Graham: Block new Fed chief over Benghazi

Several Republican lawmakers said Wednesday they will block new Obama nominations for top positions until the White House stops what they say is muzzling people who may shed light on key questions yet to be answered about the terrorist attack in Benghazi that killed a U.S. ambassador.

Sen. Lindsey Graham, R-S.C., said he will block the nomination of Janet Yellen to head the Federal Reserve until eyewitnesses and the statements they made to the FBI within 48 hours of the attack are made available to Congress.

"That's the only leverage we have," Graham said. "How can Congress conclude an investigation if we don't have access to the people who were there?"

Graham and others, including Sens. John McCain of Arizona and Kelly Ayotte of New Hampshire and Reps. Trey Gowdy of South Carolina, Jason Chaffetz of Utah and Jim Jordan of Ohio, say the Obama administration is pressuring government employees to keep them from testifying to Congress about what they may know.

The Obama administration has said releasing those witnesses and their statements would endanger a criminal investigation, Graham said. But if such a theory were allowed to stand, it would block Congressional from exercising its oversight responsibility, he said.

"For the good of the country you can't hide behind a criminal investigation," Graham said. "If that were allowed to stand, just imagine how it would allow the admin to shield itself behind an ongoing investing."

They senators say they want to know why known security problems before the terrorist attack that killed Ambassador Chris Stevens and three other Americans were not addressed by the State Department, which at the time was headed by Hillary Rodham Clinton.

They also want to know why the U.S. military did not do more to rescue Americans who were pinned down in the hours-long attack, and why the White House promoted a false narrative about who the attackers were and why they attacked.

President Obama and Clinton insisted for weeks that the at! tack emerged from a spontaneous protest of Libyans upset over an anti-Islam video produced in the United States. But personnel who have testified to Congress say State and the White House were aware that the CIA and others concluded the attack was likely an organized pre-planned assault by al-Qaeda linked terrorists. There was never a protest.

The State Department has said the witnesses are spread around the world at diplomatic postings and that State's internal review and multiple congressional hearings have answered all questions about what happened. The White House has characterized Republican focus on the incident as politically motivated.

On Sunday, the CBS news program 60 Minutes reported that a British security contractor using the alias Morgan Jones said it was clear that security was far too lax at the Benghazi compound.

Jones said he was hired a few months before the attack to train a Libyan guard force at the Benghazi compound. He said he knew when he drove up to the compound and found the guards drinking coffee and smoking cigarettes inside instead of stationed outside that they would not stand and fight in an attack.

Jones said he complained so often that the guards were not adequate and should be replaced that "in the end I got quite tired of hearing my own voice saying it."

Lt. Col. Andy Wood, a top U.S. security official in Libya during the attack, told CBS he warned his superiors weeks before the attack that an attack was imminent but his warnings were ignored.

Al-Qaeda-linked militants based in Benghazi had posted online warnings earlier in the year that they would attack the British, the International Committee of the Red Cross and the Americans in the city. By June, there had been an assassination attempt on the British ambassador in Benghazi, and an attack on the Red Cross.

"They carried out the first two and the only ones left were the Americans," Wood said. "I made it known. You're going to get attacked in Benghazi, it's going to happen. M! ove out t! emporarily or set up a new location somewhere else in the city. Do something, they're in the final planning stages."

His warnings resulted in no change in the Benghazi posting's security arrangements, Wood said. Testimony has already been heard that Stevens himself had requested more security from State but none was approved.

When the attack happened, mortar fire on a second U.S. compound attacked that night was so accurate it was clear "they practiced those things," Wood said.

The Administrative Review Board that looked into the security question was chosen by Clinton and placed the blame for the terrorist attack on four midlevel officials, all of whom have remained at State. Clinton was not interviewed by the board though she was ultimately responsible for security at diplomatic missions overseas.

Former Tripoli Regional Officer Eric Nordstrom testified in May that Clinton waived security requirements for the U.S. consulate in Benghazi despite the extremely high risk levels that staff was complaining about. Clinton has said State was relying on the Libyans to provide security despite the risk.

On the question of military rescue during the attack, Greg Hicks, the State Department's top official in Libya after Stevens at the time, said he learned from the defense attaché about an hour into the attack that the U.S. military was not sending help.

