Top Insider Trades: JCP ADC EGHT DWCH

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By Jonathan Moreland, founder of Insider Insights and author of Profit From Legal Insider Trading.

NEW YORK (TheStreet) -- It is a victory for common sense. Tracking the trading behavior of company executives, directors and large shareholders in the stocks of firms they're registered in as "insiders" has proven to be profitable, according to both academic studies and (more importantly) the experience of professional investors.

Below are lists of the top 10 mainly open-market insider purchases and sales filed at the Securities and Exchange Commission Monday, Nov. 25, 2013 as ranked by dollar value. Please note, however, that these are only factual lists, not buy and sell recommendations. Dollar value is only one metric to assess the importance of an insider transaction, and, frankly, often not even the most important metric that determines if an insider transaction is significant. At InsiderInsights.com, we find new investment ideas just about every day using these and more intricate insider screens to determine where we should focus our subsequent fundamental and technical analysis. And while stocks don't (or shouldn't) move up or down based on insider activity alone, insiders tend to be good indicators of when real stock-moving events like earnings surprises, corporate actions, and new products may be in the offing. So use these regular Top Insider Trades columns as the initial research tools they are meant to be, and clic

Heading Into Sears Earnings, Stay Away from SHLD Stock

Sears Holdings (SHLD) is hotter than a pistol, with SHLD stock up 56% year-to-date. Edward Lambert, Sears CEO and the largest shareholder of Sears stock, continues his chess moves to extract value for SHLD shareholders.

In fact, while its retail business continues to deteriorate, SHLD stock keeps drifting higher, passing a $60 mark shares of Sears stock have only sparingly seen in the past two years.

But third-quarter Sears earnings are on tap for Thursday, with analysts expecting the company to lose $3.13 per share of SHLD stock in the quarter.

When Sears earnings for the second quarter came out in late August, SHLD stock proceeded to move from $39 to $60 over a two-week period.

Will Sears stock do the same after Q3 Sears earnings? I doubt it.

SHLD Running Out of Tricks

To be blunt, Sears Holdings is running out of rabbits it can pull out of its hat. Sears earnings obviously haven’t been sending SHLD stock higher, but other gimmicks have been.

Spinning off Land's End and its automotive centers, for example, will bring SHLD stock shareholders some much-needed cash … but that's about it.

SHLD paid $1.9 billion for Land's End in 2002. If it had remained a separate entity continuing on its growth path, I suspect it would fetch at least double that amount. In the hands of SHLD, though, it's lost its brand attractiveness and likely will be spun-off for less than Sears paid over a decade ago.

As for the auto centers, the trade publication Tire Business estimates they generate $1.5 billion in revenue annually. Sears will be lucky to extract $2.3 billion in value for Sears stock shareholders on both divestitures.

And then there’s the SHLD retail operations. And it’s obvious its best days are behind it — as seen by the ugly Sears earnings on tap for Q3. SHLD has achieved 26 consecutive quarters of negative same-store sales. Sure, other stores like Gap (GPS) have gone through their own periods of negative comps. But GPS just went through four straight quarters in fiscal 2011 before hitting its stride a year later.

As for overall sales, they’re expected to fall over 5% in the coming Sears earnings report, and a total of 8% for the full year.

While it’s possible to turn around sliding SHLD sales, that’s only if you’ve got seasoned merchants running the show. Unfortunately, no one's ever accused Lampert of being a merchant. And so Sears Holdings has its work cut out for it.

Sell SHLD Stock Now

InvestorPlace editor Jeff Reeves suggested in September that Sears Holdings would face serious solvency problems in 2014 — obviously a screaming warning sign for fans of Sears stock.

At the same time you can find lengthy diatribes by firms such as Baker Street Capital that outline the unrealized value of SHLD stock. Like most value investors, Baker Street's argument is based on the underlying real estate of Sears (because it’s obviously not based on Sears earnings), which it values between $7 and $10 billion.

Adding in its other businesses while subtracting debt and pension liabilities, Baker Street says SHLD stocks is worth $92 to $169 per share — well above the current price around $65 for Sears stock.

Still, I wouldn’t expect SHLD stock to move higher after Sears earnings like it did last quarter. Why? There aren’t the same catalysts (Land's End, Auto, Sears Canada and more) available to fuel another leg up for Sears stock.

Sure, if you agree with Baker Street Capital's assessment of SHLD (I don’t), then you shouldn’t have a problem owning its stock at these prices.

But operationally — as seen by Sears earnings — SHLD is nearly a bigger embarrassment than JCPenney (JCP) … and that's saying something.

So heading into Sears earnings, I would steer clear of SHLD stock.

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

Sen. Paul: Janet Yellen likely to be confirmed

Sen. Rand Paul, R-Ky., concedes he probably won't be able to block the nomination of Janet Yellen to be the next Federal Reserve chairwoman but he still wants to try.

In an interview to air Friday on Bloomberg TV, Paul says he will block Yellen from a vote unless he gets an up-or-down vote on his bill that seeks to audit the Fed -- an idea long pressed by his father, former Texas congressman Ron Paul.

