How to Get Filthy Rich From DryShips Inc.

Source: DryShips

If you want the secret wealth beyond your wildest dreams, all you have to do is figure out how to become the CEO of DryShips (NASDAQ: DRYS  ) . Sure, the company's stock is down over 80% since its IPO, but that hasn't stopped CEO George Economou from raking in more every year from related-party transactions than most CEOs could imagine making in a lifetime. 

Related party like its 1999
What's a related-party transaction? The short version is that they are company transactions involving somebody that is connected to the company, such as an insider. They therefore have the potential to be biased in a way that is unfavorable to DryShips' shareholders, since there is a possible conflict of interest.

An example would be if the CEO of a burger chain made a deal with a beef supply company that he also owns. These types of transactions must be disclosed in SEC filings as a warning to investors. The reason is that, using the burger chain example, the CEO might be biased and unmotivated to negotiate the best possible deal for his shareholders. He may overpay for beef to create a cushy profit for himself at the expense of his burger chain's shareholders.

"Fees" a mile long
The list of related-party transactions listed in DryShips annual report seems to be a mile long. The name "George Economou" keeps popping up with many of them as well. He owns or controls several companies such as Cardiff Marine, TMS Bulkers, TMS Dry, and TMS Tankers. DryShips also does business with a number of related-party companies that Economou's close family owns. Even some of DryShips' office space in Athens was previously leased from Economou's son.

The annual report warns, "In particular, TMS Bulkers or TMS Tankers may give preferential treatment to vessels that are beneficially owned by related parties because Mr. Economou and members of his family may receive greater economic benefits."

DryShips pays many of these companies "management fees," commissions, "consultancy fees," and similar payouts. Total related-party transactions just for "fees," including stock-based compensation to Economou, was over $76 million for 2013 alone. Not a bad gravy train he's riding.

Shareholders last?
After the IPO, DryShips had around 30 million shares outstanding. Fast forward to now, and the number has ballooned to over 432 million. That's a staggering increase of 1,440%! DryShips has diluted common shareholders seemingly recklessly while making sure that Economou's businesses are well taken care of.

The self-dealing has been going back and criticized by others for many years. Back in 2007, Peter Georgiopoulos, CEO of Genco Shipping & Trading, referred to DryShips as "the guys who play games with their shareholders' money." Hedge fund manager Steven Abernathy once said, "I believe he runs DryShips as if it's his own private company."

Investors generally prefer CEOs who align their interest with the interests of shareholders. Economou has quite an incentive to keep making transactions and keeping liquidity -- no matter where the source -- flowing into the company so the "fees" can keep on growing.

Are the terms with his entities better or worse than the terms DryShips would have with other, unrelated companies performing the same services? Who knows. DryShips has racked up a lot of debt, though, and relies on its leniency from its creditors in the form of waivers to stave off bankruptcy. If the company's creditors share these concerns, then DryShips may see rough waters at the negotiation table.

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LocalShares Makes Its Debut With Nashville Area ETF ...

After hesitantly creeping along resistance for the entire week in anticipation of GDP data and FOMC commentary, the S&P 500 Index finally managed to peer above the coveted 1,700 mark on Thursday. Amid the ongoing bull run on Wall Street, Tennessee-based newcomer LocalShares is making its first splash in the exchange-traded universe with its launch of the Nashville Area ETF (NASH) on Thursday .

Think LocalOne of the key drivers of growth behind the ETF industry has been the sheer diversity of available offerings; investors both big and small can tap into virtually any asset class around the globe, and even more impressively, there's usually several products to choose between in the same niche. LocalShares has taken the theme of "targeted" exposure to a whole other level with the launch of the Nashville Area ETF, which is officially the first city-focused fund on the market .

The premise behind the Nashville ETF may seem outlandish and "too niche," but it's really rooted in business fundamentals. Elizabeth Courtney, CEO of LocalShares, notes that the city's leadership, transit infrastructure, and tax policy are just a few of the noteworthy value-add characteristics that businesses headquartered in Nashville take advantage of. In other words, the premise behind this ETF is that certain regions and communities are more pro-business than others, and Nashville is one of those "hot spots" so to speak .

So what is actually included in NASH? The methodology behind this ETF is fairly straightforward; NASH encompasses publicly traded companies that are headquartered in Davidson County, which is the formal government seat in the state, or one of the six bordering counties. Furthermore, the securities must have a minimum market capitalization of $100 million and average daily trade volumes of at least 50,000 shares. Some of the companies included in NASH are:

Tractor Supply Community Health Systems Healthcare Realty Trust At inception, all of the component securities ! are assigned an equal weight, however, factors like growth, liquidity, yield, and ROI will be used to determine rankings and allocations in future quarterly rebalances. From a cost perspective, NASH's price tag of 0.49% falls in the middle of the cost spectrum for the All Cap Equities ETFdb Category, which features an average expense ratio of 0.47%.

Historically, hyper "geo-targeted" ETFs have not done so well. In 2009, Geary Advisors launched and soon thereafter announced the closure of the first two state-based funds, the Oklahoma ETF and the Texas ETF . Nonetheless, the Nashville Area ETF offers a compelling strategy for those looking to tap into a diverse portfolio of companies situated in a pro-business environment. LocalShares has also hinted that it is interested in developing other city-based ETFs down the road.

Follow me on Twitter @SBojinov

Disclosure: No positions at time of writing.

Is Wells Fargo a Buy Ahead of Earnings?

Wells Fargo (NYSE:WFC) emerged from the financial crisis relatively unscathed. As the country's largest mortgage originator, it has benefitted from the rebounding housing market in the past year; however, some investors and analysts worry that since home loan growth is losing steam and interest rates remain low, Wells Fargo will be unable to maintain its growth. Only time will tell, as the bank is scheduled to report its second quarter earnings this Friday. Let's use our CHEAT SHEET investing framework to decide whether Wells Fargo is an OUTPERFORM, WAIT AND SEE, or STAY AWAY.

C = Catalysts for the Stock's Movement

Friday’s earnings announcement is huge for Wells Fargo. Investors and analysts were skeptical of the bank's first quarter earnings report because its mortgage origination business appeared to be losing steam. Around 65 percent of mortgage applications were for refinancing purposes, down 76 percent in the previous year's quarter. That percentage is likely to decrease further as long-term interest rates begin to rise again; however; as refinancing has tapered off, the housing market has hit its stride again. The bank will be able to generate more new home loans to buyers as demand increases and will be able to write down more loans on its balance sheet as housing prices appreciate.

E = Earnings Are Increasing Year-over-Year

Wells Fargo has demonstrated strong earnings per share growth over the last five quarters. In the most recent quarter, the bank reported earnings per share of $0.94, higher than analysts' estimates of $0.88. Despite beating estimates and reporting another quarter of earnings growth, the market reacted adversely to the report, because the mortgage origination business showed slowing growth and Wells' net interest margin decreased yet again to $3.48. New home loan applications decreased by around 9 percent—a relatively large number when you consider that mortgage originations make up around a third of the bank's business.

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The third row of the table shows Wells Fargo's net interest margin—the difference between the interest the bank pays to depositors versus the interest it collects on loans. Wells Fargo's profitability is greatly influenced by how large or small the NIM is. The steady contraction of this margin, shown in the table below, is a red flag for the bank's future profitability. Looking at the attractive growth in the table below, its difficult to imagine Wells Fargo's growth taking a substantial hit; however if both net interest margins and mortgage originations continue to fall, this will most certainly be the case.

	2013 Q1	2012 Q4	2012 Q3	2012 Q2	2012 Q1
EPS Growth YoY	22.67%	24.41%	22.22%	17.14%	11.94%
Rev. Growth YoY	-1.74%	6.52%	8.08%	4.43%	6.43%
Net Interest Margin	3.48%	3.56%	3.66%	3.91%	$3.91

*Data sourced from YCharts

S = Support is Provided by Institutional Investors

Wells Fargo has enjoyed longtime support from legendary investor Warren Buffett. His company, Berkshire Hathaway (BRK.A & BRK.B), added 18 million shares last quarter, bringing its total position in the bank to 458,170,323—working out to roughly 20 percent of his portfolio. Wells Fargo is the largest holding in Berkshire's portfolio. Its never a bad thing to have the Oracle of Omaha on your side.

E = Exceptional Performance Relative to Its Peers

While Wells Fargo trades at a higher forward price to earnings multiple than its chief competitors—Citigroup (NYSE:C), Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), and Goldman Sachs (NYSE:GS)—it maintains the highest return on equity of the five megabanks and the highest dividend yield at 2.9%. Wells Fargo is more expensive relative to the rest of the banks because it engages in more straightforward banking operations and has less exposure to overseas risks and derivatives trading. Still, its price to equity multiple is cheap compared to the industry and the S&P 500 average. Wells Fargo just announced a dividend increase from $0.25 to $0.30 and, with a payout ratio of 26 percent, it has room to increase this dividend in the future.

	WFC	C	BAC	JPM	GS
Forward P/E	10.88	9.16	10.19	9.13	10.13
ROE	13.07%	4.65%	2.14%	11.55%	10.12%
Dividend Yield	2.90%	0.10%	0.30%	2.80%	1.30%

*Data sourced from Yahoo! Finance

T = Technicals Are Strong on the Chart

At the end of Tuesday's trading day, Wells Fargo traded at $42.69, above both its 200-day moving average of $37.39 and its 50-day moving average of $40.78. The bank has experienced a definitive uptrend and is up almost 30 percent in the past 12 months. Additionally, it recently hit a 52-week high of $42.97 on Monday. Wells Fargo could see a new 52-week high depending how its earnings announcement is received this Friday.

 

Conclusion

Despite slowing growth in mortgage refinancing and a compressed net interest margin, Wells Fargo will continue to earn steady earnings in the coming quarters. Compared with its peers, Wells is slightly more expensive, but relies less on revenues from riskier areas of banking, such as derivatives trading and international banking. The company pays out an attractive dividend, which has increased twice in the past several years. Additionally, the stock's technicals are very strong. If you are looking for a relatively low-risk player in the banking sector, Wells Fargo is an OUTPERFORM.