"For a moment, I just felt lost," Hicks said.

Hours later, two former U.S. Navy SEALs, Glen Doherty and Tyronne Woods, were killed defending the second compound.

Former Pentagon chief Leon Panetta has said that the U.S. military had determined that a rescue would take too long and be too risky, though the attack dragged on for hours and a drone provided a live video feed of the attack. He said Obama told the Pentagon to decide how to handle the attack when it was first learned of.

Is Vodafone Stock Enticing at These Prices?

With shares of Vodafone (NYSE:VOD) trading around $29, is VOD an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Vodafone is a mobile communications company that provides a range of communication services, and operates across the globe. The firm’s products and services include: voice messaging, data, fixed-line solutions, and devices to assist customers in meeting their total communications needs. Vodafone operates in three geographic regions: Europe, Africa and Central Europe; Asia Pacific; and the Middle East. The firm has an investment in the U.S.-based Verizon Wireless (NYSE:VZ). Consumers and companies across the globe aim to connect and interact at increasing rates. With such a large global presence, look for Vodafone to be a major communications provider around the world.

Just recently, Vodafone reported its fiscal first-quarter earnings, which were on par with analyst expectations. The company has not been doing very well due to the recession in Europe, as well as increased regulation. Regulators in Europe have also ordered wireless carriers to make price cuts, so Vodafone expects those rules will hurt the company's revenue in the next quarter as well.

T = Technicals on the Stock Chart are Strong

Vodafone stock been struggling over the last couple of years. The stock is currently sitting near the top of a price range that it has been trying to break above. Analyzing the price trend and its strength can be done using key simple moving averages.

What are the key moving averages? They are the 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Vodafone is trading slightly above its rising key averages, which signals neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Vodafone Options	21.73%	33%	30%

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

	Put IV Skew	Call IV Skew
August Options	Flat	Average
September Options	Flat	Average

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

On the next page, let’s take a look at the earnings and revenue growth rates, and what that means for Vodafone’s stock.

E = Earnings Are Mixed Year-Over-Year

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

	2013 Q1	2012 Q1	2011 Q1	2010 Q1
Earnings Growth (Y-O-Y)	739.36%	-32.34%	-88.07%	N/A
Revenue Growth (Y-O-Y)	-5.74%	-1.96%	8.87%	N/A
Earnings Reaction	0.33%	-2.25%	3.12%	N/A

Vodafone has seen mixed earnings and revenue figures over the last three years. From these numbers, it seems the markets have been optimistic about Vodafone’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Vodafone stock done relative to its peers, Verizon (NYSE:VZ), AT&T (NYSE:T), Sprint Nextel (NYSE:S), and the overall sector?

	Vodafone	Verizon	AT&T	Sprint Nextel	Sector
Year-to-Date Return	17.27%	15.55%	5.70%	7.67%	10.18%

Vodafone has been a relative performance leader, year-to-date.

Conclusion

Vodafone is a supplier of communications products and services worldwide. Increased regulation and a European recession have the company worried. However, the firm still managed to meet analyst expectations during a recent earnings report. The stock is currently sitting near the top of a range that it has been trying to break above. Over most of the last three years, investors in the company have been optimistic, as earnings and revenue figures have been mixed. Relative to its peers and sector, Vodafone has been a year-to-date performance leader. WAIT AND SEE what Vodafone does in coming quarters.

5 Best Blue Chip Stocks To Invest In Right Now

Worries about the Fed's stimulus cutbacks continued to torment investors today as the Dow Jones Industrial Average (DJINDICES: ^DJI  ) fell for the second day in a row, ending down 1,4%, or 217 points, today to finish at 14,960. It was the first time the blue chips finished below 15,000 in exactly a month, and the descent has been much faster than the climb as the Dow reached its all-time closing high of 15,409 just over a week ago. All 30 Dow components closed lower.

Today, investors reacted to a poor jobs report and the release of the Fed's Beige Book, or its report on current economic conditions, in which it said that the nation's economy was experiencing "modest to moderate" growth, adding that "hiring had increased at a measured pace" in several regions. In an Orwellian state of affairs, investors had recently been reacting positively to bad news, sending stocks higher in the hopes that poor economic data would convince Fed officials to keep the bond-buying program in place. Today, that fever seemed to break as the blue chips fell more than 200 points even with mostly disappointing economic reports.