"Apparently, Janet Yellen's been in favor of transparency at the Fed," Paul told Bloomberg's Al Hunt. "That's all we're asking for, is an open audit ... I think that there are a lot of people in middle-class America -- some want to call flyover America where I live -- who are concerned about the revolving door from the Treasury to Wall Street firms to the Federal Reserve."

Paul said one central question to him is "are people becoming wealthy off of policy that we should know about?"

Asked if Senate Majority Leader Harry Reid, D-Nev., has the votes to get Yellen confirmed, Paul conceded: "In all likelihood, yes."

Paul's vow to block Yellen, President Obama's choice to succeed Fed chairman Ben Bernanke, is in addition to a threat on all presidential nominees made by Sen. Lindsey Graham. The South Carolina Republican is seeking more information on the Obama administration's handling of the deadly attack on the U.S. consulate in Benghazi, Libya.

Paul told Bloomberg TV that his ability to keep a "hold" on Yellen's nomination is limited under the Senate rules. "In the old days, you could place a hold on and keep it forever," he said. "Even if I stand on the floor and filibuster in a personal fashion, I can only hold it there for two days."

Follow @ccamia on Twitter.

New Apple iPhones to be Released on September 20 (AAPL)

Tech giant Apple Inc. (AAPL) announced on Tuesday that the new iPhone 5s and iPhone 5c will be available on Friday, September 20 at 8 AM.

The new phones will be available in the U.S. and 10 other countries. Apple reported that the suggested retail price for the iPhone 5s 16GB will be $199, $299 for the 32GB and $399 for the 64GB. The iPhone 5c will be $99 for the 16GB and $199 for the 32GB.

Apple noted that the new features on iPhone 5s will include the A7 64-bit chip, an 8 megapixel iSight camera with True Tone flash and Touch ID.

Apple shares were up $3.73, or 0.83%, during Tuesday morning trading. The stock is down 15% YTD.

Apple Scores Court Victory in E-books Trial

Apple Inc. (NASDAQ: AAPL) scored a modest victory on Tuesday in a trial related to price-fixing on e-books at its App Store. The same judge who has ruled against Apple on the price-fixing charges gave the company some relief from the penalties proposed by the U.S. Department of Justice.

The judge denied the Justice Department's proposal to that would have regulated the way Apple conducted business in the App Store, provided that Apple promise not to attempt to circumvent sanctions on the iBookstore. The Justice Department wanted a five-year ban on entering new contracts to sell e-books and the termination of Apple's existing contracts with five publishers. The DoJ and Apple agreed in Tuesday's hearing to allow the company to modify rather than terminate the deals with the publishers.

The court also rejected a DoJ proposal to appoint a monitor on Apple's activities for a period of five years. The judge set the time period to two years and scaled back the monitor's activities to include mainly antitrust policy and training.

And in a defeat for competitive book sellers like Amazon.com Inc. (NASDAQ: AMZN) and Barnes & Noble Inc. (NYSE: BKS), the judge rejected a proposal that would have forced Apple to offer links to competitors online stores for in-app purchases without paying a commission to Apple.

The dispute centered on the agreement Apple struck with several publishers to sell e-books at a price set by the publisher and from which Apple would take a 30% cut. This so-called agency model was opposed by retailers like Amazon, which followed a wholesale model where it purchased e-books and then resold them at any price Amazon chose. The publishers hated the model, claiming it devalued their intellectual property.

Tuesday's ruling may have been a modest victory for Apple, but the impact is significant. In her ruling last month, the judge said, "Without Apple’s orchestration of this conspiracy, it would not have succeeded as it did in the Spring of 2010." In yesterday's ruling she indicated that she did not want to punish Apple as much as she wanted to address the anticompetitive behavior in the e-book market. A final ruling is due next week.

Upbeat Jobs Report Signals Quicker QE Tapering

With Friday’s upbeat U.S. jobs report exceeding expectations, market players are now saying that the Federal Reserve could begin tapering its quantitative easing program as early as this September.

The economy added 195,000 jobs in June, according to the Labor Department report released Friday, and the unemployment rate was unchanged at 7.6%. Although the number of long-term unemployed was essentially unchanged at 4.3 million, the report stated that June’s increase is in line with the average monthly gain of 182,000 over the last year.

Wall Street had expected the economy to add only 165,000 jobs last month, so the much larger number of jobs created in June along with an upward revision for April and May has encouraged the belief that the Fed will start to put the brakes on its bond-buying program before the end of the year.

“The one weaker-than-expected part was the unemployment rate being flat at 7.6%—consensus was down a tenth—but overall the report has a strong tone,” wrote Jim O’Sullivan, chief U.S. economist with High Frequency Economics in Valhalla, N.Y. “Employment growth continues to look more than strong enough to keep unemployment trending down—even though the rate was only flat in June—and probably more than strong enough to lead to Fed tapering starting in September.”

O’Sullivan noted that there will be two more employment reports before the September Federal Open Market Committee (FOMC) meeting.

Rick Rieder, portfolio manager of BlackRock’s Strategic Income Opportunities Fund (Class A: BASIX) and co-head of BlackRock’s Americas fixed-income unit, said the 195,000 boost in payroll jobs for June promotes the concept of “a solid, but not spectacular, U.S. growth story” that is now seeing labor market improvements follow alongside broader economic gains.

