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Stocks

Trend Watch

Are Insiders Signaling These Companies are Stocks to Sell?

Recently Money Morning Chief Strategist Keith Fitz-Gerald pointed out that insider selling has been soaring of late. He pointed out that according to Vickers Weekly Insider Report the ratio of insider selling to buying by officers and directors stood at better than 9 to 1.

This is a level that has been predictive of near-term tops in the stock market and individual investors need to be on alert for potentially falling stock prices ahead. While this indicator is not a precise timing measurement it is a red flag telling us that the people running publicly traded companies have concerns about valuation and prospects as we head deeper into 2013.

Insiders can tell us something about the potential performance of individual companies as well.

As far back as the mid-1960s Victor Niederhoffer and Jim Lorie combined on studies that showed insider cluster selling was predictive and indicative of lower prices over the next 12 months. Professor Nejat Seyhun of the University of Michigan has also done extensive research and concluded that when insiders sell in clusters it is likely that lower prices are ahead.

Given that insiders in the aggregate are warning of a market decline it is useful to take a look at which stocks are also showing warnings of lower prices ahead.

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Hot Stocks

What Should Apple Do with its $137 Billion Stockpile of Cash?

Apple Inc.'s (Nasdaq: AAPL) been in the news a lot of late as its stock plunged. Meanwhile, the company sits on a cash pile of $137 billion.

When Apple stock was soaring, investors were happy. But since its stock value plunged some 35% since September, many investors have suggested Apple should share some of itsaccumulated wealth. Fund manager and investor David Einhorn went so far as to sue the company to try to force it to share more of its cash with shareholders.

Money Morning Chief Investment Strategist Keith Fitz-Gerald was asked on FOX Business what Apple (Nasdaq: AAPL) should do with its stockpile of money: Should the company pay dividends to shareholders, pursue major acquisitions or just keep its large cash position for future investments or other costs?

Check out what Fitz-Gerald and other panelists said on the FOX Business report in this accompanying video.



Read More…

Hot Stocks

Buy, Sell or Hold: Is Microsoft Stock About to Break Out of Its 10-Year Slumber?

Microsoft Corp. (NASDAQ: MSFT) is the world's largest software company. It's also the world's largest afterthought for most investors.

"It's an ancient relic," they say, "Apple and Google are the only games in town."

Or there is always this complaint: "Microsoft has no attractive products and there is no growth"…blah, blah, blah.

This ongoing apathy is one of the reasons why Microsoft stock has been stuck in the doldrums for years.

But if you are willing to look a little deeper, you'll discover this sleeping giant is coming out of its long slumber – and it's hungry.

Don't get me wrong, I'm not going to try and convince you that Microsoft is ready to change its stripes and become a full-scale growth company. Microsoft is what it is – the seller of the market-dominant PC operating system, Windows, and the seller of the market-dominant workplace productivity software, Office.

However, it does have the potential to become a major competitor in future growth markets like smartphones, tablets and enterprise solutions.

Hot Stocks

Stocks to Buy: 5 Picks Buffett and Insiders Love Right Now

Investors often look to Warren Buffett's purchases when trying to pick the best stocks to buy.

And with good reason: Buffett's conglomerate, Berkshire Hathaway (NYSE: BRK.A, BRK.B),
has an impressive track record and got off to a stellar start this year. Berkshire Hathaway gained 8.7% in January, beating the Standard & Poor's 500 Index's 6% rise and the Dow Jones Industrial Average's 7% increase.

It's also a good sign when Buffett's picks include companies with heavy insider buying, given insiders buy because they expect shares to rise.

That's why MarketWatch and Insider Monkey just took a look at Buffett's 38 holdings and compared his purchases to stocks that have had sustainable insider buying in the past 90 days.

And who knows better than insiders? These folks are privy to the most current information on their companies' prospects, and research shows stock prices rise more after insiders' net purchases than after net sales.

