Texting and stock investing don't mix

It was just one line, with more information promised on the website vipstockpicks.mobi. Another text came two hours later, saying TRON "is already up 20%+ today. Get in now before the BIG news comes this week!"

With about 20 minutes left in the day's trading, a third message arrived: The stock was up 41%. The text again urged me to get in before big news came this week. About 48 hours later, there was another text, suggesting that it was not too late to act on Toron.


The truth, however, is that anyone buying stock on the basis of a text message from a service about which they know virtually nothing is making a mistake, which is why Toron is the Stupid Investment of the Week.

In fact, Toron's pick is less about the company than about the way investors found out about it; it's hard to believe any stock being pumped via text message would be a good idea for average investors.

The interesting thing, of course, is that somebody would actually trade on advice from an anonymous text, from an anonymous website, where the information amounts to "Buy now!' without any real knowledge of the company.

Michael Whitehead, Toron's president, said the company was unaware it was the subject of the text messages and has no idea who is behind the push. It's not the first time in the company's short history, however, that it was used this way; Whitehead's wife once received a spam email touting the stock.

"We want to attract investors, but not this way," Whitehead said in a telephone interview late last week. "I believe we can attract investors by moving the company forward and having some success, which would attract investors who want to be part of this for the long-term, and not somebody who is going to buy today and sell tomorrow."

Anyone who followed up on the text by going to the VIPStockPicks website didn't exactly get any real information. The reason to invest in Toron was summed up by the site: "We all know it's the big announcements that make these small gems move."

But it would be news to Toron's president if the company had a big announcement to make.

"Whoever is behind (the texts) is making that up," Whitehead said. "There is no big announcement coming right now."

Toron was organized in 2008 and according to its own filings with the Securities and Exchange Commission was "engaged in the marketing, sales and re-sales via the Internet of web domain names."

Last summer, however, the company made the completely logical decision to move from that business into "identifying and pursuing options regarding the acquisition of mineral exploration properties." At that point, it effectively went from a shell company to an operating company, although you can't tell it by the company's revenues because there have never been any, through its latest quarterly report, dated Oct. 31, 2011.

When it made the change, the company acquired "an undivided 100% interest" in 62 mineral claims in Canada. The company then underwent a 32-for-one stock split, increasing its float to 185 million shares.


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Online Investing Opportunity for People With Little Time, Knowledge, or Money to Get Into Stocks

For people looking for online investing opportunity but with little time, little knowledge, or little money to get into investing bandwagon, here’s a great opportunity from CitisecOnline (COL). The number one online stock brokerage firm in the Philippines offers COL Easy Investment Program. The purpose of this investment program is to minimize risk and maximize earning potential for investors in the stock market over several years. It encourages investing a fixed amount of money at regular increment over an extended period of time, thus enabling investors to purchase more shares when prices are low and buy less when prices are high.

With the investment program, investors can make their savings multiply exponentially by regularly allotting as low as P5,000 to purchase blue chips or shares in companies perceived to be stable and to have a good performance record.

The program offers the investor to choose from a list of stocks preselected by COL’s analyst.  Among the stocks are those of top companies like Philippine Long Distance Telephone Co. (PLDT), SM Prime Holdings Inc.,  Ayala Land Inc., Jollibee Foods Corporation, Manila Water Co., and Bank of the Philippine Islands.
COL’s services being online, the account holder can execute buy-and-sell orders without the hassle of getting through to a broker every time, unlike in the traditional stock market. Transparent investment processes are ensured at all time because investors can monitor their transactions and stocks anytime from anywhere.

The return on investment from COL Easy Investment Program will be better in the long term.  This is a great investment vehicle for people who want to start saving money for retirement, or for those who have long-term goal.

As a personal wealth-building tool and an ideal way to build a retirement fund, the investment program  effectively reduces volatility in any portfolio as the risks of investing in the market diminish over time.  COL Easy Investment Program is an ideal entry point to the stock market for it uses the dollar cost averaging or peso cost averaging method that involves investing a set of amount at regular intervals over a long period of time to take advantage of the rises and falls in the investment prices. Though, this is not a perfect investment for people who want to invest but not willing to wait three to five years for their money to grow.

The good thing of the COL Easy Investment Program is that it takes the guesswork out of stock investment because the online brokerage firm basically suggest the right stocks and investment vehicles for investors. Investors only have to figure out how much disposable income they can afford to invest for the long term. And because the fund basically shield investors from the market volatility, the return on investment will be bigger in the long run.


How to Start Investing Online with CitisecOnline?
Signing up for CitisecOnline COL Easy Investment Program takes only four easy steps:

• Sign up for a COL account. 
• Download the forms are www.citiseconline.com/easy
• Decide on the fixed amount and schedule of your payments.
• Choose from the prescreened blue-chip stocks from the list.
• Start tracking your investments through the internet by logging on to your COL account.

For new or prospective investors who wants to familiarize themselves with the stock market trading, CitisecOnline conducts monthly training seminars that seek to educate people on the basics of stock investment and to promote the idea of investing money on staggered basis. The seminar schedules are posted on COL’s website, www.citiseconline.com.

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Fundamental Index Money Look Promising

With a great deal fanfare, fundamental index money began appearing in 2006.

Proponents predicted that the brand new funds would definitely outdo the S&P 500 as well as other traditional benchmarks. Have the fundamental funds lived up to the hype? It is too soon to draw final conclusions, but the early results look promising. A few fundamental money have outdone the S&P 500 and other traditional benchmarks.

In many cases the margins of victory have been little. But the results are noteworthy mainly because many of the fundamental money emphasize value stocks -- a segment of the market that has been out of favor in recent years. When value stocks return to the forefront, the fundamental funds could surge.

Among the winners is PowerShares FTSE RAFI US 1000(PRF), a large-cap fundamental ETF that returned 0.44% annually during the past five many years, according to Morningstar.

In comparison, Vanguard 500 Index(VFINX), the granddaddy of S&P 500 mutual funds, lost 0.37% annually. Fundamental money also excelled in small-cap categories. During the past 3 many years, Schwab Fundamental US Small/Mid Company(SFSNX) returned 18.10% yearly, compared to 14.7% for Vanguard Small Cap Index(VSCIX), a traditional index mutual fund.

Proponents of fundamental money say that traditional benchmarks are inferior because they are weighted by market capitalization. Under the traditional program, stocks with big marketplace values account for a bigger percentage of assets. In the S&P 500, the stock with the largest market value is Exxon Mobil(XOM), which accounts for 3.5% of the assets in the index. Among the smallest holdings is Washington Post(WPO), which accounts for 0.02% of the benchmark.

