Will Disney (DIS) Stock Be Affected By Theme Park Price Hike?

NEW YORK (TheStreet) -- The Walt Disney Company (DIS) announced a price increase for theme park admission to its parks in California.

The cost of admission to Disneyland is now $96, up from $92.

Admission to Disney's California Adventure also increased by $13 to $150.

Must Read: Warren Buffett's 25 Favorite Stocks  

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more

Shares of Disney are down -0.16% to $80.92 in after-hours trading on Monday.

TheStreet Ratings team rates DISNEY (WALT) CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate DISNEY (WALT) CO (DIS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows: Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year. DISNEY (WALT) CO has improved earnings per share by 30.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DISNEY (WALT) CO increased its bottom line by earning $3.38 versus $3.12 in the prior year. This year, the market expects an improvement in earnings ($4.18 versus $3.38). The net income growth from the same quarter one year ago has significantly exceeded that of the Media industry average, but is less than that of the S&P 500. The net income increased by 26.7% when compared to the same quarter one year prior, rising from $1,513.00 million to $1,917.00 million. Despite its growing revenue, the company underperformed as compared with the industry average of 14.9%. Since the same quarter one year prior, revenues rose by 10.4%. Growth in the company's revenue appears to have helped boost the earnings per share. The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, DISNEY (WALT) CO's return on equity exceeds that of both the industry average and the S&P 500. You can view the full analysis from the report here: DIS Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more

Stock quotes in this article: DIS 

The week in Tech: 5 must-know things

LOS ANGELES — Weekend project: Let's start changing all of our passwords.

The top five tech headlines this week are highlighted by a huge undertaking for all of us: password changing, thanks to the discovery of Heartbleed, a security bug that could make Internet surfing less safe as websites patch up holes.

Security researchers who uncovered the threat are worried because the lapse went undetected for more than two years.

Many popular sites, including Google, Yahoo, Facebook, YouTube and Tumblr, said that they fixed vulnerabilities this week or were not affected and that new passwords are recommended for those sites. Apple and Amazon said their consumer sites were not vulnerable.

The bottom line: Experts say it's imperative to update your passwords ASAP and to use effective ones that aren't simply "123456" or "Password." Try combinations of letters, numbers and symbols.

Here's more from the week in Tech:

A MOVE FOR MESSENGER

Sorry, Facebook fans, but that messenger program we all use on the social network to instantly reach out to folks is leaving the mobile Facebook. If you want to connect with someone, you'll need to leave Facebook soon and open up the free-standing Messenger app. The reason for the change? Facebook says messaging is a better experience on the app, so it wants to put the emphasis there.

FAREWELL TO XP

Another big change came to users of Windows XP, the 12-year-old operating system that no longer will get security updates from Microsoft, which wants you to stop using XP and buy new software. But guess what — Tuesday came and went, and millions of XP machines kept on running. So far, so good, but folks: XP without security has been described as a hacker's paradise. Best to join the modern era with more current software.

HELLO TO A NEW GALAXY

Speaking of contemporary, Samsung this week brought out the latest state-of-the-art Galaxy smartphone. The S5 has a slightly larger screen and built-in heart-rate monitor, is wate! rproof and — oh! — takes a pretty cool picture, too. In his review, USA TODAY's Ed Baig called the Galaxy S5 "a solid device" that didn't break much major ground.

WHAT'S UP IN APPS

Finally, in app news, the numbers puzzle 2048 is No. 1 on the free iTunes app chart for the third week in a row, but bubbling under is the mind game What's the Difference?, another fun time-waster. Tops for Android is Cut the Rope 2, a character-based adventure game.

Readers: Have you changed your passwords yet? Any questions about password management? Let's chat about it on Twitter, where I'm @jeffersongraham.

Don’t Overlook the Retirement Savers’ Tax Credit

You mentioned the retirement savers' tax credit in your article about President Obama's MyRA plan. How does this credit work, and who is eligible?

SEE ALSO: The Most-Overlooked Tax Deductions

The credit is 10%, 20% or 50% of your contribution to a retirement account, depending on your income, up to a maximum of $1,000 per person or $2,000 per couple. You can qualify for the retirement savers' tax credit if your adjusted gross income in 2014 is $60,000 or less if married filing jointly, $45,000 or less if filing as head of household, or $30,000 or less if you're a single filer. To qualify, you must contribute to a traditional or Roth IRA (MyRA's count), 401(k), 457, 403(b) or other retirement-savings plan.

