Lululemon: Here's What We Know

Friday capped a difficult week for stocks with another losing day, as the S&P 500 (SNPINDEX: ^GSPC  ) , and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) , lost 0.6% and 0.7%, respectively.

Lululemon laughs it off
The announcement on Monday that Lululemon Athletica's (NASDAQ: LULU  ) CEO Christine Day would be stepping down took the market by surprise -- and not the good kind, as the stock shed nearly a fifth of its value the next day. The stock has yet to recover, and the company is trying to lighten the mood with a facetious CEO job ad/ application on its website (reminiscent of Ben & Jerry's "Yo! I'm Your CEO" essay contest that ran in 1994-1995 simultaneously with their search for a new CEO).

The reasons for Day's departure remain a mystery, but it's unlikely that she was forced out by her board. This looks like a case in which the "personal reasons" that outgoing CEOs mechanically cite in the press release is actually accurate.

The following graph shows the performance of Lululemon's stock (blue line) on a total-return basis, starting on Jul. 1, 2008, the date on which Christine Day assumed the role of CEO. The graph also includes three benchmarks: the S&P 500, the Russell 2000 Growth Index (which tracks small-capitalization growth stocks) and Under Armour, the athletic apparel maker that is arguably Lululemon's closest peer.

LULU Total Return Price data by YCharts

The graph makes it plain that, over this nearly five-year period, Lululemon has absolutely smashed the broad market and small-cap growth stocks, while matching Under Armour's fantastic returns.

Now, Foolish investors know that a five-year period is a significant chunk of time, particularly in a market in which many investors' time horizon does not extend beyond the next couple of quarters. As such, that performance is unlikely to be the product of anything other than outstanding business fundamentals. On that note, it's worth recapping a few of the company's achievements under Day's tenure:

During the five-year period ending on Feb. 3, 2013, average annual return on equity was 34.5%. Better yet, this was achieved without any recourse to leverage -- Lululemon doesn't have a dollar of financial debt on its balance sheet. Over the five-year period ended May 5, 2013, revenues grew at an annualized rate of 36.5%. That's a fantastic number in any environment, but Lululemon did this in a very tough economic climate for retail.

Does this week's share price slump present an opportunity for investors? At nearly 31 times the next 12 months' earnings-per-share estimate, Lululemon's stock remains pricey by conventional standards, and it may be dead money as Wall Street takes a "wait-and-see" approach to the leadership issue. However, Lululemon appears to have carved out a solid franchise in a very competitive area; for investors with a higher-than-average risk tolerance and a multi-year time frame, the current price could ultimately prove to be an attractive entry point.

Lululemon has the potential to grow its sales by 10 times if it can penetrate its other markets like it has in Canada, but the competitive landscape is starting to increase. Can Lululemon fight off larger retailers, and ultimately deliver huge profits for savvy investors? The Motley Fool answers these questions and more in its most in-depth Lululemon research available. Thousands have already claimed their own premium ticker coverage; gain instant access to your own by clicking here now.

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Don't Get Too Worked Up Over MeadWestvaco's Earnings

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on MeadWestvaco (NYSE: MWV  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, MeadWestvaco burned $291.0 million cash while it booked net income of $167.0 million. That means it burned through all its revenue and more. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at MeadWestvaco look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

MeadWestvaco's issue isn't questionable cash flow boosts, but items in that suspect group that reduced cash flow. Within the questionable cash flow figure -- here a negative-- plotted in the TTM period above, other operating activities (which can include deferred income taxes, pension charges, and other one-off items) constituted the biggest reversal. Overall, the biggest drag on FCF came from capital expenditures.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

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We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

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3 Reasons to Sell Ford Stock

One of the most useful exercises that any investor can do is turn the tables and analyze the bearish argument for a stock that they own. Today, Motley Fool analyst Brendan Byrnes, a Ford shareholder, takes a look at potential reasons to sell the stock. In the video below, Brendan points to the cyclicality of the company, the fact that there is little moat around Ford or any automaker, and that there are fewer millennials buying vehicles as three possible reasons to sell the stock.

Worried about Ford?
If you're concerned that Ford's turnaround has run its course, relax -- there's good reason to think that the Blue Oval still has big growth opportunities ahead. The Fool's premium Ford research service outlines those opportunities. If you're looking for some freshly updated guidance to Ford's prospects in coming years, you've come to the right place -- click here to get started now.

Revised GDP Plummets, Stocks Soar

Today provided a valuable lesson in the power of revisions. Before the market opened for trading, the Department of Commerce reported (link opens PDF) its final estimate of first-quarter gross domestic product. For the three months ended March 31, the government said real GDP grew at a seasonally adjusted annual rate of 1.8% over the fourth quarter of last year, versus a previous estimate of 2.4%.

But don't tell investors, as the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up by more than 100 points as of 12:15 p.m. EDT. If it finishes the session this strongly, it will mark the 12th day out of 17 this month that the blue-chip index has made a triple-digit move. 

While there's nothing particularly surprising about a 1.8% growth rate, what is notable is how much it has been revised downward over the past two months. The Commerce Department gave an advance estimate of 2.5%. It then revised that down to 2.4% on its second estimate. The 1.8% rate, in turn, is the third and final estimate.

According to the official press release, "The downward revision to the percent change in real GDP primarily reflected downward revisions to personal consumption expenditures, to exports, and to nonresidential fixed investment that were partly offset by a downward revision to imports."

Despite the revision, there was one significant trend revealed by the data: Motor-vehicle output added 0.33 percentage points to the first-quarter change in real GDP after adding 0.18 percentage points to the fourth-quarter change. We saw this in the quarterly numbers for both Ford and General Motors. Ford's North America division saw wholesale volumes shoot up by 17% over the same quarter last year, while General Motors' retail sales increased by 9.3%. As I write, shares of both companies are up by more than 1% on the day.

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This Metric Says You're Smart to Own Allscripts Healthcare Solutions

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

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

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

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

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

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

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

Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars indicates a trend worth worrying about. Allscripts Healthcare Solutions's latest average DSO stands at 89.3 days, and the end-of-quarter figure is 91.2 days. Differences in business models can generate variations in DSO, and business needs can require occasional fluctuations, but all things being equal, I like to see this figure stay steady. So, let's get back to our original question: Based on DSO and sales, does Allscripts Healthcare Solutions look like it might miss its numbers in the next quarter or two?

I don't think so. AR and DSO look healthy. For the last fully reported fiscal quarter, Allscripts Healthcare Solutions's year-over-year revenue shrank 4.8%, and its AR dropped 4.9%. That looks OK. End-of-quarter DSO decreased 1.2% from the prior-year quarter. It was up 3.3% versus the prior quarter. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.

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Obamacare Medicaid Expansion Stiff-Arm Hurting Insurers?

Obamacare is seen as a long-term win for both managed-care stocks and hospital stocks, adding paying customers for both industries, but it may surprise some investors to discover Obamacare won't come close to eliminating the uninsured.

In this video, health-care analyst David Williamson discusses how 19 states seemingly opting out of Medicaid expansion will affect managed-care stocks like Centene and Molina along with the impact a shockingly large amount of uninsured Americans could have on the health-care system.

Still in the dark about how Obamacare might affect you and your portfolio? Don't worry -- you're not alone. To help prepare investors for the massive changes coming to the American health-care system, The Motley Fool created a special free report that makes this complex topic easily understandable. Download "Everything You Need to Know About Obamacare" and discover how the law may affect your taxes, health insurance, and investments. Click here for your free copy today.

Follow David on Twitter: @MotleyDavid.

Sony Launches 6.4-Inch Xperia Z Ultra Phablet

Today, Sony (NYSE: SNE  ) unveiled its new premium Xperia Z Ultra Android smartphone. At 6.4 inches, the company says the phone is the world's largest, slimmest, and only waterproof, full-HD smartphone display.

The phone's features include:

Qualcomm Snapdragon 800 2.2 GHz quad-core processor, with 4G LTE connectivity. Write and sketch on the display with any pencil and selected stylus or pen. Capable of filming full HD underwater. HD voice. Dust-resistant design. Battery-saving features that automatically turn off background functions when not in use.

Calum MacDougall, Sony's mobile communications director at Xperia, said in a press release that, "We're already bringing the best of Sony technology and design across a range of premium smartphones and tablets, and now we are bringing this same premium offering to the large-screen smartphone segment, setting a new standard for others to follow."

The Xperia Z Ultra will launch globally in Q3 2013, with exact availability varying depending on the market. Sony hasn't released pricing details.