Along with improved data on income levels and better consumption numbers, Friday’s report gives the Fed the confirmation to move forward with its reduction in large-scale asset purchases, “and we think that this will begin in September and that markets are clearly pricing this possibility in today,” Rieder wrote in a comment. “We think that the Fed will be very deliberate in moving interest rates, but will be more aggressive in reducing a QE program that had grown too large in scale relative to the benefits it afforded the economy."

On how he is positioning BASIX, which is BlackRock’s flagship fixed income fund, Rieder said he continues to like keeping interest rate sensitivity very low, and continues to believe the dollar will strengthen, especially given recent moves by the European Central Bank and Bank of England as well as the “clearly easy policy” in Japan.

“We also continue to favor less interest rate sensitive assets in our funds such as floating rate, real estate oriented debt (like CMBS) and front-end European paper, while keeping assets like investment grade credit (with its long duration) to a nominal position,” Rieder wrote.

Markets Remain ‘Extremely Sensitive to Swings in the Data Flow’

Meanwhile, Bank of America Merrill Lynch U.S. Economist Michelle Meyer said the June employment report was an across-the-board positive, but other data between now and September will be closely watched by the FOMC.

“If the Fed were basing policy solely on the employment report, September tapering is a done deal,” Meyer wrote in a comment titled, “Jobs: Friday fireworks.” “We believe, however, that the Fed will be looking at a range of activity indicators, which could postpone tapering until December. We believe it is a close call, leaving the markets extremely sensitive to swings in the data flow.”

Warning that the markets have been over-reacting in the last six to eight weeks, John Canally, investment strategist and economist for LPL Financial, noted that more taper talk will come next Wednesday when Fed Chairman Ben Bernanke speaks before the National Association of Business Economists.

“The jobs report solidified that the Fed is on target to begin tapering in September. There was some disagreement among market watchers before this, with some thinking tapering wouldn’t begin until December,” Canally said in a phone interview with AdvisorOne.

But with U.S. jobs growth averaging 200,000 a month this year, the Fed can now feel comfortable with tapering, he added. “That’s pretty decent job growth, and above where the market thought it was, but in line with where the Fed thought it was. Now the market needs to understand that tapering isn’t the same thing as tightening.”

Read PIMCO’s Gross: Don’t Abandon Ship in Turbulent Market at AdvisorOne.com.

Is Microsoft the Missing Link in the 3-D Printing Revolution?

Microsoft (NASDAQ: MSFT  ) made the maker community jump for joy when it announced that the upcoming version of Windows 8.1 due out later this year will feature out-of-the-box 3-D printing support. For the Windows 8.1 end user, setting up a 3-D printer should be a similar experience to setting up a plug-and-play 2-D printer. This certainly will make life easier for a demographic of entrepreneurs and enthusiasts, but will it be the spark that ignites a consumer-driven 3-D printing revolution?

High hopes
As you can imagine, 3-D printing companies are pretty pumped about Mr. Softy's vote of confidence. At Microsoft's annual Build Conference, 3D Systems (NYSE: DDD  ) demoed a Surface Tablet sending instructions to its consumer-oriented $1,299 Cube printer. Rajeev Kulkarni, general manager and vice president of 3D Systems' consumer solutions, believes that having support from Windows 8.1 gets 3-D printing closer to mainstream. "It makes it seamless to get 3-D printing in your home," he added.

Betting the farm
Last month, Stratasys (NASDAQ: SSYS  ) made quite the splash when it acquired leading consumer-enthusiast 3-D printing company MakerBot for $403 million in stock up front and, potentially, another $201 million of stock or cash if the company hits performance incentives through the end of 2014. I don't know about you, but $604 million for a company that's only earned $11.5 million in the first quarter seems like a lot of money.

Not to mention, the "personal" 3-D printing industry was only estimated to be worth about $38.2 million in 2012, and experienced a significant decline in growth from the previous four years. From 2008 to 2011, the personal 3-D printer segment experienced an average growth rate of 346% each year, whereas in 2012, it grew by 46.3% from 2011. For the time being, it could indicate that aggregate demand for personal 3-D printers is beginning to wane, given the lack of material advancements beyond plastic at the consumer level.

Keep dreaming
Although the consumer-oriented 3-D printing market gets a lot of media attention, it represented less than 2% of the $2.2 billion 3-D printing industry last year. Additionally, the fact that 70% of 3-D printing is already done on Windows tells me that this move is more about pleasing existing users than it is to attract new users. If 3-D printing is really going to take off with consumers, the range of materials that can be printed needs to be expanded greatly. Until then, the 3-D printing revolution will continue taking place in the industrial world.

Industrial Revolution 3.0
Like it or not, 3-D printing will continue to play a greater role in the manufacturing process. In fact, The Economist has coined 3-D printing as the third industrial revolution. To help investors make better sense of what this could mean for their portfolios, The Motley Fool has published a special free report, laying out three companies to own for the third industrial revolution. For those investors savvy enough to get in on the ground floor, click here to get started.

3 Reasons to Sell Ford Stock

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

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

Taubman Keeps Dividend Steady

Shopping-mall operator Taubman Centers  (NYSE: TCO  )  announced yesterday its second-quarter dividend of $0.50 per share, the same rate it paid last quarter after raising the payout 8%, from $0.4625 per share.