As a stock appreciates, its weighting in the cap-weighted index can rise, while the weighting of unloved shares can decline. Critics say that cap weighting can depress returns because it needs investors to put more cash into expensive stocks. The flaws in the approach were highlighted in the late 1990s whenever a few of technology stocks soared as well as came to account for a big percentage of the S&P 500. Whenever the technology stars collapsed, the index sank hard.

To avoid emphasizing expensive stocks, fundamental money weight holdings according to financial measures such as a company's sales, dividends, or earnings. A few fundamental money rank stocks according to 1 measure, while other people use a combination of many indicators.


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You Own More Apple Stock Than We Think

The death of Apple(AAPL) co-founder as well as former Chief Executive Officer Steve Jobs on Wednesday can have jostled many investors into checking on how many Apple shares they actually have.

Some will be amazed regarding how many they hold, given the tech firm's ubiquity as a top holding in mutual money, pension funds as well as index money. That popularity should prompt them to reassess their have portfolio's diversity, since a focus in one stock, or one industry, can add to volatility as well as reduce returns.

That's definitely not to say Apple investors have not been richly rewarded by their loyalty to the revolutionary maker of iPods, iPads and iPhones. The company's shares have a 10-year average yearly return of a staggering 47% versus the S&P 500's 2.6% return. This year, Apple's shares are up 17% compared with the S&P 500's 7.6% decline.

Tom Roseen, head of research services for fund-research fast Lipper, said "a lot of people can have become complacent in keeping up with their yearly reports" from fund providers and investment advisers. They can definitely not have realized portfolio weightings shifted over time. Therefore, a reshuffling may be in order.

Apple, now selling for almost $380 a share, bringing the total market value to a dizzying $350 billion, is 2nd just to Exxon Mobil(XOM) in the S&P 500 Index, creating it a top-10 holding in most passively managed index money as well as actively managed large-cap mutual money.

A total of 26% of U.S. and international equity mutual money have Apple in their top 10 holdings, according to Standard & Poor's mutual fund industry analyst Todd Rosenbulth. Peruse any kind of fund report as well as you're probably to see "AAPL" as a holding. It's the 1 no-brainer stock for mutual fund managers to have.

The company's ubiquity is due, in part, to the goals of the fund as well as investors' timing. For example, at some point Apple was viewed as a growth stock, and so that category of fund loaded up on it. Whenever its shares fell, it may have been viewed as a value stock, so got picked up by value fund managers. And its large-cap size makes it a part of any so-called core mutual fund or index fund. But few managers ever sold Apple when it entered their portfolios as well as juiced returns like no other.


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Bargain-hunting in rare earths

Rare earth stocks have gone from marketplace darlings to market dogs. But if we can live with the risks, there are many good reasons to take an additional look.

Remember rare earths? As well as how prices of these metals, that are necessary raw materials for technologies including wind turbines, hybrid cars as well as flat-screen displays, had soared? Technology manufacturers scrambled to find reliable sources of supply as China utilized its position as owner of 95% of global production of rare earths to restrict supplies to manufacturers outside of China. And investors scurried to find a rare earth stock or perhaps two to add to their portfolios.

As well as now?

Shares of Molycorp (MCP, news), the highest-profile U.S. rare earth miner, were down 33% in simply you week (Sept. 16 through 23) recently. Lynas (LYSDY, news) (LYC.AU in Australia) dropped 17% in Sydney and 12% in Brand new York on Sept. 26.

After falling an additional 3.5% on Sept. 30 to $32.87, Molycorp is 58% off its 52-week high. Lynas, at $1.07 in Brand new York on Sept. 30, is 64% off its 52-week high.

The plunge in the price of rare earth stocks is, of course, partly a result of macroeconomic fears -- of a slowdown in the Chinese economy, of a slide by the U.S. economy back into recession, of a chaotic default by the Greek government that will return the international financial program to the brink it faced in 2008.

Mainly because rare earth stocks such as Molycorp as well as Lynas are highly speculative issues -- Molycorp has simply begun full-scale mining, as well as Lynas is still waiting on approval from the Malaysian government to open a processing plant to turn rare earth ores into useful forms of rare earth minerals -- their share costs are more volatile than the highly volatile global financial markets.

The rare earth story isn't all macroeconomics. The drop in the cost of rare earth stocks -- and the odds that these shares may definitely not only recover and move up to brand new highs -- is a result of changes in the rare earth marketplace that have nothing to do with global macroeconomics. As well as the trajectory of any individual stock in any rally is strongly influenced by company-specific news.

In other words, if you want to figure out whether or not to invest in exactly what are currently very depressed rare earth stocks, you should understand what's been happening in this once-hot sector because it dropped from the headlines.

Let me take we back to days of yesteryear -- 2009 or perhaps and so, for many of us -- whenever rare earth stocks burst on the investment scene.

China, that controls about 95% of the global provide of rare earth elements, got the ball rolling with the risk of an export boycott. Because rare earth elements are a key ingredient in many of the world's emerging technologies, the risk was a big deal. Adding a bit of 1 of the 17 rare earth elements to a magnet in the engine of an electrical to hybrid vehicle increases the power as well as efficiency of the engine, mainly because rare earth magnets are the strongest type of permanent magnets now made. Rare earths improve the color in TV screens and in lasers. You will also find rare earth elements in tunable microwave resonators, as well as terbium, 1 of the rare earth elements, is a key ingredient in low-energy light bulbs.

We're definitely not talking about trace amounts of these elements, either. The electrical engine in a Toyota Prius uses about 2 pounds of neodymium in its permanent magnets. Each Prius battery also uses 20 to 30 pounds of yet another rare earth, lanthanum. As well as it takes about a ton of neodymium to make the big magnets used in each megawatt of wind-turbine capacity.

Fortunately, despite their name, rare earth elements aren't especially rare. They're found in reasonably high concentrations in the Earth's crust, with you, cerium, coming in at the 25th most abundant element in the crust. Global production came to about 140,000 metric tons of refined rare earths in 2008.

But supplies of the rare earths that can be profitably mined aren't distributed evenly across the world. Partly that's the luck of the geologic draw. But mostly it's a function of the huge environmental costs of mining these rare earths. The traditional way has been to bore holes into promising rock formations, pump acid down the holes to dissolve many of the rare earths, and then pump the slurry into holding ponds for extraction of the rare earths. That extraction leaves behind a lake of water mixed with acid as well as various and sundry dissolved minerals.

It's a great deal, a lot cheaper if a company can get away with spending just regarding nothing on controlling the resulting water and sludge. The world's low-cost manufacturers of rare earth elements are definitely not huge and efficient open-pit mines but small, completely unregulated mom-and-pop mining companies in China. (The Chinese government is now trying to force many of these companies from business. The motive is many combination of a desire to limit environmental damage in China as well as to exercise greater control over exports. I'd say that the latter dominates.)

