Analysts Bullish On Towers Watson Following Liazon Acquisition

Towers Watson & Co. (TW) is down slightly today, but analysts are optimistic that the stock can climb higher, given its acquisition of privately held Liazon Corporation for $125 million.

Liazon develops private benefit exchanges and online benefit markets for employees, an area where human resources and benefit solutions provider Towers Watson has already built a name for itself.

Analysts are looking at the acquisition favorably, even if the market is skeptical today. Deutsche Bank analysts Paul Ginocchio and Ato Garrett today reiterated their Buy rating on Towers Watson and raised their target price by $5 to $130.

From the note:

TW has gotten more bullish on the adoption rate of exchanges: The adoption rate of exchanges is happening faster than TW expected just 6 months ago. TW agrees with forecasts of 35-70m covered lives (employees + dependents) on an exchange in 5-yrs. TW expects middle market companies to potentially adopt faster than large market companies, thus it has acquired Liazon to meet that need now. OneExchange Active will continue to focus on the large market (>10,000 employees) while Liazon focuses on the mid-market (1,000 to 10,000) via its insurance brokerage sales network.

Liazon should help TW close the gap in the active exchanges: On 1/1/14, TW will have about 140,000 lives on its two active exchange platforms (40,000 on OneExchange Active and 100,000 on Liazon) and is targeting up to 1m lives for 1/1/15. AON has stated it will have over 600,000 covered lives on its exchange on 1/1/14, Bucks (Xerox) will have 400,000 and Mercer 165,000. The Liazon acquisition moves TW's size much closer to Mercer and puts TW in a position to capture 25-33% market share longer-term.

MKM Partners is also bullish about Towers' prospects. Analysts Darren Marcus and Harry Fong reiterated a Buy rating and $140 price target on the stock writing: "While Towers had an existing presence in the active employee exchange market, its offering catered predominantly to larger companies with over 10,000 employees. The Liazon acquisition complements Towers' existing platforms as it gives Towers access to smaller and mid-sized companies. With Liazon, Towers' can service virtually every market segment with a self and fully insured exchange product. Towers Watson clearly believes in the potential for private exchanges and is willing to invest to ensure it has a major presence in this space in the years to come."

Home loans become a little easier to get

More people are getting home loans with lower credit scores and smaller down payments.

Last month, the average FICO score for a closed home loan was 732, down from 750 a year ago, shows data from mortgage tracker Ellie Mae.

The average down payment was 19%, vs. 22% a year ago. What's more, almost one-third of closed loans had FICO scores under 700, vs. 17% a year ago. The top FICO score is 850.

"We continue to see things open up ever so slightly month by month," says Jonathan Corr, Ellie Mae president.

MORTGAGE FRAUD: Jury finds BofA liable for Countrywide loan fraud

The standards to get a home loan remain tight, mortgage experts say. But lenders are reducing some restrictions as housing prices recover and as higher interest rates curtail their refinance business.

"We're starting to see some of the banks … get more creative … to drive more volume to the door," says Jeff Taylor, managing partner at mortgage analytics firm Digital Risk.

Earlier this month, Bank of America dropped its minimum down payment requirement for non-conforming loans under $1 million to 15% from 20%. Non-conforming loans, which cannot be sold to Fannie Mae or Freddie Mac, are over $417,000 in most parts of the country.

Wells Fargo also reduced non-conforming loan minimum down payments to 15% from 20% in July.

JPMorgan Chase, meanwhile, reduced down payment requirements in Arizona, Florida, Nevada and Michigan — states that were especially hard hit by foreclosures.

The bank's minimum down payment is now 5%, down from 10%, for primary homes and 10%, instead of 20% for second homes in those states. The change brings down payment requirements in those states in line with others, says JPMorgan spokeswoman Amy Bonitatibus.

"These markets have shown strong signs of improvement," Bonitatibus says. Improving home values lessen risk for lenders.

While U.S. home prices were up 12.4% in August from a year ago, they were up more than that in Arizona, Nevada and Flori! da, CoreLogic data show. Michigan was up 12.3% year over year.

JPMorgan and Wells made their changes in July after a sharp interest rate spike in May cut into the refinance business.

Along with improving home prices, more access to private mortgage insurance is also enticing lenders to do smaller down payment loans, says Keith Gumbinger of mortgage tracker HSH.com.

Mortgage giants Freddie Mac and Fannie Mae require mortgage insurance for loans where borrowers have less than a 20% stake. When the housing market crashed, the mortgage insurance industry lost billions and insurance became tough to get. Now that industry is recovering, too, Gumbinger says.

While banks are easing some loan requirements, home lending standards remain tight and will likely stay there, says Cameron Findlay, economist at Discover Home Loans.

New lending rules expected to take hold in January require lenders to make home loans that meet federal standards or face greater liability from borrower lawsuits should the loans go sour.

Findlay doesn't expect lenders to do many loans that fall outside of the those standards.

"We're seeing tweaking of the underwriting standards, but it's not a wholesale loosening," says Guy Cecala, publisher of Inside Mortgage Finance. "The pendulum is still too far toward restrictive."

J.C. Penney Latest Retailer to Open on Thanksgiving

Patrick T. Fallon/Bloomberg via Getty Images NEW YORK -- J.C. Penney is opening its doors on Thanksgiving evening to kick off the holiday shopping season, as the beleaguered retailer hopes to get back in the game for the crucial selling period. The Plano, Texas-based chain will be opening most of its 1,100 stores at 8 p.m., the same as rival Macy's (M). The Thanksgiving evening opening is much earlier than last year, when Penney didn't open until 6 a.m. Friday. That made the retailer one of the laggards for the unofficial kickoff to the season. J.C. Penney (JCP) is also bringing back a tradition it ditched last year: it will give away nearly 2 million holiday snow globes starting at 4 a.m. on the Friday after the turkey feast. "Obviously, we were one of the last to open [last year]," said Tony Bartlett, Penney's executive vice president of stores. But he noted this year, "We're all in." He promised that Penney's deals will be at least as good as two years ago and will be much better than last year, when Penney gave away buttons tied to a prize giveaway. Penney is also hiring at least 35,000 seasonal workers for the holidays, nearly 50 percent more than a year ago. The holiday plan is yet another example of how Penney is unraveling the strategies of its former CEO Ron Johnson, who was ousted in April after 17 months on the job amid a botched up plan to reinvent the retailer. Johnson was fired two months after the company announced horrific fourth-quarter results that covered the holiday shopping season. That ended a fiscal year, which finished Feb. 2, in which the Penney amassed almost a billion dollars in losses and a 25 percent drop in sales. Penney brought back Johnson's predecessor, Mike Ullman, as CEO. He is restoring frequent sales and basic merchandise that were eliminated by Johnson who was aiming to attract a more affluent, younger shopper. Shares were down 12 cents to close at $7.35 Thursday and have lost 63 percent of their value since the beginning of the year. The stock has lost 83 percent of its value since early February of last year. Stores are ushering the holiday season earlier every year, creeping into Thanksgiving. Macy's scheduled 8 p.m. opening on Thanksgiving compares with its midnight Friday opening in 2012. Last year, Target (TGT) opened its doors at 9 p.m. on Thanksgiving, three hours earlier than the previous year. Walmart Stores (WMT), the world's largest retailer, began the early bird specials at 8 p.m on the holiday, two hours earlier than in 2011. A growing number of mall-based clothing stores such as Gap (GPS) also have opened their doors on Thanksgiving Day. Target, Walmart and Gap haven't yet announced their plans for the Thanksgiving weekend.

A. Guns B. Knives C. Pepper spray bomb

Top 5 Cheapest Companies To Watch In Right Now

Cadillac has priced its new ELR extended-range electric coupe at more than twice the price of Chevrolet Volt sedan which uses the same basic powertrain. ELR will start at $75,995, including delivery fees.

ELR is General Motor's first vehicle to use the plug-in technology of its breakthrough Volt. Volt starts at $34,995 after a $5,000 price reduction earlier this year. ELR is even priced higher than the cheapest all-electric Tesla Model S, at $69,900.

"With the electric vehicle space growing ever more competitive, the $75,000 price point of the Cadillac ELR will be out of reach for most," says Alec Gutierrez, senior analyst for Kelley Blue Book, in a statement. "Although mainstream buyers will likely shy away from the ELR, Tesla has established that there are buyers willing to shell out top dollar for an electric vehicle."

Top 5 Cheapest Companies To Watch In Right Now: PACCAR Inc.(PCAR)

PACCAR Inc, together with its subsidiaries, designs, manufactures, and distributes light-, medium-, and heavy-duty trucks and related aftermarket parts worldwide. The company offers its trucks for use in the over-the-road and off-highway hauling of freight, petroleum, wood products, construction, and other materials to independent dealers under the Kenworth, Peterbilt, and DAF nameplates. It also provides finance and leasing products and services, such as inventory financing for independent dealers; and retail loan and lease financing for new and used trucks, as well as other transportation equipment; and full service leasing under the PacLease trade name. In addition, it manufactures and sells industrial winches under the Braden, Carco, and Gearmatic nameplates. PACCAR Inc was founded in 1905 and is headquartered in Bellevue, Washington.

Advisors' Opinion:

• [By Neha Chamaria]

  Investors who follow the industrial sector closely should be ready for a busy week ahead, as some of the top names turn up with their quarterly earnings reports. One company to pay attention to is PACCAR (NASDAQ: PCAR  ) .

• [By Daniel Ferry]

  Another important development last week was the announcement that Trillium CNG, a division of Integrys Energy Group (NYSE: TEG  ) , would build 101 new compressed natural gas (CNG) refueling stations across the country by 2016. This would expand the existing infrastructure of publicly available CNG refueling stations by nearly 20%. This is good news for Westport because many of Westport's products run on CNG, including its bi-fuel WiNG system for light-duty Ford pickup trucks, as well as the medium-duty ISL G and heavy-duty ISX12 G engines it produces through Cummins Westport Incorporated, its manufacturing joint-venture with independent engine maker Cummins (NYSE: CMI  ) . Users of the ISL G and ISX12 G engines include long-haul truck manufacturers like PACCAR (NASDAQ: PCAR  ) , Volvo, and Daimler. Freight trucking is a critical growth industry for natural gas engines, because the long miles and heavy loads that freight trucks endure relative to passenger vehicles make them especially sensitive to fuel costs.