The board of directors said the quarterly dividend is payable on June 28 to the holders of record at the close of business on June 14. Taubman has paid a dividend every year since 1998, and it has steadily increased over that time period.

The board also declared quarterly dividends on two series of cumulative preferred shares, as follows:

$0.40625 per share on the 6.5% Series J, for the period April 1 through June 30 $0.46007 per share on the 6.25% Series K, for the period March 15 through June 30

The preferred dividends will be payable on June 28 to shareholders of record on June 14.

The regular dividend payment equates to a $2.00-per-share annual dividend, yielding 2.4% based on the closing price of Taubman Centers' stock on May 29.

TCO Dividend data by YCharts

Why Solazyme Is Ready to Rebound

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, renewable oil producer Solazyme (NASDAQ: SZYM  ) has earned a respected four-star ranking.

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

Solazyme facts

Headquarters (founded)	South San Francisco, Calif. (2003)
Market Cap	$483.6 million
Industry	Coal and consumable fuels
Trailing-12-Month Revenue	$44.1 million
Management	Co-Founder/CEO Jonathan Wolfson Co-Founder/Chief Technology Officer Harrison Dillon
Return on Equity (average, past 3 years)	(34.2%)
Cash/Debt	$149.0 million/$15.0 million
Competitors	ADM  ExxonMobil  Valeant Pharmaceuticals

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

On CAPS, 95% of the 396 members who have rated Solazyme believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, mebrownj, succinctly summed up the Solazyme bull case for our community:

Conversion of existing carbon based feed stock into usable oils is a genius application. This can revolutionize several industries: food, cosmetics, energy. They look like they are at the low point of their S curve and have the relationships going to put them on the steep grade up to technological and business success quite soon.

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

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.  

Gilead Sciences’ Earnings Miss Forecasts as ACA Drives Higher Costs

Shares of Gilead Sciences (GILD) have dropped in after-hours trading following the release of disappointing earnings driven primarily by Affordable Care Act-related costs.

Paul Sakuma

Gilead reported a profit of $1.84 a share not including special items, missing forecasts for $1.92 a share, on sales of $6.04 billion, topping estimates for $5.98 billion. Those aforementioned Affordable Care Act-related costs knocked 21 cents off of earnings. Sales of Gilead’s Hepatitis-C treatment Sovaldi plunged 20% during the third quarter as patients waited for the FDA to approve Harvoni.

None of that appears terribly disappointing, so why have Gilead’s shares dropped 2.4% to $110.70 at 5:30 p.m.? I asked ISI Group’s Mark Schoenebaum that very question and his succinct reply: “b/c no upside surprises.”

With Gilead trading within spitting distance of its 52-week high, that’s more than enough reason.

To Whip Your Wallet Into Shape, Ditch These 3 Toxic Mindsets

Shutterstock If you're trying to get your financial situation in order, you have to grapple with lot more than simply making the math work. Money is based in your mindset. If you're approaching money from a skewed perspective, even the best-laid plans won't bring you much success. Let's take a look at three of the most common bad money mindsets that can keep you from having a healthy relationship with money -- and how to get over them. 1. "Money Is the Root of All Evil" What it looks like in action: You feel guilty about earning and spending money. Maybe your parents drilled this mindset into you as a kid; maybe you developed it by watching their own financial struggles. Either way, you don't trust money and feel it leads to all sorts of ailments: stress, greed, you name it. The problem with this mindset: Money is not inherently evil; there are just good and bad ways to spend it. By dismissing it as troublesome, you're missing out on all of the good it can do in your life, from paying for your kids' education to helping out your favorite charity. How to fix it: You need to reprogram your brain to recognize money as something that is neither good or bad, but simply a tool. Figure out what ultimate goal you'd like to devote your money to and how you can get there. Reframing your money as a means to a positive end, and act accordingly. 2. "No One Gets Rich -- Unless They Win the Lottery" What it looks like in action: You just can't seem to get ahead, and you've resigned yourself to the notion that "that's just the way things are." You believe people who "make it" are lucky (or cheating the system) and you resent them for it, but you're also oddly proud of the way you're struggling and scrounging to make ends meet. The problem with this mindset: It's a self-fulfilling prophecy. Viewing life as an unending struggle -- and viewing money as a scarce resource that's hard to come by -- prevents you from creating the wealth that is very much within your reach. How to fix it: Take a long, hard look at those people who've "made it" and figure out what they did to get there. Sure, a few of them may have been handed a small fortune by the inheritance gods, but what about the rest? Maybe they dedicated themselves to professional development and put in long hours working their way up the ladder. Maybe they learned how to invest their money wisely and earned great returns. The same discipline and dedication you're using to live paycheck to paycheck could be transferred to a healthier goal that will pay off way more. 3. "I'm Just No Good with Money" What it looks like in action: You feel like there's always something waiting to go wrong with your finances -- and it's usually your fault. Every time you get a windfall, something winds up going wrong and eating it all up. You've wracked up a ton of debt and can't even remember why, and you have little hope that things will ever be any different -- you just seem to suck at money. The problem with this mindset: Even if you've made some really bad choices in the past, you can still change course. People have paid off tens of thousands of dollars of credit card debt and radically changed their financial outlook -- take a look at this couple that paid off $46,000 in credit-card debt. But you can't change anything if you've thrown up your hands and decided you're simply a dolt when it comes to money and there's no hope left for you. How to fix it: You need to get to the root of your bad money moves so you can learn from your mistakes and make a plan to avoid repeating them. Sit down with yourself and identify why you're in this situation. Are you prone to impulse purchases? Have you failed to stick to (or create) a budget? Once you know where things have gone wrong, you can work to set them right-so long as you believe it's in your power. More from Paula Pant
•10 Wedding Costs You Don't Want to Overlook •Recover From Your Money Mistakes in 6 Simple Steps •The 7 Worst Things You Can Do With a Pay Raise

