The Smartest Thing Warren Buffett Ever Said

Berkshire Hathaway  (NYSE: BRK-A  ) (NYSE: BRK-B  ) CEO Warren Buffett is never shy about sharing wisdom. The brilliant investor is known for witty quips ("Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.") as well as longer parables (such as "The Superinvestors of Graham-and-Doddsville").

But could any one of Buffett's gems of wisdom be the best? Could there be one Buffett-ism to rule them all? To find out, I grabbed five game Fools to weigh in.

Scott Phillips: In trying to distill Warren Buffett's brilliance, many Buffett-watchers lean heavily on the Oracle of Omaha's formative years at the metaphorical knee of his mentor, the famed value investor Ben Graham.

Graham was notoriously mechanical in his investing; seeking to find companies with specific financial characteristics, then buy them in bulk. However, Buffett -- particularly after he met his business partner and Berkshire Vice-Chairman Charlie Munger -- is far from the myopically mechanical investor some would paint him to be. Indeed, in his 1982 Chairman's letter to Berkshire Hathaway shareholders, Warren Buffett wrote:

Managers and investors alike must understand that accounting numbers are the beginning, not the end, of business valuation.

Yes, the reported numbers matter -- a lot -- but they are a guide to starting to understand the business, not neatly packaged answers.

Buffett's brilliance was in taking the fundamental lessons he'd learned from Graham and improving on them by understanding the factors that build and sustain great companies. Buffett has said he has one message for the managers of Berkshire's subsidiaries -- "widen the moat." He wants them to focus on doing those things that make the business stronger and less vulnerable to the competition. Talking about Coca-Cola (NYSE: KO  ) , he said "Give me $10 billion and how much can I hurt Coca-Cola? I can't do it." That fact won't show up in black and white on the financial statements, but is far more important than the numbers themselves.

Jason Moser: I had the great fortune of attending the Berkshire meeting last year, and while I've followed Buffett for a while now, something he said during the Q&A session last year resonated with me. Someone asked him his opinion on gold, to which he replied (and I'm paraphrasing):

Let's say you own an ounce of gold today. You hold it, love it and caress it. In 50 years you'll still own an ounce of gold. Now say you own 100 acres of farmland today. In 50 years you'll still own that same 100 acres of farmland. The difference is you'll also have had the time to produce crops to grow more stuff to buy more farmland and whatever else you want. In other words, there's a tremendous cycle of production there. Gold on the other hand is more or less an unproductive asset.

This, to me, is key to why Buffett has been such a successful investor all these years. Not only is he able to focus on longer periods of time, but also the ever-so-valuable cycles of production that can occur during that time. It should therefore come as no surprise that if you gave me a bar of gold today, I would sell it and go buy stocks.

Tim Beyers: While Buffett is often thought of as the patron saint of value investing, I find him in many ways to be the quintessential Rule Breaker. Just listen to what he said at last year's confab:

I would never spend a lot of time valuing declining businesses. The same amount of energy and intelligence brought to other businesses is just going to work out better.

I'd never have believed it had I not heard it myself. After all, what is value investing if not for figuring the worth of an oversold business that may, in fact, be in decline?

Buffett's lesson here, I think, is to be open to a broad range of stock ideas. Don't merely look for a low price-to-earnings ratio. Look instead for businesses that are surprisingly strong defenders of the majority share of a profitable niche, such as Walt Disney  (NYSE: DIS  ) . The House of Mouse isn't cheap at 20 times earnings, but can you name an enterprise with more big-name brands under its belt? Marvel, Star Wars, Pixar, and all those princesses that seven-year-old girls worship? Don't be surprised if Berkshire takes a close-up tour of the Magic Kingdom.

Jacob Roche: 

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.

This quote always stuck with me because it's so applicable to both life and business. It takes a long history of coming through for people to build a reputation with your friends, family, and coworkers, but one big mistake can shatter that reputation and leave a lasting bitter taste in the mouths of people who know you. Whether you're the normally responsible friend who had too a few too many drinks at a party, or the go-to guy at work who told off the wrong client, a person's worst impression of you is usually their most lasting.

This is even more true for the highest levels of management in a large company. It can take decades for a company to earn the trust of its customers, shareholders, and employees. And while a big accounting scandal may take years to fully percolate, it starts with one bad decision. Whether it was the massive accounting scandals at Enron, Worldcom, or even Waste Management, an unethical decision that could have been avoided can, at best, result in massive fines, like WM's half-billion dollar shareholder suit, or even jail time in the case of Enron and Worldcom executives. These unfortunate fates could have been avoided by managers at the top simply deciding to do things differently in that crucial moment.

Dan Dzombak: 

Buffett: I tell college students, when you get to be my age, you will be successful if the people who you hope to have love you, do love you. Charlie and I know people who have buildings named after them, receive great honors, etc., and nobody loves them -- not even the people who give them honors. Charlie and I talk about wouldn't it be great if we could buy love for $1 million. But the only way to be loved is to be lovable. You always get back more than you give away. If you don't give any, you won't get any. Everybody loves Don. There's nobody I know who commands the love of others who doesn't feel like a success. And I can't imagine people who aren't loved feel very successful.

Munger: You don't want to be like the motion picture exec who had so many people at his funeral, but they were there just make sure he was dead. Or how about the guy who, at his funeral, the priest said, "Won't anyone stand up and say anything nice for the deceased?" and finally someone said, "Well, his brother was worse."

Buffett: Most people in this room and most college students I talk to will have plenty of money, but some will have few friends.

-- 2003 Berkshire Hathaway Annual Meeting

Coming from one of the richest people in the world, the quote is a good reminder that there's a lot more to a successful life than just money. My definition of success is long-term sustainable happiness, and having friends who love you is a key part of that. A close network of friends has been shown to help fight illness and depression, speed recovery, slow aging, and prolong life. While it takes effort to be lovable, Buffett has shown that the benefits are massive and certainly worth the effort.

 

Heading to Omaha
On May 4, Berkshire Hathaway will be holding its epic annual meeting in Omaha, and the Fool will be there to bring you everything you need to know from this "Woodstock for Capitalists." Simply click here to follow along with all of the Fool's coverage.

PAREXEL Makes an Acquisition

Investing in Biotech Companies? Know These Names!

Investing in biotech companies can be intimidating, especially for investors without a science background. But there's hope. Understanding the naming system can make things easier to piece together, giving you confidence to invest in the sector.

Here's a breakdown of some of the suffixes that biotech companies use to name their generic drugs:

-afil: Erectile dysfunction drugs that inhibit phosphodiesterase 5 usually end in -afil. Pfizer's (NYSE: PFE  )  Viagra (sildenafil), and Eli Lilly's Cialis (tadalafil) are members of the group.

-alol: Alpha and beta blockers, which includes a multitude of drugs, usually end in -alol.

-caserin: Drugs that stimulate the serotonin receptor end in caserin like Arena Pharmaceuticals' (NASDAQ: ARNA  ) Belviq (lorcaserin). The drug is approved to treat obesity, but drugs that activate the serotonin receptor can do other things. Wyeth was developing one, vabicaserin, as an antipsychotic, for instance.

-mab: Drugs that end in -mab are usually monoclonal antibodies. Monoclonal means they bind to a protein in one specific site. Monoclonal antibodies usually inhibit the protein they're designed to bind to. AbbVie's (NYSE: ABBV  ) Humira (adalimumab), for instance, binds to tumor necrosis factor-alpha, which prevents it from activating a cascade that stimulates the immune system.

-sartan: Blood pressure drugs that block the activation of angiotensin II AT1 receptors usually end in -sartan. Merck's Cozaar (losartan) and Novartis' Diovan (valsartan) are both in this class of drug.

-statin: This is an obvious one. Statins, which lower cholesterol by inhibiting HMG-CoA reductase, usually end in -statin. Interestingly, the companies also used a similar naming situation (ending the drugs in -or) for many of the brand names as well: Pfizer's Lipitor (atorvastatin), Merck's Zocor (simvastatin), and AstraZeneca's Crestor (rosuvastatin). As far as I know, the companies weren't required to follow a similar naming for trade names, but it probably just made sense after the first couple did it.

-vir: Most antiviral drugs end in -vir, although not every drug used to treat viral infections uses the scheme. Gilead Sciences (NASDAQ: GILD  ) had two HIV drugs turned down by the Food and Drug Administration this week: elvitegravir and cobicistat. The latter doesn't end in -vir, likely because cobicistat is considered a booster; its job in the drug cocktail is to inhibit human proteins responsible for breaking down the other drugs.

What's in a name?
Biotech companies usually give drugs at least three different names during their development. Drugs often start with a code name. Pfizer, for instance, names its early stage drugs PF- followed by a series of numbers. Next, biotech companies assign generic name using the system outlined by the U.S. Adopted Names Council. Finally, drugs are given a brand name that's regulated by the FDA.

There's no standard for when a company switches from one name to another. Some biotech companies start using brand names while the drug is still in development while others wait until the drug has been approved by the FDA.

Waiting has its advantages; the FDA has been known to reject brand names, usually because they're too close to a current drug name. The agency wants to avoid prescriptions being filled incorrectly because of doctor's messy handwriting.

VIVUS' (NASDAQ: VVUS  ) Qsymia, for instance, was originally called Qnexa. The biotech company took awhile to get its sales people in place after approval, so it probably didn't have a bunch of manufacturing and sales materials with Qnexa on them printed before the approval. But all the branding opportunities as the drug worked its way through the drug development process were wasted. A Google search for Qnexa on Google results in about 610,000 hits!