Top 5 Cheapest Companies To Watch In Right Now: Popular Inc.(BPOP)

Popular, Inc., through its subsidiaries, provides a range of retail and commercial banking products and services primarily to corporate clients, small and middle size businesses, and retail clients in Puerto Rico and Mainland United States. It offers deposit products; commercial, consumer, and mortgage loans, as well as lease finance; and finance and advisory services. The company also offers trust and asset management, brokerage and investment banking, and insurance and reinsurance services. As of December 31, 2010, it owned and occupied approximately 94 branch premises and other facilities in Puerto Rico; and 119 offices, including 20 owned and 99 leased in New York, Illinois, New Jersey, California, Florida, and Texas. Popular, Inc. was founded in 1917 and is headquartered in San Juan, Puerto Rico.

Advisors' Opinion:

• [By Jake L'Ecuyer]

  Popular (NASDAQ: BPOP) shares tumbled 5.54 percent to $27.48 after Morgan Stanley downgraded the stock from Equal-weight to Underweight.

  Pacific Coast Oil Trust (NYSE: ROYT) down, falling 7.13 percent to $16.70 after the company priced a public offering by Pacific Coast Energy Company LP and other selling unitholders of 13,500,000 trust units at a price of $17.10 per unit.

• [By Paul Ausick]

  Among multinationals, Sterne Agee recommends three banks. The first is Puerto Rico�� Popular Inc. (NASDAQ: BPOP). The mid-cap bank�� stock closed at $28.21 on Friday in a 52-week range of $20.31 to $34.34. Based on Sterne Agee�� 2014 price target of $40.00, Popular has an upside potential of nearly 42% and a 2014 EPS estimate of $2.90. The investment firm�� forward multiple is just 9.6, below the Thomson Reuters consensus multiple of 10.3. Popular received TARP funds in 2009 and could repay the loan in the first quarter of next year, which will give the stock a shot in the arm as well.

5 Best Industrial Conglomerate Stocks To Own Right Now: Commercial National Financial Corporation(CNAF)

Commercial National Financial Corporation operates as a holding company for the Commercial Bank & Trust of PA that provides various commercial banking and trust services primarily in Pennsylvania. It engages in extending credit, providing deposit services, marketing non deposit investments, and offering financial counseling. The company also offers automated TouchTone Teller banking services, as well as Internet banking services. It operates two banking offices in Latrobe; two in Unity Township; two in Hempfield Township; and one each in Ligonier, West Newton, Greensburg, and North Huntington, Pennsylvania. Commercial National Financial Corporation was founded in 1934 and is headquartered in Latrobe, Pennsylvania.

Top 5 Cheapest Companies To Watch In Right Now: SAI Global Ltd(SAI.AX)

SAI Global Limited engages in providing information services and solutions for managing risk, achieving compliance, and driving business enhancement worldwide. The company?s Information Services segment distributes technical and business information, such as standards, legislation, and other technical information; provides internally developed intellectual property, including bibliographic databases and property certificates; and provides conveyancing, lending, and other workflow solutions. Its Compliance Services segment offers advisory services; newsfeeds, alerts, and databases covering key compliance and regulatory topics; governance, risk, and compliance (GRC) solutions that catalogue, monitor, update, notify, and manage a company?s operational GRC needs; a library of Web-based learning and awareness solutions, supported by a learning management system providing audit and compliance learning management; and whistleblower and related case management and incident repor ting services. The company?s Assurance Services segment provides assessing system and product conformity to international and locally based standards; a suite of services across the food value chain, from agricultural production through to the point of sale or service for managing risks within the supply chain and enhancing the quality, safety, and security of food products; tools for enhancing business processes; and standards related training and business enhancement solutions. SAI Global Limited was founded in 1922 and is headquartered in Sydney, Australia.

Top 5 Cheapest Companies To Watch In Right Now: Community Partners Bancorp(CPBC)

Community Partners Bancorp operates as the holding company for Two River Community Bank, a state-chartered commercial bank that provides a range of commercial and retail banking services to small and medium-sized businesses, not-for-profit organizations, professionals, and individuals principally in Monmouth and Union counties, New Jersey. The company offers a range of deposit products, including non-interest bearing or lower cost interest bearing checking accounts, savings accounts, money market accounts, and certificates of deposit accounts. It also provides various loan products consisting of construction loans for residential dwellings, apartment buildings, restaurants, shopping centers, and owner-occupied business properties; commercial business loans; commercial real estate loans for the acquisition of new property or the refinancing of existing property; residential real estate and consumer loans, including residential mortgages, home equity lines of credit, equity loans, personal loans, automobile loans, and overdraft protection; participation loans; and small business administration loans. In addition, the company offers safe deposit boxes, night depositories, wire transfers, money orders, travelers? checks, automated teller machines, direct deposits, telephone and Internet banking services, and corporate business services. It operates 15 banking offices in Middletown, Allaire, Atlantic Highlands, Cliffwood, Manasquan, Navesink, Port Monmouth, Red Bank, Tinton Falls, West Long Branch, Westfield, Cranford, and Fanwood, New Jersey. The company was founded in 2000 and is based in Middletown, New Jersey.

Top 5 Cheapest Companies To Watch In Right Now: Columbus Energy Limited (CEL.V)

Columbus Energy Limited, an exploration-stage Company, engages in the acquisition, exploration, and development of oil and gas properties located in Canada and Italy. The company was formerly known as Golden Dynasty Resources Ltd. and changed its name to Columbus Energy Limited in September 2008. Columbus Energy Limited is based in Vancouver, Canada.

Top 5 Cheapest Companies To Watch In Right Now: Magindustries Corp (MAA.TO)

MagIndustries Corp., together with its subsidiaries, focuses on the exploration and development of potash assets in the Republic of Congo. Its principal project includes the Mengo project that holds a mining license for a 136 km2 area with 33.2 million tonnes of proven and probable reserves of potash located to east of the Atlantic port city of Pointe-Noire, the Republic of Congo. The company also focuses on the construction and commissioning of a potash plant located to the east of the Atlantic port city of Pointe-Noire, the Republic of Congo to produce primarily agricultural-grade potash fertilizers for South American, South African, and European markets. In addition, it owns and operates a 68,000 hectare eucalyptus forestry plantation in Pointe-Noire, the Republic of Congo, which produces and sells wood chips to customers in the pulp and paper, and fiberboard industry in the European market; and evaluating the development of a Kouilou magnesium plant near Pointe-Noire i n the Republic of Congo located adjacent to the potash plant. The company was formerly known as Magnesium Alloy Corporation and changed its name to MagIndustries Corp. in January 2005. The company is headquartered in Toronto, Canada. As of July 22, 2011, MagIndustries Corp. operates as a subsidiary of Evergreen Industries Holding Group Co., Ltd.

Top 5 Cheapest Companies To Watch In Right Now: Penn National Gaming Inc.(PENN)

Penn National Gaming, Inc. and its subsidiaries own and manage gaming and pari-mutuel properties in the United States. It operates approximately 27,000 gaming machines; 500 table games; and 2,000 hotel rooms in 23 facilities in 16 jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. The company was formerly known as PNRC Corp. and changed its name to Penn National Gaming, Inc. in 1994. Penn National Gaming, Inc. was founded in 1982 and is based in Wyomissing, Pennsylvania.

Advisors' Opinion:

• [By Roberto Pedone]

   

  Penn National Gaming (PENN) is a diversified, multi-jurisdictional owner and manager of gaming and pari-mutuel properties. This stock closed up 1.4% at $56.13 in Monday's trading session.

   

  Monday's Volume: 1.11 million
  
  Three-Month Average Volume: 824,334
  
  Volume % Change: 73%

   

   

  From a technical perspective, PENN jumped modestly higher here right above some near-term support at $54.71 with above-average volume. This move is quickly pushing shares of PENN within range of triggering a breakout trade. That trade will hit if PENN manages to take out some near-term overhead resistance at $57.44 to some past resistance at $58 with high volume.

   

  Traders should now look for long-biased trades in PENN as long as it's trending above Monday's low $55.65 or above more support at $54.71 and then once it sustains a move or close above those breakout levels with volume that this near or above 824,334 shares. If that breakout hits soon, then PENN will set up to re-test or possibly take out its 52-week high at $59.93. Any high-volume move above $59.93 will then give PENN a chance to hit $65.

   

• [By Paul Ausick]

  Stocks on the Move: BlackBerry Ltd. (NASDAQ: BBRY) is down 16.4% at $6.50 after announcing that no buyout bid will be forthcoming. Penn National Gaming Inc. (NASDAQ: PENN) is down 76.7% at $13.75 after spinning-off its real-estate holdings into a REIT. Suntech Power Holdings Co. Ltd. (NYSE: STP) is up 15.5% at $1.53 following the acquisition of its major operations in Wuxi.

Top 5 Cheapest Companies To Watch In Right Now: Ultra Petroleum Corp.(UPL)

Ultra Petroleum Corp., an independent oil and gas company, engages in the acquisition, exploration, development, production, and operation of oil and natural gas properties in the United States. It primarily focuses on developing a tight gas sand trend located in the Green River Basin of southwest Wyoming; and assessing, exploring, and developing its position in the Marcellus Shale and other horizons located in the north-central Pennsylvania area of the Appalachian Basin. As of December 31, 2011, the company owned interests in approximately 53,000 net acres in Wyoming covering approximately 190 square miles; 258,000 net acres in Pennsylvania; and 130,000 net acres in eastern Colorado?s Denver Julesburg Basin. Ultra Petroleum Corp. was founded in 1979 and is headquartered in Houston, Texas.

Advisors' Opinion:

• [By Aaron Levitt]

  The natural gas glut that took place a few years ago hurt many producers, including Ultra Petroleum (UPL). However, with natural gas prices beginning to rise after a series of extra cold and snowy weather conditions in the Northeast, UPL stock is on the move.

• [By Aimee Duffy]

  Customer diversification and fee-based revenue are tough to beat. Let's look at some of QEP's top customers:

  Anadarko Petroleum EOG Resources (NYSE: EOG  ) Questar (NYSE: STR  ) Ultra Resources, a subsidiary of Ultra Petroleum (NYSE: UPL  )

  EOG Resources accounted for 11% of the midstream unit's revenue in 2012, while Questar accounted for 12%. Ultra is one of the two-largest shippers on QEP's Green River 60-mile crude oil pipeline (the other is Chevron).