5 Best Blue Chip Stocks To Invest In Right Now: Apple Inc.(AAPL)

Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.

Advisors' Opinion:

• [By Evan Niu, CFA]

  You'd never know it, but Apple (NASDAQ: AAPL  ) has been on a buying spree lately. Of course, Apple doesn't announce its acquisitions unless it absolutely has to, such as when it acquired publicly traded fingerprint sensor specialist AuthenTec last year for $356 million. Avoiding disclosure is just another reason why the company prefers the small, specialized purchase to the big, flashy one.

• [By Rick Munarriz]

  Briefly in the news
  And now let's take a quick look at some of the other stories that shaped our week.

  Smith & Wesson� (NASDAQ: SWHC  ) posted strong quarterly results this week. Sales rose a hearty 38%, and earnings soared even higher. That's not a surprise. Firearms are in hot demand as consumers fear that ownership restrictions will be tightened.� Apple (NASDAQ: AAPL  ) can't catch a break. Oppenheimer & Co. analyst�Ittai Kidron became the latest to get cold feet, lowering his price target from $480 to $460 and reducing his iPhone 5 shipment projections for the current quarter. Apple wasn't the only former tech darling to get talked down this week. Maxim Group's Echo He lowered his price target on Baidu (NASDAQ: BIDU  ) to $75. The concern here is that margins will continue to come under pressure as competition intensifies.�

• [By Evan Niu, CFA]

  Apple (NASDAQ: AAPL  ) wants to move away from Samsung. This we know. While the South Korean conglomerate has many independent divisions, Apple doesn't like giving the component segment business while the smartphone segment is its most viable competitor. To that end, the surest signs yet have emerged that Apple has inked a three-year deal with Taiwan Semiconductor (NYSE: TSM  ) .

• [By Marshall Hargrave]

  Sotheby's has only five analysts following it -- compared with the 48 following Apple (Nasdaq: AAPL) -- so it can be tough to get information on the company. But investors can use this to their advantage: Despite the fact that Sotheby's has three activist investors collectively owning 15% of the company, the stock is flat since Loeb's involvement. 

5 Best Blue Chip Stocks To Invest In Right Now: McDonald's Corporation(MCD)

McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.

Advisors' Opinion:

• [By Tamara Rutter]

  McDonald's (NYSE: MCD  ) is already a household name in about 118 countries around the world. However, the stock has been under pressure lately because of dismal sales projections for the restaurant industry at large. In fact, sales at fast-food restaurants such as McDonald's are estimated to grow less than 4% over the next 10 years, according to The New York Times. Yet, despite this tough environment, McDonald's stock could prove the bears wrong, thanks to rising comps and fresh menu innovations.

• [By Steve Symington]

  McDonald's (NYSE: MCD  ) , for example, also took a hit during April, as same-store sales for its Asia/Pacific region fell 2.9% that month, thanks largely to weakness in China. Of course, when we remember McDonald's currently operates less than one-third the total number of locations in China as Yum! Brands, combined with the fact that Mickey D's most significant market here in the U.S. is showing remarkable strength, it should come as no surprise that McDonald's investors weren't nearly as concerned as those with an interest in Yum! stock.�

• [By Sue Chang]

  McDonald�� (MCD) �is projected to report third-quarter earnings of $1.51 a share, according to a consensus survey by Thomson Reuters.

• [By Rick Aristotle Munarriz]