Who will win the obesity drug market?
Can VIVUS pick up its lagging sales and fend off the competition, or will Arena Pharmaceuticals reign supreme in the obesity space? If you're in the dark, grab copies of The Motley Fool's premium research reports on VIVUS and Arena Pharmaceuticals to get must-know information, including an in-depth look at the obesity market and reasons to buy and sell both stocks. Click now for an exclusive look at Arena and VIVUS -- complete with a full year of free updates -- today.

 

Will the U.S. Jobs Report Derail the Gold Rally?

The U.S. Bureau of Labor Statistics recently released weekly data on the condition of the U.S. labor market that showed the unemployment picture is better than expected. This parallels a recent rally in gold prices that has been driven by demand for physical gold. The rally represents a potential structural shift in the gold market, explaining why miners like Goldcorp (NYSE: GG  ) , Barrick Gold (NYSE: ABX  ) , and Newmont Mining (NYSE: NEM  )  outperformed the SPDR Gold Trust (NYSEMKT: GLD  ) for the week after the two-day plunge in gold prices (see chart below) and roughly in line since that same plunge.

Source: GLD data by YCharts.

In the video below, Fool.com contributor Doug Ehrman discusses the potential impact of the U.S. jobs report on the gold market and what investors can expect from here.

Goldcorp is one of the leading players in the gold mining market. For the last several years, investors have been the beneficiaries of several successful acquisitions and strong organic growth. Goldcorp's low-cost production of one of the most sought-after metals in the world continues to make this stock an attractive choice for long-term investors. To learn everything you need to know about this mining specialist, you're invited to check out The Motley Fool's premium research report on the company, which comes with a full year of ongoing updates and analysis to keep you informed as key news breaks. Click here now to claim your copy today.

American Autos Don't Get Enough Credit

At least once a week I hear someone hollering that Detroit's vehicles are junk. It makes me realize how far in the past consumer perceptions of Detroit's vehicles remain. I don't think some people realize how far domestic vehicles have come in the past five years. Some only remember when the Big Three made great trucks but lousy, inefficient, poor-quality vehicles -- and refuse to give it another thought. Some of the investing community still describes Ford (NYSE: F  ) and General Motors (NYSE: GM  ) stock in similar distasteful terms.

Times have changed. In looking at the new vehicles rolling out of Detroit, here are a few things for consumers to keep in mind, as well as what they mean for investors. I'll use Ford as my prime example.

Quality
It took years for the American consumer to give up on domestic vehicles, and it will take years to win them back, but the fact remains that the Big Three have been fighting -- and perhaps winning -- the quality battle. In your head, rank Toyota (NYSE: TM  ) , Honda, GM, and Ford one through four, with No. 1 representing the highest total number of recalls over the past three years. Whom do you think comes out on top? The results may surprise you. 

Toyota, previously known for its industry-leading quality, tops all automakers in total recalls. It also has more recalls than the No. 2 and 3 spots combined -- or GM tripled -- in that time period.

I'll take it a step beyond recalls and point out that Ford is winning critics over with its value. Ford was recently a shining star in the U.S News and World Report "Best Car for the Money" awards for 2013. It dominated the competition by taking home six first-place categories, more than any other brand. 

Past and present
When Toyota and Honda first entered the U.S. market, everybody just knew Detroit was invincible. Well, we all know what happens when we get complacent, and sure enough, Detroit fell -- hard.

We find ourselves in a similar situation today with perceptions, except the roles are reversed. Recently it was unthinkable for Detroit to produce a quality and fuel-efficient passenger car to compete with the Japanese. People still struggle to grasp the notion that things have changed. After all, we just know the Toyota Camry and Corolla are unbeatable. The Camry has been America's best-selling car for 11 straight years, after all.

But look at how far the Ford Fusion has come in its short six-year lifespan:

The Fusion is keeping pace so far this year as well, with both vehicles topping 80,000 sales in the U.S. for the first quarter. Camry sales, meanwhile, declined 12% last month, losing some ground to the Fusion, which gained 6%. The factory producing the Fusion is now running over capacity to try to keep cars on the lots.

But this race between the Fusion and Camry isn't the only story making headlines for the competing automakers. Last year, the Ford Focus topped over 1 million in global sales, allowing it to claim the No. 1 selling "nameplate" crown -- a crown that Toyota's Corolla had worn. When global sales for the Corolla sold under different names are included, the Corolla does top the Focus, with 1.16 million sold to 1.02 million -- but that doesn't change the fact that Toyota is probably scratching its head and wondering how Ford has managed to make such a quick turnaround. Ford not only competes in segments it was once laughed out of -- it's beginning to win.

Bottom line
Popular vehicles and better management have provided a consistently profitable bottom line for Ford. The company has also improved operations while growing economies of scale -- giving a boost to its industry-leading margins. It reinstated its dividend, and then soon after doubled it. Loyal investors from the start of Ford's turnaround are enjoying their spoils while waiting for a future that could bring even greater returns.

As consumers begin to give Detroit another chance, it should be a rewarding ride for Ford investors.

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

Meritor Selling Brazilian JV Stake

Roper Industries's Earnings Beat Last Year's by 17%

Roper Industries (NYSE: ROP  ) reported earnings on April 29. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Roper Industries missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share grew significantly. GAAP earnings per share grew.

Margins increased across the board.

Revenue details
Roper Industries reported revenue of $737.1 million. The seven analysts polled by S&P Capital IQ wanted to see a top line of $776.6 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.27. The 11 earnings estimates compiled by S&P Capital IQ averaged $1.22 per share. Non-GAAP EPS of $1.27 for Q1 were 17% higher than the prior-year quarter's $1.09 per share. GAAP EPS of $1.25 for Q1 were 15% higher than the prior-year quarter's $1.09 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 57.2%, 220 basis points better than the prior-year quarter. Operating margin was 25.1%, 110 basis points better than the prior-year quarter. Net margin was 16.9%, 170 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $807.9 million. On the bottom line, the average EPS estimate is $1.39.

Next year's average estimate for revenue is $3.29 billion. The average EPS estimate is $5.73.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 117 members out of 126 rating the stock outperform, and nine members rating it underperform. Among 39 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 37 give Roper Industries a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Roper Industries is hold, with an average price target of $126.60.

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Add Roper Industries to My Watchlist.

Today's 3 Worst Stocks

Surprisingly strong corporate earnings, combined with a jump in home sales during March, sent the S&P 500 Index (SNPINDEX: ^GSPC  ) to its third straight day of gains. A brief panic caused by a fake tweet from the Associated Press roiled markets around lunchtime, but within minutes the tweet was exposed as the work of a hacker. Thankfully, claims that there was an explosion at the White House were patently false, and the S&P ended more than 1% higher, at 1578. But even the bullish sentiment of the day couldn't rally these three S&P components.

While rapid swings and unexpected news is par for the course on Wall Street, logic can be a little harder to find. Such was the case on Tuesday for shares of office supplies retailer Staples (NASDAQ: SPLS  ) , which slipped 4.5% on virtually no material news. The drop could be due to algorithm-based technical trading, as shares just crossed below their 200-day moving averages (apparently that's bad). With so little to substantiate today's weak performance, shareholders should take Tuesday's slip with a grain of salt. 

If you're a Cliffs Natural Resources (NYSE: CLF  ) investor, however, you may want to take a closer look at the company and its direction. Shares lost 1.9% today after the stock suffered a price target decrease at the hands of FBR Capital yesterday. A $2.5 billion company with $2.1 billion in debt on the books, Cliffs needs to start ponying up to its creditors before its shareholders can expect handsome rewards of their own.

Lastly, document management powerhouse Xerox (NYSE: XRX  ) shed 1.9% on Tuesday after reporting earnings. While revenues were down slightly from a year ago, profits increased from $269 million to $296 million. Not bad, actually. But the real hit to the stock came from the company's forecasts. Headwinds in the document technology area have Xerox looking for earnings per share between $0.19 and $0.21 this quarter, a far cry from the $0.26 figure analysts expected.

 

Cliffs Natural Resources has grown from a domestic iron ore producer into an international player in both the iron ore and metallurgical coal markets. It has also underwhelmed investors lately, especially after its dramatic 76% dividend cut in February. However, it could now be looked at as a possible value play due to several factors that are likely to remain advantageous for Cliffs' management. For details on these advantages and more, click here now to check out The Motley Fool's premium research report on the company.

Natural Gas Gives Households a Break on Energy Bills

Utility and Manufacturing companies may be enjoying the benefits of cheap natural gas in the U.S., but what about everyday American consumers? According to the Energy Information Administration, quite a bit. In 2012, only 2.7% of total household income was dedicated to energy bills, the lowest its been in a decade. Much of that can be attributed to a 3% reduction in residential gas prices. 

Certainly, increased production is a big reason for this -- but its not the only reason. We also need to consider that pipeline infrastructure over the past few years has allowed gas to more efficiently reach the market. In this video, Fool.com contributor Tyler Crowe takes a look at some of the driving forces behind this drop in energy bills, and if we can expect this trend to continue through 2013.