Church Cross Latest Attempt at Stealth Cellphone Towers

Charlie Neibergall/APA cellphone tower inside the bell tower is seen over the Resurrection Lutheran Church in Ankeny, Iowa. DES MOINES, Iowa -- One might be hidden in a cross on a church lawn. Others are disguised as a cactus in the desert, a silo in farm country or a palm tree reaching into a sunny sky. Whatever the deception, the goal is the same: concealing the tall, slender cellphone towers that most Americans need but few want to see erected in their neighborhoods. As telecommunications companies fill gaps in their networks, many have sought to camouflage the ungainly outdoor equipment that carries the nation's daily supply of calls, texts and data. It's another indication of how the industry is evolving to meet the demands of consumers who insist on ever-increasing amounts of wireless information but won't tolerate large antennas looming over their homes, parks and other beloved sites. "Each community and each neighborhood can be different, so we really have to work on a case-by-case basis with each city and with each zoning authority," said Karen Smith, a spokeswoman for Verizon (VZ). So-called stealth cellphone towers have been around for more than two decades and appear to be growing in popularity. They have been concealed in a wide variety of ways, including in a stop sign in New Orleans, a pine tree in Kinnelon, New Jersey, and a water tower in San Dimas, California. Now an Iowa church wants to join the club by building a tower in the shape of a cross. It's a move that's irked some nearby residents who think the design will be too big and too out of place. It also shows how sensitive the issue can still be. The First Presbyterian Church in Des Moines is working with Verizon to construct a tower that will be dressed up as an 11-story cross. The deal, which is being reviewed by a city zoning board, includes annual compensation to the church. "Like a lot of churches, we have to keep each year finding ways to pay our bills," pastor Ken Stubert said. "It's an unusual church that doesn't have to worry about something like that." Suzette Jensen said the tower's height and color wouldn't match the church's exterior, making it an instant eyesore. The pastor said that wouldn't happen. "We pay some pretty high property taxes. We feel very strongly that it's going to be a detriment to the value of our homes," she said, adding that neighbors are considering legal action. Scenic America, a nonprofit that works to preserve scenery along the nation's roads, has generally opposed the building of more communication towers, but the group has been more amenable to disguised designs. "We've been in favor of disguising them if you can and you can do it well," said spokesman Max Ashburn. But even some of the disguised towers are dead giveaways.

Sometimes the attempt to cover them up actually makes it stand out more than if they just put up the tower.

"You can tell right away that they're not what they pretend to be," Ashburn said. "Sometimes the attempt to cover them up actually makes it stand out more than if they just put up the tower." When Verizon first contacted the church last year, the company proposed standard designs for the tower. The church ultimately pushed for the cross-shaped design, which mirrors a tower outside a church in the Minneapolis suburb of Eden Prairie. Stealth Concealment Solutions, a South Carolina-based company that offers hidden antennas and towers, has created dozens of multitasking steeples and crosses over the years. In 1992, a BP (BP) sign at a gas station in Atlanta earned the distinction of being the first stealth cellphone tower in the country, according to the company. Designs have expanded over the years and now include a quirky pole in Liberty, Michigan, that looks like a pencil. Cindy Wishart, a Stealth spokeswoman, said the company is constantly educating people about the industry and its possibilities. "They always associate concealment as a tree," she said. "It's just so much more than that." Specific data on the number of stealth towers is limited, but Stealth said it works on up to 800 projects a year. The Wireless Association, an industry trade group also known at CTIA, said the presence of towers in general around the country has dramatically increased over the years in an effort to expand coverage. At the end of 1997, the country had just over 50,000 cell towers. By the end of 2012, the most recent year for which information is available, that number had jumped to more than 300,000. Stubert said he was surprised by the community backlash. "It's ridiculous," he said. "Churches put up crosses all the time that are simply crosses. This will be a cross that's also helping us to pay our bills." Jensen said the tower should be put in another location because space outside the church is too small. In Des Moines, a minimum 10-acre lot is needed for a communication tower. The church has just over three acres. Smith, of Verizon, wouldn't go into detail about the tower, although she did say the company chooses locations that fit within a geographic radius and meet engineering specifications. People constantly need more data "to do all the different multimedia applications that are now part of their lives," Smith said, creating continual pressure to "add more capacity to our network to stay ahead of that demand."

Q&A: Net neutrality — what is at stake?

The future of the Internet gets hotly debated Thursday at the Federal Communication Commission.