• [By Matt DiLallo]

  Now, once burned and twice shy of those risks, most energy investors are steering clear of anything related to natural gas. That's why few are seeing the shift within the industry to actually live within cash flow. Take Ultra Petroleum (NYSE: UPL  ) for example, which from 2001 to 2011 grew its production by 1,911% while its reserves grew 1,019%. In the wake of low gas prices the company no longer pursuing growth for the sake of growth, instead, the company is focusing on returns.

• [By Dan Caplinger]

  On Friday, Ultra Petroleum (NYSE: UPL  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

5 Lessons from the Lehman Brothers Collapse

On September 15 five years ago, the world awoke to a financial calamity: One of the nation's largest investment banks was collapsing, unable to meet its obligations. The Lehman Brothers bankruptcy, in turn, triggered the near destruction of the entire financial system and the worst recession since the Great Depression.

See Also: What Keeps Me Awake Now

The U.S. stock market, which had started falling almost 12 months earlier, plunged. Standard & Poor's 500-stock index eventually lost 55.3%, hitting bottom on March 9, 2009.

What can we, as investors, learn from the collapse and its aftermath? Here are the five most important lessons I've gleaned.

1) Bubbles happen fairly often. When it comes to markets, it's not unusual for prices to soar to irrational levels. Whenever that happens, you need to tread carefully.

Sometimes bubbles are easy to spot. In the late 1990s, tech stocks sold at ridiculous multiples of sales and earnings (assuming a company had profits, which often wasn't the case). The problem for investors then was that it took years for the seemingly obvious bubble to pop. It was maddeningly difficult to stay away from overpriced stocks because they kept rising for so long. The real estate bubble was likewise pretty easy to see. But few people guessed a fall in home prices would endanger the entire economy.

Watch out any time you hear, "X always goes up" or "This technology will change the world." Nothing always goes up. New technologies can change the world, but only a few investors get rich from them. Plus, tech changes so rapidly that today's innovations become tomorrow's abacuses.

Bond prices have been falling lately, popping a bubble in the fixed-income market. The false premise behind that bubble was that bond yields were guaranteed to stay low—and bond prices, which move inversely with yields, would stay high—as long as the Federal Reserve wanted. The Fed can control short-term yields, but the market ultimately sets long-term bond yields.

2) Don't overdo stocks—or any other investment. Over ten-year periods, stocks have almost always achieved much higher returns than bonds. Meanwhile, cash, or money in the bank, has done little more than keep even with inflation.

But putting all your money in stocks, as many advised in the 1980s and 1990s, proved to be far too risky. Over the long haul, large-company stocks have returned about 10% annualized, bonds have returned about 5% annualized, and cash has returned a little over 3% annualized--about the same as inflation.

But stock bear markets are brutal and usually impossible to forecast. Owning some bonds—even today, when interest rates seem almost certain to go higher—always makes sense. So does holding some cash.

3) Invest in high-quality stocks. Many of the smartest investors practice value investing. Over the long term, value stocks—stocks priced cheaply relative to earnings and other measures—have beaten the market. Ditto for stocks of small companies. And the best returns of all have come from bargain-priced small-company stocks.

But in the 2007-09 bear market, the Russell indexes of value stocks, small-company stocks and small-company-value stocks each tumbled three to four percentage points more than the S&P 500.

Meanwhile, funds that specialize in high-quality stocks—large companies with low debt and steady earnings growth—held up much better than the S&P. I can't find a good index of high-quality stocks, but among high-quality funds, Vanguard Dividend Growth (VDIGX) lost 42.3% and BBH Core Select (BBTRX) fell 41.3%. (The Vanguard fund is a member of the Kiplinger 25; the BBH fund was removed from the Kiplinger 25 after it closed to new investors.)

I'm not suggesting that you shouldn't invest in stocks of undervalued companies or small companies. To the contrary, I think you should diversify your stock investments broadly. But don't load up on value or small-capitalization stocks—unless they are really, really cheap, as they were before the 2000-02 bear market.

Emphasizing high-quality stocks makes a lot of sense to me, even though they usually command premium prices and tend to lag during bull markets.

4) Financial stocks are cheap for a reason. Relative to earnings, assets and other measures, bank stocks are usually cheaper than the broad market. That shouldn't come as a surprise. Every ten years or so, financial companies get into some kind of mess. All that borrowed money eventually leads to trouble, regardless of what the regulators do to mitigate the risk of that happening.

Top 5 Blue Chip Stocks To Own Right Now

5) Don't expect to get the big picture right. In the days and weeks before the Lehman disaster, only a handful of investing gurus were predicting the horror that was about to befall us. Afterward, those who got it right were lionized, and many investors felt foolish that they had missed the warning signs.

But many of those brilliant bears have stayed bearish—even as a ferocious bull market has more than made up for the losses of the worst bear market since the 1930s.

It has been my experience that the bearish case regarding the stock market is almost always more convincing and intellectually more compelling than the bullish argument. But get this: Usually and ultimately, the bulls have been right. I expect that to continue.

Steven T. Goldberg is an investment adviser in the Washington, D.C. area.

BMY Pummeled After Earnings, But Bristol-Myers Squibb Stock Still a Buy

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Bristol-Myers Squibb (BMY) did better in the fourth quarter than most analysts and investors were expecting, beating per-share earnings exceptions by 18% and topping revenue estimates by 3.2%, thanks to strong sales of Baraclude, Orencia, Yervoy and Sprycel.

All told, BMY reported a profit of 51 cents per share, vs. estimates of 43 cents and a year-ago figure of 47 cents. Sales-wise, Bristol-Myers Squibb generated $4.44 billion worth of revenue, which compares favorably to the anticipated Q4 2013 top line of $4.19 million and Q4 2012′s revenue of $4.19 billion.

The bulk of the sales growth came from overseas markets, while the improvement in profits was driven by a combination of higher sales and lower R&D costs.

With all of that being said, current or prospective Bristol-Myers Squibb stock owners might want to embrace the fact that — for better or worse — the same BMY from last quarter isn’t going to be the same BMY a year from now. A significant reconfiguring of Squibb’s drug portfolio in addition to a change of plans for some of the most promising therapies in its pipeline require a more thorough look, just so shareholders know what to expect in 2014.

A New (and Likely Improved) Bristol-Myers Squibb

Last quarter, Bristol-Myers Squibb saw sales of hepatitis drug Baraclude grow 14%, reaching $412 million. Revenue from cancer drug Yervoy was up 23%, to $260 million. Immunotherapy (rheumatoid arthritis) Orencia sales expanded 22%, to $397 million. Sales of HIV treatment Sustiva grew 11% to $427 million. And, cancer drug Sprycel improved sales to the tune of 30%, reaching revenue of $365 million.

Hot Financial Stocks For 2015

BMY stock owners and observers should know, however, there were some red flags waving in last quarter’s report. Sales of antipsychotic drug Abilify slumped 22%, to only $635 million, and though sales of blood-thinning Plavix were technically up 65% on a year-over-year basis in the fourth quarter, Plavix only generated $81 million in revenue during Q4. In 2012, Plavix sales were approaching sales of nearly $2 billion per quarter, before its patent expired.

The hot spots last quarter in its portfolio of existing drugs largely reflect the company’s new direction. Going forward, Bristol-Myers Squibb stock holders can expect an even deeper focus on cancer treatments like Yervoy and Sprycel, as well as further development of immunotherapy drugs like Orencia, and antivirals.

Conversely, though BMY has no apparent plans to shed its slumping Plavix or Abilify franchises, the company isn’t devoting a great deal of time or resources to develop replacements…. perhaps because the heir-apparent to Plavix, Eliquis, has been a very slow starter. In fact, Bristol-Myers Squibb is looking to shed many of its non-cancer and non-immunotherapy projects to better focus on those two areas. Case in point: Despite decent revenue growth from its diabetes portfolio in Q4, the company will be selling all four of its diabetes drugs to AstraZeneca (AZN) later in the year.

And despite growth in Baraclude’s sales, BMY also announced in November that it would be axing its hepatitis C programs.

What Now for Bristol-Myers Squibb Stock Owners?

With a new-found focus on the areas that Bristol-Myers Squibb is most interested in, “how” becomes the big question. Broadly speaking, it looks like the company is willing to let go of its partnership bent and start to do more on its own.

Selling its diabetes business to now-former-partner AstraZeneca is some evidence to that end, but it’s not the only sign that BMY is migrating to a policy of self-sufficiency. The company has also given up on partnering with Gilead (GILD) on the hepatitis C front.

Gilead is the maker of Sovaldi, the first-ever pill-form hepatitis C treatment. Alone the pill works quite well, but when combined with Bristol-Myers Squibb’s daclatasvir hepatitis therapy, the drug duo is almost miraculous. Gilead wants none of such a partnership, however, opting to develop its own drugs to combine with Sovaldi to improve its efficacy. As it turns out, however, BMY stock owners may have the last laugh, though, and Gilead may regret its decision go it alone. Daclatasvir is up for a likely approval in Europe, where doctors are apt to prescribe it in off-label combinations with other hepatitis therapies. Success there in conjunction with other hepatitis drugs could serve as a launching point for approval in the United States.

Bristol-Myers Squibb stock holders will also want to keep tabs on Nivolumab. The story of this non-small-cell lung cancer therapy took an apparent wrong turn earlier in the week when it was announced that a new Phase 3 study of the drug was being initiated, implying that the previous study of Nivolumab (in combination with Yervoy) isn’t going as well as hoped. It’s important to note that the company has said nothing of any issues with the Yervoy/ Nivolumab trial, however, and it’s entirely possible BMY has simply chosen to pursue two parallel studies, just to see which option produces the highest efficacy.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

Finra cautions investors to be careful with IRA rollovers, notes that adviser fees can hurt returns

Bloomberg

Finra cautioned investors Thursday that they may face increased fees and expenses when they transfer retirement savings from a company plan to an individual retirement account.

In an investor alert, the Financial Industry Regulatory Authority Inc. debunked claims that IRA rollovers can be cost-free.

“Even if there are no costs associated with a rollover itself, there will almost certainly be costs related to account administration, investment management or both,” the alert states. “Don't roll over your retirement funds solely based on the word 'free.'”

Finra also pointed out that financial advisers can earn commissions and fees from rollover decisions, potentially diminishing the return that investors get from their retirement accounts.