Hyundai starts selling engines to racing enthus…

LAS VEGAS -- Detroit's auto industry still takes a bow when it comes to its most famous engines, whether it was Chevrolet 350-cubic-inch V-8, Ford 302 or Chrysler 440 Magnum. Now comes South Korea's Hyundai with hopes of joining the list.

Hyundai announced at the big SEMA aftermarket car parts trade show here that it is going to join other big makers in selling two of its more popular engines to enthusiasts who want something bigger or better under the hood.

They're called crate engines because, well, they used to come in a crate -- without a car. Detroit's Big 3 and aftermarket suppliers have had a nice little side business over the years selling whole engines to racers that they can drop in and go.

With Hyundai having had popular, youthful race-oriented Genesis coupe, executives figured there are now enough used cars out there that there could be some interest from hot-rodders.

"As more Genesis Coupes have entered the pre-owned enthusiast market since its 2009 launch, we've witnessed strong interest in leveraging the low cost potential of this rear-drive platform and its powertrains," says John Krafcik, CEO of Hyundai Motor America, in a statement. "Now, with our new crate engine program, Hyundai is making it more affordable for these same enthusiasts to modify their Genesis Coupe.

Some may be current Genesis owners who want more oomph out of their engines. Others may be "someone who doesn't have a Hyundai coupe and buys one," then starts itching to improve its performance, says Hyundai spokesman Jim Trainor in an interview after his presentation here.

While relatively few customers ever tinker with their engines, the move could help build credibility with the racer community -- with helps amp up the overall popularity of the brand.

Hyundai will start by selling two engines:

•The Lambda 3.8-liter, direct-injected V-6 is being priced at $9,000.

•The Theta 2-liter, four-cylinder engine will start at $4,500. It will be "turbo ready." Or buyers can ! elect to have the turbocharger, intercooler and ducting included for a total price of $6,000.

Gentex to Acquire Johnson Controls Unit

Gentex (NASDAQ: GNTX  ) is accelerating its efforts in the vehicle-based remote control segment. The company announced it has signed a definitive agreement with car-parts supplier Johnson Controls (NYSE: JCI  ) to acquire the latter's HomeLink unit. This is described by Gentex as "a vehicle-based control system that enables drivers to remotely activate garage door openers, entry door locks, home lighting, security systems, entry gates, and other radio frequency convenience products." According to Gentex, it can function with nearly all automatic garage door openers.

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The price of the deal is $700 million.

HomeLink's owner-to-be is very familiar with the system -- Gentex has been integrating it into its signature automatic-dimming rearview mirrors for over a decade. The company estimates that, once fully integrated, HomeLink will contribute $125 million-$150 million in annual revenue.

The transaction is subject to approval from the relevant regulators. Gentex expects it to close "on or about" September 30 of this year.

4 Stocks Making Moves

The following video is from Tuesday's Investor Beat, in which host Chris Hill and analysts Jason Moser and Isaac Pino dissect the hardest-hitting investing stories of the day.

Tesla Motors (NASDAQ: TSLA  ) falls after getting a downgrade. Johnson & Johnson's (NYSE: JNJ  ) second-quarter profits rise 172%. Chuy's Holdings (NASDAQ: CHUY  ) gets a downgrade of its own. And Krispy Kreme (NYSE: KKD  ) announces a buyback of $50 million worth of stock. In this installment of Investor Beat, Jason and Isaac discuss four stocks making moves today.

If you're on the lookout for high-yielding stocks, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here.

Hot Defensive Stocks To Own Right Now

At Tier 1 Investments, I seek out and invest in elite businesses. These include companies with the most valuable brands, best management, superior products and services, and strongest competitive advantages.

You may have heard your friends refer to Whole Foods (NASDAQ: WFM  ) as "whole paycheck," in reference to its high prices. Whether that's a bad rap or not, perceptions can damage a brand. But can the grocery stalwart clear out this bruised fruit without getting into a defensive price-war?

It's hard to believe that a grocery store could book investors more than 30 times their initial investment, but that's just what Whole Foods has done for those who saw the organic trend coming some 20 years ago. However, it may not be too late to participate in the long-term growth of this organic foods powerhouse. In this brand-new premium report on the company, we walk through the key must-know items for every Whole Foods investor, including the main opportunities and threats facing the company. So make sure to claim your copy today by clicking here.

Hot Defensive Stocks To Own Right Now: Bona Film Group Limited(BONA)

Bona Film Group Limited distributes films in the People?s Republic of China. It distributes films to movie theaters, as well as to non-theatrical distribution channels, including DVD and Blu-ray and other home video products; Internet and digital distribution; in-flight entertainment; and cable, satellite, and broadcast televisions. The company also invests in the production of Chinese and Hong Kong films in order to obtain the distribution rights for movie theaters and non-theatrical channels. In addition, Bona Film Group operates six movie theaters in five cities of the People?s Republic of China; operates a talent agency business that represents artists; and involves in film advertising and television production businesses. The company was founded in 2003 and is headquartered in Beijing, the People?s Republic of China.

Advisors' Opinion:

• [By Seth Jayson]

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

• [By Bryan Murphy]

  With just a quick glance at the chart, Bona Film Group Ltd (NASDAQ:BONA) doesn't look like anything other than an erratic mess. When you take a step back and take a look at the longer-term chart of BONA, however, you can see the last several weeks have ushered in a major bullish change of direction for the stock... meaning now's a great time to start wading into a position.

Hot Defensive Stocks To Own Right Now: Eastern Virginia Bankshares Inc.(EVBS)

Eastern Virginia Bankshares, Inc. operates as the holding company for EVB, a state-chartered community bank that provides a range of personal and commercial banking services to individuals and small to medium-sized businesses primarily in eastern Virginia. The company offers various interest-bearing deposits, including checking, savings, money market, and certificate of deposit and other time deposit accounts, as well as noninterest-bearing demand deposits. It also provides commercial business, industrial, agricultural, one-to-four family residential real estate, multi-family residential real estate, construction, farmland, non-farm and non-residential real estate, and consumer loans. In addition, the company, through the subsidiaries of its bank, offers investment brokerage services; originates and sells residential mortgages; underwrites and sells title insurance to mortgage loan customers; and sells various insurance products as an agent. As of December 31, 2010, it own ed and operated 24 full-service branch offices that serve customers in Caroline, Essex, Gloucester, Hanover, Henrico, King and Queen, King William, Lancaster, Middlesex, New Kent, Richmond, Northumberland, Southampton, Surry, and Sussex counties, as well as in the city of Colonial Heights. The company was founded in 1910 and is headquartered in Tappahannock, Virginia.

Advisors' Opinion:

• [By Bristol Voss]

  Eastern Virginia Bankshares (Nasdaq: EVBS) is a bank holding company. It received $24 million in financial bailout funds, but it's been released from its agreement with regulators because it raised enough money through private placement. Its $66.7 million market cap puts it in the middle of the group, although its share price is currently the lowest at just over $6. It has a forward P/E of 9.2, but its 1.1% dividend yield is the least of the three. Net income and earnings were down for the most recent quarter, mainly on charge-offs for non-performing and uncollectible assets and other losses.

5 Best Quality Stocks To Invest In Right Now: Durect Corporation(DRRX)

DURECT Corporation, a specialty pharmaceutical company, develops pharmaceutical products and therapies based on its proprietary drug formulations and delivery platform technologies. The company sells ALZET osmotic pumps for animal research use; LACTEL biodegradable polymers, which are used as raw materials in pharmaceutical and medical products; and excipients for pharmaceutical and medical device clients for use as raw materials in their products. Its product pipeline consists of Remoxy, an oral oxycodone gelatin capsule for the treatment of chronic pain under approval stage with the U.S. Food and Drug Administration; POSIDUR, a Phase III clinical stage sustained-release formulation of bupivacaine for the treatment of post-surgical pain; ELADUR, a Phase II clinical stage transdermal bupivacaine patch intended to provide continuous delivery of bupivacaine for up to three days from a single application for pain; and TRANSDUR, a Phase II clinical stage transdermal sufentanil patch intended to provide continuous delivery of sufentanil for up to seven days from a single application for chronic pain. The company?s Phase II clinical stage products comprise ORADUR-based opioid for the treatment of pain; and ORADUR-ADHD for the treatment of attention deficit hyperactivity disorder. It also conducts various research programs covering diseases and medical conditions of the central nervous system, cardiovascular disease, and cancer. The company has strategic agreement with Hospira, Inc.; Alpharma Ireland Limited; Nycomed Danmark ApS; Pain Therapeutics, Inc.; Pfizer Inc; Endo Pharmaceuticals Inc.; and EpiCept Corporation. DURECT Corporation was founded in 1998 and is headquartered in Cupertino, California.

Advisors' Opinion:

• [By Roberto Pedone]

  One under-$10 name that's starting to move within range of triggering a major breakout trade is Durect (DRRX), which develops pharmaceutical products based on its proprietary drug delivery technology platforms. This stock is off to a hot start in 2013, with shares up sharply by 41%.

  If you take a look at the chart for Durect, you'll notice that this stock has been trending sideways for the last two months and change, with shares moving between $1 on the downside and $1.34 on the upside. Shares of DRRX have now started to flirt with that $1.34 major resistance level on Thursday, since the stock has hit an intraday high of $1.35 a share with strong upside volume flows. This could be signaling that shares of DRRX are ready to break out above the upper-end of its recent range and trend substantially higher.

  Traders should now look for long-biased trades in DRRX if it manages to break out above some near-term overhead resistance levels at $1.34 to $1.35 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 679,480 shares. If that breakout triggers soon, then DRRX will set up to re-fill some of its previous gap down zone from May that started near $1.80 a share. If DRRX gets into that gap with volume, then this stock could easily trend north of $2 a share.