It's easy to forget the necessity of midstream operators that seamlessly transport oil and gas throughout the United States. Kinder Morgan is one of these operators, and one that investors should commit to memory due to its sheer size – it's the fourth largest energy company in the U.S. – not to mention its enormous potential for profits. In The Motley Fool's premium research report on Kinder Morgan, we break down the company's growing opportunity – as well as the risks to watch out for – in order to uncover whether it's a buy or a sell. To determine whether this dividend giant is right for your portfolio, simply click here now to claim your copy of this invaluable investor's resource.

Can Athenahealth Meet These Numbers?

Athenahealth (Nasdaq: ATHN  ) is expected to report Q1 earnings on May 2. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Athenahealth's revenues will increase 25.4% and EPS will grow 64.3%.

The average estimate for revenue is $121.1 million. On the bottom line, the average EPS estimate is $0.23.

Revenue details
Last quarter, Athenahealth reported revenue of $116.3 million. GAAP reported sales were 26% higher than the prior-year quarter's $92.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $0.29. GAAP EPS of $0.15 were the same as the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 61.1%, 130 basis points worse than the prior-year quarter. Operating margin was 10.9%, 10 basis points worse than the prior-year quarter. Net margin was 5.1%, 70 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $542.0 million. The average EPS estimate is $1.22.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 191 members out of 249 rating the stock outperform, and 58 members rating it underperform. Among 68 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 55 give Athenahealth a green thumbs-up, and 13 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Athenahealth is hold, with an average price target of $79.18.

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Add Athenahealth to My Watchlist.

These Cars Are Big With Subprime Buyers

The Kia Forte may be a favorite of buyers with sub-prime credit. Photo credit: Kia

Is your credit rating damaged? Do you need a new car?

You might want to consider buying a car from Chrysler or Kia (NASDAQOTH: KIMTF  ) , like the Kia Forte pictured above.

Chrysler and Kia are the automakers with the biggest presence on a new list of top 10 new vehicles bought by subprime borrowers who worked through CarFinance.com, a site that helps subprime buyers find financing.

CarFinance.com's data set isn't big enough for us to draw too many conclusions about what actually might be going on here. But I found it interesting, because the automakers on the list have seen big growth since the economic crisis.

And for a couple of those automakers, there's some evidence that subprime lending might have a lot to do with that growth.

10 cars popular with subprime buyers
Here are the vehicles on CarFinance.com's Top 10 list, in order:

Vehicle

Type

Automaker

Starting price

Dodge Avenger	Mid-sized sedan	Chrysler	$18,995
Kia Forte	Compact	Kia	$15,900
Kia Optima	Mid-sized sedan	Kia	$21,350
Chrysler 200	Mid-sized sedan	Chrysler	$18,995
Dodge Journey	Mid-sized SUV	Chrysler	$19,590
Ford Focus	Compact	Ford (NYSE: F  )	$16,200
Ram 1500	Pickup	Chrysler	$22,640
Nissan Sentra	Compact	Nissan (NASDAQOTH: NSANY  )	$15,990
Nissan Versa	Subcompact	Nissan	$11,990
Kia Sorento	Mid-sized SUV	Kia	$24,100

This list probably reflects a limited data set, but it has a lot of overlap with one released by auto-data site Edmunds.com last year. That list showed the top 10 new cars with the highest percentage of purchasers paying more than 10% interest on their loans, which Edmunds considers an indicator of subprime status. The Avenger, Forte, Sentra, 200, Journey, and Versa were all on that list as well.

Not surprisingly, almost all of the vehicles on the list are value-priced choices. Chrysler markets the Dodge Avenger as America's "most affordable midsized car," and the South Korean-made Kias are positioned as stylish but inexpensive alternatives to the mainstream Japanese brands.

The exception is the Focus, which Ford has positioned as a somewhat premium product. But its position on this list might just reflect its general popularity -- Ford said recently that the Focus was the world's best-selling car in 2012.

Like most automakers, Ford has an in-house financing arm, Ford Credit. And like most automakers' finance companies, Ford Credit does make loans to subprime buyers. But Ford Credit is quite conservative, generally speaking, and officials said late last year that their "high risk" loans were in the 5% to 6% range -- in line with the industry average, and not a cause for concern.

The story is a little different with Chrysler, though. Chrysler doesn't have an in-house financing arm, for one thing. And for another, it has always had a reputation for being a little more willing than most to find deals for customers with damaged credit.

Chrysler and Kia top the subprime list
Chrysler's reputation has some data to support it: Data from credit agency Experian last year showed that in the first quarter of 2012, 29% of Chrysler's customers had credit scores below 680, which Experian considers subprime.

That was good enough for second place among the automakers doing business in the United States.

Care to guess who was in first? If you guessed corporate cousins Hyundai  (NASDAQOTH: HYMTF  ) and Kia, who together have 31%, you got it.

Now, if I tell you that Chrysler's U.S. sales were up 21% last year, does that suggest anything? Or that Kia had a streak of 27 straight months of U.S. sales growth that ended only last December?

I don't know if it does. But the economic downturn left a lot of Americans with dents in their credit ratings. It might well be that these companies are more willing to reach out to these folks than others are-- and that might turn out to be a sales advantage nowadays.

Have you considered buying Ford stock?
Ford's turnaround has been one for the history books. But there's good reason to think that the Blue Oval still has big growth opportunities ahead. We've outlined those opportunities in detail, in the Fool's premium Ford research service. If you're looking for some freshly updated guidance to Ford's prospects in coming years, you've come to the right place -- click here to get started now.

Raytheon Wins $58.1 Million in Satcom and Radar Contracts

After a slow start to the week Monday, Department of Defense contracts are rolling out with increasing speed as the week progresses. Worth a combined $621 million, 13 contracts were awarded on Tuesday and 25 on Wednesday.

One of the bigger winners in the race to land contracts yesterday was Raytheon (NYSE: RTN  ) , which came away with two contract wins worth a combined $58.1 million -- about 9% of the total.

Of the two contracts Raytheon won, the smaller award took the form of a $7.5 million indefinite-delivery, firm-fixed-price contract to supply the U.S. Army with hardware components to support the Multiplexer Integration And Digital Communications Satellite Subsystem (DCSS) Automation System. Known by the overarching acronym "MIDAS," this system is designed to improve and expand military tactical satellite communications.

The larger contract, for $50.6 million, was a fixed-price-incentive, firm fixed-price, cost-reimbursement contract to supply the Air Force with 19 D-RAPCON deployable air traffic control systems, which can be used to control air traffic at remote battlefield or disaster area sites. Raytheon is expected to deliver all 19 systems by Dec. 2016.

 

Yahoo! New CEO rights the ship

As one of the original dotcom behemoths, Web-portal and online content provider Yahoo! (YHOO) needs no introduction.

The company has come a long way from its years of market dominance in the early 2000s, with Google usurping much of Yahoo's former territory. Ironically, former Google executive Marissa Mayer now has the helm at Yahoo, and is finally righting the ship.

Yahoo has always been an excellent value as a company from an asset perspective alone—it's why Microsoft tried to purchase Yahoo back in 2008. But, under Mayer's leadership, Yahoo is finally starting to develop meaningful partnerships to take advantage of its online assets.

For instance, Yahoo recently signed on to a deal with Cloud-storage specialist Dropbox in order to offer broader Yahoo!Mail services. Most notably, however, is the deepening relationship with Apple.

Since both Apple and Yahoo have a common enemy in Google, a closer integration of services and data offerings on Apple iOS devices benefits both companies significantly, with Apple distancing itself from Google and Yahoo developing a much needed presence in the mobile market.

As for Yahoo's bottom line, Mayer's presence has helped reinvigorate stagnant revenue, with Yahoo banking 2% growth last quarter on earnings growth of 28%.

In fact, Yahoo has averaged earnings growth of 47% during the past four quarters. Investors should note that Yahoo is scheduled to release its 2013 Q1 earnings after the close on April 16. While we expect no real surprises, you should take only small bites ahead of the event, or hold off until after the report.

For the past several years, YHOO shares were as flat as the company's revenue growth. In fact, the stock hardly strayed outside of a 2-point trading range between 16 and 18 since the start of 2009.

That all changed in the second half of 2012, as Marissa Mayer was appointed CEO. The stock came to life following the news, embarking on rally in late October that would carry YHOO more than 60% higher. The stock has enjoyed solid support from its 25-day and 50-day trendlines throughout this uptrend.

With earnings looming, YHOO is trading at a multi-year high just below former support/resistance in the $25 region. Another solid quarterly report could be just the catalyst YHOO needs to extend its current revival.

Trading Through the 2008 Crash From the Perspective of a Financial Historian

The 2008 financial crisis will have a place in the history books and be talked about for centuries. If you invested through it, congratulations.

We all remember what it felt like to see the Dow Jones (DJINDICES: ^DJI  ) fall 50%. I sure do, anyway.

But what was it like from the perspective of a financial historian? I asked David Cowen, CEO of the Museum of American Finance. Here's what he had to say (transcript follows):

Morgan Housel: During 2008, did you respond with less of a shock than others? Do you think knowing that this has happened before -- we've had crash after crash after crash -- whereas to Main Street, it sort of felt like this is a one-in-a-century event?

