Financial plans not implemented could be a futile exercise

Mr. Kartik Mahadevan is a salaried individual holding a senior position in a telecom company. He is always hard pressed for time and has been postponing his own financial planning to a future date. On and off he has been investing for getting some tax benefits and to honor certain relationship commitments of buying certain products from friends and relatives. He then one day decided to take services of a financial planner and got his complete plan done. However after the plan presentation his planner gave him a list of things which has to be implemented to achieve hi set goals. However as soon as the plan was completed there was no implementation on his part.  It�s almost more than a year and Mr. Kartik decides to go back to his financial planner just to realize that his financial commitments have increased for the same goal as he has lost considerable time period of investing.

The story of Kartik is a story of many today. We many at times end up getting good advice from our financial planners but a plan which is not implemented falls flat. Let�s analyze the reasons of why this happens:-

1) Time poverty: - People are hard pressed for time as there are steep commitments on professional front. But what we seem to forget is that we work hard in order to satisfy your personal goals which gets lost in the process.

2) Fear of commitment: - when a plan is discussed many times it recommended starting investing in certain specific instruments in order to achieve ones goals. But on seeing the commitment needed at time there is a fear of not being able to do it currently and that leads to not starting anything. The fact is that it might not always be possible to touch the idealistic investment figure needed to achieve you goals but alteast a start in that direction needs to be done. This is so because goals might change and there could always be changes in our income and expenses so we might be able to catch up with the figure needed even at a slightly future date. But not starting anything will lead us nowhere. we need to remember that � a journey of a 1000 miles starts with a single step�

3) Waiting for something wrong to happen before starting:-  we many a times ignore some work in our life which is important and one day it becomes urgent. The decisions taken in panic most of the times end�s up in an unfavorable result. The same rule applies to financial planning. I have seen people not taking a term insurance plan till they encounter an unexpected death in their family. This aspect of human nature makes them postpone their financial planning implementation.

However genuine these reason might sound but the fact remains that goals cannot be achieved by reasons alone but there needs to be an active participation by the entire family in order to ensure that the milestones set by us turns into reality in the future.

Mukund Seshadri is a partner at MSVentures Financial Planners.