  Traders can look to buy DRRX off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at its 50-day moving average of $1.16 a share or its 200-day moving average at $1.11 a share. One can also buy DRRX off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Hot Defensive Stocks To Own Right Now: AEterna Zentaris Inc.(AEZS)

Aeterna Zentaris Inc. operates as a late-stage drug development company specialized in oncology and endocrine therapy. Its lead oncology compounds include perifosine, a PI3K/Akt pathway inhibitor that is in Phase 3 registration trial for refractory advanced colorectal cancer and multiple myeloma; and AEZS-108, a doxorubicin-targeted conjugate in Phase II for the treatment of ovarian, endometrial, castration refractory prostate, and refractory bladder cancer. The company?s lead endocrinology compound, AEZS-130, is an oral ghrelin antagonist in Phase III trial as a diagnostic test for adult growth hormone deficiency. Its pipeline also includes earlier-stage compounds, such as AEZS-112 that is in a Phase I trial in advanced solid tumors and lymphoma, as well as AEZS-120, an anti-cancer vaccine in pre-clinical development. The company was founded in 1991 and is headquartered in Quebec City, Canada.

Advisors' Opinion:

• [By Eric Volkman]

  Aeterna Zentaris (NASDAQ: AEZS  ) has made a significant change in its executive suite and boardroom. David Dodd is now the company's chief executive and a member of its board of directors. He succeeds Juergen Engel. The firm did not provide the reasons for the succession.

• [By Sean Williams]

  High-risk, high-reward suggestions
  There's an undeniably large dollar amount being pledged to cancer research, but, even if a drug gains approval, that's no guarantee that the biotech or pharmaceutical company behind that drug will be a success. Some of the biggest gains (and losses) come from taking a leap of faith based on clinical data, or the approval of one or two drugs or devices within a pipeline. After that, it's all up to the drug or devices' effectiveness, its pricing, and the success of the marketing teams promoting the drug or device. Here are a few high-risk, high-reward names you should be keeping your eye on.

  Exelixis (NASDAQ: EXEL  ) : In November Exelixis had its first drug, known as Cometriq, approved by the Food and Drug Administration to treat metastatic medullary thyroid cancer. Although the market for this disease is pretty small -- somewhere between 500 and 700 people in the U.S. -- the near-tripling in progression-free survival, or PFS, in trials would indicate to me a strong likelihood that it could translate to success in other cancer types. In mid-stage prostate cancer trials, for instance, Cometriq was found to be particularly effective in dealing with bone metastases as a second or third-line treatment. We won't get any additional data until next year on Cometriq, but positive data on the prostate cancer front could be enough to double its share price if the PFS, compared to the placebo, is notably strong. ImmunoGen (NASDAQ: IMGN  ) : In February, Roche�and ImmunoGen received approval for Kadcyla as a secondary treatment for HER2-positive breast cancer. This is ImmunoGen's first drug approval, and it gives the company a chance to showcase what I feel is one of the future pathways of fighting cancer -- its targeted-antibody payload, or TAP, technology. ImmunoGen's TAP technology works by attaching a toxin -- in this case Roche's Herceptin -- to an antibody, and teaching that antibody to release the to
• [By Sean Williams]

  What's coming down the pipeline
  As we saw with the current treatment options, the endometrial cancer pipeline isn't filled with a lot of choices, but they are at least more encouraging than the standard care treatments we've seen over the past three decades.

  Avastin: Surprise: It's Roche's (NASDAQOTH: RHHBY  ) wonder drug yet again! Roche's Avastin is in the process of being tested as a treatment for recurrent endometrial cancer and demonstrated promising results in a mid-stage trial according to the Journal of Clinical Oncology. Avastin, which is an angiogenesis inhibitor (a fancy way of saying it inhibits blood vessel growth), was tested on 52 evaluable patients and delivered a progression-free survival of at least six months for 21 of them. Overall median PFS was 4.2 months, and median overall survival came in at 10.5 months. Don't be surprised if Roche decides to pursue further studies of Avastin in recurrent endometrial cancer with these results.� AEZS-108: Currently in late-stage development by Aeterna Zentaris (NASDAQ: AEZS  ) , a holding in my own portfolio, AEZS-108 is an intravenous treatment composed of a synthetic peptide carrier and doxorubicin that targets Luteinizing Hormone Releasing Hormone-receptor expressing tumors. That series of scientific jargon simply means it targets cancer cells with minimal healthy cell death relative to the current standards of treatment. In mid-stage trials, AEZS-108 delivered an overall response rate of 30.8% and a clinical benefit rate of 74.4%. These figures were enough to get AEZS-108 a special protocol assessment (SPA), which should streamline its approval if these results stay consistent in late-stage studies.

  Your best investment
  With very few investable options to choose from, since many of these treatments are off patent as they're decades old, I'm going to split my decision this week between Roche and Aeterna Zentaris for obvious reasons.

Hot Defensive Stocks To Own Right Now: MEDIFAST INC(MED)

Medifast, Inc., through its subsidiaries, engages in the production, distribution, and sale of weight management and disease management products, and other consumable health and diet products in the United States. The company?s product lines include weight and disease management, meal replacement, and vitamins. It also operates weight control centers that offer Medifast programs for weight loss and maintenance, customized patient counseling, and inbody composition analysis. The company markets its products under the Medifast and Essential brand names, including shakes, appetite suppression shakes, women?s health shakes, diabetics shakes, joint health shakes, coronary health shakes, calorie burn drinks, calorie burn flavor infusers, antioxidant shakes, antioxidant flavor infusers, bars, crunch bars, soups, chili, oatmeal, pudding, scrambled eggs, hot cocoa, cappuccino, chai latte, iced teas, fruit drinks, pretzels, puffs, brownie, pancakes, soy crisps, crackers, and omega 3 and digestive health products. Medifast Inc. sells its products through various channels of distribution comprising Web, call center, independent health advisors, medical professionals, weight loss clinics, and direct consumer marketing supported via the phone and the Web; Take Shape for Life, a physician led network of independent health coaches; and weight control centers. The company was founded in 1980 and is headquartered in Owings Mills, Maryland.

Advisors' Opinion:

• [By Holly LaFon] ast produces, distributes and sells weight and health management products with the brand names Medifast, Take Shape for Life, Hi-Energy Weight Control Centers and Woman�� Wellbeing.

  Its return on assets in the third quarter of 2011 was 19.6%, which has been increasing in the past several years. The average return on assets for the specialty retail industry is 10.48% for the trailing 12 months.

  The company�� total assets amounted to $94 million in 2010, which increased from $62.8 million in 2009. Net income also increased to $19.6 million in 2010 from $12 million in 2009.

  Boston Beer Inc. (SAM)

  Boston Beer Inc. is the largest brewer of handcrafted beers in America. Boston Beer is a growing company that recently saw a large increase in its return on assets. It increased from 19.3% in 2010 to 29.7% in 2011, and was negative as recently as 2008. The average return on assets for the beverages industry in the trailing 12 months is 9.47%.

  In 2011, the company�� total assets increased to $272.5 million from $258.5 million in 2010. Net income increased to $66 million from $50 million.

  Alliances Resources Partners (ARLP)

  Alliance Resources Partners is a coal producer and marketer primarily in the eastern U.S. Its ROA has been increasing since 2008 and increased to 22.5% in 2011 from 21.4% in 2010. The average return on assets for the oil, gas & consumable fuels industry in the trailing 12 months is 24.47%.

  In 2011, its total assets increased to $1.7 billion from $1.1 billion in 2010. Its net income increased to $389 million from $321 million.

  Factset Research Systems Inc. (FDS)

  Factset researches global market trends and develops analytical tools for investors. Of all of GuruFocus��5-star predictable companies, it has the highest return on assets at 27%. ROA has been increasing over the past several years. The average return on assets for the software industry for the trailing 12 m

• [By Ben Levisohn]

  Shares of Nutrisystem have gained 20% to $18.05 at 1:34 p.m., while Weight Watchers (WTW) has risen 3.6% to $39.42. Medifast (MED), however, has dropped 1.9% to $24.94.

• [By Monica Gerson]

  Medifast (NYSE: MED) is expected to post its Q4 earnings at $0.36 per share on revenue of $80.83 million.

  Full House Resorts (NASDAQ: FLL) is estimated to post a Q4 loss at $0.06 per share on revenue of $33.24 million.

• [By Robert Hanley]

  Consumer-goods marketer Blyth (NYSE: BTH  ) , owner of weight-loss upstart ViSalus, has been in the doghouse lately, sitting near a 52-week low due to poor results in its weight-loss unit.� Despite a large potential customer base of overweight people worldwide, the industry has had difficulty generating growth lately, with data provider Marketdata Enterprises estimating that industry sales rose only 1.7% in 2012.� However, Blyth caught a bid in late October from a proposed combination with marketing-services provider CVSL, indicating that some people see incremental value in Blyth's businesses.�So, should small investors bet on this small cap or should they focus their attention on Weight watchers International (NYSE: WTW  ) and Medifast (NYSE: MED  ) instead?

Hot Defensive Stocks To Own Right Now: AMR Corp (AAMRQ.PK)

AMR Corporation (AMR), incorporated in October 1982, operates in the airline industry. The Company�� principal subsidiary is American Airlines, Inc. (American). As of December 31, 2011, American provided scheduled jet service to approximately 160 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. AMR Eagle Holding Corporation (AMR Eagle), a wholly owned subsidiary of AMR, owns two regional airlines, which do business as American Eagle - American Eagle Airlines, Inc. and Executive Airlines, Inc. (collectively, the American Eagle carriers). American also contracts with an independently owned regional airline, which does business as AmericanConnection (the AmericanConnection carrier). As of December 31, 2011, AMR Eagle operated approximately 1,500 daily departures, offering scheduled passenger service to over 175 destinations in North America, Mexico and the Caribbean.

American, AMR Eagle and the AmericanConnection airline served more than 250 cities in approximately 50 countries with, on average, 3,400 daily flights and the combined network fleet numbered approximately 900 aircraft as of December 31, 2011. American Airlines is also a founding member of the oneworld alliance, which includes British Airways, Cathay Pacific, Finnair, LAN Airlines, Iberia, Qantas, JAL, Malev Hungarian, Mexicana, Royal Jordanian and S7 Airlines. Together, oneworld members serve 750 destinations in approximately 150 countries, with about 8,500 daily departures. American is also one of the scheduled air freight carriers in the world, providing a range of freight and mail services to shippers throughout its system onboard American�� passenger fleet.