If you are married filing jointly, for example, the credit can be worth 50% of your contribution (a $2,000 credit for a $4,000 contribution) if your joint income in 2014 is $36,000 or less. The credit is worth 20% of your contribution if you earn $36,001 to $39,000 and 10% if you earn $39,001 to $60,000. Married couples can't qualify for the credit if they earn more than $60,000. See the IRS factsheet for a table showing the income cutoffs for each level of the credit for joint filers, heads of household and singles for both 2013 and 2014 returns (the income numbers are slightly lower for 2013).

To qualify for the credit, you must be at least 18 years old and not a full-time student, and no one else (such as your parents) can claim an exemption for you on their tax return. You can qualify for this credit even if you make pretax contributions to an employer's retirement plan or nondeductible contributions to a traditional or Roth IRA, or if you get other tax breaks for your retirement-savings contributions -- such as a tax deduction for a traditional IRA contribution.

Keep in mind that this is a credit, not a deduction, so it lowers your income tax dollar for dollar. It is a nonrefundable tax credit, however, which means it cannot reduce your tax liability below zero. See IRS Publication 4703 for more information about the credit.

Complete IRS Form 8880 to determine the rate and amount of the credit, and file it with your income tax return. If you realize that you would have qualified for the credit in previous years but didn't claim it, you can file an amended return (Form 1040X) as far back as 2010 and still get the money. A 2010 amended return is due by April 15, 2014; a 2011 amended return is due by April 15, 2015; and a 2012 amended return is due by April 15, 2016. See Instructions for Form 1040X for more information about filing an amended return.

You still have until April 15, 2014, to contribute to an IRA for 2013 and qualify for the credit for 2013. See Often Overlooked Opportunities to Save in a Roth IRA for more information about Roth contributions if you're a nonworking spouse, retiree or freelance worker.

Got a question? Ask Kim at askkim@kiplinger.com.

Report: Fracking raising water supply worries

The USA's domestic energy boom is increasing demands on water supplies already under pressure from drought and growing populations, a new report says.

The water-intensive process used to extract oil and gas from shale underground — known as hydraulic fracturing or fracking — has required almost 100 billion gallons of water to drill more than 39,000 oil and shale gas wells in the U.S. since 2011, says Ceres, a green investment group.

More than half of those wells — 55% — were in drought-stricken areas, and nearly half were in regions under high or extremely high water stress, such as Texas, the report says.

To be in extremely high water stress means more than 80% of the area's available surface and ground water is already allocated for city, agriculture or industrial use. High stress means 40% to 80% of the water is already allocated, Ceres says.

Shale development is also occurring rapidly in areas where groundwater is already being depleted by other uses, including agriculture and residential development.

Nationwide, more than 36% of the 39,000 wells drilled since 2011 were in areas already experiencing groundwater depletion, the study says.

Hydraulic fracturing pumps water and chemicals at high pressure to break the shale, allowing trapped oil or gas to flow to the surface.

While fracking consumes far less water than agriculture or residential uses, the impact can be huge on particular communities and is "exacerbating already existing water problems," says Monika Freyman, author of the Ceres study.

Hydraulic fracking is the "latest party to come to the table," Freyman says. The demands for the water are also "taking regions by surprise," she says. More work needs to be done to better manage water use, given competing demands, she says.

Texas has the highest concentration of hydraulic fracturing activity in the U.S. More than half of its wells put in since 2011 were in high or extremely high water stress regions, Ceres says.

In Colorado ! and California, 97% and 96% respectively of the wells were drilled in regions under high or extremely high water stress.

The oil and gas industry says it's doing more to reuse and recycle water. It also points out that overall water use by the fracking industry is small.

In Colorado, oil and gas development accounts for 0.1% of the state's total water demand, while in Texas, it's less than 1%, says Katie Brown, researcher with Energy in Depth, a research arm of the Independent Petroleum Association of America.

A recent report from the University of Texas also found that natural gas fracking saves water overall by making it easier for utilities to switch from coal to natural gas power. As a result, it's helping to "shield the state from water shortages," Brown says.

