Goldman Sachs Initiates Coverage on EQT Midstream Partners at “Buy” (EQM)

Goldman Sachs analysts started coverage on EQT Midstream Partners LP (EQM) early on Monday, giving the oil and natural gas distribution company a bullish rating due to its low-risk cash flows.

The analysts rate EQM as “Buy” and see shares reaching $59. This price target suggests a 22% upside to the stock’s Friday closing price of $48.28.

Goldman Sachs analyst Theodore Durbin said, “EQM’s FERCregulated pipeline and storage assets offer stable, low-risk fee-based cash flows supported by firm long-term contracts. A robust production outlook in the Marcellus and meaningful inventory of dropdown assets at the parent enhances distribution growth visibility. EQM has a low cost of capital, no debt outstanding, high liquidity and an aligned sponsor that should bolster the partnership's multi-year double-digit distribution growth outlook.”

EQT Midstream Partners shares were inactive during pre-market trading on Monday. The stock is up 54.99% year-to-date.

Fertilizer Comeback Takes Hold For Now

Potash and fertilizer stocks found their shares murdered over the summer after Russian potash producer OAO Uralkali announced that it was ending its marketing ventures in a cartel agreement. Now it appears that at least some of the decision is being reverse, or at least that it could be reversed.

A report came out of Dow Jones showing that Uralkali would consider any proposition that would create a new selling partnership with Belarus or another producing partner. This report is one which we would say is going to be very difficult to confirm or refute. What is not hard to refute is that potash and fertilizer stocks are rallying in appreciation mode.

Potash Corp. of Saskatchewan Inc. (NYSE: POT) was up 25 at $33.12 in Monday afternoon trading. Monday’s gain puts shares up within striking distance of its breakout point from the aftermath this summer that took shares from $38 to $31 and ultimately back under $30 before recovering.

Gains are being seen elsewhere as well, except in shares of The Mosaic Company (NYSE: MOS). Agrium Inc. (NYSE: AGU) was up almost 3% at $91.95 in late Monday trading, although this one held up much better in the destructive news phase when the alarming news roiled these stocks. The big winner is Intrepid Potash, Inc. (NYSE: IPI), with a gain of 7% to $16.20 in late-Monday trading.

It was back in July when Uralkali ended its marketing venture with Belarus. It was almost entirely unexpected by US investors in these companies. Even the Market Vectors Agribusiness ETF (NYSE MKT: MOO) is trading higher with the ETF’s shares up 1.4% at $52.30 in late-Monday trading.

In all honesty, the move in July and August was literally shocking. Then the news became even stranger with a corporate arrest reported. Maybe there is simply just too much money to walk away from.

'Mad Money' Lightning Round: Don't Sell Verizon

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

NEW YORK (TheStreet) -- Here's what Jim Cramer had to say about some of the stocks callers offered up during the "Mad Money Lightning Round" Friday evening:

LifeLock (LOCK): "This has gone up a lot and I think it's OK. "

Linn Energy (LINE): "They have an SEC problem and accounting issues equals sell." Oasis Petroleum (OAS): "Boy, this one is good. There's a lot more oil in the ground that people realize." Rite Aid (RAD): "I like Rite Aid. I think it's a real great turnaround story." Verizon (VZ): "Verizon is fine and it has a big yield. I would not sell Verizon." To read a full recap of "Mad Money" on CNBC, click here. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. -- Written by Scott Rutt in Washington, D.C. To email Scott about this article, click here: Scott Rutt Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

The Kids Think You're Spending Their Inheritance. Are They Wrong?

Getty Images You've all seen the bumper stickers -- maybe you even have one on your car -- "We're spending our kids' inheritance." But funny as the sticker is, and as much as you might share the sentiment on occasion, the truth is that most Americans of retirement age say they aren't doing anything of the sort. That's the upshot of a new survey from Bankrate.com (RATE) subsidiary Interest.com, which recently polled Americans ages 18 to 59, asking whether they expect to receive an inheritance from their elders at some point in their lifetimes. And then they polled the folks bearing the bumper stickers... and came to a pretty startling conclusion: Barely 1 in 4 Americans under the age of 60 have any hope of ever inheriting anything from anybody. But nearly 2 out of 3 Americans age 60 and over say that yes, indeed, they have been saving, and one of these days, their heirs are going to benefit. What We Have Here Is a Failure to Communicate A 2011 study conducted by the Boston College Center for Retirement Research estimated that U.S. retirees have built up an astounding $8.4 trillion dollars worth of inheritable wealth. Baby Boomers have benefited from giveaways to the tune of $2.4 trillion already, but this still leaves $6 trillion more waiting to be handed out. So on one hand, according to Interest.com, 64 percent of the folks with the dough say they expect to have enough money left over at the end of their lives to bequeath it to their heirs. Yet on the other hand, 27 percent of Americans who might inherit that money don't think they'll ever see any of it. Why not? The bumper stickers may be one reason. When enough people start joking about planning to spend what they've got on themselves -- especially in an economy like this one, when that may be their only option -- you can hardly blame the kids for beginning to believe them. Or perhaps the kids may not be expecting to receive an inheritance because they simply don't know there's any money to inherit. Interest.com notes that "older parents may ... be reluctant to share their financial situation with children, not wanting to raise expectations." The Best Intentions But a third possibility also bears consideration: Maybe the kids are right. According to the Centers for Disease Control, life expectancy in the U.S. has increased by 30 years over the past century -- lengthening the amount of time a retiree's nest egg must last to permit any inheritance to take place. The Social Security Administration estimates that a man who's 60 today will, on average, live to see his 81st birthday. A woman will likely live past 84. A lot can happen over 20 years. It may well be that, as a whole, retirees have "$6 trillion" saved up. And maybe they really do to hand this money down to their heirs. Still, you have to figure that, just as in society at large, an awful lot of this money is concentrated in the hands of relatively few individuals -- "the retiree 1 percent," you might call them. Meanwhile, as mentioned here on DailyFinance before, 60 percent of American workers ages 55 and older have saved less than $100,000 for retirement. Even with the help of Social Security and pensions, it's not going to be easy to stretch $100,000 over a 20-year retirement. Even if the remaining 40 percent of the population is a bit better off, it may prove simply, fiscally impossible for 60 percent of the population to make any significant bequests. And as for the 64 percent who nonetheless insist that they plan to pass some wealth down to their heirs? A lot of them may be overly optimistic about their assets, or overly pessimistic about how long they'll live. Either way, it may end up being the thought that counts.