To improve access to each other�� markets, American has established marketing relationships with other airlines and rail companies. As of December 31, 2011, American had marketing relationships with Air Berlin, Air Pacific, Air Tahiti Nui, Alaska Airlines , British Airways, Cape Air, Cathay Pacific, China Eastern ! A! irlines, Dragonair, Deutsche Bahn German Rail, EL AL, Etihad Airways, EVA Air, Finnair, GOL, Gulf Air, Hawaiian Airlines, Iberia, Japan Airlines (JAL), Jet Airways, JetStar Airways, LAN (includes LAN Airlines, LAN Argentina, LAN Ecuador and LAN Peru), Niki Airlines, Qantas Airways, Royal Jordanian, S7 Airlines, and Vietnam Airlines.

American has established the AAdvantage frequent flyer program (AAdvantage). AAdvantage members earn mileage credits by flying on American, American Eagle and the AmericanConnection carrier or by using services of other participants in the AAdvantage program. Mileage credits can be redeemed for free, discounted or upgraded travel on American, American Eagle or other participating airlines, or for other awards. American sells mileage credits and related services to other participants in the AAdvantage program. There are over 1,000 program participants, including a credit card issuer, hotels, car rental companies, and other products an d services companies in the AAdvantage program. As of December 31, 2011, AAdvantage had approximately 69 million total members.

The Company competes with Alaska Airlines (Alaska), Delta Air Lines (Delta), Frontier Airlines, JetBlue Airways (JetBlue), Hawaiian Airlines, Southwest Airlines (Southwest) and AirTran Airways (Air Tran), Spirit Airlines, United Airlines (United) and Continental Airlines (Continental), US Airways and Virgin America Airlines.

Advisors' Opinion:

• [By Insider Monkey]

  Last but not the least is US Airways Group (LCC), in which Y/Cap slightly increased its position, now owning around $7.9 million. U.S. Airways is currently on the minds of many investors, mainly due to its plans to merge with American Airlines parent AMR Corp (AAMRQ.PK). While European regulators approved the merger, the U.S. Department of Justice put a spoke in the wheel, and is trying to block the move. The companies filed a motion to the court to set the trial date for November 12. Amid these actions, U.S. Airways and American Airlines prolonged the outside date at which one of the companies can terminate the proposed merger.

• [By Tom Sandlow]

  Synopsis: As a result of the terms of its bankruptcy and the proposed merger with U.S. Airways (LCC), an equity investment in AMR Corp (AAMRQ.PK) is equivalent to a series of derivatives on LCC. At current market values, AAMRQ is undervalued by approximately 40%. It is possible to create an arbitrage position that should capture this pricing differential over the next 6 months.

Hot Defensive Stocks To Own Right Now: Discovery Minerals Ltd (DSCR)

Discovery Minerals Ltd., formerly Dhanoa Minerals Ltd., incorporated on July 11, 2005, is an exploration-stage company. The Company�� principal business is the acquisition and exploration of menial resources located in the United States, Central and South America. The Company operates in only one business segment, namely natural resource exploration, mining and recovery.

The Company does not own any properties that contain mineral reserves that are economically recoverable. The Company's projects include Turquoise Mountain Project and Yukon Mining Project.

Advisors' Opinion:

• [By Peter Graham]

  Small cap mining stocks Discovery Minerals Ltd (OTCMKTS: DSCR), Zinco Do Brasil Inc (OTCMKTS: ZNBR) and Amalgamated Gold and Silver Inc (OTCMKTS: BCHS) have been getting some extra attention lately as one stock surged last Friday while the other two are or have been in the past, the subject of paid promotions. It goes without saying though that small cap mining stocks tend to be riskier than your average stock. But do these three small cap mining stocks have what it takes to produce a mother lode for investors? Here is a deeper dig into all three:

  Discovery Minerals Ltd (OTCMKTS: DSCR) Is Branching Out Into Mining Apps

  Small cap Discovery Minerals Ltd is a production stage company formed to acquire and develop natural resource properties. Activities include gold, precious metals and petroleum minerals, including rare earth minerals production and sales. In addition, the company has initiated a new program to evaluate undervalued assets, including clean tech and alternative energy investments, for potential addition to its portfolio. On Friday, Discovery Minerals Ltd surged 25% to $0.001 for a market cap of $1.66 million plus DSCR is down 73% over the past year and down 97.1% over the past five years according to Google Finance.

Hot Defensive Stocks To Own Right Now: Veolia Environnement(VE)

Veolia Environnement S.A., together with its subsidiaries, provides environmental management services to individuals, public authorities, and industrial and commercial services customers worldwide. It operates in four segments: Water, Environmental Services, Energy Services, and Transportation. The Water segment offers water and wastewater services, including the management and operation of large-scale and customized drinking water plants, wastewater decontamination and recycling plants, drinking water distribution networks, and wastewater collection networks; and provision of call centers and billing services. The Environmental Services segment provides waste management and logistical services, which include waste collection, waste processing, cleaning of public spaces, maintenance of production equipment, treatment of polluted soil, and management of waste discharge at industrial sites. The Energy Services segment offers a range of energy management services comprising o peration of heating and cooling networks, decentralized energy production, thermal and multi-technical services, industrial utilities, installation and maintenance of production equipment, integrated facilities management, and electrical services on public streets and roads; and provides heating systems maintenance services, plumbing and renewable energy services, and meter-reading services. The Transportation segment operates various bus networks, suburban trains, tramways, metros, and ferries, as well as offers customized transportation-on-demand services. This segment also provides intercity and regional passenger transportation, infrastructure management and airport services, and transportation management services. The company was formerly known as Vivendi Environnement and changed its name to Veolia Environnement S.A. in April 2003. Veolia Environnement S.A. was founded in 1853 and is headquartered in Paris, France.

Advisors' Opinion:

• [By Benjamin Shepherd]

  The first is to focus on infrastructure companies that lay the groundwork for easier water access, such as France-based Veolia Environment (NYSE: VE).

Spirit Realty Sets Pro Rata Q3 Dividend

With Spirit Realty Capital (NYSE: SRC  ) set to merge with Cole Credit Property Trust II in the third quarter, the commercial real estate REIT announced yesterday it would pay a pro-rated dividend for the third quarter based on a quarterly payout of $0.3125 per share, the same rate it paid last quarter. Spirit only went public last September and began paying dividends in January.

The board of directors said the quarterly dividend is payable to shareholders of record as of 5:00 p.m. New York time on the day before the merger. They will receive $0.0034 per share per day from July 1, the first day of the third quarter, through the day before the merger. Payment of the pro-rated dividend is contingent upon the closing of the deal.

Spirit Realty Capital anticipates that the surviving corporation will declare a dividend for the remainder of the third quarter following the closing of the merger. The full quarterly payout would equate to a $1.25-per-share annual dividend, yielding 7% based on the closing price of Spirit Realty Capital's stock on July 1.

link

Ashford Hospitality to Spin Off Portfolio of 8 Luxury Hotels

Seeking to create clarity for investors by creating a company focused solely on the luxury hotel segment, Ashford Hospital Trust (NYSE: AHT  ) announced yesterday it was spinning off eight of its properties into a new real estate investment trust to be called Ashford Hospitality Prime.

Where Ashford Trust services all segments of the hospitality industry, the new entity will target the luxury, upper-upscale, and upscale hotels that are expected to generate RevPAR at least twice the national average, or about $130 and higher. 

RevPAR, or revenue per available room, is a key performance metric in the hotel industry that's calculated by multiplying a hotel's average daily room rate by its occupancy rate, excluding ancillary revenues generated from food, beverages, parking, and the like.

The initial portfolio will consist of the Hilton La Jolla Torrey Pines, Capital Hilton in Washington, D.C., Marriott Plano Legacy Town Center, Seattle Marriott Waterfront, Courtyard San Francisco Downtown, Courtyard Seattle Downtown, Courtyard Philadelphia Downtown, and Renaissance Tampa International Plaza. For the year ended Dec. 31, 2012, the initial Ashford Prime hotels had RevPAR of $140.

Ashford Hospitality Trust Chairman and CEO Monty J. Bennett said: "Over the past year, we have made a concerted effort to improve our transparency and communications with the investor and analyst community regarding our historical total stockholder return, our debt management strategy, and asset performance by debt pool.  After analyzing several strategies to maximize stockholder value, the board decided to pursue a spin-off of Ashford Prime."

Post-spinoff, the portfolio of remaining properties comprising Ashford Trust will look similar to how it looks today, but with 115 hotels sporting a 2012 RevPAR of approximately $95, which is only $4 less than the pre-spinoff portfolio RevPAR. Also, the leverage level for Ashford Trust is expected to reduce slightly post-spinoff. 

A conservative capital structure was also one of the key considerations in constructing Ashford Prime, which will emphasize low-leverage over time, with a target net debt and preferred equity/EBITDA level of 5.0 or lower.

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Ashford Trust will spin off an 80% interest in the portfolio, retaining 20% for itself. It will continue to target all levels of the hospitality industry except for that area represented by Prime. The transaction will take the form of a taxable special distribution expected to be composed of common stock in Ashford Hospitality Prime that will occur sometime toward the end of the third quarter.

In addition to the eight initial properties, Prime will also enter into option agreements with Ashford Trust to acquire the Pier House Resort in Key West, Fla., and the Crystal Gateway Marriott in Crystal City, Va. Ashford Prime will have the right to exercise the Marriott option for a period of 12 months following a six-month lockout, while the Pier House Resort option may be exercised for a period of 18 months after the date of the distribution. 

Ashford Trust will also enter into a right-of-first-offer agreement with Ashford Prime regarding certain other hotels that it currently owns that satisfy the investment criteria of Ashford Prime. 

Bank of America Merrill Lynch served as financial advisor to Ashford Trust in connection with the spinoff.