Over the past 20 years, the accidents of geology as well as the realities of unequal regulation slowly led to the closure of most of the rare earth mines outside of China. The Mountain Pass, Calif., mine, the world's richest proven reserve of rare earths, stopped production in 2002, for example.

Rising demand began to change that pic. Companies like Lynas as well as Molycorp crept back onto the stage with plans to start brand new mines or perhaps resume production from old mines.

It took the Chinese overplaying their hand, however, to turn that small trend into a speculator's dream. The Chinese started to reduce the amount of rare earth metals that can be exported. Companies outside China began to worry about the very real possibilities of paying higher prices as well as of not being able to purchase required raw materials.

This appears to be a key goal in China's strategy. By restricting exports, China would definitely force high-technology companies that need these rare earths to relocate production to China, accelerating the transfer of intellectual property to Chinese companies. It's no secret that China wants to create major wind, solar as well as hybrid-car industries.

The restrictions on production have increased in 2011. Beijing just regarding closed down its industry in early August to assess pollution issues (at least that's the official story). China is also creating a government-controlled monopoly, Bao Gang Rare Earth, that would definitely consolidate the 35 companies that now mine rare earths in northern China. Three similar government-controlled companies will consolidate production in the south of the nation.

The growing demand for rare earths from brand new technologies, plus China's moves, had 2 immediate effects. First, prices for rare earth minerals, especially those of the heavy rare earth elements, soared. Costs for many rare earth elements climbed 10 times from 2009 into 2011. 2nd, the scramble was on for alternative sources of supply. Quickly, there was a lot of capital available to restart mines that had closed mainly because of low prices as well as stricter environmental regulation outside of China.


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How To Find The Best Penny Stocks To Buy

Finding the best penny stocks to purchase takes more than simply wishing for luck. People who go into this form of trading such as gamblers usually end up like many gamblers as well as walk away from the casino with nothing. It may have been fun but it was not profitable. If you need to actually make revenue from your penny stock trades, you should examine a few of the indicators that suggest viability as well as possible for a breakout in a specific stock.

The best penny stocks to purchase will usually experience high percentage gains in their costs over a couple of days. This will be accompanied by high levels of transactional amount. These events recommend that an up trend is in the creating. Get in on it and so to market whenever it starts to peak.

Based on your own research, determine if the business behind the stock has a sound business model. Ignore the hype that the company or perhaps other investors make regarding the stock. Listen to research that comes from neutral sources as well as evaluate stocks based on solid financial information.

You can make fairly accurate predictions about the future performance of the best penny stocks to purchase based on their previous performance. This is called technical analysis. Examine a stock’s moving averages over 50-day and 200-day time schemes. If the former is better than the latter, this suggests that something is afoot as well as the penny stock will be experiencing and extended up trend.

Insider buying sounds ominous to illegal but it is a good sign. When people inside the company purchase their own stock, this reflects their have firsthand knowledge of the company s basics. Combine this revelation with solid information you have already gathered and absolutely nothing should stop you from finding the best penny stocks to buy.

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Penny Stock Picks and Penny Stocks: What Are They?

Penny stocks are usually defined as a common stock that trades for less than two cents a share as well as are traded over the counter (OTC) through quotation services including the OTC Bulletin Board (OTC BB) or the Pink Sheets.  Even though penny stocks have additionally been defined as any kind of stock currently trading under $5.

Precisely why trade penny stocks?

Many traders are fans of penny stocks due to the fact a penny stock has a chance for huge gains. For example a penny stock trading at $0.01 can very easily jump to $0.03 therefore tripling the penny stock traders cash! Make sure to check into Strategic Stocks and Penny Stocks  often for the latest hot penny stocks!

Fans of the stock market today should make sure to find a free stock screener.  Make sure to find a top quality brokerage to purchase stocks. Searching for dividend stocks can help balance out your own stock portfolio. As well as, then make sure to find a few coupon codes to save more revenue for penny stock trading.


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Penny stock trading Tips

Purchasing penny stock lists is becoming a good profitable proposition. Allow me to explain: You invest a few income, to around we well can, but because they OTC stocks are priced so low, we can afford to purchase many volume. However, the trick to creating a huge profit with Pink Sheet Stocks is usually to know how to select the ones that are planning to actually become profitable as well as become outside the stinkers. Do we need to learn how to do this?

Hear, purchasing stocks whether inexpensive ones such as pink sheet stocks to normal ones isn't the identical to gambling to playing the lotto. You need a solid investment plan, otherwise you'll wind up throwing the income away. Without having a doubt, the one best way to obtain information is a cent stock newsletter, which by the way, are no cost and contain fantastic and up up to now information. Less than bad, huh?
penny stock

Whenever you join get this kind of information, you'll end up getting premier information as well as tips regarding the top penny stock lists to watch. The skills to blame for putting together these details have a proven record of choosing the correct stocks before they blow up, making them a great pick: purchase low, market high.

Look, you can pretend to know very well just what just what we are doing or worse, you can keep leaving your investing advisor responsible for your financial future, to you can certainly take control of your finances and register with receive penny stock trading alerts. This particular service is free of charge, but packed with great information that can help you obtain top profits very quickly. Able to act?


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The Great Penny Stocks

Anyone who is an investor or who plans to invest some of their money in the market always has one question on their mind: What are the great penny stocks out there? You see people making lots of cash by putting their money into the companies they believe in, but not all of these companies are publicly traded on the New York Stock Exchange or on NASDAQ. Some will be someday, but for now the prices of their shares are well below $5. This does not mean that they are not valuable companies; it only means that they have not arrived yet.

Though it may not be as easy to conduct research on these businesses, the good news; actually great news, is that there are services that do the homework for you or at least allow you to come up with educated decisions. They do a background into the establishments and even go as far as to project what their share price will be down the road. If you want to keep informed on what the great penny stocks are, than I believe these services are a necessity, not a luxury. With information like that, it makes getting rich easy a whole lot easier.

Trying to go about it yourself without the available information that is out there is kind of like trying to predict the score of a baseball game without reading the sports pages or watching ESPN. Of course no one will ever know with certainty who will win the contest, but if you know who is pitching, notice any potential injuries, look at batting averages, and weather conditions, your odds of picking a winner dramatically improve. The same hold true for finding out what the great penny stocks are. Unless you are an investing whiz, it would serve you best to use the information that is out there on the web. Subscribe to a newsletter, read blogs, watch CNBC; do anything that will give you an edge.

