In Hard Times, People Who Grew Up Poor Spend More, Cut Less

Jahi Chikwendiu/The Washington Post via Getty Images What would your response be to the following questions? Would you prefer to have $20 tomorrow or $30 a month from now? Would you prefer a certainty of receiving $20 or a 60% chance of getting $50? Would you rather have $40 today or $50 next week? Would you rather be certain of receiving $30 or have a 40% chance of getting $45? Now, consider how your answers would be different if you grew up in a wealthy family or if you came from a poor one.

Recently, a team of researchers from MIT Sloan School of Management posed these questions to subjects in a series of experiments to confirm the impact of "life-history theory," which says that your early life environment creates a pattern of behavior and responses that emerge even more strongly in adults during stressful times.

What they found was that the economic environment in which you are raised influences how you handle financial problems as an adult. No surprise there. What's eye-opening about their findings is how people from different walks of life act during times of economic crisis.

In a nutshell: Poor people spend more than rich people during difficult economic times.

Stress Response: Save or Spend?

You'd think that when times are tough, everyone's natural instinct would be to pull back on their spending and switch to save mode. It also seems logical to expect that those who grew up in families that struggled financially would be more cautious about money when faced with a weak economy.

But when measuring the survey responses, Prof. Joshua Ackerman and his fellow researchers found that people who grew up in rich households were more risk-averse and reacted to an economic crisis by slowing their spending. Meanwhile, people who grew up poor were more impulsive and took more risks than those from wealthy backgrounds.

A supplementary experiment testing how recession cues affect decisions to save rather than to spend money from a paycheck gave the researchers similar results: Individuals from wealthier backgrounds chose to save for the future, while those from low-income childhoods opted to spend money to improve their current quality of life.

Why Do People Who Grew Up Poor Spend More?

On the surface, spending more when times are tough may just seem foolish, but Ackerman says that people who come from a poor background are behaving rationally according to their psychological instincts.

Ackerman explains it this way: If you grew up poor, your life history may lead you to think your chances of surviving a recession and coming out ahead are very low. Your expectation that your lifespan may be shorter -- again, based on your life history -- means that instead of taking measured steps to preserve the little money you have, you're more likely to take risks and spend money on things like jewelry or cars in order to show off and attract others to "promote reproductive success."

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.

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Retail Police Blotter: The Week in Retail Crime

If there's a dispute at a fast-food restaurant, odds are good that someone is going to wind up throwing food. It happened a couple weeks ago at a McDonald's in Connecticut, and now we've had another incident at an Auntie Anne's pretzel shop in the Detroit suburb of Troy, Mich. According to the Detroit Free Press, a customer at an Auntie Anne's realized she'd received the incorrect dipping sauce for her pretzel. The dispute escalated, an employee flung nacho cheese at the angry customer, the customer vaulted the counter, and property damaged ensued. The company's president took to YouTube to apologize, and Detroit-area locations will be giving out free dip, which hopefully won't be thrown at anyone.

Photo: YouTube.com

Nacho Cheese Assault at Auntie Anne's

Meanwhile in Connecticut, a guy got really high on PCP and stole $137 worth of Easter baskets from Walmart. The thief, identified as Antonio Sanabria, wasn't trying to be the Easter equivalent of the Grinch; he explained in a brief interview that the drugs "made me lose my mind." Police say he stole a shopping cart with ten baskets, and was found in the parking lot trying to sell them. Sanabria pled guilty to sixth-degree larceny and was released. PCP has been known to drive people to cannibalism, so he can consider himself lucky that snatching some Easter baskets was the worst of his drug-induced crimes.

Easter Egg Bandit at Walmart

Remember the scene in Pulp Fiction where a couple of gun-toting bandits demand that all the patrons of a diner hand over their wallets? An armed thief in Miami tried the same scheme, but didn't consider Floridians' penchant for packing heat. Police say Travis Harris walked into a Burger King and demanded a family's valuables at gunpoint. When he left the restaurant, the father followed him outside and shot him in the leg.

Top Medical Companies To Own In Right Now

Organovo Holdings (NYSEMKT: ONVO  ) was one of last week's biggest winners, soaring 55% after making the leap to the more prolific NYSE MKT exchange.

A bigger stage plays well when you have a neat tale to tell, and Organovo certainly has all of the makings of a hot story stock.

Organovo takes 3-D printing to a seemingly implausible extreme. Its bioprinting process can generate a reasonable proxy to human tissue in a lab that can be used in culture plates or bioreactors for medical research and therapeutic applications.

Yes, that's pretty cool, and recent investors seeing the stock jump from $3.87 to $6.01 in a single week have a good reason to get giddy.

Unfortunately, long-term investors have seen this before.

The stock traded as low as $2.35 in May of last year, only to peak at $10.90 a month later and bottom out at $1.49 the month after that.

Top Medical Companies To Own In Right Now: Elan Corporation PLC (ELN)

Elan Corporation, plc (Elan), incorporated in December 1969, is a neuroscience-based biotechnology company. The Company is focused on discovering and developing advanced therapies in neurodegenerative and autoimmune diseases. Elan�� business focuses on neurodegenerative diseases, such as Alzheimer�� disease and Parkinson�� disease; autoimmune diseases, including MS and Crohn�� disease and neo-epitope based targets for treatments across a range of therapeutic indications. Tysabri is a treatment for MS and Crohn�� disease that the Company markets and distributes with Biogen Idec. On September 16, 2011, Elan sold its EDT business to Alkermes, Inc. In November 2011, Elan launched a collaboration with the University of Cambridge, England, the Cambridge-Elan Centre for Research Innovation and Drug Discovery (Cambridge-Elan Centre). On December 21, 2012, the Company completed the demerger of Prothena Corporation plc. In April 2013, it closed the TYSABRI (natalizumab) Collaboration Transaction with Biogen Idec.

Tysabri

Tysabri, which is an alpha-4 integrin inhibitor, is a therapy for MS, a neurological disorder involving central nervous system dysfunction among adults. Tysabri is approved in more than 65 countries. Tysabri is approved in the United States as a monotherapy for relapsing forms of MS, for patients who have had an inadequate response to, or are unable to tolerate, an alternative MS therapy. In the European Union, it is approved for relapsing-remitting MS (RRMS) in adult patients who have failed to respond to beta interferon or have rapidly evolving, severe RRMS. As of December 31, 2011, there were approximately 64,400 patients on Tysabri therapy worldwide.

In June 2011, the European Commission (EC) approved the inclusion of the anti-JCV antibody status as an additional factor in stratifying patients at risk for developing PML in the Summary of Product Characteristics��(SmPC) for Tysabri in the European Union. The Company has developed a two-step ! enzyme-linked immunosorbent assay (ELISA), STRATIFY JCV, with Biogen Idec. The assay detects anti-JCV antibodies in the blood of patients, and is commercially available in Europe. In January 2012, the FDA cleared the assay for commercial use in the United States. As of December 31, 2011, over 80,000 tests had been administered using the assay. Tysabri is marketed and distributed by Elan and Biogen Idec. The Company�� research group, Neotope, is focused on creating monoclonal antibodies based on neo-epitope targets for the treatment of a range of therapeutic indications.

Beta Amyloid Immunotherapies (AIP)

Beta amyloid immunotherapy includes the treatment of Alzheimer�� disease by inducing or enhancing the body�� immune response in order to clear toxic species of beta amyloid from the brain. The AIP includes bapineuzumab (intravenous and subcutaneous delivery) and ACC-001, as well as other compounds. Bapineuzumab is an experimental humanized monoclonal antibody delivered intravenously that is being studied as a treatment for mild to moderate Alzheimer�� disease. It is designed to provide antibodies to beta amyloid directly to the patient (passive immunotherapy).

ELND005, an A� Aggregation Inhibitor

The small molecule ELND005 (Scyllo-inositol) is a beta amyloid anti-aggregation agent. Preclinical data suggest that ELND005 may act through the mechanism of preventing and reversing the fibrilisation of beta amyloid (the aggregation of beta amyloid into clumps of insoluble oligomers). ELND005 may have additional applications in psychiatric indications, such as bipolar disorder. In November 2011, the Company entered into a manufacturing agreement for the supply of the active pharmaceutical ingredient for ELND005 with Lonza Group AG.

Neotope Biosciences Limited

Neotope Biosciences Limited (Neotope) is the Company�� wholly owned subsidiary that focuses on the discovery and development of antibodies to neo-epitope related targ! ets for t! he treatment of a range of indications. It includes amyloidosis, diabetes, cancer and macular degeneration. Neotope�� portfolio of targets includes alpha-synuclein for the potential treatment of synucleinopathies, such as Lewy body dementia and Parkinson�� disease, tau for Alzheimer�� disease and other tauopathies. It also has a program for type 2-diabetes.