Jobs Report Aside, Here's Why Tapering Is Still on the Table

Investors generally took the lackluster August jobs report as a sign the U.S. Federal Reserve will hold off announcing a tapering of its $85 billion a month bond program at the Sept. 17-18 Federal Open Market Committee (FOMC) meeting.

The Labor Department reported today (Friday) that U.S. job growth last month increased by a less-than-expected 169,000 jobs, adding to signs that economic growth likely slowed in the third quarter. The unemployment rate dipped in August to 7.3% from 7.4%. Economists were looking for employers to have increased headcount in August some 180,000.

So what will the Fed do?

We asked Money Morning Chief Investment Strategist Keith Fitz-Gerald.

"The 'so-bad-it's-good' theme continues," Fitz-Gerald told us this morning. "The softness of the jobs number clearly perpetuates the hope for further stimulus."

But if there is a delay in Septaper, investors must remember it won't be permanent...

"While the markets are excited by the prospect of more 'free' money, the bogeyman remains in the shadows," Fitz-Gerald said. "Eventually the party will end. And, when it does, every new dollar put in now makes for a potentially very rocky ride."

Fitz-Gerald said we could still see some Fed action come mid-September - and investors need to be ready for a market reaction.

"The Fed is under increasing pressure to taper without destroying the financial markets; this number wasn't soft enough to remove the possibility of a 'test-taper' this fall," he said. "Whether the taper is $10 or $10 billion doesn't matter. The markets are going to have a 'taper-tantrum.'"

The "Bad" August Jobs Report

Along with the dreary August jobs report came significant downward revisions for the previous two months.

Job growth in July was revised down to a thin 104,000 from the initially reported 162,000. June's figure was revised downward to 172,000 from an earlier estimate of 188,000.

However, this month's unemployment rate decline came for a discouraging reason: Scores of Americans have stopped looking for work and are no longer counted among the unemployed.

"Unemployment dropped as yet more people left the workforce. That's bad any way you cut it because the smaller workforce means lower future growth," Fitz-Gerald explained. "People haven't put two and two together yet."

The size of the workforce declined by roughly 300,000, and the participation rate - a key measure of employment - dropped to 63.2% from 63.4%, its lowest level since August 1978.

Also discouraging is that the length of the work week ticked up to an average (still weak) 34.5 hours. Average hourly earnings rose a measly five cents, and temporary employment rose by 13,000.

Employers continue to shift some positions to part-time and wring more work out of full-timers in attempts to curb costs they face under upcoming Obamacare. The number of involuntary part-timers seeking full-time work is a whopping 8.2 million.

Businesses have an incentive to create part-time jobs in lieu of full-time ones because they don't have to provide health insurance to part-timers.

While Obamacare hits small businesses, investors can make moves today to make money off our changing national healthcare system... just go here to find out how.

Related Articles:

The Globe and Mail:
U.S. Job Growth Misses Expectations, Offers Cautionary Note for Fed Bloomberg:
Treasuries Extend Gains as Economy Add Fewer Jobs USA Today:
Stock Futures Jump on August Jobs Numbers

Does Wal-Mart Have a Bright Future?

With shares of Wal-Mart (NYSE:WMT) trading around $76, is WMT 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

Wal-Mart operates retail stores in various formats around the world. The company aims to price items at the lowest price every day. Wal-Mart operates in three business segments: the Walmart U.S. segment, the Walmart International segment, and the Sam's Club segment. It manages retail stores, restaurants, discount stores, supermarkets, super centers, hypermarkets, warehouse clubs, apparel stores, Sam''s Clubs, neighborhood markets, and other small formats, as well as Walmart.com and Samsclub.com. Through its retail channels, Wal-Mart is able to provide a variety of products and services at affordable prices to consumers and companies worldwide.

In Wal-Mart's desire to become America's top beer retailer, it has been selling Budweiser, Coors, and other brands almost at cost in some stores. Internal documents seen by Bloomberg indicated that the markup on a 36-pack of Coors Light cans at a Los Angeles-area store came to 0.6 percent versus 16.2 percent for a package of Flaming Hot Cheetos. Retailers rarely divulge data regarding markups, so the March data allow an unusual glimpse of Wal-Mart's alcohol pricing strategy. The giant retailer's move into beer is part of a plan to double alcohol sales by 2016 and grab a bigger piece of the domestic beer market, which is worth around $45 billion.

T = Technicals on the Stock Chart Are Mixed

Wal-Mart stock has made solid progress in the last couple of years. The stock has been trading sideways for most of this year and is now trading near yearly mid-prices. 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, Wal-Mart is trading between its key averages, which signals neutral price action in the near-term.

Source: Thinkorswim

Taking a look at the implied volatility and implied volatility skew levels of Wal-Mart options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Wal-Mart Options	14.58%	23%	21%

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

	Put IV Skew	Call IV Skew
October Options	Flat	Average
November Options	Flat	Average

As of Monday, there is 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 minimal amount of call and put option contracts and are leaning neutral to bullish over the next two months.

E = Earnings Are Rising 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 Wal-Mart’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Wal-Mart look like and, more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	5.93%	4.59%	11.14%	12.50%
Revenue Growth (Y-O-Y)	1.68%	1.04%	3.86%	3.36%
Earnings Reaction	-2.60%	-1.70%	1.51%	-3.63%

Wal-Mart has seen rising earnings and revenue figures over the last four quarters. From these numbers, the markets have expected more from Wal-Mart’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has Wal-Mart stock done relative to its peers, Target (NYSE:TGT), Costco (NASDAQ:COST), and Kohl’s (NYSE:KSS), and sector?

	Wal-Mart	Target	Costco	Kohl’s	Sector
Year-to-Date Return	11.56%	8.71%	19.28%	21.10%	17.63%

Wal-Mart has been an average relative performer, year-to-date.

Conclusion

Wal-Mart is a retail company that provides a variety of products and services to consumers and companies worldwide. It looks like the company is attempting to gain a larger portion of the alcohol market share, as it has been cutting prices to near cost. The stock has made positive progress in the last couple of years but is now trading sideways as it consolidates after a recent run. Over the last four quarters, earnings and revenues have been rising. However, investors have grown to expect more from the company. Relative to its peers and sector, Wal-Mart has been an average year-to-date performer. WAIT AND SEE what Wal-Mart does this coming quarter.