More recycling will occur because companies "recognize the economic risk they have," with access to needed water, says Marcus Gay, water research director at IHS Global Insight.

Only about 5% of water consumed by oil and gas producers in the Barnett Shale in North Texas is currently being recycled, says a recent report by research scientist Jean-Philippe Nicot, of the University of Texas. That's probably about average for fracking throughout Texas, Nicot says.

Producers in Pennsylvania, meanwhile, are doing more recycling because they lack good access to deep injection wells to store spent water. For those companies, "it's cheaper to recycle" than ship the water out of state to deep injection wells, Nicot says.

5 Big Trades to Take Before the New Year

BALTIMORE (Stockpickr) -- Three more days -- that's how much time stands in between this morning's open and the final trading session of 2013.

It would take a pretty active three days to derail what's been a spectacular year for stock investors. Since the calendar flipped over to January, the S&P 500 has rallied more than 29%, climbing to new all-time highs in spite of a real lack of participation in among retail investors. And if yesterday's trading is any indication, a Santa Claus rally looks likely to tack on some extra gains before the first trade of 2014.

That's why we're taking a closer technical look at five year-end trades to take this week.

If you're new to technical analysis, here's the executive summary.

Technicals are a study of the market itself. Since the market is ultimately the only mechanism that determines a stock's price, technical analysis is a valuable tool even in the roughest of trading conditions. Technical charts are used every day by proprietary trading floors, Wall Street's biggest financial firms, and individual investors to get an edge on the market. And research shows that skilled technical traders can bank gains as much as 90% of the time.

Every week, I take an in-depth look at big names that are telling important technical stories. Here's this week's look at five high-volume stocks to trade this week.

Bally Technologies

It may seem like a sort of unlikely choice, but mid-cap gambling device designer Bally Technologies (BYI) is topping off our list today. Bally is capping off a stellar run in 2013, after rallying more than 72% since the start of the year. But don't worry if you missed the move; the technicals point to even higher ground in the short-term.

That's because Bally is currently forming an ascending triangle pattern, a bullish price setup that's formed by a horizontal resistance level above shares and uptrending support to the downside. Basically, as BYI bounced between those two technical price levels, it's been getting squeezed closer and closer to a breakout above resistance. The breakout happened just before Christmas, and it's giving us a buy signal this week.

Momentum adds some extra confidence to the setup in BYI: 14-day RSI has been trending higher since early October, an indication that buyers have been piling in at an increasing rate as the pattern developed. If you decide to jump in here, I'd recommend putting a protective stop at the 50-day moving average.

Stericycle

We're seeing the exact same setup in shares of Stericycle (SRCL), but with one big difference: This stock hasn't broken out yet. Stericycle is another ascending triangle pattern, in this case with a resistance level at $120. A breakout above that $120 price ceiling is the signal that it's time to take this trade.

Whenever you're looking at any technical price pattern, it's critical to think in terms of buyers and sellers. Triangles and other pattern names are a good quick way to explain what's going on in a stock, but they're not the reason it's tradable – instead, it all comes down to supply and demand for shares.

That $120 resistance level is a price where there has been an excess of supply of shares; in other words, it's a place where sellers have been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above it so significant -- the move means that buyers are finally strong enough to absorb all of the excess supply above that price level.

Don't be early on the SRCL trade.

Ansys

$8 billion engineering simulation software maker Ansys (ANSS) is looking tradable too after spending most of the last five months in a sideways slump. Even though ANSS' price action hasn't exactly shown outstanding momentum, the bias is definitely on the side of sellers right now. Here's why.

Ansys is currently forming a rectangle pattern, a consolidation setup that's formed by a pair of horizontal price levels that basically "box in" shares of the stock. In Ansys, the rectangle is formed by resistance above shares at $90 and support down at $84. The breakout signal works just like the ones in BYI and SRCL – a move through the $90 level is the buy signal for shares of Ansys.

Strictly speaking, a move through $84 support is just as strong of a sell signal as the move through $90 is to buy. But the moves leading up to the rectangle pattern have a lot to say about how these setups typically resolve. Since ANSS started consolidating after a move up, a bullish breakout is the likelier outcome here. Either way, don't try to predict what's going to happen in shares; just be ready to react to it.

