CBO: Real debt ceiling deadline could hit in March

Treasury Secretary Jack Lew this week again noted that political brinksmanship over raising the debt ceiling benefits no one. And he urged lawmakers to raise the limit soon to create certainty for the economy.

NEW YORK (CNNMoney) The budget focus on Capitol Hill is whether lawmakers will do the bare minimum and agree on a spending level for this fiscal year before funding runs out on January 15.

But soon enough, they will have to turn their attention to raising the debt ceiling.

If they don't they will risk a potential default on U.S. debt as early as March, according to a report released Wednesday by the Congressional Budget Office.

The deal lawmakers brokered in October to end the government shutdown let the Treasury Department continue borrowing new money through February 7 without regard to the debt limit. Then, on February 8, the debt limit will automatically reset to a higher level that reflects how much Treasury borrowed during the nearly 4-month debt ceiling suspension period.

At that point, however, Treasury will still be able to use "extraordinary measures," the special accounting maneuvers that let it keep paying the country's bills without going over the debt limit.

But the measures won't last very long.

"CBO projects that those measures would probably be exhausted in March. However, the timing and magnitude of tax refunds and receipts in February, March, and April could shift that date of exhaustion into May or June," the agency said.

Given how uneven the government's cash flow is from day to day and month to month, it's impossible to say with more precision when an actual default could occur.

CBO notes that the Treasury typically issues a large amount of tax refunds in February and March, which can lead to big monthly deficits. By contrast, April tends to c! reate a large surplus because everyone is sending in their federal tax returns along with checks for any additional taxes they owe for the previous year.

Treasury Secretary Jack Lew has noted many times that political brinksmanship over raising the debt ceiling benefits no one. And he suggested as much again this week at the Wall Street Journal CEO Forum, where he urged lawmakers to raise the limit without drama.

Hot Penny Stocks To Watch For 2014

"I hope ... they just do the debt limit in a business-like way and give some certainty to the U.S. and global economy. That would be the right thing to do."

Don't Fear the Taper

It's still too early to worry about the Fed tapering; yes, Fed tapering will be a legitimate worry in a few months, but should not be yet, suggests market timing specialist Sy Harding in his Street Smart Investing.

Analysts and economists have been concerned for almost five years now about how Fed Chairman Bernanke would ever be able to manage a successful exit from the Fed's massive QE stimulus efforts.

QE2 was scheduled to expire at the end of June 2011. But the S&P 500 topped out in May 2011, and plunged 19% to its October low.

In seeming panic, the Bernanke Fed rushed to the rescue with Operation Twist on September 21, 2011; that new stimulus program reversed the market correction on a dime. The market has not experienced even a 10% pullback since.

There was a brief pullback in the spring of 2012, on concerns that Operation Twist was due to expire in June. But the Fed quickly extended Operation Twist, and followed that up with a new stimulus program, QE3, last September.

The result was that, last fall, the stock market launched into the powerful new leg up that ran through last winter, and continued even through the market's unfavorable summer season this year.

It did pull back briefly a couple of times this year, again on Fed worries. However, when the market sold off in May, Bernanke rushed in to provide assurances that tapering will not begin until the economy can handle it. The market rallied back to new highs.

The market stumbled again in August, on concerns the Fed might begin tapering at its September meeting. But the Fed announced its no taper decision after that meeting, and the market recovered again, rallying back to still higher highs.

Now expectations are back that tapering could begin as early as the December meeting. That is highly unlikely for a number of reasons.

To begin with, the December and January FOMC meetings will be Bernanke's last, the end of eight years of his governance.

It's improbable that after launching the stimulus and keeping it going all this time, he would make the major decision to begin tapering as his final act in office, leaving it up to his successor to deal with the fallout.

In addition, let's not forget that the spending bill and debt-ceiling crisis were only kicked down the road to January and February.

So, unless the economy forces its hand with a dramatic upturn of positive reports, including a big turnaround in recently slowing employment, and in the slowing housing recovery, the new market worries about the Fed tapering earlier than next spring are quite-likely misplaced.

Investors probably have reason for caution short-term, due to the market's short-term overbought condition and the high level of investor bullishness. But the renewed concerns about Fed tapering soon are probably premature.

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How one should not fall prey to emotional investment ads

It has been a long tradition amongst us that you allow your heart to rule when you fall in love. You heart takes the decision there and not your mind. Similar thing should not happen when you take your investment and financial decisions.

Most of the financial and investment products are marketed to create an emotional appealing and not a rational appealing.

Why the marketing campaigns are emotionally appealing?

Well, I think all those investors who are above 30 years will vouch safe for me is that heart takes decision non-rationally (not irrationally), which is quicker, means it takes the decision and may or may not think about the consequences.

Hence, marketers find it easy to sell their products, even complex financial investment decisions with long term implications, by appealing to heart.

Let us see some examples?

Selling pension schemes!!! Very few people actually think of retirement planning until and unless they approach 50 years of age. Now how to lure young people between 30 and 40 years of age to buy retirement plans like pension schemes.

They would show an elderly couple frolicking in Goa beaches to show that they are enjoying their life even in their retirement life and money is no constraint as they have invested in the right pension plan when they were young.

Selling Children Education Plans!!! While advertising an educational plan for children, the marketer would tug at the heart strings of the parents by showing a picture where the child is dreaming about a good overseas degree. Now which parent will think twice about not fulfilling the dreams of their child (and in today's nuclear family, there is only one child to educate).

And, a further stronger pulls at the heart, by putting a girl child's photograph, with career aspiration. Making the parent feeling double guilty for not doing much for the girl child, and if she is the only child, more so.

Is it wrong to follow the heart?

Many of my friends will now argue that it makes sense to go for retirement planning when one is younger or it is not always the aspiration of the parents to give the best to their children. I have no issues with these arguments. I would like to join in this chorus by advocating both. But with a word of caution.

Look for right investment products

Please look for right investment products which will fulfil your need of retirement planning or savings for children education who are not spending too much money on advertisement saving it to give higher returns on their investment products.

PPF is a very good safe investment option for anyone to accumulate money for their long term needs like retirement or children's education / marriage.

Similarly investing in mutual fund SIPs is also a good way of accumulating money for retirement and children's future. The charges in mutual funds are very low when compared to the charges in children plan or pension plan from insurance companies.

Avoid buying a long term insurance product like a consumer product like soap!!!

Long term saving product are not consumer product, which we finish using within a month. It is OK if you see your favourite actress selling a soap and you opt for it. But will it be wise for you to go for an insurance policy (Payable for 10 years or more) product sold by her.

Please remember! The marketers who are pulling at your heart strings through advertisements have also the onus to recover the advertisement expenses including their own salaries, bonuses and perks. Why become a Mamu just like that!!!

Use only your mind, when you make your investment decisions, and you will hardly regret any such decisions.

Next Steps:

Now take a list of all your existing investments and check you have bought them because it appealed to you rationally or emotionally. If you have just bought them, only because it emotionally appealed to you, then now verify the same investment appeals to you also rationally or not.

If it is not rationally appealing, then you have fallen prey for the emotionally appealing strategy used by the marketers. Good that you are able to find this now. As you have realised this now, take a prudent decision to come out of this wrong investment and buy a right investment rationally.

A man must be big enough to admit his mistakes, smart enough to profit from them and strong enough to correct them.

The author is Ramalingam K, CFP CM is the Chief Financial Planner at holisticinvestment.in, a leading Financial Planning and Wealth Management company.

Herbalife Drops 4% as Ackman Shakes Up Bet

Herbalife (HLF) has fallen this morning, even as Pershing Square’s William Ackman said he had decreased the amount of Herbalife shares he had sold short and replaced them with long-term put options that will also profit if the stock falls.

Bloomberg News

The main benefit, according to the Wall Street Journal: a smaller short position makes the company less susceptible to a squeeze. Ackman still believes that Herbalife is destined to plummet. In his letter to investors–via the Journal–he wrote:

“We believe it is only a matter of time before the Company is shut down and prosecuted by regulators,” he wrote, later saying he had not seen “a less attractive risk-reward ratio than a long investment in Herbalife common stock at current levels”

D.A. Davidson’s Timothy Ramey notes that the new position seems “at odds” with Pershing Square’s goals. He writes:

If it truly still believes the go-to-zero thesis, and Mr. Ackman writes in his letter that he does, then it makes no sense to put a time element into this trade. He now needs to be both right on the go-to-zero thesis and right on the timing. On one thing we do agree – Pershing Square has significantly reduced the risk of unlimited losses, but has increased the certainty of a total loss of the original $1 billion short position as the puts expire worthless. The counterparty to his trades indeed has a winning hand.