  AP The hungry will get some new value-priced dining options at McDonald's (MCD) next month as the world's largest restaurant chain breaks the buck to offer a broader Dollar Menu. Facing what it foresees will be a challenging holiday quarter, McDonald's is going national with the Dollar Menu & More menu that it has been testing in five markets. The rollout will officially kick off on Nov. 4, but may be available at an eatery near you before that. McDonald's will make sure that you hear all about it. A national advertising campaign will kick off a week after its debut. Bucking the Trend The premise of Dollar Menu & More is simple. Instead of simple sandwiches, side salads, and dessert treats for a dollar, the new offerings will be slightly more robust and sell for $2. There will also be shareable items available for $5. Franchisees are on board with the shift -- indeed, they'd been pushing for it, and it's easy to see why. The profit on a $1 McDouble sandwich is far less than what they can earn by merely adding bacon to the same burger and charging $2 for it. With labor and operating costs on the rise, the burger beast probably didn't have much of a choice. Pricing flexibility is a big reason why rival Wendy's (WEN) moved away from a value menu where everything set patrons back just 99 cents. It now has more wiggle room under its "Right Price Right Size" signage. If poultry or beef prices shoot higher, it can adjust accordingly. McDonald's now feels that it can offer different value items at dollar intervals. This would make it seem as if customers will wind up paying more when they head out to the Golden Arches next month, but there's more to offering bargains than meets the eye. Too Much Gilding on the Golden Arches McDonald's knows it has a problem. After nearly a decade of consistently rising same-restaurant sales, McDonald's has posted several negative months of unit-level activity since last October. The company concluded that trying to m

Best Clean Energy Stocks To Watch Right Now: Philip Morris International Inc(PM)

Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.

Advisors' Opinion:

• [By Maxx Chatsko]

  However, you would be hard-pressed to find any connection between falling smoking prevalence and share performance at Reynolds American (NYSE: RAI  ) , Lorriland (NYSE: LO  ) , Phillip Morris (NYSE: PM  ) , and Altria (NYSE: MO  ) . These companies are some of the best performers in the past decade. In fact, Altria is the best-performing stock of the last half-century!

• [By Laura Brodbeck]

  Thursday

  Earnings Expected From: UnitedHealth Group Incorporated (NYSE: UNH), Verizon Communications (NYSE: VZ), PrivateBancorp, Inc. (NASDAQ: PVTB), PPG Industries, Inc. (NYSE: PPG), Philip Morris International Inc (NYSE: PM), Nokia Corporation (NYSE: NOK), Peabody Energy Corporation (NYSE: BTU), Intuitive Surgical, Inc. (NASDAQ: ISRG), Chipotle Mexican Grill (NYSE: CMG) Economic Releases Expected: Chinese GDP, Chinese industrial production, Chinese retail sales, US industrial production, US housing starts, US building permits

  Friday

5 Best Blue Chip Stocks To Invest In Right Now: International Business Machines Corporation(IBM)

International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.

Advisors' Opinion:

• [By Matt Thalman]

  Shares of IBM (NYSE: IBM  ) ended the week lower by 1.82% after an independent study indicated that the company may no longer be the best in chips and servers, saying that Oracle's new chips and servers outperformed IBM's top-line products. IBM has long been the king of the hill, and as the competition heats up, the company will have to step up its game if it wants to remain at the top. �

5 Best Blue Chip Stocks To Invest In Right Now: Visa Inc.(V)

Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.

Advisors' Opinion:

• [By Chuck Carnevale]

  Visa Inc. (V)

  Even though Visa did not make my cut, I thought it would be interesting to showcase their phenomenal record. Therefore, dividend growth investors interested in total return might want to take a closer look at Visa.

Top 10 Oil Companies For 2014

There's a new king in a closely watched brand marketing survey, and the Gulf oil spill is back in the spotlight. These stories and more are in Monday's Market Minute. The Dow Industrials (^DJI) and the S&P 500 (^GPSC) both fell by more than one percent last week, but the Nasdaq (^IXIC) edged slightly higher. The major averages are set to sell-off this morning as the market braces for a government shutdown. AP Photo/Kin Cheung Apple (AAPL) has toppled Coca-Cola (KO) as the world's most valuable brand. This is the first time in the Interbrand survey's 13-year history that Coke has not been number one. It fell to third, with Google (GOOG) sliding into the second spot. BP is back in court today for the start of the second phase of a three-part trial to determine responsibility for the gigantic Gulf of Mexico oil spill three years ago. The company is trying to limit the amount of damages it might have to pay. Fines could total as much as 18-billion dollars. BP has already paid out more than 42-billion in clean-up, compensation and fines. Meanwhile, Royal Dutch Shell plans to sell its stake in a major oil project in Texas. It says the Texas project has not live up to expectations. IBM (IBM) agreed late Friday to settle federal charges that it discriminated against Americans in some of its hiring practices. The company's online job listings expressed a preference for software developers who had student visas or H-1B visas. IBM will pay a small fine and revise its hiring process. We continue to watch shares of J.C. Penney (JCP), which plunged 30 percent last week. The retailer issued 84-million shares, diluting the value of its current stock, and analysts warned that sales growth remains sluggish. And King.com, the online entertainment company best known for its Candy Crush game, has filed to go public in the U.S. The British company says it has 30-billion games played globally each month. The filing reportedly values King at about 5-billion dollars.