David Cowen: You know, that's interesting because you're asking me personally, and I was actually trading at that time and had to live through that moment, and so I wasn't thinking with my financial historian's hat, but when you're in the moment, just trying to survive and do the right things in that context. So no, I didn't have my financial historian's hat on the way I do at other times. But then once you get through that moment, you start to contextualize it. You know that in 1792, at the beginnings of our nation, we had a financial panic; 1819 we had a panic -- 1837, 1857, 1870, 1873, 1890s, et cetera, et cetera. 1907, another famous panic. 1929, as I keep going on and on. So yeah, when you step back from it, but on those days and those moments you're in the fight.

But what I would say is when there's a central regulating monetary authority like the Federal Reserve -- and in our periods of history, the first bank in the United States, 1791 to 1811; second bank in the United States, 1816 to '36 -- that it's much more mitigated. There are much less of these type of panics when there is a central regulating monetary authority to check the activity to the best extent they can and then be lender of last resort to assist in times of need.

Morgan Housel: If we have fewer crises within the central-bank model, are they deeper and more severe when they happen? There have been people who have made that argument.

David Cowen: I don't necessarily think so, because let's take a look at the 1987 crash. We quickly rebound from that, right? The Fed, Greenspan injects a lot of liquidity so there are times they can stem what might have been exasperating or exasperating circumstances. So no, I don't think so, though we're in a very difficult one right now. Ben Bernanke's a great student of the Depression, but most economists, I think, would say if they didn't take the actions they did in 2008, we would have had a much more severe downturn than we actually did.

link

Can Apple Stay Above $400?

After three consecutive closes below the psychologically important $400 level, Apple (NASDAQ: AAPL  ) managed to climb higher during Tuesday's session to close at $406.13. Apple's stock has been falling since it crossed $700 last fall, and recent operating results are not helping matters. While the company announced that it will speed up the clip at which it returns cash to investors, it is not doing so at the rate many had hoped to see from Cupertino. The question now becomes whether Apple has put the bad news behind it and can grow from here or if things are really beginning to look grim. While news of a slower-than-expected release schedule is not good news for shareholders, at current levels the stock is attractive.

Earnings results
CEO Tim Cook was unusually candid about the tepid nature of Apple's latest operating results: "Though we've achieved a credible scale and financial success, we acknowledge that our growth rate has slowed and our margins have decreased from the exceptionally high level we experienced in 2012." For the second fiscal quarter, Apple saw profits fall by 18% even with an 11% rise in revenue. Reduced analyst expectations had the company earning $10 per share; Apple reported EPS of $10.09 relative to $12.30 a year earlier.

Other news
As a part of the release, the company also announced that it was accelerating the rate at which it returns money to investors. The dividend will be increased by 15% to $3.05 per quarter and a stock repurchase program will be put in place as well. All in all, the company plans to return as much as $100 billion to investors by the end of 2015. The move is seen by some analysts as a good start rather than a complete solution, as shareholders have been clamoring for more since the shareholders' meeting.

In addition to earnings details and an updated capital plan, Cook hinted that new products would not be available as quickly as once thought. He alluded to new releases in the fall, meaning the iPhone 5 upgrade would miss the summer release some had hoped for. Rumors of a cheaper iPhone abound, though it seems this may be delayed as well.

Behind the numbers
While the operating results were hardly glowing, putting them in context is an important first step. It is very easy to forget how stellar Apple's results have been, even compared to rivals like Google and Samsung. Google has avoided the plunge that took Apple shares down 44%, but on valuation and other metrics, Apple's stock looks compelling here. The impact of these past results is that the street is now looking for near perfection from the company. Most companies and investors would salivate over Apple's results, yet they look meager relative to hopes.

Still, the report was not without some points of concern. For example, growth in China came in around 8%. This was the slowest growth region for the company behind the U.S., underscoring how much of a challenge Apple faces in this critical market. With Android still the dominant OS, and with Nokia's Windows Phones doing well, Apple's success is far from certain in the region.

Ultimately, the $400 level remains a critical one for Apple, particularly over the next few days. If the stock can hold above this mark, investors may gain the confidence to help push it higher. If shares falter below $400 for an extended period, the stock could tumble further. Even given this risk, an allocation makes sense here because the pure value is absolutely present.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

CenterPoint Energy Declares Fresh Dividend

CenterPoint Energy (NYSE: CNP  ) is keeping true to its steady nature and maintaining its quarterly dividend policy. The company announced that it will distribute $0.2075 per share of its common stock on June 10 to shareholders of record as of May 16. This amount matches CenterPoint's previous payout, which was dispensed in February. Before that, the company distributed $0.2025 per share.

The company is a very steady and predictable dividend payer. It tends to raise that payout at the beginning of every year.

The current dividend annualizes to $0.83 per share. That yields 3.4% at CenterPoint's current stock price of $24.32.

More Expert Advice from The Motley Fool

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

South African Miners No Longer Willing to Pay to Play

Considering the work stoppages and violent clashes that have become the norm at South African precious-metals mines, perhaps the miners were wondering exactly what they were getting for their money. An expose by South Africa's Daily Maverick has uncovered a system where miners such as AngloGold Ashanti (NYSE: AU  ) and BHP Billiton (NYSE: BHP  ) surreptitiously paid for the salaries of the heads of the local mining unions to keep the mine workers in line, and it's only because the miners sought to end the "uncomfortable arrangement" with the unions that the matter came to light.

Mining in mineral-rich South Africa has been contentious for years, but in recent months, clashes have become particularly violent, with a strike last August at Lonmin's Marikana platinum mine leaving 44 people dead and bringing the crisis to the forefront.

Much of the violence is said to be a result of the unions' competition to represent the workers as the new Association of Mineworkers & Construction Union seeks to unseat the powerful National Union of Mineworkers, which is closely tied to the African National Congress political party. AngloGold Ashanti paid the salary of NUM's president, while BHP paid the salary of the deputy president. The Lonmin clash was in part a result of workers who no longer wanted to be represented by NUM, as they saw a conflict of interest between the union representatives and the miners.

Mining operations have long been subject to the vagaries of strikes and violence in South Africa. Harmony Gold (NYSE: HMY  ) suspended its operations at Kusasalethu because of security concerns, Gold Fields (NYSE: GFI  ) lost 35,000 ounces of production and had its credit rating reduced by Standard & Poor's because of labor unrest (and reduced its full-year production forecast by 200,000 ounces), and Xstrata has had to halt activity several times as a result of union violence.

From Barrick Gold to Kinross Gold, miners have been looking to exit from their South African holdings -- partially as a result to bring costs under control as commodity prices have plunged, but also as a means of insulating themselves from the vagaries of the country's labor problems.

The Daily Maverick indicated that jealousy over the payouts may have been a contributing factor to the violence, as unions on the outs wanted in on the lucrative stipends the others were receiving. Since the payments were said to be originally enacted to create a more harmonious relationship with the unions, the escalating level of clashes may have left the miners wondering what they were getting for their money.

It was a relationship that was bound to be problematic considering the inherent conflicts of interest, and ending the system may help to ameliorate, even if it doesn't eliminate, the violent and bloody protests of labor unions.

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Bigger Threat to Newspapers: Google or Amazon?

Jeff Bezos is in the disruption business. His latest target: printed news media. The Amazon.com (NASDAQ: AMZN  ) founder led a $5 million investment round in Henry Blodget's online news site, Business Insider.

The pairing is interesting on multiple levels. Blodget at one time covered Bezos and Amazon as a financial analyst for Merrill Lynch, with disastrous results. He's rehabilitated his image in the years since. BI is a go-to-destination for many seeking market and business commentary. More than a few Motley Fool writings have appeared there.

Amazon, meanwhile, seems determined to shatter the very foundation of traditional media and publishing. Think of direct-to-Kindle books and self-produced television shows, for example. Now, by investing in BI, Bezos appears to be going after newspapers and traditional magazines, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following video.

Will he succeed? A digital newsstand of direct-to-Kindle commentary isn't out of the question, Tim says, and it could hurt traditional properties such as New York Times Co. (NYSE: NYT  ) . Please watch this short video to get Tim's full take, and then leave a comment to let us know where you see Business Insider fitting into Amazon's plans.

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Has Caterpillar Finally Cleaned out Its Closet?

Caterpillar (NYSE: CAT  ) came in only just slightly below analyst estimates this quarter, but in the video below, Motley Fool industrials analyst Blake Bos tells investors why short-term quarterly earnings are far from the real story. Blake gives investors a clear picture of Caterpillar's continuing problem with high inventory levels, and he shines a light on the inventory mismanagement that has led to Caterpillar's awful days inventory outstanding numbers. The stock has ticked up recently due to the expectation that these inventory issues should be clearing up – Blake tells investors exactly where to look to know if that narrative is really playing out.

Caterpillar is the market share leader in an industry in which size matters; its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in The Motley Fool's brand-new report. Just click here to access it now.

At Long Last, Is This the Turning Point for Corning Stock?

The Men Who Run IMI

LONDON -- Management can make all the difference to a company's success and, thus, its share price.

The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I'm assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today I am looking at IMI  (LSE: IMI  ) , the maker of fluid control valves for everything from nuclear power plants to drinks machines.

Here are the key directors:

Director Position

Robert Quarta	(non-exec) Chairman
Martin Lamb	Chief Executive
Douglas Hurt	Finance Director
Roy Twite	Executive Director

Robert Quarta has been chairman since November 2011. He is a partner and European chairman of Clayton, Dubilier & Rice, the U.S. private equity firm that numbers Jack Welch and Terry Leahy among its advisors. He worked in an executive capacity with the firm from 2001. He was CEO of BBA Aviation from 1993 to 2001, subsequently moving up to be its chairman until 2007. He spent the previous 17 years in various positions in BTR. A slew of previous non-executive directorships include BAE Systems.