Never be intimidated by putting your money to work for you. In the end, you are simply just trying to look for a company you can put your cash in to that will grow and prosper over time. You don’t become wealthy by putting your cash under your mattress. You have to let it grow over the long haul. You have to give your money a fighting chance to help you. I recommend investing in penny stocks, but you have to select the great penny stocks as there is a difference. Imagine plunking down $500 worth of 10 cent stock shares and having it go to $1. You just made $5000!

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Energy Stocks Heat Up

Recently back from a trip to the Middle East, Casey Research Energy Division Chief Investment Strategist Marin Katusa shares some of his best energy investment opportunities. In this exclusive interview with The Energy Report, he explains why this is a good time to pick up uranium and geothermal stocks.


The Energy Report: As the Chief Investment Strategist for the Energy Division of Casey Research, you follow the whole range of energy segments and investments for your company. There have been quite a few changes on both the political and economic fronts since you spoke with The Energy Report last November. Can you bring us up to date on opportunities in your coverage area—petroleum, natural gas, uranium and geothermal?


Marin Katusa: When looking at the energy sector, one must start with petroleum, as that alone is a very large sector. Brent Crude is currently trading at a premium to WTI (West Texas Intermediate), mainly because of a political instability premium based on what's happening in the Middle East. Speculators have propped up the prices because of the amount of demand required from Europe, which comes from the Middle East. The WTI price has lagged as the differentials increased since February because of the Middle East turmoil.

That said, in the last three weeks you've seen a significant pullback on the petroleum sector market-wide, in the spot price of the oil and equities in both big caps and the juniors. The main reasons are the weak economy and the U.S. Energy Information Administration report stating, "$100+ per barrel (bbl.) oil is just too much of a burden in this fragile economy." That brings out the speculators, which comprises a 20%-25% premium in petroleum. Another reason for a big drop in the price of oil is that the United States is leading an international effort to release 60 million barrels (MMbbl.) of crude reserves to world markets.


TER: Natural gas is a little different story, isn't it?


MK: Natural gas is a very localized market. If you look at North America, because of the success of the unconventional technologies, mainly shale fracking, the companies are a victim of their own success. Because these unconventional explorers have been so successful in finding unconventional sources of gas, there is a glut of gas. But that, too, shall pass as the cure for low prices is low prices. It's just going to take some time—more time than most investors are willing to wait. We wrote a report a couple of years ago called, "The Hidden U.S. Supply of Gas." It shined a light on the thousands of uncompleted wells that are drilled, but not completed and could be tapped into the pipeline structure in 72 hours if they were viable. You're going to see sideways gas for the next 6-12 months in North America, and over the next 3 months you could see petroleum sideways to down.


TER: How about uranium in light of Fukushima?


MK: The uranium sector had a big fall, obviously, since the Fukushima disaster. Ironically, mainly by fluke, about 2.5 weeks before Fukushima, in our newsletter and on TV, we came out with a "take profits" opinion on the uranium sector mainly because we went very bullish on it eight months before. I think when this whole cloud has settled down, you're going to see some really interesting buying opportunities in a few very select uranium companies.

The uranium companies you want to stick with are the lowest cost producers with no debt and explorers with tangible, real deposits that are very high-grade in areas of developed infrastructure (a pro-uranium mining culture helps) with defined resources within the NI 43-101 standard that look like take-out targets. You want to stay away from the early stage exploration projects in areas that lack infrastructure. The smart money is staying away from those types of projects. In my opinion, those projects are going to go sideways to down because explorers will always need to raise money to explore.

It's a fact that the U.S. is the largest consumer of uranium, but the country only produces about 8% of that domestically. It purchases the rest. So there's still plenty of existing demand. The uranium story isn't dead, but an investor has to be much more careful in choosing investments. I'd also stay away from thorium. It's shocking how many emails I get about thorium. We've written about all the reasons to stay away from thorium quite a bit in our Casey Energy Report.

Back to uranium, you've got Germany, where Chancellor Angela Merkel just said, "We're going away from nuclear power" and the Japanese are saying the same. But you've got the RISC countries—Russia, India, South Korea, and China—and they're going nowhere. They're going to stick with the uranium demand that they have, and it will increase (they will be building nuclear plants fueled with uranium, not thorium).


TER: And what about geothermal?


MK: Now, the geothermals have taken a significant hit back, even though the current PPAs (power purchase agreements) provide significant profits. The actual public companies have taken a big fall following the Ram Power Corp. (TSX:RPG) disaster where they missed their wells and had cost overruns. Geothermal is currently a contrarian investment opportunity where these geothermal companies are trading at a fraction of what they were a year ago. I just wrote an article called "The Valley of Darkness" comparing the current geothermal sector to the copper sector in late 2008.


TER: So you think oil prices will be sideways in the next year because the market can't sustain these kinds of prices. Is that correct?


MK: If the Arab Spring does shift—and the key here is whether Saudi Arabia falls—you will see $150-$200/bbl. oil overnight. If something were to happen to the flow from the massive Ghawar oil field in Saudi Arabia, that would result in the single largest increase in oil prices the world has ever seen. Otherwise, oil is sideways to down. My point is that we really are on the edge of chaos. Saudi Arabia is very important to keeping oil below $150/bbl.


TER: You mentioned the possibility of opening up fracked natural gas wells. Is that going to go crazy any time soon?


MK: A moratorium exists on a lot of new shale gas wells due to concerns about water supplies. We did a report a few years ago where we talked about how an unconventional well uses between 2 and 5 million gallons of water, of that you get back roughly half. The Marcellus Shale, the Utica Shale, the Paris Basin—all of these basins have moratoriums on them because some people are worried about polluting the water table. The fracking occurs many thousands of meters below the water table so I think it is a misplaced fear, but you're dealing with politicians and NGO groups, so you aren't really dealing with facts or science. If these groups are successful, further moratoriums could be imposed, but it would be a crying shame if these moratoriums extended into the Haynesville Shale in Louisiana or the Eagle Ford Shale in Texas. I don't suspect we will see this happen, but if it did, you would see a significant pop in the price of domestic natural gas.


TER: Going to nuclear now, despite the Fukushima disaster, nuclear power is here to stay. How much effect is the current controversy over nuclear safety going to have on new plant development currently in the works?


MK: Global demand will be affected by countries such as Germany and Japan. They still have existing plants; remember they're going to be operating until 2022, in the case of Germany. A lot of this is political lip service; they're giving the people what they want to hear now. What are the Germans going to replace that production with?


TER: Well, maybe they think they can do it with solar?


MK: I don't think so. They're importing nuclear energy across the border from France. So, this is just political lip service. The politicians just want to stay in power long enough to get their juicy pensions. They don't care about—or even if they did care, they aren't able to find—real solutions, that is why they are politicians. I believe that before 2022 rolls around, the Germans will rethink their nuclear position. But remember, you have more than 20 nuclear plants being built in China; you've got South Korea, Russia and India looking to develop. So let's just imagine that Germany and Japan do close down, whatever they shut down is going to be replaced by growth in other countries.