Apple

I've been a big fan of Apple (AAPL) for while now -- I own shares too. I'm happy to report that, from a technical standpoint, Apple couldn't look much better than it does now. And you don't have to be some kind of expert technical analyst to see why.

Apple is currently forming an uptrending channel, a setup formed by a pair of parallel trendlines. When it comes to price channels, up is good and down is bad; it's as simple as that. Shares have bounced higher on each of the last four tests of trendline support, and so, with the most recent bounce just a couple sessions ago, now's a pretty good time to be a buyer once again.

Relative strength (not to be confused with RSI, the momentum gauge we looked at earlier) continues to look exemplary for Apple right now. With a market that's teetering on new highs as I write, relative strength remains the single most important technical indicator to add to your toolbox right now. It speaks volumes that Apple's RS line is still in bull mode.

The 50-day moving average has been a pretty good proxy for support for the last few months, so short-term traders may want to consider putting a protective stop just below it.

Honeywell

Last up is Honeywell (HON), another basic channel trade to watch right now.

Honeywell has been forming a picture-perfect uptrending channel since back in February, bouncing higher off of each of the last seven tests of support. More bounces indicate more buying pressure below the trendline, and that's a very good thing for anyone who owns HON right now.

While shares of Honeywell are a fair bit off of trendline support right now, it still makes sense to wait for the next return to the lower bound of the channel. Then, buy the bounce.

Buying off a support bounce makes sense for two big reasons: it's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, we're ensuring HON can actually still catch a bid along that line.

To see this week's trades in action, check out this week's Must-See Charts portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

 

RELATED LINKS:

 

>>4 Stocks Spiking on Big Volume

 

>>5 Stocks Insides Love Right Now

 

>>5 Dividend Stocks Ready to Pay You More in 2014

 

Follow Stockpickr on Twitter and become a fan on Facebook.

 

At the time of publication, author was long AAPL.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

 

Follow Jonas on Twitter @JonasElmerraji

 

It Might Be the Time for Beer

After a couple of capital increases and what looks like a weak strategy for its growth in different South American countries, Chile's beer king Compania Cervecerias Unidas (CCU) – most commonly knows as CCU - is selling at a steep discount to its peers. In other words, being down by 23% year to date, I think it might be the time to start thinking of buying CCU's shares.  

A Weak Growth Strategy

CCU recently issued more than 50 million shares and plans to use the proceeds for organic growth as well as M&A in South America. Possible targets could be related to soft drinks in Colombia, dairy in Chile, or a multi-category approach in Argentina and Uruguay (where the company recently acquired a mineral water company). That being said, I agree with most analysts. CCU should focus on its wonderful beer business in Chile (where the company is an effective monopoly) and on returning capital to its shareholders through dividends and buybacks.  

Results Are Still Wonderful

Despite having lost some ground in terms of market share in its main market against its rival, the Brazilian giant AmBev (ABEV), CCU's results are still ameliorating fast. Revenues were up by 13% year over year, EBITDA increased 6% year over year and their net income grew by 21% year over year. Better yet, consolidated organic volumes (the most important figure for beverage companies) increased by 7% year over year while pricing was also up by 5% year over year. That said, cost increases in Chile, Argentina and Uruguay (where the company is still losing money) were behind the 1.2% EBITDA margin contraction. Even when CCU's figures look very compelling, the company needs to work a lot on its cost structure and on focusing on its main market. After all, CCU's 18.4% EBITDA margin is well below AmBev's 50% margins.  

Valuation Contraction Looks Overdone

Despite the unnecessary capital increase, I believe it's time to take a deep look at the shares. Price is! what you pay and value is what you get, and at the current market price, I think you will get more than you pay for if you buy CCU's shares. The Chilean beverage leader sells for 7.7 times 2014 EV/EBITDA and 15 times earnings. Meanwhile, AmBev, which is down by 16% year to date, currently trades at 13 times 2014 EV/EBITDA and 20 times earnings. Even when the Brazilian beverages leader pays a much higher cash dividend yield than CCU (2.95% versus 1.95%), I believe the valuation gap is too wide. Moreover, with CCU you always have the M&A free call attached to the asset. The Chilean beer leader would be a wonderful target for the much bigger AmBev, which has been (unsuccessfully) trying to enter the Chilean market for more than a decade now. The Brazilian company could buy CCU and put into practice its wonderful famous cost-cutting strategies in order to boost margins.