In what is the agency's most anticipated meeting in recent memory, the commission takes up the issue of network neutrality. Protests against so-called "fast lanes" are planned, as is a rally in favor of strong net neutrality rules.

The focus on net neutrality, also called open Internet, comes after a federal court in January threw out the FCC's existing rules. And the draft of new rules that FCC Chairman Tom Wheeler gave to commissioners three weeks ago has divided the body — and caused a furor.

His initial proposal allowed fast lanes to consumers' homes, the so-called "last mile," that content providers such as Netflix can purchase as long as the same opportunities are available to others on "commercially reasonable" terms. After an outcry — and 35,000 public comments on the issue — Wheeler revised the rules to ban certain types of fast lanes and to give the agency the power to review any deals that gave priority to some data.

If the FCC approves new rules, there will be 60 days for public comment and another 57 for replying to the comments before the FCC takes final action.

Q: What is net neutrality?

Also called open Internet, net neutrality is the principle that all legal content on the Internet is treated equally. That is meant to foster creativity and innovation without the fear of Internet service providers throttling some content. As part of its acquisition of NBCUniversal in 2011, Comcast agreed to open Internet rules by not favoring NBC content over that of other video providers, such as YouTube.

Q: Why do we need new open Internet rules?

In January, the U.S. Court of Appeals for the District of Columbia overturned much of the FCC's current body of rules.

Q: How do the new open Internet rules differ from the old ones?

It's not entirely clear, since the drafts have not yet been made public. However, many, including companies such as Goo! gle, Facebook and Twitter, have voiced concern about the possibility that the FCC would let Internet service providers charge tolls for "fast lanes" or discriminate against content. "If these reports are correct, this represents a grave threat to the Internet," says a letter signed by more than 100 companies, including those three, Amazon and Microsoft.

Meanwhile, Internet service providers have voiced their own concerns that the FCC might be too heavy-handed. "As it begins its rule-making process, the Commission should reaffirm its commitment to the light-touch approach that has ensured America's leadership throughout the Internet ecosystem, from networks to services, from applications to devices," reads a letter from more than two dozen broadband companies, including AT&T, Comcast, Cox and Verizon.

Q: What's up with these fast lanes I keep hearing about?

After the court tossed out the FCC's open Internet rules, Netflix announced that it had agreed to pay Comcast to improve the speed and quality of its streaming content to subscribers — in effect, creating a fast lane. Since then, the video provider has signed a similar deal with Verizon.

But Netflix said it signed the deals out of frustration, and company spokesman Joris Evers characterized it as "the wrong path" toward a future where "ISPs get explicit legal permission to do deals with Internet companies."

Other fast-lane critics call the prioritization a form of discrimination that could leave small businesses and entrepreneurs at a disadvantage.

Q: What about this talk that the FCC might start governing the Internet as a public utility?

In its January ruling, the court said the FCC can regulate Internet providers if the agency reclassifies them as "common carriers" — private companies that sell their services to all consumers without discrimination, like utilities, rather than tailoring their rates for different types of consumers.

Back in 2010, when it crafted the open Internet rules, the FC! C chose n! ot to invoke this option — calling broadband "telecommunications services" under Title II of The Telecommunications Act — because it wanted to refrain from overly regulating the Internet. Chairman Wheeler has said "I won't hesitate to use Title II," but says that another shot at rule-making would be faster and avoid litigation.

Some net neutrality supporters, including the Progressive Change Campaign Committee and its NoSlowLane.com campaign, have latched onto the idea of treating the net "like water." On Wednesday, Rep. Henry Waxman, D-Calif., joined that movement, writing to Wheeler that "this approach will allow the FCC to get the policy right and avoid the need to water down essential open Internet protections out of a concern about inadequate authority."

But broadband providers warned in their letter that such a move "would impose great costs, allowing unprecedented government micromanagement of all aspects of the Internet economy."

Q: What about wireless?

The previous batch of open Internet rules did not include wireless services, but the new draft rules include a segment that asks for public comment on whether the FCC should fold wireless in.

It will be easier for all parties once the draft rules are made public, says George Foote, a Washington, D.C.-based attorney with Dorsey & Whitney. "The whole debate about net neutrality has been hijacked by self-interest and sidetracked by a poor metaphor," he says. "Everyone is free to argue for their favored position. ... But to rage that the rich will get a fast lane and the rest of us will be shunted to the slow lane does not begin to describe the likely outcome of the Wheeler proposals."

Get Ready for Wall Street's Quarterly Shell Game

It's earnings season. In fact it's prime time for companies' first-quarter earnings.

For company players the game is about trying to beat analysts' estimates, to get your company's stock to pop so you look better than your reflection.

But, the game is rigged.

What! Another rigged game on the purposely muddied fields where Wall Streeters play?

Yep. Another rigged game.

And like high-frequency trading (HFT) and so many other "institutionalized" games on the Street that are sucking the life out of other people's dreams, it's not illegal.

This is the norm...

The game is called managed earnings, or managing earnings.

The most successful gamers play with a gusto that crosses over the legal border. They juggle their books to shove losses and profits into columns, drawers, and boxes depending on what their objective is for that particular accounting period.