Opening Print and S&P Levels to Watch

The Asian markets closed lower (Shanghai Comp. -2.05%) and Europe is trading modestly lower. Today is the first day of the long-awaited two-day Federal Open Market Committee meeting. While today will be prone to headline news, the real headlines do not start until Wednesday's FOMC meeting announcement, with forecasts at 1:00 CT and the Bernanke press conference at 1:30. We were right about selling the early rally and a low-volume grind, but this time it was a downward grind. Don't listen to anyone; the real reason the ESZ (S&P e-mini futures) sold off was simple. All the buying associated with Larry Summers headlines was done Sunday night into Monday morning. By the time the S&P futures opened at 8:30 CT the buying was used up and what was left was all sell stops and sell programs. It was definitely a case of selling the news. One by one the S&P is knocking down all the upside obstacles and making bad news into good. That is how it works. It's not just picking levels on your charts to buy and sell at. Learning the feel of the S&P can be just as important as a critical support or resistance level. Just two weeks ago the markets were worried about the Fed taper and Syria, and now the S&P has seen its largest weekly gain in eight months. There is definitely a psychological side to the markets at work. Our view: The S&P has closed higher 8 out of the first 10 trading days of September for a total gain of 66.5 handles and has rallied 78.75 handles from its 1625.00 low. It has been a nonstop buy fest, but it's all short covering. Based on that price action, one would think there is probably more selling around for today. We again lean to selling the early rally and buying weakness. The S&P futures may not close above the contract highs today, but we can't rule out that possibility on Wednesday afternoon. There is a congestion of buy stops building up above 1704 vs. the Dec e-mini S&P that runs to the 1712-1715 level. As always, use stops and keep an eye on the 10-handle rule. Don't forget to catch MrTopStep on The Closing Print video found under the OptionsTV page (top bar) on Options Profits. We report directly from the SPX pits, wrapping up the day and positioning for trade tomorrow. OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits MrTopStep can be followed on Twitter at twitter.com/MrTopStep For LIVE futures chat, more information on the 10-handle rule and futures educational content CLICK HERE FOR A SEVEN-DAY FREE TRIAL.

Empowering Verizon's Cloud

NEW YORK (TheStreet) -- Verizon Communications (VZ) has essentially married itself to the U.S. mobile market by acquiring full control of Verizon Wireless. While the move has been met with skepticism by investors worried about U.S. mobile market saturation, Verizon has expressed confidence that the expensive deal is justified by evidence that consumer and corporate wireless demand in the country remains insatiable. [Read: 4 Tech Stocks Under $10 Triggering Breakout Trades]

Verizon Communications has amassed a substantial amount of debt to take full control of its wireless assets, earlier this month pricing the biggest corporate debt offering ever at $49 billion in order to finance the $130 billion deal. But the bets appear to be well hedged given that the U.S. wireless market appears poised for more growth. Even though the majority of households in the U.S. already own mobile devices, a host of other home devices also carry the potential for wireless connectivity. The growing appetite for data sharing plans and perpetual desire for higher-speed networks is also fuelling the activity in the wireless market. Furthermore, Verizon will be able to significantly strengthen the integration of its wireline and wireless businesses as all Verizon Wireless assets come under Verizon Communications' full purview. This would allow the company to better leverage the anti-churn potential of a less publicized area of its overall business: enterprise cloud.

The company has said in filings that it considers the cloud as a growth promoter for Verizon Communications. In 2011, Verizon paid $1.4 billion to buy IT infrastructure and cloud services company Terremark, which is now grouped into the company's enterprise solutions division within its wireline group. Verizon said in its fiscal second-quarter earnings filing that during both the three and six months ended June 30, its cloud business exposure was one of the factors that helped offset decreases in overall global enterprise revenues. Verizon's enterprise cloud operates data centers in North America, Latin America, Europe and the Asia-Pacific and services both government and enterprise executives.

"For Verizon to offer services in that area, makes sense," said Randy Warren, chief investment officer of Warren Financial Service. "They certainly have the knowledge, the communications, the network, the backup facilities, all of the things that you need to guarantee cloud communications, cloud technology." Warren said this view also applies to AT&T (T), which also has its hand in the cloud. With total control of the wireless group, Verizon Communications may now have the increased opportunity to bundle its Verizon Terremark offerings from the wireline division with wireless services, potentially adding an important lock-in component that further disincentivizes retail postpaid customers from defecting to a competitor. Even though Verizon's monthly churn rate remains at impressively low levels, the company can't afford to become complacent on working hard to keep every one of its customers loyal given that raising prices in the oligopoly type structure of the U.S. telecom world hasn't really been an option. Retail postpaid customers make up a majority of Verizon Wireless' customer base and include corporate accounts. The firm has not been disclosing any specific revenue numbers for its cloud business, but in some ways the amount may not be as relevant if the business was viewed solely as an anti-churn tool or a loss leader. [Read: Robots and 3D Printing] "Cost controls are paramount given the saturation of the market and the high costs of rolling out new technologies like 4G," said Brian Frank, portfolio manager at Frank Capital. "In a commodity-like business, the company with the lowest costs is at a large advantage. It makes sense they would be happy to spend money on cloud as a loss-leader if it helped lower customer churn."

Despite Verizon consistently being able to keep churn rates at very low levels over the last decade, rates have edged up compared to five years ago. The company's churn rate for retail postpaid customers came in at 0.93% and 0.97% for the three months and six months ended June 30. Five years ago during the same period, the figures were at 0.83% and 0.88%, respectively. The latest wireless churn rate data on other telecom companies show T-Mobile USA (TMUS) coming in at 1.6% and 1.8% during those same periods, and AT&T's arriving at 1.02% and 1.03% and almost rivaling Verizon's during those respective time frames. In any case, Verizon still has the chance to prove that it's able to beat its own churn rate lows again in the coming years. [Read: Blackberry Fails at the 'Vision Thing']

"The more difficult it is to switch wireless providers, the lower churn becomes," Frank added. "If a good portion of your data is 'stuck' in the Verizon cloud, you are less likely to switch to AT&T if you cannot access your Verizon cloud to port all your data."

Verizon Wireless has recently also begun offering cloud services specifically to households and individuals. Verizon Wireless began rolling out Verizon Cloud for smartphones and tablets in May, allowing for the transfer of data between Android and iOS devices and 125 gigabytes of storage space with up to 500 megabytes of it for free, which could help reduce churn rates for individual and family plans.