Top 10 Oil Companies For 2014: Marathon Oil Corporation(MRO)

Marathon Oil Corporation, through its subsidiaries, operates as an international energy company with operations in the United States, Canada, Africa, the Middle East, and Europe. It operates through three segments: Exploration and Production, Oil Sands Mining, and Integrated Gas. The Exploration and Production segment explores for, produces, and markets liquid hydrocarbons and natural gas. The Oil Sands Mining segment mines, extracts, and transports bitumen from oil sands deposits in Alberta, Canada; and upgrades the bitumen to produce and market synthetic crude oil and vacuum gas oil. The Integrated Gas segment markets and transports products manufactured from natural gas, such as liquified natural gas and methanol. The company was formerly known as USX Corporation and changed its name to Marathon Oil Corporation in July 2001. Marathon Oil Corporation was founded in 1887 and is based in Houston, Texas.

Advisors' Opinion:

• [By Jon C. Ogg]

  Marathon Oil Corp. (NYSE: MRO) was upgraded to Outperform from Market Perform by Raymond James.

  Illumina Inc. (NASDAQ: ILMN) was reiterated as Buy but that price target was raised to $90 from $83 at BofA/Merrill Lynch.

Top 10 Oil Companies For 2014: HollyFrontier Corp (HFC)

HollyFrontier Corporation (HollyFrontier), formerly Holly Corporation, incorporated in 1947, is a petroleum refiner, which produces light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. HollyFrontier operates in two segments: Refining and Holly Energy Partners, L.P. (HEP). The Refining segment includes the operations of its El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries and NK Asphalt. The HEP segment involves all of the operations of HEP. The Company merged with Frontier Oil Corporation (Frontier), on July 1, 2011. On November 9, 2011, HEP acquired from the Company certain tankage, loading rack and crude receiving assets located at its El Dorado and Cheyenne Refineries.

Refinery Operations

The Company�� refinery operations serve the Mid-Continent, Southwest and Rocky Mountain regions of the United States. HollyFrontier owned and operated five refineries having an aggregate crude capacity of 443,000 barrels per day, as of December 31, 2011. During the year ended December 31, 2011, gasoline, diesel fuel, jet fuel and specialty lubricants represented 48%, 32%, 5% and 3%, respectively of its total refinery sales volumes. Its refineries are located in El Dorado, Kansas, (the El Dorado Refinery), Tulsa, Oklahoma (the Tulsa Refineries), which consists two production facilities, the Tulsa West and East facilities, a petroleum refinery in Artesia, New Mexico, which operates in conjunction with crude, vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (the Navajo Refinery), Cheyenne, Wyoming (the Cheyenne Refinery) and Woods Cross, Utah (the Woods Cross Refinery). Light products are shipped by product pipelines or are made available at various points by exchanges with other parties and are made available to customers through truck loading facilities at the refinery and at terminals.

The Company�� principal customers for gasoline include other refin! ers, convenience store chains, independent marketers, and retailers. Diesel fuel is sold to other refiners, truck stop chains, wholesalers, and railroads. Jet fuel is sold for military and commercial airline use. Specialty lubricant products are sold in both commercial and specialty markets. LPG�� are sold to LPG wholesalers and LPG retailers. HollyFrontier produces and purchases asphalt products that are sold to governmental entities, paving contractors or manufacturers. Asphalt is also blended into fuel oil and is either sold locally or is shipped to the Gulf Coast. Tulsa West facility is 85,000 barrels per stream day refinery in Tulsa, Oklahoma. It owns Tulsa East facility is 75,000 barrels per stream day refinery that is also located in Tulsa, Oklahoma. In September 2011, HEP completed the Tulsa interconnecting pipeline project which facilitated a combined crude processing rate of 125,000 barrels per stream day. The El Dorado Refinery is a coking refinery.