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The market, however, clearly hasn’t taken it that way, as Herbalife’s shares have dropped 4% to $70.21. Direct seller Avon Products (AVP) has fallen 1.2% to $20.67, while nutritional-product retailer GNC Holdings (GNC) has declined 1.6% to $53.81.

Despite Positive Economic Data at Home, U.S. Stocks Fall on International Weakness

Here at home, investors were hit with strong housing numbers, and lower-than-expected jobless claims. Unfortunately, poor industrial purchasing numbers, and the fall of the Japanese stock market by 7% last night, sent a wave of fear throughout the U.S. markets this morning. At one point, around 10 a.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) had fallen 127 points, but it slowly recovered, and actually climbed as high as 15,348, which is 41 points higher than were it closed yesterday. But, when the closing bell rang, the blue-chip index was down 12 points, or 0.08%. Both the S&P 500 and the Nasdaq experienced similar rides today, and ended the day down 0.29% and 0.11%, respectively.

Although the markets, in general, had a bad day, a few Dow stocks rose higher.

Shares of Hewlett-Packard (NYSE: HPQ  ) took off today, gaining an astonishing 17.10% during today's regular trading period. The move came after H-P announced first-quarter earnings last night after the market closed. The company beat the street's estimates for operating profit of $0.81 per share by posting $0.87. And, although revenue declined by 10%, its $27.6 billion in sales still beat what analysts were expecting. But, what investors surely liked the most, was that H-P is still on track with its turnaround plan, and those surrounding Meg Whitman truly believe that, over time, she can get the company back on track. 

Boeing (NYSE: BA  ) was also flying higher today after the stock was upgraded by Bank of America this morning. B of A increased its price target on the stock to $120 per share, and held its rating at a "Buy." The analyst believes that Boeing will be able to deliver more planes this year than it had in the past. If that's the case, investors should see revenue and profits both rise in the coming quarters. In other news pertaining to Boeing, the Chinese government approved the Boeing 787 Dreamliner for commercial use within the country. This will likely open up a number of doors for Boeing as Chinese airlines update their aging fleets. Shares of Boeing rose 1.86% today.

Another analyst's comments caused shares of Cisco (NASDAQ: CSCO  ) to move higher by 0.73% today. Citigroup recently put out a report in which the investment bank said that they believe Cisco's economic leverage was under-appreciated by the market. The report went further, stating that positive earnings could push the share price as high as $30. Citigroup currently has a buy rating on the stock, with a $26 price target. 

More foolish insight

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's rapidly shifting its strategy under the new 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 blip 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.

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How To Play the Decline in Commodities and Emerging Market Currency Prices

Cole Wilcox, the portfolio manager, CEO and CIO of Longboard Asset Management, has an interesting way to play the decline in commodities and emerging market currency prices.

His strategy: invest in the dry bulk sector.

"What's happening all over the world is a huge glutton of commodities [are] coming into the market from emerging market countries that…are kind of over-producing commodities in a weak economy, trying to put stuff out there in the marketplace," Wilcox told Benzinga.

Wilcox said there has been a lot of demand from emerging markets to export a "tremendous amount of raw material commodities around the world."

"For consumers of commodities in China, the relative cost of importing commodities from other places has gone down relative to domestic producers," he added.

Dry bulk shipping companies are an essential part of that effort, as they are needed to transport the commodities from an emerging market (such as Latin America) to another region.

Related: Will Stocks See A Santa Claus Rally Next Week?

"As emerging market currencies continue to go down, and the need and demand for continuing to export large amounts of increased production and [the need to] move those commodities, you have the need for dry bulk shipping cargo containers to move stuff around," Wilcox explained.

Even so, some investors may be unwilling to budge. After all, dry bulk companies took a beating over the last few years; who's to say they'll perform any better in the future?

Wilcox has faith in the sector, but he is most interested in DryShips (NASDAQ: DRYS). While the stock has fallen well below its all-time high (DryShips traded above $120 a share in October 2007), the company is trying to crawl its way back to the top. Year-to-date, DryShips is up more than 127 percent.

"The stock and the sector, it got destroyed over the last five years," said Wilcox. "There was a huge amount of consolidation. [Companies] went out of business. And now you're getting into this supply/demand, this equilibrium, where you can see a huge move in the stock to the upside -- re-pricing for the upside."

Wilcox is also intrigued by the fact that George Soros recently invested in the sector, including DryShips.

"If you look at the people who are in the trade right now -- George Soros took a significant position across the whole [smattering] of the dry bulk shipping cargo companies in the last quarter," said Wilcox. "So some of the best macro minds are…long this position and it's a great opportunity to have a rise to the upside."

Wilcox said that he likes DryShips because it is "probably the best brand in the investment world."

"It had a huge move back in 2007 -- kind of in the bull market commodity," he added, noting that traders are very aware of the stock.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Posted-In: Cole Wilcox dry bulk DryShips George Soros Longboard Asset ManagementLong Ideas News Commodities Success Stories Markets Trading Ideas Interview Best of Benzinga

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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10 Best Undervalued Stocks To Buy For 2014

Ever-volatile premium mattress company�Select Comfort (NASDAQ: SCSS  ) delivered an earnings report this week that failed to impress the Street in a big way. The company missed its estimates on either end, suggesting that things were getting soft (punny, I know) in the mattress world. As a result, the stock took a near 10% hit in Wednesday's after-hours trading, and through into Thursday. Management, however, is sticking�to its full-year guidance, and did not find the missed estimates to be as terrible an issue. Does the stock drop create an opportunity for the company, or is the market a prophet of more difficulty to come?

A difficult pick
Keeping a close eye on Select Comfort for a few years has illuminated a few things about the company -- sales seem to swing from great to poor, with little in between; and the stock is tremendously sensitive because of it. The five-year price chart shows near 2,000% gains -- not bad��ut since its peak roughly 16 months ago, Select Comfort has been a series of rapid gains and losses. While frustrating for an existing or prospective shareholder, it does suggest that the stock is frequently mis-priced. The question now is, at under $25 per share, has the market undervalued the long-term growth prospects of the company?

10 Best Undervalued Stocks To Buy For 2014: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:

• [By Jonas Elmerraji]

  2013 has been a stellar year for shares of oil service giant Schlumberger (SLB). Since the calendar flipped over to January, SLB has rallied more than 25%, beating the broad market's impressive pace by double digits. As oil prices linger on the high end of their historic range, SLB is well positioned to keep ticking higher.

  Schlumberger provides must-have services to national and supermajor oil firms as well as smaller E&Ps, offering up niche services like seismic surveys and well drilling and positioning. In a nutshell, SLB's job is to pull oil out of the ground as efficiently as possible. Oil firms turn to Schlumberger because the tasks they need to accomplish are too nuanced or proprietary to pull off in-house. So as long as the company continues to pour cash into R&D for drilling technology and software, the firm should continue to score lucrative contracts.

  Some of Schlumberger's most attractive opportunities right now come from overseas. The firm is one of the largest oil servicers in Russia, a key growth market in the years ahead. It's also got an important presence in smaller oil markets, where it's a big fish in a small pond. A big scale and stellar reputation should guarantee Schlumberger an attractive piece of the oil pie for years to come.

• [By Paul Ausick]

  Big Earnings Movers: Google Inc. (NASDAQ: GOOG) is up 13.8% at $1,011.65 after hammering estimates. Advanced Micro Devices Inc. (NYSE: AMD) is down 13.7% at $3.53. General Electric Co. (NYSE: GE) is up 3.6% at $25.57 after beating estimates. Morgan Stanley (NYSE: MS) is up 2.6% at $29.68. Schlumberger Ltd. (NYSE: SLB) is up 2.8% at $93.95 on solid earnings. All these stocks, except AMD, posted new 52-week highs today; Google posted its all-time high.

• [By David Smith]

  Big and not so big at your service
  In the services sector, perhaps the most difficult to comprehend of the sub-sectors, you likely have a good handle on the kingpin, Schlumberger (NYSE: SLB  ) . The company, with a $100 billion market cap, operates in about 85 countries, through the efforts of more than 100,000 employees. Its services include everything from soup to nuts, or seismic to production assistance. So, if you're looking for an ideal company to constitute a single proxy for the services contingent, Schlumberger's a good bet.

• [By Teresa Rivas]

  As for companies with the most upside, Marathon Petroleum (MPC) tops the list, with 63.6%, followed by Autodesk (ADSK), Ventas (VTR), salesforce.com (CRM) and American Tower (AMT). Outside the top five, the list also includes big names like Schlumberger (SLB), Halliburton (HAL), Expedia (EXPE) and General Motors (GM).