(Don't miss: 10 tips for a worry-free IRA rollover)

“In contrast, leaving assets in your old employer's plan or rolling the assets to a plan sponsored by your new employer likely results in little or no compensation for a financial professional,” the alert states. “In short, even if the recommendation is sound, any financial professional who recommends you move money from an employer-sponsored retirement plan into an IRA could benefit financially from that move.”

The alert marks the third time that the brokerage industry self-regulator has addressed rollovers in the past month. Finra issued a regulatory notice Dec. 30 and included rollovers on its list of examination priorities Jan. 2.

Other regulators also are getting in on the rollover action. The Securities and Exchange Commission included the topic on its examination priority list, and the Labor Department may include the issue in a pending regulation that would expand fiduciary requirements for retirement savings advice.

Top Consumer Stocks For 2015

“Workers and retirees should understand that in many cases, they don't have to act immediately upon switching jobs or retiring,” Gerri Walsh, Finra senior vice president for investor education, said in a statement. “Taking the time to compare costs and investment options can help you keep your nest egg from suffering unnecessary cracks.”

An adviser whose business concentrates on 401(k) plans said that the rules surrounding transparency and disclosure for those vehicles are tighter than they are for IRAs.

“In most cases, there seems to be more oversight of a retirement plan to that of an IRA,” said Gary Josephs, managing principal of the Retirement Benefits ! Group. “I think Finra is trying to increase the oversight of the IRA, and in that regard, I applaud their direction.”

Although Mr. Josephs welcomes the rollover guidance from Finra, he doesn't want the regulator to go too far.

“What I don't want to see them do is tell participants what they can and can't do as long as it's within the law and in the participant's interest,” he said.

IRAs account for about $5.4 trillion of the $19.5 trillion retirement asset market at the end of 2012, according to the Investment Company Institute.

A survey by the Employee Benefit Research Institute in May showed that rollovers account for 13 times more money added to IRAs than contributions.

Jason Hochstadt, chief executive of Jedi Management, an investment advisory firm, supports reviewing IRA rollovers but said that potential increased expenses should be put in context.

“You have to go through the details in terms of the service being rendered, the advice and the costs,” he said. “You have to factor in not just costs but the quality of the relationship.”

Mr. Josephs expressed a similar concern.

“Too often in our industry [regulation] is all about the costs,” he said. “It's never about the quality.”

Mr. Hochstadt questioned why concern about retirement savings vehicles is being elevated above other investment accounts.

“It seems as if retirement accounts are getting put on a different level,” he said. “It's almost as if advisers will feel guilty and have to prove their innocence.”

Power Your Portfolio with the Mass Index

Developed by Donald Dorsey, the Mass Index is an indicator that identifies trend reversals, and here, MoneyShow’s Tom Aspray explains how it helps him in his analysis.

The majority of technical tools that I use in my analysis and discuss in my trading lessons are ones that I have used for decades or are strategies that have evolved over the years. I was fortunate in the early 1980s to have access to CompuTrac, which included the majority of today’s most frequently used technical indicators.

I do continue to do additional research and came across a technical tool that, I think, investors as well as traders should consider adding to their arsenal of market-timing indicators.

It is called the Mass Index, which first appeared in the June ‘92 Technical Analysis of Stocks & Commodities article “The Mass Index”, by Donald Dorsey. As he said in the article "Range oscillation, not often covered by students of technical analysis, delves into repetitive market patterns during which the daily trading range narrows and widens. Examining this pattern, Donald Dorsey explains, allows the technician to forecast market reversals that other indicators may miss.” Dorsey proposes the use of range oscillators in his Mass index.

Essentially, it measures the narrowing and widening of the range between the high and low prices. The signals do not tell you the direction of the trend change but that is when I rely on other tools such as the NYSE Advance/Decline and the on balance volume.

To calculate the Mass Index:

Calculate a nine-day exponential moving average (EMA) of the difference between the high and low prices. Calculate a nine-day exponential moving average of the moving average calculated in Step 1. Divide the moving average calculated in Step 1 by the moving average calculated in Step 2. Total the values in Step 3 for the number of periods in the Mass Index (e.g., 25 days).

In my research I found the Mass Index to be most useful on the weekly data. On the weekly chart of the S&P 500, the Mass Index is in blue and there are two horizontal lines, one at 27 (in red) and the other at 26.5 (in green).The chart covers the period from the early part of 2006 until early in 2010.

Click to Enlarge

Mr. Dorsey looked for what he called “bulges” which was when the Mass Index moves above the 27 level. The first example occurred on August 7, 2007, (line 1), which was two weeks after the July stock market high as the first hints of the mortgage crisis resulted in a wave of selling. Two weeks later, the S&P 500 formed a panic low on August 16.

The Mass Index dropped back below the 27 level at the end of September but did not drop below the 26.50 level, which would have signaled a change in trend. A second bulge occurred the week ending November 16 (line 2) as the Mass Index stayed above 27 until the middle of December.

NEXT PAGE: Examples of the Mass Index in Action

Page 1 | Page 2 | Page 3 | Page 4 | Next Page

Best Bank Companies To Watch For 2014

Argus is truly an independent research firm free from most of the same conflicts of interest of other research firms, which is why we give its research a close look when it issues upgrades or downgrades. We also review its monthly portfolio changes because it does not make any investment decisions with another side of its business seeking investment banking relationships.

We have seen new portfolio changes for the September 1, 2013 model portfolio. Changes were made to the equity income portfolio, growth and income, as well as mid-cap growth.

In the model equity income portfolio, Argus has recommended adding shares of Clorox Co. (NYSE: CLX) at $85.15 for a 3.4% allocation of the portfolio. The firm is selling its full holding of KKR�& Co. L.P. (NYSE: KKR). Since inclusion in January 2013, the KKR shares have appreciated 27% while providing an annual yield that has ranged as high as 6.7%. Argus sees the benefits of Clorox continuing ahead with it being a S&P Dividend Aristocrat.

Best Bank Companies To Watch For 2014: Banco Bilbao Vizcaya Argentaria S.A. (BBVA.N)

Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) is a diversified international financial group, with strengths in the traditional banking businesses of retail banking, asset management, private banking and wholesale banking. The Company also has investments in some of Spain�� companies. During the year ended December 31, 2009, BBVA focused its operations on six major business areas: Spain and Portugal, Wholesale Banking and Asset Management, Mexico, The United States, South America and Corporate Activities. On August 21, 2009, through its subsidiary BBVA Compass, BBVA acquired certain assets of Guaranty from the United States Federal Deposit Insurance Corporation (the FDIC).

Spain and Portugal

The Spain and Portugal business area focuses on providing banking services and consumer finance to private individuals, enterprises and institutions in Spain and Portugal. The main business units included in the Spain and Portugal area Spanish Retail Netwo rk, which manages individual customers, high net-worth individuals (private banking) and small companies and retailers in the Spanish market; Corporate and Business Banking, which manages business with small and medium enterprises (SMEs), large companies, institutions and developers in the Spanish market, and Other units, which includes consumer finance, that manages renting and leasing business, credit to individual and to enterprises for consumer products and Internet banking; European Insurance that manages the insurance business in Spain and Portugal, and BBVA Portugal, that manages the banking business in Portugal. The Spanish Retail Network unit services the financial and non-financial needs of households, professional practices, retailers and small businesses. The Corporate and Business Banking unit offers a range of services and products to SMEs, large companies, institutions and developers with specialized branch networks for each segment.

The Company

Best Bank Companies To Watch For 2014: KeyCorp (KEY)

KeyCorp is a bank holding company for KeyBank National Association (KeyBank). Through KeyBank and certain other subsidiaries, the Company provides a range of retail and commercial banking, commercial leasing, investment management, consumer finance and investment banking products and services to individual, corporate and institutional clients through two business segments: Key Community Bank and Key Corporate Bank. As of December 31, 2011, these services were provided through KeyBank�� 1,058 full-service retail banking branches in 14 states, additional offices, a telephone banking call center services group and a network of 1,579 automated teller machines (ATMs) in 15 states. On January 17, 2012, the Company opened another national bank subsidiary.

In addition to the banking services of accepting deposits and making loans, the Bank and trust company subsidiaries offer personal and corporate trust services, personal financial services, access to mutual funds, cash management services, investment banking and capital markets products, and international banking services. Through its bank, trust company and investment adviser subsidiaries, the Company provides investment management services to clients that include corporate and public retirement plans, foundations and endowments, individuals and trust funds. The Company provides other financial services - both within and outside of its primary banking markets - through various nonbank subsidiaries. These services include community development financing, securities underwriting and brokerage. It is also an equity participant in a joint venture that provides merchant services to businesses.

Lending Activities

As of December 31, 2011, the Company�� Commercial, Financial and Agricultural loans, also referred to as Commercial and Industrial, represented 39% of its total loan portfolio. As of December 31, 2011, commercial real estate loans represented approximately 19% of its total loan portfolio. These loans include bo! th owner and nonowner-occupied properties and constitute approximately 27% of its commercial loan portfolio. Its commercial real estate lending business is conducted through two primary sources: its 14-state banking franchise, and Real Estate Capital and Corporate Banking Services. The Company conducts financing arrangements through its equipment finance line of business. Commercial lease financing receivables represented 17% of commercial loans at December 31, 2011. The home equity portfolio is the largest segment of its consumer loan portfolio.

Investment Activities

The Company�� securities portfolio totaled $18 billion at December 31, 2011. Available-for-sale securities were $16 billion at December 31, 2011. Held-to-maturity securities were $2.1 billion at December 31, 2011. At December 31, 2011, it had $2.1 billion in collateralized mortgage obligations (CMOs) in its held-to-maturity securities portfolio. At December 31, 2011, the Company had $15.9 billion invested in CMOs and other mortgage-backed securities in the available-for-sale portfolio. Federal Agency CMOs constitute most of its held-to-maturity securities along with foreign bonds and preferred equity securities. The investments in equity and mezzanine instruments made by its principal investing unit represented 61% of other investments at December 31, 2011. They include direct investments (investments made in a particular company), as well as indirect investments (investments made through funds that include other investors).

Sources of Funds

Domestic deposits are the Company�� primary source of funding. During the year ended December 31, 2011, these deposits averaged $58.5 billion and represented 80% of the funds it used to support loans and other earning assets. Wholesale funds, consisting of deposits in its foreign office and short-term borrowings, averaged $3.4 billion during 2011. At December 31, 2011, the Company had $4.7 billion in time deposits of $100,000 or more.