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Why Tenet Healthcare and Vanguard Health Systems Shares Soared

Coal Keeps Its Crown... for Now

Thanks to a jump in gas prices over the past year, coal is starting to gain back some of the ground it lost to natural gas in electricity generation. Back in April of 2012, the percentages of power generation from coal and natural gas in the U.S. were both standing very close to 32%. Those power generation figures stand at 40% from coal versus 25% from natural gas as of March 2013. 

Despite the gains as of late, the long-term window for coal in the U.S. doesn't look as promising. Thanks to the large amount of coal facilities to be shut down in the next couple of years and more utility companies looking at other forms of generation, coal companies will need to look for a larger share of revenue coming from outside our borders. In this video, Fool.com contributor Tyler Crowe looks at some of the trends expected to come from utility companies over the next couple of years and what coal companies are doing to take advantage of the overseas markets. 

Because exports are becoming a much bigger part of the domestic coal landscape, Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has authored a special new premium report detailing exactly why Peabody Energy is perhaps most worthy of your consideration. Don't miss out on this invaluable resource – simply click here now to claim your copy today.

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More Expert Advice from The Motley Fool

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

Top Industrial Conglomerate Companies To Invest In 2014

Industrial conglomerate�Valmont Industries� (NYSE: VMI  ) �will pay a�regular quarterly cash dividend�of $0.25 per share, representing an 11.1% increase in the payout to shareholders.

The payment will be made on July 15 to the holders of record at the close of business on June 28, the company announced Monday.

Valmont has paid a quarterly dividend consistently since 1992, with the just-declared quarterly dividend up from its prior distribution of $0.225. The dividend has increased every year since 2005.

Valmont designs and manufactures poles, towers, and structures for lighting and traffic, wireless communication, and utility markets, industrial access systems, and highway safety barriers. It also provides protective coating services and mechanized irrigation equipment for agriculture.

Top Industrial Conglomerate Companies To Invest In 2014: Megastar Development Corp. (MDV.V)

Megastar Development Corp. engages in the acquisition, exploration, and development of mineral properties in Canada. It owns gold and base metal properties in Quebec and British Columbia. The company holds interests in the SIMKAR property consisting of 557 acres located east of Val d'Or, Quebec; and RALLEAU property consisting of located east of Qu茅villon, Quebec. It also holds an option agreement to acquire 100% interest in a total of 46 mineral claim units located in the Omineca Mining Division, British Columbia. The company is based in Vancouver, Canada.

Top Industrial Conglomerate Companies To Invest In 2014: RigNet Inc.(RNET)

RigNet, Inc. provides remote communications services for the oil and gas industry. It offers remote communications services through a controlled and managed Internet protocol/multiprotocol label switching (IP/MPLS) global network, enabling drilling contractors, oil companies, and oilfield service companies to communicate. The company offers a communications package of voice, data, video, networking, and real-time data management to offshore and land-based remote locations. It primarily provides voice-over-Internet-protocol, data, and high-speed Internet access, as well as other value-added services, such as video conferencing solutions, TurboNet solutions for wide area network, real-time data management solutions, Wi-Fi hotspots and Internet kiosks, wireless intercoms, and handheld radios. The company also offers Secure Oil Information Link, a managed members-only communications network hub that enables collaborative partners, suppliers, and customers to transfer and share data. It serves the owners and operators of offshore drilling rigs and production facilities, land rigs, remote offices, and supply bases primarily in the United States, Brazil, Norway, the United Kingdom, Nigeria, Qatar, Saudi Arabia, Singapore, and Australia. The company was founded in 2000 and is headquartered in Houston, Texas.

Top Dow Dividend Stocks To Invest In Right Now: Tandy Brands Accessories Inc.(TBAC)

Tandy Brands Accessories, Inc. engages in designing and marketing of men?s, women?s, and children?s accessories in North America. Its product line includes casual, work, dress, and golf belts; gifts, such as emergency kits, lights, coin banks, games, beverage mugs, and tie racks; small leather goods consisting of men?s and women?s wallets; and suspenders, eyewear, neckwear, and sporting goods accessories. The company markets its products under various private, licensed, and proprietary brand names, including Totes, Wolverine, Eddie Bauer, Eileen West, Haggar, Bone Collector, Levi Strauss Signature, Dockers, Kodiak, Terra, Rolfs, Amity, Canterbury, Prince Gardner, Princess Gardner, Chambers Belt Company, Absolutely Fresh, and Surplus, as well as private brands for retail customers. Tandy Brands Accessories, Inc. sells its products through various retail distribution channels, such as mass merchants, national chain stores, department stores, specialty stores, catalog re tailers, golf pro shops, sporting goods stores, and the retail exchange operations of the United States military. The company was founded in 1990 and is based in Dallas, Texas.

Top Industrial Conglomerate Companies To Invest In 2014: China North East Petroleum Holdings Limited(NEP)

China North East Petroleum Holdings Limited engages in the exploration and production of crude oil in northern China. As of December 31, 2010, it operated 295 producing wells with proven reserves of 5,476,200 barrels of crude oil at Qian?an 112, Hetingbao 301, Daan 34, and Gudian 31 oilfields. The company, through its subsidiary, Song Yuan Tiancheng Drilling Engineering Co., Ltd., provides contract land drilling and other oilfield services for state-owned and non-state-owned oil companies. China North East Petroleum Holdings Limited is headquartered in Song Yuan City, the People?s Republic of China.

Top Industrial Conglomerate Companies To Invest In 2014: Dollarama Inc Com Npv(DOL.TO)

Dollarama Inc., through its subsidiaries, owns and operates a chain of dollar stores in Canada. Its dollar stores offer a range of private label and branded products, including everyday consumer products, general merchandise, and seasonal items. As of January 29, 2012, the company operated 704 Dollarama dollar stores. Dollarama Inc. was formerly known as Dollarama Capital Corporation and changed its name to Dollarama Inc. in September 2009. The company was founded in 1992 and is headquartered in Montreal, Canada.

Dow Dips Below 15,000 Mark as Markets Sell Off

As investors nervously anticipate the day the Federal Reserve slows its easy-money policies, the markets are tumbling. As of 12:50 p.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down 206 points, or 1.36%, to slide below the 15,000 mark. The S&P 500 and the Nasdaq have lost 1.49% and 1.53%, respectively.

As my colleague Dan Caplinger noted earlier, the majority of the Dow's components are simply moving lower because of the overall negativity in the markets, rather than company-specific news. But a few of the Dow's 30 stocks didn't even need macroeconomic pressure to underperform today.

Shares of Coca-Cola (NYSE: KO  ) and Walt-Disney (NYSE: DIS  ) are down significantly after analysts released negative comments about the companies. Morgan Stanley cut its estimates on Coke today due to lower demand for the company's beverages and unfavorable currency rates. We have seen in the past how a strong dollar can affect a company's quarterly profits, and because Coke's products are found in nearly every country around the world and it continues to see more revenue come from outside the U.S., Coke will surely be negatively affected if the dollar continues to strengthen against other currencies around the globe. Shares of Coke are down 2.2%.

Disney has lost 2.4% today after Goldman Sachs lowered its rating on the stock from "buy" to "neutral" and removed the stock from Goldman's Conviction List. Goldman Sachs cited increasing competition for Disney's ESPN network. ESPN recently announced job cuts and the end of its 3-D programming as ways to lower its operating costs, but increased competition in the sporting market will likely raise the cost of long-term programming rights for sporting events. 

Although fellow Dow component Hewlett-Packard (NYSE: HPQ  ) received a stock rating upgrade, shares are still down 1.8%. Wells Fargo upgraded HP to "outperform" from "market perform" based on the idea that even without sales improving, HP can deliver growth in net income and free cash flow in the future. 

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP is rapidly shifting its strategy under the leadership of CEO Meg Whitman. But does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor detour on its road to irrelevance? The Motley Fool's technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now to get your copy today.

Investors Want a Lot From H&R Block's Biggest Quarter

On Wednesday, H&R Block (NYSE: HRB  ) will release its latest quarterly results. With the tax-preparation giant doing most of its business between early February and mid-April, this quarter is always the most important one for the company, and investors already have high expectations for the company.

One thing that H&R Block always has going in its favor is the complexity of the tax code. With new tax increases having taken effect at the beginning of 2013, the company can expect even more confusion among taxpayers during next year's tax season, pointing to further growth potential ahead. Let's take an early look at what's been happening with H&R Block over the past quarter and what we're likely to see in its quarterly report.

Stats on H&R Block

Analyst EPS Estimate	$2.61
Change From Year-Ago EPS	28%
Revenue Estimate	$2.27 billion
Change From Year-Ago Revenue	13.3%
Earnings Beats in Past 4 Quarters	2

Source: Yahoo! Finance.

Can H&R Block knock its earnings out of the park this quarter?
Analysts have gotten a bit more enthusiastic about H&R Block's earnings in recent months, raising their estimates for the April quarter by $0.03 per share and increase their views on fiscal 2014 by a penny per share. But the stock has already gotten a head start on the celebration, rising 19% since early March.