Restructuring
Martin Lamb has been CEO for 12 years. An engineer by training, he has spent most of his career with IMI, joining in 1986, and quickly moving into management and business development roles. He joined the board in 1996, responsible for the beverages-dispensing business.

On becoming CEO in 2001, he instituted a strategic review that led to substantial restructuring over the next few years. Diversified operations were sold off, manufacturing was relocated to low-cost countries, the business was focussed globally on product niches, and the balance sheet strengthened with debt reduction. The shares have quadrupled during his tenure.

A chartered accountant, Douglas Hurt joined IMI as finance director in 2006. After leaving the profession he worked at GlaxoSmithKline in finance and operational roles.

Company man
Roy Twite is a company man. He joined IMI's engineering graduate recruitment scheme in 1988, and worked his way up the company, running various divisional operations from 2001 onwards. He now has direct responsibility for two of IMI's more significant divisions. A second executive director, Ian Whiting, left last year, and has not been replaced.

IMI's non-executives have a broad range of backgrounds, not dominated by engineers. Phil Bentley, the Managing Director of British Gas. who is controversially getting a 10 million pounds pay-off on his departure from Centrica this year, was appointed in 2012.

I analyse management teams from five different angles to help work out a verdict. Here's my assessment:

1. Reputation. Management CVs and track record. Very good.	Score 4/5
2. Performance. Success at the company. Excellent over a long period.	Score 5/5
3. Board Composition. Skills, experience, balance Surprising.	Score 3/5
4. Remuneration. Fairness of pay, link to performance. Uncontroversial.	Score 3/5
5. Directors' Holdings, compared to their pay. Three executives each have over £2m-worth of shares.	Score 4/5

Overall, IMI scores 19 out of 25, a very good result. Shareholders have done well from a long-serving CEO, who fashioned IMI into what it is today.

I've collated all my FTSE 100 boardroom verdicts on this summary page.

Buffett's favourite FTSE share
Legendary investor Warren Buffett has always looked for impressive management teams when picking stocks. His latest acquisition, Heinz, has long had a reputation for strong management. Indeed, Mr. Buffett praised its "excellent management" alongside its high-quality products and continuous innovation.

So, I think it's important to tell you about the FTSE 100 company in which the billionaire stock-picker has a substantial stake. A special free report from The Motley Fool -- "The One U.K. Share Warren Buffett Loves" -- explains Mr. Buffett's purchase and investing logic in full.

And Mr. Buffett, don't forget, rarely invests outside his native United States, which, to my mind, makes this British blue chip -- and its management -- all the more attractive. So why not download the report today? It's totally free and comes with no further obligation.

Speculation Comes to the Pipeline Business

These Banks Sent the Dow Down Triple Digits

Earnings season is always a volatile time for the stock market, as one day's positive news is often followed by bad news on subsequent days. Today, overall investor sentiment toward earnings was decidedly negative, and as we move into the heart of earnings season, the much more rapid pace of releases could lead to even more volatility. This morning, the Dow Jones Industrials (DJINDICES: ^DJI  ) made a triple-digit move for the third straight day this week: As of 11 a.m. EDT, it has lost 179 points. The broader market has fallen even more sharply.

Within the Dow, the big news came from Bank of America (NYSE: BAC  ) , which has dropped almost 5% after announcing earnings earlier this morning. The bank quadrupled its quarterly profit from the year-ago quarter, with loan-loss provisions continuing to fall and the bank's capitalization continuing to improve. Yet weakness in the mortgage-lending business contributed to an overall drop in revenue, and as interest rates start to bottom out, the refinancing activity that has made up most of B of A's mortgage-related revenue will likely start drying up, and pressure on net interest margins will intensify. JPMorgan (NYSE: JPM  ) faces many of the same problems, and its shares have declined almost 3% as investors fear that the entire banking sector could suffer from the disappearance of the favorable trends that have helped it recover from the financial crisis.

Beyond the Dow, earnings also had a big impact. Cirrus Logic (NASDAQ: CRUS  ) has plunged nearly 14% after releasing preliminary figures for its just-ended fiscal fourth quarter. The major supplier for Apple cited "a decreased forecast for a high volume product" as justifying its warning for both the previous and current quarters, and a Wall Street analyst followed suit with a downgrade of Cirrus stock. Apple also dropped further, with its 4.7% decline leading the stock to flirt with the $400 level, which it hasn't breached since late 2011.

Finally, Magnum Hunter Resources (NYSE: MHR  ) has lost a quarter of its value after disclosing in an SEC filing yesterday that it dismissed PricewaterhouseCoopers as its accounting firm. According to the filing, PricewaterhouseCoopers had identified several issues with the energy company, including certain deficiencies in internal controls. Magnum Hunter offered a remediation plan to address PwC's concerns, but it nevertheless replaced PwC with an accounting firm called BDO USA. Investors have grown accustomed to selling at the first hint of accounting issues, and that's clearly the case with Magnum Hunter today.

Will today's setback for Bank of America have an impact on its future success? Find out in our premium research report on B of A, in which our top analysts look at whether B of A can add to its huge gains in 2012. The report includes details on three reasons to buy and three reasons to sell the bank's stock. Click here now to claim your copy.

For BlackBerry, It All Comes Down to This

Looking back, it's easy to say that BlackBerry (NASDAQ: BBRY  ) should have -- if they could have -- gone to market with its Q10 smartphone first, keyboard and all. The Q10, by most accounts, is a top-flight version of the BlackBerry Bold smartphone, which fans have come to know and love over the years. Results for BlackBerry's first phone running its BB10 OS, the Z10 with its touchscreen, are so-so.

Even with a late rollout, the one million Z10s sold in BlackBerry's recent fiscal Q4 is marginal at best, particularly for a company fighting its way back from obscurity. It needs a home run, not a base hit, which is why BlackBerry's turnaround hinges on the Q10.

The rubber meets the road
According to sources, delays in formatting BlackBerry's new BB10 OS to the Q10's smaller screen took a bit longer than expected, leaving customers with a few choices: Forget the keyboard and grab BlackBerry's Z10 touchscreen smartphone, wait for the Q10, or opt for one of the other smartphone alternatives out there. Problem is, even if BlackBerry fans are waiting on the Q10, the overall market for keyboard phones is shrinking fast.

According to IDC, of the 62.8 million phones with keyboards sold in 2012, BlackBerry garnered 47% of the market: That's the good news. What's discouraging for BlackBerry isn't the market share of its keyboard smartphones, it's how much smaller the overall market has become. The 62.8 million units that the IDC reported sold worldwide in 2012 was down nearly 40% from the 100 million keyboard devices sold the previous year.

Does the Q10 have enough oomph to put an end to the shift toward touchscreen smartphones? We'll know soon enough, as BlackBerry prepares to roll the Q10 out in Canada on May 1, the U.K. shortly thereafter, and in the states within a few weeks.

Not alone
The high-end, keyboard-enabled smartphone market is where the Q10 resides, but it's hardly the only option out there. Samsung, Motorola, and Nokia, among others, offer keyboards with some of their many phone models. Nokia's recently released Asha 210 is a low-priced phone with a keyboard, and HTC is another phone manufacturer fighting for a piece of the declining keyboard phone market.

BlackBerry and Nokia are often mentioned in the same breath, as the once high-flying device makers work to reinvent themselves. A marked advantage that Nokia has over BlackBerry is the ability to continually introduce new devices targeting different price points, markets, and touchscreen or keyboard users. BlackBerry plays strictly in the high-end smartphone niche, competing more directly with industry-leading Apple (NASDAQ: AAPL  ) and its iPhone. Making a dent in Apple's smartphone sales – 37.4 million iPhones sold last quarter alone – is a tall order, even as industry pundits bemoan Apple's lack of innovation and declining margins. Despite recent pressures, Apple remains a worthy competitor, and if BlackBerry's going to make a dent, it looks like the Q10 will have to do it.

Going forward
Based on the 6% jump in share price since BlackBerry announced earnings in late March, investors either viewed the one million Z10s sold as a win, or brushed that aside to focus on other news, and there were a lot of positives. BlackBerry's profitable quarter took many by surprise, and word that 55% of Z10 buyers came from other platforms bodes well for both the Z10 and Q10. Gross margins also impressed, jumping to 40.1%, and let's not forget the winning combination of zero long-term debt and BlackBerry's $2.6 billion in cash and equivalents.

The decline in BlackBerry's service subscribers took a bit of the luster off fiscal Q4 results, as did the drop in revenues, sequentially and compared to last year. And with CEO Thorsten Heins' commitment to ramp up marketing costs by as much as 50% this quarter, breaking even will be a challenge.

The challenges facing BlackBerry aren't insurmountable, as last quarter demonstrated. But one million Z10s, limited production time or not, isn't going to get it done. For BlackBerry to become relevant again -- not just stay afloat, but become a genuine threat to companies of the smartphone world like Apple, Google, and Nokia -- it's up to the Q10, keyboard and all.

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Why Citibank Is Crashing Today

Citigroup (NYSE: C  ) is down 2.21% already today. After a solid first-quarter earnings report on Wednesday, it's not entirely clear what's driving shares down today, but poor market reaction to Bank of America's (NYSE: BAC  ) first-quarter earnings report probably isn't helping things.