Advisors' Opinion:

• [By Eric Volkman]

  Bank of America's (NYSE: BAC  ) Merrill Lynch, Wells Fargo's (NYSE: WFC  ) Securities unit, KeyCorp (NYSE: KEY  ) subsidiary KeyBanc Capital Markets, and Bank of Montreal's (NYSE: BMO  ) BMO Capital Markets are the joint book-running managers of the issue.

• [By Jay Jenkins]

  A consortium of banks, lead by Citigroup (NYSE: C  ) , Bank of America (NYSE: BAC  ) , BB&T (NYSE: BBT  ) , U.S. Bancorp (NYSE: USB  ) , and KeyCorp (NYSE: KEY  ) have joined forces to develop critical technology to pave the way for true mobile banking.�

• [By Jay Jenkins]

  Huntington, and other regional banks like KeyCorp (NYSE: KEY  ) and Regions Financial (NYSE: RF  ) , are staying out of the headlines, bringing strong products to the market, and as a result, winning new business. In the video below, Motley Fool contributor Jay Jenkins highlights Huntington as an industry leader in customer-focused banking.

Top 10 Low Price Companies To Own In Right Now: Itau Unibanco Holding SA (ITUB)

Itau Unibanco Holding S.A., incorporated on September 9, 1943, is a bank in Brazil. The Company has four operational segments: Commercial Banking, Itau BBA, Consumer Credit and Corporate and Treasury. Commercial banking, including insurance, pension plan and capitalization products, credit cards, asset management and a variety of credit products and services for individuals, small and middle-market companies). Itau BBA includes corporate and investment banking. Consumer credit includes financial products and services to its non-accountholders. Corporate and treasury includes the results related to the trading activities in its portfolio, trading related to managing currency, interest rate and other market risk factors, gap management and arbitrage opportunities in domestic and foreign markets. It also includes the results associated with financial income from the investment of its excess capital.

On October 24, 2010, Itau Unibanco completed the integration of customer service locations throughout Brazil. In total, 998 branches and 245 customer site branches (CSB) of Unibanco were redesigned and integrated as Itau Unibanco customer service locations, thus creating a network of approximately 4,700 units in the country under the Itau brand. The Company is a financial holding company controlled by Itau Unibanco Participacoes S.A. (IUPAR). As of December 31, 2010, it had a network of 3,747 service branches throughout Brazil. As of December 31, 2010, it operated 913 CSBs throughout Brazil. As of December 31, 2010, it operated 28,844 automated teller machines (ATMs) throughout Brazil.

Commercial banking

The commercial banking segment offers a range of banking services to a diversified base of individuals and companies. Services offered by the commercial banking segment include insurance, pension plan and capitalization products, credit cards, asset management, credit products and customized products and solutions. The commercial banking segment comprises the specialized! areas and products, such as retail banking (individuals); public sector banking; personnalite (banking for high-income individuals); private banking (banking and financial consulting for wealthy individuals); very small business banking; small business banking; middle-market banking; credit cards; real estate financing; asset management; corporate social responsibility fund; securities services for third parties; brokerage, and insurance, private retirement and capitalization products.

The Company�� credit products include personal loans, overdraft protection, payroll loans, vehicles, credit cards, mortgage and agricultural loans, working capital, trade note discount and export. Its investments products include pension plans, mutual funds, time deposits, demand deposit accounts, savings accounts and capitalization plans. Its services include insurance (life, home, credit/cash cards, vehicles, loan protection, among others), exchange, brokerage and others. Its core business is retail banking, which serves individuals with a monthly income below R$7,000. In October 2010, it completed the conversion of branches under the Unibanco brand to the Itau brand and as of December 31, 2010, it had over 15.2 million customers and 4,660 branches and CSBs. Its public sector business operates in all areas of the public sector, including the federal, state and municipal governments (in the executive, legislative and judicial branches). As of December 31, 2010, it had approximately 2,300 public sector customers. Itau Personnalite�� focus is delivering financial advisory services by its managers, who understand the specific needs of its higher-income customers; a portfolio of exclusive products and services; special benefits based on the type and length of relationship with the customer, including discounts on various products and services. Itau Personnalite�� customer base reached more than 600,000 individuals as of December 31, 2010. Itau Personnalite customers also have access to Itau Unibanco netwo! rk of bra! nches and ATMs throughout the country, as well as Internet banking and phone.

Itau Private Bank is a Brazilian bank in the global private banking industry, providing wealth management services to approximately 17,951 Latin American clients as of December 31, 2010. The Company serves its customers��needs for offshore wealth management solutions in major jurisdictions through independent institutions in the United States through Banco Itau Europa International and Itau Europa Securities , in Luxembourg through Banco Itau Europa Luxembourg S.A. , in Switzerland through Banco Itau Suisse , in the Bahamas through BIE Bank & Trust Bahamas and in Cayman through Unicorp Bank & Trust Cayman. As of December 31, 2010, it had over 565 very small business banking offices located throughout Brazil and approximately 2,500 managers working for over 1,235,000 small business customers. Loans to very small businesses totaled R$5,981 million as of December 31, 2010. As of December 31, 2010, it had 374 small business banking offices located nationwide in Brazil and nearly 2,500 managers who worked for over 525,000 companies. Loans to small businesses totaled R$28,744 million as of December 31, 2010.

As of December 31, 2010, it had approximately 115,000 middle-market corporate customers that represented a range of Brazilian companies located in over 83 cities in Brazil. The Company offers a range of financial products and services to middle-market customers, including deposit accounts, investment options, insurance, private retirement plans and credit products. Credit products include investment capital loans, working capital loans, inventory financing, trade financing, foreign currency services, equipment leasing services, letters of credit and guarantees. The Company also carries out financial transactions on behalf of middle-market customers, including interbank transactions, open market transactions and futures, swaps, hedging and arbitrage transactions. It also offers its middle-market custom! ers colle! ction services and electronic payment services. The Company is able to provide these services for virtually any kind of payment, including Internet office banking. It charges collection fees and fees for making payments, such as payroll, on behalf of its customers.

The Company is engaged in the Brazilian credit card market. Its subsidiaries, Banco Itaucard S.A. (Banco Itaucard) and Hipercard Banco Multiplo S.A. (Hipercard), offers a range of products to 26 million customers as of December 31, 2010, including both accountholders and non-accountholders. As of December 31, 2010, it had approximately R$16,271 million in outstanding real estate loans. As of December 31, 2010, it had total net assets under management of R$291,748 million on behalf of approximately 2.1 million customers. The Company also provides portfolio management services for pension funds, corporations, private bank customers and foreign investors. As of December 31, 2010, it had R$184,496 million of assets under management for pension funds, corporations and private bank customers. As of December 31, 2010, the Company offered and managed about 1,791 mutual funds, which are mostly fixed-income and money market funds. For individual customers, it offered 154 funds to its retail customers and approximately 287 funds to its Itau Personnalite customers. Private banking customers may invest in over 600 funds, including those offered by other institutions. Itau BBA�� capital markets group also provides tailor-made mutual funds to institutional, corporate and private banking customers.

The Company provides securities services in the Brazilian capital markets. Its services also include acting as transfer agent, providing services relating to debentures and promissory notes, custody and control services for mutual funds, pension funds and portfolios, providing trustee services and non-resident investor services, and acting as custodian for depositary receipt programs. The Company also provides brokerage services to inte! rnational! customers through its broker-dealer operations in New York, through its London branch, and through its broker-dealers in Hong Kong and Dubai. Its main lines of insurance are life and casualty (excluding Vida Gerador de Benefucio Livre), extended warranties and property. Its policies are sold through its banking operations, independent local brokers, multinational brokers and other channels. As of December 31, 2010, it had 9.9 million in capitalization products outstanding, representing R$2,620 million in liabilities with assets that function as guarantees of R$2,646 million. The Company distributes these products through its retail network, Itau Personnalite and Itau Uniclass branches, electronic channels and ATMs. These products are sold by its subsidiary, Cia. Itau de Capitalizacao S.A.

Itau BBA

Itau BBA is responsible for its corporate and investment banking activities. As of December 31, 2010, Itau BBA offered a portfolio of products and services to approximately 2,400 companies and conglomerates in Brazil. Itau BBA�� activities range from typical operations of a commercial bank to capital markets operations and advisory services for mergers and acquisitions. As of December 31, 2010, its corporate loan portfolio was R$ 76,584 million. In investment banking, the fixed income department was responsible for the issuance of debentures and promissory notes that totaled R$18,888 million and securitization transactions that amounted to R$4,677 million in Brazil in 2010. In addition, Itau BBA advised 35 merger and acquisition transactions with an aggregate deal volume of R$16,973 million in 2010.

Itau BBA is also active in Banco Nacional de Desenvolvimento Economico e Social (BNDES) on-lending to finance large-scale projects, aiming at strengthening domestic infrastructure. In consolidated terms, total loans granted by Itau BBA under BNDES on-lending represented more than R$9,010 million in 2010. Itau BBA focuses on the products and initiatives in the international ! business ! unit, such as structuring long-term, bilateral and syndicated financing, and spot foreign exchange. In addition, in 2010 Itau BBA continued to offer a large number of lines of credit for foreign trade.

Consumer Credit

As of December 31, 2010, its portfolio of vehicle financing, leasing and consortium lending consisted of approximately 3.8 million contracts, of which approximately 71.1% were non-accountholder customers. The personal loan portfolio relating to vehicle financing and leasing reached R$60,254 million in 2010. The Company leased and financed vehicles through 13,706 dealers as of December 31, 2010. Sales are made through computer terminals installed in the dealerships that are connected to its computer network. Redecard S.A. (Redecard) is a multibrand credit card provider in Brazil, also responsible for the capturing, transmission, processing and settlement of credit, debit and benefit card transactions. As of December 31, 2010, the Company held approximately 50% interest in Redecard�� capital stock.

The Company competes with Bradesco, Banco do Brasil S.A. (Banco do Brasil), Banco Santander, Caixa Economica Federal (CEF), BNDES, HSBC, Banco Citibank S.A, Banco de Investimentos Credit Suisse (Brasil) S.A., Banco JP Morgan S.A., Banco Morgan Stanley S.A., Banco Merrill Lynch de Investimentos S.A., Banco BTG Pactual S.A., Banco Panamericano S.A, Citibank S.A., Banco GE Capital S.A. and Banco Ibi S.A.