Much of those gains came right after H&R Block's earnings report three months ago, in which the company gave some positive guidance for the April quarter. Although the company reported a much wider-than-expected loss in its fiscal third quarter, CEO Bill Cobb projected tax-filing growth of 1% to 2% and said that H&R Block was winning the competitive battle. Although early tax filings were down because of IRS delays stemming from the late passage of the fiscal-cliff compromise, expected overall growth was good news for the company.

But then, H&R Block ran into trouble with its software. The IRS said that a limited number of software company products failed to provide for the correct treatment of the American Opportunity educational tax credit, forcing an estimated 660,000 taxpayers to have to wait an additional six weeks for their refunds, and H&R Block had been informing its customers about the problems. Intuit (NASDAQ: INTU  ) already has a commanding lead over H&R Block with Intuit's TurboTax software, so H&R Block's slip-up likely didn't add much to Intuit's dominance. But even Blucora's (NASDAQ: BCOR  ) TaxAct software might well benefit from the issue, forcing H&R Block to rely even more on its bricks-and-mortar stores in order to keep its sales up.

In the end, H&R Block wasn't able to deliver on its promise of tax-return growth, as the company announced toward the end of April that it had served 0.9% fewer clients through April 18 than it did the previous year. With its inability to gain market share from Intuit, Blucora, and other tax-preparation alternatives, it's unclear why investors have been bidding the shares up so aggressively.

In H&R Block's quarterly report, look beyond the headline revenue and profit numbers to figure out where the company is having the most success getting clients and which products are driving revenue the most. Despite its short-term setbacks, H&R Block really does have a lucrative opportunity next tax season to capture a whole new audience, and so a disappointment that spurred a share-price plunge might actually provide a nice buying opportunity for long-term investors.

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

Click here to add H&R Block to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

IG Group Holdings Reports Q4 Revenue Up 8%

LONDON -- The shares of IG Group  (LSE: IGG  )  added 4 pence to 594 pence this morning after the spread-betting specialist revealed its fourth-quarter revenues had improved 8%.

The FTSE 250 mid-cap said its turnover during February, April, and May had advanced from £96 million to £104 million.

The company claimed its clients had responded to a number of separate market events, including the Cypriot bank "bail-in," the gold-price slump, and actions from the Bank of Japan during the last three months.

IG added the Q4 performance had helped second-half revenue climb 13% to £193 million, although turnover for the 12 months to May 2013, at £362 million, was 1% lower than the £366 million registered the year before.

IG did confirm, however, that "actions... to slow down investment" had reduced operating costs and had helped 2012-13 profits before tax come in ahead of the prior year.

Prior to today, some City experts were expecting IG's earnings to have dropped from 37 pence to about 34 pence per share. Assuming earnings remain at 37 pence per share, the shares are valued on a P/E multiple of 16.

A trailing 22.5 pence per share dividend currently supports a 3.8% income.

Of course, whether those ratings, this morning's Q4 update, as well as the wider prospects of the spread-betting sector all combine to make IG a buy is something only you can decide.

However, if you already own IG shares and are looking for more buying opportunities, this exclusive wealth report reviews five particularly attractive possibilities.

Indeed, all five opportunities offer a rich mix of robust prospects, illustrious histories and dependable dividends. Just click here for your report -- it's free.

Look Who Else Is Flying Delta These Days

Delta Air Lines (NYSE: DAL  ) is one of the largest and most successful U.S. airlines today. In 2012, the company carried more than 100 million passengers on the way to earning an adjusted profit of $1.55 billion. This strong momentum has led to enviable gains for shareholders: Delta stock has nearly doubled since the beginning of December.

Delta Stock Chart, 12/3/12-6/14/13, data by YCharts

Among the many passengers flying Delta last year, one may have escaped notice: top competitor United Continental (NYSE: UAL  ) . United, which has performed far worse than Delta recently -- it earned an adjusted profit of just $589 million in 2012 despite being similar in size to Delta -- has nevertheless managed to ride Delta's coattails to stock greatness in the last six months.

Delta vs. United Continental Stock Performance, data by YCharts

While United's stock has not performed quite as well as Delta's, a 65% gain is nothing to sneeze at. Clearly, Mr. Market is extrapolating from Delta's success and assuming that United will be able to achieve similar profitability soon, particularly now that it has nearly finished integrating United and Continental. However, Mr. Market (and United investors) may be in for a surprise, because while Delta is the real deal, United's results will not be able to support its high stock price.

Disappointment ahead
United's stock has been soaring despite a weak performance in the first half of 2013. The company posted an adjusted loss of $0.98 per share in Q1. Capacity reductions drove a healthy 5.9% unit revenue increase, but this was more than offset by a 6.5% increase in unit costs. Cost growth has moderated in Q2 as jet fuel prices have fallen, but unit revenue has simultaneously taken a turn for the worse, decreasing 0.5% in April and a similar amount in May.

Coming into Q2, industry analysts expected United to return to strong profit growth, but they have since been forced to backtrack due to the company's weak revenue performance. The average analyst EPS estimate for Q2 has dropped precipitously from $1.98 60 days ago (around the time of United's Q1 earnings report) to $1.42 today.

Strangely, while lowering their estimates for this quarter, analysts have actually raised their estimates for Q3 EPS from $2.21 to $2.31 over the past 60 days. Q4 EPS estimates have risen even more sharply, to approximately $0.65, which would be a big swing from last year's $0.58 per share loss in the fourth quarter.

In essence, Wall Street analysts are softening the blow of lower earnings expectations for the current quarter by raising expectations for future quarters. However, this is just likely to lead to an even bigger disappointment for investors down the road. In order to meet full-year earnings expectations, United would need to achieve nearly 500 basis points of year-over-year margin growth in the second half of 2013.  This is not likely to happen.

Based on United's cost projections, unit cost growth may reverse in the second half of this year if fuel prices continue to retreat. However, the company would still need robust unit revenue growth to generate 500 basis points of margin expansion. Yet whereas United cut capacity by 4.9% in Q1 and is on pace to cut capacity by more than 2% in Q2, the company plans to increase capacity somewhat in the second half of the year. While this is helping reduce unit costs, it will also create a unit revenue headwind.  This will prevent anything beyond modest unit revenue growth.

Be careful out there!
Analysts are still projecting a fairly rosy profit scenario for United this year, despite its continuing weak performance. While Delta recently projected a Q2 adjusted operating margin of 10%-11% -- a healthy improvement from last year's 9.1% result -- United appears poised to duplicate its 7.9% adjusted operating margin from Q2 2012.

Delta's margin advantage of 200-300 basis points over United appears sustainable based on the company's lower, projected-cost growth and its strategic initiatives to boost its corporate revenue share, particularly in New York. That margin advantage is equivalent to roughly $1 billion per year in additional profit for Delta!

United stock has been able to log big gains in the past six months, largely thanks to Delta's success, but ultimately United will have to produce higher profitability to keep the stock afloat. However, the company has no clear path to replicating Delta's superior margins. As a result, United's stock looks very vulnerable over the next year or so.

With the American markets reaching new highs, investors and pundits alike are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery" outlines three companies that could take off when the global economy gains steam. Click here to read the full report!

ABN Amro Trims Stock Holdings as VIX Rises on Fed Bets

ABN Amro Private Banking trimmed its global equity allocation for the first time in a year as investor speculation that the Federal Reserve may reduce the pace of its asset purchases sent a measure of volatility to a 15-week high this month.

ABN Amro's wealth-management unit cut its equity holding to 40 percent in June from 44 percent in March after increasing it for three consecutive quarters. It raised its cash investment to 13 percent from zero, the highest in a year. The Chicago Board Options Exchange Volatility Index, or VIX, a gauge of options used to protect against losses in the Standard & Poor's 500 Index, rose to 18.59 on June 12, the highest since Feb. 25.

"We're seeing higher volatility across almost all asset classes," Didier Duret, chief investment officer for the private bank, which manages 165 billion euros ($220 billion), said in an interview from Amsterdam yesterday. "We want to observe the volatility in the equity and currency markets, and manage risk. Seeing volatility come down would be an opportunity for us to go back into equities, which are the next target."

The S&P 500 has lost 1.8 percent from a record on May 21, the day before Fed Chairman Ben S. Bernanke said the central bank could pare stimulus if the U.S. economy improves sustainably. The Fed will hold its two-day policy meeting beginning today, with Bernanke scheduled to speak after the central bank's decision tomorrow.