Big-bank roundup
All the big banks are down today, as well as the markets:

B of A is leading the retreat, down a massive 4.76% so far. JPMorgan Chase (NYSE: JPM  ) is also collapsing, down 3.07%. Wells Fargo (NYSE: WFC  ) is even down more than a point: 1.12%

The herd has spoken
B of A reported first-quarter earnings today, which were far better than any investor had the right to hope for, but the market clearly doesn't see it that way. Citi itself reported solid earnings on Wednesday. Investors, again, had every reason to be pleased. And they certainly were: on Wednesday. But not today.

JPMorgan and Wells reported their first-quarter earnings last Friday. There were some signs of trouble for both banks, like shrinking total revenue and a shrinking mortgage business, but overall, the news was very good.

Chances are, all the big banks are just following B of A into the pit of pessimism and despair. There's no other reasonable explanation for all of them to be plummeting Earthward like they are.

The markets are down, too. Throw that on top of everything. Though it's entirely possible the banking sector is dragging the markets down along with it. Call it the chicken-and-egg effect: Which is dragging down the other?

In times like this, remember that you're in it for the long-term. Keeping an eye on company fundamentals and ignoring the day-to-day gyrations of the market are at the heart of investing Foolishly. "Get rich slowly" is one of The Motley Fool's investing mottos, and maybe something to keep handy on a Post-It for moments like this, when the markets are so inexplicably volatile. 

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If so, look no further than our new premium report on the superbank. In it, Matt Koppenheffer -- The Motley Fool's senior banking analyst -- will fill you in on both reasons to buy and reasons to sell Citigroup. He'll also clue you in on what areas investors need to watch going forward. For instant access to Matt's personal take on Citi, simply click here now.

Apple Sets Dates for Worldwide Developers Conference

3 Reasons to Buy Stock in PNC Right Now

Apple Just Changed Everything

2 Reasons "The Walking Dead" Could Be a Billion-Dollar Franchise

By every measure, The Walking Dead is success for AMC Networks (NASDAQ: AMCX  ) . Season 3 ended with 12.4 million viewers of last month's gut-wrenching finale.

Overall, the show thrust AMC ahead of network rivals when it comes to attracting the coveted 18-to-49 adult demographic, as this chart shows:

Zombies Consuming TV Viewers | Infographics

"In just three seasons, The Walking Dead has become a pop-culture phenomenon, entertaining millions of passionate viewers and obliterating traditional lines between cable and broadcast television," said Charlie Collier, AMC's president, in a recent press release.

He's right. Network television used to command the highest ratings. Now, CBS (NYSE: CBS  ) , Comcast (NASDAQ: CMCSA  ) subsidiary NBCUniversal, News Corp.'s (NASDAQ: NWSA  ) Fox, and Walt Disney's (NYSE: DIS  ) ABC are fighting for every eyeball as AMC, HBO, and Netflix break rules.

AMC's rebellious streak stretches well beyond The Walking Dead. The studio also recently green-lit All-Star Celebrity Bowling, which had been a project for The Nerdist Channel on YouTube created by Talking Dead host Chris Hardwick. (Find the teaser promo here.)

The benefits of ownership
For investors, licensing is where AMC's development of The Walking Dead starts to get particularly interesting. Here's what CEO Josh Sapan had to say when asked about the company's longer-term distribution plans at December's Global Media and Communications Conference, hosted by UBS:

When we make a TV show like The Walking Dead, a decision that we need to make is whether to, I'll put quotes around this, "sell it to ourselves outside of the U.S.," which means put it on the channels that we now operate under the name Sundance in Europe and Asia or -- and WE tv in Asia -- or to sell it to another company. In this case, we sold it to Fox for a price because we, frankly, found it very hard to turn the money down because our footprint of channels was not sufficiently large to justify being our own buyer. Should we come to the point where that footprint is large enough, then we can be our own buyer.

Translation: We've only started to think through the various ways we can monetize The Walking Dead around the world. Expect us to take our time cashing in.

Source: Skybound Entertainment.

Meanwhile, the comic book series written by co-creator Robert Kirkman is still going strong after more than 100 issues. I've read through Issue 78. The TV show and the comics are different in huge ways, but they're close enough that my reading says the TV series has only explored about a third of the source material.

Thus, AMC could make six more seasons of The Walking Dead right now. Would we still want this show six seasons from now? Would Kirkman still want to be involved? There's no way to know for sure. All we can be certain of is that AMC has what looks to be the richest content wellspring in all of entertainment right now, and it's nowhere near fully tapped.

Like AMC, Netflix is changing the entertainment business from the inside out. How can you profit? Find out by tuning into our newest premium research report, in which we take you inside Netflix's entertainment empire and tell you what the streaming sensation is really worth, and whether the stock deserves a place in your portfolio. Access your report now by clicking here.

Ann Taylor Cuts Carbon Footprint

In commemoration of Earth Day, retailer ANN INC (NYSE: ANN  ) , the parent company of Ann Taylor and LOFT, says that not only has it already met its goal two years early of reducing its "carbon footprint" by 9% by 2015 but it's doubled it. And ANN isn't done "greening" yet.

ANN announced yesterday that an analysis of its year-end 2012 results shows that it has already reduced carbon emissions by 20% compared to what it was emitting in 2008. The company explained that introduction of more energy efficient LED lighting in its nearly 400 stores, plus changing energy usage "behavior" among its associates, helped it to meet (and exceed) its goal ahead of schedule.

What's more, rather than rest on its laurels, ANN says it's doubling down on its success by setting a new 2015 goal: 30% shrinkage in its carbon footprint in comparison to 2008. In other words, that's even more than its original 8% goal and on top of the 20% improvement it's already achieved.

Investors, however, weren't particularly impressed. ANN shares traded mostly flat on Monday, losing a penny in value to close at $28.03.

Investors Reward Citigroup Today

The financial sector is lit up bright green this Tuesday mid-day, continuing its climb from the second half of the day yesterday. The early part of the day wasn't kind to big banks, which made me wonder why investors were punishing Citigroup (NYSE: C  ) , especially after its positive earnings report early last week.

With big banks like Citi, Bank of America (NYSE: BAC  ) , Wells Fargo (NYSE: WFC  ) , and JPMorgan Chase (NYSE: JPM  ) having reported earnings, perhaps the market has had enough time to digest all this new information. Bank of America's report, in particular, seemed to have a roiling effect on the financial sector, despite the fact that it wasn't half bad at all.

But what a difference a day makes. Citi is moving up nicely, as is the whole sector. Bank of America is leading the way, as its share price moves up to and over the $12 mark, a rise of more than 3%. Citigroup is nearly matching that pace, so far racking up a 2.9% rise about half an hour before lunch time.

Will this forward momentum last? The market can be fickle, certainly. But, when it comes to Citigroup, investors are doubtless rewarding the big bank for the progress it has made over the past year, aptly reflected in its first-quarter earnings report.

One thing that became abundantly clear was the fact that Citi is fast becoming a mover and shaker in the mergers and acquisitions and investment banking business, something that shows no signs of abating. With the shrinking of troublesome Citi Holdings, as well as other cost-cutting measures, the bank's expenses are being brought under control. With new CEO Michael Corbat at the helm, things are definitely looking up.

Like Bank of America, Citi seems to be more willing to show its softer side these days, too. Ahead of its shareholders' meeting, the bank has invited Mike Mayo, the often-outspoken CSLA analyst, to have a private chat with Corbat. Mayo had to demur, but the offer indicates that Citi wants this year's annual meeting to be friendlier than the last, when shareholders voted down then-CEO Vikram Pandit's pay package. Unruffling Mayo's feathers ahead of time -- he is expected to have a list of tough questions for the bank's management -- was obviously tops on Citi's agenda.

With all the positive changes at Citi since last year's meeting, however, things should go much more smoothly.

Citi is flying high today, but tomorrow could paint an entirely different picture. As Foolish, long-term investors, we recognize the fact that one-day changes in share price don't make or break an investment. Even stocks have good days and bad days, so it's important to realize that sometimes they're not portents of dire news, but merely squiggles that we can safely ignore. 

Citigroup's stock looks tantalizingly cheap. Yet the bank's balance sheet is still in need of more repair, and there's a considerable amount of uncertainty after a shocking management shakeup. Should investors be treading carefully, or jumping on an opportunity to buy? To help figure out whether Citigroup deserves a spot on your watchlist, I invite you to read our premium research report on the bank today. We'll fill you in on both reasons to buy and reasons to sell Citigroup, and what areas that Citigroup investors need to watch going forward. Click here now for instant access to our best expert's take on Citigroup.

These Crushed Gold Stocks Are Poised to Profit From a Gold Rebound

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some gold-related stocks to your portfolio, the iShares MSCI Global Gold Miners ETF (NYSEMKT: RING  ) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF's expense ratio -- its annual fee -- is a rather low 0.39%. The fund is fairly small, though, so if you're thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF is too young to have much of a track record to assess. It's down more than 40% over the past year, though. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why gold?
Gold is not everyone's cup of tea, but some investors like to include some in their portfolios for the sake of diversification. Some also favor precious metals, as some of them have more utility. With gold's recent plunge, some are steering clear, while others are seeing bargains.

It wasn't a pretty past 12 months for gold-related companies, due to falling gold prices, rising costs, and even some labor difficulties around the globe, along with a strengthening dollar.