If You're Not Haggling, You're Wasting Money

Casey Rodgers/Invision for History/AP My anniversary is coming up soon. And I've stalked my wife on Pinterest looking for gift ideas. Pinterest is the perfect place to find gift ideas for us clueless guys. And I've found the perfect gift. The problem is that it's expensive. Even eBay (EBAY) is pricey for the designer sunglasses that she wants. Then a brilliant idea hit me: I should ask the seller on eBay for a discount. The online retailing giant opened a proverbial can of worms when it started allowing sellers to add the "or best offer" option to auction listings. Even though this listing didn't allow for haggling from its "buy it now" option, I thought I would try anyway. So I emailed the seller, asking if the listing price on eBay was the best it could offer. I had nothing to lose. The worst thing it could tell me was no. And the seller had already beaten the best price I could find elsewhere by more than 10 percent. I was pleasantly surprised when the retailer lowered the price by an additional 15 percent and threw in free shipping. This made me wonder how many other opportunities for discounts I was missing. All it takes is a little creativity and negotiation skills. Here are a few ideas. Retail Stores Are Tough to Negotiate with for Customers My friends gave me a crash course in bartering when I traveled to Mexico in college: If a store has air conditioning, the retailer freezes its prices as well. It's hard to negotiate with retail stores. They have a lot of overhead and often price their wares in order to earn a specific profit margin. But it isn't impossible to negotiate. One of the best ways that you can open the conversation is to simply ask, "Is that the best price you can do?" This is a very powerful question. Retailers may surprise you by offering you a discount simply by asking for it. Call About Cable, Phone and Internet Service Cable and satellite TV providers are notorious for offering deep discounts and freebies when you initially sign up. But the price typically skyrockets after the introduction period expires. You can save a bundle on a your package by calling and requesting a discount. "A quick call to your cable, home phone or Internet provider may uncover a new promotion that will save you big bucks," says Andrea Woroch, consumer and money-saving expert with Kinoli. "Some may provide a discount for going paperless or setting up automatic payments. So ask what's available or threaten to switch providers." Walking away has been a popular negotiating tactic that consumers have honed while buying cars, but you can use this tactic with a lot of online and brick and mortar retailers as well. Craigslist Is a Breeding Ground for Discounts I'm not sure if anyone pays the full listing price for items on Craigslist. Be sure to offer less than the asking price and be prepared to haggle. I recently bought a road bicycle for a steep discount, saving hundreds of dollars, by bringing cash and simply asking if the seller was open to a lower price. Another great technique is to pay attention to how long an item has been on Craigslist or eBay. This could indicate that a seller is more inclined to negotiate to move an item that has been lingering. Use Negotiating Tactics Seen on TV Television shows like "Pawn Stars" and "American Pickers" have shown great tips to increase your negotiating prowess. The first person to recommend a price for an item is at a disadvantage. One of the best techniques is to make the other person start. Of course, this doesn't apply to an item that has a price tag on it. Make sure that you aim low and leave wiggle room to meet in the middle. Have you noticed how the two parties on these shows eventually gravitate to the middle? There is a fine line between throwing out an insultingly low price and one that is too high, which will leave money on the table that should have been in your pocket. Don't forget that there are a lot of other costs that comprise a retailer's selling price. Many people on "Pawn Stars" are insulted when they are offered half of the retail value because they forget that the shop has to resale the item as well as pay its employees' salaries and shop overhead. Retailers may offer you discounts and surprise you simply by asking for them. Are you leaving money on the table by not asking for a better price? You may be surprised when you start practicing your negotiating skills. Do you routinely ask for a discount? Do you try and score a discount even at brick and mortar stores? What are some of your favorite techniques to get the negotiations going?

Yahoo's de Castro got $58M for 15 months on job

Henrique de Castro's 15 months as Yahoo's chief operating officer may have ended on a sour note, but it was sweetened by a severance package valued at nearly $58 million.

All but about $1 million of de Castro's severance was based in the value of his equity award in Yahoo, which began appreciating after former Google colleague Marissa Mayer joined the company in July 2012. He became Mayer's first big hire just four months later. But in a letter to employees following de Castro's Jan. 16 ouster, Mayer said she "made the difficult decision" that he should leave.

His exit package outpaced Mayer's 2013 compensation, valued at $24.9 million. She gained an additional $21.2 million from vested shares, Yahoo said in a preliminary proxy filing Wednesday.

De Castro, a top Google sales exec, was hired to revive Yahoo advertising. His high-priced, short-lived tenure has already come under fire.

Last month, shareholders filed suit against Yahoo directors and de Castro, alleging that the board wasted corporate assets and breached its fiduciary duty by failing to understand how much compensation de Castro was entitled to. The company says in its preliminary proxy that it will file a motion to dismiss the case.

In defense of de Castro's hiring and sign-on package, Yahoo said in Wednesday's filing that its board believed he "had a unique set of highly valuable skills and experiences that would be key to returning the company to long-term growth as success."

The sharp 2012-2013 gain in Yahoo share price boosted the value of de Castro's Yahoo stake from $17 million to $58 million, the company said. Much of Yahoo's gains have come on the soaring value of its 24% stake in Alibaba, which is planning an initial public stock offering that could value the Chinese e-commerce giant at $200 billion.

Yahoo earlier said de Castro's job offer had costs with "significant compensation value" to offset potential compensation he forfeited when he left Google. His exit package from Yahoo ! included "negotiated protection'' in the event he was terminated by Yahoo. His sign-on packaged included a "make-whole" package then valued at $20 million.

Follow Strauss on twitter @gbstrauss.

Legal costs hurt Bank of America, shares dip on…

Bank of America swung to a $276 million first-quarter loss Wednesday as revenue declined while the bank continued to grapple with legal costs stemming from the financial crisis.

Shares of the nation's second-largest bank fell more than 2.5% to $15.97 shortly after U.S. financial markets opened.

The Charlotte, N.C.-based bank said revenue for the quarter slipped to $22.76 billion — edging the $22.33 billion forecast of Wall Street analysts surveyed by Thomson Financial Network.

The bank said it lost 5 cents a share. A year ago in the same period, it earned 10 cents a share or $1.5 billion.

Bank of America's adjusted earnings, not counting one-time charges, were 35 cents a share. That topped the 27-cent-per share projection of financial analysts surveyed by FactSet.

The financial results included a pre-tax expense of $6 billion, or approximately 40 cents a share after tax, to cover litigation costs as the bank moved to resolve mortgage-related litigation fallout from the financial crisis that began in 2007 and other issues.

"The cost of resolving more of our mortgage issues hurt our earnings this quarter," said CEO Brian Moynihan in a statement issued with the earnings results. But in a later conference call with Wall Street analysts, he said improving financial results helped offset the losses.

"We feel that we're better positioned" for the rest of the year, CFO Bruce Thompson told the analysts.

Bank of America in March agreed to pay $9.3 billion to settle claims it marketed risky mortgages to Fannie Mae and Freddie Mac. At the same time, the bank reached a $15 million settlement with the New York State Attorney General's office over its 2009 purchase of Merrill Lynch.

And on April 9, the bank also agreed to pay $772 million in refunds and fines to settle allegations by the Consumer Financial Protection Bureau and the Office of Comptroller of the Currency that it had bilked millions of customers with deceptive credit card practices. The agreement was! "in line with what we expected," bank spokesman Tony Allen said last week.

Bank officials told Wall Street analysts the $6 billion in litigation costs included a boost in reserves for pending mortgage-related matters not yet publicly disclosed.

Excluding litigation expenses, expenses in the bank's legacy mortgage-servicing division dropped by $1 billion compared with the first quarter of 2013.

Thompson said liquidity and capital ratios "improved to record levels," while credit quality also improved.

The bank said it repurchased roughly 87 million shares from investors during the quarter for approximately $1.4 billion at an average price of $16.63 per share.

Additionally, the earnings report included previously announced plans to raise Bank of America's quarterly stock dividend to 5 cents per share, starting in this year's second quarter.

4 Stocks Making Moves

The following video is from Tuesday's Investor Beat, in which host Chris Hill and analysts Jason Moser and Matt Koppenheffer dissect the hardest-hitting investing stories of the day.

Dollar General's (NYSE: DG  ) first-quarter profits rose rose 3%, but the retailer cut guidance for the full year. Business market software maker ExactTarget (NYSE: ET  ) rose more than 50% after Salesforce.com (NYSE: CRM  ) agreed to buy the company for more than $2.3 billion. Zynga (NASDAQ: ZNGA  ) held firm after shares tanked on Monday in the wake of the company announcing it's cutting 18% of its staff. And IBM (NYSE: IBM  ) buys a company to better compete in the cloud computing space. In this installment of Investor Beat, our analysts discuss four stocks making big moves.

Zynga's post-IPO performance has been dreadful, and investors are beginning to wonder if it's "game over" for this newly public company. Being so closely tied to the world's largest social network can be a blessing and a curse. You can learn everything you need to know about Zynga and whether it's a buy or a sell in our new premium research report. Don't even think about picking up shares before you read what our top analysts have to say about Zynga. Click here to access your copy.

The relevant video segment can be found between 2:21 and 5:21.

International Business Machines Corp. Earnings: What to Expect Wednesday

On Wednesday, IBM (NYSE: IBM  ) will release its quarterly report, and investors will be watching closely to see if the tech giant can finally get its sales moving higher after a long stretch of sluggishness. Although Cisco Systems (NASDAQ: CSCO  ) has faced some of the same challenges as IBM, Oracle (NYSE: ORCL  ) has found ways to find growth. IBM needs to work on getting its share of the growing cloud-computing and data-analytics pie in order to keep itself moving in the right direction.

IBM has a history of being ahead of the curve in technology, moving away from its historic hardware focus in a timely fashion before the bottom fell out of that market. Yet even as it has aimed to capture higher-margin services and provide value-added information for its customers, IBM nevertheless has had to deal with extensive competition from Cisco, Oracle, and other tech giants seeking to offer more integrated products. For its part, IBM needs to use its enterprise focus to its best advantage, reaching out to as many potential customers as possible. Let's take an early look at what's been happening with IBM over the past quarter and what we're likely to see in its report.

Source: Alfred Lui via Flickr.

Stats on IBM

Analyst EPS Estimate	$2.54
Change From Year-Ago EPS	(16%)
Revenue Estimate	$22.93 billion
Change From Year-Ago Revenue	(2.1%)
Earnings Beats in Past 4 Quarters	2

Source: Yahoo! Finance.

Source: IBM.

When will IBM earnings bounce back?
Analysts have slashed their views on IBM earnings in recent months, cutting their first-quarter estimates by more than 20% even as they hold out hope that revisions downward for the full 2014 year will only be minimal. The stock has held its own, rising 6% since early January.