Bull of the Day: HEICO Corp (HEI) - Bull of the Day

Remember when the Fiscal Cliff was going to destroy defense-related stocks? That was so 40% ago, as my chart below shows comparing the iShares Dow Jones Aerospace & Defense index ETF (ITA) vs. the S&P 500 for the past year.One year ago, Lockheed Martin CEO Robert Stevens told a House committee that deep Pentagon cuts slated to kick in January 2, 2012 would force his firm and others to fire employees and close factories. It was expected that those moves would hinder U.S. national security, erode defense firms' bench of highly skilled workers, and, of course, cut into weapons-makers' bottom lines.But the blows never came. In fact, with big guns like Boeing (BA), Lockheed Martin (LMT), and Northrop Grumman (NOC), the ITA really took off in the past 5 weeks...This group has consistently been in the top 20% of the 265 industries ranked by Zacks, since before the election last fall. Given this outperformance, I was drawn to looking at one of the sub-industries of the Aerospace/Defense sector which currently ranks 24th of 265.A&D Equipment MakersIt makes sense that the suppliers of equipment to large Aerospace & Defense (A&D) companies would be doing well. I looked at these 3 Zacks #1 Rank stocks in the group:Orbital Sciences (ORB) is a leading space technology systems company that designs, manufactures, operates and markets a broad range of space-related products and services.Astronics Corporation (ATRO) is a manufacturer of specialized lighting and electronics for the cockpit, cabin and exteriors of military, commercial transport and private business jet aircraft.HEICO Corporation (HEI) is engaged primarily in certain niche segments of the aviation, defense, space and electronics industries. HEICO's customers include a majority of the world's airlines and airmotives as well as numerous defense and space contractors and military agencies worldwide in addition to telecommunications, elec! tronics and medical equipment manufacturers. I picked HEICO for "Bull of the Day" for two reasons. First, I like their projected earnings and sales growth of 19% and 13% respectively.Secondly, I like the fact they have a diverse mix of products, target markets, and customers, beyond A&D. In other words, commercial and general aviation, not just the space program or the military. They even serve computer, electronics, and healthcare markets.On May 22, the $2.9 billion company reported strong quarterly results and raised guidance. In the chart below, you can see the resulting breakout above $47 on strong volume.On May 24, upward EPS estimate revisions from analysts caused HEI to become a Zacks #2 Rank (Buy). On June 27, when HEI was still trading below $51, it became a Zacks #1 Rank (Strong Buy).Head-to-Head on All the MetricsOne great resource in the Zacks Premium tools is the ability to compare industry peers on dozens of fundamental metrics. Here's a snapshot of these 3 companies from the Earnings view...What stands out is that HEICO is more expensive on a valuation basis. But if the global trends of commercial aviation expansion continue to favor the fortunes of companies like Boeing, HEICO should be along for the flight.But, what about that Boeing 787 fire at Heathrow on Friday? We'll get to that in a moment.Here is how HEICO structures itself in two primary business segments...The Flight Support group designs, engineers, manufactures, repairs, distributes and overhauls FAA-approved parts that extend over the entire aircraft, from the engines all the way to hydraulic, pneumatic, electromechanical, avionic, structures, wheels and brakes and even interiors.The Electronic Technologies group produces electrical and electro-optical systems and components serving niche segments of the aerospace! , defense! , communications, and computer industries. Boeing 787 Woes: Where There's Smoke...This week should be an interesting one for many of these A&D stocks after the damage to Boeing shares on Friday. A 787 runway fire at London's Heathrow airport sent the stock down over $8 (7.5%) in less than 20 minutes on the news.But BA shares bounced off of $99 to close just below $102, down only $5 (4.7%). Not terrible considering it just made new all-time highs Friday above $108, eclipsing the record highs set in July 2007 above that mark. The good news for HEI shares is that they only fell 1% and are still within 1% of their closing all-time high just below $55. Going forward, I would trade any of these A&D equipment makers in tandem with their large-cap A&D customers.In other words, as the big guns of the sector go, so go the suppliers. Right now, I like HEI the best for its sold growth, diverse products and customers, and a strong price chart.If Boeing can put out their fires, HEICO should be a good wing man.Kevin Cook is a Senior Stock Strategist with Zacks.com

Don't Get Too Worked Up Over Ingredion'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 Ingredion (NYSE: INGR  ) , 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, Ingredion generated $353.0 million cash while it booked net income of $444.6 million. That means it turned 5.4% of its revenue into FCF. That sounds OK. However, 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 Ingredion 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.

With 10.5% of operating cash flow coming from questionable sources, Ingredion investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, other operating activities (which can include deferred income taxes, pension charges, and other one-off items) provided the biggest boost, at 5.0% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 47.5% of cash from operations.

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.

Can your portfolio provide you with enough income to last through retirement? You'll need more than Ingredion. Learn how to maximize your investment income and get "The 3 DOW Stocks Dividend Investors Need." Click here for instant access to this free report.

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Beyond the Printer Makers: Other Opportunities in 3-D Printing

The 3-D printing industry continues to see major breakthroughs, but the technology has only scratched the surface with consumers. Will we ever reach the point when most homes can print up a new part for the car or a toy for the kid?

That was the topic addressed by experts at CE Week in New York City. Motley Fool analyst Rex Moore was there, and spoke with CNET executive editor Paul Sloan, who moderated the panel "Bringing 3D Printing to Consumers."

In this segment, Sloan talks about the areas investors can consider beyond printer makers such as 3D Systems (NYSE: DDD  ) and Stratasys (NASDAQ: SSYS  ) .

Printing up a bright future
The Economist compares this disruptive invention to the steam engine and the printing press. Business Insider says it's "the next trillion dollar industry." And everyone from BMW, to Nike, to the U.S. Air Force is already using it every day. Watch The Motley Fool's shocking video presentation today to discover the garage gadget that's putting an end to the Made In China era... and learn the investing strategy we've used to double our money on these 3 stocks. Click here to watch now!