AuRico Gold (NYSE: AUQ  ) plunged 44%, having posted some disappointing results lately, and is also suffering from a competitive disadvantage, with its costs above those of some peers. On the plus side, though, the company recently initiated a dividend, which now yields about 2.8%.

Kinross Gold (NYSE: KGC  ) sank 40%, and yields about 3%. It has some worried, with its rising debt, and recently negative free cash flow. Its stock has been setting some multi-year lows and, while its earnings are in the red, its revenue has been growing steadily over the past few years. Last year, management committed itself to quality over quantity -- and delayed some mining projects.

Randgold Resources (NASDAQ: GOLD  ) shed 19%, despite posting record production last year. The company has significant operations in Mali, which has been in the midst of considerable political upheaval. Still, its sizable African operations are promising. The company recently hiked its dividend by 25%,

Yamana Gold (NYSE: AUY  ) fell 18%. It recently yielded 2%, and it has been upping that payout significantly. Bulls like its conservative management and relatively low costs, and have high hopes for its recently acquired Cerro Moro mine in Argentina.

The big picture
A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.

Want another gold candidate for your portfolio? Consider Goldcorp, one of the leading players in the gold mining market. For the last several years, investors have been the beneficiaries of several successful acquisitions and strong organic growth. Goldcorp's low-cost production of one of the most sought-after metals in the world continues to make this stock an attractive choice for long-term investors. To learn everything you need to know about this mining specialist, you're invited to check out The Motley Fool's premium research report on the company, which comes with a full year of ongoing updates and analysis to keep you informed as key news breaks. Click here now to claim your copy today.

Is Silver Going To Crash Further?

Over the last week I have been inundated with emails and messages from investors "freaking out" about the recent drop in silver. While the drop occurred from the 28 region rather than the 29 region, it otherwise has acted as we had expected, so I really wish people would calm down. Getting emotional over any investment is not placing you in a mindset ideal to make an appropriate investment decision.

Now, take a step back, and think about why you bought silver in the first place. And, there are usually two different answers to this query. Some people look at silver as insurance against the collapse of our financial system. These are people who continually stock up on both metals in physical form and intend on holding for generations.

But note, silver and gold serve different purposes under this perspective, and I am asked about this all the time. For the many that ask me about how to invest in silver, I personally do not like silver bars. Rather, I view gold as your store of value under this perspective, whereas silver's utility under the financial melt-down scenario is as a medium of exchange. To this end, I usually suggest buying silver in coin form, and I suggest having a healthy amount of junk silver for this purpose.

Then there are those of us who like to trade silver within the financial markets. These are traders who use the ETFs, or even options on the ETFs, to make money on the movements on silver. As we all know, silver is a very volatile metal, and being on the right side of the silver trade is quite exhilarating. In fact, the best trades of my career were silver trades. But, this takes a lot of work, a solid risk management plan to which you must always adhere, and an appropriate methodology in which you can have confidence in determining silver's movements.

Since I began writing for Seeking Alpha almost two years ago, where my first market timing article was calling the top in gold, I have made it quite clear that I do not proscribe to only one o! f the perspectives above. Rather, I am a big believer that everyone should own physical metals for insurance purposes, and every larger drop to a support region is a very long term buying opportunity.

But, at the same time, you know that I like to trade silver as well, and I use Elliott Wave analysis as my preferred methodology in so doing. Over the years, many of you have gone so far as ridiculing this methodology. Many simply just do not understand it. But, what it basically does is it tracks the public's sentiment as it relates to the metal. It also provides us with if-then perspectives, using Fibonacci mathematics, to determine what silver will likely do, but it does not provide us with absolutes. For those that can understand this perspective, such analysis becomes invaluable when trading silver, and has made them quite a nice bundle based upon the emails I have received.

Bringing me back to the initial purpose of this article, I am suggesting to everyone to rein in the emotion and consider why you invest in silver. For those that buy silver for insurance purposes, you are being provided with another opportunity to buy another tranche for your investment portfolio within the low 20s, a level which I predicted to see many moons ago.

For those that trade silver, this is clearly a gut check time. For quite some time, I have been trying to emotionally prepare you for the possibility that we are going to find ourselves in this region. Even though many did not really believe it, we are here. But, please do not panic. In order to make the appropriate trade at this time, you need to be thinking about this as a trade from a non-emotional perspective. A good trader once taught me that you have to learn to trade the chart, and not the money. So, let's see what we need to know to trade the chart.

First, silver provided us with extreme extensions that took us below our ideal support level this past week, but we did bottom at the lower end of our long time target region. But, the market i! s clearly! telling us that even though it has since bounced, this bounce is clearly only a corrective bounce. It also tells me to look towards the next larger degree Fibonacci support level, which is the 19.81-20.90 region in the silver futures.

I do believe silver will likely see at least one more decline which can target that region next. The reaction we see from that region will be quite important for the long term silver trade which can still take us over $60 in a relatively short period of time. But, I must warn you that I even have to start considering that the longer term pattern in silver may break down, which will likely be confirmed for me if silver does break down below the 18 region in the futures. Clearly, this is not my expectation at this time, but when we come this close, we need to consider this possibility. So, for traders, we find ourselves approaching a relatively low risk buying region, with a clearly defined exit region.

Disclosure: I am long SLV. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Additional disclosure: I am long using LEAPS, with intermediate term hedges.

Monday's Top Upgrades (and Downgrades)

This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, our headlines include a pair of aerospace upgrades for European Aeronautic Defence and Space Company (NASDAQOTH: EADSY  ) and Hexcel (NYSE: HXL  ) . But it's not all good news, so let's start off by finding out why.

This analyst doesn't dig Cliffs Natural Resources
Investors in coal and iron miner Cliffs Natural Resources (NYSE: CLF  ) are off to a rocky start this week, as analysts at FBR Capital cut their price target on the stock 15% to $28 a share.

Now admittedly, FBR isn't recommending you sell Cliffs. To the contrary, the banker reiterated its overall feeling that the stock's more of a market performer than an actual sell. The big question, though, is why FBR didn't come out and give Cliffs a big ol' buy rating -- seeing as it thinks the stock is worth $28, and Cliffs only costs $17 and change today.

After all, Cliffs does appear pretty attractive on the surface. The stock pays a nice, fat 3.4% dividend. It's not growing fast, but it is growing, with most analysts suggesting Cliffs can increase profits by about 6% per year over the next five years. So really, why not just dive right into Cliffs and buy?

The way I see it, there are at least three reasons to hesitate before taking the plunge -- and three reasons that FBR is still too optimistic even with its reduced target price. First and foremost is the fact that, at 6% projected growth, Cliffs shares appear to have too high a PEG ratio for their 7.8 forward P/E (not to mention their negative trailing P/E).

Second, the company's total lack of free cash flow to back up its reported GAAP earnings suggests that next year's hoped-for earnings, even if they arrive, may not be worth much.

Third and finally, until Cliffs returns to generating cash profits instead of burning cash (the company burned more than $600 million last year), it will have a hard time paying down its $2.1 billion debt load -- which itself is a factor arguing that the stock is more expensive than it appears. Long story short, there are a lot of negatives to consider here, and any one of them could trip up Cliffs before it reaches FBR's new price target.

Next up: Hexcel
Flipping over from bad news to good news, analysts at RBC Capital Markets upped their rating on airplane parts supplier Hexcel this morning, rating the stock outperform and raising their price target to $33 a share. Hexcel costs $28 and change currently, so we're looking at about a 16% gain if RBC is right. But is it right?

I have to admit: I have my doubts.

Priced at nearly 18 times earnings, and paying no dividend, Hexcel shares look overpriced to me based on analyst estimates of 12% long-term earnings growth. The company's burdened by a bit of debt, too, weighing down its valuation, and its trailing free cash flow number is... negative. Rather than generating cash at the same rate at which it reports earnings ($164 million last year, supposedly), Hexcel actually burned through more than $31 million in negative free cash flow last year.

Long story short, RBC may think this one's a buy, but I'm leaning more toward sell.

Does EADS spell B-U-Y?
A second stock winning high marks from RBC today is European aerospace "champion" and Boeing (NYSE: BA  ) archrival European Aeronautic Defence and Space Company. Like Hexcel, RBC is slapping a buy rating (actually, outperform) on EADS today. But to be honest, I'm even more leery of this one than I am of RBC's other recommendation.

Valued at $42.4 billion, EADS is at nearly two-thirds Boeing's market cap. But with only $1.6 billion in annual net income, the company pulls down less than half the $3.9 billion in annual profit of its American rival. Worse, EADS generated only about $752 million in real cash profit last year -- less than half its own net income. In contrast, Boeing's $5.8 billion in trailing free cash flow vastly exceeds the $3.9 billion that GAAP accounting standards permitted the company to report as net income.

Simply put, Boeing's a cash monster, and EADS is not. At a valuation of 26.5 times earnings, and an even more altitudinous price to free cash flow, EADS shares are priced to crash and burn. For this stock, at least, investors' fear of flying seems well-founded.

Motley Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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Can Ford Keep Riding America's Recovery Higher?

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

Ford's comeback over recent years has been nothing short of spectacular, as the automaker managed to regain its footing without government assistance to turn the tables on its competitors both in the U.S. and abroad. But how can the company keep its momentum going forward? Let's take an early look at what's been happening with Ford over the past quarter and what we're likely to see in its quarterly report.