10 Best Undervalued Stocks To Buy For 2014: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:

• [By Eric Volkman]

  Tupperware Brands (NYSE: TUP  ) is reaching into its corporate bowl for a fresh payout to shareholders. The company has declared a quarterly dividend of $0.62 per share. This will be paid on July 8 to stockholders of record as of June 19. That amount matches the firm's previous distribution, which was paid in early April. Prior to that, Tupperware Brands was rather less generous, handing out $0.36 per share.

• [By Monica Gerson]

  Tupperware Brands (NYSE: TUP) is expected to report its Q3 earnings at $1.03 per share on revenue of $623.34 million.

  Varian Medical Systems (NYSE: VAR) is projected to post its Q4 earnings at $1.12 per share on revenue of $779.02 million.

• [By Brian Pacampara]

  Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, household products company Tupperware Brands (NYSE: TUP  ) has earned a coveted five-star ranking.

• [By Oliver Pursche]

  European large-cap pharmaceuticals like Novartis (NVS) �and Bristol Meyers Squibb (BMY) �count amongst some of our favorite stocks right now, as do U.S. multinationals that are growing revenue and margins in Asia ��Tupperware (TUP) �is a shining example. Stay away from utilities and energy stocks, as they are likely to be the laggards over the next year.

Best Clean Energy Companies To Buy For 2014: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:

• [By Arjun Sreekumar]

  Even some of the largest players in the railroad industry, including Berkshire Hathaway's Burlington Northern Santa Fe, Union Pacific, and Norfolk Southern, are carefully studying the costs and benefits of converting their freight trains' engines to burn natural gas instead of diesel. BNSF, for instance, is using units from General Electric (NYSE: GE  ) and Caterpillar (NYSE: CAT  ) , the biggest manufactures of locomotives in the world, to determine whether it wants to convert some of its trains to run of a mix of natural gas and diesel.

• [By Dan Caplinger]

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

• [By John Divine]

  That said, there was a modicum of more straightforward logic behind today's slump: Dow Jones Industrial Average (DJINDICES: ^DJI  ) component Caterpillar (NYSE: CAT  ) issued a gloomy outlook for the coming year and disappointed on earnings. The Dow ended with 25-point, or 0.2%, losses, closing at 15,542.

10 Best Undervalued Stocks To Buy For 2014: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:

• [By Ben Eisen]

  Perpetually struggling department store J.C. Penney Co. (JCP) �said it expects a sales boost this holiday season as it returns to a promotional strategy. But for the most part, retailers including Dollar Tree Inc. (DLTR) �, GameStop Corp. (GME) � and Abercrombie & Fitch Co. (ANF) � gave dour outlooks in their earnings reports.

• [By Rising Dividend Investing]

  Falling Stock Correlation: What It Says About Consumer Spending

  As we mentioned in the Take Aways from the August 26th Investment Policy Committee meeting, the correlation index has been steadily declining. In 2008-09, macroeconomic events drove nearly every stock downwards. Specific sectors and stocks moved in tandem with one another. Today, stocks and sub-industries within each sector are performing very differently – which indicates a return to a more normal stock market environment.
  The Consumer Discretionary (also known as Consumer Cyclicals) sector is an example of an industry that has been rewarded for its fundamental success over the past 12 months. As a whole, the sector grew sales 6.1% and earnings 9.2% in the second quarter - much better than the 1.4% sales and 3.3% earnings growth of the S&P 500. While the overall sector did well in the second quarter, the table below shows how differently the 5 sub-categories of Consumer Discretionary performed:
  
  (click to enlarge)
  As we drill down even further, sub-categories of sub-sectors differ even more dramatically. Below is a snapshot of the Retailing sub-sector and its notable components:
  
  (click to enlarge)
  Specific stocks within each sub-category are varying in performance as well. General Merchandise retailers were significantly differentiated in the second quarter. Target’s (TGT) adjusted EPS were up 6.1% from 2012, while Dollar General (DG) and Dollar Tree’s (DLTR) earnings were up nearly 12% and 9%, respectively.
  The differences in sales and earnings growth amongst these different industries tell a story. The economy is not improving enough that people feel like they can let go and spend money on pure pleasures, but it is improving enough that they can afford to replace their cars and fix the doors on their houses. As these items wear out and need to be replaced, we expect the pent up demand will drive increased economic activity from cons

Is Exxon Mobil a Buy Near All Time Highs?

With shares of Exxon Mobil (NYSE:XOM) trading around $97, is XOM an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Exxon Mobil is a manufacturer and marketer of commodity petrochemicals like olefins, aromatics, polyethylene, and polypropylene plastics, as well as a range of specialty products. The company has a number of divisions and affiliates with names that include ExxonMobil, Exxon, Esso, and Mobil, which operate or market products in the United States and other countries. Exxon Mobil's principal business is energy, involving the exploration for and production of crude oil and natural gas; manufacture of petroleum products; and transportation and sale of crude oil, natural gas, and petroleum products.

Exxon Mobil is leading the way in calling for the United States to end restrictions on the exporting of oil, the Wall Street Journal reports. The ban on the exportation of oil from the United States dates back to the 1970s, when fears over the looming energy crisis caused the government to institute the measure. With gasoline prices going through the roof, and shortages occurring at gas stations throughout the country, it seemed like a logical step to keep as many fossil fuels as possible within U.S. borders.

T = Technicals on the Stock Chart Are Strong

Exxon Mobil stock has been surging higher in recent quarters. The stock is currently trading near all time highs and looks ready to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Exxon Mobil is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Exxon Mobil options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Exxon Mobil options	18.18%	96%	93%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
January Options	Flat	Average
February Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Exxon Mobil’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Exxon Mobil look like and more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	-14.35%	-54.55%	6.00%	11.33%
Revenue Growth (Y-O-Y)	-2.41%	-16.41%	-12.29%	-5.29%
Earnings Reaction	0.91%	-1.08%	-1.52%	0.07%

Exxon Mobil has seen mixed earnings and decreasing revenue figures over the last four quarters. From these numbers, the markets have had conflicting feelings about Exxon Mobil’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has Exxon Mobil stock done relative to its peers, BP (NYSE:BP), Chevron (NYSE:CVX), Royal Dutch Shell (NYSE:RDSA), and sector?

	Exxon Mobil	BP	Chevron	Royal Dutch Shell	Sector
Year-to-Date Return	10.67%	11.52%	11.55%	-1.60%	9.03%

Exxon Mobil has been an average relative performer, year-to-date.

Conclusion

Exxon Mobil is a provider of essential commodity products and services that people and companies use around the world. The company is leading the way in calling for the United States to end restrictions on the exporting of oil. The stock has been surging higher in recent quarters and is currently trading near all time highs. Over the last four quarters, earnings have been mixed while revenues have been decreasing, which has produced conflicting feelings among investors. Relative to its peers and sector, Exxon Mobil has been an average year-to-date performer. WAIT AND SEE what Exxon Mobil does this quarter.

Is Welfare Becoming a for-Profit Business?

The social health and financial buffer put in place in the United States to protect the basic human needs of all individuals, collectively known as welfare, is gigantic. Some 47.8 million people are currently enrolled in the Supplemental Nutritional Assistance Program, which you may know better by its short-hand term, food stamps. Also, as of mid-January, close to 5.6 million people were receiving some form of unemployment benefits.

The scope of welfare is difficult to comprehend, but the amount of money spent by federal and state governments on social and health programs is plain as day. According to Sen. Jeff Sessions (R-Ala.), welfare spending between state and federal governments is up more than 30% since President Obama took office and topped $1 trillion in 2011, based on a study released last October.

We've definitely seen certain companies angling themselves to take advantage of the increasing government dollars flowing into welfare -- especially in the health-care sector. The passing of the Patient Protection and Affordable Care Act (aka Obamacare) is going to bring upwards of 16 million newly insured low-income individuals and families under the umbrella of government-sponsored Medicaid, so insurers have been doing everything they can to get their slice of the pie. WellPoint (NYSE: WLP  ) ponied up $4.5 billion to buy Amerigroup and hurdle past UnitedHealth Group to become the nation's largest private Medicaid insurer. Aetna (NYSE: AET  ) followed suit shortly thereafter in August with a $5.6 billion purchase of Coventry Health Care, aimed, similarly, at gaining more Medicaid-based customers.  

Is the game about to change?
The point is we've expected this of health insurers and certain medical service providers for years. But, the way I see it, a completely different set of circumstances currently making their rounds throughout the states could greatly broaden the scope of welfare from simply a basic human-needs service to a for-profit business.