Onclave Therapeutics Limited

Elan�� wholly owned subsidiary Onclave Therapeutics Limited (Onclave) was formed to develop assets originating from Elan that have application in oncology related diseases. Onclave�� program, NEOD001, which originated from Neotope, is being investigated for the treatment of AL amyloidosis, which is a fatal disease involving abnormal accumulation of amyloid in organs and tissue. During the year ended December 31, 2011, Onclave filed for orphan drug designation of NEOD001. Onclave�� pipeline includes additional compounds with relevance in diverse cancer indications.

The Company competes with Biogen Idec, Bayer Schering Pharma AG, Bayer Schering Pharma, Merck Serono, Pfizer, Teva Neurosciences, Inc., Sanofi-Aventis and Novartis AG.

Top Medical Companies To Own In Right Now: Algeta ASA (ALGETA)

Algeta ASA is a Norway-based biotechnology company engaged in the development of targeted cancer therapies based on its alpha-pharmaceutical platform. The Company�� principal product is Alpharadin for the treatment of bone metastases resulting from castration-resistant prostate cancer. The Company�� pipeline also includes Alpharadin for the treatment of bone metastases resulting from breast cancer, a combination of Alpharadin with Taxotere for the treatment of bone metastases resulting from prostate cancer and Thorium-227 showing various cancer indications. The Company develops Alpharadin in a development and marketing cooperation with Bayer Schering Pharma. Algeta ASA is active through the two wholly owned subsidiaries, Algeta Innovations AS and Algeta UK Limited. On April 12, 2012, the Company announced that it estabilished a subsidiary active in the United States, Algeta US.

5 Best Stocks To Invest In Right Now: Organovo Holdings Inc (ONVO.PK)

Organovo Holdings, Inc. (Organovo), formerly Real Estate Restoration & Rental, Inc., incorporated in 2007, is a development-stage company. The Company has developed and is commercializing a platform technology for the generation of three-dimensional (3D) human tissues that can be employed in drug discovery and development, biological research, and as therapeutic implants for the treatment of damaged or degenerating tissues and organs. On December 28, 2011, Real Estate Restoration and Rental, Inc.�� (RERR) entered into an Agreement and Plan of Merger, pursuant to which RERR merged with its, wholly owned subsidiary, Organovo (Merger Sub). On February 8, 2012, the Company merged with and into Organovo Acquisition Corp. (Acquisition Corp.), a wholly owned subsidiary of Organovo, with the Company surviving the merger as a wholly owned subsidiary of Organovo Holdings (the Merger). As a result of the Merger, Organovo acquired the business of Organovo, Inc.

The C ompany has collaborative research agreements with Pfizer, Inc. (Pfizer) and United Therapeutic Corporation (Unither). As of March 31, 2012, it has five federal grants, including Small Business Innovation Research grants and developed the NovoGen MMX Bioprinter (its first-generation 3D bioprinter). The Company is engaged in the development of specific 3D human tissues to aid Pfizer in discovery of therapies in two areas of interest. In addition, in October 2011, it entered into a research agreement with Unither to establish and conduct a research program to discover treatments for pulmonary hypertension using its NovoGen MMX Bioprinter technology. Additionally, under the research agreement with Unither, the Company granted Unither an option to acquire from the Company a worldwide, royalty-bearing license in certain intellectual property created under the research agreement solely for use in the treatment or prevention of pulmonary hypertension and all other lung diseases.

The Company�� NovoGen MMX Bioprinter is an aut! om! ated device that enables the fabrication of three-dimensional (3D) living tissues comprised of mammalian cells. A custom graphic user interface (GUI) facilitates the 3D design and execution of scripts that direct precision movement of the dispensing heads to deposit cellular building blocks (bio-ink) or supporting hydrogel. The Company is using a third party manufacturer, Invetech Pty., of Melbourne, Australia, to manufacture its NovoGen MMX Bioprinter. Its bioprinting technology and surrounding intellectual property and commercial rights serve as a platform for product generation across multiple markets that employ cell- and tissue-based products and services.

The Company competes with Organogenesis, Advanced BioHealing, Tengion, Genzyme, HumaCyte and Cytograft Tissue Engineering.

Top Medical Companies To Own In Right Now: DENTSPLY International Inc.(XRAY)

DENTSPLY International Inc. designs, develops, manufactures, and markets dental consumable products, dental laboratory products, and dental specialty products worldwide. The company?s dental consumable products include dental sundries, such as dental anesthetics, prophylaxis pastes, dental sealants, impression materials, restorative materials, tooth whiteners, and topical fluoride; and small equipment, including high and low speed handpieces, intraoral curing light systems, dental diagnostic systems, and ultrasonic scalers and polishers used in dental offices for the treatment of patients. Its dental laboratory products comprise dental prosthetics, including artificial teeth, precious metal dental alloys, dental ceramics, and crown and bridge materials, as well as equipment, such as computer aided machining ceramic systems and porcelain furnaces used in the preparation of dental appliances by dental laboratories. The company?s dental specialty products consist of endodonti c instruments and materials, implants and related products, bone grafting materials, 3D digital implantology, and orthodontic appliances and accessories. Its customers include dentists, dental hygienists, dental assistants, dental laboratories, and dental schools. The company distributes its dental products directly to dental laboratories and dental professionals, as well as through distributors, dealers, and importers. DENTSPLY International Inc. was founded in 1983 and is headquartered in York, Pennsylvania.

Advisors' Opinion:

• [By Newsy Stocks]

  DENTSPLY International Inc. (Nasdaq: XRAY) designs, develops, manufactures, and markets dental consumable products, dental laboratory products, and dental specialty products worldwide. The company has a total market capitalization of $4.8 billion and in the last 1-year the stock has given a return of 11.8 percent. The company has a dividend yield of 0.59 percent, and has a price of profit of 16. The stock is trading at a P/E of 17.46, higher than the industry’s average P/E of 15.81. The PEG ratio of the stock is 1.65 years, higher than industry’s PEG of 1.15 years. The average 5 years historical earnings growth is 7.50 percent and is expected to grow at 11.20 percent for the next 5 years. Its quarterly revenue growth is estimated at 6.83 percent. The stock has a P/B value of 2.30x percent. Analyst at Barrington Research has given it an outperform rating on $42.75 price target. Based on the price target the stock is trading at a dis count of 21.73 percent. XRAY was up 1.98 percent to $34.01 a share.

Top Medical Companies To Own In Right Now: Cannabis Science Inc (CBIS)

Cannabis Science, Inc., incorporated on May 4, 2007, is a development-stage company. The Company is engaged in the creation of cannabis-based medicines, both with and without psychoactive properties, to treats disease and the symptoms of disease, as well as for general health maintenance. On February 9, 2012, the Company acquired GGECO University, Inc. (GGECO). On March 21, 2012, the Company acquired Cannabis Consulting Inc. (CCI Group).

The Company is engaged in medical marijuana research and development. The Company works with world authorities on phytocannabinoid science targeting critical illnesses, and adheres to scientific methodologies to develop, produce, and commercialize phytocannabinoid-based pharmaceutical products.

Don't Get Too Worked Up Over Materion's Earnings

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

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

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Materion generated $12.0 million cash while it booked net income of $25.3 million. That means it turned 1.0% of its revenue into FCF. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Materion look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With questionable cash flows amounting to only 8.0% of operating cash flow, Materion's cash flows look clean. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 10.0% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 79.0% of cash from operations.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Looking for alternatives to Materion? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add Materion to My Watchlist.

Does This Struggling Drugmaker Have an Ace Up Its Sleeve?

Shares of health-care giant Johnson & Johnson (NYSE: JNJ  ) have climbed more than 22% since the start of 2013. Part of this Dow component's success has been its growing pharmaceutical portfolio, which includes the recently approved type 2 diabetes drug Invokana. Shares of Merck (NYSE: MRK  ) have also jumped around 15% year to date, but the company hasn't had a drug with blockbuster potential approved by the FDA so far this year. There is a great deal of optimism, however, surrounding Merck's PD-1 drug for the treatment of melanoma. In the following video, health-care analyst Max Macaluso discusses this experimental drug and another PD-1 drug in development at Bristol-Myers Squibb (NYSE: BMY  ) .

Can Merck beat the patent cliff?
This titan of the pharmaceutical industry stumbled into 2013 and continues to battle patent expirations and pipeline problems. Is Merck still a solid dividend play, or should investors be looking elsewhere? In a new premium research report on Merck, the Fool tackles all of the company's moving parts, its major market opportunities, and reasons to both buy and sell. To find out more click here to claim your copy today.