Maybe they made too much money and want to hide some for another quarter where they don't make what analysts expect. Maybe they bury losses somewhere so they don't look as bad in a reporting quarter.

It's about manipulation.

That part of the game is illegal. But because it's merely accounting hocus pocus, the worst a company gets - when the facade of its magic show is blown - is a slap on the wrist.

If you want a history of how to play this part of the game to perfection, look how General Electric under Jack Welch, performed - I mean managed - their earnings. All I'll say is you just can't have your earnings come out to the penny quarter after quarter after quarter without internal prestidigitation.

While that locker room game is for seasoned pros, every company plays the field game.

On the field it's all about what analysts' estimates are.

If your company earnings beat what analysts expect, you're a winner. If your earnings fall short, you're a loser and so is your stock.

And where do these highly touted Wall Street analysts get their estimates from?

I'll tell you where, but you're not going to believe it...

They do their homework and study the company's business and sales and margins and everything else they have to look at to determine what they think a company is going to be earning that quarter.

Oh, and they talk to the company.

That's the real game: Talking to the company... And getting their take on their earnings.

For heaven's sake if all your big shot peers are putting out earnings estimates you don't want to be the only one who is wrong! That's why they all talk to the companies they cover.

It's a mutually beneficial game, for the most part. The analysts don't want to be too off the mark and companies want their earnings to come out better than the analysts' consensus estimates.

Of course companies don't want their earnings to be a negative surprise and come out far below the consensus. If that happens their stock gets clobbered. And that does happen - but not why you think.

The game for companies is to "guide" analysts they talk to. If they're having a bad quarter relative to a year ago and everyone is thinking they're doing well, their job is to guide analysts' expectations down. That's right, they tell analysts things aren't as good as they'd expected or hoped for. Then all the analysts, who don't want to look stupid, ratchet down their earnings estimates right before the company reports.

And presto! When earnings come out, miraculously, they "beat" consensus estimates and their stock pops higher.

It's manipulation. But it's not illegal.

The problem is that average investors don't understand the game. Earnings come out and they're better than the consensus, things must be good, right? Maybe.

What gets lost in translation is how much the analysts were guided. It's a regular phenomenon: Consensus estimates fall right before earnings reports come out.

The analysts should not be able to speak with the companies they cover. If the company wants to guide earnings expectations lower, they should post an SEC-filed statement for analysts to follow and the public sees for themselves.

Then when earnings come out, analysts should report their original earnings based on their estimates and the difference between original estimates and their ratcheted-down estimates.

News reports should have to display analysts' original consensus estimates at the beginning of the quarter and latest estimates and calculate the increase or decrease in the consensus. That way the public can see how the company did over the quarter relative to how it was expected to do - before it guided analysts' consensus estimates down WITHOUT TELLING THE INVESTING PUBLIC.

So far this quarter, the first quarter of 2014, analysts have lowered their growth estimates from the beginning of the quarter to right before companies started reporting by 5.6 percentage points.

Did you know that? Did you know that earnings estimates had been guided down so much? I doubt it. No one announces that. It's just an adjustment between the analysts and the companies they cover.

I'm not even going to get into how most of the big bank analysts don't just cover these companies... they work for them. On Wall Street they call that a symbiotic relationship.

So, how come companies miss ratcheted-down estimates and have to endure their stocks dropping as a result? Because if companies actually guided down enough they'd be torn between letting the cat out of the bag early and seeing unwanted headline news clobber their stock. They'd rather hope and pray the market will be strong when their crappy earnings come out and their stock will get lifted in a general euphoria.

It's a dirty game. It should be cleaned up.

More from Shah Gilani: The growing threat to capitalism is "socialism for the rich" - and it's the new normal. And there's only one thing that can put a stop to it...

Smith & Wesson: Good? Bad? I’m the One With the Gun

Shares of Smith & Wesson (SWHC) have gained 17% today after the gun maker reported better-then-forecast earnings.

Bloomberg News has the details on Smith & Wesson’s results:

Earnings per share in the quarter ended Jan. 31, rose 35 percent to 35 cents, the Springfield, Massachusetts company said in a statement yesterday. That beat the 29 cent average estimate of eight analysts in a Bloomberg survey. The company said it estimates full-year earnings per share of between $1.39 and $1.42, increasing its previous estimate of between $1.30 and $1.35.

Sales of handguns, which include the company's popular M&P pistols, grew 30 percent as the company sought to increase market share, Chief Executive Officer James Debney said in a conference call yesterday. Total revenue grew 7 percent to $145.9 million, surpassing estimates of 142.9 million. Income from continuing operations rose to $20.1 million from $17.5 million.

Wedbush’s Rommel Dionisio and Alicia Reese fret about Smith & Wesson’s retail-sales trends:

In the wake of the Newtown tragedy in Dec. 2012, widespread consumer fears of tightened gun control pulled forward industry demand in early 2013. Now facing unusually difficult y/y comparisons, retail sales trends the past several months have been down significantly y/y (see Figure 1), a trend which should continue through at least May or June. We also note from our recent channel checks that overall retail inventories, which were in short supply last spring, have largely normalized…

S&W's recent decision to stop selling its most important product line of M&P pistols
in California, effectively shutting down much of its total sales in this major market
rather than comply with the state's new microstamping law, will likely begin to
impact results in FY15.