The El Dorado Refinery is located on 1,100 acres south of El Dorado, Kansas and is a refinery. The principal process units at the El Dorado Refinery consists of crude and vacuum distillation; hydrodesulfurization of naphtha, kerosene, diesel, and gas oil streams; isomerization; catalytic reforming; aromatics recovery; catalytic cracking; alkylation; delayed coking; hydrogen production, and sulfur recovery. Supporting infrastructure includes maintenance shops, warehouses, office buildings, a laboratory, utility facilities, and a wastewater plant (Supporting Infrastructure) and logistics assets owned by HEP, which includes approximately 3.7 million barrels of tankage, a truck sales terminal, and a propane terminal. The facility processes approximately 135,000 barrels per stream day of crude oil with the capability. The Tulsa West facility is located on a 750-acre site in Tulsa, Oklahoma situated along the Arkansas River. The principal process units at the Tulsa West facility consists of crude distillation (with light ends recovery), n! aphtha hy! drodesulfurization, catalytic reforming, propane de-asphalting, lubes extraction, methyl ethyl ketone (MEK) dewaxing, delayed coker and butane splitter units.

Tulsa West facility�� Supporting Infrastructure includes approximately 3.2 million barrels of feedstock and product tankage, of which 0.4 million barrels of tankage is owned by Plains All American Pipeline, L.P. (Plains), and an additional 1.2 million barrels of tank capacity was out of service, as of December 31, 2011. The Tulsa East facility is located on a 466-acre site also in Tulsa, Oklahoma situated along the Arkansas River. The principal process units at the Tulsa East facility consists of crude distillation, naphtha hydrodesulfurization, fluid catalytic cracking (FCC), isomerization, catalytic reforming, alkylation, scanfiner, diesel hydrodesulfurization and sulfur units. The Tulsa East facility�� Supporting Infrastructure includes approximately 3.75 million barrels of tankage capacity on the refinery�� premises, of which approximately 3.4 million barrels of tankage is owned by HEP. The primary markets for the El Dorado Refinery�� refined products are Colorado and the Plains States, which include the Kansas City metropolitan area.

The gasoline, diesel and jet fuel produced by the El Dorado Refinery are primarily shipped via pipeline to terminals for distribution by truck or rail. The Company ships product via the NuStar Pipeline Operating Partnership L.P. Pipeline to the northern Plains States, via the Magellan Pipeline Company, L.P. (Magellan) mountain pipeline to Denver, Colorado, and on the Magellan mid-continent pipeline to the Plains States. The Tulsa Refineries��principal customers for conventional gasoline include Sinclair Oil Company (Sinclair), other refiners, convenience store chains, independent marketers and retailers. Sinclair and railroads are the primary diesel customers. Jet fuel is sold primarily for commercial use. The refinery�� asphalt and roofing flux products are sold via truck or! railcar ! directly from the refineries or to customers throughout the Mid-Continent region primarily to paving contractors and manufacturers of roofing products. HollyFrontier�� Tulsa West facility also produces specialty lubricant products sold in both commercial and specialty markets throughout the United States and to customers with operations in Central America and South America.

The El Dorado Refinery is located about 125 miles, and the Tulsa Refineries are located approximately 50 miles from Cushing, Oklahoma, a crude oil pipeline trading and storage hub. Both its Mid-Continent Refineries are connected via pipeline to Cushing, Oklahoma. In addition, the Company has a transportation services agreement to transport up to 38,000 barrels per calendar day of crude oil on the Spearhead Pipeline from Flanagan, Illinois to Cushing, Oklahoma, enabling it to transport Canadian crude oil to Cushing for subsequent shipment to either of the Company�� Mid-Continent Refineries or to its Navajo Refinery. The Navajo Refinery has a crude oil capacity of 100,000 barrels per stream day.The Navajo Refinery�� Artesia, New Mexico facility is located on a 561-acre site and is a refinery with crude distillation, vacuum distillation, FCC, residuum oil supercritical extraction, (ROSE) (solvent deasphalter), hydrofluoric (HF) alkylation, catalytic reforming, hydrodesulfurization, mild hydrocracking, isomerization, sulfur recovery and product blending units. Supporting Infrastructure includes approximately 2 million barrels of feedstock and product tankage, of which 0.2 million barrels of tankage are owned by HEP.