IBM's fourth-quarter earnings report showed the recent disconnect between the company's revenue and earnings. A plunge in hardware sales sent IBM's overall revenue down 5% from the year-ago quarter, even as net income came in better than most had expected. As IBM moves away from poor-performing hardware toward higher-margin services, shareholders will likely see even more downward pressure on sales -- but if profit margins improve, the boost to the bottom line should be substantial.

IBM made a big move in that direction during the quarter, announcing in January that it would sell its x86 server business to Lenovo for $2.3 billion. IBM isn't giving up entirely on servers, with mainframes and servers using proprietary IBM processors still giving the company hardware with which it can compete against Oracle's Sun products and other rivals. But the move tracks with what Oracle and Cisco Systems have done in emphasizing IT services.

Meanwhile, IBM is also pushing forward with multiple initiatives. Its Smarter Planet project helps businesses and governments use available data to make projections on a wide range of issues, ranging from infrastructure to marketing. IBM also announced a partnership with a French automaker to collect information for analysis that IBM hopes will improve safety and perhaps lead to automated driving. Perhaps most exciting was its BlueMix service, on which it's collaborating with a well-known business services company to use location-based data to gather improved analytics.

In the IBM earnings report, watch to see how the company keeps moving forward on the cloud-computing and big-data fronts. Even if revenue continues to sag, it's important for IBM to reignite its earnings growth. Otherwise, its rivals might catch up and surpass the tech giant and make it difficult for IBM to recapture its leadership position.

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Judge nixes Nissan’s $1B New York City taxi plan

Plans to flood New York's streets with the Taxi of Tomorrow hit a roadblock Tuesday when a judge ruled that the city's Taxi and Limousine Commission went too far when it ordered operators to buy a only a single brand of vehicle.

The big loser in this case is Nissan, which has specially equipped its NV 200 as the "Taxi of Tomorrow" in a deal worth $1 billion over 10 years.

In an action brought by taxicab operators, state Supreme Court Justice Shlomo Hagler in Manhattan says the commission can't require the purchase of a particular vehicle under the city charter.

Nissan had gone to great lengths to try to outfit the perfect taxicab, with germ-killing seat upholstery, rear-seat video, big sliding doors and "low-annoyance" horns. Plus, the taxis are far more fuel efficient than the Ford Crown Victorias they replace. But at $29,700, the taxis are pricey.

Nissan issued a statement saying it is undeterred.

"We are disappointed in the court's decision, but it will not prevent our plan to start upgrading the NYC taxi fleet with the Nissan Taxi of Tomorrow at the end of the month," the statement says. "Given the specific NYC taxi research and development that we have conducted, we are confident that the Nissan taxi provides optimal safety, comfort and convenience for passengers and drivers alike. We are evaluating options for next steps regarding the exclusivity contract."

The court ruling opens the door to a raft of other automakers, many of whom already have footholds in the New York taxi fleet.

One is Ford, which just unveiled the 2014 version of its Transit Connect taxi. It has been scratching to stay in the New York market, where Transit Connects and Escape Hybrid SUVs are already part of the mix.

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"Ford has consistently taken the position that a competitive market is in the best interest of th! e taxi fleet and their customer," it said in a statement. "Ford has a proven track record of developing products that meet the needs of taxi fleets across the country and in New York City through continually improving our products in response to customer demands."

Contributing: The Associated Press

Cramer on Buffett: 'His luck's about to change'

Jim Cramer is coming to Warren Buffett's defense.

This headline in The New York Times caught Cramer's eye: "The Oracle of Omaha, lately looking a bit ordinary."

The story cited a new statistical study by Salil Mehta that compared Berkshire Hathaway's performance to the benchmark S&P 500 stock index.

While Buffett's company has beaten the market in 38 of the past 48 years, it has underperformed the S&P in four of the past five years. Mehta calculates there's only a 3% chance Buffett is suffering through a period of bad luck.

On Tuesday night's "Mad Money," Cramer shot back. "Whenever I see an article that criticizes the stock holdings of Warren Buffett's Berkshire Hathaway, I know it's time to break out his portfolio and look it over for some terrific ideas."

Cramer believes that "just when it starts to seem like Buffett may have lost his touch, that's when his bets really start to pay off."

In addition, Cramer said the tide is turning on Wall Street. "This piece comes out right at a moment when momentum funds are falling by the wayside and what's hot has definitely become what's not."

Here's his take on Berkshire's top 10 publicly disclosed U.S. stock holdings:

Wells Fargo: The bank has a "truly fortress balance sheet." If the stock gets hit by Friday's earnings report, Cramer thinks Buffett might buy more and "maybe you should, too."

Coca-Cola: "I'm not a fan" as carbonated drink sales drop in the U.S., but it's still growing oversees and has a "terrific" dividend "so it's holding up fine."

American Express: "Who among us doesn't wish that we own this juggernaut."

IBM: "I think 2015 is when IBM will produce both better margins and better revenues. Buffett's a very patient man."

Procter & Gamble: "I know this company's trying to get back on its game," but it's buying back stock and increased its dividend, "keeping you enticed while management figures out how to right the ship, which they will."

Exxon Mobil: The stoc! k's decline has reversed and "Exxon in the end is going to stay extremely lucrative even if it hasn't been able to grow production." It also has the best stock buyback "in the land."

Wal-Mart: The retailer, "while not a favorite, has at least stabilized its decline. ... You could do a lot worse."

US Bancorp: "A personal favorite of mine. ... Ever notice how you never hear about these guys getting in trouble? That's because they don't."

DIRECTV: "In a land of scarce media properties, here's one of the most coveted names around."

DeVita HealthCare: "This dialysis play is one of the best baby boomer stories out there."

(DIRECTV and DeVita were bought for Berkshire by the company's new portfolio managers, not by Buffett himself.)

Cramer's conclusion: "I think anyone looking for 10 nonmomentum, total-value ideas would be hard-pressed to find many better than this portfolio." It's the "antidote to the madness infecting the market, or at least the Nasdaq right now."

"Warren Buffett: I'm a buyer, not a seller. I think this year his luck's about to change."

Times change, of course. In February 2009, just before the U.S. stock market hit its financial crisis low, Cramer told investors not to follow Buffett's lead because they will not profit "within the time frame they care about."

He also criticized Buffett's "Buy American" New York Times op-ed the previous October. Stocks continued to plunge in the following months, so Cramer said, "Those who bought America that day are feeling ... well, downright un-American. Or at least they're feeling poorer."

Since then, Buffett has acknowledged his call to buy stocks was a bit early and Cramer has acknowledged that Buffett had the right idea.

Top Defensive Companies To Buy Right Now

Disclosure: Jim Cramer's charitable trust owns shares of IBM and Wells Fargo.

MORE: Is Warren Buffett losing his touch?!

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15 Oil and Gas Stocks to Sell Now

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This week, the overall grades of 15 oil and gas stocks are lower, according to the Portfolio Grader database. Each of these rates a “D” (“sell”) or “F” overall (“strong sell”).

Crescent Point Energy Corp.’s () rating falls this week to an F (“strong sell”), down from last week’s D (“sell”). In Portfolio Grader’s specific subcategories of Earnings Revisions, Earnings Surprise, Cash Flow and Margin Growth, CPG also gets F’s. Shares of the stock are changing hands at twice the rate they were a week ago. The stock currently has a trailing PE Ratio of 99.10. .

This week, Golar LNG Partners () falls to a D (“sell”), worse than last week’s grade of C (“hold”). Golar LNG Partners owns floating storage and regasification units and liquefied natural gas carriers. .

This week, Kinder Morgan, Inc. Class P () drops from a D to an F rating. Kinder Morgan is a pipeline transportation and energy storage company. The stock’s trailing PE Ratio is 28.50. .

Cosan Limited Class A’s () rating weakens this week, dropping to an F versus last week’s D. Cosan is a fully integrated company in the renewable energy and infrastructure segments in Brazil. The stock gets F’s in Cash Flow and Margin Growth. The stock has a trailing PE Ratio of 38.50. .

Goodrich Petroleum Corporation () earns a D this week, falling from last week’s grade of C. Goodrich Petroleum explores, develops, produces and acquires oil and natural gas properties. In Earnings Growth, Earnings Revisions, Equity and Cash Flow the stock gets F’s. As of April 11, 2014, 29.3% of outstanding Goodrich Petroleum Corporation shares were held short. .

EXCO Resources, Inc. () experiences a ratings drop this week, going from last week’s D to an F. EXCO Resources is an oil and natural gas company involved in the exploration, exploitation, development and production of onshore North American oil and natural gas properties. The stock gets F’s in Earnings Surprise, Equity and Cash Flow. As of April 11, 2014, 15.5% of outstanding EXCO Resources, Inc. shares were held short. The stock’s trailing PE Ratio is 55.80. .

The rating of Calumet Specialty Products Partners, L.P. () slips from a D to an F. Calumet Specialty Products produces hydrocarbon products in North America. The stock receives F’s in Earnings Growth, Earnings Momentum and Earnings Revisions. Cash Flow and Margin Growth also get F’s. Shares of the stock have been changing hands at an unusually rapid pace, twice the rate of the week prior. .

Chevron Corporation () is having a tough week. The company’s rating falls from a D to an F. Chevron is an integrated energy company with operations in countries located around the world. Shares of the stock have been trading at an exceptionally rapid pace, up twofold from the week prior. .

Slipping from a C to a D rating, Plains All American Pipeline, L.P. () takes a hit this week. Plains All American Pipeline is involved in interstate and intrastate crude oil pipeline transportation and crude oil terminalling storage activities. .

TransCanada Corporation () earns an F this week, moving down from last week’s grade of D. TransCanada develops and operates energy infrastructures, including natural gas pipelines. The stock currently has a trailing PE Ratio of 28.00. .

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Enbridge () is having a tough week. The company’s rating falls from a D to an F. Enbridge is in the business of transportation and distribution of crude oil and natural gas primarily in Canada and the United States. The stock gets F’s in Earnings Growth, Earnings Momentum and Cash Flow. The trailing PE Ratio for the stock is 82.40. .