MarketWatch and Insider Monkey came up with the following five stocks to buy now, based on Buffett's holdings and insider buying.

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Stock Market Today

Stock Market Today: Wall Street Reacts to State of the Union Speech

The stock market today (Wednesday) shrugged off U.S. President Barack Obama's State of the Union speech in which he urged Congress to take steps to strengthen the economy.

In early afternoon trading, the Dow Jones Industrial Average was off 38 points, the Standard & Poor's 500 Index was up 1 and the Nasdaq rose 7.

The tepid reaction to the president's speech is not unusual. Historically, most presidential addresses move markets by less than 1% the day after a speech, with the average move just 0.15%, according LPL Financial's Jeff Kleintop.

Whatever the Dow does Wednesday, expect the benchmark to soon hit an all-time high. The index is just 1% off the record 14,165, set in 2007. Since 2009, stocks have soared some 127%, with pullbacks within each month. So it looks like it may be March before we reach a record high, but it's coming.

A lackluster retail sales report from the Commerce Department didn't provide any stimulus to the stock market today. U.S. retail sales rose a paltry 0.1% in January as an increase in payroll taxes left consumers with less disposable income.

"The payroll tax increase is having some impact on spending here. It looks like maybe momentum is not necessarily carrying forward into the first quarter," Jefferies economist Thomas Simons told Bloomberg News.

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Trend Watch

Are Japanese Stocks a "Buy" with the Nikkei on the Rise?

Anyone invested in Japanese stocks took notice when the country's minister of state for economic and fiscal policy, Akira Amari, said at a Yokohama meeting that he hopes the government takes steps to push shares of the Nikkei 225 up about 17% to 13,000.

"I would like the government to take successive steps to push share prices higher,"Amari said Saturday. "Higher share prices work to improve corporate earnings. It is important for the government to show that it will work hard to aim at having the [Nikkei 225] index hit 13,000 by the end of the fiscal year in March."

Amari also noted the Nikkei was up more than 2,000 points since former Prime Minister Yoshihiko Noda announced the dissolution of the Diet in November. In fact, the Nikkei 225 Stock Averagelast week closed at its highest since September 2008 after a 12-week advance that was the longest such streak since 1959, according to Nikkei Inc.

Articles in the English-language press misidentified Amari as minister of finance – a position held by former Prime Minister Taro Aso – making the comments seem more like official government policy.

Of course, no one in the government of Prime Minister Shinzo Abe will be upset if Amari turns out to be correct. Higher share prices are good for the economy and for achieving the government's aim of ending the deflationary spiral in Japan – and good for anyone who owns Japanese stocks.

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Global Economy

Will the Year of the Snake Bring Another Stock Market Crash?

The Chinese New Year officially began Feb. 10, bringing us the year of the snake – which some investors consider a very bad omen.

Not only does the year of the snake have the worst stock market returns of all zodiac signs, but some of the darkest moments in U.S. history have come during that zodiac year.

Art Cashin, director of floor operations at UBS AG (NYSE: UBS), appeared on CNBC's "Squawk on the Street" Monday and even listed the year of the snake as one reason investors should be cautious about stocks.

And there's plenty of history to back up Cashin's statement.

Global Economy

Berlusconi is Back, and So Is the Eurozone Debt Crisis

Since the beginning of the year, the markets have been behaving as if the Eurozone debt crisis has been magically solved.

Yields on Spanish and Italian debt are trading more than 1% lower than at their peak, while world stock markets have soared close to all-time highs.

Unfortunately, you can expect that all of this euphoria will fade when the Italian elections take place on February 23-24.

Why?…It's summed up in two words: Silvio Berlusconi.

That's because until recently a win by the former Prime Minister wasn't seen as very likely. Not long ago, The EU establishment believed they had the Italian elections completely wired.

The socialist "Democratic party" led by Pier Luigi Bersani was expected to win and be supported by a coalition of center parties led by the EU's favorite, Mario Monti, imposed as prime minister in November 2011.