Advisors' Opinion:

• [By Charles Sizemore]

  And speaking of top dividend stocks with high capital gains potential, next on the list of are Brazilian banking groups Banco Bradesco (BBD) and Banco Itau (ITUB) — two monthly dividend stocks you must consider.

• [By Hilary Kramer]

  Itau Unibanco (ITUB): A lot of investors have never heard of Itau because it’s headquartered in Brazil, but it’s one of the world’s largest financial institutions. With 5,000 branches, 100,000 employees and nearly $500 billion in assets (yes, half a trillion!), ITUB is not just the largest Latin American bank, it is one of the biggest in the world. With proven dominance in Brazil (and Latin America), Itau Unibanco is a go-to financial pick, and it currently yields an attractive 3.5%. I recently recommended that my Inner Circle readers sell ITUB on a nice bounce due to the risk of near-term weakness on economic data out of China, but I�� already looking for an opportunity to get back in.

Best Bank Companies To Watch For 2014: Federal National Mortgage Association Fannie Mae (FNMAT)

Federal National Mortgage Association Fannie Mae is a government-sponsored enterprise (GSE) chartered by the United States Congress to support liquidity and stability in the secondary mortgage market, where mortgage-related assets are purchased and sold. The Company�� activities include providing market liquidity by securitizing mortgage loans originated by lenders in the primary mortgage market into Fannie Mae mortgage-backed securities (Fannie Mae MBS), and purchasing mortgage loans and mortgage-related securities in the secondary market for its mortgage portfolio. Fannie Mae operates in three business segments: Single-Family business, Multifamily Business (formerly Housing and Community Development (HCD)) and Capital Markets group. Its Single-Family Credit Guaranty and Multifamily businesses work with its lender customers to purchase and securitize mortgage loans customers deliver to the Company into Fannie Mae MBS.

The Company obtains funds to support its business activities by issuing a variety of debt securities in the domestic and international capital markets. Fannie Mae acquires funds to purchase mortgage-related assets for its mortgage portfolio by issuing a variety of debt securities in the domestic and international capital markets. It also makes other investments. Fannie Mae conducts its business in the United States residential mortgage market and the global securities market. It conducts business in the United States residential mortgage market and the global securities market. During the year ended December 31, 2011, the Company��

Single-Family Business

Single-Family business includes mortgage securitizations, mortgage acquisitions, credit risk management and credit loss management. Single-Family business works with the Company�� lender customers to provide funds to the mortgage market by securitizing single-family mortgage loans into Fannie Mae MBS. Its Single-Family business also works with its Capital Markets group to facilitate the purc! hase of single-family mortgage loans for the Company�� mortgage portfolio. Fannie Mae�� Single-Family business prices and manages the credit risk on its single-family guaranty book of business, which consists of single-family mortgage loans underlying Fannie Mae MBS and single-family loans held in its mortgage portfolio. Single-Family business and Capital Markets group securitize and purchase primarily single-family fixed-rate or adjustable-rate, first lien mortgage loans, or mortgage-related securities backed by these types of loans.

The Company securitizes or purchases loans insured by Federal Housing Administration (FHA), loans guaranteed by the Department of Veterans Affairs (VA), and loans guaranteed by the Rural Development Housing and Community Facilities Program of the Department of Agriculture, manufactured housing loans, reverse mortgage loans, multifamily mortgage loans, subordinate lien mortgage loans and other mortgage-related securities. Its Single-Family business securitizes single-family mortgage loans and issues single-class Fannie Mae MBS. Fannie Mae�� Single-Family business securitizes loans solely in lender swap transactions, in which lenders deliver pools of mortgage loans to the Company, which are placed immediately in a trust, in exchange for Fannie Mae MBS backed by these loans. Generally, the servicing of the mortgage loans held in its mortgage portfolio or that backs its Fannie Mae MBS is performed by mortgage servicers on the Company�� behalf. Lenders who sell single-family mortgage loans to Fannie Mae service these loans for the Company. For loans it owns or guarantees, the lender or servicer must obtain its approval before selling servicing rights to another servicer.

Fannie Mae�� mortgage servicers collect and deliver principal and interest payments, administer escrow accounts, monitor and report delinquencies, perform default prevention activities, evaluate transfers of ownership interests, respond to requests for partial releases of sec! urity, an! d handle proceeds from casualty and condemnation losses. Its mortgage servicers are the primary point of contact for borrowers and perform implementation of its homeownership assistance initiatives, negotiation of workouts of troubled loans, and loss mitigation activities. Mortgage servicers also inspect and preserve properties and process foreclosures and bankruptcies.

Multifamily Mortgage Business

Multifamily business works with the Company�� lender customers to provide funds to the mortgage market by securitizing multifamily mortgage loans into Fannie Mae MBS. Through its Multifamily business, Fannie Mae provides liquidity and support to the United States multifamily housing market principally by purchasing or securitizing loans that finance multifamily rental housing properties. It also provides some limited debt financing for other acquisition, development, construction and rehabilitation activity related to projects that complement this business. Fannie Mae�� Multifamily business also works with its Capital Markets group to facilitate the purchase and securitization of multifamily mortgage loans and securities for Fannie Mae�� portfolio, as well as to facilitate portfolio securitization and resecuritization activities.

The Company�� multifamily guaranty book of business consists of multifamily mortgage loans underlying Fannie Mae MBS and multifamily loans and securities held in Fannie Mae�� mortgage portfolio. Revenues for Fannie Mae�� Multifamily business are derived from a variety of sources, including guaranty fees received as compensation for assuming the credit risk on the mortgage loans underlying multifamily Fannie Mae MBS and on the multifamily mortgage loans held in its portfolio and on other mortgage-related securities; transaction fees associated with the multifamily business, and other bond credit enhancement related fees. As with the servicing of single-family mortgages, multifamily mortgage servicing is performed by the lenders who s! ell the m! ortgages to the Company. Fannie Mae�� Multifamily business is organized and operated as an integrated commercial real estate finance business.

Capital Markets

Capital Markets group's primary business activities include mortgage and other investments, mortgage securitizations, structured mortgage securitizations and other customer services, and interest rate risk management. Capital Markets group manages the Company�� investment activity in mortgage-related assets and other interest-earning, non-mortgage investments. It funds its investments primarily through proceeds the Company receives from the issuance of debt securities in the domestic and international capital markets. Its business activity is focused on making short-term use of its balance sheet rather than long-term investments. Activities Fannie Mae is undertaking to provide liquidity to the mortgage market include whole loan conduit, early funding, real estate mortgage investment conduit (REMICs) and other structured securitizations and dollar roll transactions. Whole loan conduit activities include its purchase of both single-family and multifamily loans principally for the purpose of securitizing them. During the year ended December 31, 2010, it was engaged in dollar roll activity. A dollar roll transaction is a commitment to purchase a mortgage-related security with a concurrent agreement to re-sell a similar security at a later date or vice versa.

Fannie Mae�� Capital Markets group is engaged in issuing both single-class and multi-class Fannie Mae MBS through both portfolio securitizations and structured securitizations involving third party assets. Its Capital Markets group creates single-class and multi-class Fannie Mae MBS from mortgage-related assets held in its mortgage portfolio. Fannie Mae�� Capital Markets group may sell these Fannie Mae MBS into the secondary market or may retain the Fannie Mae MBS in its investment portfolio. The Company�� Capital Markets group creates single-class ! and multi! -class structured Fannie Mae MBS, for its lender customers or securities dealer customers, in exchange for a transaction fee. The Company�� Capital Markets group provides its lender customers and their affiliates with services that include offering to purchase a range of mortgage assets, including non-standard mortgage loan products; segregating customer portfolios to obtain optimal pricing for their mortgage loans, and assisting customers with hedging their mortgage business.

Although the Company�� Capital Markets group�� business activities are focused on short-term financing and investing, revenue from its Capital Markets group is derived primarily from the difference, or spread, between the interests it earns on its mortgage and non-mortgage investments and the interest it incurs on the debt the Company issues to fund these assets. Its Capital Markets revenues are primarily derived from the Company�� mortgage asset portfolio. Capital Markets group funds its investments primarily through the issuance of a variety of debt securities in a range of maturities in the domestic and international capital markets. Investors in the Company�� debt securities include commercial bank portfolios and trust departments, investment fund managers, insurance companies, pension funds, state and local governments, and central banks.

The Company competes with Freddie Mac, FHA and Ginnie Mae.

Best Bank Companies To Watch For 2014: Ellington Financial LLC (EFC)

Ellington Financial LLC (EFC) is a specialty finance company, which specializes in acquiring and managing mortgage-related assets. As of December 31, 2011, its targeted assets included residential mortgage-backed securities (RMBS), backed by prime jumbo, Alternative A-paper (Alt-A), manufactured housing and subprime residential mortgage loans (non-Agency RMBS); RMBS for which the principal and interest payments are guaranteed by a United States Government agency or a United States Government-sponsored entity (Agency RMBS); mortgage-related derivatives; commercial mortgage-backed securities (CMBS), commercial mortgage loans and other commercial real estate debt, and corporate debt and equity securities and derivatives. It also acquires and manages other types of mortgage-related assets and financial assets, such as residential whole mortgage loans, asset-backed securities (ABS), backed by consumer and commercial assets, non-mortgage-related derivatives and real property.

Non-Agency RMBS

The Company acquires non-Agency RMBS backed by prime jumbo, Alt-A, manufactured housing and subprime residential mortgage loans. Its non-Agency RMBS holdings include investment-grade and non-investment grade classes. Non-Agency RMBS are debt obligations issued by private originators of or investors in residential mortgage loans. Non-Agency RMBS are issued as CMOs and are backed by pools of whole mortgage loans or by mortgage pass-through certificates. Non-Agency RMBS are securitized in senior/subordinated structures, or in excess spread/over-collateralization structures. In senior/subordinated structures, the subordinated tranches absorb all losses on the underlying mortgage loans before any losses are borne by the senior tranches.

Agency RMBS

The Company�� assets in this asset class consist of whole pool pass-through certificates, the principal and interest of which are guaranteed by Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Cor! poration (Freddie Mac), or Government National Mortgage Association (Ginnie Mae), and which are backed by adjustable rate mortgages (ARMs), hybrid ARMs or fixed-rate mortgages. Mortgage pass-through certificates are securities representing undivided interests in pools of mortgage loans secured by real property where payments of both interest and principal, plus pre-paid principal, on the securities are made monthly to holders of the security, in effect passing through monthly payments made by the individual borrowers on the mortgage loans that underlie the securities, net of fees paid to the issuer/guarantor and servicers of the securities. Whole pool pass-through certificates are mortgage pass-through certificates that represent the entire ownership of a pool of mortgage loans.