What I'm talking about is the ongoing debate over mandatory drug testing. Certain states, including Michigan in 1999, Florida in 2011, and Georgia in 2012, passed laws that allowed them to mandate that everyone receiving welfare be drug tested before divvying out their monthly disbursement. In Michigan, this law was overturned in 2003, and in Florida, the American Civil Liberties Union successfully argued for, and had a federal appeals court uphold, a temporary ban against the encompassing drug screenings for everyone on welfare. Other states, including Arizona, Missouri, Utah, and Oklahoma also test welfare recipients, but only if there's a reasonable cause for suspicion according to The Wall Street Journal.

Best Low Price Companies To Own For 2014

As with all political battlegrounds, there are two sides to this issue. On one hand, with government budgets tightening because of the sequester, it would be nice to know that members of society who need a helping hand are getting it. Mandatory drug testing would keep that money out of the hands of illicit drug dealers and put it in the hands of people who need the assistance.

Conversely, mandatory drug testing is expensive and time consuming, and it hasn't proved to be a money-saving effort in its short history. According to USA Today, Arizona's "suspicion-driven" testing was effective only 0.00001% of the time, with only one person of the 87,000 tested coming back positive. The head-banger of the Arizona test is that applicants had only to answer a question "yes" or "no" to whether they had used illegal drugs in the past 30 days. If they answered "no," then Arizona couldn't test them! Even in Florida, where everyone is testing everyone, only 2.7% of applicants have failed the drug screening. Worse yet, the test costs $30-$40 and is to be paid by the applicant. The applicant is reimbursed if he or she passes, but $30-$40 can sometimes be hard to scrape together for welfare recipients.

The real question is whether other states will catch onto and adopt this idea -- and the answer seems to be leaning toward "yes." In 2011, 36 of 50 states considered adopting some form of drug testing for welfare recipients, based on figures in The New York Times -- a dramatic increase from previous years. If adopted on a large scale, it could push welfare from being just a battleground for health-service providers to a free-for-all across a myriad of sectors.

Welfare as a driver of profits
First of all, drug diagnostic companies would be the logical winners under a larger adoption scenario. Regardless of whether these companies are paid by the state or by the recipient, it's guaranteed money in their pocket. Under a wider adoption scenario, I wouldn't even be surprised if diagnostic companies switched gears and developed their own drug-testing kits in order to join the fray.

Another winner under this scenario would be the nation's prison system. Even as some states begin to legalize the use of recreational marijuana in a person's home, the federal government still views it as an illegal substance.

Source: California Department of Corrections. 

The premise here would be that any increase in nationwide drug testing would be bound to turn up additional drug users and could boost the prison population. That would be great news for the GEO Group (NYSE: GEO  ) and Corrections Corp. of America (NYSE: CXW  ) , which are contracted out through the government to run and service prisons around the country.

Finally, legal alternatives to "getting high" should see a boost -- namely, spirit producers. Since most drugs are traceable in the human body for weeks and alcohol tends to leave your system long before 24 hours is up, domestic beer behemoths such as Anheuser-Busch InBev and Molson Coors (NYSE: TAP  ) , as well as hard-liquor producers such as Brown-Forman, the maker of Jack Daniels and Southern Comfort, should be primed to benefit. For the domestic beer producers, this would be an incredibly welcome sign, as stagnant take-home pay has weighed heavily on beer consumption.

Where do we go from here?
There's no question in my mind that these industry groups would benefit from expanded welfare drug screening. The question comes down to whether it's ethical and worth spending the added government funds and resources on expanding this program to additional states. Furthermore, aside from the health-benefits industry, should businesses in these industries be gearing up for increased testing to essentially "stay ahead of the curve?" Sound off with your thoughts in the comments section below.

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Test Drive: Trailhawk unstoppable for off-road fun

Test Drive: 2014 Jeep Cherokee

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SUMMIT POINT, W. Va. — Bring the 2014 Jeep Cherokee Trailhawk to a complete stop; check. Shift to low range four-wheel-drive; check. Engage the locking differentials; check.

Hit the mud. Check and check and check some more.

The thing's unstoppable in the backwoods, mud-laden off-road course at Summit Point Motorsports Park here.

Locking differentials — left and right wheels turn at the same speed, no matter what; power's not wasted on an easy-spinning wheel with little traction — is the off-road equivalent of the hand of God.

T-hawk's shining, grin-producing off-road ability is even more remarkable when you understand that the Cherokee is basically a Dodge Dart compact sedan done up as an SUV.

The chassis used by Dart and Cherokee is what Jeep's parent Chrysler Group calls CUS-W (for compact, U.S. market, wide). It's derived from a platform provided by Chrysler majority owner Fiat's Alfa-Romeo brand.

CUS-W is laid out for a transverse engine and front-wheel-drive. Cherokee adds four-wheel-drive hardware.

Trailhawk is the off-road specialty model of the new Cherokee. Slightly different trim and coloring vs. the Latitude and Limited make it the only Cherokee with looks that don't provoke Test Drive's gag reflex.

The others have a face only a mom could love. Trailhawk's pretty close to that, but gets a pass for its jock-ness.

Trailhawk also has bright red, fang-like tow hooks below the front and rear bumpers, giving it an especially business-like persona.

Reasonable people often disagree on matters of taste, so maybe you'll love the Cherokee's looks. Certainly it's been in enough TV ads that you likely already know what you think.

By most measures, Cherokee is ex! ceptional. But, beyond styling, there are exceptions to exceptional:

• Paved-road ride seems too jiggly on all models, not just the specially under-slung T-hawk. We drove a variety of models here, around Hell, Mich., and in suburban Virginia and on all we noticed annoying jiggles and wiggles on highways and in town; over bumps and on smooth stretches.

• The version you'll probably really want is too expensive. Though the starter price is a fetching $23,490, that gets you one with front-wheel drive (FWD) and a four-cylinder engine. It can sound pretty coarse in modestly challenging terrain and in our testing wasn't significantly more fuel-efficient than the optional V-6 that has much more power and runs more sweetly.

Desirable versions will run about $32,000 to $38,000 — a lot for a modest-size SUV, even with Cherokee's array of features.

An unusual asset: Versions with the either of the two top 4x4 systems can be flat-towed, great for RV ramblers who bring along something to drive once settled in the RV park.

Perhaps the biggest reason to salute Cherokee is that it's finally here.

Cherokee replaces the Liberty, which was introduced in late 2001 as 2002 model and was a contemporary jewel, then was enlarged and uglified for the second generation.

Liberty production ended August 2012. Cherokee began arriving at dealers only this October.

The first-gen Liberty, by the way, is more capable some ways than Cherokee. Early Liberty models could tow 5,000 lbs., carry 1,500 lbs. Cherokee, 4,500 lbs., 1,000 lbs. Lest you think all change is good.

Cherokee noteworthies:

• It's first on the market with a nine-speed automatic transmission. It beat the 2014 Range Rover Evoque, which has a similar nine-speed by about two months. The 2014 Evoque is arriving at dealers this month.

• Cherokee's nine-speed shifted well most of the time.

• Rear leg room is commendable. Adults fit nicely.

• Cargo and passenger space is thoughtfully ex! ecuted. R! ear seat slides fore-aft to blend cargo and rear passenger needs. Front passenger seat folds flat forward for long cargo when combined with fold-down rear seat.

• Steering, cornering, braking all pass muster with room to spare.

• Connectivity/infotainment systems are excellent, typical of Chrysler (and General Motors) vehicles these days.

Looks and the unsettled ride take Cherokee off our list. But it is a compelling package for those with kinder views of the styling and suspension. And for those who really go off-road, the Trailhawk is a remarkable piece of work.

ABOUT THE JEEP CHEROKEE TRAILHAWK

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What? Compact four-door, five-passenger SUV replacing the Liberty; available with front-wheel (FWD) and three types of four-wheel drive (4x4); four-cylinder or V-6 engine.

When? On sale since October.

Where? Made at Toledo, Ohio.How much? $23,490 including shipping for the base, FWD four-cylinder, to $38,260 for loaded AWD V-6 Trailhawk trim.

What makes it go? Base is 2.4-liter, four-cylinder, Tigershark 2 MultiAir, gasoline engine rated 184 horsepower at 6,400 rpm, 171 pounds-feet of torque at 4,600 rpm. Optional: 3.2-liter Pentastar gas V-6 rated 271 hp at 6,500, 239 lbs.-ft. at 4,400 rpm.

How big? Similar but longer, wider, taller than Ford Escape or Honda CR-V.

Passenger space, 103.4 cu. ft. Cargo: 24.6 cu. ft., back seat upright, 54.9 cu. ft., back seat folded. Weighs 3,775-4,106 lbs.