Both of these candidates were safely pro-euro, and prepared to put Italy through a fair amount of "austerity" to keep it, provided the handouts kept flowing from Germany and the European Central Bank. The status quo wouldn't be threatened.

Meanwhile, the two anti-euro candidates were supposed to be comedians.  

One is an actual comedian named Beppe Grillo, leading an eccentric "Five Star Movement," while the other  is the aforementioned Silvio Berlusconi, who is currently under indictment for sex with under-age prostitutes and therefore (in the eyes of the EU bureaucracy) not seen as a serious threat.

At best it was thought Berlusconi and Grillo might get as much as 30% of the vote between them, but it wouldn't give them any significant power. 

Well, let's just say things have changed.

A Defeat for the Eurozone?

According to the latest polls, Berlusconi's party would get 30% of the vote on its own, while Grillo's would earn a solid 15%.  Not bad for a couple of comedians.

As for the establishment picks, Bersani's party still leads with about 34%, while Monti's supporters trail with around 12%.

That suggests a very close vote, or possibly (if as sometimes happens, voters are falsely claiming to opinion pollsters that they support the "respectable" parties) even a Berlusconi victory, provided he could come to a satisfactory arrangement with Grillo.

But here's where it gets slippery for the EU: Anything but a solid Bersani/Monti majority is bad news for the euro, or at least for Italy's participation in it.

Here's why…

Italy's budget is in fact quite close to balanced (Berlusconi had repaired much of the damage done by his leftist predecessors) which means an Italian exit from the euro — getting cut off from EU handouts and austerity programs — would be pretty painless.

However, if Italy left the euro, it's likely that Spain, Greece, Portugal and very likely France would also be forced out.

But a Berlusconi return to power is not the threat faced by the euro these days.

Tech Investing

Can "Perceptual Computing" Help Intel Get Its Groove Back?

When you peruse the tech-dominated headlines these days, a lot of the talk is about how smartphones and tablets are taking over for notebooks and laptops – which had taken over for desktop PCs.

But with the confusing mix of keyboards, track pads, touch-screens, and even voice and gesture commands that are in use today, there are at least as many different ways to interact with all those computing devices as there are different devices themselves.

But Intel Corp. (Nasdaq: INTC) is pioneering a new type of technology the chip-giant says will bring order to this interface confusion.

And it refers to this invention as "perceptual computing."

No doubt, this is Intel's latest attempt to regain its relevance in a world that is going mobile at an accelerating rate – a transition that has transformed the once-dominant firm into a veritable also-ran. And most of these earlier attempts amounted to almost nothing at all.

But I believe perceptual computing is different – and, in fact, could have two important results.

Hot Stocks

Should Investors Dump Facebook Stock for LinkedIn?

LinkedIn Corp. (Nasdaq: LNKD) just reported fourth-quarter earnings that blew away Wall Street estimates, a nice addition to its already impressive resume — and one that is making LNKD much more attractive than Facebook stock.

LinkedIn earned 35 cents a share, nearly triple the 12 cents earned in the same quarter a year ago. Net income soared 60% to $11.5 million, up from $6.9 million. Revenue jumped 81% to $304 million up from $168 million. Analysts were looking for 19 cents on revenue of $280 million.

U.S. markets accounted for 62%, or $189 million, of Q4 revenue. That was down 2% from the previous quarter. But international growth was robust, kicking in $114.6 million to LinkedIn's bottom-line.

CEO Jeff Weiner called 2012 a "transformative year."

"We have exceeded our own expectations by a wide margin," CFO Steve Sordello said during a conference call.

Shares surged $12.11, or some 10%, to $136.20 after hours Thursday following the report. The rally continued Friday with shares climbing another $26, or almost 21%, hitting an all-time high of $150.25 intraday.

Since its May 2011 initial public offering at $45, shares have more than tripled.

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