognizing underpriced assets and through the use of massive amounts of leverage (e.g. junk bonds), he built an empire and ranked #40 on the 2013 Forbes 400 with a fortune estimated to be worth some $10 billion.

• [By Ben Levisohn]

  Typically, when the chairman of a company dies, its shares drop. That hasn’t been the case for Valhi (VHI), Kronos Worldwide (KRO) and NL Industries (NL), which have all advanced today after Harold Simmons passed away.

source from Top Stocks Blog:http://www.topstocksblog.com/top-5-high-tech-companies-to-buy-for-2014.html

Stellar Stocks: China Trio

Richard Schmidt, growth stock expert and editor of Stellar Stock Alert, holds a number of China-based companies in his model portfolio; here, he highlights three that currently earn his buy rating.

We admittedly bought into China Automotive Systems (CAAS) too soon. The stock is still down from our original recommendation price, but the future looks very bright.

If you've paid attention to the Chinese car market's growth, you know that it's one of the best growth stories of our day. The Chinese car market has grown tremendously, but it's far from saturated.

In fact, we see their car market continuing to grow for the foreseeable future. While the middle class in the US dwindles, the growth of the Chinese middle class is just beginning.

So their market still has room to grow. And we'll profit from it with our CAAS holding. If you haven't bought in, do so now. CAAS is a strong buy.

Some people are suggesting that the iPhone introduction into China wasn't a good thing for China Mobile (CHL). Frankly, they're making a harsh judgment much too early.

Yes, the stock came down after the announcement. But you know the old adage, "buy on the rumor, sell on the news."

Well, this is one case where it was accurate (it isn't always). But it wasn't the iPhone news that pulled the stock down. It was simply a continuation of a long-term correction.

"Long-term" for CHL is about six to eight months. This stock bounces around a lot for being such a large stock. Now we're looking at a chart that's looking very bullish.

The stock looks like it has bottomed. As sales of the iPhone move through China, CHL is going to be the biggest beneficiary of this huge market. So we expect CHL to move back up in the coming months. CHL is a buy.

Shares of e-House Holdings Limited (EJ) finally came to life in the last five months of last year. They cooled off in January, but moved back up in February.

Hot Stocks To Buy Right Now

Like the car and phone industry in China, the rising middle class is pushing that country's markets up in a big way. Now we're seeing it in their housing market. EJ is still below our recommended price, but our patience is paying off. That will change in the near future. EJ is a strong buy.

iShares FTSE/Xinhua China (FXI) moved up about 10% in February. The strong move came as a result of a strong resurgence in China's economic growth and its improved quality.

As investors are looking for the next big opportunity, many are seeing the sideways movement our market is set to experience. And they're moving to Chinese stocks. The FXI is a buy.

Subscribe to Stellar Stock Alert here…

More from MoneyShow.com:

Insights from the #1 China Fund

New Oriental: Educated Gains

Asian Trio: China, Cambodia, and Philippines

5 Best Cheap Stocks To Buy For 2014

5 Best Cheap Stocks To Buy For 2014: Uranium Resources Inc.(URRE)

Uranium Resources, Inc. engages in the acquisition, exploration, development, and mining of uranium properties, using the in situ recovery or solution mining process. It owns developed and undeveloped uranium properties in South Texas; and undeveloped uranium properties in New Mexico. The company?s primary customers include utilities who utilize nuclear power to generate electricity. Uranium Resources, Inc. was founded in 1977 and is based in Lewisville, Texas.

Advisors' Opinion:

• [By Bryan Murphy]

  If you listened to my bullish calls from December 27th and/or February 24th about Uranerz Energy Corp. (NYSEMKT:URZ), Uranium Resources, Inc. (NASDAQ:URRE), and Ur-Energy Inc. (NYSEMKT:URG), then congratulations - you're now up as much as 50%, depending on when you stepped into a trade, and which stock you chose. Now get out. See, as well as URZ and URG have done and are doing (URRE not so much), it looks like the short-term rally I first spotted a little more than a couple of months ago has fully run its course, and now these names are setting up a pullback.

• [By James E. Brumley]

  Well, I'll give myself an A for effort, but a C- for timing. But, I can bump that C- up to a B+ if my intuition is right as we head into the last few days of 2013 and the first few of 2014. What I'm talking about is a bullish commentary I penned back on November 26th regarding Uranerz Energy Corp. (NYSEMKT:URZ), Uranium Resources, Inc. (NASDAQ:URRE), and Ur-Energy Inc. (NYSEMKT:URG). All three stocks were perking up, and more than that, the buzz surrounding URG, URRE, and URZ was getting louder. More often than not, when the fervor and bullish action and chatter reaches the levels they had reached a month ago, an explosion is right around the corner.