Time Frame for Solar Is Underestimated

The prospects of solar power have been growing day by day, so some are wondering when the technology -- and the industry -- will truly come into their own. According to Dr. Ernest Moniz, the new Department of Energy secretary, that time frame is "underestimated," meaning that it should come sooner than many expect. There are several indicators that are pointing to that, as well. As several Chinese solar companies are hitting the wall because of a panel-supply glut, some of the weaker companies are on their way out. This is clearing the way for the stronger candidates to get pricing on panels again. First Solar (NASDAQ: FSLR  ) recently announced that it could not take orders for new panels until after the third quarter, because all panels to be built until then are contracted out. 

There's another aspect of the solar industry that's taking root: distributed power. Companies like SolarCity (NASDAQ: SCTY  ) are showing that it is indeed possible to make money in the residential solar business, something that has been a struggle in the past. Tune into the video conversation below between Fool analysts Joel South, Taylor Muckerman, and Fool.com contributor Tyler Crowe as they discuss some of the other emerging trends in the solar industry.

Companies all across the energy space are emerging as high flyers that could change the entire industry. Find out which energy stock The Motley Fool's Chief Investment Officer determined is his best pick of the year in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

 

Hot Canadian Stocks To Buy For 2014

If you're a value investor, you can pat yourself on the back, because most people aren't cut out to handle your style. It seems easy enough, right? All you have to do is find a stock out of favor, and then buy low and sell high. Of course, if it was that easy I wouldn't need to write this, nor would you be reading. The truth is that value investing is difficult and can often take years for the gains to pan out -- something investors have a hard time waiting for. If you can be patient enough, I think both Devon Energy (NYSE: DVN  ) and AK Steel Holding (NYSE: AKS  ) will reward investors. Here are some reasons to be bullish.

Devon Energy
Devon has an asset base that includes both oil and natural gas plays in the U.S. and Canada. Its recent change in strategy was to shift its focus to U.S. and Canadian assets and sell off its deepwater and international plays. Starting late in 2009, the company sold nearly $10 billion in assets, which has led to a very strong balance sheet.

Hot Canadian Stocks To Buy For 2014: Nexen Inc.(NXY)

Nexen Inc. operates as an independent energy company worldwide. The company?s Conventional Oil and Gas segment explores for, develops, and produces crude oil and natural gas from conventional sources. This segment operates in the United Kingdom, Canada and the United States, and offshore West Africa, Colombia, and Yemen. Nexen?s Oil Sands segment develops and produces synthetic crude oil from the Athabasca oil sands in northern Alberta. The company?s Shale Gas segment explores for and produces unconventional gas from shale formations in northeastern British Columbia. Nexen Inc. was founded in 1971 and is headquartered in Calgary, Canada.

Hot Canadian Stocks To Buy For 2014: Natural Gas(NG)

NovaGold Resources Inc., through its subsidiaries, engages in the exploration and development of mineral properties primarily in North America. The company primarily explores for gold, silver, copper, zinc, and lead ores. It holds interests in the Donlin Creek property covering 81,361 acres and the Ambler property comprising 90,614 acres located in Alaska; and the Galore Creek property comprising 293,838 acres located in northwestern British Columbia, Canada. The company was formerly known as NovaCan Mining Resources (1985) Limited and changed its name to NovaGold Resources Inc. in March 1987. NovaGold Resources Inc. was founded in 1984 and is based in Vancouver, Canada.

Advisors' Opinion:

• [By Vodicka]

  Novagold Resources Inc New Ord (AMEX:NG): This equity had 11,424,918 shares sold short as of Aug 31st, as compared to 11,493,664 on Aug 15th, which represents a change of -68,746 shares, or -0.6%. Days to cover for this company is 4 and average daily trading volume is 2,735,045. About the equity: NovaGold Resources Inc. is a mineral exploration company. The Company, through its subsidiaries, explores and develops mineral properties in North America. NovaGold primarily focuses on gold properties, which may include copper, silver and zinc resources.

Hot Tech Stocks To Watch For 2014: Research in Motion Limited(RIMM)

Research In Motion Limited (RIM) designs, manufactures, and markets wireless solutions for the worldwide mobile communications market. The company, through the development of integrated hardware, software, and services, provides platforms and solutions for seamless access to time-sensitive information, including email, phone, short messaging service, and Internet and Intranet-based applications and browsing. Its products and services principally comprise the BlackBerry wireless platform, the RIM Wireless Handheld product line, software development tools, and other software and hardware. The company?s BlackBerry smartphones use wireless, push-based technology that delivers data to mobile users? business and consumer applications. Its BlackBerry smartphone portfolio includes BlackBerry Bold series, the BlackBerry Torch, BlackBerry Curve series, the BlackBerry Style, BlackBerry Storm series, the BlackBerry Tour, BlackBerry Pearl series, and the BlackBerry PlayBook tablet. T he company?s BlackBerry enterprise solutions comprise BlackBerry enterprise server, BlackBerry enterprise server express, BlackBerry mobile voice system, and hosted BlackBerry services. Its technology also enables third party developers and manufacturers to enhance their products and services through software development kits, wireless connectivity to data, and third-party support programs. In addition, the company offers BlackBerry technical support services, non-warranty repairs, and nonrecurring engineering services. Further, it provides BlackBerry App World that offers BlackBerry smartphone users an electronic catalogue that aids in the discovery and download/purchase of applications directly from their BlackBerry smartphone. The company markets and sells its BlackBerry wireless solutions primarily through global wireless communications carriers, and third party distribution channels. Research In Motion Limited was founded in 1984 and is headquartered in Waterloo, Canad a.

Advisors' Opinion:

• [By Kevin M. O'Brien]

  Research In Motion (RIMM) will go private. The stock, rightfully so, has been completely crushed in 2011. The negative sentiment surrounding this company makes it hard to envision the stock price recovering anytime soon. Their two-CEO structure has been a major problem. Concerns with Research In Motion are plentiful. This was once a great and innovative company. It actually makes sense to take it private sooner rather than later as the stock price looks to be headed to the single digits unless a buyout could happen, which I do not see taking place.

• [By Fitz Gerald]

  Rumors that the BlackBerry maker hired an investment banker to assist in weighing strategic options spurred heavy trading traffic in the weeklies this morning. Shares in RIMM are up 4.15% at $21.35 as of 12:05 pm on the East Coast, after earlier rallying as much as 9.7% to $22.49. Options on Research In Motion are some of the most active today, with volume on the stock approaching 110,000 contracts in early-afternoon trade. Investors are favoring calls, exchanging nearly 2 call options for each single put in play thus far in the session. Fresh prints in weekly calls suggest some strategists are positioning for shares in RIMM to extend gains through the end of this week. Volume in the weeklies is heaviest at the Oct. '07 $22 strike, where more than 8,600 contracts changed hands against previously existing open interest of 2,399 positions. Traders appear to have purchased the majority of the contracts for an average premium of $0.59 each. Call buyers profit if RIMM's shares rally another 5.8% to exceed the average breakeven price of $22.59 at expiration. Buyers outnumbered sellers driving substantial volume in calls at the Oct '07 $24 and $25 strikes, as well. Continued speculation surrounding the beleaguered BlackBerry maker could be just what call buyers need to see the value of their call options appreciate in the next few days. Increases in options implied volatility on the stock, which currently trades 2.38% higher on the day at 81.0%, may also benefit long option holders.

• [By Chuck Carlson]

  RBC Capital’s Mike Abramsky today reiterates a Sector Perform rating on Research in Motion (RIMM) shares, writing that the company’s fiscal Q2 results for the three months that ended in August likely beat the consensus $4.47 billion revenue estimate and 87 cents EPS estimate, coming in more like $4.5 billion and 90 cents.

  He also thinks Q3′s forecast will beat the consensus $5.3 billion and $1.36, helped by the introduction last month of new BlackBerry models based on “OS 7.”? The devices are succeeding in luring upgrade buyers from existing BlackBerrys, he writes, with his “checks” of 90 different outlets for Verizon Communications (VZ), AT&T (T), Sprint-Nextel (S), and T-Mobile USA showing a 20% sell-out rate across the various models.

  Despite that positive data point, Abramsky believes there’s still risk to RIM’s turnaround.

  “With BB7 uptake in line with our base case scenario QNX handsets may remain pivotal to reversing NA share declines,” he writes, with RIM perhaps having 12% share of North American smartphone shipments at present, down from 15% last quarter, and below Google’s (GOOG) 60% share by platform and Apple’s 25% share.

  “To be more constructive on the shares, we look for signs of North American share recovery, better execution, improved visibility to QNX Smartphones and related innovations (LTE, multi-device BES, Android emulation), or value-creating initiatives.”

  RIM shares today are down 44 cents, or 1.4%, at $31.05.