Investors such as Carl Icahn and Richard Perry have held CCU for long periods of time. Maybe they should be buying once more. Always remember: “Price is what you pay and value is what you get.”

Also check out: Carl Icahn Undervalued Stocks Carl Icahn Top Growth Companies Carl Icahn High Yield stocks, and Stocks that Carl Icahn keeps buying

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Stocks to Watch: Joy Global, Costco, Avanir

Among the companies with shares expected to actively trade in Wednesday’s session are Joy Global Inc.(JOY), Costco Wholesale Corp.(COST) and Avanir Pharmaceuticals Inc.(AVNR)

Mining-equipment maker Joy Global’s fiscal fourth-quarter earnings plummeted 87% as the company struggled to cut costs and an oversupply of commodities-accentuated weaker demand in emerging markets. “With a limited number of projects that can book in time to help 2014, we continue to see both the need and opportunity to lower the cost base in our business,” Chief Executive Mike Sutherlin said. Shares dropped 4.8% to $53.55 premarket.

Costco Wholesale Corp.’s fiscal first-quarter profit rose 2.2%, though missed market expectations, as the wholesale club’s revenue grew less than anticipated. Shares slipped 1.7% to $118.05 premarket.

Avanir Pharmaceuticals Inc. said Tuesday a Phase II clinical trial of an investigational treatment for central neuropathic pain in multiple sclerosis patients didn’t meet its primary efficacy endpoint. The biopharmaceutical company separately reported its fiscal fourth-quarter loss widened amid a one-time charge related to the company’s investigational migraine treatment. Shares fell 14% to $3.68 premarket.

Discovery Communications Inc.(DISCA) is mulling a bid for Scripps Network Interactive Inc.(SNI), the owner of cable channels like the Food Network and HGTV, according to a person familiar with the matter. Shares of Scripps jumped 10% to $83.01 premarket.

Laboratory Corp. of America Holdings’ issued a preliminary 2014 profit outlook that missed Wall Street’s expectation, as the medical-testing services provider sees muted demand and an uncertain healthcare environment. The company’s shares slid 9.2% to $90 premarket.

MasterCard Inc.'s(MA) board approved a series of shareholder-friendly actions including an 83% boost to its dividend and an authorization to repurchase as much as $3.5 billion of its shares. Shares climbed 4.2% to $795.90 premarket.

NorthStar Realty Finance Corp.(NRF) disclosed a plan to spin off its asset-management business into a separate publicly traded company, a move investors praised. NorthStar’s shares rose 17% to $11.60 premarket.

Avon Products Inc.(AVP) said it halted a roll-out of a new order management system, saying a pilot program in Canada resulted in “significant business disruptions in the market.” The company said the change will result in additional layoffs and write-downs.

CBOE Holdings Inc.(CBOE) said it will pay a special cash dividend that will cost nearly $44 million, while the U.S. options exchange operator also boosted its stock buyback authorization by an additional $100 million.

Vacation-home rental website operator HomeAway Inc.(AWAY) and midstream energy owner American Midstream Partners LP(AMID) separately disclosed plans to offer shares and units, respectively. HomeAway is aiming to raise proceeds for general corporate purposes, while American Midstream is looking to use some of the funds to pay for a previously disclosed acquisition.

Home Depot Inc.(HD) issued a slightly cautious earnings target for the new year, projecting 17% growth in per-share earnings, while analysts polled by Thomson Reuters expect growth of 18%. The home-goods retailer typically issues cautious guidance and then repeatedly raises expectations throughout the year.

H&R Block Inc.'s(HRB) fiscal second-quarter loss narrowed, as the tax-services provider recorded a higher income-tax benefit, though revenue slid and overall expenses climbed.

Marathon Oil Corp.(MRO) boosted its capital budget for next year and said it expects production to grow as it plans to ramp up rig activity at U.S. resource plays. Marathon said it will invest more than 60% of the budget in its North American resource play assets.

Smith & Wesson Holding Corp.'s(SWHC) fiscal second-quarter earnings fell 20% despite continued strong growth in handgun sales and higher margins. The gun maker’s revenue was near the high end of estimates and the company provided fiscal third-quarter guidance that topped expectations.