• [By James E. Brumley]

  You know, were it! just Uranium Resources, Inc. (NASDAQ:URRE) or just Ur-Energy Inc. (NYSEMKT:URG) or just Uranerz Energy Corp. (NYSEMKT:URZ) making a decided bullish move, I might be able to dismiss it. Similarly, if URZ had only been moving higher for one or two days (or only URG or only URRE), it might be easy to not be impressed. Neither of those situations has been the actual case, however. All three stocks have been moving upward for several days now, quite a bit, on noticeably higher volume. There's something "going on", as it were, and if prior group-wide movements are any clue, it's the kind of move worth tapping into.

source from Top Stocks Blog:http://www.topstocksblog.com/5-best-cheap-stocks-to-buy-for-2014.html

Best Sliver Stocks To Own Right Now

Best Sliver Stocks To Own Right Now: Ishares Msci Switzerland (EWL)

iShares MSCI Switzerland Index Fund (the Fund) seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the aggregate in the Swiss market, as measured by the MSCI Switzerland Index (the Index). The Index seeks to measure the performance of the Swiss equity market. The Index is a capitalization-weighted index that aims to capture 85% of the (publicly available) total market capitalization. Component companies are adjusted for available float and must meet objective criteria for inclusion in the Index. The Index is reviewed quarterly.

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. The Fund's investment advisor is Barclays Global Fund Advisors.

Advisors' Opinion:

• [By Carlton Delfeld]

  The iShares Switzerland (EWL) is a wonderful way to gain exposure to a basket of Switzerland's leading multinationals and has an expense ratio of only 0.59%. In addition, while a rising Swiss franc puts pricing pressure on Swiss exporters, a strong Swiss franc supercharges returns for investors in EWL.

• [By Mark Salzinger]

  iShares MSCI Germany (EWG) and iShares MSCI Switzerland (EWL) continue to have relatively attractive valuations.

  EWG recently sported an average price/earnings (P/E) ratio on 2013's projected earnings of 12.6 and a price/book value (P/B) of just 1.4.

source from Top Stocks Blog:http://www.topstocksblog.com/best-sliver-stocks-to-own-right-now-2.html

Top 10 Dividend Stocks To Buy For 2014

Top 10 Dividend Stocks To Buy For 2014: Snap-On Incorporated(SNA)

Snap-on Incorporated provides tools, equipment, diagnostics, repair information, and systems solutions for professional users. Its products include hand tools, such as wrenches, screwdrivers, sockets, pliers, ratchets, saws and cutting tools, pruning tools, and torque measuring instruments; power tools, including pneumatic, hydraulic, cordless, and corded tools; and tool storage products comprising tool chests, roll cabinets, and tool control systems. The company?s diagnostics and repair information products include handheld and PC-based diagnostics products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems, business services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer purchasing facilitation services, and warranty management systems and analytics to manage and track performance. Snap-on Incorporated?s equipment products comprise solutions for the diagnosis and service of automotive and industrial equipment, such as wheel alignment, collision repair, air conditioning service, brake service, fluid exchange, transmission troubleshooting, and safety testing equipment, as well as wheel balancers, tire changers, vehicle lifts, test lane systems, battery chargers, and hoists. The company also provides financial services, including business loans and vehicle leases to franchisees; loans to the franchisees? customers; and loans to its industrial and other customers for the purchase of tools, equipment, and diagnostics products. Snap-on Incorporated sells its products and services through mobile vans, franchisees, company-direct sales, distributors, and the Internet in approximately 130 countries, including the United States, the United Kingdom, Canada, Germany, Australia, France, Japan, Spain, Italy, Sweden, the Ne! therlands, Argentina, China, and Brazil. Snap-on Incorporated was founded in 1920 and is based in Kenosh a, Wisconsin.

Advisors' Opinion:

• [By Matt Thalman]

  Another player that operates heavily within this industry, but in a slightly different fashion, announced earnings today. Shares of tool company Snap-On (NYSE: SNA  )  rose 7.76% today after beating estimates on both the top and bottom lines. Revenue came in at $797.5 million for the quarter, a 5.9% increase from last year and higher than the $779.5 million analysts were looking for. Earnings per share hit $1.60, again higher than the $1.56 that was expected. One of the areas that management would like to focus on moving forward is expanding its vehicle repair garage, which again would make sense given the average age of vehicles on the road today. 

• [By Lisa Levin]

  Snap-on (NYSE: SNA) shares gained 0.60% to create a new 52-week high of $106.62. Snap-on's PEG ratio is 1.78.

  Posted-In: 52-Week HighsNews Intraday Update Markets Movers

source from Top Stocks Blog:http://www.topstocksblog.com/top-10-dividend-stocks-to-buy-for-2014.html

Top Warren Buffett Stocks To Watch For 2014

Top Warren Buffett Stocks To Watch For 2014: QEP Midstream Partners LP (QEPM)

QEP Midstream Partners, LP (QEP), incorporated on April 19, 2013, is a limited partnership formed by QEP Resources, Inc. to owns, operates, acquires and develops midstream energy assets. The Company's primary assets consist of ownership interests in four gathering systems and two Federal Energy Regulatory Commission (FERC)-regulated pipelines, through which it provides natural gas and crude oil gathering and transportation services. The Company's assets are located in, or are within close proximity to, the Green River Basin located in Wyoming and Colorado, the Uinta Basin located in eastern Utah, and the portion of the Williston Basin located in North Dakota. As of December 31, 2012, the Company's gathering systems had 1,475 miles of pipeline and an average gross throughput of 1.8 million british thermal units per hour of natural gas and 18,224 barrels of crude oil.