Economic Data

Investors have been watching economic data to determine whether growth is strong enough to prompt the bank to scale back stimulus measures. Bernanke may provide some visibility on when the Fed plans to begin reducing its $85 billion in monthly asset purchases, which will give investors more certainty and may bring down volatility, according to ABN Amro's Duret.

"It's been a live experiment for the Fed to just observe what could happen when they really do scale down asset purchases," he said by phone. "The Fed has done well to manage what was an expectation of infinite Fed liquidity in the system."

ABN Amro Private Banking still maintained its overweight position in equities for a fourth quarter, meaning it holds more of the assets than represented in benchmark portfolios, as recent drops provide opportunities to buy into an improving U.S. economy. Stocks with above-average earnings growth, like information technology companies, will gain the most, Duret said.

Not Worried

"We are not worried," he said. "On the contrary, it's allocating from what has been dependent on central bank liquidity to fundamentally grounded equities which have earnings growth behind them. The strategy is really rotating into growth stocks."

The VStoxx Index, a measure of volatility in the Euro Stoxx 50 Index, rose to 22.27 on June 5, its highest since April 17.

ABN Amro Private Banking started selling European equities and reduced its position to underweight as the Euro Stoxx 50, which tracks the largest companies in the euro-area, last month reached its highest level since July 2011. ABN diversified its stock holdings in the region after the rally made northern European markets expensive, Duret said.

"What's new is we're not focusing only on northern countries, but we also want to broaden our exposure in Europe. It's more investing into the Stoxx 600 than the Euro Stoxx 50 (SX5E) now, so now we have a broader exposure that also includes peripheral markets."

3 Stocks to Watch This Morning

Last week marked the third week of losses out of four in the U.S. markets. This morning, we're getting the week started on the right foot, with the S&P 500 (SNPINDEX: ^GSPC  ) and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) up 0.94% and 1.01%, respectively, at 10:05 a.m. EDT.

The Federal Open Market Committee begins a key two-day meeting tomorrow. As such, Fed-watchers and investors are scrutinizing this morning's Empire State Manufacturing Survey for June. The index of general business conditions rose nine points to 7.8, substantially greater than expectations of zero (a positive figure indicates expansion). However, "most other indicators in the survey fell," including the index for the number of employees, which dropped to zero, and that for the average workweek. Indexes for the six-month outlook also declined. All told, the report offers mixed signals on the economy at best.

Three tocks on the market's radar
Shares of No. 2 microprocessor maker AMD (NYSE: AMD  ) are up 3.4%, almost certainly due to a positive Barron's article that ran on Saturday, proclaiming: "AMD Could Double, Helped By Its Strategy." The thrust of the article is that AMD's 2012 acquisition of SeaMicro has been critical in opening up a new market opportunity: Server and micro-server chips. Intriguing as that may sound, the notion that the stock could double comes from a hedge fund manager who is quoted in the article. For that to happen would require -- among other assumptions -- 30% revenue growth by 2015.

Today marks the start of the week-long Paris Air Show, the aviation industry's biggest trade show. In an interview with The Wall Street Journal, Airbus (NASDAQOTH: EADSY  ) CEO Fabrice Bregier said he was confident the company would raise its operating margin to 10% within two years (excluding the one-time cost associated with the launch of the new A-350 jet liner). The emphasis is on profitability, as Airbus' current order book is equivalent to eight years of production.

The same is true of its rival, Dow component Boeing (NYSE: BA  ) . Speaking of which, Boeing is expected to launch a larger version of its 787 Dreamliner, the 787-10, with $30 billion in orders!

Boeing is a major player in a multitrillion-dollar market in which the opportunities are massive. However, emerging competitors and the company's execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. The Fool's premium research report on the company provides investors with the must-know issues surrounding Boeing. They'll be updating the report as key news hits, so don't miss out -- simply click here now to claim your copy today.

Top 5 International Stocks To Own Right Now

Friday saw a kickoff in quarterly reporting from the oilfield services group, as both Schlumberger (NYSE: SLB  ) and Baker Hughes (NYSE: BHI  ) topped analysts' estimates in the process of chalking up relatively solid quarters.

Schlumberger's results were especially sound, with its adjusted earnings coming in at $1.01, two pennies higher than the analysts' consensus. Its income from continuing operations were up 4% to $1.35 billion, while its revenues grew nearly 8% to $10.7 billion, compared with $9.9 billion a year ago. International revenues climbed by 13% year on year, while contributions from North America slipped by approximately 4%. Among the one-time items during the quarter was a total of $0.07 in charges related to currency devaluations in Venezuela.

Top 5 International Stocks To Own Right Now: Peoples Bancorp of North Carolina Inc.(PEBK)

Peoples Bancorp of North Carolina, Inc. operates as the holding company for Peoples Bank, which provides various banking products and services to individuals and small to medium-sized businesses in Catawba Valley and surrounding communities in North Carolina. Its deposit products include demand deposits; interest-bearing checking accounts; NOW, MMDA, and savings deposits; regular savings accounts; money market accounts; time deposits; and certificates of deposit. The company?s lending portfolio comprises commercial loans, real estate mortgage loans, real estate construction loans, and consumer loans, as well as agricultural loans. It also provides real estate appraisal and real estate brokerage services, as well as access to investment counseling and non-deposit investment products, such as stocks, bonds, mutual funds, tax deferred annuities, and related brokerage services. It operates 22 banking offices located in Lincolnton, Newton, Denver, Catawba, Conover, Maiden, Cla remont, Hiddenite, Hickory, Charlotte, Monroe, Cornelius, Mooresville, and Raleigh in North Carolina, as well as a loan production office in Denver, North Carolina. The company was founded in 1912 and is based in Newton, North Carolina.

Top 5 International Stocks To Own Right Now: Lean Hogs (HE)

Hawaiian Electric Industries, Inc., through its subsidiaries, primarily engages in electric utility and banking businesses primarily in Hawaii. The company is involved in the production, purchase, transmission, distribution, and sale of electricity from renewable energy sources, such as wind, solar, photovoltaic, geothermal, wave, hydroelectric, sugarcane waste, municipal waste, and other biofuels, as well as from fuel oil. It distributes and sells electricity on the islands of Oahu, Hawaii, Maui, Lanai, and Molokai; and serves suburban communities, resorts, the United States armed forces installations, and agricultural operations. As of December 31, 2011, the company had net generating and firm purchased capability of 2,326.9 megawatts. It also engages in providing banking and other financial services, such as accepting savings accounts, checking accounts, money market accounts, and certificates of deposit; and providing loans comprising residential and commercial real es tate, residential mortgage, construction and development, multifamily residential and commercial real estate, consumer, and commercial loans to consumers and business. The company operated 57 branches and 119 automated teller machines. Hawaiian Electric Industries, Inc. was founded in 1891 and is based in Honolulu, Hawaii.

Hot Oil Stocks To Buy For 2014: Sagent Pharmaceuticals Inc.(SGNT)

Sagent Pharmaceuticals, Inc., a specialty pharmaceutical company, develops, sources, and markets pharmaceutical products, principally injectable-based generic equivalents to branded products in the United States. It offers a range of products across anti-infective, oncolytic, and critical care indications in various presentations, including single-and multi-dose vials, pre-filled ready-to-use syringes, and premix bags. The company?s anti-infective products include Levofloxacin, a fluoroquinolone antibacterial for the treatment of various infections caused by susceptible bacteria in adults of age 18 years or older; and Cefepime, an antibiotic used to treat infections of the urinary tract, and skin and skin structure, as well as moderate to severe pneumonia, intra-abdominal infections, and as empiric therapy for febrile neutropenic patients. Its oncology products comprise Gemcitabine, a nucleoside metabolic inhibitor used for the treatment of ovarian, breast, lung, and panc reatic cancers; and Topotecan, a topoisomerase inhibitor for small cell lung cancer sensitive disease. The company also offers critical care products consisting of Adenosine, an antiarrhythmic used for the treatment of cardiac rhythm disturbances; and Heparin, an anticoagulant used to prevent and treat blood clotting during and after surgery and dialysis. As of December 31, 2011, it marketed 33 generic injectable products; and had a new product pipeline that included 36 products represented by 63 Abbreviated New Drug Applications (ANDAs). The company sells its products to pharmaceutical wholesale companies, which then distribute the products to end-user hospitals, long-term care facilities, alternate care sites, and clinics. The company was formerly known as Sagent Holding Co. and changed its name to Sagent Pharmaceuticals, Inc. in April 2011. Sagent Pharmaceuticals, Inc. was founded in 2006 and is headquartered in Schaumburg, Illinois.