Barron’s offers its take here.

 

ZU Stock: Top Online Retail Plays for the Polar Vortex

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January's winter storms have caused revenue shortfalls for most brick-and-mortar retailers. With reduced traffic due to poor driving conditions,people unable to make it out to the mall look to ordering online, instead.

Companies such as Amazon (AMZN) and Overstock (OSTK) should be ideally situated to cope with the weather-related issues currently plaguing the retail industry. While traditional retail has fared miserably in 2014, it's logical that online-only retailers have performed better over the same period.

Intuitively, I have to believe this is true. But investors can't rely on intuition alone. We need concrete facts. Pulling together as much empirical information as possible, I'll look at whether there are any good stocks to buy when it comes to online-only retailers.

ZU Stock: Flash Sales

Zulily (ZU) gained 36% Tuesday after delivering its first quarterly report as a public company. The Wall Street Journal does a good job explaining why ZU stock is up 166% since its November IPO. The most important thing about Zulily's business model is that it's focused on busy moms who don't have a lot of time to waltz through shopping malls looking for great buys.

In the span of a year, the number of active customers (at least one purchase annually) has doubled to 3.2 million. The revenue derived from each customer is increasing by about 10% per year. Most importantly, its customer retention is through the roof. According to its prospectus, 83% of its U.S. orders through the 12 months ended September 29, 2013, were from existing customers. Those three stats paint a very nice picture for ZU stock.

While it's true that Zulily's target audience are mostly women who already shop online, it's probably equally true that poor weather in January ramped up their online purchasing. If you can't get out and you need something, your only option is to order it online. On the downside, Zulily takes about 11 days to fulfill the average purchase due to its just-in-time inventory ordering system.

As a result, most customers likely weren't ordering anything that was needed immediately. However, its revenue guidance for the first quarter was $225-$235 million — higher than the consensus estimate of $223 million. Some of the difference could be weather-related, but nothing material in nature.

So, should you buy ZU stock?

With the gains ZU stock has already booked combined with a valuation that is sky high, my inclination is to suggest waiting until other online-only retailers go public like Gilt Groupe and others. That gives you time to further assess the opportunity presented by flash-sale retailing. In the long-term (3-5 years), I think ZU stock will do well, but at the moment it's priced for perfection.

Who's Buying Online

Well, we know moms are. But according to the Commerce Department, sales at internet stores fell 0.6% in January, the largest decline since May 2013. More surprising is the fact that retail stores overall saw a 0.4% decline in January — 20 basis points less than online-only stores.

It's clear the entire retail industry ran out of steam in January as customers struggled to pay holiday bills. While that's not an unusual phenomenon, it certainly shows that weather wasn't the only culprit.

But the cold did help a specific breed of online retailers in January — those specializing in cold-weather gear. Internet Retailer suggests consumers upped their online purchases of parkas, gloves, hats, etc., because it was too cold to go out to the stores for those items.

Summit Sports, a Michigan-based retailer of sporting goods, had this to say about the cold: "Our apparel sales are through the roof on Amazon … We've seen a 50% to 60% increase in sales on Amazon." According to Compete Inc., the average weekly traffic in January for seven big-time retailers of cold-weather gear increased by 22% year-over-year. Both Columbia Sportswear (COLM) and Timberland, part of VF Corp. (VFC), saw YOY increases of more than 40%.

On this statistic alone, not to mention previous articles I've written about COLM stock, I'd say that the Portland-based apparel maker, although not exclusively an online retailer, is as good a stock to own if you want to benefit from the polar vortex.

High-End Online Retail

So far, I've given a wait-and-see rating to ZU stock and a thumbs-up to COLM stock. Another omni-channel retailer that could benefit from the brutal winter we've been having is Williams-Sonoma (WSM). WSM stock generates about half its annual revenue from online sales, and, to a much lesser extent, catalog sales.

Although WSM stock is down almost 5% year-to-date through February 26, it has two big factors working in its favor as we move further into 2014. First, because it already generates so much of its business online, any winter storms had a smaller chance of affecting its overall business. Secondly, as the housing industry continues to recover and grow, consumers are going to want new gadgets for the kitchen.

WSM stock might be drifting downward with the rest of specialty retail at the moment, but once we get into spring and earnings are released in mid-March, I think we'll see that WSM didn't skip a beat in January. I like WSM stock a lot.

Bottom Line

Spotting the winners in online-only retail is a very tricky deal because there really aren't many publicly traded options. Beyond Amazon and eBay (EBAY), you might have a handful of names worth considering, including ZU stock. Add in the fact retailers aren't nearly as forthcoming about their monthly sales numbers as they used to be and you have a very imprecise exercise.

In addition to the three I've mentioned already, you might want to consider companies like Walmart (WMT) who have huge numbers of in-store customers but also operate very large e-commerce businesses. As the snow fell in January and its customers couldn't make the trek to the store, it's possible many of them went online.

If you must go online-only, your truest bet is ZU stock … but be prepared for a lot of volatility. Otherwise, I’d go with COLM stock or WSM stock. And if you don’t mind paying top-dollar, Amazon’s always a good play for online retail.

As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.