Green River System

The Company's Green River System, located in western Wy oming, consists of three complimentary systems owned by Green River Gathering, Rendezvous Gas and Rendezvous Pipeline and gathers natural gas production from the Pinedale, Jonah and Moxa Arch fields. In addition to gathering natural gas, the system also gathers and stabilizes crude oil production from the Pinedale Field, transports the stabilized crude oil to an interstate pipeline interconnect, and gathers and handles produced and flowback water associated with well completion activities in the Pinedale Field. The Green River Gathering assets are comprised of 405 miles of natural gas gathering pipelines, 61 miles of crude oil gathering pipelines, 81 miles of water gathering pipelines and a 60-mile, FERC-regulated crude oil pipeline located in the Green River Basin. The Rendezvous Gas assets consist of three parallel, 103-mile high-pressure natural gas p! ipelines, with 1,032 million cubic feet per day of throughput capacity and 7,800 basic hydrogen peroxide of gas compression . Rendezvous Pipeline's sole asset is a 21-mile, FERC-regu! lated natural gas transmission pipeline that provides gas transportation services from QEP's Blacks Fork processing complex in southwest Wyoming to an interconnect with the Kern River Pipeline.

Vermillion Gathering System

The Vermillion Gathering System consists of gas gathering and compression assets located in southern Wyoming, northwest Colorado and northeast Utah, which, when combined, include 454 miles of low-pressure, gas gathering pipelines and 23,197 basic hydrogen peroxide of gas compression. The Vermillion Gathering System is primarily supported by life-of-reserves and long-term, fee-based gas gathering agreements with minimum volume commitments, which are designed to ensure that it will generate a certain amount of revenue over the life of the gathering agreement by collecting either gathering fees for actual throughput or payments to cover any shortfall. The primary customers on our Vermillion Gathering System include Questar, Samson R esources Corporation (Samson Resources), QEP and Chevron USA, Inc. (Chevron).

Three Rivers Gathering System

Three Rivers Gathering is a joint venture between QEP and Ute Energy Midstream Holdings, LLC (Ute Energy) that was formed to transport natural gas gathered by Uintah Basin Field Services, L.L.C., an indirectly owned subsidiary of QEP (Uintah Basin Field Services), and other third-party volumes to gas processing facilities owned by QEP and third parties. The Three Rivers Gathering System consists of gas gathering assets located in the Uinta Basin in northeast Utah, including approximately 50 miles of gathering pipeline and 4,735 basic hydrogen peroxide of gas compression.

Williston Gathering System

The Williston Gathering System is a crude oil and natural gas gathering system located in the ! Williston! Basin in McLean County, North Dakota. The Williston Gathering System includes 17 miles of gas gathering pipelines, 17 mi les of oil gathering pipelines 239 basic hydrogen peroxide o! f gas com! pression, and a crude oil and natural gas handling facility, located primarily on the Fort Berthold Indian Reservation.

The Company competes with Enterprise Products Partners, L.P., Western Gas and The Williams Companies, Inc.

Advisors' Opinion:

• [By Lauren Pollock]

  QEP Resources Inc.(QEP) plans to separate its midstream business, QEP Field Services Co., into a separate entity, including its interest in QEP Midstream Partners LP(QEPM).

• [By Dimitra DeFotis]

  But things aren’t all bad. A spate of initial public offerings traded at nice prices Friday. Among them was QEP Midstream Partners (QEPM), an energy master limited partnership. (Press release here). More on IPOs from Bloomberg here.

source from Top Stocks Blog:http://www.topstocksblog.com/top-warren-buffett-stocks-to-watch-for-2014.html

Best Insurance Stocks To Watch For 2014

Best Insurance Stocks To Watch For 2014: Metlife Inc (MET)

MetLife, Inc. (MetLife), incorporated on August 10, 1999, is a provider of insurance, annuities and employee benefit programs, serving 90 million customers in over 50 countries. Through its subsidiaries and affiliates, MetLife operates in the United States, Japan, Latin America, Asia Pacific, Europe and the Middle East. It is organized into six segments: Insurance Products, Retirement Products, Corporate Benefit Funding and Auto & Home (collectively, U.S. Business), and Japan and Other International Regions (collectively, International). In addition, the Company reports certain of its results of operations in Corporate & Other, which includes MetLife Bank, National Association (MetLife Bank) and other business activities. U.S. Business provides insurance and financial services products, including life, dental, disability, auto and homeowner insurance, guaranteed interest and stable value products, and annuities through independent retail distribution channels, as well as a t the workplace. Outside the U.S., it operates in Japan and over 50 countries within Latin America, Asia Pacific, Europe and the Middle East. MetLife is the life insurer in Mexico and also holds positions in Japan, Poland, Chile and Korea. This business provides life insurance, accident and health insurance, credit insurance, annuities, endowment and retirement and savings products to both individuals and groups. In August 2012, it acquired Reynolds Plantation. In January 2013, the Company completed the sale of MetLife Bank, N.A.'s deposit business. Effective July 25, 2013, MetLife Inc acquired Broadstone Laurel Highlands, from Alliance Residential Fund I. In September 2013, MetLife Inc and Thayer Lodging Group acquired the 365-room Hilton Los Cabos Beach & Golf Resort in Cabo San Lucas, Mexico in a joint venture.