Carries 1,000 lbs. of accessories, people, cargo. Tows up to 4,500 lbs. with trailer package; 2,000 lbs. without.

Turning-circle diameter: 37.6 to 38.1 ft.

How thirsty? 4-cyl. models rated 21-22 mpg in the city, 27-31 mpg highway, 23-25 mpg combined city/highway driving.

V-6: 19/26-28/21-22 mpg.

Test vehicles included 4-cyl. and V-6, FWD and 4x4 and all hovered around 18 mpg (5.56 gallons per 100 m! iles) in ! vigorous suburban driving with frequent wide-open throttle.

4-cyl., FWD model driven gently on smooth, level country roads: 28.7 mpg (3.48 gal./100 mi.).

Regular recommend, tank holds 15.9 gallons.

Overall: Ugly, potentially pricey, generous array of standard features, modern and roomy interior, exceptional 4x4 choices.

Top 5 Medical Stocks To Watch For 2014

After underperforming for nearly a decade, stocks in one sector have come alive and outpaced the overall market for the past two years. And MoneyShow's Howard R. Gold thinks these stocks may not be finished quite yet.

The four and a half year-plus bull market is looking a bit tired, but one sector has really come into its own.

Health care stocks, which underperformed for almost a decade, have outpaced the overall market for more than two years. The Health Care Select Sector SPDR ETF (XLV) has gained 86% from August 10, 2011 through Tuesday, November 12, 2013. It beat the Standard & Poor's 500 index (SPX) by nearly 30 percentage points and trailed only soaring consumer cyclicals during that time.

But whereas cyclicals already have had a monster run, health care stocks may have much further to go.

Click to Enlarge

This diverse sector, which includes red-hot biotechnology, Big Pharma, medical device makers, hospitals, health insurers, and other services, is profiting from structural shifts far beyond the changes brought in by the Affordable Care Act.

Top 5 Medical Stocks To Watch For 2014: Prosensa Holding NV (RNA)

Prosensa Holding N.V., formerly Prosensa Holding B.V., is a biotechnology company engaged in the discovery and development of ribonucleic acid-modulating (RNA)-modulating, therapeutics for the treatment of genetic disorders. The Company�� primary focus is on rare neuromuscular and neurodegenerative disorders with a large unmet medical need, including Duchenne muscular dystrophy, myotonic dystrophy and Huntington�� disease. The Company�� clinical portfolio of RNA-based product candidates is focused on the treatment of Duchenne muscular dystrophy (DMD). The Company�� platform technology allows the development of RNA-modulating therapeutics that either interferes with splicing (exon skipping, exon inclusion, or splice mutation correction), remove mutant RNA, or block RNA expression, for different indications.

DMD is a rare, severe muscle wasting disease that occurs in up to 1 in 3,500 male births. It is commonly diagnosed between the ages of three to five, when boys begin to show signs of impaired motor development. PRO044, the Company�� product candidate, addresses a separate sub-population of DMD patients. The Company developed PRO044 using its exon-skipping technology to generate a product candidate with the same mechanism of action that is used by drisapersen.

Advisors' Opinion:

• [By Keith Speights]

  Successful launch
  You couldn't even buy stock in Prosensa (NASDAQ: RNA  ) just a few weeks ago. The biotech launched its IPO on June 28. To say that launch has gone successfully is an understatement. Shares are now more than double the IPO price and climbed 41% this week.

Top 5 Medical Stocks To Watch For 2014: Organovo Holdings Inc (ONVO.PK)

Organovo Holdings, Inc. (Organovo), formerly Real Estate Restoration & Rental, Inc., incorporated in 2007, is a development-stage company. The Company has developed and is commercializing a platform technology for the generation of three-dimensional (3D) human tissues that can be employed in drug discovery and development, biological research, and as therapeutic implants for the treatment of damaged or degenerating tissues and organs. On December 28, 2011, Real Estate Restoration and Rental, Inc.�� (RERR) entered into an Agreement and Plan of Merger, pursuant to which RERR merged with its, wholly owned subsidiary, Organovo (Merger Sub). On February 8, 2012, the Company merged with and into Organovo Acquisition Corp. (Acquisition Corp.), a wholly owned subsidiary of Organovo, with the Company surviving the merger as a wholly owned subsidiary of Organovo Holdings (the Merger). As a result of the Merger, Organovo acquired the business of Organovo, Inc.

The C ompany has collaborative research agreements with Pfizer, Inc. (Pfizer) and United Therapeutic Corporation (Unither). As of March 31, 2012, it has five federal grants, including Small Business Innovation Research grants and developed the NovoGen MMX Bioprinter (its first-generation 3D bioprinter). The Company is engaged in the development of specific 3D human tissues to aid Pfizer in discovery of therapies in two areas of interest. In addition, in October 2011, it entered into a research agreement with Unither to establish and conduct a research program to discover treatments for pulmonary hypertension using its NovoGen MMX Bioprinter technology. Additionally, under the research agreement with Unither, the Company granted Unither an option to acquire from the Company a worldwide, royalty-bearing license in certain intellectual property created under the research agreement solely for use in the treatment or prevention of pulmonary hypertension and all other lung diseases.

The Company�� NovoGen MMX Bioprinter is an aut! om! ated device that enables the fabrication of three-dimensional (3D) living tissues comprised of mammalian cells. A custom graphic user interface (GUI) facilitates the 3D design and execution of scripts that direct precision movement of the dispensing heads to deposit cellular building blocks (bio-ink) or supporting hydrogel. The Company is using a third party manufacturer, Invetech Pty., of Melbourne, Australia, to manufacture its NovoGen MMX Bioprinter. Its bioprinting technology and surrounding intellectual property and commercial rights serve as a platform for product generation across multiple markets that employ cell- and tissue-based products and services.

The Company competes with Organogenesis, Advanced BioHealing, Tengion, Genzyme, HumaCyte and Cytograft Tissue Engineering.

Best Casino Stocks To Watch For 2014: StemCells Inc (STEM)

StemCells, Inc. (StemCells), incorporated in August 1988, is engaged in the research, development, and commercialization of stem cell therapeutics and related tools and technologies for academia and industry. The Company is focused on developing and commercializing stem and progenitor cells as the basis for therapeutics and therapies, and cells and related tools and technologies to enable stem cell-based research and drug discovery and development. The Company�� primary research and development efforts are focused on identifying and developing stem and progenitor cells as potential therapeutic agents. The Company has two therapeutic product development programs, including its CNS Program, which is developing applications for HuCNS-SC cells, its human neural stem cell product candidate, and its Liver Program, which is characterizing the Company�� human liver cells as a therapeutic product.

CNS Program

The Company in its CNS Program, is in clinical development with its HuCNS-SC cells for a range of disorders of the central nervous system. The CNS includes the brain, spinal cord and eye. In February 2012, the Company had completed a Phase I clinical trial in Pelizeaus-Merzbacher Disease (PMD), a fatal myelination disorder in the brain.

The Company�� CNS Program is focused on developing clinical applications, in which transplanting HuCNS-SC cells protect or restore organ function of the patient before such function is irreversibly damaged or lost due to disease progression. The Company�� initial target indications are PMD, and more generally, diseases in which deficient myelination plays a central role, such as cerebral palsy or multiple sclerosis; spinal cord injury, disorders in which retinal degeneration plays a central role, such as age-related macular degeneration or retinitis pigmentosa. The Company�� product candidate, HuCNS-SC cells, is a purified and expanded composition of normal human neural stem cells. Its HuCNS-SC cells can be directly transp! lanted.

Liver Program

Liver stem or progenitor cells offer an alternative treatment for liver diseases. A liver cellular therapy or cell-based therapeutic provide or support liver function in patients with liver disease. The Company held a portfolio of issued and allowed patents in the liver field, which cover the isolation and use of both hLEC cells and the isolated subset, as well as the composition of the cells themselves.

The Company�� range of cell culture products, which are sold under the SC Proven brand, includes iSTEM, GS1-R, GS2-M, RHB-A, RHB-Basal, NDiff N2, and NDiff N2B27. Its iSTEM is a serum-free, feeder-free medium that maintains mouse embryonic stem cells in their pluripotent ground state by using selective small molecule inhibitors to block the pathways, which induce differentiation. RHB-A is a defined, serum-free culture medium for the selective culture of human and mouse neural stem cells and their maintenance and expansion as adherent cell populations. RHB-Basal is a defined, serum-free basal medium. When supplemented with specific growth factors, this media is formulated for the propagation and differentiation of adherent neural stem cells. RHB-Basal can also be tailored to specific-cell type requirements by the addition of customer preferred supplements.