Hot Canadian Stocks To Buy For 2014: TotalFinaElf S.A.(TOT)

TOTAL S.A., together with its subsidiaries, operates as an integrated oil and gas company worldwide. The company operates through three segments: Upstream, Downstream, and Chemicals. The Upstream segment engages in the exploration, development, and production of oil and natural gas. It also involves in the transportation, trade, and marketing of natural gas and liquefied natural gas (LNG), as well as in LNG re-gasification and natural gas storage operations. In addition, this segment engages in the shipping and trade of liquefied petroleum gas (LPG); power generation from gas-fired power plants, nuclear, or renewable energies; production, trade, and marketing of coal, as well as in solar power systems and technology operations. As of December 31, 2010, it had combined proved reserves of 10,695 Mboe of oil and gas. The Downstream segment involves in refining, marketing, trading, and shipping crude oil and petroleum products. It also produces a range of specialty products, s uch as lubricants, LPG, jet fuel, special fluids, bitumen, marine fuels, and petrochemical feedstock. This segment holds interests in 24 refineries located in Europe, the United States, the French West Indies, Africa, and China, as well as operates a network of 17,490 service stations. The Chemicals segment produces base chemicals, including petrochemicals and fertilizers, as well as engages in rubber processing, resins, adhesives, and electroplating activities. TOTAL S.A. was founded in 1924 and is based in Paris, France.

Advisors' Opinion:

• [By Glenn]  

  TOT has a market capitalization of $130 billion. Its dividend yield last year of 5% is among the best in the industry. Current P/E ratio of 9.2 seems very attractive compared to the industry average of 12. The stock prices did not participate much in the recent bull market. While smaller sized competitors such as ConocoPhillips (COP), Marathon Oil Corporation (MRO) and Statoil ASA (STO) offered spectacular returns (ranging from 30% to 50%), Total’s return in 2010 was only 2%. One may find that the price will catch up with profits.

• [By Dave Friedman]

  Institutional investors bought 15,892,820 shares and sold 13,997,360 shares, for a net of 1,895,460 shares. This net represents 0.08% of common shares outstanding. The number of shares outstanding is 2,234,829,040. The shares recently traded at $46.80 and the company’s market capitalization is $109,165,864,774.97. About the company: Total SA explores for, produces, refines, transports, and markets oil and natural gas. The Company also operates a chemical division which produces polypropylene, polyethylene, polystyrene, rubber, paint, ink, adhesives, and resins. Total operates gasoline filling stations in Europe, the United States, and Africa.

Fibria Celulose Increases Sales but Misses Estimates on Earnings

Fibria Celulose (NYSE: FBR  ) reported earnings on July 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Fibria Celulose met expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased slightly. Non-GAAP loss per share increased. GAAP loss per share grew.

Gross margins grew, operating margins grew, net margins dropped.

Revenue details
Fibria Celulose booked revenue of $753.2 million. The 10 analysts polled by S&P Capital IQ expected revenue of $748.3 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 -$0.48. The five earnings estimates compiled by S&P Capital IQ predicted -$0.26 per share. Non-GAAP EPS were -$0.48 for Q2 compared to -$0.44 per share for the prior-year quarter. GAAP EPS were -$0.49 for Q2 versus -$0.44 per share for the prior-year quarter.

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 19.9%, 360 basis points better than the prior-year quarter. Operating margin was 8.6%, 350 basis points better than the prior-year quarter. Net margin was -35.7%, 40 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $807.1 million. On the bottom line, the average EPS estimate is $0.00.

Next year's average estimate for revenue is $2.95 billion. The average EPS estimate is -$0.07.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 212 members out of 225 rating the stock outperform, and 13 members rating it underperform. Among 52 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give Fibria Celulose a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Fibria Celulose is hold, with an average price target of $12.26.

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Add Fibria Celulose to My Watchlist.

Can Yamana Earnings Weather the Gold Storm?

Yamana Gold (NYSE: AUY  ) will release its quarterly report on Wednesday, and investors already understand that the plunge in gold prices that came in April will have a huge negative impact on the company's financial success. Yet even as other less healthy gold miners expect sizable losses, Yamana earnings should remain positive and give the company a good chance to endure the adverse pricing environment with minimal damage.

As difficult as it is to find and extract gold from the ground, it's easy for investors to understand what happens to mining companies when the prices they get for their products drop. In the long run, Yamana obviously needs to see higher gold prices to maximize profits, but could low prices actually help the company by giving it some new opportunities? Let's take an early look at what's been happening with Yamana Gold over the past quarter and what we're likely to see in its quarterly report.

Stats on Yamana Gold

Analyst EPS Estimate	$0.10
Change From Year-Ago EPS	(44%)
Revenue Estimate	$484.64 million
Change From Year-Ago Revenue	(9.5%)
Earnings Beats in Past Four Quarters	2

Source: Yahoo! Finance.

How bad a hit will Yamana earnings take?
Analysts have taken down their views on Yamana earnings substantially in recent months, cutting their June-quarter estimates by more than 40% and their full-year 2013 and 2014 views by 35%-45% as well. The stock price has also faltered, with losses of 11% since late April even after a more sizable decline earlier in that month that corresponded to falling gold prices.

Across the gold industry, falling prices have spelled trouble for mining companies that rely on revenue from gold sales to drive their profits and cash flow. After its initial drop, gold prices have fallen another $100 per ounce since late April, and even though gold has risen from its lowest levels more recently, reduced investor demand for shares of the SPDR Gold (NYSEMKT: GLD  ) ETF and other investor-friendly vehicles for investing signals a potential shift in long-term sentiment away from the yellow metal after its long bull-market run.

But Yamana has benefited from its low cost structure, and it only intends to make its operations even cheaper going forward in light of low gold prices. Despite already having cash operating costs of less than $400 per ounce, the company expects to cut those costs by another $100 per ounce, doing its best to increase efficiency and maximize profit margins in a tough environment. Weak prices for byproduct metals like copper and zinc have added to Yamana's woes, but it and peer Goldcorp (NYSE: GG  ) have kept enough of a lid on their expenses to remain profitable even with gold at current levels.

In fact, the current environment could create opportunities for Yamana. As other producers struggle, Yamana's relatively healthy balance sheet could let it buy up assets from weaker players at cheap prices. In doing so, Yamana will likely have to compete against streaming companies Royal Gold (NASDAQ: RGLD  ) and Silver Wheaton (NYSE: SLW  ) , which will look for similar chances to profit from cash-hungry metals producers. But if low prices continue, there could be enough opportunities for everyone to benefit.

In the Yamana earnings report, watch to see how cost-containment initiatives are proceeding. If the company can deliver expected cost savings, then the stock could recover more quickly than many are expecting even if gold prices remain low for the foreseeable future.

You know how gold can help you protect against financial risks, but which stocks will give you the best protection right now? The Motley Fool's new free report, "The Best Way to Play Gold Right Now", dissects the recent volatility and provides a guide for gold investing. Click here to read the full report today!

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

5 Practical Money Tips for New Grads

Alamy

Yes my friends, it's that time of year again. No, not allergy season -- graduation. That seminal moment in our lives when, in ceremonies of varying degrees of pomp and circumstance, our elders pass on the wisdom of the ages to those of us who are evolving from the shelter of the ivory tower to the stark reality of the "real world."

Tens of thousands of graduates will likely hear that Emerson nugget "Hitch your wagon to a star," (currently lurking in countless commencement addresses across the land). Others will doubtless hear the Dr. Seuss classic, "Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind."

Commencement speakers face the Herculean task of painting a picture of opportunity and challenge that is engaging, thought-provoking and reasonably optimistic while trying not to terrify or bore.

The good news: This is not a graduation speech. Not one Hallmark card verse (well, maybe one) in this piece. I leave that to the thousands of wizened elders who are feverishly working on their content and delivery of "life in the real world" barnburners at this very moment.

That said, if any prospective commencement speakers are reading, you might consider including some practical advice for the new grads, that just might make their lives easier for the next few years.

1. Learn How to Manage Your Student Loans.

If you have federally-backed loans, consider consolidating them. Student loan interest rates are at or near all-time lows. Since the interest rate of the new loan is taken from the average of your existing loans, consolidation could save you meaningful dollars on interest.

But consolidation isn't right for everyone, as it may lengthen your repayment period and could temporarily lower your credit score by adding a "new" account to your credit report. And while private loans cannot be consolidated with federal student loans, consolidating just your private loans at a lower interest rate could be an option if your credit scores are substantially higher now than when the loans were originated.

Here's another trick: If you sign up for automatic payments from your checking account, your loan servicer may lower the interest rate, often by a quarter of a percent, saving you thousands.