Insurance Products

The Insura! nce Products segment offers a range of protection products and services aimed at serving the financ ial needs of its customers throughout their lives. These pro! ducts are sold to individuals and corporations, as well as other institutions and their respective employees. It is organized in three businesses: Group Life, Individual Life and Non-Medical Health.

The Group Life insurance products and services include variable life, universal life, and term life products. It offer group insurance products as employer-paid benefits or as voluntary benefits where all or a portion of the premiums are paid by the employee. These group products and services also include employee paid supplemental life and are offered as standard products or may be tailored to meet specific customer needs.

The Individual Life insurance products and services include variable life, universal life, term life and whole life products. Additionally, through its broker-dealer affiliates, it offers a full range of mutual funds and other securities products. The products within both Group Life and Individual Life include Variable Life, Universa l Life, Term Life and Whole Life. Variable life products provide insurance coverage through a contract that gives the policyholder the policyholder flexibility in investment choices and, depending on the product, in premium payments and coverage amounts, with certain guarantees. With variable life products, premiums and account balances can be directed by the policyholder into a variety of separate account investment options or directed to the Company's general account. In the separate account investment options, the policyholder bears the entire risk of the investment results.

Universal life products provide insurance coverage on the same basis as variable life, except that premiums, and the resulting accumulated balances, are allocated only to the Company's general account. Universal life products may allow the insured to increase or decrease the amoun! t of deat! h benefit coverage over the term of the contract and the owner to adjust the frequency and amount of premium payments.

Term life products provid! e a guara! nteed benefit upon the death of the insured for a specified time period in return for the periodic payment of premiums. Specified coverage periods range from one year to 30 years, but in no event are they longer than the period over, which premiums are paid. Death benefits may be level over the period or decreasing. Decreasing coverage is used principally to provide for loan repayment in the event of death. Premiums may be guaranteed at a level amount for the coverage period or may be non-level and non-guaranteed. Term insurance products are sometimes referred to as pure protection products, in that there are typically no savings or investment elements. Term contracts expire without value at the end of the coverage period when the insured party is still living.

Whole life products provide a guaranteed benefit upon the death of the insured in return for the periodic payment of a fixed premium over a predetermined period. Premium payments may be required for the e ntire life of the contract period, to a specified age or period, and may be level or change in accordance with a predetermined schedule. Whole life insurance includes policies that provide a participation feature in the form of dividends. Policyholders may receive dividends in cash or apply them to increase death benefits, increase cash values available upon surrender or reduce the premiums required to maintain the contract in-force.

The Non-Medical Health products and services include dental insurance, group short- and long-term disability, individual disability income, long-term care (LTC), critical illness and accidental death & dismemberment coverage. Other products and services include employer-sponsored auto and homeowners insurance provided through the Auto & Home segment and prepaid legal plans. The Company also sells administrative service! s-only (A! SO) arrangements to some employers. The products in this area are Dental, Disability and Long-term Care (LT C). Dental products provide insurance and ASO plans that ass! ist emplo! yees, retirees and their families in maintaining oral health while reducing out-of-pocket expenses and providing superior customer service. Dental plans include the Preferred Dentist Program and the Dental Health Maintenance Organization. Disability products provide a benefit in the event of the disability of the insured. This benefit is in the form of monthly income paid until the insured reaches age 65. In addition to income replacement, the product may be used to provide for the payment of business overhead expenses for disabled business owners or mortgage payment protection. This is offered on both a group and individual basis. LTC products provide protection against the potentially high costs of LTC services. They generally pay benefits to insureds that need assistance with activities of daily living or have a cognitive impairment.

Retirement Products

The Retirement products segment includes a variety of variable and fixed annuities that are primarily sold to individuals and employees of corporations and other institutions. The products in this area are Variable Annuities and Fixed Annuities. Variable annuities provide for both asset accumulation and asset distribution needs. Variable annuities allow the contract holder to make deposits into various investment options in a separate account, as determined by the contract holder. The risks associated with such investment options are borne entirely by the contract holder, except where guaranteed minimum benefits are involved.

Fixed annuities provide for both asset accumulation and asset distribution needs. Fixed annuities do not allow the same investment flexibility provided by variable annuities, but provide guarantees related to the preservation of principal and interest credited.