TER: Who will benefit from continued demand for uranium? Which uranium stocks do you think are going to continue to be attractive under the current scenarios?


MK: Let's start with Uranium Energy Corp (NYSE.A:UEC), one of the lowest cost producers in the world. It has been a big win for our subscribers a few times, and it is a new producer led by Amir Adnani, who is in our "Ten bagger" club—a club for companies that delivered 1000+% gains for our subscribers.
I also like Denison Mines Corp. (TSX:DML; NYSE.A:DNN) a lot. It has production in the U.S. and access to a mill in the Athabasca Basin, which hosts one of the highest grade uranium projects on the planet. They made a major discovery at their Phoenix deposit—a very, very high-grade deposit. So, that's a blend of low-cost production and high-grade deposits. We have a lot of technical research on both of these companies on our website at www.caseyresearch.com , as we've been to their projects, and our subscribers have done well on both of these companies.

If you want a higher risk story, we like Hathor Exploration Ltd. (TSX.V:HAT). We have had that in our portfolio for many years and they've made a great discovery of a high-grade deposit. So those are the three that we have in our Casey Energy Report that we follow.


TER: Any new developments with those companies?


MK: Uranium Energy Corp. has hit the numbers that they gave the public regarding production costs and are actually lower than originally stated—less than $18/lb. The company is growing production to 1 Mlb. annually. It's very important to know that yes, the spot price of uranium has taken a big hit, but the spot market price is still north of $50/lb., and the long term price trades north of $70/lb. The netback—the differential between what the selling price and the production costs—are still very impressive profits.


TER: Any other juniors you think have merit at this point?


MK: In our Energy Confidential, we really like Fission Energy Corp., which is adjacent to the Hathor deposit. The play there is that we believe that Hathor will buy out Fission so that they can have a large consolidated resource. At that point, we think Hathor will have over 60 Mlb. of very high-grade uranium. From there we believe the play would be that Denison will buy out the combined Hathor and Fission company.

The ultimate end game in the Athabasca Basin, we believe, would involve BHP Billiton Ltd.. There's good potential that they want access into the Athabasca Basin, and the only way that they can do that would be through access to a mill. It's very difficult to get the permits to build a mill in the Athabasca Basin. Either it buys out Cameco Corp., which is not going to happen; or the big French uranium company AREVA (PAR:CEI), sells an interest, which is not going to happen; or it buys Denison Mines, which owns a percentage of an operating mill.

So the key to the play there for the juniors like Hathor and Fission is to be bought out by a larger company. That's why we like Fission, it has good management that discovered a very good project.


TER: The geothermal sector is obviously quite a bit smaller than the other energy sectors, but people are taking another look there also. There seems to be a lot of potential out there, but it's not so easy to capitalize on it. What's going on with the companies that you follow there?


MK: In our Energy Opportunities Newsletter, we follow Ormat Technologies Inc. (NYSE:ORA), the world's largest, pure-play geothermal company. If you want lower risk, you probably want to stick with Ormat. If you've got an appetite for a higher risk junior, we think Alterra Power Corp. (TSX:AXY), which is Ross Beaty's deal, is a good play. It's the old Magma Energy merged with Plutonic Power Corp. Alterra just received $70M+ cash from the sale of a portion of their Iceland asset. They're very sound; they make money. It's one of the few junior companies that can stay afloat because it actually makes money. It has a sustaining business and Ross Beaty has done a great job building that. Don't ever count out Ross Beaty, the guy is a legend. In time, he will build AXY into a winner. Investors have to be patient; the geothermal sector right now isn't the place for fast money.

Ram Power seems to be fixing itself up here. It fell on its knees when founder and President Hezy Ram left after missing targets and cost overruns. The company has restructured the management, refinanced it and so far the results look promising. It still has to build up its San Jacinto plant and the geysers seem to be going on track. So, time will tell with Ram. It's been very disappointing, but so far, it seems like they're headed in the right direction.

Nevada Geothermal Power Inc. (TSX.V:NGP; OTCBB:NGLPF) has built the largest geothermal plant in the U.S. in the last decade. The company just bought out some Iceland assets in California. The geysers and the joint venture with Ormat on the Crump Geyser property in Oregon is moving as expected. So, all of these companies are doing the right things now, except the market is not reflecting it because no one really cares about it. It's the unloved energy sector. The companies are cheap, but their time will come. We don't know when it will happen, but because it is such a small sector, there are only a handful of companies, so when it does get attention these stocks are going to trade up multiples from where they are today.


TER: Years ago I visited the Geysers geothermal production facilities northeast of San Francisco. Who owns that now?


MK: I believe you are talking about the facilities about 100m northeast of San Francisco that are owned by Calpine Corp. (NYSE:CPN). The geysers are the largest group of geothermal plants in the world and Calpine has some good assets and production, but geothermal production is a very small percentage of Calpine's overall electricity production. Their main electricity plants are natural gas. It's a very large company; they've done very well, and they've got a good portfolio of geothermal assets.


TER: So, that's not a clean geothermal play by any means.


MK: No, and that's why we've avoided Calpine. If you want exposure to the geothermal sector, that's not the one you want to be in.


TER: Are there any other companies you would like to bring up at this point that you think our readers should be looking at?


MK: I think in general you want to stick with management teams that are proven; they've done it before; they're heavily invested in the companies themselves and they have a focus factor. One of my favorite companies right now is a company called East West Petroleum Corp. (TSX.V:EW). The company just signed a massive deal in Romania with a large energy company called NIS, which is more than half owned by the Russian gas company Gazprom. NIS is going to drill 12 wells on their unconventional gas assets in Romania, which is over US$50M worth of exploration on EW 100%-owned assets over the next 24 months. The company also signed a deal in India with three of the four largest Indian energy companies and has a deal in the Middle East with one of the largest independent oil producers, Kuwait Energy Corp. You want to stick with a company whose management team can attract a major company and use the major company's money to develop the assets that they own. It's kind of like the joint venture model in mining, the OPM, where you use other people's money. East West is a company we really like, and own a lot of shares.

Another one we really like is Niko Resources Ltd. (TSX:NKO). It's a much larger company, but we believe in the next 12-18 months they're going to have a lot of news coming out on their drill programs. In this market, it's time to pick your favorite stocks and be patient; put in your stink bids and see if you get a hit. Unfortunately, the company has recently gotten itself into some trouble that will cost it about CASD$10M-CAD$12M in fines. That's very disappointing, but the assets sure look good.


TER: Yes, it's summertime and nobody cares about the market.