If you find yourself struggling financially, you do have other options with your federal student loans. The best is called income-based repayment. IBR allows you to limit your monthly payments to 15 percent of your monthly discretionary income, which is figured out by looking at the difference between your adjusted gross income and 150 percent of the federal poverty line for your family size. This varies by state. Based upon this formula, you may even qualify to pay nothing. The program can continue indefinitely, and the reduced payments count toward your forgiveness period, which could be 10, 20 or 25 years.

You can also temporarily suspend payments through forbearance. This may help in a financial emergency. But unlike IBR, the payments you miss under forbearance do not count toward your forgiveness period, which means you'll eventually have to pay them.

2. Use Your Debt to Increase Your Credit Score.

In addition to the benefit of consolidation, student loans can help you strengthen your credit score, if you make timely payments every month.

It's a popular misconception that large student loan debt hurts your credit because it represents such a big chunk of your available debt. Credit utilization (balance/limit ratio) that amounts to about 30 percent of your credit score applies almost entirely to "revolving" credit, such as credit cards, which come with defined credit limits. Student loans, on the other hand, are considered "installment" accounts -- just like auto loans and mortgages -- and carry no penalty for big balances. But the key is paying on time.

3. Manage Your Credit Portfolio.

Everybody's heard of an investment portfolio, which consists of assets including stocks, bonds or real estate. You have a credit portfolio that works the same way. It consists of student loans, credit cards and -- if you play your cards right -- a car loan and a mortgage.

Like investments, credit is a tool we can leverage to buy the things we need. Both require constant management, nurturing and protection. Check your credit reports; review your bank and credit card account activity daily to protect against fraudulent activity; sign up for programs offered by financial institutions that notify you when transactions post; don't provide personal information to people you don't know ("If you see something, say something"); and don't needlessly apply for credit, but always be looking for the best deals, rates and rewards.

You can check your credit reports for free each year at AnnualCreditReport.com, and there are plenty of free tools out there, like Credit.com's Credit Report Card, that provide you with an easy-to-understand overview of your credit standing.

4. Do a Hygiene Check on Your Facebook and Twitter Accounts.

You heard me right -- I said "hygiene." You wouldn't show up to a job interview looking like you just rolled out of bed, so don't post pictures of yourself having just rolled out of bed, or doing things that you wouldn't want your mother to see. In a world where every word we write, and every picture and video we post becomes another tile in our undeletable digital life mosaic, it is imperative to act appropriately in all social media environments. It's not just your friends and Twitter followers who are interacting with and scrutinizing you. It's also future employers, financial institutions, insurance companies, divorce lawyers, identity thieves, debt collectors -- even government agencies and intelligence services.

Keep these unexpected audiences in mind as you post things. Never show the world your address or Social Security number. Don't tell Facebook you're about to leave on vacation (informing robbers of precisely the right times to visit your place). There's no need to post pictures from the last beer pong tournament either. As for pictures of yourself smoking banned substances, come on dude!

Pro tip: Become Facebook friends with the most critical adult you know and then ask for constant feedback.

5. Manage Your Identity Portfolio.

Your identity, like your credit, is a huge asset. It has many components. And like credit, it can be your best friend or your worst enemy (an enhancer or destroyer), depending upon how effectively and responsibly you manage it.

The "stocks and bonds" of your identity consist of information like your name, email, Social Security number, address, phone number and mother's maiden name (just to name a few). By stealing enough of these "assets," identity thieves can perpetuate fraud in your name, profiting from scams while ruining your credit or worse. If your identity is used to obtain medical products or services, it can even jeopardize your life -- imagine getting the wrong blood type or a medicine to which you're allergic in an emergency situation because someone used your information and their health data was co-mingled with yours. If your identity is used in connection with a crime, you could be arrested or even shot during a routine traffic stop.

The best way to deal with this threat is to stay alert and manage your life portfolios. Limit the amount of private information you share with people who you don't (or even do) know, or institutions you think you know, and make sure that when you share, the data you provide is properly protected.

This is an exciting time for many college seniors. Think about what I have said as it relates to you, and take a moment to reflect upon these wise commencement speech-worthy words from Ralph Waldo Emerson: "Make the most of yourself, for that is all there is of you."

More from Credit.com Can You Really Get Your Credit Score for Free? The Ultimate Credit Report Cheat Sheet How Do Student Loans Impact Your Credit?

Is Tesla Overvalued?

The following video is from Tuesday's MarketFoolery podcast, in which host Chris Hill and analysts Jason Moser and Andy Cross discuss the top business and investing stories of the day.

Shares of Tesla (NASDAQ: TSLA  )  rose again on Tuesday. Morgan Stanley raised its price target from $47 to $103. Shares of the electric car maker have doubled in the past month. How much of Tesla's recent upswing is because of a short squeeze? In this installment of MarketFoolery, our analysts take stock in the future of Tesla.

Near-faultless execution has led Tesla Motors to the brink of success, but the road ahead remains a hard one. Despite progress, a looming question remains: Will Tesla be able to fend off its big-name competitors? The Motley Fool answers this question and more in our most in-depth Tesla research available for smart investors like you. Thousands have already claimed their own premium ticker coverage, and you can gain instant access to your own by clicking here now.

The relevant video segment can be found between 9:09 and 14:57.

For the full video of today's MarketFoolery , click here .

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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.

Boeing Ends the Dow's Record Run

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) may be having a record-setting week, but don't tell Boeing (NYSE: BA  ) shareholders that. The aerospace stock has soured today despite the markets' upward momentum, and Boeing's new 787 Dreamliner is to blame once again. The Dow itself hasn't had too bad of a day, down a moderate 36 points as of 2:25 p.m. EDT, and the blue-chip index's stocks are split fairly evenly between winners and losers. Let's check out the big stories as the markets' week comes to a close.

Boeing in a bind
Just when everyone thought the Dreamliner's problems were over, a new PR headache has arisen for Boeing. An Ethiopian Airlines 787 caught fire at London's Heathrow Airport earlier today, less than two months after the FAA lifted the grounding order on Boeing's newest line of aircraft. The incident brings to mind the battery problems that occurred in January and got the 787 grounded in the first place.

Boeing has issued a notice that it is "aware" of the problem but has yet to release details on what caused the fire. If it's the battery again, it's a troubling incident for the 787 so soon after the company and regulators signaled that the Dreamliner was ready to take to the skies. Investors haven't taken kindly to the report: Boeing's stock has dived more than 4% on the day, having lost more than 6% earlier in the trading session.

Boeing has recovered well from the 787 grounding, and shares have bounced back in recent months. If today's incident is nothing more than an isolated fire, the stock offers plenty of reasons for optimism. The company boasts a giant backlog of planes and has sold 787 orders consistently in the aftermath of the grounding, having picked up more than 100 offers for its new 787-10 model at the Paris Airshow last month alone. However, shareholders need to watch this Heathrow incident carefully. If Boeing's battery problem is rearing its head again, the PR nightmare that many thought was over could come roaring back.

Elsewhere on the Dow, Verizon (NYSE: VZ  ) shares have slumped by 1.5%. America's leading wireless company needs to sell more than $23 billion worth of Apple's (NASDAQ: AAPL  ) iPhones this year in order to break even with its contract demands with the tech company -- and with iPhone demand slowing, analysts have cautioned that Verizon could be on the hook for billions of dollars at the end of the year.

Nomura Holdings analyst Stuart Jeffrey has reasoned that Verizon could owe $12 billion if Apple enforces its contract terms with the company, and while the tech firm could allow its partner a pass, analysts have warned that allowing Verizon to skirt its bill could tempt other carriers to ignore sales commitments as well. It's a tough situation both for Apple, which faces risking its relationship with Verizon, and for the wireless carrier itself, which might be forced to pay back a huge commitment if Apple takes a hard line about the unsold stock.

Finally, Bank of America shares have shot up 1.9% despite the company's ongoing court battle regarding accusations that it delayed or "misplaced" mortgage modifications for at-risk homeowners. B of A has accused its former mortgage workers of "impossible" claims regarding the firm's work with the federal Home Affordable Modification Program, but a Colorado lawsuit recently took things a step further by accusing the bank of racketeering violations under the government's RICO Act. Shots are being fired by both sides in a battle that won't end for a while, but for shareholders, this fight is key indicator for B of A's future as the company tries to escape its troubled recent history.

Boeing, Bank of America, and the Dow's blue-chip stocks all offer unique potential for shareholders, but one investing approach -- the best, we would argue -- is choosing great companies and sticking with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Now More Than Ever, Size Matters for Stock Returns

Investors can't complain about the performance of the S&P 500 (SNPINDEX: ^GSPC  ) so far this year, with gains of nearly 20% since 2013 began looking especially impressive when you consider that the year still has five months to go. But when you look at some of the other S&P indexes, you'll realize that even with its outsized gains, the large-cap space hasn't given investors everything the stock market has to offer.