Corporate Benefit Funding

!

Th! e Corporate Benefit Funding segment includes a range of annuity and investment products, including, guaranteed intere st products and other stable value products, income annuitie! s, and se! parate account contracts for the investment management of defined benefit and defined contribution plan assets. This segment also includes certain products to fund postretirement benefits and company, bank or trust owned life insurance used to finance non-qualified benefit programs for executives. The products in this area are Stable Value Products, Pensions Closeouts, Torts and Settlements, Capital Markets Investment Products and other Corporate Benefit Funding Products and Services. The Company offers general account guaranteed interest contracts, separate account guaranteed interest contracts, and similar products used to support the stable value option of defined contribution plans. It also offers private floating rate funding agreements that are used for money market funds, securities lending cash collateral portfolios and short-term investment funds.

The Company offers general account and separate account annuity products, generally in connection with the termination of defined benefit pension plans, both in the United States and the United Kingdom. It also offers partial risk transfer solutions that allow for partial transfers of pension liabilities and annuity products that include single premium buyouts. It offers strategies for complex litigation settlements, primarily structured settlement annuities. Under the Capital Markets Investment Products, the products offered include funding agreements, Federal Home Loan Bank advances and funding agreement-backed commercial paper. Under the Other Corporate Benefit Funding Products and Services, it offers specialized insurance products designed specifically to provide solutions for non-qualified benefit and retiree benefit funding purposes.

Auto & Home

The Auto & Home segment includes personal lines property and casualty ! insurance! offered directly to employees at their employer's worksite, as well as to individuals through a variety of retail distributi on channels, including independent agents, property and casu! alty spec! ialists, direct response marketing and the individual distribution sales group. Auto & Home primarily sells auto insurance, which represented 67% of Auto & Home's total net earned premiums in 2011. Homeowners and other insurance represented 33% of Auto & Home's total net earned premiums in 2011. The products in this area are Auto Coverages and Homeowners and Other Coverages. Auto insurance policies provide coverage for private passenger automobiles, utility automobiles and vans, motorcycles, motor homes, antique or classic automobiles and trailers. Auto & Home offers traditional coverage, such as liability, uninsured motorist, no fault or personal injury protection, as well as collision and comprehensive. Homeowners' insurance policies provide protection for homeowners, renters, condominium owners and residential landlords against losses arising out of damage to dwellings and contents from a variety of perils, as well as coverage for liability arising from ownership or occupancy. Other insurance includes personal excess liability (protection against losses in excess of amounts covered by other liability insurance policies), and coverage for recreational vehicles and boat owners. Most of Auto & Home's homeowners' policies are traditional insurance policies for dwellings, providing protection for loss on a replacement cost basis. These policies also provide additional coverage for reasonable, normal living expenses incurred by policyholders that have been displaced from their homes.

International

International provides life insurance, accident and health insurance, credit insurance, annuities, endowment and retirement & savings products to both individuals and groups. The Company focuses on markets primarily within Japan, Latin America, Asia Pacific, Europe and the Mi! ddle East! . It operates in international markets through subsidiaries and affiliates. The Company operates in 22 countries in Latin America, with o perations in Mexico, Chile and Argentina. It operates in fou! r countri! es in Asia Pacific with operations in Korea, Hong Kong and Australia. It operates in 35 countries in Europe and the Middle East with operations in Poland, the United Kingdom, France, and the United Arab Emirates, as well as through a consolidated joint venture in India.

Corporate & Other

Corporate & Other contains the excess capital not allocated to the segments, which is invested to optimize investment spread and to fund company initiatives and various start-up and run-off entities. Mortgage products offered by MetLife Bank include forward and reverse residential mortgage loans. Residential mortgage loans are originated through MetLife Bank's national sales force, mortgage brokers and mortgage correspondents. The residential mortgage banking activities include the origination and servicing of mortgage loans. Mortgage loans are held-for-investment or sold primarily into Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corpo ration (FHLMC) or Government National Mortgage Association (GNMA) securities. Deposit products include traditional savings accounts, money market savings accounts, certificates of deposit (CDs) and individual retirement accounts.

Advisors' Opinion:

• [By Ben Levisohn]

  It’s been a good day for life insurers across the board today, thanks to speculation that the Fed could get more hawkish following today’s jobs report–and higher interest rates would benefit insurers. Shares of Prudential have gained 2% to $88.47 at 2:53 p.m. today, while Metlife (MET) has risen 1.3% to $53.04 and Lincoln National (LNC) has advanced 1.6% to $52.75. American International Group (AIG) has dropped 0.2% to $51.05.

• [By Lauren Pollock]

  Rothesay Life Ltd. agreed to buy MetLife ! Inc.'s(ME! T) U.K.-based annuity pension unit as it continues to build out its annuity portfolio. Financial terms of the deal, which is expected to close in the second quarter, weren’t disclosed.