In addition to investing in specific pools of Agency RMBS, the Company utilizes forward-settling purchases and sales of Agency RMBS where the underlying pools of mortgage loans are to be announced mortgage-backed securities (MBS) (TBAs). Pursuant to these TBA transactions, it agrees to purchase or sell, for future delivery, Agency RMBS with certain principal and interest terms and certain types of underlying collateral. It uses TBAs for hedging purposes. It engages in TBA transactions for purposes of managing certain risks associated with its long Agency RMBS and its non-Agency RMBS.

Mortgage-Related Derivatives

The Company takes long and short positions in various mortgage-related derivative instruments, including credit default swaps. A credit default swap is a credit derivative contract in which one party (the protection buyer) pays an ongoing periodic premium (and often an upfront payment as well) to another party (the protection seller) in return for compensation for default (or similar credit event) by a reference entity. In this case, the reference entity can be an individual MBS or an index of several MBS, such as an ABX Index, PrimeX or a CMBX Index.

CMBS

CMBS ar! e mortgage-backed securities collateralized by loans on commercial properties. CMBS issued are fixed rate securities backed by fixed rate loans made to multiple borrowers on a range of property types, though single-borrower CMBS and floating-rate CMBS have also been issued. Commercial mortgage loans are loans secured by liens on commercial properties, including retail, office, industrial, hotel and multifamily properties. Commercial real estate loans may also be structured into more complicated senior/subordinate structures, including those providing for multiple B-Note or multiple mezzanine loan senior/subordinate components.

Corporate Debt and Equity Securities and Derivatives

For hedging purposes, the Company takes short positions in corporate debt and equity (including indices on corporate debt and equity) by entering into derivative contracts, such as credit default swaps, total return swaps and options. These hedges reference corporations (such as financial institutions that have substantial mortgage-related exposure) or indices whose performance has a degree of correlation with the performance of its portfolio. Given this correlation, a short position with respect to such corporations or indices provides a hedge to its portfolio of MBS as a whole.

Other Assets

The Company from time to time acquires other mortgage-related and financial assets, which include residential whole mortgage loans, ABS backed by consumer and commercial assets and real property. It also acquires real property interests, such as single family and multifamily residential properties.

Best Bank Companies To Watch For 2014: Bank of Nova Scotia (BNS)

The Bank of Nova Scotia (the Bank) is a diversified financial institution. As of October 31, 2011, the Bank offered a range of products and services, including retail, commercial, corporate and investment banking to more than 18.6 million customers in more than 50 countries around the world. The Bank has four business lines: Canadian Banking, International Banking, Scotia Capital and Global Wealth Management. In January 2012, the Company closed its acquisition of 51% of Banco Colpatria. In April 2012, the Company through Scotia Capital Inc. acquired Howard Weil Incorporated. In April 2013, Bank of Nova Scotia acquired a 50% interest in Administradora de Fondos de Pensiones Horizonte SA. Advisors' Opinion:

• [By Will Ashworth]

  TD Rating: 7.5

  Bank of Nova Scotia (BNS)

  Dividend Yield: 3.9%

  The last of the major Canadian banks is Bank of Nova Scotia (BNS). Not known for its Canadian retail banking, its biggest calling cards are its businesses outside of Canada in Latin America and Asia. Analysts expect it to deliver a 9.1% increase in adjusted net income in the fourth quarter to C$1.6 billion, 47% of which will come from outside of Canada.

• [By Alex Barinka]

  Bank of Nova Scotia (BNS) fell 1.7 percent to C$57.71. Canada�� third-largest lender by assets said net income for the period fell 14 percent from a year earlier when the bank had a one-time gain. Earnings from its global banking and markets business slipped 3 percent in the latest quarter.

• [By Brian Pacampara]

  Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Canadian banking giant Bank of Nova Scotia (NYSE: BNS  ) has earned a respected four-star ranking. �

Warren Buffett & Bill Gates on the Markets, Interest Rates, Equities, Bonds, Investing, Currencies

 

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Big banks beat expectations, but ...

Big banks released quarterly results this week. Morgan Stanley was a winner, while Citigroup fell short.

NEW YORK (CNNMoney) Investors got a peek inside the nation's biggest banks this week. And the picture wasn't too bad -- as long as you don't look too closely.

For the final three months of 2013, five of the six largest U.S. banks reported earnings that were better than analysts had expected. But underlying profits were hurt in several cases by legal expenses, sluggish mortgage activity and lackluster trading. Overall revenue fell in many cases.

JPMorgan Chase (JPM, Fortune 500) and Morgan Stanley (MVNR) both reported hefty legal hits that dragged profits lower. Excluding those costs and other one-time items, earnings at both banks topped analyst expectations.

Echoing comments by JPMorgan chief executive Jamie Dimon, Morgan Stanley CEO James Gorman said Friday that his bank is "continuing to address many of the legal issues from the financial crisis."

Wells Fargo (WFC, Fortune 500), the nation's largest home lender, was also hurt by weakness in the mortgage market as rising interest rates deterred borrowers.

But earnings at Bank of America (BAC, Fortune 500) came in better than expected, helped by a $2 billion profit in the company's consumer banking division, which includes branch banking and loans for small business.

Unlike its main rivals, BofA has yet to settle with the Federal Housing Finance Agency over allegations that it misled investors about the quality of mortgage-backed securities sold prior to the financial crisis. CEO Brian Moynihan seemed to allude to this by saying "work remains on past issues."

BofA and JPMorgan both benefited from an improvement in overall credit quality, which allowed them to set aside less money for losses on bad loans.

Meanwhile, earnings at G! oldman Sachs (GS, Fortune 500) plunged 19% in the quarter, but still topped expectations.

Goldman, which was the lead banker on Twitter's (TWTR) IPO in November, said fees from stock underwriting more than doubled to $622 million.

The firm's trading business rebounded in the fourth quarter, which eased some concerns about the impact of new regulations that impose limits on certain risky trading strategies. Revenue from fixed income, commodities, and currency trading fell 15% in the fourth quarter from a year ago. But it was up 38% from the third quarter.

Despite the rebound in trading late last year, the amount of money Goldman spent on benefits, salaries and bonuses fell in 2013.

But compensation was up at Morgan Stanley from a year ago. Morgan Stanley reported a big jump in revenue from underwriting thanks to last year's robust IPO market. The company's wealth management and brokerage businesses were strong as well, due to the bull market in stocks. But revenue from fixed-income and commodities trading fell to $694 million from $811 million a year ago.

Citigroup (C, Fortune 500) was the big disappointment. The bank's earnings fell short of analysts' expectations, due largely to the slowdown in mortgage financing. Shares of Citi are down sharply for the week.

Top 10 Financial Companies To Own For 2014

The NFL Players Association announced Tuesday that it has expanded its four-year-old partnership with Financial Finesse, the retirement and financial education provider, with the launch of a Financial Helpline service that NFLPA members can use. 

In a webcast, Liz Davidson, founder and CEO of Financial Finesse (who also writes regularly for AdvisorOne) and Dana Hammond, director of player affairs and development for the NFL players union, spoke of the unique challenges faced by NFL players in managing their money, and the role that Financial Finesse has already played in educating players about not just the basics of money and investing, but also how to choose an advisor.

Hammond said that NFL players’ financial challenges starts with the fact that “We’re dealing with impressionable young men coming into the big NFL, playing out a lifelong dream.” However, “they’re often victims of financial advisors who are looking to separate them from their newfound wealth,” while “the requests they get from friends and family add to the pressures they’re feeling.”

Top 10 Financial Companies To Own For 2014: Virginia Commerce Bancorp(VCBI)

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

Top 10 Financial Companies To Own For 2014: Nuveen California Select Quality Municipal Fund Inc.(NVC)

Nuveen California Select Quality Municipal Fund, Inc. is a closed-ended fixed income mutual fund launched by Nuveen Investments, Inc. The fund is managed by Nuveen Asset Management. It invests in the fixed income markets of California. The fund invests primarily in municipal securities rated Baa/BBB or better. It invests in securities that provide income exempt from federal and California income tax. The fund employs fundamental analysis with bottom-up stock picking approach to create its portfolio. It benchmarks the performance of its portfolio against the S&P California Municipal Bond Index and the S&P National Municipal Bond Index. Nuveen California Select Quality Municipal Fund, Inc. was formed on April 3, 1991 and is domiciled in the United States.

Top 5 Tech Stocks To Buy For 2014: Community Partners Bancorp(CPBC)

Community Partners Bancorp operates as the holding company for Two River Community Bank, a state-chartered commercial bank that provides a range of commercial and retail banking services to small and medium-sized businesses, not-for-profit organizations, professionals, and individuals principally in Monmouth and Union counties, New Jersey. The company offers a range of deposit products, including non-interest bearing or lower cost interest bearing checking accounts, savings accounts, money market accounts, and certificates of deposit accounts. It also provides various loan products consisting of construction loans for residential dwellings, apartment buildings, restaurants, shopping centers, and owner-occupied business properties; commercial business loans; commercial real estate loans for the acquisition of new property or the refinancing of existing property; residential real estate and consumer loans, including residential mortgages, home equity lines of credit, equity loans, personal loans, automobile loans, and overdraft protection; participation loans; and small business administration loans. In addition, the company offers safe deposit boxes, night depositories, wire transfers, money orders, travelers? checks, automated teller machines, direct deposits, telephone and Internet banking services, and corporate business services. It operates 15 banking offices in Middletown, Allaire, Atlantic Highlands, Cliffwood, Manasquan, Navesink, Port Monmouth, Red Bank, Tinton Falls, West Long Branch, Westfield, Cranford, and Fanwood, New Jersey. The company was founded in 2000 and is based in Middletown, New Jersey.

Top 10 Financial Companies To Own For 2014: Dewmar International BMC Inc (DEWM)

Dewmar International BMC, Inc., formerly Convenientcast, Inc., incorporated on August 15, 2003, focuses on searching for properties of merit to acquire and develop. On June 9, 2009, the Company sold its interest in the Big Andy Mine. In February 2012, the Company acquired The DSD Network of America, Inc.