Tessera Technologies Inc.(TSRA) named its interim chief executive, Thomas Lacey, to the top post Tuesday, bringing to a close a months-long search for a permanent leader.

Will a Tentative Agreement Offer JPMorgan Chase a Boost?

With shares of JPMorgan Chase & Co. (NYSE:JPM) trading around $54, is JPM an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

JPMorgan Chase is a financial holding company that provides various financial services worldwide. The company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management, and private equity. Financial services companies like JPMorgan Chase are essential for well-functioning economies around the world.

JPMorgan Chase has reached a tentative agreement with the U.S. Department of Justice to settle the many investigations against the bank, The New York Times reports. The agreement involves JPMorgan paying a $13 billion fine and contains no promise that the DoJ won't pursue a criminal investigation. The JPMorgan settlement would be a record one for the government agency, as no single company has ever paid such a steep settlement, but the Times cautioned that talks could still fall apart.

T = Technicals on the Stock Chart Are Strong

JPMorgan Chase stock has done relatively well in the past couple of years. The stock is currently trading sideways as it digests the flurry of recent news it has received. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, JPMorgan Chase is trading slightly above its rising key averages, which signals neutral to bullish price action in the near term.

Source: Thinkorswim

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
JPMorgan Chase Options	22.7%	6%	5%

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

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

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

E = Earnings Are Mixed Quarter Over Quarter

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

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	-112.14%	32.23%	33.61%	54.89%
Revenue Growth (Y-O-Y)	-7.67%	13.67%	-3.57%	10.16%
Earnings Reaction	-0.01%	-0.3%	-0.6%	1.01%

JPMorgan Chase has seen increasing earnings and mixed revenue figures over the last four quarters. From these numbers, the markets have not been pleased with JPMorgan Chase’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has JPMorgan Chase stock done relative to its peers – Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Wells Fargo (NYSE:WFC) — and sector?

	JPMorgan Chase	Bank of America	Citigroup	Wells Fargo	Sector
Year-to-Date Return	23.31%	25.11%	29.08%	25.04%	25.53%

JPMorgan Chase has been an average relative performer, year to date.

Conclusion

JPMorgan Chase is a bellwether in the banking space that forms an essential part of the United States financial system. The company is reportedly reaching a tentative agreement with the Justice Department to settle its many investigations. The stock has done relatively well in recent months but is now trading sideways as it digests recent news. Over the last four quarters, earnings have been increasing while revenues have been mixed, which has not pleased investors in the company. Relative to its peers and sector, JPMorgan Chase has been an average year-to-date performer. WAIT AND SEE what JPMorgan Chase does this quarter.

Private Foundation Assets Rebound From Recession

Private foundation endowments returned an average of 12% (net of fees) for the January to December 2012 fiscal year, according to a new study by the Council on Foundations and Commonfund Institute.

The return was a significant improvement over the FY2011 loss of 0.7%.

The study comprised 140 foundations, representing $79 billion in assets.

Foundations with assets between $101 million and $500 million produced the highest return, 12.4%. Organizations with more than $500 million in assets realized an average return of 11.9%, while those with less than $101 million produced an average return of 11.4%.

The study showed that trailing three-year returns for participating foundations averaged 7.9% in 2012, compared with 10.3% in 2011. The decline was the result of 2009’s strong returns being dropped from the three-year calculation.

Trailing five-year returns averaged 1.8%, versus 1.4% in the prior year, reflecting the continuing inclusion of FY2008’s losses in the five-year number. For the trailing 10-year period, returns averaged 7.9%, compared with last year’s 5.2%, as the losses from FY2002 were now no longer included.

“After a mildly negative 2011, private foundations secured double-digit gains in 2012, restoring much needed growth to their endowments,” John Griswold, Commonfund Institute’s executive director, said in a statement.

“Even more heartening is the higher 10-year return, an average of almost 8%. Last year’s 10-year return, in the 5% range, was simply not high enough to sustain spending levels once inflation and investment management costs are taken into account.”

Domestic and international equities were the greatest contributors to FY2012’s 12% return, the latter leading all asset classes with a 17.5% gain and the former close behind at 16.3%. Fixed income returned 7.1%, alternative strategies 7% and short-term securities/cash/other 1%.