StealthGas () gets weaker ratings this week as last week’s C drops to a D. StealthGas offers marine transport services for liquefied petroleum gas producers and users. The stock gets F’s in Earnings Growth, Earnings Revisions, Earnings Surprise and Cash Flow. .

Ultrapar Participacoes S.A. Sponsored ADR’s () rating weakens this week, dropping to an F versus last week’s D. Ultrapar is engaged in the fuel distribution and chemical businesses in Brazil. .

Gevo () earns an F this week, moving down from last week’s grade of D. Gevo operates as a technology development company for biobutanol. The stock gets F’s in Equity, Cash Flow and Sales Growth. As of April 11, 2014, 10.8% of outstanding Gevo shares were held short. .

PDC Energy () experiences a ratings drop this week, going from last week’s C to a D. PDC Energy is an oil and gas company with drilling and production operations in the Rocky Mountains, the Appalachian Basin and Michigan. The stock gets F’s in Earnings Revisions and Cash Flow. As of April 11, 2014, 11.3% of outstanding PDC Energy shares were held short. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

APL: Taxes and the Toll-Road Business

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Master Limited Partnerships are a part of the oil and gas and energy industry that has been exploding in recent years, says Matthew Skelly, Head of Investor Relations at Atlas Pipeline Partners, who explains what they are and how they relate to federal and state taxes.

Master Limited Partnerships (MLPs) came around in the early 1980s. The government created this form of company to foster energy infrastructure build-out in this country. Master Limed Partnerships were created as a way to not charge any of these companies corporate income tax, which, in turn, allowed the companies to take their cash flow and pay investors, and reinvest, and build pipelines, plants, as well as to produce oil and gas.

That's kind of how this whole asset class came about. Master Limited Partnerships don't pay corporate income tax. That way, these MLPs essentially pass the savings through to the distribution, or dividend; that's how MLPs are able to pay such high yields on their units (stocks).

There were 21 new MLPs created in 2013 alone. There are probably between 80 and 90 different MLPs currently that are publically traded. So the choices for MLP investors keep getting wider and wider as a direct result of the energy resurgence in this country.

Companies in the pipeline portion of the energy sector are the types of businesses you traditionally think of, when you think of MLPs. These MLPs follow a "toll-road business model." Much like with a toll on a highway, the more cars that pay the fee, the more cash is raised. Pipelines are very much the same way, volumes of natural gas and liquids flow through pipe, and the Pipeline MLP just collects a fee from the drilling customers.

And that's what you want in an MLP. You want steady, predictable cash flow, because the MLP is on the hook to pay a distribution to their investors every quarter. People invested in MLPs are invested because of the distribution, because of the yield (not to mention a potential rising stock price!). It is great income, so you want to make sure that cash flow is as predictable as possible, because of that distribution that is expected every quarter.

However, when it comes to investing in MLPs, there are some state and federal tax considerations that come into play. MLPs are considered partnerships, not corporations, so an investor will get a K-1 tax form at the end of the year. It's just one extra form that the investor files with his federal taxes, basically saying that he's part of a partnership. It will show how much an investor has gotten in distributions, and that is usually considered a return of capital against his purchase price, provided the cost basis has not gone to zero (cost basis is reduced by the distribution). Every time an investor gets a dividend, or distribution, his cost basis decreases from what he paid in. Basically, it's tax-deferred and an investor doesn't really have a tax obligation until his basis gets to zero, which could be for quite some time.

In regards to state taxes, the MLP investor is getting cash flow from various states in the form of a distribution, or dividend, and therefore, he/she has to file state taxes in the states in which the MLP operates. This can be cumbersome if invested in a large MLP that operates in multiple states.

However, our midstream MLP only operates in just three states. Atlas Pipeline Partners (APL) only operates in Oklahoma, Kansas, and Texas. And Texas has no state taxes. So, an Atlas Pipeline investor may only have to file, potentially, in Oklahoma and Kansas.

Please note neither Atlas Pipeline Partners nor Matthew Skelly gives tax advice and this article should not be taken as such. It is for informational purposes only. Please contact a tax advisor as MLPs may not be suitable for all investors.

Click here to learn more about Atlas Pipeline Partners...

4 Gift Ideas for Mom and the Stocks Behind Them

With Mother's Day just around the corner on May 12, most of us are still in shopping mode for the moms in our lives. Below are four gift ideas that may help get you started in your search for the perfect gift, each from companies whose stock looks like an attractive investment at current levels. While we each want to find something special and unique for Mom, these companies offer gifts we can all benefit from.

Barnes & Noble (NYSE: BKS  )  
With the company's recent announcement that its Nook tablet will now include the full complement of Google Android applications, the device looks more attractive than ever. With a starting price of $199, the Nook is competitive with other similarly equipped tablets, while offering one of the best displays on the market. As for the stock, while Google may be the real winner, B&N should be reinvigorated by this new partnership and become more competitive in the tablet market. Furthermore, with the company potentially up for sale, the stock has the potential to pop from here.

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Source: Barnes & Noble.

Apple (NASDAQ: AAPL  )
For ease of use and simplicity, it is hard to beat an Apple iPad Mini for Mom on her special day. Starting at $329, the iPad Mini is more pricey than the Nook, but if Mom is already a part of the Apple ecosystem, the ease with which she will be able to add the device to her daily routine is impossible to match. As an investment, while Apple shares have taken a beating over the past few quarters, the combination of the company's solid business and recently announced share buyback and dividend increase make shares very attractive at current levels.

Source: Apple.

Macy's (NYSE: M  )
From perfume to a treat for the kitchen, Macy's gives you the flexibility to pick something for your mom that is special for her. With countless retail locations and the option to shop online, this is the best broad option on the list. From an investment perspective, Macy's has been slowly grinding higher all year, beating the return of the overall market and showing no signs of slowing down. With a dividend yield of 1.7%, the stock offers the income element of U.S. Treasuries and plenty of upside beyond that.

Coach (NYSE: COH  )
It is hard to beat a Coach bag or accessory for showing Mom that you have both good taste and the willingness to spend a little extra for her special day. With this in mind, Coach has made a big push lately to offer purses at a wider range of price points in order to attract more shoppers. The company was able to beat analysts' expectations at its most recent earnings release, leading to a 10% bump in the stock. Even with the move, the stock has a long way to go to climb out of the hole it has built for itself, so if it can reach former highs, the upside looks quite nice. Finally, with a dividend yield of 2.1%, there is no lack of income offered by the stock.

Ultimately, choosing a Mother's Day gift that fully captures what we love about the moms in our lives is a very personal choice, but these are some ideas that should get those creative juices flowing. The bonus that each comes from a company that offers an attractive investment option just makes the process more appealing. Whatever you choose, this Fool wishes all moms a great day this Mother's Day.

The Apple of her eye
There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Cities with the most content workers

Americans spend much of their day at work, and more than half of Americans rated their overall work environment poorly last year. Although the number of workers who gave their workplace a positive overall review is up to 48% from an all-time low of 47.2% in 2011, it has yet to recover to past levels of over 51%.

Of course, workers in different cities can have markedly different feelings about their jobs. According to the recent Gallup-Healthways Well-Being Index, San Luis Obispo, Calif., was the metropolitan area with the best work environment. The area with the worst work environment was Fayetteville, N.C.

To determine the best and worst work environments, Gallup surveyed hundreds of thousands of Americans in 189 metropolitan areas in the U.S. in 2012 and 2013. The Work Environment Index included four metrics: job satisfaction; whether employees felt they used their strengths at work; how employees were treated by their supervisors; and whether supervisors created an open and trusting work environment.

How workers were treated by their supervisors was perhaps the most meaningful indicator of a healthy workplace. According to Dan Witters, research director of the Gallup-Healthways Well-Being Index, workers were far more likely to give positive evaluations to other elements of their jobs if they felt treated like a partner at work. As a result, the cities with the best work environments were largely those where workers most often felt treated like a partner.

In fact, seven of the 10 best cities for work also had among the 10-highest percentages of workers who felt treated like a partner at work. Workplace environments were also tied to other well-being measures such as emotional and physical health. "Emotional health gets better where work environment well-being is higher," Witters said.

But, he added, the relationship between emotional health and work environment is reciprocal. Emotionally healthy workers make more valuable employees and are more likely to be hired in the fi! rst place. In the cities where people most enjoyed work, residents were more likely to say they learned something new every day, a key measure of emotional health in the Well-Being Index. In the San Luis Obispo metro area, more than 73% of residents said they had learned something new or interesting in the past day, a higher rate than in all but three other metro areas nationwide.

The opposite was frequently true in poorly ranked cities, where workers were far less likely to feel they had daily learning opportunities. Witters also highlighted that a good work environment is often connected to better exercise and eating habits.

"Workplaces that advocate and promote high well-being lifestyles can have a very significant influence [on employees]," Witters explained. Simultaneously, "people who exhibit those healthier behaviors are more attractive for a workplace to hire."

For instance, all but two of the 10 best cities for work had smoking rates below the national rate, and just 11.1% of San Jose residents smoked, the second lowest rate in the nation. At the other end, residents in the nation's worst cities for work were more likely to smoke and practice other unhealthy behaviors.

In Charleston, W. Va., more than 34% of residents smoked, the highest percentage in the nation. Since answers to questions from Gallup's work environment index were provided by people who had jobs, the health of the areas' job market may not always have a huge impact on workplace environment well-being.

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While six of the 10 highest rated cities had unemployment rates below the national rate as of December, four did not. In the Visalia, California metro area, the unemployment rate was 13.1%, nearly double the national rate of 6.7% that month. Similarly, among the worst rated cities, Charleston's unemployment rate was 5.4% — much lower than the national rate. While not a direct relationship, the health of the job market ca! n affect ! workplaces.

For instance, the recession and constant daily layoffs has created stressful work environments overall and therefore also impacted workers with a job. In some cases, when it is harder find a job, "you'll see [some] supervisor-worker relationships erode, and suffer, as a result of that shifted power arrangement." Median income and educational attainment rates might be expected to have substantial effects on workplace evaluations, but that was not always the case. In several instances, respondents from relatively poor areas overwhelmingly approved of their jobs, while residents of wealthier areas were often likely to give poor assessments.