The Company was formed as a holding company for making business acquisitions in various industries and providing business development services for those entities. As of December 31, 2009, it had not generated any revenues.

Top 10 Financial Companies To Own For 2014: Commerce Bancshares Inc.(CBSH)

Commerce Bancshares, Inc. operates as the bank holding company for Commerce Bank, N.A. that provides various general banking services to individuals and businesses. It operates in three segments: Consumer, Commercial, and Wealth. The Consumer segment includes the retail branch network, consumer installment lending, personal mortgage banking, consumer debit and credit bank card activities, and student lending. The Commercial segment provides various corporate lending, merchant and commercial bank card products, leasing, and international services, as well as business and government deposit and cash management services. The Wealth segment offers traditional trust and estate tax planning services, brokerage services, and advisory and discretionary investment portfolio management services to personal and institutional corporate customers. This segment also manages a family of proprietary mutual funds, which are available for sale to trust and general retail customers. The comp any, through its other non-banking subsidiaries, involves in underwriting credit life and credit accident, and health insurance; selling property and casualty insurance; private equity investment; securities brokerage; mortgage banking; and leasing activities. It serves customers through a network of branches and ATM machines, online banking, and a central contact center from approximately 370 locations in Missouri, Kansas, Illinois, Oklahoma, and Colorado. Commerce Bancshares, Inc. was founded in 1966 and is headquartered in Kansas City, Missouri.

Advisors' Opinion:

• [By Monica Gerson]

  Commerce Bancshares (NASDAQ: CBSH) is projected to report its Q3 earnings at $0.72 per share on revenue of $254.92 million.

  First Republic Bank (NYSE: FRC) is estimated to report its Q3 earnings at $0.76 per share on revenue of $320.72 million.

• [By John Maxfield]

  Bank investors got their first glimpse of what first-quarter earnings might look like today when Commerce Bancshares (NASDAQ: CBSH  ) reported its results. Shares of the Kansas City-based bank are trading sharply lower after its earnings per share fell by 4.3% on a year-over-year basis.

Top 10 Financial Companies To Own For 2014: Morgan Stanley Emerging Markets Fund Inc. (MSF)

Morgan Stanley Emerging Markets Fund, Inc. is a closed-ended equity mutual fund launched and managed by Morgan Stanley Investment Management Inc. It invests in the public equity markets across the global emerging markets. The fund invests in stocks of companies operating across diversified sectors. It makes its investments in companies across all market capitalizations. The fund benchmarks the performance of its portfolio against the MSCI Emerging Markets Free Index. Morgan Stanley Emerging Markets Fund Inc. was formed on November 1, 1991 and is domiciled in the United States.

Advisors' Opinion:

• [By George Putnam, Editor, New Generation Research, Inc.]

  Morgan Stanley Emerging Markets Fund (MSF) is not an index-based fund, and therefore, its portfolio managers have a lot of latitude.

  Among their top ten holdings are a range of consumer and technology holdings, such as Samsung Electronics and Taiwan Semiconductor, as well as financials. At current prices, the fund is trading at a roughly 10.5% discount to its net asset value (NAV).

Top 10 Financial Companies To Own For 2014: Ishares Trust Dow Jones Select Dividend (DVY)

iShares Dow Jones Select Dividend Index Fund (the Fund) seeks investment results that correspond generally to the price and yield performance of the Dow Jones U.S. Select Dividend Index (the Index). The Index measures the performance of a selected group of equity securities issued by companies that have provided relatively high dividend yields on a consistent basis over time. The Index stocks are screened by dividend-per-share growth rate, dividend payout percentage and average daily dollar trading volume, and are selected based on dividend yield.

The Index consists of 100 of the highest dividend-yielding securities (excluding real estate investment trusts) in the Dow Jones U.S. Total Market Index, an index representative of the total market for United States equity securities. To be included in the Index, the securities must have had a flat to positive dividend-per-share growth rate for each of the last five years; must have an average five-year dividend payout ratio of 60% or less, and must have a minimum three-month average trading volume of 200,000 shares a day. The Index is reconstituted annually. The Fund uses a representative sampling strategy in seeking to track the Index. The Fund�� investment advisor is Barclays Global Fund Advisors.

Advisors' Opinion:

• [By Dan Caplinger]

  Investing in dividend stocks is easy. Exchange-traded funds Vanguard Dividend Appreciation (NYSEMKT: VIG  ) , iShares Dow Jones Select Dividend (NYSEMKT: DVY  ) , and SPDR S&P Dividend (NYSEMKT: SDY  ) give you low-cost access to dozens or even hundreds of dividend-paying stocks, all within a single investment vehicle. If you prefer, you can also buy individual stocks, either through a broker or through direct investment plans. Blue-chip companies General Electric (NYSE: GE  ) and Procter & Gamble (NYSE: PG  ) are just two of the hundreds of stocks that offer shares through direct plans and allow you to reinvest dividends automatically in additional shares at no fee.

• [By Jim Pyke]

  If you recall my previous article that looked at iShares Dow Jones Select Dividend Index (DVY) and SPDR S&P Dividend ETF (SDY), there is an interesting comparison. While both SDY and DVY were underweight in Energy-Oils by substantial margin, both VIG and VYM are overweight in this sector. VIG has a 13.2% of its assets and VYM is at 13.0% relative to the market at 10.5%.

• [By Dan Caplinger]

  Which dividend stocks are getting hit hardest?
  So far, we've seen some evidence that dividend-paying stocks are doing worse than the overall market since the latest pullback began. Going back to the end of April, the iShares DJ Select Dividend ETF (NYSEMKT: DVY  ) , which has a high concentration of strong dividend payers, has fallen about 4%, compared to a more-or-less flat performance from the S&P 500 and other broader benchmarks.

Top 10 Financial Companies To Own For 2014: Arch Capital Group Ltd.(ACGL)

Arch Capital Group Ltd., together with its subsidiaries, provides insurance and reinsurance products worldwide. It operates in two segments, Insurance and Reinsurance. The Insurance segment offers casualty; construction; executive assurance; healthcare; collateral protection, debt cancellation, and service contract reimbursement products; national accounts casualty; professional liability; programs; property, energy, marine, and aviation; surety; and travel and accident insurance products. It also provides other insurance products, such as excess workers compensation and employers' liability insurance coverages for qualified self-insured groups, associations, and trusts; captive insurance programs; and accident, disability, and medical plan insurance coverages for employer groups, medical plan members, students, and other participant groups. This segment markets its products through a network of licensed independent retail and wholesale brokers. The Reinsurance segment rei nsures third party liability and worker?s compensation exposures; individual property risks that include personal lines and commercial property exposures; other specialty lines, including surety, accident and health, workers' compensation catastrophe, multi-peril crop, trade credit, and political risk; catastrophic perils, such as hurricane, earthquake, flood, tornado, hail, and fire; marine business, which includes coverage for hull, cargo, and transit and offshore oil and gas operations, as well as aviation business that comprises coverage for airline and general aviation risks; and non-traditional business to provide insurers with risk management solutions. This segment markets its reinsurance products through brokers, as well as directly with the ceding companies. The company was founded in 1995 and is headquartered in Hamilton, Bermuda.

Advisors' Opinion:

• [By Holly LaFon]

  Arch Capital (ACGL)'s Dinos Iordanu recently described to our analysts how he met me in 2001. Before we invested in his business, we asked him all sorts of personal questions about how he came to America from Cyprus; whether or not his wife had a job; and how big was his house? He told our analysts that "Ron was trying to get a sense of me. He wanted to understand how I viewed risk. No one else asked us such questions. They were the right questions since you were investing in our business, which was assuming underwriting risk on your behalf. "We got it right with Dinos and have about quadrupled our money in the past twelve years, not exactly the most propitious time to invest in stocks! Of course, there can be no assurance that future investments will be as profitable��lthough you can be assured that we will continue to work hard to try to achieve similar results.

Top 10 Financial Companies To Own For 2014: Encore Capital Group Inc(ECPG)

Encore Capital Group, Inc., through its subsidiaries, engages in consumer debt buying and recovery business primarily in the United States. The company purchases and manages portfolios of defaulted consumer receivables, such as consumers? unpaid financial commitments to credit originators, including banks, credit unions, consumer finance companies, commercial retailers, auto finance companies, and telecommunication companies; and receivables subject to bankruptcy proceedings or consumer bankruptcy receivables. It also provides bankruptcy services to the finance industry, such as negotiating bankruptcy plans, monitoring and managing consumer?s compliance with bankruptcy plans, and recommending courses of action to clients in case of a deviation from a bankruptcy plan. The company was founded in 1998 and is headquartered in San Diego, California.

Advisors' Opinion:

• [By John Udovich]

  Small cap debt collection stocks like�Asta Funding, Inc (NASDAQ: ASFI), Encore Capital Group, Inc (NASDAQ: ECPG) and Portfolio Recovery Associates, Inc (NASDAQ: PRAA) could be the latest target of a government shakedown or crackdown as the Consumer Financial Protection Bureau said this week that�before it formally proposes any rules for debt collection, it wants to hear how collectors verify borrowers' information and communicate with consumers. In other words, debt collectors could be restricted from using text messages, social media or other Internet-based tools in their pursuit to collect debts. With about one in 10 Americans coming out of the financial crisis with some debt in collection, investing in small cap�debt collection stocks has been profitable for investors. However, there is no timeline for when any new rules might be released for review or come into effect.

Top 10 Financial Companies To Own For 2014: Newport Bancorp Inc.(NFSB)

Newport Bancorp, Inc. operates as the holding company for Newport Federal Savings Bank that provides financial services to individuals and small businesses in Newport and Washington County, Rhode Island, and Stonington, Connecticut. It accepts various deposit products that include including non-interest-bearing demand deposits, such as checking accounts; interest-bearing demand accounts comprising NOW and money market accounts; regular savings accounts; and certificates of deposit. The company?s loan portfolio comprises one-to-four family residential real estate loans; multi-family and commercial real estate loans; home equity loans and lines; construction loans for one-to-four family homes and commercial, multi-family, and other nonresidential purposes; commercial loans; consumer and other loans, including auto loans; and loans secured by passbook savings or certificate accounts. It operates through its main office located in Newport; and five full-service branch offices located in Middletown, Wakefield, Westerly, and Portsmouth, Rhode Island, as well as Stonington, Connecticut. The company was founded in 1888 and is headquartered in Newport, Rhode Island.