Where the best gains are
In fact, when you compare returns across stocks of various sizes, you'll get some surprising results:

The SPDR S&P 500 ETF (NYSEMKT: SPY  ) weighs in with 20% gains with its exposure to 500 of the largest companies in the U.S. market. When you step down to mid-cap stocks, though, you'll get even better returns, with the SPDR S&P MidCap 400 ETF (NYSEMKT: MDY  ) posting returns of 21% so far in 2013, based on the performance of 400 mid-sized companies domestically. The smallest companies in the market have done better still, as the SPDR S&P SmallCap 600 ETF (NYSEMKT: SLY  ) has given investors impressive 24% returns since Jan. 1.

Why are smaller companies outperforming the largest stocks in the market? Historically, smaller stocks have posted better long-term returns than their larger counterparts, with theoreticians pointing to the greater risk involved in small-cap stocks as justifying the higher risk premium that investors should demand in order to hold them over the long run.

But there are also a couple of reasons specific to the current environment that have supported small-cap stocks lately. One is that as merger and acquisition activity has risen, small-cap stocks have benefited disproportionately, as large companies tend to be the acquirers in such transactions and end up paying premiums over prevailing share prices in order to buy out their smaller targets. By contrast, small-cap companies that get bought out often exit with a bang, going out in a blaze of soaring-share-price glory.

The other is that the U.S. economy has been relatively healthy compared to those in the rest of the world. Increasingly, large-cap stocks tend to be more exposed to the global economy, collectively getting more of their revenue and profits from overseas and therefore suffering when sluggish conditions abroad hold back their international growth prospects. By contrast, small-cap stocks in the U.S. are often still laser-focused on growing their domestic business, and with U.S. economy conditions continuing to improve, those small caps reap more of the benefit.

What's next?
The flip side of the relationship among different-sized stocks is that during bear-market periods, large caps have often held up better than their smaller counterparts. So if you believe a correction is imminent, banking on continued small-cap outperformance could leave you disappointed. But if you think the bull market has further to run, then small caps might be able to sustain their outperformance and make their more risk-tolerant investors happy for months or even years to come.

Two small-cap companies with long-term government deals are reaping the rewards of the government's recent spending spree, securing some monstrous, guaranteed profits while also limiting any risk exposure they have. We outline how they're taking advantage in our special,100% free report "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." Just click here to get instant access to the names of both companies, and start reaping the profits right alongside them!

Intel's Focused on the Future

With PC sales as terrible as they've been, it should come as no surprise that Intel's (NASDAQ: INTC  ) second-quarter earnings results failed to excite investors. For the quarter, the company reported revenue of $12.8 billion, which represented a decrease of 5.1% year over year. As far as net income is concerned, it declined by 29% year over year, thanks largely, in part, to the softening PC market. The icing on the cake was that the company lowered full-year revenue guidance, which it now expects will be flat on the year, as opposed to up a few percentage points. It's worth noting that the company expects its third-quarter gross profit margin will be 61%, which represents a 2% sequential increase from the second quarter.

Rounding out the results, Intel's PC client group experienced a 7.5% year-over-year decline in revenue, driven by volume declines in desktop and notebook processors ahead of the Intel Haswell refresh. Additionally, its data center group reported flat year-over-year revenue growth, thanks to relatively unchanged volumes and prices. After going through the conference call, I get the sense that Intel executives continue to place their emphasis on the company's future prospects, thanks to its technological advantage.

The market will decide
With a new CEO in place, Brain Krzanich drove home the importance during the conference call for Intel to create compelling products suitable for all computing segments, and letting the market decide where the future of computing goes. Investors should take this to mean that the company has placed a greater emphasis on Intel Atom-based products, which will become the company's key player in the high-growth ultra-mobile segment. In other words, compelling products like Intel Bay Trail are only just the beginning for the company's renewed Atom emphasis.

The investor fear with this approach is that Intel Atom products become so great, they will cannibalize its more expensive Core family of processors. But, like the late Steve Jobs, Krzanich also doesn't fear cannibalization. In his words, "At the end of the day, the market will go where the market goes and better to have a product like Bay Trail that we can play no matter where it goes rather than miss that market."

A key selling point
Since Intel's x86 architecture is compatible with both Google Android as well as Microsoft Windows, it gives device makers an opportunity to "buy in bulk" across product lines, and leverage a greater economy of scale. Additionally, having a single product and architecture that works with two operating systems invites the possibility of a more streamlined manufacturing process. When also taking into account the expected performance gains of Bay Trail against the ARM Holdings competition, these factors could allow Intel to make inroads in the mobile computing space, assuming Intel doesn't charge too much of a premium over the competition.

Extending the lead
By the end of the year, Intel will begin production of its next-generation 14-nanometer process technology, putting it well ahead of the Taiwan Semiconductor's timetable. With this technological advantage, Intel will be able to produce the lowest cost, most powerful, and most energy-efficient transistors on the planet. On paper, this certainly sounds promising, but in reality, it's unclear if technology alone will be able to drive meaningful results for shareholders, especially considering average selling prices are expected to decline. Unfortunately, investors are left to patiently wait and see if a technological advantage will translate into a brighter future.

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.

5 Best Oil Stocks To Watch Right Now

I've been following the remarkable rise of the railroads as the preferred shipment option for our increased crude oil production. Last year, crude oil and petroleum products delivered by rail rose by over 30%. This was driven primarily by the rise in production coming out of North Dakota's Bakken region.

Bakken producers like Continental Resources (NYSE: CLR  ) seem to have a sweet spot for this age-old mode of transportation. The company and its peers had been producing more oil than the current pipeline infrastructure could handle. That created a huge differential between the price of Bakken crude and that of U.S. benchmark West Texas Intermediate. However, thanks to the rails, that differential has come down significantly.

In one of the best quotes from earlier this year, Continental President and COO Rick Bott told investors: "We've recently seen a significant improvement in Bakken oil price differentials, reflecting higher volumes being shipped by rail to the coasts and the anticipation of increased pipeline capacity ... We now have excess transportation capacity in both pipe and rail, and, with additional infrastructure projects in the planning and construction stages, capacity should remain ahead of Bakken production growth."

5 Best Oil Stocks To Watch Right Now: Markwest Energy Partners LP (MWE)

MarkWest Energy Partners, L.P. (MarkWest Energy) is a master limited partnership engaged in the gathering, processing and transportation of natural gas; the transportation, fractionation, storage and marketing of natural gas liquids (NGLs), and the gathering and transportation of crude oil. It provides services in the midstream sector of the natural gas industry. The Company also provides processing and fractionation services to crude oil refineries in the Corpus Christi, Texas area through its Javelina gas processing and fractionation facility. As of December 31, 2011, the Company operated in four segments: Southwest, Northeast, Liberty and Gulf Coast. Effective December 31, 2011, the Company acquired the remaining 49% interest in MarkWest Liberty Midstream. On February 1, 2011, the Company acquired Langley processing plant.

Southwest Segment

The Company owns a system in East Texas that consists of natural gas gathering pipelines, centralized compressor stations, a natural gas processing facility and an NGL pipeline. The East Texas system is located in Panola, Harrison and Rusk Counties and services the Carthage Field. Producing formations in Panola County consist of the Cotton Valley, Pettit, Travis Peak and Haynesville formations. During the year ended December 31, 2011, approximately 77% of its natural gas volumes in the East Texas System result from contracts with six producers. The Company sells substantially all of the purchased and retained NGLs produced at its East Texas processing facility to Targa Resources Partners, L.P. (Targa) under a long-term contract. Such sales represent approximately 19.4% of its consolidated revenue in 2011.

The Company owns a natural gas gathering system in the Woodford Shale play in the Arkoma Basin of southeast Oklahoma. The liquids-rich natural gas gathered in the Woodford system is processed through Centrahoma Processing LLC (Centrahoma), its equity investment, or other third-party processors. In addition, it owns the Foss Lake! natural gas gathering system and the Western Oklahoma natural gas processing complex, all located in Roger Mills, Beckham, Custer and Ellis Counties of western Oklahoma. The gathering portion consists of a pipeline system that is connected to natural gas wells and associated compression facilities. The Company also owns a gathering system in the Granite Wash formation in Wheeler County in the Texas panhandle that is connected to its Western Oklahoma processing complex. The Company completed the expansion of the Western Oklahoma natural gas processing plant in October 2011.

Approximately 70% of its Oklahoma volumes result from contracts with three producers in 2011. The Company sells substantially all of the NGLs produced in the Western Oklahoma processing complex to ONEOK Hydrocarbon L.P. (ONEOK) under a long-term contract. Such sales represent approximately 13.2% of its consolidated revenue in 2011. The Company owns a number of natural gas gathering systems located in Texas, Louisiana, Mississippi and New Mexico, including the Appleby gathering system in Nacogdoches County, Texas. It gathers a portion of the gas produced from fields adjacent to its gathering systems, including from wells targeting the Haynesville Shale. In addition, it owns four lateral pipelines in Texas and New Mexico.