Despite the current benefits, there remains the risk that cloud services could become commoditized in the telecom world as big players such as AT&T also foray into the business. Last November, AT&T said it was launching Project "VIP" or "Velocity IP" where it would invest $14 billion over the next three years into significantly expanding and enhancing its wireless and wireline IP broadband networks to help AT&T pursue multiple new billion-dollar business opportunities in key growth areas that it said includes the cloud. This was followed Wednesday by AT&T's announcement that Microsoft (MSFT) will be pairing its Windows Azure cloud platform with AT&T's virtual private networking technologies to become available to customers by the middle of next year. But customers can only benefit from the commoditization as the telecom giants turn to options such as increasing free storage space and adding more security features to increase the competitiveness of their cloud offerings to help tide these corporations over until their next big breakthrough in building out the next generation of high-speed wireless networks. Follow @atwtse -- Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.>

Are You Really Retired Just Because You Stopped Working?

From the time I took my first job washing cars at age 15 to the day I retired, working kept money flowing into my bank account. I needed money, and so I had to work (no silver spoon here). A few weeks back, I penned an article highlighting how most older folks fear running out of money more than death. Several readers suggested that continuing to work as long as possible is the best way to quell that fear. Could the solution be that simple?

One of the most successful executives I have ever worked with is a friend of mine named John. A few months ago, he announced that he had "flunked" retirement and was back at work, doing consulting on his own terms. He certainly does not need the money, but retirement bored him. He felt like he had a lot of tread left and plans to keep working as long as it's still fun.

I have another friend, Nate, who was also very successful in his first career and retired relatively young. Sailing was his lifelong passion, and he immediately became a sailing instructor. Now he delivers boats all over the world, and says things to his "first mate" like, "Honey, do you feel like going on a cruise to Trinidad?" She can say "yes" or suggest he take one of his other retired buddies with him on the job.

My wife Jo and I bought a new motorhome when we first retired. There are several motorhome manufacturers in the Pacific Northwest that hire retirees to deliver their products from the factory to customers all over the country. Some folks make the delivery and fly home. Others tow their car behind the motorhome, bring their spouse, and take a leisurely drive back. The driver who delivered our motorhome to Tampa plans a trip with his wife every other month around his "job," and they love it.

In all three of these instances, retirees are setting their own schedules, and they only choose the jobs they want to do. On top of that, these folks really enjoy their work. Job stress is virtually nonexistent, and their projects pay pretty well to boot.

Plug the Money Leak Folks on either side of the retirement cusp fall into a few different groups:

People who have saved too little to retire and likely must keep working in order to survive. People who have retired but are spending at a much faster pace than they anticipated. People who saved money and spend modestly, but are still not sure their nest egg will last. People who are retired and have enough money, but are just plain bored. People who have hobbies that could be turned into moneymakers. As my regular readers know, I am adamant that retirees are all money managers. Our primary job is to tend our nest egg and continue to learn about investing. The time and money invested in a financial education will pay off a hundredfold compared to what one could earn from a low-paying job.

A second job at Walmart is not the most efficient route to financial freedom. If you're earning minimum wage but your retirement account is leaking because of mismanagement, your time could be spent more effectively by focusing on your financial education. However, if you can work part-time at a job you actually like, why not do both?

The Ideal Second Act For most folks, the ideal post-retirement job:

Has flexible hours Is fun Is something your spouse can easily support Promotes longevity as opposed to detracting from it Brings emotional rewards Allows time to still look after your nest egg Makes money Working during retirement can be fulfilling, as the examples of my friends Nate and John show. But they are working on their own terms, and money is not their primary motivation. I have been officially retired for several years now, and while I put more time in to our weekly and monthly publications than I could have ever imagined, it hardly feels like work.

Our first careers were hard work, and now we have to work to stay on top of our retirement finances. That's probably why you're reading this article today: you know you have to continually teach yourself how to be your own money manager.

Some of my Money Forever subscribers are already retired, and some are a few years out. In either case, they have committed themselves to putting aside the time to become their own money managers: to continually educate themselves on handling their money. Remember: no one has more of a vested interest in you getting this right than you do.

From the very first issue of Money Forever our goal—my mission—has been to help those who truly want to take control of their retirement finances. I aim to give folks who have accumulated wealth a deeper understanding of how to create an income-producing portfolio. Our subscribers do not have to fear they won't have enough, whether retired or a few years out.

With that in mind, I'd like to invite you to give Money Forever a try. The current subscription rate is affordable—it's less than that of a typical morning newspaper, and a whole lot better for your portfolio. The best part is you can take advantage of our 90-day, no-risk offer. You can cancel for any reason or even no reason at all, no questions asked within the first 90 days and receive a full, immediate refund. As you might expect, our cancellation rates are very low, and we aim to keep it that way. Click here to find out more.

Dennis Miller is the author of "Retirement Reboot", a book chronicling his own journey to save his retirement in a low yield, turbulent investing environment and providing readers with actionable ideas for getting their retirement finances back on track. He works with some of the country's top investment managers, authors and analysts to tackle the financial challenges faced by today's retirees. Working with analysts at Casey Research, Dennis created "Miller's Money Forever," a newsletter that provides retirees, and those soon to be retired, with actionable recommendations on how to prepare and maintain a profitable retirement portfolio. Prior to retiring in 2008 Dennis ran a successful consulting business and authored several books on sales management. He was also a regular contributor to the American Management Association and an active international lecturer for 40 years. Find more of Dennis' columns and latest special research reports at millersmoney.com or contact him at dennis@millersmoney.

How a Plant Fire Helps Micron and SanDisk

Micron Technology Inc. (NASDAQ: MU) and SanDisk Corp. (NASDAQ: SNDK) are both winning at the loss of one of their competitors in the world of DRAM. Reports of a fire at a Chinese plant under rival SK Hynix Semiconductor is giving these companies another leg up. In fact, Micron even hit a new multiyear high earlier on Wednesday.

Stern Agee said that there is potential for a minor DRAM-NAND disruption from this Hynix fire as a potential supply disruption. Sterne Agee said that this would be a positive for both SanDisk Corp. (NASDAQ: SNDK) and Micron Technology Inc. (NASDAQ: MU). These shares are both rated as Buy at the firm.

China’s Xinhua News reported,

One person has been slightly injured after a factory workshop in east China’s Jiangsu Province caught fire on Wednesday afternoon. … The fire broke out at 3:30 p.m. in a workshop of SK Hynix Semiconductor Company (China) in Wuxi City. Witnesses told of dense smoke coming from the building.