Top 5 International Stocks To Own Right Now: Astec Industries Inc.(ASTE)

Astec Industries, Inc. engages in the design, engineering, manufacture, and marketing of equipment and components for road building, utility, and related construction activities worldwide. The company?s Asphalt Group segment offers hot-mix asphalt plants, concrete mixing plants, and related components; heating and heat transfer processing equipment; and thermal fluid storage tanks for asphalt paving and other non-related industries. Its Aggregate and Mining Group segment provides jaw, cone, and impact crushers; vibrating feeders; inclined and horizontal screens; various crushing plants; digital crusher controllers; aggregate and ore processing equipment; mobile screening plants; screen structures; vibrating screens; stationary rockbreaker systems; articulated production and utility vehicles; hydraulic breakers; compactors; demolition attachments; and bulk material handling and minerals processing equipment primarily for the aggregate, metallic mining, and recycling market s. The company?s Mobile Asphalt Paving Group segment provides asphalt pavers, asphalt material transfer vehicles, milling machines, and asphalt reclaiming and soil stabilizing machinery; asphalt paver screeds; windrow pickup machines; asphalt rollers and screeds primarily for road construction markets; and dirt and asphalt compaction equipment. Its Underground Group segment produces heavy-duty trenchers, compact horizontal directional drills, high pressure diesel powered pump trailers; maxi drills, auger boring machines, and down-hole tooling for these units; and vertical drills, water well drills, oil and gas drilling rigs, material handling trailers, and tools for the oil and gas, geothermal, and water well industries. The company also offers whole-tree pulpwood chippers, biomass chippers, horizontal grinders, and blower trucks. Astec Industries, Inc. sells its products through sales agents, distributors, and dealers. The company was founded in 1972 and is based in Chatta nooga, Tennessee.

Top 5 International Stocks To Own Right Now: Chicago Rivet & Machine Co.(CVR)

Chicago Rivet & Machine Co. operates in the fastener industry in North America. It operates in two segments, Fasteners and Assembly Equipment. The Fasteners segment involves in the manufacture and sale of rivets, cold-formed fasteners and parts, and screw machine products. The Assembly Equipment segment engages in the manufacture of automatic rivet setting machines, automatic assembly equipment, and parts and tools. The company primarily sells its products to manufactures of automobiles and automotive components. Chicago Rivet & Machine Co. was founded in 1920 and is headquartered in Naperville, Illinois.

Bank of America's Simple and Ingenious Business Model

Bank of America headquarters in Charlotte, N.C.

Bold statement alert! Bank of America (NYSE: BAC  ) may have the best business model in the world right now.

Unfortunately for Bank of America shareholders, just having the best business model in theory doesn't guarantee operational or financial success. B of A's master plan isn't relatively new, but leadership blunders and lack of communication across the company have prevented the bank from fulfilling its true potential.

So, what is this mind-blowing, revolutionary strategy? In the words of CEO Brian Moynihan at a recent Goldman Sachs conference, "We're pursuing the customer relationship model."

In a perfect world
The collection of businesses and services under the B of A umbrella is virtually unmatched. Let's highlight the power of the bank's franchise with the life story of "Tommy" and how he could become every Bank of America shareholder's dream customer.

Ten years ago, Tommy was born.

Today, young Tommy's parents take him to the local Bank of America branch and put $100 into a deposit account and $200 into a savings account for Tommy. At this point, out 10-year-old is an extremely unprofitable customer for the bank and will be for the next several years -- but the seed has been planted.

At age 15, Tommy has a part-time job and begins to use his B of A debit card. Each time Tommy swipes that card, Bank of America receives revenue in the form of interchange fees. Despite now having $2,000 in his combined accounts, Tommy is still unprofitable to the bank.

At age 18, before he leaves for college and to start building his credit, Tommy acquires a Bank of America credit card. The bank now earns swipe fees on all of these transactions. Tommy manages all of these basic banking relationships on his iPhone 13.

At this point, B of A shareholders aren't thrilled to have Tommy at the bank. Given his relatively low account balance, the bank doesn't see the benefit of his balance on the lending side of the business, and it costs money to service his products. However, the seed has begun to poke its head out of the ground.

After college, Tommy goes to work on Wall Street at JPMorgan Chase. He begins to earn more, and his savings account grows to $65,000. Tommy is savvy with his money and opens an investment account via Merrill Edge, B of A's retail-focused brokerage.

After a few years of working, investing, and saving, Tommy is now married and wants to settle down in the New York suburbs and buy a house. He needs a mortgage, and he meets with his local B of A mortgage lender to commence the dealing. After issuing Tommy's mortgage, B of A sells that loan to one of the GSEs (assuming they're still around in 2030.) for a gain and retains the value of the servicing rights.

Taking it to the next level
Feeling burned out by Wall Street, Tommy decides to explore his entrepreneurial side and start a small business. Happy with this other B of A services, Tommy takes out a loan from the bank and manages his payroll and cash flow via B of A's online tools and technology.

Tommy is now becoming a very profitable customer for the bank because of his various revenue streams to the bank and minimal expense base.

Tommy's business continues to grow, and his needs become more complex. He now uses foreign suppliers and needs help managing his FX payments and supply-chain management -- Bank of America continues to meet his needs, a service for which he gladly forks over a fee.

Now at age 45, Thomas (he now prefers "Thomas" over "Tommy") has grown his business and generates over $500 million in annual sales. He wants to expand, but he needs capital. Thomas decides to take his company public. Enter Bank of America's investment-banking team -- this where the fees really start to roll in.

Armed with one of the largest investment-banking arms in the world, B of A provides Thomas with the expertise that allows him to get the most out his IPO.

With his business thriving, Thomas' business continues to hold cash balances in excess of $500 million with B of A -- allowing the bank to lend that cash out elsewhere. In addition to his business, Thomas is also flush with personal wealth and now uses an established Merrill Lynch financial advisor (more fees).

After years of expansion and using Bank of America's markets and banking services, Thomas is ready to sell his empire. Again, given his prior relationships and satisfaction in the past, he uses B of A's investment-banking team to get the best sale price.

After the sale, Thomas is a multimillionaire and requires highly specialized, personalized service. Enter B of A's U.S. Trust unit – the area of the bank dedicated to individuals with ultra-high net worth.

At this point, Thomas is 70 years old and has used only one financial institution for all of his financial needs.

Great on paper -- can it deliver?
The Bank of America business model can become an unparalleled profit engine, but only if management can facilitate communication across its business lines and make an organization of roughly 267,000 employees feel like one of only 267. The entire strategy hinges on providing customer satisfaction, something the bank has notoriously struggled to do.

Brian Moynihan and his current management team won't be around forever, but they must begin to set the tone for that will determine how customers and clients view the megabank. If the bank can shed its legacy issues and focus on profitably pleasing its droves of customers, in 10 years from today, fewer people will be scoffing at the financial behemoth and more will be saying what Warren Buffett said after making his B of A investment in 2011:

"I am impressed with the profit-generating abilities of this franchise."

Is it right for your portfolio?
Do you believe Moynihan has B of A moving in the right direction? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

4 Stocks Making Big Moves

Business Sales Slump, Inventories Up for April

Business sales are down, and inventories are up, according to an April Commerce Department report (link opens in PDF) released today.

Seasonally adjusted sales took a 0.1% dip, to $1,268 billion, for April. While retailers maintained steady sales, a 0.7% drop-off in manufacturing outweighed a 0.5% increase in merchant wholesalers. In the last year, a 3.5% boost in retail sales has provided the primary push for a 1.5% increase in total business sales. Manufacturing is up 0.6% in the last 12 months, while merchant wholesalers have managed a 0.7% increase.

As sales dipped, April inventories headed up a seasonally adjusted 0.3%, to $1,657 billion. The moves mostly mimic sales, with a 0.4% increase in retail inventories leading the way. Manufacturers and merchant wholesaler supplies are both up 0.2% for April. In the last year, overall inventories are up 4.2%. 

To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales fell and inventories rose from March to April, the inventories/sales ratio increased to 1.31, compared to March's 1.30 value. The April 2012 ratio was 1.27.

Source: Census.gov

Top 5 Railroad Stocks To Own Right Now

On this day in economic and business history ...

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) was first published on May 26, 1896. Charles Dow, working in partnership with Edward Jones and Charles Bergstresser, was a pioneering financial journalist who began creating stock indexes (primarily composed of railroad companies) in 1884 to flesh out his daily news bulletins. These quick briefs would be hand-delivered to traders on the New York exchange floor throughout the day and would later be aggregated into a close-of-business news recap called the "Customer's Afternoon Letter" -- the progenitor of The Wall Street Journal, which was originally only four pages long and cost its stock-loving readers a mere two cents.