MK: It's also the time to be accumulating your favorite stocks on sale. Buy on fear; sell on greed.


TER: Do you have any other thoughts you would like to leave with our readers?


MK: I think the reality of the sector is, regardless of what happens with the equities in the near term, if you're patient, the solid companies will grow their assets and either produce higher cash flows or get bought out by a major who needs to replace reserves. So, just because the market right now has a lot of negative sentiment, we look at this as a buying opportunity to pick up more shares of your favorite companies. They're on sale right now. Fortune favors the bold. Just make sure you do your homework and control your emotions. Don't let the fluctuations in the stock price take a toll in your personal life. Don't invest more than you can afford to lose. Juniors stocks are risky, but if invested in the right management teams, the risk is definitely worth the potential rewards.


TER: That's certainly true. Thanks for taking time out of your busy schedule to talk with us today. We appreciate your thoughts and input and hopefully our readers will also find them useful.


MK: Thanks for the opportunity.
Investment Analyst Marin Katusa is the senior editor of Casey's Energy Report, Casey's Energy Opportunities and Casey's Energy Confidential. He left a successful teaching career to pursue what has proven an equally successful—and far more lucrative—career analyzing and investing in junior resource companies. With a stock pick record of 19 winners in a row—a 100% success rate last year—Marin's insightful research has made his subscribers a great deal of money. Using his advanced mathematical skills, he created a diagnostic resource market tool that analyzes and compares hundreds of investment variables. Through his own investments and his work with the Casey team, Marin has established a network of relationships with many of the key players in the junior resource sector in Vancouver. In addition, he is a member of the Vancouver Angel Forum, where he and his colleagues evaluate early seed investment opportunities. Marin also manages a portfolio of international real estate projects.


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Is This Tech Stock Poised For a 33% Gain?

I remember being in college back in 1998, when Yahoo! was the leading search engine.
Around the same time, two graduate students at Stanford came up with a better way to search the internet. They started Google.

Now, Google is the number one internet search engine. Every day, Google processes 1 billion search requests. It’s also the leader in online advertising.

And Google’s always looking for new opportunities. Over the past decade, they’ve bought nearly 100 companies Almost every time they enter a new market, they become the dominant player.

Three things contributed to their success…


1. They buy the best company in the sector.
In 2006, they paid $1.65 billion for YouTube. It seemed like a lot of money at the time for a free service. But they’ve been able to monetize it with online advertising. YouTube also started renting movies, just like Netflix and Amazon.

2. They develop or buy the technology cheaply, and give away the service for free.
Google paid $80 million to buy internet telephone technology. They got the technology by buying Grand Central and Gizmo5. That’s 1/100th of what Microsoft recently paid to buy Skype. And they’ve already merged the technology with Gmail, and Android OS. The technology is Google Voice. It’s free for U.S. calls.

3. Google make its services easy to integrate with other software.
Microsoft, Apple and Sony don’t do this. They keep their technology secret, and it hurts them in the long run.
Google takes a different approach. For instance, Google opened up their mobile phone platform, Android OS to programmers, manufacturers and carriers. And they gave it away for free. Within 18 months, Android OS-based phones have become the largest segment of smart phones. With 33% of the market share, they’ve even overtaken the Apple iPhone.

And unlike Apple, they’re giving a third of the application revenue to the telecomm carriers. Understandably, the telecom companies are falling over each over to support Android phones.

Now Google is entering the laptop sector. It’s releasing the Chromebook, a Google OS-based laptop. It plans to rent it out to students and businesses on three year contracts.

Google has seen amazing growth. But the stock is cheaper than it’s ever been.

Google is valued at $172 billion. It has $36 billion in cash, and only $5 billion in debt. In the past twelve months it generated over $31 billion in revenue.

Over the past five years, revenue grew at an average rate of 35%, and net income at 42%. But the stock sells for less than 14 times next year’s earnings. Growth companies like these, with little debt and large cash reserves, usually sell for 20-24 times earnings.

The market is undervaluing Google’s future growth. Even at 18 times earnings, Google’s stock is worth 33% more.

I just bought two shares of Google for my Roth IRA account at $525. The only thing preventing me from buying more is the lack of dividends. But the growth is compeling at this price. If the share price drops below $500, I might pick up a few more.

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Forex Or Stocks?

Today's investors and active traders have access to a growing number of trading instruments, from tried-and-true blue chips and industrials, to the fast-paced futures and forex markets. Deciding which of these markets to trade can be complicated, and many factors need to be considered in order to make the best choice.

The most important element may be the trader's or investor's risk tolerance and trading style. For example, buy-and-hold investors are often more suited to participating in the stock market, while short-term traders, including swing, day and scalp traders, may prefer markets where price volatility is more pronounced. In this article, we'll compare investing in the forex market to buying into blue chip stocks, indexes and industrials.


Forex Vs. Blue Chips
The foreign exchange market is the world's largest financial market, accounting for more than $4 trillion in average traded value each day as of 2011. Many traders are attracted to the forex market because of its high liquidity, around-the-clock trading and the amount of leverage that is afforded to participants.

Blue chips, on the other hand, are stocks from well-established and financially sound companies. These stocks are generally able to operate profitably during challenging economic conditions, and have a history of paying dividends. Blue chips are generally considered to be less volatile than many other investments, and are often used to provide steady growth potential to investors' portfolios.

Volatility Volatility is a measure of short-term price fluctuations. While some traders, particularly short-term and day traders, rely on volatility in order to profit from quick price swings in the market, other traders are more comfortable with less volatile and less risky investments. As such, many short-term traders are attracted to the forex markets, while buy-and-hold investors may prefer the stability offered by blue chips.

Leverage Leverage is another consideration. In the United States, investors generally have access to 2:1 leverage for stocks. The forex market offers a substantially higher leverage of up to 50:1, and in parts of the world even higher leverage is available. Is all this leverage a good thing? Not necessarily. While it certainly provides the springboard to build equity with a very small investment - forex accounts can be opened with as little as $100 - leverage can just as easily destroy a trading account.

Trading Hours Another consideration in choosing a trading instrument is the time period that each is traded. Trading sessions for stocks are limited to exchange hours, generally 9:30am to 4pm Eastern Standard Time, Monday through Friday with the exception of market holidays. The forex market, on the other hand, remains active round-the-clock from 5pm EST Sunday, through 5pm EST Friday, opening in Sydney, then traveling around the world to Tokyo, London and New York. The flexibility to trade during U.S. Asian and European markets, with good liquidity virtually any time of day, is an added bonus to traders whose schedules would otherwise limit their trading activity.