The Company�� NDiff N2 is a defined serum-free scell culture supplement for the derivation, maintenance, expansion and/or differentiation of human and mouse embryonic stem (ES) cells and tissue-derived neural stem cells supplement. Its NDiff N2-AF is a serum-free and animal component-free version of NDiff N2. Its NDiff N2B27 is a defined, serum-free medium for the differentiation of mouse embryonic stem cells to neural cell types. NDiff N27-AF is a serum-free and animal component-free version of NDiff N27. Its GS1-R is a serum-free media formulation shown to enable the derivation and long-term maintenance of true, germline competent rat embryonic stem cells without the add! ition of ! cytokines or growth factors. Its GS2-M is a defined, serum- and feeder-free medium for the derivation and long-term maintenance of true, germline competent mouse iPS cells.

The Company also markets a number of antibody reagents for use in cell detection, isolation and characterization. These reagents are also under the SC Proven brand and it includes STEM24, STEM101, STEM121 and STEM123. Its STEM24 is a human antibody that recognizes human CD24, also known as heat stable antigen (HSA), a glycoprotein expressed on the surface of many human cell types, including immature human hematopoietic cells, peripheral blood lymphocytes, erythrocytes and many human carcinomas. Its CD24 is also a marker of human neural differentiation. Its STEM101 is a human-specific mouse antibody that recognizes the Ku80 protein found in human nuclei. Its STEM121 is a human-specific mouse antibody that recognizes a cytoplasmic protein of human cells. Its STEM123 is a human-specific mouse antibody that recognizes human glial fibrillary acidic protein (GFAP).

The Company�� Other products marketed under SC Proven include total cell genomic DNA (gDNA), RNA and protein lysate reagents purified from homogenous stem cell populations for intra-comparative studies, such as Epigenetic fingerprinting, Southern, Western and Northern blots, PCR, RT-PCR and microarrays. This range of purified stem cell line lysates includes mouse embryonic stem (ES) cells propagated in SC Proven 2i inhibitor-based GS2-M media and mouse ES cell-derived and fetal tissue-derived neural stem (NS) cells propagated in SC Proven RHB-A media.

Advisors' Opinion:

• [By John Udovich]

  The results of a recent Pew Center Poll regarding attitudes towards abortion and various forms of stem cell research could be a good sign for the stem cell industry along with small cap stem cell stocks like StemCells Inc (NASDAQ: STEM), NeoStem Inc (NASDAQ: NBS), Neuralstem, Inc (NYSEMKT: CUR),�International Stem Cell Corp (OTCMKTS: ISCO) and BioRestorative Therapies (OTCBB: BRTX). Basically, Americans think that having an abortion is a moral issue with 49% of American adults believing abortion is morally wrong, 23%�view it not as a moral issue and and 15% view it as morally acceptable. However and when Americans were asked about issues surrounding�human embryos, such as stem cell research or in vitro fertilization, as a matter of morality, their views were different.

• [By James E. Brumley]

  When an investor thinks of spinal-related stem cell stocks, usually a name like Neuralstem, Inc (NYSEMKT: CUR) or StemCells Inc (NASDAQ: STEM) comes to mind. And well they should. STEM has logged some amazing breakthroughs in the field of spinal cord repair, while CUR has done the same. Not all back problems are spinal cord related though. In fact, most back problems - and therefore the most opportunity - are bone and disc related problems. That's where a young gun like BioRestorative Therapies (OTCBB: BRTX) can step in and make stem cell waves. BRTX has developed an approach to rejuvenate and revive failing spinal discs, potentially ending pain for millions of back-pain sufferers, and circumventing expensive spinal surgeries that are in increasing burden on insurance companies.

Top 5 Medical Stocks To Watch For 2014: Cell Therapeutics Inc (CTIC.A)

Cell Therapeutics, Inc. (CTI), incorporated in 1991, develops, acquires and commercializes treatments for cancer. The Company�� research, development, acquisition and in-licensing activities concentrate on identifying and developing new ways to treat cancer. As of December 31, 2011, CTI focused its efforts on Pixuvri (pixantrone dimaleate) (Pixuvri), OPAXIO (paclitaxel poliglumex) (OPAXIO), tosedostat, brostallicin and bisplatinates. As of December 31, 2011, it developed Pixuvri, an anthracycline derivative for the treatment of hematologic malignancies and solid tumors. Another late-stage drug candidate of the Company, OPAXIO, is being studied as a potential maintenance therapy for women with advanced stage ovarian cancer, who achieve a complete remission following first-line therapy with paclitaxel and carboplatin. As of December 31, 2011, it also developed tosedostat in collaboration with Chroma Therapeutics, Ltd. (Chroma). On May 31, 2012, CTI completed its acquisi tion gaining worldwide rights to S*BIO Pte Ltd.'s (S*BIO) pacritinib.

Pixuvri

As of December 31, 2011, the Company developed Pixuvri, an aza-anthracenedione derivative, for the treatment of non-Hodgkin�� lymphoma (NHL), and various other hematologic malignancies, and solid tumors. Pixuvri was studied in the Company�� EXTEND, or PIX301, clinical trial, which was a phase III single-agent trial of Pixuvri for patients with relapsed, refractory aggressive NHL who received two or more prior therapies and who were sensitive to treatment with anthracyclines. On September 28, 2011, CTI announced that a second independent radiology assessment of response and progression endpoint data from its PIX301 clinical trial of Pixuvri was achieved with statistical significance. The results of the EXTEND trial met its primary endpoint and showed that patients randomized to treatment with Pixuvri achieved a significantly higher rate of confirmed and unconfirmed co mplete response compared to patients treated with standard! c! hemotherapy had a significantly increased overall response rate and experienced a statistically significant improvement in median progression free survival. Pixuvri had predictable and manageable toxicities when administered at the proposed dose and schedule in the EXTEND clinical trial in heavily pre-treated patients. In March 2011, the Company initiated the PIX-R trial to study Pixuvri in combination with rituximab in patients with relapsed/refractory diffuse large B-cell lymphoma (DLBCL). Pixuvri has also been studied in patients with HER2-negative metastatic breast cancer who have tumor progression after at least two, but not more than three, prior chemotherapy regimens. In the second quarter of 2010, the NCCTG opened this phase II study for enrollment. The study is closed to accrual and results are expected to be reported by the NCCTG later in 2012.

OPAXIO

OPAXIO is the Company�� biologically-enhanced chemotherapeutic agent that links pacli taxel to a biodegradable polyglutamate polymer, resulting in a new chemical entity. As of December 31, 2011, the Company focused its development of OPAXIO on ovarian, brain, esophageal, head and neck cancer. OPAXIO was designed to improve the delivery of paclitaxel to tumor tissue while protecting normal tissue from toxic side effects. In November 2010, results were presented by the Brown University Oncology Group from a phase II trial of OPAXIO combined with temozolomide (TMZ), and radiotherapy in patients with newly-diagnosed, high-grade gliomas, a type of brain cancer. The trial demonstrated a high rate of complete and partial responses and a high rate of six month progression free survival (PFS). Based on these results, the Brown University Oncology Group has initiated a randomized, multicenter, phase II study of OPAXIO and standard radiotherapy versus TMZ and radiotherapy for newly diagnosed patients with glioblastoma with an active gene termed MGMT that reduces respons iveness to TMZ. A phase I/II study of OPAXIO combined ! with r! a! diothera! py and cisplatin was initiated by SUNY Upstate Medical University, in patients with locally advanced head and neck cancer.

Tosedostat

In March 2011, the Company entered into a co-development and license agreement with Chroma Therapeutics, Ltd. (Chroma), providing the Company with marketing and co-development rights to Chroma�� drug candidate, tosedostat, in North, Central and South America. Tosedostat is an oral, aminopeptidase inhibitor that has demonstrated anti-tumor responses in blood related cancers and solid tumors in phase I-II clinical trials. Interim results from the phase II OPAL study of tosedostat in elderly patients with relapsed or refractory acute myeloid leukemia (AML) showed that once-daily, oral doses of tosedostat had predictable and manageable toxicities and results demonstrated response rates, including a high-response rate among patients who received prior hypomethylating agents, which are used to treat myelodysplastic synd rome (MDS), a precursor of AML.

Brostallicin

As of December 31, 2011, the Company developed brostallicin through its wholly owned subsidiary, Systems Medicine LLC, which holds rights to use, develop, import and export brostallicin. Brostallicin is a synthetic deoxyribonucleic acid (DNA) minor groove binding agent that has demonstrated anti-tumor activity and a favorable safety profile in clinical trials, in which more than 230 patients have been treated as of December 31, 2011. The Company uses a genomic-based platform to guide the development of brostallicin. A phase II study of brostallicin in relapsed, refractory soft tissue sarcoma met its predefined activity and safety hurdles and resulted in a first-line phase II clinical trial study that was conducted by the European Organization for Research and Treatment of Cancer (EORTC).