• [By Christina Rexrode]

  Marsh & McLennan Cos Inc. (MMC) and MetLife Inc. (MET) have been rising since those companies reported earnings earlier this week.

source from Top Stocks Blog:http://www.topstocksblog.com/best-insurance-stocks-to-watch-for-2014.html

U.S. stock futures trade in narrow range

U.S. stock futures traded in a tight range on Thursday and were up slightly before the market opened.

Dow Jones industrial average index futures were up 0.1%, Standard & Poor's 500 index futures rose 0.2% and Nasdaq index futures added 0.2%.

Global stocks continued to focus on CHina's economy and a possible slowdown.

In early European trading, stocks clung to a tight range. Britain's FTSE 100 inched down 0.2% to 6,610 while Germany's DAX rose 0.2% to 9,208.

Asian stock markets were mixed. Japan's Nikkei 225 lost 0.1% to 14,815.98 and Hong Kong's Hang Seng shed 0.7% to 21,756.08. In mainland China, the Shanghai Composite rose 1.1% to 2,019.11.

Oil prices rose in early trading a day after falling below $100 a barrel. A barrel of benchmark crude for April delivery was up 45 cents to $98.44 in electronic trading on the New York Mercantile Exchange. The contract fell $2.04, or 2%, to close at $97.99 on Wednesday.

Top Growth Stocks To Buy For 2014

U.S. stocks closed mixed on Wednesday as the Dow fell 11.17 points, or 0.1% to close at 16,340.08. The Dow has now fallen for three consecutive days. The S&P 500 index was basically flat, rising 0.57 to 1,868.20 and the Nasdaq composite index rose 16.14 points, or 0.4% at 4,323.33. The Nasdaq broke it's four day losing streak.

WEDNESDAY: Stocks close mixed; Dow falls for a third day

Top 5 Cheapest Stocks For 2015

Top 5 Cheapest Stocks For 2015: Penn West Petroleum Ltd(PWE)

Penn West Petroleum Ltd. engages in acquiring, exploring, developing, exploiting, and holding interests in petroleum and natural gas properties and related assets in North America. The company produces light and medium crude oil, natural gas liquids, heavy oil, and natural gas. It operates in two major regions, including the Southern District, which covers properties within Manitoba, Saskatchewan, and southern and east central Alberta with developed and undeveloped land base totaling approximately 3.3 million net acres; and the Northern District encompassing northeastern British Columbia, northern Alberta, parts of west central Alberta, and the Northwest Territories with developed and undeveloped land position of approximately 2.9 million net acres. The company was formerly known as Penn West Energy Trust and changed its name to Penn West Petroleum Ltd. in January 2011. Penn West Petroleum Ltd. was founded in 1979 and is headquartered in Calgary, Canada.

Advisors' Opinion:

• [By Jake L'Ecuyer]

  Equities Trading DOWN
  Shares of Penn West Petroleum (NYSE: PWE) were down 10.57 percent to $7.36 after the company issued operational update for the fourth quarter and 2013.

• [By Roberto Pedone]

  Another under-$10 stock that's starting to trend within range of triggering a big breakout trade is Penn West Petroleum (PWE), which is engaged in the business of acquiring, exploring, developing, exploiting and holding interests in petroleum and natural gas properties and related assets. This stock has been under pressure by the bears during the last three months, with shares off by 24%.

  If you take a look at the chart for Penn West Petroleum, you'll notice that this stock has been trending sideways over the last two months, with shares moving between $7.89 on the downside and $8.84 on the upside. Shares ! of PWE are now starting to spike higher above its recent low of $8.14 a share and it's quickly moving within range of triggering a breakout trade above the upper-end of its recent sideways trading chart pattern.

  Market players should now look for long-biased trades in PWE if it manages to break out above some near-term overhead resistance levels at $8.84 a share to its 50-day moving average of $8.96 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 2.43 million shares. If that breakout hits soon, then PWE will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $10.07 to $11 a share. Any high-volume move above those levels will then give PWE a chance to tag $11.50 to $12 a share.

  Traders can look to buy PWE off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $8.14 a share or at $7.89 a share. One can also buy PWE off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

• [By Insider Monkey]

  Penn West Petroleum (PWE) is the next on the list, with Y/Cap raising its position by over 100,000 shares to 875,000 shares, worth around $9.7 million. Penn West reported a net loss of $40 million in the second quarter, after reporting an income worth $235 million, with revenue also remaining almost flat on the year. The company also reduced the number of its employees by 25% since the beginning of the year, in order to increase its competitive performance.

source from Top Stocks Blog:http://www.topstocksblog.com/top-5-cheapest-stocks-for-2015-2.html

Mid-Morning Market Update: Markets Surge; AutoZone Posts Rise In Profit

Related BZSUM Market Wrap For March 4: Bulls Take Over As Ukraine Fears Dissipate Mid-Afternoon Market Update: Markets Rally on Easing Ukraine Tensions as Dendreon Pulls Back

Following the market opening Tuesday, the Dow traded up 1.10 percent to 16,345.41 while the NASDAQ surged 1.46 percent to 4,339.62. The S&P also rose, gaining 1.17 percent to 1,867.30.