Within the broad category of alternative strategies, distressed debt returned 14.7%, followed by an 8% gain from marketable alternative strategies (hedge funds, absolute return, market neutral, long/short, 130/30, event driven and derivatives). Private equity (leveraged buyouts, mezzanine and mergers and acquisitions funds, and international private equity) returned 7.7%, followed by private equity real estate (noncampus), at 6.7%; venture capital, at 6.5%; energy and natural resources, at 4.6%; and commodities and managed futures, at 1.3%.

Among all participating foundations, 34% reported an increase in their effective spending rate (derived by dividing the amount spent on mission by the market value of the foundation at the beginning of the year), 22% reported a decrease and 14% reported no change. Thirty percent gave no answer or were uncertain.

Foundations continued the deleveraging trend of recent years. For fiscal 2012, the 13 foundations that reported carrying debt had an average debt level of $47 million, versus $54 million in fiscal 2011. Median debt, however, rose to nearly $15 million in fiscal 2012 from $14 million in fiscal 2011. The number of full-time professional private foundation staff members devoted to investments averaged 1.4 full-time equivalents, down from last year’s average of 1.5 FTEs. Twenty-three percent of study participants reported having a chief investment officer, a figure that rose to 72% among the largest participating foundations with at least $500 million in assets.

Eighty percent reported using a consultant, compared with 76% a year ago. Thirty-eight percent said they had substantially outsourced their investment function, up from last year’s 30% that did.

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Check out 10 Worst Charities in America on ThinkAdvisor.

Broker Dealers, Equity-Focused Managers To Lag On Taper Delay: Citi

Investors are still wading through the implications of the Federal Reserve's decision not to begin tapering its bond purchases. Citigroup's William Katz has a note out today wading through the consequences for brokers and asset managers.

He expects two main outcomes from the taper delay. Firstly, that broker dealers will likely lag in the short term, given rate leverage embedded in their models and recent outperformance—although he warns that a more prolonged delay would "materially impact" the time before these names will reach normalized earnings.  He also writes that managers focused on stocks will likely lag compared to fixed income managers, while wondering overall if the move calls into question the strength of the economic recovery and the credibility of the Fed.

Read on for company-specific musings from the report:

Moving up Franklin Resources (BEN) among Traditionals; Close out T. Rowe Price (TROW)/Legg Mason (LM) pair trade — We are still selective on Traditional managers but are re-ranking our short-term (ST) preferences as we believe FI-centric managers may outperform as NAV risks diminish while volumes become more sustainable. Invesco (IVZ) remains our top selection but we move up BEN ahead of TROW. BEN should outperform given: a) attractive relative valuation; and, b) easing investor concern over FI NAV risk and global bond volumes. We also close out long TROW/underweight LM pair trade as equities flow recovery could slow. Additionally, we see Wisdom Tree Investments (WETF) negatively impacted as DXJ is ~35% of AUM and depreciating USD may result in uneven ST volumes.

Expect B/Ds to lag in the ST but keeping perspective on LT thesis — The delay in tapering and the pullback in rate expectations weakens the ST case for rate sensitive names but does not take away from upside potential with respect to normalized earnings power. While the 10-year Treasury yield pulled back sharply on 9/18 to 2.70%, it is still up from ~2.50% at 6/30. Nonetheless, we see Buy-rated LPL Financial (LPLA) and Neutral-rated Raymond James Financial (RJF) as likely defensive in the ST given FI centricity within key businesses; lower correlation to long end of the curve; and underperformance relative to TD Ameritrade (AMTD) + Charles Schwab (SCHW). Among LPLA and RJF, we prefer LPLA given stronger ETR potential and less risk around consensus expectations. That said, there is no change to our positive LT thesis on B/Ds reflecting bottoming EPS expectations; improving retail re-engagement; and higher NIM.

For alternative names, Katz notes these remain well positioned, as low rates in the short term could reduce pressure on financing costs (although with the prospect of reduced economic growth). He favors Blackstone Group (BX), Apollo Group (APO), KKR, (KKR), and Och-Ziff Capital Management Group (OZM).

Five money management tips for the youth

If you are young and confused in money matters, don't worry; help is at hand. We present five money management tips for young investors.