The Company competes with Bristol-Myers Squibb Company, Sanofi-Aventis, Pfizer, Roche Group, Genentech, Inc., Astellas Pharma, Eli Lilly and Company, Cel! gene, Tel! ik! , Inc., T! EVA Pharmaceuticals Industries Ltd. and PharmaMar.

Top 5 Medical Stocks To Watch For 2014: RXi Pharmaceuticals Corp (RXII)

RXi Pharmaceuticals Corporation (RXi), incorporated on September 8, 2011, is a development-stage company. The Company is a biotechnology company focused on discovering, developing and commercializing therapies addressing medical needs using RNA interference (RNAi)-targeted technologies. As of July 12, 2012, RXi was focusing on its internal therapeutic development efforts in fibrosis. RXI-109 is its RNAi product candidate, which is a dermal anti-scarring therapy that targets connective tissue growth factor (CTGF). The Company�� therapeutic platform consists of two main components: RNAi Compounds (rxRNA) and Advanced Delivery Technologies. RNAi compounds include rxRNAori, rxRNAsolo and sd-rxRNA, or self-delivering RNA. On April 26, 2012, it completed the spin-off transaction from Galena Biopharma, Inc. (Galena).

In January 2011, the Company announced research results in collaboration with Generex Biotechnology Corporation, and RXi�� wholly owned subsidiary Antigen Express, Inc., in developing vaccine formulations for immunotherapy. In January 2011, it announced initial results as part of its collaboration with miRagen Therapeutics, Inc. in creating microRNA mimics, or artificial copies of microRNAs, using the Company�� sd-rxRNA technology. In February 2011, it announced the initiation of RXi�� development program for RXI-109.

Corcept Therapeutics Just Sprang to Life... for All the Right Reasons (CORT, AVEO, SNTA)

Looks out Synta Pharmaceuticals Corp. (NASDAQ:SNTA), and AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO), you're on notice too. Corcept Therapeutics Incorporated (NASDAQ:CORT) is nipping at your heels, and better still, shares of the company looks like they're about to dole out a sizeable reward to investors who see the writing on the wall.

CORT is a biotech stock. Specifically, Corcept Therapeutics is the brains behind Korlym - a hyperglycemia treatment intended for a fairly specific subset of patients. The subset is big enough, however, to drive $2.6 million worth of sales last quarter, which is huge considering the drug only hit the market in the middle of last year. And, we're already seeing solid growth. It's also got the some drug (the same active molecule anyway) in Phase 3 trials as a treatment for depression. That's not what's making CORT worth a look today, and it's not what Synta Pharmaceuticals and AVEO Pharmaceuticals have to worry about.

"Triple-negative breast cancer" isn't a term people hear that often, even within medical circles. It's a description of a rare set of breast cancer patients that don't express the genes for estrogen receptors, progesterone receptors, and Her2/neu. About 20% of breast cancers are triple-negative breast cancers, or TNBC. That translates into about 30,000 cases of TNBC per year in the United States, and 170,000 per year globally. Regardless of the frequency, once most chemotherapies target one of the three receptors, women with that rare strain of cancer have few viable treatment options.

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AVEO Pharmaceuticals is working on a TNBC-specific treatment. Tivozanib, from AVEO, is currently in Phase 2 trials. Synta Pharmaceuticals Corp. is working on a triple-negative breast cancer therapy too, called ganetespib. SNTA is in Phase 2 trials with ganetespib as a treatment for TNBC as well. And to be fair, both drugs show promise. Corcept Therapeutics may have stolen the show today, however.

It's not even started Phase 1 trails yet. In fact, it's not even been allowed by the FDA to start those trials; it's only asked permission. But, CORT is aiming to begin the development of its own triple-negative breast cancer therapy based on encouraging clinical data. All told, five of eight patients with triple-negative breast cancer patients who experience relapse showed a partial or complete clinical response to treatment with mifepristone plus nab-paclitaxel... the drug combo Corcept Therapeutics intends to develop.

It's only a beginning - the first step on a long road. But, as veteran biotech investors can attest, progress toward a worthy and achievable end-goal is more than enough to prod a stock higher. It's the stock, in fact, that's the big story here.

Regardless of the reason, CORT is now on breakout mode, and has plenty more upside to dole out before hitting a peak. Yes, the daily chart suggests shares are overbought and ripe for a dip. The weekly chart of Corcept Therapeutics Incorporated, however, shows how the stock has been slung - bullishly - out of a sideways consolidation phase, and now that the ceiling at $2.21 is out of the way, CORT doesn't have much holding it back... after a the stock cools off just a bit in the daily timeframe. Timing is still everything. But, an eventual revisit to the ceiling just above $4.00 is a realistic target.

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Nontraded Schorsch REIT soon to list on public exchange

The $1.7 billion American Realty Capital Healthcare Trust Inc., headed by REIT mogul Nicholas Schorsch, will list its common stock on a national stock exchange in one of the first of what one analyst expects to be up to $20 billion of liquidity events of nontraded REITs over the next two years.

Kevin Gannon, president of investment bank Robert A. Stanger & Co. Inc., said ARC Healthcare Trust's listing would be, along with American Realty Capital Trust IV Inc. and Corporate Property Associates 16 Global Inc., the first to kick off the coming tide of listings of nontraded real estate trusts.

“And there's more coming,” said Mr. Gannon. “Over next two years, and maybe sooner if the financial markets stay healthy, $20 billion of deals are coming to list.”

The board of ARC Healthcare Trust said Friday it intended to begin the process to list its common stock on an exchange under the symbol HCT. It expects to provide more information about the listing in the next few weeks. The REIT earlier had said it was going to examine its long-term, strategic alternatives. Mr. Schorsch is chairman and chief executive of the REIT.

Mr. Gannon said the nontraded REIT sponsors who have performed well will be rewarded. If a REIT lists above its initial offering price, which is typically $10 per share, the REIT's sponsor has a 50% chance of a client recycling cash and investing in a new offering, Mr. Gannon said. If a REIT lists significantly below its offering price, clients are likely to reinvest with the same sponsor only 10% to 20% of the time, he said.

The rosy outlook for REIT listings comes after a strong 2013 for the product. This year saw six listings of nontraded REITs that originally raised $16.9 billion in equity, Mr. Gannon said. In total, the industry expects to raise a record $20 billion in 2013.

4 Stocks to Buy Even When Good News Frightens the Markets

Earlier this year, the bond market freaked out when Ben Bernanke hinted that the easy-money party would be coming to an end. The yield on the three-year Treasury spiked from 0.3% in May to nearly 1% after Labor Day. Ben was clearly shocked by the market's reaction to his comments, and he's been careful to walk back, or "clarify," those remarks. Either way, the Fed hasn't come near tapering since. But now Bernanke is nearly out the door, and Janet Yellen will soon be taking over. The latest conventional wisdom is that tapering will be coming this March. We'll see about that.

But the bond market has been in a sour mood again. On Thursday, the yield on the 30-year Treasury closed at 3.92% which is its highest yield since August 1, 2011. But here's the key point: The recent sell-off in the bond market is quite different from what we saw this summer. Back then, it was the middle part of the yield curve that saw the biggest rise in rates. This reflected the belief that short-term interest rates were going to rise sooner than folks had expected.

This time, the rise in rates has largely been at the long end of the curve. In fact, the middle part of the curve hasn't moved very much at all. The three-year is hovering just over 0.6% which is well below its peak from September.

This is an important change in the market's attitude, and I think it's because the current bond market downturn is due to a belief in stronger economic growth rather than an imminent rise in interest rates. Here's the weird part. Lower bond prices may be specifically due to a belief that the Fed will hold down rates for a while more. In other words, the Fed is working to steepen the yield curve.

So what's all this good economic news, then? Let's review.

On Monday, the November ISM Manufacturing Index came in at 57.3. That's the highest level since April 2011. Any reading above 50 indicates that the manufacturing sector is expanding. This was the 50th time in the last 52 months that the ISM has come in above 50. Let me be clear: That isn't gangbusters, but it's not bad.

On Wednesday, the Federal Reserve released its "beige book" report, which is a survey of the U.S. economy by region. On balance, the report was encouraging, and business activity seems to be picking up, although there are still pockets of weakness.

Also on Wednesday, ADP, the private payroll firm, said that 215,000 jobs were created last month. That was 30,000 more than analysts were expecting. Then on Thursday, the number of Americans filing first-time jobless claims fell to 298,000 which is the second-lowest number since early 2007. This report tends to bounce around a lot, so it's better to look at the trend which has been heading in the right direction. It also appears that any side effects of the government shutdown have passed.