Leading and Lagging Sectors
In trading on Tuesday, industrials shares were relative leaders, up on the day by about 1.61 percent. Top gainers in the sector included Plug Power (NASDAQ: PLUG) and Maxwell Technologies (NASDAQ: MXWL).

Top New Stocks To Own For 2015

Utilities sector gained 0.78 percent in the US market today. Among the utilities stocks, Huaneng Power International (NYSE: HNP) was down more than 1.4 percent, while UIL Holdings (NYSE: UIL) tumbled around 0.7 percent.

Top Headline
AutoZone (NYSE: AZO) reported a gain in its fiscal second-quarter profit. AutoZone's quarterly profit surged to $192.8 million, or $5.63 per share, versus a year-ago profit of $176.2 million, or $4.78 per share. Its net sales rose to $1.99 billion versus $1.86 billion. However, analysts were expecting earnings of $5.57 per share on sales of $1.98 billion. AutoZone's US same-store sales jumped 4.3% in the quarter.

Equities Trading UP
Vipshop Holdings (NYSE: VIPS) shot up 37.53 percent to $175.71 after the company reported better-than-expected fourth-quarter results and issued a strong revenue forecast for the first quarter.

Shares of Trina Solar (NYSE: TSL) got a boost, shooting up 4.54 percent to $15.42 after the company posted a profit in the fourth quarter.

MBIA (NYSE: MBI) was also up, gaining 8.18 percent to $14.41 after the company reported upbeat Q4 earnings.

Equities Trading DOWN
Shares of McDermott International (NYSE: MDR) were down 6.97 percent to $7.55 after the company reported a Q4 loss of $1.37 per share on revenue of $517.3 million. It also withdrew its previous outlook. Capital One Financial downgraded the stock from Equalweight to Underweight and cut the price target from $8.00 to $6.00.

Ascena Retail Group (NASDAQ: ASNA) shares tumbled 5.83 percent to $17.77 after the company reported Q2 results. Ascena Retail expected FY14 earnings of $1.00 to 1.05 per share.

WebMD Health (NASDAQ: WBMD) was down, falling 3.65 percent to $41.75 after Stifel Nicolaus downgraded the stock from Buy to Hold and removed the target price of $55.

Commodities
In commodity news, oil traded down 1.21 percent to $103.65, while gold traded down 1.23 percent to $1,333.70. Silver traded down 1.75 percent Tuesday to $21.11, while copper rose 0.66 percent to $3.19.

Eurozone
European shares were higher today.

The Spanish Ibex Index rose 1.89 percent, while Italy's FTSE MIB Index surged 2.88 percent.

Meanwhile, the German DAX jumped 2.31 percent and the French CAC 40 rose 2.33 percent while U.K. shares climbed 1.51 percent.

Economics
The ICSC-Goldman same-store sales index climbed 0.3% in the week ended Saturday versus the earlier week.

The Treasury is set to auction 4-and 52-week bills.

Posted-In: Earnings News Guidance Eurozone Futures Forex Global Econ #s Economics Intraday Update Markets Movers Tech

(c) 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Most Popular Warren Buffett: America's Best Days Lie Ahead Morgan Stanley Sees The Coca-Cola Company's 2014 Consensus EPS As Still Too High Warner Bros. To Make 'Minecraft' Movie What You Need To Know About The Crisis In Ukraine The Top Five Dow Stocks In February #PreMarket Primer: Monday, March 3: Markets Unsteady On The Prospect Of War In Ukraine Related Articles (AZO + ASNA) Mid-Afternoon Market Update: Markets Rally on Easing Ukraine Tensions as Dendreon Pulls Back Ascena Retail Shares Fall Amid Q2 Beat, Lackluster Guidance Mid-Day Market Update: Dow Jumps Over 200 Points; Vipshop Shares Surge After Q4 Results Mid-Morning Market Update: Markets Surge; AutoZone Posts Rise In Profit US Stock Futures Signal Higher Start On Wall Street #PreMarket Primer: Tuesday, March 4: US Takes Steps To Limit Putin's Forces Around the Web, We're Loving... Overstock Surpasses $1M in Bitcoin Purchases Lightspeed Trading Presents: Using Trade Ideas with the Lightspeed Trader Platform Why Facebook Wants to Buy a Drone Company Create an Account With Options House and Get 150 Free Trades! Wynn, MGM, Other Casino Giants Vying For U.S. Turf What Should You Know About AMZN?

Caterpillar: How Much Higher Can It Go?

After a dismal 2013, Caterpillar (CAT) has found some love so far this year.

AFP

Caterpillar’s shares have gained 6.6% in 2014, double its 2013 gain of 3.3%, and besting the 7.7% drop in Deere (DE), the 0.4% rise in Terex (TEX), the 0.3% dip in Cummins (CMI) and the 4.5% decline in Joy Global (JOY).