Northeast Segment

The Company�� Northeast segment assets include the Kenova, Boldman, Cobb, Kermit and Langley natural gas processing plants, an NGL pipeline and the Siloam NGL fractionation plant. In addition, it has two caverns for storing propane at its Siloam facility and additional propane storage capacity under a long-term firm-capacity agreement with a third party. The Northeast segment operations include fractionation and marketing services on behalf of the Liberty segment. The Company owns and operates a crude oil pipeline in Michigan (Michigan Crude Pipeline) providing transportation service for three shippers.

Liberty Segment

The Company pr! ovides na! tural gas midstream services in southwestern Pennsylvania and northern West Virginia through MarkWest Liberty Midstream. It is a processor of natural gas in the Marcellus Shale, with gathering, processing, fractionation, storage and marketing operations.

Utica Segment

Effective January 1, 2012, the Company and The Energy and Minerals Group (EMG) formed MarkWest Utica EMG, a joint venture focused on the development of natural gas processing and NGL fractionation, transportation and marketing infrastructure to serve producers' drilling programs in the Utica shale in eastern Ohio. During 2011, the Utica Segment did not have any operations.

Gulf Coast Segment

The Company owns and operates the Javelina processing facility, a natural gas processing facility in Corpus Christi, Texas that treats and processes off-gas from six local refineries operated by three different refinery customers. As of December 31, 2011, the Company owned a 40% interest in Centrahoma Processing LLC (Centrahoma), a joint venture with Cardinal Midstream, LLC (Cardinal). Centrahoma owns certain processing plants in the Arkoma Basin and Cardinal operates an additional processing plant that is not owned by Centrahoma but is located adjacent to and operates in conjunction with the Centrahoma plants.

5 Best Oil Stocks To Watch Right Now: Whiting Petroleum Corporation(WLL)

Whiting Petroleum Corporation engages in the acquisition, development, exploitation, exploration, and production of oil and gas primarily in the Permian Basin, Rocky Mountains, Mid-Continent, Gulf Coast, and Michigan regions of the United States. As of December 31, 2010, its estimated proved reserves were 304.9 million barrels equivalent of oil; and had interests in 9,698 gross productive wells covering approximately 1,115,000 gross developed acres. The company sells its oil and gas to end users, marketers, and other purchasers. Whiting Petroleum Corporation was founded in 1983 and is Denver, Colorado.

Advisors' Opinion:

• [By Gordon Wilcox]

  Whiting Petroleum (NYSE: WLL) Two months ago, takeover rumors surrounding Whiting swirled after it was reported the company hired Bank of America to explore a possible sale. Those rumors gained steam again last week and it is easy to see why.

  Not only does Whiting control over 700,000 Bakken Shale acres, making it the second-largest producer there, it is attractively valued. The shares currently trade for more than 35 percent below the average analyst price target and well below the five-year average price-to-earnings ratio.

  Adding to the takeover case are the facts that the bulk of Whiting’s reserves are oil, not gas, and that the company has increased production guidance multiple times this year.

Top 10 Growth Stocks To Invest In 2014: North American Energy Partners Inc. (NOA)

North American Energy Partners Inc. provides heavy construction and mining, piling, and pipeline installation services to customers in the Canadian oil sands, industrial construction, commercial and public construction, and pipeline construction markets. The company operates in three segments: Heavy Construction and Mining, Piling, and Pipeline. The Heavy Construction and Mining segment focuses on providing surface mining support services for oil sands and other natural resources. Its activities include land clearing, stripping, muskeg removal, and overburden removal to expose the mining area; the supply of labor and equipment to supplement customers� mining fleets supporting ore mining; and provision of general support services, such as road building, repair and maintenance for mine and treatment plant operations, and hauling of sand and gravel. This segment also engages in the construction related to the expansion of existing projects-site development and infrastructure ; and the provision of environmental and tailings management services. In addition, it provides industrial site construction for mega-projects; and underground utility installation services for plant, refinery, and commercial building construction. The Piling segment installs driven, drilled, and screw piles, as well as caissons and earth retention, and stabilization systems. It also designs, manufactures, and sells screw piles and pipeline anchoring systems worldwide, as well as provides tank maintenance services to the petro-chemical industry in Canada and the United States. The Pipeline segment provides small and large diameter pipeline construction and installation services, as well as equipment rental to energy and industrial clients. The company�s fleet includes approximately 900 pieces of diversified heavy construction equipment supported by approximately 750 pieces of ancillary equipment. North American Energy Partners Inc. was founded in 1953 and is headquartered i n Calgary, Canada.

5 Best Oil Stocks To Watch Right Now: Royal Caribbean Cruises Ltd.(RCL)

Royal Caribbean Cruises Ltd. operates in the cruise vacation industry worldwide. It owns five cruise brands, which comprise Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, and CDF Croisi�es de France. The Royal Caribbean International brand provides various itineraries and cruise lengths with options for onboard dining, entertainment, and other onboard activities primarily for the contemporary segment. It offers surf simulators, water parks, ice skating rinks, rock climbing walls, and shore excursions at each port of call, as well as boulevards with shopping, dining, and entertainment venues. The Celebrity Cruises brand operates onboard upscale ships that offer luxurious accommodations, fine dining, personalized services, spa facilities, venue featuring live grass, and glass blowing studio for the premium segment, as well as resells computers and other media devices. The Pullmantur brand provides an array of onboard activities and serv ices to guests, including exercise facilities, swimming pools, beauty salons, gaming facilities, shopping, dining, complimentary beverages, and entertainment venues serving the contemporary segment of the Spanish, Portuguese, and Latin American cruise markets. The Azamara Club Cruises brand offers various onboard services, amenities, gaming facilities, fine dining, spa and wellness, butler service for suites, and interactive entertainment venues for the up-market segment of the North American, United Kingdom, German, and Australian markets. The CDF Croisieres de France brand offers seasonal itineraries to the Mediterranean; and various onboard services, amenities, entertainment venues, exercise and spa facilities, fine dining, and gaming facilities for the contemporary segment of the French cruise market. As of December 31, 2011, the company operated 39 ships with a total capacity of approximately 92,650 berths. Royal Caribbean Cruises Ltd. was founded in 1968 and is headqua rtered in Miami, Florida.

Advisors' Opinion:

• [By Hawkinvest]

  Royal Caribbean Cruises (RCL) is one of Carnival's competitors in the cruise industry. Royal does not have the same issues as Carnival in terms of the Costa Concordia incident, but it could be impacted by discounting in cruise fares, as well as higher fuel costs. Royal Caribbean shares were recently downgraded to a strong sell by Zacks Investment Research, and a recent analyst report states:

  We are a bit doubtful about the cruising sector in the near term after Carnival's ship Costa Concordia ran aground in mid-January on Italy's west coast. The disaster hit the industry in the wake of the wave season between January and March. The recent tragedy resulted in subdued bookings. Royal Caribbean's overall booking volumes in North America came down. In Europe, where the incident took place, the cut in bookings has been steeper. Business in APMEA was also down slightly. The company expects a 20% decline in new bookings during the peak of wave season.

  This stock was trading below $26 in early January, but it has rallied with the markets. With oil prices trending higher, and the stock at the high end of the recent trading range, the shares look vulnerable to a pullback.

  Here are some key points for RCL:

  Current share price: $29.89

  The 52 week range is $18.70 to $45.45

  Earnings estimates for 2011: $2.32 per share

  Earnings estimates for 2012: $2.94 per share

  Annual dividend: 40 cents per share which yields about 1.3%

5 Best Oil Stocks To Watch Right Now: Marathon Petroleum Corp (MPC)

Marathon Petroleum Corporation (MPC), incorporated on November 9, 2009, is a petroleum product refiners, transporters and marketers in the United States. The Company operates in three segments: Refining & Marketing, Speedway and Pipeline Transportation. Marathon Petroleum�� refining, marketing and transportation operations are concentrated in the Midwest, Gulf Coast and Southeast regions of the United States. MPC has two retail brands: Speedway and Marathon. Effective as of June 30, 2011, MPC was separated from Marathon Oil Corporation (Marathon Oil) and became an independent company in a spin-off transaction.