Piper Jaffray has also “piped” in here. Both Micron and SanDisk saw their Overweight ratings reiterated because it believes that the workshop produces some 170,000 wafers per month. It also noted that this one spot may contribute as much as 15% to 20% of the worldwide global DRAM capacity. DRAM pricing was noted as being down 5% to 15% in this quarter, but up 70% or so year to date.

Micron Technology Inc. (NASDAQ: MU) was up over 4% at $14.59 and hit a new multiyear high of $15.27 earlier on Wednesday. SanDisk Corp. (NASDAQ: SNDK) is up right at 3% at $56.95 against a 52-week range of $38.47 to $63.97. Jefferies also reiterated its Buy rating and $21 price target for Micron. We are seeing similar gains in Spansion Inc. (NYSE: CODE), up 2.3% at $10.69, but we would warn that its 52-week range is $9.96 to $14.54. Wells Fargo initiated coverage with an Outperform rating and a $12 to $14 valuation.

Qualcomm, Clinical Cloud-Based Software

Qualcomm Inc. NASDAQ (QCOM) is a global leader in supplies of chips for cellphones. The 2013 outlook looks very promising with profits posted at 36% YOY rise and revenues at 29% upsurge, completing nearly $2 billion revenue last fourth quarter. The industry as a whole last Thursday closed the day up 1.1%. By the end of trading, Qualcomm rose $0.71 (1.1%) to $65.27 on average volume. Throughout the day, 10,978,535 shares of Qualcomm exchanged hands as compared to its average daily volume of 13,646,300 shares. The stock ranged in a price between $64.31-$65.48 after having opened the day at $64.78 as compared to the previous trading day's close of $64.56

Qualcomm sustains global demand for its integrated circuit products. Its customer base includes giants such as Apple Inc. (NASDAQ:AAPL), Ingram Micro Inc. (NYSE: IM), Samsung (SSNLF:PK) and BlackBerry (NASDAQ:BBRY). The company is capitalizing on the rise of smartphones and 4G. QCOM is set to begin trading ex-dividend March 06, 2013. A cash dividend payment of $0.25 per share is scheduled to be paid for March 27, 2013. 2013's expected earnings are at $4.35 a share. A new $5 billion share buyback program has also been initiated to replace its existing $4 billion program with $2.5 billion remaining for repurchases. The repurchase program has no expiration date. Qualcomm's daily earnings are at $65.86 - $66.65 with earnings at a 52 week range $53.09 - $68.87. The company expects annual earnings to be $24 billion.

A company committed to innovation, willing to build their capabilities, and open to a new view of value will likely be the first to reap the rewards of big data and help patients achieve better outcomes. Over the last decade, pharmaceutical companies have been aggregating years of research and development data into medical databases, while payors and providers have digitized their patient records.

eMarketer estimates that digital pharma US ad spending will reach $1.19 billion in 2013 and climb to $1.33 billion by 2016. 2012 marked! a year of many opportunities in digital health enjoying high growth rates over the past twelve months. Digital health investments for software rose 19 percent and digital health grew 45 percent. Personal health tools and health tracking totaled $143 million. Consumer engagement was at $237 million. The market has also remained cautious in its investment strategies following regulations and standards.

Qualcomm is a company that leads investing in digital health. A forecast of 5 billion sales of smartphones are expected from Qualcomm between 2012 and 2016. The mHealth partnership shows investors Qualcomm's market capabilities where the company is able to lead ahead of its rivals.

Qualcomm Life's 2net Platform is an FDA-listed, Class I Medical Device Data System (MDDS) that will enable millions of consumers to connect to the device. The WebMD and Qualcomm Life collaboration will help consumers sync data collected and give consumers the opportunity to take charge of their health via a technology ecosystem of digital health apps and third-party devices.

For investors, Qualcomm understand the benefits of cloud services. It seems there are numerous questions unresolved. Over the last decade, pharmaceutical companies have been aggregating years of research and development data into medical databases, initiating overhauls of its R&D and selling, general and administrative (SG&A) segments for Pharma. A company willing to build their capabilities, and open to a new view of value will likely achieve better outcomes. Delivering support, personalization, scalability, speed and flexibility are attractive areas for growth.

Is senior management able to significantly impact by, and address to guide appropriate R&D investment decisions to its organizations?

Qualcomm is a global leader in supplies of chips for cellphones. Founded in 1985, QUALCOMM is an American telecommunications company that specializes in digital wireless telecommunications products. So, this company has a hand in e! verything! from mobile phone components to chat programs to operating systems. Over the past 10 years, the company has made at least nine high-profile acquisitions, increasing the company's exposure to various wireless technology applications. This company brought in just under $15 billion in sales in 2011 and employs 21,200 worldwide.

The 8 Groups Capitalism Forgot: Holes in the Social Safety Net

Getty Images For the historically-minded, the political battles of the last few years may have induced an especially vertiginous bout of deja vu. After all, many of the big debates currently roiling our government -- including those over the minimum wage, health care, college tuition and unemployment -- are nothing new. For decades, politicians and pundits have hashed over these topics, arguing over the appropriate breadth and depth of America's social safety net. On Salon, Paul Buchheit offers an interesting rundown of government policies that hurt children, students, the elderly, wage earners, women, minorities, the sick and disabled, and the homeless -- a collection of constituencies that Buchheit calls "the eight biggest victims of America's predatory capitalism." Very succinctly, but with a great deal of solid evidence, he lays out his argument that, over the past few decades, the United States has de-invested from these groups ... with appalling results. There's a lot of room to disagree with Buchheit. Among other things, his categories have a great deal of overlap, and one could argue that he cherry-picks a great deal of his evidence. On the other hand, it's also hard to ignore America's recent attempts to balance the budget by slashing holes in the social safety net. Buchheit's article is a reminder that governmental "savings" rarely come without a cost -- and that the ones left holding the bill are often the people who have the most to lose.

Last Week's Worst Performing Dow Components

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

It was a big week in terms of economic data with the jobs report, the beige book, housing information, trade deficit information, and, of course, the potential for conflict in Syria. But even with all those headwinds, the markets looked strong this past week, and after four consecutive weeks in which the Dow Jones Industrial Average (DJINDICES: ^DJI  ) moved lower, it has finally broken its losing streak. Over the past four days of trading, the index managed to gain 112 points, or 0.75%, and now sits at 14,922. The other two major indexes, the S&P 500 and the Nasdaq, also closed higher this week, gaining 1.35% and 1.95%, respectively.