Can the good times continue? Deutsche Bank’s Vishal Shah thinks they can. He explain:

We have a positive bias towards CAT as we believe investors are overly focused on the decline in resource industries revenue, which will likely trough earlier than expected in 2014, and are neglecting the significant growth opportunities within construction segment over the next 3-4 years as well as consistent execution within the power systems segment. Although we expect mining capex to decline by 55% from 2012 peak and trough in 2016-17, we believe the decline in Resource industries revenue will be smaller (down 45%) and shorter (ending in 2014). We expect the aftermarket business (25% of segment revenue) to mitigate some of the downside risk. We also expect CAT to be among the first construction equipment companies to benefit from the non-resi recovery and expect dealers to start building inventory as early as 2014.

It shouldn’t come as a surprise, then, that Shah thinks Caterpillar is going higher–much higher. He initiated Caterpillar as a Buy with a $122 price target, 25% above its current price.

Cummins and Deere, meanwhile, get Buy ratings, with price targets of $170 and $110, respectively. Buy-rate Terex could hit $52, while Hold-rated Joy Global has a price target of $57.

Best Japanese Stocks To Invest In Right Now

Shares of Caterpillar have gained 1.1% to $97.25, while Deere has advanced 1% to $85.15, Terex has jumped 2.5% to $43.19, Cummins has risen 0.8% to $141.15 and Joy Global is up 1.1% at $56.50.

Deere: Good News and Not-So Good News

Good news from this agriculture giant was followed by slightly bad news, writes MoneyShow's Jim Jubak, who says this should serve as a reminder to the cyclical nature of farm and fertilizer stock.

Good news from Deere (DE) on fiscal first quarter 2014 earnings. The company announced earnings of $1.81 cents a share, 28 cents a share above the Wall Street consensus on revenue of $6.95 billion. (Also above Wall Street consensus of $6.76 billion.)

But the company's closely-watched estimate of farm incomes pointed to a drop in cash receipts in 2014 of 7% from the record level of 2013. Global corn planting is likely to fall in 2014, Deere reported.

That's certainly not good news for such agriculture stocks as fertilizer producers Potash of Saskatchewan (POT), Mosaic (MOS), and Yara International (YARIY). And it's not good news for Deere for 2014, as a whole, either. The company lowered guidance for the quarter that ends in April to sales of $9.65 billion, versus the current Wall Street consensus of $9.89 billion. That would represent a 6% drop in sales in the quarter.

Deere's agriculture equipment sales weren't all that robust in the quarter, with sales of farm equipment climbing just 2% year over year. Operating income for that part of Deere's business (78% of sales in 2013) climbed 4%. It was the recovery of sales for construction and forestry equipment that led to the first quarter earnings beat. Sales for those businesses climbed 4%, but operating income grew by 32%.

Deere expects the construction equipment business to continue to outperform in 2014. For the year, Deere guided analysts to a 10% increase in 2014 sales for this unit. Unfortunately, Deere said sales for the remainder of its business are projected to fall by 6% in 2014. That's not surprising since Deere projects industry sales of farm equipment will drop by 5% to 10% in North America, by 5% in the European Union, and by 5% to 10% in South America. Industry sales in Asia will be up slightly, Deere projects.

This slightly negative appraisal—only slightly negative, I'd say, because 2013 was a record year for farm incomes—has been echoed by other companies in the agriculture sector.

On February 11, for example, fertilizer Mosaic said that potash fertilizer prices fell by $130 a metric ton in 2013 and phosphate prices by $150 a ton. Phosphate prices may have bottomed in the fourth quarter, the company said, and recent contracts with China may indicate a bottom for potash, but it will take further increases in demand to produce significant improvement in prices. Mosaic said it doesn't expect any dramatic short-term increase in potash prices, but that it does expect better operating conditions in the second half of the year.

On February 12, Yara International (YARIY in New York or (NO:YAR) in Oslo) reported a huge drop in fourth quarter net income (from NOK 7.21 a share in the fourth quarter of 2012 to NOK 2.64 a share in the fourth quarter of 2013, excluding special items). Volumes climbed 22% on increased sales in Brazil as a result of Yara's purchase of Bunge's (BG) fertilizer business in that country. But prices plunged: Urea prices were 26% lower year over year and nitrate prices fell 15%.

The comments from Deere, and other companies in the agriculture sector, should serve as a reminder that farm stocks remain very cyclical. After the boom and record crops in 2013, the comparisons for 2014 are very difficult. 2014 doesn't look like a bad year—it just doesn't look like we'll see record farm incomes move to a new record.

As a result, Deere is facing its first earnings decline in five years. And the rest of the sector is likely to follow that trend.

Full disclosure: I don't own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund may or may not now own positions in any stock mentioned in this post. The fund did own shares of Yara International as of the end of December. It did not own shares of Deere, Mosaic, or Potash of Saskatchewan. For a full list of the stocks in the fund, see the fund's portfolio here.