But the really big economic report is Friday's jobs report for November. The non-farm payroll report topped 200,000, which is more confirmation that the economy is ramping up.

We got more good news on Thursday when the government revised its Q3 GDP report significantly higher. The initial report came in at 2.8%, but now the number crunchers say the economy grew by 3.6% last quarter. Over the last 30 quarters, that's the economy's fifth-strongest quarter. But one downside to the GDP revisions is that a good portion of that economic activity was restocking shelves, and not so much people buying stuff off those shelves. However, this was the third quarter in a row that economic growth has accelerated.

These encouraging economic reports aren't much of a surprise to us. I've recently discussed how the rally has been led by cyclical stocks, and that's usually a precursor of good economic news. By cyclical, I mean industries that are heavily tied to the economic cycle. When things get tight, folks keep buying toothpaste, but new houses? Not so much. Last Wednesday, the relative strength of the Morgan Stanley Cyclical Index reached its highest point since July 2011. For the last 16 months in particular, cyclical stocks, consumer discretionaries especially, have been grabbing the lion's share of the market's gains.

I've often noted that the current rally is the most-hated rally in Wall Street's history. OK, perhaps that's a bit of an overstatement. Still, I suspect that a major reason for this hatred isn't that the bears haven't seen drops; it's that they have. Consider that during the current rally, which began in March 2009, we've seen separate drops of 5.6%, 5.8%, 6.4%, 7.1%, 7.7%, 8.1%, 9.9%, 16.0% and 19.4%. Every single one has led to a new high. Every single one.

What's also interesting is the breadth of this market. The top 10 point contributors in the S&P 500 have accounted for 18% of this year's gain. In 1999, that number was 65%. The tech bubble was created by a very small number of stocks. That's not what's happening now. Nor have we run out of room. Since World War II, the S&P 500 has gained 20% or more 18 times. The following year's gain has averaged 10%.

Here's my take

No, I'm not going to predict a crash. That's a pointless endeavor. I do, however, caution investors not to expect the kinds of easy gains we've seen this year to continue. The simple fact is those higher bond yields I talked about are more attractive to investors, and that's stiffer competition for stocks; that's what's driving the "good news is bad news" dynamic.

And yes, there's still the issue of the Fed's endlessly-discussed taper, but that's probably a few months off at the earliest. I think that explains the recent downturn in gold. The yellow metal is closing in on a three-year low, and this will be its first yearly loss since 2000.

For now, a lot of healthcare names look very good here, and much of the tech sector has been left out of the rally. I continue to like Oracle (ORCL). The company has another earnings report later this month. Ford (F) is also cheap here. The automaker had another strong month for sales. Truck sales are at a nine-year high.

Both Cognizant Technology (CTSH) and DirecTV (DTV) are good buys. Cognizant said this week it plans to hire 10,000 workers in the U.S. over the next three years. Weak companies don't say things like that. (By the way, here's a good profile of Cognizant's CEO Frank D'Souza.)

Average 30-year mortgage rate jumps to 4.46%

WASHINGTON (AP) — Average U.S. rates for fixed mortgages rose sharply this week, making home-buying slightly less affordable.

Mortgage buyer Freddie Mac said Thursday the average rate on the 30-year loan jumped to 4.46% from 4.29% last week. The average on the 15-year fixed loan increased to 3.47% from 3.30%.

Rates have risen a full percentage point since May after the Federal Reserve signaled it might slow its bond purchases by year's end. Rates peaked at 4.6% in August.

Mortgage rates have stabilized since September, when the Fed surprised markets by taking no action. And rates remain low by historic standards. The Fed meets later this month and could slow the bond purchases if the economy shows further improvement.

The bond purchases are designed to keep long-term rates low.

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The increase in mortgage rates has contributed to a slowdown in home sales over the past two months. But the government reported Wednesday that purchases of new homes ramped up in October after three months of soft sales, evidence that the housing market is improving fitfully.

Sales of new homes increased 25.4% to a seasonally adjusted annual rate of 444,000 in October, the largest monthly percentage increase since May 1980.

And in another sign of potential economic strength, the Commerce Department said Thursday the economy grew at a 3.6% annual rate from July through September, the fastest since early 2012. But nearly half the growth came from a buildup in business stockpiles, a trend that could reverse in the current quarter and hold back growth.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage fell to 0.5 point from 0.7 point. The fee for a 15-year loa! n dropped to 0.4 point from 0.7 point.

The average rate on a one-year adjustable-rate mortgage ticked down to 2.59% from 2.60% last week. The fee was unchanged at 0.4 point.

The average rate on a five-year adjustable mortgage jumped to 2.99% from 2.94% last week. The fee declined to 0.4 point from 0.5 point.

Mortgage rates move higher

Average rate nationwide for 30-year fixed-rate home loan

Sponsored byPercent

30-year

0,4.57

1,4.5

2,4.32

3,4.22

4,4.23

5,4.28

6,4.13

7,4.10

8,4.16

9,4.35

10,4.22

11,4.29

12,4.46

Source: Source: Freddie Mac weekly survey of about 125 lenders

After A Terrible Quarter, Renren's Future Remains Bright

Social network stocks have done terrific this year. Marketers are showing more ads on social networks and spending less money on printed media, as one of every four minutes online is spent using social networks. It's no wonder why investors long in Facebook (NASDAQ: FB  ) , LinkedIn, or Twitter have seen amazing returns.

However, although these companies have also seen meaningful improvements in sales and earnings, their market valuations are far from cheap. Given such high multiples, and considering the high level of uncertainty surrounding monetization of social networks, many prefer to stay on the sidelines when it comes to Facebook -- trading at 98 times earnings -- or LinkedIn. In this bullish context, distressed and unloved Internet company Renren  (NYSE: RENN  ) , also known as the "Facebook of China," could be an interesting play, as the company just saw a massive sell-off after a disappointing earnings call.

Not all social networks are created equally
Renren, which operates one of the most popular social networks in the second-largest economy, has lost more than 80% of its market capitalization since it went public. To put this in perspective, in the same period, competitor Tencent Holdings  (NASDAQOTH: TCEHY  )  experienced massive share appreciation, as its messaging apps Tencent QQ and WeChat gained international users, and therefore more advertisers. The company has become the third-largest Internet company in the world, only behind Google and Facebook.

The good, the bad, and the ugly
Things are said to be cheap for a reason, and in the case of Renren, the company has never been consistently profitable. The latest earnings call came in with revenue down 5.6% from the same quarter in 2012. This caused the company to report a loss of more than $35 million. Right after the company announced these poor figures, Jefferies downgraded the stock to "underperform."

It's important to highlight that, despite a weak third-quarter performance, Renren is still a long-term growth story. This is because Renren is a holding tech company, with presence in virtually every important market segment from online games to social media. The latest results were caused by a strong decline in game revenue -- down almost 17% year-over-year -- as some of the company's top-grossing titles reached "maturity" and lost many users. 

The good news is that the social network business unit keeps adding new users. Last year, Renren added almost 28 million new users. Monetization remains weak, but at the current stage the focus should instead be on user growth figures. Furthermore, Renren may not excel at monetizing its social network directly, but it uses its enormous user base to bring high traffic to its new apps. For example, it developed Groupon-like buying site Nuomi.com in 2010, and managed to sell a 59% stake in this business to search engine giant Baidu for about $160 million.This shows how fast Renren can create meaningful value.

Renren is also making steady progress in its social network and messaging business units. Even on the gaming side, Renren plans to launch several new in-house game titles next quarter. This increases Renren's chances to release a hit.

The catalyst everybody is waiting for
Clearly, Renren's main asset is its 200-million-member-strong social network service, which isn't fully monetized at the moment. Establishing a solid, sustainable monetization plan for the social network remains a top priority. With China's mobile penetration still well below average, and considering the country already has close to 600 million Internet users, Renren -- whose demographics are pretty young -- is likely to do fine in the future, both in terms of user growth and monetization. Investors bullish on China's tech sector may do well adding this stock to their watch lists.

My Foolish take
Bottom line, Renren is a cheap social network with an interesting growth story. For less than $3 dollars per share, investors can add exposure to a company that's actively using its user base to start new ventures and build a well-diversified portfolio of apps, covering every available segment from e-commerce to gaming. Ultimately, it may be useful to rethink the value of a user profile. At $1.1 billion, the market thinks a Renren user profile is worth less than $6, which may be too cheap considering Renren's ability to start new businesses, drive traffic, show ads, and promote games.

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