Stats on Ford

Analyst EPS Estimate	$0.38
Change From Year-Ago EPS	(2.6%)
Revenue Estimate	$33.78 billion
Change From Year-Ago Revenue	10.6%
Earnings Beats in Past 4 Quarters	4

Source: Yahoo! Finance.

Will Ford keep driving its earnings ahead this quarter?
In recent months, analysts have toned down their enthusiasm about Ford's earnings prospects, cutting their estimates for the just-finished quarter by $0.04 per share and more aggressively reducing full-year 2013 earnings-per-share estimates by $0.07. The stock has gotten stuck in reverse as a result, losing almost 10% of its value since mid-January.

Ford has seen dramatic successes in its U.S. market lately, with pent-up demand for new vehicles finally starting to work its way through to new sales. New models in its small fuel-efficient-vehicle segment and strength in its core truck division have bolstered growth, helping Ford take advantage of improved economic conditions for buyers.

But internationally, Ford has a tougher road to follow. On one hand, Europe has been problematic for automakers everywhere, as the weak economy there, combined with the challenges of the European labor markets, has caused losses not only at Ford but also its competitors. In China, though, Ford has lagged behind General Motors (NYSE: GM  ) , which got a head-start in pushing into the emerging-market country. GM sold six vehicles in China last year for every one that Ford sold, even though Ford's new Focus has been a huge hit in the emerging-market country and could help the company catch up to GM.

The other area for Ford to address is gaining a bigger presence on the luxury end of the market. Toyota's (NYSE: TM  ) Lexus and GM's Cadillac have both made huge names for themselves for high-end buyers, but Ford has largely missed out on that end of the demographic spectrum. Efforts to reinvigorate its Lincoln division haven't gone as well as many hoped, threatening to leave Ford without an obvious strategy to keep its share of the luxury market.

In Ford's quarterly report, be sure to look beyond the sales figures that we've already gotten to focus instead on whether the company remains on track to score big improvements in profitability, especially overseas. Sales are important, but producing more income from them is the key to future gains for Ford investors, both in the form of further dividend increases as well as share-price increases.

Find out more about Ford's turnaround and its big growth opportunities ahead by joining the Fool's premium Ford research service. Inside, our top analysts look at the automaker's prospects for the future, with freshly updated guidance on Ford's potential both now and in the long run. Click here to get started now.

Click here to add Ford to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

A Catastrophe That Changed the World

On this day in economic and business history...

"All San Francisco May Burn" -- The New York Times, April 19, 1906, the day after the earthquake:

At midnight the fire still roars. Fleeing inhabitants can see from miles around the pillars of fire towering skyward. The crash of falling ruins and the muffled reports of the exploding dynamite reach the ear at regular intervals. ...

The exact loss of life never will be known. Hundreds have been incinerated. Tonight the city resembles one vast shambles with the red glare of the fire throwing shadows across the worn and panic-stricken faces of the homeless.

"Earthquake and Flames Bring Death and Ruin to City of San Francisco" -- The Washington Post, April 19, 1906:

The greatest earthquake disaster in the history of the United States visited San Francisco early yesterday morning. The earthquake was followed by a fire which was still burning at 2 a.m. today, and which has covered most of the affected area.

It is impossible now to say anything definite of the loss of life.

"The San Francisco Horror" -- Chicago Daily Tribune, April 19, 1906:

Chicago extends her sympathy to San Francisco. The world was generous to Chicago in the days of 1871. San Francisco relatively has suffered more than Chicago did, and needs help. All America will answer and Chicago will not let the other cities outdo her in generosity. San Francisco will rise again more splendid than ever. The Golden Gate can never lose its commercial importance, and it is impossible that there should not be a great city there. But there is no city now, except as it may be found in the courage, pride, and self-confidence of the people who once lived in San Francisco.

Source: The New York Times, April 19, 1906.

The ultimate casualty reports from the devastating San Francisco earthquake of April 18, 1906 were later revised upward to 3,000 out of an estimated population of 400,000. More than half the city's population was made homeless by a fire that raged for three days and destroyed 28,000 buildings. In contemporary terms, monetary losses of at least $400 million represented more than 1% of the entire national GDP. By this measure, the earthquake was by far the most economically devastating disaster ever to strike the U.S.

The earthquake occurred at the beginning of one of the Dow Jones Industrial Average's (DJINDICES: ^DJI  ) most damaging bear markets and was a contributing factor to the recession and widespread bank failures that led to the Panic of 1907. An economics paper by Professors Kerry Odell and Marc Weidenmier of Scripps College makes the case that the requirements of a gold-standard economy forced London insurers (the primary agents of most San Francisco insurance policies) to shift significant gold reserves to the U.S. as they paid out claims. As a result of its tighter gold supply, the Bank of England raised interest rates on American financing, which reversed the outflows by 1907 and led to a short but sharp recession in the U.S.

The recession and its attendant panic, only solved by the personal intervention of financier J. P. Morgan, would lead to the creation of the Federal Reserve. Would any of this have happened without San Francisco's utter destruction?

A new threat to the U.S. economy
What macro trend was Warren Buffett referring to when he said "this is the tapeworm that's eating at American competitiveness"? Find out in our free report: "What's Really Eating At America's Competitiveness." You'll also discover an idea to profit as companies work to eradicate this efficiency-sucking tapeworm. Just click here for free, immediate access.

5 Must-Watch Earnings Reports in the Health-Care Sector This Week

If you haven't noticed, it's earnings season once again! Believe it or not, there are times when earnings reports slow down in frequency, but this is certainly not one of those times. In the health-care sector we have 71 companies set to report next week, according to Finviz, so it definitely pays to be prepared. Here's your personal cheat sheet to the five companies reporting next week that I've got my eye on and that you can't afford to miss.

Wednesday, April 24

Eli Lilly (NYSE: LLY  ) : Lilly is in the midst of a very dangerous period in its company's history, since it's set to lose a good chunk of its revenue to patent expirations between now and 2017. Reports from Eli Lilly have confirmed that the company is planning layoffs to reduce expenses, but a report by The Wall Street Journal indicated that layoffs could reach as many as 1,000 people. It's therefore extremely important -- especially considering that so many income investors rely on Lilly's dividend -- to keep an eye on what the company has to say about what's going on in its pipeline and what actions it's taking to reduce costs. Lilly's first-quarter expectations are for 1% sales growth and a 14% jump in EPS, but I'm not convinced that they'll reach those targets. WellPoint (NYSE: WLP  ) : This will be one of the first looks we get at WellPoint, which purchased Amerigroup last summer to gain access to the millions of Medicaid members under its fold. The Patient Protection and Affordable Care Act is coming up on eight months until it's fully in effect, and insurers are looking as if they won't be in nearly as bad a shape as it was first suspected when the bill was passed. Keep your ears open for anything management might have to say about premiums, and certainly key on anything WellPoint has to say with regard to the PPACA, also known as Obamacare. Revneue is expected to jump 19% (mainly from its acquisition of Amerigroup) to $18 billion, while EPS are forecast to jump $0.04 to $2.38 from the year-ago period. 

Thursday, April 25

Biogen Idec (NASDAQ: BIIB  ) : Biogen is so hot right now, I'd highly recommend using oven mitts when handling shares. Over the past quarter, Biogen announced the purchase of the remaining global rights to multiple sclerosis drug Tysabri from Elan for $3.25 billion in cash and had the Food and Drug Administration approve its revolutionary new MS-drug Tecfidera. I don't believe Biogen Idec's first-quarter results will have much bearing on its share price so much as its forward guidance. This will be the first time Wall Street gets a glimpse at the growth Biogen expects from Tecfidera sales as well as owning the full global rights to Tysabri. Pay attention to its full-year EPS forecast and anything the company has to say regarding its 2014 growth estimates. Celgene (NASDAQ: CELG  ) : Celgene's CEO, Robert Hugin, made some very bold claims at the JPMorgan Healthcare Conference in January that his company would be able to triple revenue and double EPS growth by 2017 based solely on organic growth. Consider this quarter the first test of that assertion. Things have definitely moved in Celgene's favor, with Abraxane gaining additional indications in cancer treatment and Revlimid sales running strong. However, it'll need to gain approval of Apremilast to treat psoriasis if it hopes to achieve its lofty growth targets. Following Celgene's huge first-quarter run, the company's guidance here will be everything, so focus all of your attention on that, and any comments with regard to the advancement of Apremilast. Alexion Pharmaceuticals (NASDAQ: ALXN  ) : Having seen Affymax shares implode because of a recall, I'm always concerned about companies whose entire pipeline lives and dies off one drug. Alexion's Soliris is a billion-dollar blockbuster, but its entire pipeline involves the use of Soliris in one indication or another. Therefore, my big focus in Alexion's first-quarter report will be if it can top EPS expectations by double digits. Alexion's previous four reports have all trumped estimates by a mile, and any less than a 10% beat given its lack of diversification could be enough to pummel its already lofty share price.

Is Eli Lilly a buy or sell?
With two of its top three drugs poised to lose patent protection this year, is Eli Lilly a dividend stock headed nowhere fast? In a new premium report, The Motley Fool's senior pharmaceuticals analyst breaks down all of Lilly's moving parts, including an in-depth analysis of the company's must-know opportunities and reasons to buy and sell today. To find out more click here to claim your copy today.