Charles Dow's early forays into stock indexing coincided with a massive boom in railroad investments, an echo of the explosion of railroad companies that followed the construction and completion of the Transcontinental Railroad. However, a massive financial panic struck in 1893, crushing many railroads and causing a multiyear recession. Three years later, Dow created his first "Industrial Average," which contained only one railroad company -- and this company was actually a diversified materials enterprise as well. The Dow Jones Industrials became a symbol of American business durability while also showing the ability to adapt when necessary.

Top 5 Railroad Stocks To Own Right Now: Chemical Financial Corporation(CHFC)

Chemical Financial Corporation operates as the financial holding company for Chemical Bank that offers banking and fiduciary products and services in Michigan. Its products and services include business and personal checking accounts, savings and individual retirement accounts, time deposit instruments, electronically accessed banking products, residential and commercial real estate financing, commercial lending, consumer financing, debit cards, safe deposit box services, money transfer services, automated teller machines, access to insurance and investment products, corporate and personal wealth management services, and other banking services. The company also provides mutual funds, annuity products, and market securities to customers, as well as issues title insurance to buyers and sellers of residential and commercial mortgage properties, including properties subject to loan refinancing. As of January 26, 2012, Chemical Financial Corporation operated 142 banking offices in approximately 32 counties in the lower peninsula of Michigan. The company was founded in 1973 and is headquartered in Midland, Michigan.

Top 5 Railroad Stocks To Own Right Now: Riverview Bancorp Inc(RVSB)

Riverview Bancorp, Inc. operates as the holding company for Riverview Community Bank that provides various banking products and services to commercial and retail customers in Washington and Oregon. Its deposit products include demand deposits, negotiable order of withdrawal accounts, money market accounts, regular savings accounts, certificates of deposit, and retirement savings plans. The company also offers commercial loans; real estate mortgage loans; real estate construction loans; and consumer loans, such as one-to-four family mortgage loans, home equity lines of credit, land loans to consumers for the future construction of one-to-four family homes, and other secured and unsecured consumer loans, as well as various installment loans, including loans for debt consolidation and other purposes, automobile loans, boat loans, and savings account loans. In addition, it originates mortgage loans for various mortgage companies; provides automated teller machines, debit cards , and Internet banking services; and asset management services, such as trust, estate planning, and investment management services. As of October 27, 2011, the company had 17 branches, including 12 in the Portland-Vancouver area and 3 lending centers. Riverview Bancorp, Inc. was founded in 1997 and is headquartered in Vancouver, Washington.

Best Industrial Disributor Stocks To Own For 2014: Stats Chippac Ltd (S24.SI)

STATS ChipPAC Ltd., together with its subsidiaries, provides semiconductor packaging design, bump, probe, assembly, test, and distribution solutions. The company offers packaging services, including leaded, laminate, memory card, and wafer level chip-scale packages (CSPs) to customers with a range of packaging solutions; turnkey services for various electronics applications; and redistribution layers, integrated passive devices, and wafer bumping services for flip-chip and wafer level CSPs. It also provides package design; electrical, mechanical, and thermal simulation; and measurement and design of lead-frames and laminate substrates. In addition, the company offers test services comprising wafer probe and final testing on various test platforms; various semiconductors for mixed-signal, radio frequency, and analog and high-performance digital devices; and test-related services, such as burn-in process support, reliability testing, thermal and electrical characterization, dry pack, and tape and reel. Further, it provides pre-production and post-production services consisting of package development, test software and related hardware development, warehousing, and drop shipment services. Additionally, the company offers advanced packages, including stacked die, system-in-package, and flip-chip, as well as BGA packages and wafer level CSPs. It serves omputing, communications, and consumer markets. The company has operations in Singapore, South Korea, China, Malaysia, Thailand, and Taiwan. STATS ChipPAC Ltd. was founded in 1994 and is headquartered in Singapore.

Top 5 Railroad Stocks To Own Right Now: Davide Campari(CPR.MI)

Davide Campari-Milano S.p.A., together with its subsidiaries, operates in the beverage sector worldwide. The company offers spirits under the Campari, Carolans, SKYY Vodka, Wild Turkey, Aperol, Cabo Wabo, CampariSoda, Cynar, Frangelico, Glen Grant, Ouzo 12, X-Rated Fusion Liqueur, Zedda Piras, Dreher, Old Eight, and Drury's brands; sparkling and still wines, including aromatized wines, such as vermouth wines under the Cinzano, Liebfraumilch, Mondoro, Odessa, Riccadonna, Sella & Mosca, and Teruzzi & Puthod names; and soft drinks under the Crodino and Lemonsoda brands. It also provides semi-finished goods; and is involved in bottling activities. The company was founded in 1860 and is headquartered in Sesto San Giovanni, Italy. Davide Campari-Milano S.p.A. is a subsidiary of Alicros S.p.A.

Top 5 Railroad Stocks To Own Right Now: Camfin(CAMI.MI)

Camfin S.p.A engages in the energy, environment, investment management, and real estate businesses. It develops technology-based solutions for sustainable development, which include Gecam, the ?white diesel?; and Feelpure, the particulate filters for treatment of exhaust from diesel engines. The company also engages in the environmental services, alternative energy production, and generation of renewable energy from waste, as well as offers ?clean? energy sources that reduce emissions of harmful gases. The company was founded in 1915 and is based in Pero, Italy.

Losses Expand for Troubled LDK Solar

The solar industry is doing fairly well around the world this year. Recent data shows that U.S. installations were up 33% in the first quarter, Japan is growing rapidly, and China is investing billions to grow domestic demand. 

But all of these positives couldn't help LDK Solar (NYSE: LDK  ) post decent numbers, and the company continues to slip closer and closer to bankruptcy. First-quarter sales were just $104.3 million, which isn't even double the quarterly interest expense of $58 million, and net loss was $187.1 million. 

Management also announced that it is in talks with lenders to refinance $2.9 billion worth of debt after partially defaulting on a $24 million bond earlier this year. If this were the U.S., debtors would have pushed the company into bankruptcy by now, but Chinese state-run banks hold most of the debt, so a solution is very difficult for investors to predict. 

What is known is that LDK Solar is nowhere near profitability and won't be for a long time. Debt has a stranglehold on the company, and without a bailout from China, there's no way the company survives. That means this stock is hands off to investors. 

Stick with quality
LDK Solar and Suntech Power (NYSE: STP  ) have already defaulted on debt, and the most leveraged Chinese manufacturers may follow others into full on bankruptcy (Suntech's subsidiary is already bankrupt, but the parent company isn't). Betting on leverage and hope for a recovery in China is a dangerous game, and investors should stick with high-quality manufacturers.

In China, Canadian Solar (NASDAQ: CSIQ  ) is doing a better job transitioning to Japan and project development than most, and it would be a much better pick than most. But still, there are risks, and this Fool's choice is to stick with high-quality U.S. companies for which you don't have to depend on government banks for survival. 

My top pick is still SunPower (NASDAQ: SPWR  ) , and another great company is SolarCity (NASDAQ: SCTY  ) . Residential solar grew 53% in the first quarter, and both companies have a major share of this growing market. Unlike utility-scale solar, the residential space is far more consistent, and we can expect more growth in the future. Both SunPower and SolarCity sign customers up to 20-year leases, ensuring revenue long-term. 

Another company with a solid balance sheet is First Solar, once the largest solar company in the world. The company has a great balance sheet and captive demand with massive solar projects. I don't like this market as much as solar leasing, but the company's project-development expertise can't be matched. 

I recently took a deep dive into First Solar's strengths and weaknesses in our premium report, found here. It comes free with updates when news breaks and will keep you on top of the solar market. 

Foolish bottom line
LDK Solar is on its last leg, and after China let Suntech's subsidiary go into bankruptcy, I don't see why it wouldn't do the same with LDK Solar. This is a stock I would stay far, far away from. 

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RBC's Analysis Of Nokia Is Questionnable

I do feel sorry for analysts. It's a difficult profession to predict the future. After reading RBC's (RY) opinion on Nokia's (NOK) current quarter, I was not pleased. As a Nokia shareholder, I was interested in poking some holes into the piece written by Mark Sue. Since the analysis is only available to RBC investment account holders, I cannot provide a link that would enable you to read the whole document, but I will quote from some passages.

Mr. Sue says in his opening paragraph: "A glimpse into Nokia's new product line for the fall leaves us uninspired."

While you cannot discuss personal tastes, many people believe the current flagship Lumias are the best handsets in the world. The 928 improves on the 920 with a xenon flash and three high amplitude microphones for recording distortion free sound in very loud environments. It is thinner and lighter for those who had to get a gym membership to hold the 920 for longer than 30 seconds at a time. The newer 925 uses an aluminum frame, and is also thinner and lighter than the 920.

Feature Phones

Mr. Sue goes on to say: "Worryingly, Nokia's historically profitable feature-phone business is eroding as well."