India's 'young' population is the topic of several discussions and debates. As this sizeable chunk of the population starts earning, it gives rise to higher disposable incomes, needs and aspirations.

Expectedly, managing money is a natural corollary. However, the youth as a segment, has its own set of needs and niceties. In keeping with the same, we present five money management tips for young investors.

1.  Say no to lazy money 

One of the biggest financial blunders is to leave money idle in a savings bank account. Sure, some banks have capitalised on the liberalised regime to offer higher rates than the norm, but that doesn't justify leaving substantial monies in the bank account.

Instead, you should set aside enough money to meet your monthly expenses say for a 6-month period or thereabouts. In effect, this sum can be used to provide for any contingencies that may arise, and the balance monies should be invested.

If you can take on risk, then investing in equity mutual funds via a systematic investment plan is an option. If you would rather just park monies in an alternative avenue, then liquid funds or ultrashort bond funds can be considered.

Finally, if your risk appetite doesn't permit taking on risk, then  bank fixed deposits can be apt. Even a combination of the aforementioned options can be considered. While the investment avenues and allocation must be determined based on your risk profile, needs and investment horizon, the key is to make your money work for you.

2.  Buy a term plan

With age on your side, buying insurance is unlikely to be a priority for you. Nonetheless, the importance of buying insurance cannot be overstated. Start off with a term plan. A term plan offers insurance in its purest form.

Simply put, if an eventuality occurs, then the policy holder's dependents receive the sum assured; however, if the policy holder survives the tenure of the policy, then no pay out is made.

Since the investment component is missing, a term plan is the cheapest form of availing an insurance cover. Furthermore, given that you are young, the premium amount will be lower now rather than later; also, it certainly helps that the premium amount remains unchanged over the tenure of the policy.

Over time, as your needs and obligations change, you can consider adding more policies to your portfolio, but now is as good a time as any, to get started with a term plan.

3. Start a PPF account

Public Provident Fund or PPF as it is popularly referred to, makes for an attractive long-term investment avenue. Presently, investments in PPF earn an assured return of 8.8 percent per annum. Not only is the interest tax-free, investments of upto Rs 100,000 in each financial year are eligible for tax benefits under Section 80C of the Income Tax Act.

Additionally, the investments are backed by a sovereign guarantee ensuring the highest degree of safety for both the sum invested and interest.

Recurring investments (on an annual basis) add an element of discipline to the investment process; the latter coupled with a 15-year investment horizon make PPF an ideal avenue for long-term investing.

You can use PPF to provide for long-term goals like buying real estate or retirement. PPF's appeal is not restricted to just risk-averse investors. For instance, if you are a risk-taking investor, the PPF account can be apt as the stable, assured return component of your portfolio.

 4. Use your credit card judiciously

The basic advantages that a credit card offers are common knowledge. However, it is the ancillary benefits that you need to be circumspect about. For instance, it isn't uncommon for credit card companies to offer a cash limit, which entitles you to withdraw money using the card.

Card companies will also offer the option to pay a 'minimum amount due' rather than the entire due. Another common feature is to buy gadgets from a retailer who has tied-up with the credit card company; payments can be made using the EMI facility.

However, there is no free lunch in the world of credit cards. Availing the aforementioned facilities comes at a steep price an exorbitant interest rate. The credit card's terms and conditions will reveal that cash withdrawals attract an interest rate ranging around 2.5 percent-3.4 percent per month.

Furthermore, transaction fees are levied as well. Paying only the 'minimum amount due' or paying for shopping via the EMI facility can be pricey propositions too. Hence, it is prudent to be disciplined and spend only as much as you can afford to pay for at once. Don't use the credit card for any extraneous purpose.

5. Become financially literate

Surprised to read this as a money management tip? Don't be! In India, the investment industry is coming of age. There is a growing breed of investment advisors and financial planners who are equipped to help you manage your finances.

You would do well to engage the services of a competent and experienced advisor. That being said, it will certainly help your cause, if you are involved in the process as well be it evaluating options or choosing between them. This in turn necessitates that you be financially literate.

There are several books, websites and publications that offer information on investing and personal finance. Invest time and effort to educate yourself. The intention is not to become an expert; instead, you should have enough knowledge to be able to make informed decisions. Let's not forget that making informed decisions is the first step towards achieving financial nirvana.