Refining & Marketing

The Company owned and operated six refineries in the Gulf Coast and Midwest regions of the United States with an aggregate crude oil refining capacity of approximately 1.2 million barrels per calendar day as of December 31, 2011. During 2011, its refineries processed 1,177 million barrels per day of crude oil and 181 mbpd of other charge and blend stocks. Its refineries include crude oil atmospheric and vacuum distillation, fluid catalytic cracking, catalytic reforming, desulfurization and sulfur recovery units. The refineries process a range of crude oils and produce numerous refined products, ranging from transportation fuels, such as reformulated gasolines, blend-grade gasolines intended for blending with fuel ethanol and ultra-low-sulfur diesel fuel, to heavy fuel oil and asphalt. Additionally, MPC manufacture aromatics, propane, propylene, cumene and sulfur.

The Company�� Garyville, Louisiana refinery is located along the Mississippi River in southeastern Louisiana between New Orleans and Baton Rouge. The Garyville refinery is configured to process heavy sour crude oil into products, such as gasoline, distillates, asphalt, polymer grade propylene, propane, isobutane, sulfur and fuel-grade coke. The Catlettsburg, Kentucky refinery is located in northeastern Kentucky on the western bank of the Big Sandy River, near the confluence! with the Ohio River. The Catlettsburg refinery processes sweet and sour crude oils into products such as gasoline, distillates, asphalt, cumene, petrochemicals, propane and propylene. The Robinson, Illinois refinery is located in southeastern Illinois. The Robinson refinery processes sweet and sour crude oils into products, such as multiple grades of gasoline, distillates, anode-grade coke, propane, butane and propylene.

MPC�� Detroit, Michigan refinery is located near Interstate 75 in southwest Detroit. It is the petroleum refinery operating in Michigan. The Detroit refinery processes light sweet and heavy sour crude oils, including Canadian crude oils, into products, such as gasoline, distillates, asphalt, slurry, propane, and propylene. Its Canton, Ohio refinery is located approximately 60 miles southeast of Cleveland, Ohio. The Canton refinery processes sweet and sour crude oils into products such as gasoline, distillates, asphalt, propane, slurry and roofing flux. Its Texas City, Texas refinery is located on the Texas Gulf Coast approximately 30 miles south of Houston, Texas. The refinery processes sweet crude oil into products such as gasoline, chemical grade propylene, propane, slurry and aromatics.

As of December 31, 2011, the Company owned and operated 62 light product and 21 asphalt terminals. In addition, it distributes through approximately 52 third-party light product and 12 third-party asphalt terminals in its market area. During 2011, marine transportation operations included 15 towboats, as well as 167 owned and 14 leased barges that transport refined products on the Ohio, Mississippi and Illinois rivers and their tributaries, as well as the Intercoastal Waterway. As of December 31, 2011, the Company leased or owned approximately 1,950 railcars of various sizes and capacities for movement and storage of refined products. In addition, it own 124 transport trucks for the movement of refined products.

The Company produces propane at all six of its! refineri! es. Propane is primarily used for home heating and cooking, as a feedstock within the petrochemical industry, for grain drying and as a fuel for trucks and other vehicles. The Company is also a producer and marketer of feedstocks and specialty products. Product availability varies by refinery and includes propylene, cumene, dilute naphthalene oil, molten sulfur, toluene, benzene and xylene. Propane is primarily used for home heating and cooking, as a feedstock within the petrochemical industry, for grain drying and as a fuel for trucks and other vehicles.

Speedway

The Company sells transportation fuels and convenience products in the retail market in the Midwest, primarily through Speedway convenience stores. The Speedway segment sells gasoline and merchandise through convenience stores that the Companu owns and operates, primarily under the Speedway brand. Speedway-branded convenience stores offer a range of merchandise, such as prepared foods, beverages and non-food items, including a number of private-label items. As of December 31, 2011, Speedway had 1,371 convenience stores in seven states.

Pipeline Transportation

The Company transports crude oil and other feedstocks to our refineries and other locations, delivers refined products to wholesale and retail market areas and includes, among other transportation-related assets, a majority interest in LOOP LLC, which is the owner and operator of the United States deepwater oil port. It owns common carrier pipeline systems through Marathon Pipe Line LLC (MPL) and Ohio River Pipe Line LLC (ORPL), both of which are wholly owned subsidiaries. These pipeline systems transport crude oil and refined products, primarily in the Midwest and Gulf Coast regions, to its refineries, its terminals and other pipeline systems. The Company�� MPL and ORPL wholly owned carrier systems consist of 1,707 miles of crude oil lines and 1,825 miles of refined product lines comprising 31 systems located in 11 states, as of Decem! ber 31, 2! 011. In addition, MPL leases and operates 217 miles of common carrier refined product pipelines.

The common carrier refined product pipelines include the owned and operated Cardinal Products Pipeline and the Wabash Pipeline. The Cardinal Products Pipeline delivers refined products from Kenova, West Virginia, to Columbus, Ohio. The Wabash Pipeline system delivers refined products from Robinson, Illinois, to various terminals in the area of Chicago, Illinois. Other refined product pipelines owned and operated by MPL extend from: Robinson, Illinois to Louisville, Kentucky; Robinson, Illinois to Lima, Ohio; Wood River, Illinois to Indianapolis, Indiana; Garyville, Louisiana to Zachary, Louisiana, and Texas City, Texas to Pasadena, Texas.

As of December 31, 2011, the Company had partial ownership interests in the pipeline companies that have approximately 110 miles of crude oil pipelines and 3,600 miles of refined products pipelines, including about 970 miles operated by MPL, which include Centennial Pipeline LLC (Centennial), Explorer Pipeline Company (Explorer), LOCAP LLC (LOCAP), LOOP LLC (LOOP), Muskegon Pipeline LLC (Muskegon) and Wolverine Pipe Line Company (Wolverine).

The Company holds a 50% interest in Centennial, which owns a refined products pipeline system connecting the Gulf Coast region with the Midwest market. The Company holds a 17% interest in Explorer, a refined products pipeline system extending from the Gulf Coast to the Midwest. It holds a 51% interest in LOOP, the owner and operator of the Louisiana Offshore Oil Port, which is a deepwater oil port capable of receiving crude oil from large crude carriers, located 18 miles off the coast of Louisiana, and a crude oil pipeline connecting the port facility to storage caverns and tanks at Clovelly, Louisiana. The Company holds a 60% interest in Muskegon, which owns a refined products pipeline extending from Griffith, Indiana to North Muskegon, Michigan. It hold a 6% interest in Wolverine, a refined prod! ucts pipe! line system extending from Chicago, Illinois to Toledo, Ohio.

Advisors' Opinion:

• [By Jim Jubak]

   A river of oil from the oil-shale boom in North Dakota and Texas is gradually making its way to the country's Gulf Coast refineries as pipelines and other infrastructure are built out. The arrival of oil from resources like the Eagle Ford and Bakken shales will mean rising margins at Gulf Coast refineries as they begin their work with cheaper oil.

  Marathon Petroleum (MPC) will get a big hunk of that refining business -- and those higher refining margins -- and it seems determined to gather in even more with its purchase in October of BP's (BP) Texas City refinery. Texas City gives Marathon a refinery close to growing crude production from Eagle Ford and the Permian Basin. What I like about this deal -- and Marathon Petroleum's positioning -- is that as the infrastructure buildout continues, the company will be able to grow margins and earnings by simply substituting cheaper mid-continent oil for more expensive imported oil.

Why Medicines Co. Is Poised to Outperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, drug developer The Medicines Company (NASDAQ: MDCO  ) has earned a respected four-star ranking.

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

Medicines Co. facts

Headquarters (founded)	Parsippany, N.J. (1996)
Market Cap	$1.8 billion
Industry	Pharmaceuticals
Trailing-12-Month Revenue	$587.7 million
Management	Chairman/CEO Clive Meanwell President/CFO Glenn Sblendorio
Return on Capital (average, past 3 years)	22.5%
Cash/Debt	$252.1 million / $228.6 million
Competitors	GlaxoSmithKline Pfizer

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

On CAPS, 89% of the 169 members who have rated Medicines Co. believe the stock will outperform the S&P 500 going forward.   

Just last week, one of those Fools, All-Star zzlangerhans, succinctly summed up Medicines Co. bull case for our community:

Angiomax revenues have remained solid, although I'm concerned regarding ongoing litigation with generic manufacturers. Regardless, the drug will only maintain exclusivity through 2019 due to agreements with [Teva Pharmaceutical] and Fresenius. However, the company has now produced a second act for the near term in the form of cangrelor, which recently showed strong superiority to Plavix in the CHAMPION PHOENIX trial. The company is also broadening their approach by inlicensing ALN-PCS RNAi from Alnylam Pharmaceuticals  and purchasing Incline Therapeutics and their Ionsys pain platform. I'm more skeptical about oritavancin, an antibiotic whose prospects failed to keep developer Targanta from being absorbed for a pittance. Nevertheless, positive phase III data from the SOLO-2 trial could give the stock a boost in mid 2013.

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

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