While this is a legitimate concern, it is certainly not new. The decline of the feature phone has been ongoing for years , well before it was highlighted in this analysis. As a shareholder, I can easily tell that Nokia is well aware of the shift that more people are aspiring to smarter phones. That is why the Asha full touch line was created. It provides a smartphone experience that can be purchased outright for less than US $100. It is also the least expensive to operate with a longer lasting battery and data compression available in its browser and several social apps. In the best scenario, the Asha full touch would have been produced earlier on to help Nokia stay ahead of low cost Android producers. Using 2012 as a reference, while sales decreased in the Mobile phones division in Q1 from the! previous quarter, the trend was reversed in Q2, as was pointed out in Nokia's latest quarterly teleconference. Nokia needs to keep innovating in mobile phones to squeeze as much revenue as possible while the trend continues towards smarter phones.

Carrier support

"Carrier support may further dwindle for Nokia, which has been donating market share…", says Mr. Sue.

When speaking of market share the analyst is well aware that a new line of phones with a new operating system (OS) cannot jump past market leaders from a standing stop. Microsoft's (MSFT) Windows Phone 8 is the first version of the OS in which Nokia has been involved with from the beginning, and its products only started selling six months ago, in November 2012. As far as the previous version, Windows Phone 7.x, the OS was already designed before Nokia produced its first phone. It was too late for the phonemaker to put its footprint on it. Therefore WP8 has to gather momentum, as it is currently doing, before it can take share back from its competitors.

As far as carrier support is concerned, it is increasing, at least in the US, as Verizon (VZ) added the Lumia 928 to its portfolio after having sales success with the 822. T-Mobile (TMUS) has also added the Lumia 925, after selling out numerous times with the 521. The International Business Times has proclaimed that a Windows Phone will appear on Sprint in early 2014, without confirmation on the choice of manufacture, although it predicts it will be from HTC.

If Mr. Sue is referring to carriers elsewhere in the world, he does not mention any. In fact his whole analysis is void of any reference. His entire analysis seems to be based on personal opinion only, including his prediction that Nokia will warn investors that it will not meet its Q2 guidance.

Having the choice of believing either Mark Sue of RBC or guidance from Nokia, I will put my money on the people that I believe should know the pulse of sales of their own products around ! the world! . During the Q1 earnings teleconference, Nokia called for a larger than 27% increase in smartphone sales for Q2.

Higher rates of return

Mr. Sue says: "After an initial spurt, Nokia's 920, 720, and 520 may now be fading, and we're noticing a higher than normal rate of return."

It is my opinion that if you are going to provide an analysis that will influence some shareholders to buy and sell stocks, you should at least give some kind of idea to readers how you arrived at a conclusion of "higher than normal rates of return." I believe that a respected bank such as RBC should require its analysts to divulge their research methodology for arriving as such impactful conclusions. I cannot think of any reason for not doing so unless the research is so highly inadequate that it risks being a source of embarrassment for the bank.

One Finnish smartphone retailer has taken it upon itself to publish stats that contradict Mr. Sue's opinion on Lumia's rates of return. In that article it is said that the Lumia 920 has a rate of return of one tenth of the iPhone 5 and half of the Galaxy S4.

Perhaps this is why RBC does not go out on a limb to lend any credence to Mr. Sue's report when it says "the rating assigned to a particular stock represents solely the analyst's view". And "All of the views expressed in this report accurately reflect the personal views of the responsible analyst(s)." To me this is not an endorsement.

Smartphone Design

"Feedback on the upgraded Lumia 925 and Lumia 928 remains mixed, with consumers pointing to the devices' derivative design", goes on to say Mr. Sue.

If the Lumia 925 and 928 have a derivative design, the same can be said for the complete line of Galaxy Series by Samsung (SSNLF.PK) and iPhones by Apple (AAPL). If there is one quality Nokia is still renowned for, it is for its beautiful and sturdy designs. I have even criticized them in an earlier article entitled Nokia's Challenger Checklis! t for spe! nding too much on quality in their handsets while it does not seem to be such a high priority for their competitors. In any event, the Lumia 925 has not yet been released, so it's too soon to obtain real feedback. The 928 has only been available for three weeks now. To date the average rating on Amazon is 4.5 stars out of 5.

The most damning element included in the analysis written by Mark Sue is a graph illustrating RBC's rating for Nokia from 06/03/10 to 04/18/13. An Outperform rating was given from 09/10/10 until 04/19/12. Then a Sector Perform rating was given from 04/30/12 to 04/18/13. In other words, while the share price was diving down from $9 to $3, in a two year period, RBC gave it one notch below its highest rating. From April 30, 2012 to April 18, 2013, while the price continued down to its lowest point in Nokia history at $1.63 and then back up to $4.60, RBC brought its rating down one notch to Sector Perform.

Conclusion

No one can predict the future. In no circumstance should any investor rely solely on a report from an analyst to decide whether to buy or sell a stock. Conduct your own research. Reading transcripts of quarterly teleconferences provided free of charge by Seeking Alpha is a good starting place.

In conducting my own research on Nokia, I conclude that sales momentum seems to be increasing in its Lumia range of phones if you examine performance in past quarters and company guidance for the current quarter. Nokia Siemens Network has also put together several profitable quarters in a row. As far as sales in mobile phones and HERE maps, they are unpredictable from one quarter to the next. Revenue for mobile phones depends largely on the timing and marketing of new products by Nokia versus offerings from competitors. HERE maps depends on making the product more and more attractive and the ability of sales personnel to get long term commitments from clients.

Most reports have recently indicated that Windows Phone is increasing its market share, thanks i! n large p! art to its least expensive smartphone, the Lumia 520 and its variants. If company guidance is correct for Q2 and the Lumia 928 and 925 sell well in Q3, the share price should increase from its present level. If future product launches in the coming months are successful in Q4, typically the highest sales quarter for smartphones, perhaps the share could finally surpass that elusive $5 mark by reporting time in mid-January, 2013.

Disclosure: I am long NOK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Additional disclosure: Long since mid 2011.

Why Wells Fargo's Stock Is Worth Owning

The next selection for the Inflation-Protected Income Growth Portfolio is banking titan Wells Fargo (NYSE: WFC  ) . One of the few major banks to have recovered its dividend to nearly its pre-financial-crisis level, and one that even noted value hunter Warren Buffett is willing to buy, Wells Fargo stands out for its strength.

It's true that the financial crisis did force Wells Fargo to cut its dividend, but that was due in large part to its acquisition of troubled bank Wachovia amid that crisis. The company's relatively quick recovery suggests that the blow was painful, but not fatal. So long as the company learned from that experience and stays away from buying severely troubled assets, it should be well positioned for the future.

Why it's worth owning in the iPIG Portfolio
To earn a spot in the portfolio, a company has to pass a series of tests related to its dividends, its balance sheet and valuation, and how it fits from a portfolio diversification perspective.

Dividends:

Payment: The company's dividend currently sits at $1.20 a share, a yield of about 3% based on Thursday's closing price. Growth history: The company was one of the fastest major banks to significantly begin rebuilding its dividend after the financial crisis, with increases resuming in March 2011. Contrast that with Citigroup  (NYSE: C  ) and Bank of America  (NYSE: BAC  ) , neither of which have been able to take their dividends back above $0.01 yet, and Wells Fargo's strength becomes very clear. Reason to believe the growth can continue: With a payout ratio of around 28%, the company retains nearly three-quarters of its earnings to invest for future growth. That reasonable payout ratio is comforting given the banking crisis we just lived through and also gives the company flexibility to maintain its dividend if future growth doesn't materialize as quickly as hoped.

Balance sheet and valuation:

Balance sheet: A debt-to-equity ratio of around 1.2 indicates that the company does use debt, but it hasn't overleveraged itself to the point where a near-term financial hiccup would derail it. Indeed, for an industry that often relies on leverage to juice returns, that level looks remarkably reasonable.

Valuation: By a discounted earnings analysis that uses a 15% discount rate, the company looks to be worth around $226 billion. That makes its recent market cap of $212 billion seem reasonable.

Diversification fit:
The previous picks for the portfolio included:

An industrial conglomerate A generic-pharmaceutical powerhouse A provider of staple foods An auto parts distributor A safety equipment provider A high-tech (software) titan A toy maker An electric utility A shipping company A pipeline giant (though this one might actually get away) A drugstore A semiconductor superstar A two-for-one railroad special A fast-food juggernaut A medical device maker A supplemental insurance writer An air chemicals business A defense contractor An industrial engineering and electrical equipment company

As the first bank to make its way into the portfolio, Wells Fargo fits pretty well from a diversification perspective.

Why pick it over its peers?
Still, as there are plenty of banks out there, it raises the question: Why select this one instead of another?