Forex Vs. Indexes
Stock market indexes are a combination of similar stocks, which can be used as a benchmark for a particular portfolio or the broad market. In the U.S. financial markets, major indexes include the Dow Jones Industrial Average (DJIA), the Nasdaq Composite Index, the Standard & Poor's 500 Index (S&P 500) and the Russell 2000. The indexes provide traders and investors with an important method of gauging the movement of the overall market.

A range of products provide traders and investors broad market exposure through stock market indexes. Exchange-traded funds (ETFs) based on stock market indexes, such as S&P Depository Receipts (SPY) and the Nasdaq-100 (QQQQ), are widely traded. Stock index futures and e-mini index futures are other popular instruments based on the underlying indexes. The e-minis boast strong liquidity and have become favorites among short-term traders because of favorable average daily price ranges. In addition, the contract size is much more affordable than the full-sized stock index futures contracts. The e-minis, including the e-mini S&P 500, the e-mini Nasdaq 100, the e-mini Russell 2000 and the mini-sized Dow Futures are traded around the clock on all-electronic, transparent networks.

Volatility The volatility and liquidity of the e-mini contracts is enjoyed by the many short-term traders who participate in stock market indexes. The major equity index futures trade at an average daily notional value of $145 billion, exceeding the combined traded dollar volume of the underlying 500 stocks. The average daily range in price movement of the e-mini contracts affords great opportunity for profiting from short-term market moves.

While the average daily traded value pales in comparison to that of the forex markets, the e-minis provide many of the same perks that are available to forex traders, including reliable liquidity, daily average price movement quotes that are conducive to short-term profits, and trading outside of regular U.S. market hours.

Leverage Futures traders can use large amounts of leverage similar to that available to forex traders. With futures, the leverage is referred to as margin, a mandatory deposit that can be used by a broker to cover account losses. Minimum margin requirements are set by the exchanges where the contracts are traded, and can be as little as 5% of the contract's value. Brokers may choose to require higher margin amounts. Like forex, then, futures traders have the ability to trade in large position sizes with a small investment, creating the opportunity to enjoy huge gains - or suffer devastating losses.

Trading hours While trading does exist nearly around the clock for the electronically traded e-minis (trading ceases for about an hour a day to enable institutional investors to value their positions), the volume may be lower than the forex market, and liquidity during off-market hours could be a concern depending on the particular contract and time of day.


Tax Treatment
While outside the scope of this article, it should be noted that various trading instruments are treated differently at tax time. Short-term gains on futures contracts, for example, may be eligible for lower tax rates than short-term gains on stocks. In addition, active traders may be eligible to choose the mark-to-market (MTM) status for IRS purposes, which allows deductions for trading-related expenses, such as platform fees or education. In order to claim MTM status, the IRS expects trading to be the individual's primary business;  IRS Publication 550 and Revenue Procedure 99-17 cover the basic guidelines on how to properly qualify as a trader for tax purposes. It is strongly recommended that traders and investors seek the advice and expertise of a qualified accountant or other tax specialist to most favorably manage investment activities and related tax liabilities.


The Bottom Line
The internet and electronic trading have opened the doors to active traders and investors around the world to participate in a growing variety of markets. The decision to trade stocks, forex or futures contracts is often based on risk tolerance, account size and convenience. If an active trader is not available during regular market hours to enter, exit or properly manage trades, stocks are not the best option. However, if an investor's market strategy is to buy and hold for the long term, generating steady growth and earning dividends, stocks are a practical choice. Regardless of which instrument(s) a trader or investor selects, the decision should be based on which is the best fit.

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Should You Be Investing in Small-Cap Stocks?

Should you be investing in small-cap stocks? The answer is yes, but with some limitations.

First, consider that small-cap stocks have a strong, long-term track record. As a group, small-cap stocks have beat large-cap stocks fairly consistently for a number of years.

Small-cap stocks are generally considered to have a market capitalization of $1 billon or less.

That success alone makes them worth adding to your portfolio.

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Stock Choices That May Prosper on Obesity Epidemic

Companies that provide solutions to problems are often good choices for stock investors. Whether the problem affects a business or is personal in nature, there is money to be made in solutions.

One of the most talked about health care problems facing the U.S. is obesity. Regardless of how you measure it, the number of over-weight people is in the tens of millions.

Providing solutions to shedding pounds presents significant long-term opportunities.

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Stock Investors Worry About Return on Savings

Investors in the stock market must also have a cash reserve for emergencies and near-term financial needs.

This means parking cash in savings accounts, money market mutual funds, short-term bonds and so on.

When interest rates are low, the return on these savings can be anemic.

What's a good strategy to boost returns on savings?

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The Manual Method of Protecting Stock Profits

Sometimes the old-fashioned way works best for stock investors. This method of protecting stock profits requires you pay more attention to price changes.

The manual method of protecting stock profits is based on the theory that it is better to take several small profits rather than wait for a single big profit.

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Why I’m Buying Boring Stocks

I remember the good ol’ days of the Internet Bubble in late 1999, early 2000. I bought Qualcomm (QCOM) at around $300 a share and watched it skyrocket to $800 a share in less than a year. Valuations didn’t matter, only the stories behind the stocks. I had lofty ambitions of early retirement and life of luxury. Warren Buffett was widely derided (amongst my friends) as an old fool who didn’t understand the new economy – this time it was surely different.

Sadly, no one told me the party was going to end and I rode that pony all the way back down the hill.
And then my brokerage called me and informed me that not only was my investment account worth zero, I also owed them an additional thousand dollars! Yeah, leverage works both ways.

That’s when I realized that investing isn’t about excitement, it’s about buying dull, income-generating stocks and as Buffett would say, sitting on your hands for extended periods of time.

I realized that I didn’t need to be invested in growth stocks that double every year. I just need to find stocks that generate 8-12% a year in capital appreciation and dividends, and I’ll be able to beat 90% of money managers on the planet.

So why am I bringing this up today? I recently read an article about how an investor was abandoning his position in Johnson and Johnson (JNJ), citing lack of growth as the main reason.

I am not suggesting that JNJ is about to collapse or slowly fade into the background. As I said, JNJ is a strong cash flow generator and the company does generate very strong returns on capital. With such a large amount of reinvestable cash, there will always be at least the hope of better days.
The problem, though, is that JNJ just isn’t a dynamic player. If you want a company that will produce large amounts of cash, and send a fair bit of it back to shareholders in dividends and buybacks, JNJ is a fine choice. But if you really want to harness the growth potential of the healthcare market with a top-notch operator, JNJ simply does not fit the bill.

Based on the 150+ comments, it seems like the investor and numerous readers were tired of the lack of stock performance of JNJ. How anyone would mistake a humongous, global conglomerate for a growth stock is another story, but is it really a dog of a stock?