Before we hit the Dow losers, let's look at this week's best performing component. JPMorgan Chase (NYSE: JPM  ) gained 4.01% this past week, mainly on the announcement of the two major M&A deals reported on Monday. JPMorgan is reportedly one of the lead underwriters involved in Verizon's $130 billion buyout of Vodafone's 45% stake in the joint venture Verizon Wireless. That deal alone is estimated to line JPMorgan's pockets with more than $600 million in fees. It's also likely that the company will be involved in the Microsoft (NASDAQ: MSFT  ) -Nokia deal, and while that won't be as lucrative for the bank, it's sure to make some decent coin.  

The big losers
Speaking of Microsoft, it was the Dow's biggest loser this past week, falling 6.73%. That decline comes after the stock lost 3.88% two weeks ago, making it one of the Dow's worst performers back then, too. The previous fall was related to the belief that the Xbox One will perform poorly this holiday season, and this one came following the announcement that the company is purchasing Nokia's handset business and the rights to the company's patents for the next 10 years for $7.2 billion. This move will give Microsoft not only the software to run a smartphone but now the smartphone hardware. Many investors are debating whether this was a good or bad move by Steve Ballmer, who has already announced he will be leaving the company within the next 12 months. This development will surely put the new CEO in a tough position.  

Verizon (NYSE: VZ  ) , meanwhile, lost 2.19% this past week after the company announced over the holiday weekend that it had come to an agreement to purchase the 45% stake Vodafone owned of Verizon Wireless. While on the surface that sounds like great news -- full ownership, full profit retention, full control -- it will cost Verizon $130 billion for all those things, and the company will rack up enough debt to prevent it from pursuing other growth opportunities for some time. That's probably what scared investors off.  

Finally, Home Depot (NYSE: HD  ) lost 2.4% last week despite the Mortgage Bankers Association's report that mortgage applications rose 1.3% two weeks ago. The data came in as interest rates again rose this week, which could hamper home sales and slow Home Depot's revenue growth as the flow of new customers also slows down. Some will argue that the company can continue to grow sales as new homeowners update their properties to fit their personalities and others spruce up their houses to get ready to put them on the market. I think there's some merit to those arguments, but eventually more homes will have to move on the market for Home Depot to see an uptick in revenue.

The other Dow losers this week:

(For more information on why shares of the other losers fell lower this past week, click on the following links.)

AT&T, down 1.24% Procter & Gamble, down 0.95% Wal-Mart, down 0.53%

More Foolish insight
Warren Buffett has made billions investing in quality companies at cheap prices. Would he jump at some of this week's losers, or would he think they need to fall lower? If you want to know what he's probably thinking, you can tap into the best of Warren Buffett's wisdom in a new special report from The Motley Fool. Click here now for a free copy of this invaluable report.

Flying Under The Radar, But Not For Long: ZipRealty Has 60% Upside

As I have noted in previous articles, when looking for a company to buy, I try to find some of the following characteristics:

A stock that has fallen out of favor with investorsA stock that has a major catalyst on the horizonA company that has signaled that they are close to a bottom in their businessA compelling valuationA stock that is supported by assets that create a "floor" on the stockInsider Buying

ZipRealty (ZIPR) is a company that meets 5 of the 6 criteria listed above. The stock has fallen out of favor over the last several years as performance declined during the recession. The company has completed a major restructuring and recently returned to positive EBITDA margins. Operations of the company are further supported by a pickup in home sales in the US. There has also been significant insider buying over the past month, and the company trades at a deep discount to its competition. I believe the stock has at least 60% upside from its current price.

Inflection Point in Business - A Return to Positive EBITDA

The last few years have not been kind to ZIPR. The company was originally geared towards a more traditional real estate brokerage business, which leveraged the internet to display housing listings. Management over-expanded the business during the housing boom, and as home sales declined in the recession, the company saw drastic declines in operating performance. We can see that even over the last few years, revenues have declined dramatically:

	2012	2011	2010	2009	2008
Revenues ($'000's)	$73,820	$85,149	$118,696	$123,130	$107,450

We can also see how this performance impacted the company's stock price:

(click to enlarge)

Source: https://www.google.com/finance?q=zipr&ei=7SsgUrjwDKPz0gHx-AE

In 2011, with the company in free-fall, management began a restructuring initiative to refocus the business around their core strengths in technology, online marketing, and only their most attractive local real estate markets. ZIPR closed offices in the following markets: Fresno/Central Valley, CA, Charlotte, SC, Naples, FL, Jacksonville, FL, Miami, FL, Palm Beach, FL, Tampa, FL, Hartford, CT, Minneapolis, MN, Virginia Beach, VA, Tucson, AZ, Atlanta, GA, Raleigh-Durham, NC, Philadelphia, PA, Salt Lake City, UT, and Westchester County/Long Island, NY. The company also transitioned local operations to eight third-party brokerages in Tucson, AZ, Atlanta, GA, Raleigh-Durham, NC, Philadelphia, PA, Salt Lake City, UT, Westchester, NY, Long Island, NY and Brooklyn, NY.

As part of this restructuring, management launched the Powered by Zip program to provide third-party real estate brokers with robust, proprietary end-to-end technology solutions. We will talk about this new, software-as-a-service business later on.

The restructuring has been successful to date. Recently, with a new business model, the company returned to positive EBITDA territory:

Source: ZIPR August 2013 Investor Presentation

The company expects to remain in positive EBITDA territory, and grow EBITDA by at least 10% annually, for the foreseeable future.

This inflection point has gone mostly unnoticed by investors, mainly due to a lack of analyst coverage (more on this later). The company has transformed its business and now is prepared to grow and benefit from the pickup in housing trends. As we will talk about later, an EBITDA profitable business in this segment should be valued much higher than its current stock price.

ZipRealty

ZipRealty is the company's traditional, real estate brokerage business. The comp! any owns ! and operates brokerage business in 19 regions with over 1,500 licensed realtors. Here is a brief overview of strategy and economics of the business from the company's recent presentation:

We see from the chart that home prices have increased over the last several months, which improves the company's profitability. ZIPR then takes half of the commission, less lead generation costs, which results in 32% contribution margins.

The company's competitive advantage in this segment is its technology platform, user-friendly website, and award-winning mobile app. The company uses the site to allow consumers to do their own research, which management recently noted has become the preferred method of screening for houses by potential buyers. The company also leverages this technology in the new Powered by Zip segment.