One of the biggest reasons is that, as mentioned above, neither Citigroup nor Bank of America has gotten its act together well enough to resume raising its dividend. While fellow banking giant JPMorgan Chase  (NYSE: JPM  ) has been able to boost its dividend back up out of the basement, JPMorgan also has held its dividend steady for the past five consecutive quarters. Contrast that with Wells Fargo, which was able to raise its dividend for its most recent payout, and Wells Fargo is signaling a far stronger position than those peers.

As the ability to pay and regularly raise dividends is a key feature of what makes a company worth owning for the iPIG portfolio, that's a significant plus for Wells Fargo.

What are the risks?
Of course, no investment is without risk. Another financial crisis or acquisition of overly damaged goods can force Wells Fargo to again slash its dividend -- or even worse. Additionally, as a California-based financial institution, Wells Fargo is at risk from that state's geology (earthquakes), wild swings in its housing market, and net outward migration from the state. 

Additionally, banks are among the first to feel the impacts of shifts in Federal Reserve policy, as the Federal Reserve deals directly with banks. If and when the Fed starts easing up on the aggressive stimulus it has been pumping into the banking system in the past few years, Wells Fargo could feel some pain, along with the other banks.

What comes next?
When the Fool's disclosure policy allows, I plan to buy Wells Fargo's stock for the Inflation-Protected Income Growth portfolio, as long as it remains below $42.50 a share. I expect to invest around $1,500 in a 5% allocation in the portfolio, leaving 5% of the portfolio currently waiting on the stock that might get away.

Also, to score the performance of this pick, I'm making an outperform CAPScall on the stock at Motley Fool CAPS, putting my All-Star ranking on the line along with the plan to invest cold, hard cash.

Watch my article feed for news on the iPIG portfolio, and feel free to join the discussion on the iPIG portfolio's free message board, by clicking here. This Wells Fargo pick was suggested by a member of that message board who goes by the ID "kelbon." If you choose to participate on the board, you may be the one who suggests the stock that gets the iPIG portfolio to stop waiting on that elusive stock that might get away and instead put that cash to productive use.

Is there really such a think as a strong bank these days?
Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it stands out as The Only Big Bank Built to Last. You can uncover the top pick that Warren Buffett loves in The Motley Fool's special report. It's free, so click here to access it now.

Why Xerox Is Poised to Keep Climbing

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, copier maker and business services provider Xerox (NYSE: XRX  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Xerox and see what CAPS investors are saying about the stock right now.

Xerox facts

Headquarters (founded)	Norwalk, Conn. (1906)
Market Cap	$10.8 billion
Industry	Office electronics
Trailing-12-Month Revenue	$22.2 billion
Management	Chairman/CEO Ursula Burns CFO Kathryn Mikells
Return on Equity (average, past 3 years)	9.4%
Cash/Debt	$993.0 million / $8.5 billion
Dividend Yield	2.6%
Competitors	Accenture Canon Hewlett-Packard

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 87% of the 4,435 members who have rated Xerox believe the stock will outperform the S&P 500 going forward.

Earlier today, one of those Fools, All-Star dreamjob, tapped the stock as a particularly timely bargain opportunity:

Xerox looks very affordable right now at $8.80. Strong cash flows, respectable [cash return on invested capital] (would like a little higher), manageable debt, growing earnings and book value. Cash yield at almost 15% makes this cheap in my eyes.  

If you want market-topping returns, you need to put together the best portfolio you can. Of course, despite its four-star rating, Xerox may not be your top choice.

We've found another growth play we are incredibly excited about -- excited enough to dub it "The Only Stock You Need to Profit from the NEW Technology Revolution." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

SEC Charges California Wealth Manager With Insider Trading

Mark Hurd's Legacy Lives On at Hewlett-Packard

Why Media General Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Media General (NYSE: MEG  ) were soaring today, up as much as 29% today after the broadcaster announced a merger with privately held New Young Broadcasting.

So what: The two companies will combine in an all-stock transaction, forming a media enterprise with 30 stations in 27 markets, reaching 16.5 million, or 14% of U.S. TV households. The new company, still to be known as Media General and trading under the same ticker symbol, also expects to see free cash flow improve in the first year, and said cost-saving synergies would be the range of $25 million to $30 million. Current Media General shareholders will only own about a third of the new company, however. New Young had more than $600 million in revenue last year, compared to Media General's $360 million.

Now what: Media General certainly appears poised to become a stronger company after the combination, growing from 18 to 30 TV stations nationwide. The merger is the latest step in Media General's attempt to rejuvenate its business after several years in the red. Last year, it sold off all of its print media assets, many to Berkshire Hathaway, which has a 17% stake in Media General. Profits aren't guaranteed after the merger, of course, but it looks like a step in the right direction.

Stay on track of Media General. Add the company to your Watchlist by clicking right here.

link

Hourly Wages Fall Most Since WWII

United Airlines Now Selling "Subscriptions" for Better Seats, Free Baggage

United Continental (NYSE: UAL  ) has a new program of all-you-can-eat fringe benefits for its customers.

The parent company of United Airlines announced Monday that it is now offering flyers the option of "subscribing" for benefits formerly ordered a la carte. For example:

For $499 per year, flyers can join the "Economy Plus" program offering "additional legroom to stretch out and relax" on "most" of the airline's nearly own aircraft, and also on nearly 180 United Express aircraft. For $349 per year (and up), flyers can subscribe for free checked baggage on their flights. Multiple conditions apply -- in particular, subscriptions cost more when bought for use in regions broader than just the continental United States and can range up to $799. Also, checking more than one bag costs $50 more, and the company may charge an "initiation fee" at some point in the future. United is permitting customers to buy yearlong memberships in United Club for $500 (and up).

United notes that as of today, it is "the only U.S. carrier to offer an annual subscription for its extra-legroom economy seating and checked baggage service charges."

Can Cracker Barrel Keep Setting Record Highs?

On Monday, Cracker Barrel Old Country Store (NASDAQ: CBRL  ) will release its latest quarterly results. But with the stock having recently hit all-time record highs, can the restaurant chain's earnings deliver enough to justify its stock's performance?

If you've ever taken a road trip, you've probably seen plenty of Cracker Barrel locations along the way, as the company has more than 600 locations across the nation. What sets Cracker Barrel apart from most chains is the fact that it has gift shops connected to its restaurants, combining a retail business with its primary food exposure. Let's take an early look at what's been happening with Cracker Barrel over the past quarter, and what we're likely to see in its quarterly report.

Stats on Cracker Barrel

Analyst EPS Estimate	$0.94
Change From Year-Ago EPS	9.3%
Revenue Estimate	$630.56 million
Change From Year-Ago Revenue	3.6%
Earnings Beats in Past 4 Quarters	4

Source: Yahoo! Finance.

How will Cracker Barrel's earnings fare this quarter?
Wall Street has gotten more optimistic about Cracker Barrel's earnings in recent months, boosting their estimates for the April quarter by $0.02 per share, and raising full-year fiscal 2013 calls by more than $0.10 per share. The stock has reflected that optimism, soaring 23% since late February.

As in past years, most of the attention around Cracker Barrel's stock lately has come from the ongoing battle between the company and Biglari Holdings (NYSE: BH  ) , which owns roughly 20% of Cracker Barrel's shares. Back in February, the company offered to buy back Biglari's stock in hopes that it could avoid a third consecutive proxy fight to try to get Biglari CEO Sardar Biglari onto the board of directors. But Biglari rejected Cracker Barrel's offer.

Meanwhile, investors seem untroubled by Biglari's accusations that Cracker Barrel isn't properly accounting for the retail side of its business. Biglari has come up with estimates of return-on-investment for the company that are more than 10 percentage points lower than Cracker Barrel's own figures, claiming that the company has improperly excluded important expenses in its ROI calculations.

Lost in the debate over Biglari has been the tepid growth in Cracker Barrel's business. Same-store sales rose 3.3% during the most recent quarter, with overall sales rising at a slightly faster 4.5% pace. But the range of earnings guidance that Cracker Barrel provided implied maximum growth for full-year 2013 of just 4%.

Still, the stock's performance reflects overall enthusiasm about restaurant chains generally. Red Robin Gourmet Burgers (NASDAQ: RRGB  ) struggled mightily during the recession, but its stock has bounced back convincingly, with gains sending shares to levels not seen since 2005. Even Brinker International (NYSE: EAT  ) , which cut its estimates on same-store sales growth to just 1%, and guided earnings to the lower end of its previous range, has seen its stock soar in anticipation of better times ahead.

In Cracker Barrel's report, look closely for further signs of Biglari's influence. Unless the company's growth initiatives bear more fruit, the stock's recent run has left it looking unappetizing at current levels.

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

Click here to add Cracker Barrel to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.