The Artesia facility is operated in conjunction with a refining facility located in Lovington, New Mexico, approximately 65 miles east of Artesia. The principal equipment at the Lovington facility consists of a crude distillation unit and associated vacuum distillation units. Supporting Infrastructure includes 1.1 million barrels of feedstock and product tankage, of which 0.2 million barrels of! tankage ! are owned by HEP. The Lovington facility processes crude oil into intermediate products that are transported to Artesia by means of three intermediate pipelines owned by HEP. The Navajo Refinery primarily serves the southwestern United States market. The Navajo Refinery primarily serves the southwestern United States market. The Company�� products are shipped through HEP�� pipelines from Artesia, New Mexico to El Paso, Texas and from El Paso to Albuquerque and to Mexico via products pipeline systems owned by Plains and from El Paso to Tucson and Phoenix via a products pipeline system owned by Kinder Morgan�� subsidiary, SFPP, L.P. (SFPP). In addition, the Navajo Refinery transports petroleum products to markets in northwest New Mexico and to Moriarty, New Mexico, near Albuquerque, via HEP�� pipelines running from Artesia to San Juan County, New Mexico.

HollyFrontier has refined product storage through its pipelines and terminals agreement with HEP at terminals in El Paso, Texas; Tucson, Arizona; and Artesia, Moriarty and Bloomfield, New Mexico. The Company uses a common carrier pipeline out of El Paso to serve the Albuquerque market. In addition, HEP leases from Mid-America Pipeline Company, L.L.C., a pipeline between White Lakes, New Mexico and the Albuquerque vicinity and Bloomfield, New Mexico. HEP owns and operates a 12-inch pipeline from the Navajo Refinery to the leased pipeline, as well as terminalling facilities in Bloomfield, New Mexico, which is located in the northwest corner of New Mexico, and in Moriarty, which is 40 miles east of Albuquerque. The Navajo Refinery is situated near the Permian Basin. The Company purchases crude oil from independent producers in southeastern New Mexico and west Texas, as well as from oil companies.

HollyFrontier also purchases volumes of isobutane, natural gasoline and other feedstocks to supply the Navajo Refinery from sources in Texas and the Mid-Continent area that are delivered to its region on a common carrier pipeline ! owned by ! Enterprise Products, L.P. The Cheyenne Refinery has a crude oil capacity of 52,000 barrels per stream day and the Woods Cross Refinery has a crude oil capacity of 31,000 barrels per stream day. The Cheyenne Refinery processes Canadian crudes, as well as local sweet crudes, such as that produced from the Bakken shale and similar resources. The Woods Cross Refinery processes regional sweet and black wax crude, as well as Canadian sour crude oils into light products. The Cheyenne Refinery facility is located on a 255- acre site and is a refinery with crude distillation, vacuum distillation, coking, FCCU, HF alkylation, catalytic reforming, hydrodesulfurization of naphtha and distillates, butane isomerization, hydrogen production, sulfur recovery and product blending units. Supporting Infrastructure includes approximately 1.6 million barrels of feedstock and product tankage, of which 1.5 million barrels of tankage are owned by HEP.

The Woods Cross Refinery facility is located on a 200-acre site and is a fully integrated refinery with crude distillation, solvent deasphalter, FCC, HF alkylation, catalytic reforming, hydrodesulfurization, isomerization, sulfur recovery and product blending units. Supporting Infrastructure includes approximately 1.5 million barrels of feedstock and product tankage, of which 0.2 million barrels of tankage are owned by HEP. The facility processes or blends an additional 2,000 barrels per stream day of natural gasoline, butane and gas oil over its 31,000 barrels per stream day capacity. The Company owns and operates four miles of hydrogen pipeline that connects the Woods Cross Refinery to a hydrogen plant located at Chevron�� Salt Lake City Refinery. The Cheyenne Refinery primarily markets its products in eastern Colorado, including metropolitan Denver, eastern Wyoming and western Nebraska. Crude oil is transported to the Cheyenne Refinery from suppliers in Canada, Nebraska, North Dakota and Montana via common carrier pipelines owned by Kinder Morgan, Plains All Am! erican Pi! peline and Suncor Energy, as well as by truck.