Powered by Zip

The Powered by Zip segment allows third party brokers to leverage the company's technology for their own use. This gives the individual realtors a competitive advantage and incremental referral point in their respective regions. Here is an overview of strategy and economics of this software-as-a-service business:

Competition in this segment includes Zillow (Z) and Trulia (TRLA). The company differentiates itself from the competition in multiple ways:

The focus is on serious customers, defined as those who expect to purchase or sell a home within the next six to eighteen months. ZIPR does not have the reach or traffic that Zillow or Trulia has, but they have a higher conversion rate from users. The company is also known for having the most up-to-date listings in th! e industr! y, which improves customer satisfaction with serious customers.The focus is more geared towards real estate agents than the other sites. This allows the company to better foster relationships and convert a higher percentage of users. The company provides a more user-friendly platform that its competition.The platform creates a competitive advantage for the third party users. ZIPR not only helps to generate online leads on their behalf, but also provides them access to an enterprise cloud-based application that better enables them to turn client leads into closed transactions. Zap offers these brokers crystal-clear, real-time visibility on their transaction pipeline, brokerage operations and financials, while facilitating a paperless transaction environment. Because Zap is a cloud-based application, third parties benefit from a rapid innovation cycle without the burden of expensive IT maintenance and software upgrade costs.

We have talked about the inflection point of the company as it restructured its traditional business and launched its software-as-a-service business. Let's now talk more about other catalysts for the stock…

Insider Buying

I've noted in several articles that I look for insider buying when I evaluate a name. When looking at ZIPR, insider buying has been strong over the last month:

(click to enlarge)

Source: http://www.secform4.com/insider-trading/1142512.htm

We have seen over 200,000 shares purchased by insiders (avg. volume of 45K shares traded daily and 21MM total shares outstanding) over the past month. These purchases have been made by both the CEO and Osmium Partners (2nd largest shareholder who already owns over 2.5MM shares). These purchases give me even more conviction on the prospects of ZIPR going forward.

Lack of Analyst Coverage

Another thing I like to see in a stock is a lack of analyst coverage. This is for two reasons:Lack of ! coverage creates a lack of both knowledge and consensus on the company. This creates an opportunity for analysts to do their own work, which can cause a short-term "information arbitrage" vs. the overall market.Increased sell-side coverage can be a catalyst - as coverage increases, more investors will understand the story, which could create greater demand for the stock.

When looking at ZIPR, Yahoo finance shows no analyst coverage:

(click to enlarge)

Source: http://finance.yahoo.com/q/ae?s=ZIPR+Analyst+Estimates

Furthermore, on the company's latest earnings call, there were no questions from sell-side analysts.

I believe sell-side coverage could begin in the near future for multiple reasons:

High-flyers Zillow and Trulia already have expanded coverage (10 analysts and 8 analysts covering each respective name). There is much overlap between the companies, making coverage of ZIPR easier to implement.As the economy and housing picks up, demand for housing-related names will increase, creating a justification for the sell-side to begin coverage.The company has been making the rounds at small-cap conferences (3 conferences attended so far this year) which gets the story out to the analyst community and will create greater demand for coverage.

New Home Sales as a Catalyst

New home sales are the biggest driver for the real estate brokerage industry since it is a commission-based industry. Home prices are the other major driver, but we noted above that home prices have recently increased. As for sales, the US has recently seen a stabilization/pickup in new home sales, which should be a catalyst for the real estate brokerage industry, and therefore ZIPR, going forward.

Source: US Census Bureau

We see in this chart that: 1. We are under the long-term av! erage of ! annual new home sales, and 2. We have seen an inflection point upward. Both of these facts should help support the real estate brokerage industry, and ZIPR, going forward.

Balance Sheet

The company has a clean balance sheet, with $13MM in cash (14% of market capitalization) and no debt. In the company's most recent 10-K, management highlighted the company's liquidity position:

"We believe that our current cash, cash equivalents and short-term investments will be sufficient to fund cash used in our operations, restructurings and capital expenditures for at least the next twelve months. Our future capital requirements will depend on many factors, including our level of investment in technology and online marketing initiatives, our rate of growth in our local markets and in expanding our Powered by Zip broker referral network and possible litigation settlements and legal fees. Although there are signs that an economic recovery may be underway, if the recent depressed macroeconomic environment and residential real estate market continues without recovering or worsens, we may have a greater need to fund our business by using our cash, cash equivalent and short-term investment balances, which could not continue indefinitely without raising additional capital. We currently have no bank debt or line of credit facilities. In the event that additional financing is required, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business and results of operations will likely suffer."

I take this statement as support that the company has adequate cash on hand for operations (this is a 10-K so they are going to protect themselves and be conservative with their statements). It is also possible for the company to take on a revolver to finance operations if necessary, without issuing new shares.

Valuation

We have already reviewed the various catalysts for the company's stock. Now, let's take a look ! at its va! luation compared to the competition:

	EBITDA	Enterprise Value	EV/EBITDA	EV/Sales	EBITDA Margin
Z	$20MM	$3.5B	175.0x	32.0x	18.2%
TRLA	($5MM)	$1.1B	N/A	15.5x	-7.1%
ZIPR	$2MM	$80MM	40.0x	1.0x	2.5%

I will say that ZIPR, considering it is a hybrid business model, will most likely always trade at a discount to Z and TRLA, but the comparative analysis shows that ZIPR is significantly undervalued compared to the other two companies. Furthermore, considering EBITDA has such a small base and just returned to positive territory, we could see big increases in EBITDA over the next several years. Considering the business model, let's take a look at EBITDA sensitivity based on revenue:

		Annual Revenue ($MM)
	$80	$90	$100	$110	$120	$130
EBITDA ($MM)	$2	$6	$10	$14	$18	$23

For my valuation, I am assuming revenues grow back to at least $110MM (still below 2010 levels). I am using a 10.0x EV/EBITDA multiple, which equates to a $7.25 price target (60% upside from current price. This also equates to a 1.2x EV/Sales multiple, which makes sense considering sales are now becoming more profitable, so expansion of the EV/Sales multiple could occur. These multiples are still well under the valuations of Z and TRLA.

Longer-term, I think the company will get to ! $150MM in! sales and at least $25MM in EBITDA (as the company expands they will have to reinvest in technology). This gives us an upside target (on a blended valuation of the 10.0x EV/EBITDA and 1.5x EV/Sales multiples) of $11.50 (150% upside).