For example, in the Fort Smith metro area, located in Arkansas and Oklahoma, median household income was just $36,061 in 2012, but residents rated their workplaces fifth-best. Median household income in the Poughkeepsie, New York metro area, on the other hand, was $66,612 that year, but residents their rated their workplaces among the worst. According to Witters, this is due primarily to the weight a supervisor carries in determining the quality of a work environment.

If you have a bad supervisor, your work experience will be poor regardless of the level of your education and financial situation. Witters said, as your education improves, however, the kinds of jobs available to you are going to be different. For example, in "the low education, low income jobs, you're going to be more likely to be in a hierarchical arrangement — you're less likely to be in a role that requires you to be imaginative and creative and collaborative." Rather, "you're more likely to be in a role where you just need to take your orders and do what you're told to." To identify the best and worst cities for work, 24/7 Wall St.reviewed the metropolitan areas with the best and worst scores on the Work Environment Index, part of the Gallup-Healthways Well-Being Index.

MORE: America's most content (and miserable) cities

The Gallup-Healthways Well-Being Ind! ex assess! ed 189 metropolitan statistical areas. The Work Environment Index is one of five subindices included in the groups' overall score. The index measures workplace happiness for the U.S., states, metropolitan areas and occupations, based on answers to four questions.In addition to these figures, we also considered income, poverty and educational attainment data from the U.S. Census Bureau, all from 2012. Local, seasonally adjusted unemployment rates, current as of December 2013, are from the Bureau of Labor Statistics. These are the cities with the most content and miserable workers.

Here are the best cities for work:

10. Kingsport-Bristol-Bristol, Tenn.-Va.

> Work environment index score: 54.7
> Pct. feel treated with respect: 90.9% (49th lowest)
> Pct. learned something new that day: 54.5% (2nd lowest)
> Pct. with college degree: 19.2% (75th lowest)
> Median household income: $37,769 (21st lowest)

Unlike some of the cities where workers are most satisfied, Kingsport area residents had low educational attainment rates, with slightly more than 19.2% of adults 25 and older having graduated college, considerably lower than the national rate. A typical household in the area also made just $37,769 in 2012, considerably lower than most other metro areas. Despite the low education levels and incomes, area workers had among the most pleasant work environments. Employees in the Kingsport metro area had among the best supervisors in the nation last year. Nearly 65% of survey-respondents felt their supervisors treated them like a partner, and 84.6% felt their supervisors created a trusting work environment, more than all but a handful of other areas reviewed.

9. San Jose-Sunnyvale-Santa Clara, Calif.

> Work environment index score: 54.8
> Pct. feel treated with respect: 93.5% (11th highest)
> Pct. learned something new that day: 68.4% (32nd highest)
> Pct. with college degree: 46.4% (10th highest)
> Median household inc! ome: $90,! 737 (the highest)

A typical household in the San Jose metro area earned more than $90,000 in 2012, more than in any other metro area in the nation. High incomes are likely the result of the strong presence of traditionally high-paying sectors. For instance, the professional, scientific, and management sector accounted for 18.4% of the area jobs, much higher than the sector's proportion of less than 11% of workers nationwide. Large companies such as Google and Apple are based in the area and provide lucrative job opportunities to area residents. Like a number of high-paying tech companies, both companies were listed on Glassdoor's Best Places to Work this year. Additionally, residents of the San Jose metro area, along with those of Washington, D.C., had the highest economic confidence in the nation, according to a recent Gallup survey. ALSO READ: States With the Highest (and Lowest) Taxes

8. Kennewick-Pasco-Richland, Wash.

> Work environment index score: 55.0
> Pct. feel treated with respect: 93.9% (7th highest)
> Pct. learned something new that day: 66.6% (49th highest)
> Pct. with college degree: 24.8% (173rd lowest)
> Median household income: $57,189 (54th highest)

Nearly nine in 10 respondents from the Kennewick region said they used their strengths at work last year, more than in all but four other metro areas. Supervisors in the region were also well-regarded, with 66.7% of respondents reporting their supervisor treated them like a partner last year, second-highest among all areas reviewed. Residents earned more than most Americans, with a median household income of $57,189 in 2012, compared to $51,371 nationwide. While the relationship to workplace satisfaction is unclear, a relatively large percentage — 8.4% of the workforce — was employed in the agricultural industry, more than four times the rate across the nation.

7. Roanoke, Va.

> Work environment index score: 55.1
> Pct. feel treated with respect: 91.2% (67th l! owest) > Pct. learned something new that day: 64.1% (91st lowest)
> Pct. with college degree: 25.5% (182nd highest)
> Median household income: $46,974 (181st highest)

Unlike other metro areas with highly rated workplaces, supervisors in Roanoke were not as likely to create a trusting work environment. Less than 80% of respondents thought their supervisor did so in 2013, in-line with the average across all metro areas. However, this did not prevent residents from liking their jobs, with 90.5% of survey respondents reporting job satisfaction, among the best job evaluations among all metro areas surveyed. The job climate in Roanoke is also relatively good, with just a 5.4% unemployment rate in December last year, below the national rate of 6.7% that month.

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6. Visalia-Porterville, Calif.

> Work environment index score: 55.3
> Pct. feel treated with respect: 93.9% (7th highest)
> Pct. learned something new that day: 65.4% (65th highest)
> Pct. with college degree: 14.7% (12th lowest)
> Median household income: $40,302 (50th lowest)

The unemployment rate in the Visalia metro area was an abysmal 13.1% last December, considerably higher than the national rate of 6.7% that month. Meanwhile educational attainment rates were well below the national rate, with fewer than 15% of residents over 25 holding a college degree. Despite all this, survey respondents felt much better about their workplace than most metro areas surveyed. Respondents rated supervisors, in particular, very well, with 65.6% of residents saying their superiors treated them like a partner. Like several other regions with positively-reviewed work environments, the agriculture sector made up a large proportion of employment in the Visalia area, accounting for nearly 19% of the workforce, compared with just 2.0% nationwide.

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5. Fort Smith, Ark.- Okla.

> Wor! k environ! ment index score: 56.4
> Pct. feel treated with respect: 91.5% (85th lowest)
> Pct. learned something new that day: 59.2% (15th lowest)
> Pct. with college degree:15.8% (24th lowest)
> Median household income: $36,061 (9th lowest)

Residents of the Fort Smith metro area were more likely to say their supervisors provided a trusting environment than Americans anywhere else, with 88.2% saying so in the last year. Nearly 92% were also satisfied with their jobs, more than the vast majority of metro areas reviewed by Gallup. Job satisfaction, however, does not seem to be connected with high incomes in Fort Smith, where a typical household earned just $36,061 in 2012, among the lowest nationwide. Additionally, it did not seem to have much bearing on how people rated other elements of their lives. Fort Smith residents rated their present lives and their future expectations lower than residents anywhere else in the U.S. More than 17% of the workforce in Fort Smith were employed in the manufacturing sector, compared with slightly more than 10% of workers nationwide.

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4. Naples-Marco Island, Fla.

> Work environment index score: 57.8
> Pct. feel treated with respect: 96.7% (the highest)
> Pct. learned something new that day: 64.6% (80th highest)
> Pct. with college degree: 31.0% (88th highest)
> Median household income: $54,126 (81st highest)

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Naples residents reported feeling less stressed than those in any other metro area reviewed by Gallup, with more than 70% reporting no stress during the majority of the previous day last year. Low stress levels in the area may be due to a healthy work environment and a relatively good job market. Nearly 64% of respondents thought their supervisors treated them like an equal, compared with just 56.6% nationwide. The area unemployment rate w! as less t! han 6.0% in December of that year, much lower than the national unemployment rate of 6.7%.

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3. Fort Collins-Loveland, Colo.

> Work environment index score: 58.2
> Pct. feel treated with respect: 93.5% (11th highest)
> Pct. learned something new that day: 71.8% (7th highest)
> Pct. with college degree: 44.7% (13th highest)
> Median household income: $55,890 (63rd highest)

Like many of the cities where workers are satisfied, residents of the Fort Collins metro area are well educated, with nearly 45% of adults 25 years and older having at least a bachelor's degree as of 2012. Much of the work in the area demands high skills and education. This may translate, for many residents, into intellectually stimulating work. Nearly 72% of residents said they learned something new daily, more than all but six metro areas. The area is home to a large number of high-tech manufacturers, as well as Colorado State University, a major research institution. Overall, more than 90% of Fort Collins respondents were satisfied with their jobs, among the highest rates in the U.S.

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2. Lincoln, Neb.

> Work environment index score: 58.7
> Pct. feel treated with respect: 90.8% (43rd lowest)
> Pct. learned something new that day: 69.8% (16th highest)
> Pct. with college degree: 35.9% (41st highest)
> Median household income: $50,668 (126th highest)

More than 91% of Lincoln inhabitants said they were satisfied with their jobs last year, the 12th-highest percentage in the nation. Additionally, nearly 64% of respondents felt treated like a partner at work, higher than in all but a handful of other metro areas. Like many of the cities where workers are satisfied, the area is home to a major research university. Lincoln is home to the University of Nebraska-Lincoln, which spent a quarter-billion dollars on research and development in fisca! l 2012 an! d had more than 8,000 employees as of 2013. The area's job market was excellent as of December last year, with an unemployment rate of just 3.3%.

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1. San Luis Obispo-Paso Robles, Calif.

> Work environment index score: 59.1
> Pct. feel treated with respect: 92.7% (35th highest)
> Pct. learned something new that day: 73.3% (4th highest)
> Pct. with college degree: 33.5% (59th highest)
> Median household income: $60,264 (36th highest)

San Luis Obispo residents evaluated their work experiences better than residents in any other metro area. Nearly nine in 10 area residents were satisfied with their jobs last year. This may be due in part to the fact that respondents believed their lives were filled with interesting experiences and intellectual growth. More than 73% of respondents said they learned something new or interesting the previous day, more than in all but three other metro areas. Additionally contributing to residents' high ratings of their workplace, more than 88% said they utilized their strengths at work and more than 67% felt treated like a partner, both among the highest rates in the country. Workers were also relatively well-paid, with a median household income of $60,264 in 2012, well above the national median of $51,371 that year.

24/7 Wall St. is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.