After holding it for a decade (like some of the readers claimed they did), should you sell it now in favor of a tantalizing growth stock, like maybe SalesForce (CRM) that sells for 260 times earnings?

The problem with growth stocks is that everyone knows they’re a growth stock destined for great things, and investors usually overpay for this privilege, or should I say, excitement.

Studies have shown that over the long run, growth (or glamour) stocks underperform boring, value stocks.


So are people correct in giving up on boring, no-growth JNJ?
Well, JNJ’s story sure isn’t getting any more interesting. In fact, the 100+ year-old stodgy company is so unexciting, I can’t even be bothered to read what it does on its profile page on Yahoo! Finance. I know it makes medicine and related products. It had a slew of recalls and maybe it even makes Splenda. But seriously, who cares?

I don’t need to be swayed by some BS management story. I went to business school, I know how those yarns are spun! Just show me the numbers…

JNJ has a market cap of $166B and it has zero net debt – always a good sign.

Over the past decade (2001 through 2010), income has almost doubled from $33B to $61.6B. Operating cash flow has almost doubled from $8.8B to $16.38B. And most importantly, free cash flow (or as Benjamin Graham would say, the Owners Share of Income) also nearly doubled from $7.1B to $14B.

In terms of valuation metrics, the P/E fell from 32 to 12.7 over the same time period, and the P/CF fell from 20.5 to 10.3. Which meant that it went from being grossly overvalued in 2001 to being favorably-valued in 2010.

At today’s prices, the P/FCF is currently 11.84, which is quite cheap for a blue-chip stock and it has a projected yield of 3.6%, which incidentally, puts in on par with the yield of the 10-year US Treasury.

However, JNJ has been growing its dividend around 9-10% every year since 1972. In fact, it has increased the dividend every single year for 48 years!

If you had invested in JNJ 10 years ago, your entry price (adjusted for splits and dividends) would be about $37. It’s currently trading around $60.50, so while a 64% increase over a decade may not be the dreams that growth stocks are made of, at least your initial quarterly dividend payment of 0.16 cents has more than tripled to 0.54 cents.

And even though you made the wrong decision in buying an overvalued stock a decade ago, you’re still not doing too badly. At your entry price of $37, you’re almost making a 6% yield today.

Buying this boring, no growth stock today gives me an annual yield of 3.6%. If it repeats its performance over the next decade and the dividend triples again, I’ll be making 12% annual yield from the dividends, based on my purchase price. I can live with that sort of sub-par performance!

And if the P/E expands to growth-stock levels, causing the share price to soar and the dividend yield to drop back under 1% like it did 2001, I’ll be happy to sell it to some growth-story-chasing investor.  But until then I’m happy eschewing the glamor stocks in favor of the cheap, boring, no-growth, value stocks.


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Semiconductor Stocks Helped Higher By Analyst Comments On Micron

Despite the lack of direction being shown by the broader markets, semiconductor stocks are seeing notable strength in late morning trading on Monday. Upbeat analyst comments regarding sector component Micron (MU) are contributing to the upside.

The gains by semiconductor stocks have resulted in a 1.2 percent advance by the Philadelphia Semiconductor Index, which is currently poised to end the day at its best closing level since October of 2007.

Micron is turning in one of the sector's best performances, with the memory chip maker currently up by 3.8 percent. Shares are on pace to close at their highest price since August of 2007.

ThinkEquity boosted its estimates through 2012 based on projecting strong end-user demand for the firm's chips. ThinkEquity has a Buy rating on Micron and a $15 price target.

Further, Micron indicated a positive outlook for pricing in the memory-chip market on Friday, forecasting pickups in February and March numbers.

SanDisk (SNDK) is also benefiting from the news, rising by 3.6 percent and on target for its best close in nearly a month.

Advanced Micro Devices (AMD) is also trading higher, seeing a gain of 3.3 percent. Shares are also on track for their best close in a month's time.

MEMC Electronic Materials Inc. (WFR), Cirrus Logic (CRUS), KLA-Tencor (KLAC) and NetLogic Microsystems (NETL) are also sharply higher, while Broadcom (BRCM) is one of the few losers in the sector, down by 0.7 percent on the day.

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Networking Stocks Rally After Mixed Results From Alcatel Lucent, Cisco

Networking stocks are posting notable gains during trading on Thursday, as better than expected fourth quarter earnings from Alcatel Lucent (ALU) are helping to overshadow disappointing guidance from sector giant Cisco Systems (CSCO).

The strength among networking stocks is reflected by the 3.2 percent gain currently being shown by the NYSE Arca Networking Index. The move has the index on pace for its best close since early 2004.

French telecommunications equipment maker Alcatel-Lucent reported a surge in its fourth-quarter profits, with the increase driven by strong revenue growth in all geographic regions and business segments.

On an adjusted basis, Alcatel-Lucent's earnings per ADS topped analyst estimates. The company also said it expects strong profit growth and market improvement in 2011.

Alcatel-Lucent has surged up by nearly 20 percent on the news and is on pace for its best closing price since October of 2009.

Meanwhile, Cisco is sharply lower after reporting better than expected second quarter earnings but providing disappointing guidance.

The networking giant said it expects third quarter earnings of $0.35 to $0.38 per share, below analyst estimates for $0.40 per share. Cisco also said full year sales growth would be at the mid to low-end of its previous outlook.

Cisco has plummeted by 13 percent and is on track for its worst close since early December.

In other action within the sector, Juniper Networks (JNPR), Ciena (CIEN) and Adtran (ADTN) are posting strong gains and are all on pace for new benchmark highs.

Juniper is poised to close at its best price since mid-2001, while Ciena is on pace for its best close since 2008. Adtran is looking to close at a fresh historic high.

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Railroad Stocks Advancing Amid Relief Buying

As the broader markets have jumped on news of the resignation of Egyptian President Hosni Mubarak, railroad stocks are posting notable gains amid relief buying on Friday.

The strength in the railroad sector is reflected by the 1.7 percent gain currently being shown by the Dow Jones Railroads Index. With the gain, the index is once again on pace for an historic closing high.

Kansas City Southern (KSU) is turning in one of the sector's best performances, rising by 2.5 percent. Shares of Kansas City Southern are currently poised for a fresh historic closing high.

CSX Corp. (CSX) and Westinghouse Air Brake Technologies (WAB) are also markedly higher, up by 1.6 percent and 1.3 percent, respectively.

CSX is on track for an all-time closing high, while Westinghouse Air Brake Technologies is poised to end the day at its best closing price since September of 2008.

Norfolk Southern (NSC), Union Pacific (UNP) and Canadian Pacific (CP) are also markedly higher, while some weakness is visible among shares of Guangshen Railway (GSH), which are down by 1.1 percent.

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