My downside target is $90MM in sales and $6MM in EBITDA, and a $3.50 price target (20% downside). This gives us a 3-to-1 risk-to-return ratio on our intermediate price target and a 7.5-to-1 risk-to-reward ratio on our longer-term target.

Risks

Risks for the company include:

Economic Sensitivity - as we said above, the company is dependent of new home sales and increased home prices. A reversal in economic growth would be negative for the company.Inability to grow the Powered by Zip Segment.Overexpansion - as the company did during the housing boom.Higher-than-expected technology costs.

Catalysts

Catalysts for the company include:

A pickup in the economy and home sales.Increased home prices.Increased sell-side coverage.Market-share gains.

Conclusion

ZIPR has several company-specific catalysts and has reached on inflection point in both its restructuring and overall business. The company is also supported by improving trends in the industry. Using conservative multiples, as compared to the company's competition, I am using a $7.25 price target on the stock, with a longer-term target of $11.50. I believe the downside target is $3.50. I am encouraging investors to buy the stock now at its current price level.

Source: Flying Under The Radar, But Not For Long: ZipRealty Has 60% Upside

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

This is an Alpha-Rich Idea
Alpha-Rich ideas are our best money-making long and short investment ideas. They are released exclusively to Seeking Alpha Pro users 24 hours before publication. Learn more about Seeking Alpha Pro.

Ackman’s JC Penney Sale: Analysts Have Mixed Feelings, Investors Don’t as Shares Gain 3%

Ackman’s leaving the building–and JC Penney (JCP) shares are staging a revival.

AP

The stock of the beaten-down retailer has gained 3.5% to $13.82 today after Pershing Square’s William Ackman filed to sell his stake in the company. The Wall Street Journal reports:

Mr. Ackman’s Pershing Square Capital Management LP is unloading its 39 million shares—nearly 18% of Penney’s stock—with help from Citigroup Inc., which underwrote the sale.

Citigroup reached agreements to sell the shares to new buyers at $12.90 each, a person familiar with the matter said. That was well below their closing price Monday of $13.35 and close to half the roughly $25 apiece that Pershing Square paid for the shares, mostly in 2010 and 2011.

Oppenheimer’s Brian Nagel and team think Ackman’s sale is positive for JC Penney:

We do not view the decision of Pershing Square to sell JCP as all that shocking. The primary concern for JCP, we believe, is that a new wave of shares hitting the market could further undermine an already weak stock price. Longer term we view the decision of Pershing Square to part ways with JCPenney as potentially positive for the chain, as it will allow the company’s management and board to focus on fixing the ailing retailer in a more cohesive fashion.

Citigroup analyst Deborah Weinswig has mixed feelings about the sale:

We note that this transaction will not help to improve the liquidity of the company (JCP does not receive any proceeds). It could also tap a meaningful portion of demand for the stock, which could make an additional capital raise more challenging. However, the completion of the sale will eliminate one of the overhangs we saw on JCP's stock.

JC Penney’s gain is all the more surprising consider what’s happened to other retailers today. Macy’s (M) has dropped 0.8% to $43.83, Kohl’s (KSS) has dipped 0.4% to $50.16 , Dillard’s (DDS) has fallen 2% to $76.19 and Nordstrom (JWN) has declined o.6% to $56.98.

Howdy Doody or Scooby Doo? Mind the Gap Between Early, Late Boomers

Kids born in 1946 — the beginning of the baby boom generation — gathered around their TV sets to watch the Mickey Mouse Club, Leave it to Beaver and Howdy Doody. The kids born at the tail end of the boom, in 1964, tuned into Scooby Doo, Super Friends and Little House on the Prairie.

Early and late boomers have widely varied cultural perspectives and life experience — so advisors lump them together at their peril, the Insured Retirement Institute warns.

While their differences are not as pronounced as the gap between boomers and millennials, younger boomers will likely face additional challenges, according to an IRI report released Monday.

Overall, just 34% of boomers said they were confident in their ability to retire comfortably, the report found. However, older boomers, those between ages 61 and 66, were more confident, with 42% saying they could retire comfortably. Just 25% of boomers between ages 50 and 55 agreed.

It doesn’t hurt that early boomers are more likely to have retired already, making retirement a reality instead of a vague unknown.

“From a retirement planning perspective, we need to start segmenting the boomer cohort to ensure that we are appropriately addressing their unique retirement needs and challenges,” Cathy Weatherford, IRI president and CEO, said in a statement. “Those on the back end of the generation have had a much different workplace experience than the first boomers.”

Weatherford noted that unlike many early boomers who likely have pension plans, younger boomers were more likely to spend most of their careers in the defined contribution plan era and “will face many of the risks and challenges that have come with it. As a result they will be more self-responsible for their retirement income security. At the same time, late boomers have less saved for retirement and their low confidence regarding their future financial security reflects this.”

Furthermore, early boomers worked through long spells of economic stability, giving them a leg up on retirement security, according to the report. Indeed, the Pew Charitable Trust found in May that early boomers may be the last generational cohort to retire well.

Almost a third of early boomers say they have less than $100,000 saved for retirement, but nearly half of late boomers said they have less than that saved, IRI found. Just over a quarter of late boomers said they are doing a good job preparing for retirement, compared with 45% of early boomers.

Late boomers are also more likely to struggle with day-to-day expenses or support adult children financially. Almost a third said they were having trouble paying their mortgage or rent, compared with 20% of early boomers. Thirty-four percent of younger boomers say they are providing financial support for adult children, compared with 21% of older boomers.

Social Security is another challenge weighing unevenly on late boomers. Over half of early boomers expect Social Security to be a major source of income in retirement, compared with just 36% of late boomers.

Despite all these challenges, 41% of late boomers expect their financial situation will improve over the next five years, compared with 25% of early boomers. IRI theorized that this is likely because they still have a few years left in the work force. “Part of the explanation of this greater optimism among late boomers could be more late boomers are working with at least 12 more years until full Social Security eligibility for the oldest in this cohort, the 55-year-olds. More working years provides more opportunity to improve upon current financial challenges,” according to the report. Furthermore, according to the Bureau of Labor Statistics, unemployment for people between 50 and 54 was under 6% in May, down from 7.2% in 2009.

---

Check out Early Boomers May Be Last Generation on Track to Retire Well on AdvisorOne.