The Woods Cross Refinery obtains its supply of crude oil from suppliers in Canada, Wyoming, Utah and Colorado as delivered via common carrier pipelines that originate in Canada, Wyoming and Colorado. HollyFrontier manufactures and markets commodity and modified asphalt products in Arizona, New Mexico, Oklahoma, Kansas, Missouri, Texas and northern Mexico. The Company has three manufacturing facilities located in Glendale, Arizona; Albuquerque, New Mexico; and Artesia, New Mexico. The Company's Albuquerque and Artesia facilities manufacture modified hot asphalt products and commodity emulsions from base asphalt materials provided by its refineries and third-party suppliers. The Company�� Glendale facility manufactures modified hot asphalt products from base asphalt materials provided by its refineries and third-party suppliers. HollyFrontier�� products are shipped via third-party trucking companies to commercial customers that provide asphalt based materials for commercial and government projects.

The Company owns Ethanol Management Company, is 25,000 barrels per calendar day products terminal and blending facility located near Denver, Colorado. It also owns a 50% joint venture interest in Sabine Biofuels II, LLC, a 30 million gallon per year biodiesel production facility located near Port Arthur, Texas. The Company owns a 75% joint venture interest in the UNEV Pipeline, a 400 mile 12-inch refined products pipeline from Salt Lake City, Utah to Las Vegas, Nevada, together with terminal and ethanol blending facilities in the Cedar City, Utah and North Las Vegas areas and storage facilities at the Cedar City terminal with Sinclair, its joint venture partner, owning the remaining 25% interest. The pipeline has a capacity of 62,000 barrels per calendar day (based on gasoline equivalents). The pipeline was mechanically completed in November 2011.

Holly Energy Partners, L.P.

As of December 31, 2011, the Compa! ny owned ! a 42% interest in HEP, including the 2% general partner interest. HEP owns and operates logistic assets consisting of petroleum product and crude oil pipelines and terminal, tankage and loading rack facilities in the Mid-Continent, Southwest and Rocky Mountain regions of the United States. Revenues are generated by charging tariffs for transporting petroleum products and crude oil through its pipelines and by charging fees for terminalling petroleum products and other hydrocarbons, and storing and providing other services at its storage tanks and terminals. In additioin, HEP owns a 25% interest in the SLC Pipeline LLC (SLC Pipeline) that serves refineries in the Salt Lake City, Utah area. Revenues from the HEP segment are earned through transactions with unaffiliated parties for pipeline transportation, rental and terminalling operations, as well as revenues relating to pipeline transportation services provided for its refining operations. HEP has a 15-year pipelines and terminals agreement with Alon USA, Inc.

Advisors' Opinion:

• [By Tyler Crowe]

  Let's face it, building pipeline to move oil and gas takes a long time, and several refiners and exploration and production companies just can't wait around for these pipes to get built. That is a large reason why HollyFrontier (NYSE: HFC  ) just announced that it and its midstream subsidiary Holly Energy Partners (NYSE: HEP  ) plan to add rail capacity of 70,000 barrels per day to its operations to move oil from Holly Energy's pipes in Southeast New Mexico to HollyFrontier's refining facilities in the region.�

• [By Ben Levisohn]

  Shares of Holly (HFC) have gained 1.9% to $43.29 at 10:43 a.m., shares of Marathon (MPC) have risen 1.8% to $68.41, and shares of Valero Energy (VLO) have ticked up 0.6% to $36.77. Tesoro (TSO) has dropped 0.8% to $45.21.

Top 5 Performing Companies For 2014: Nuverra Environmental Solutions Inc (NES)

Nuverra Environmental Solutions, Inc., formerly Heckmann Corporation, incorporated on May 29, 2007, provides environmental solutions to protect, enhance and advance environmental sustainability. Nuverra provides full-cycle environmental solutions to a national customer base consisting of two distinct end markets: Shale Solutions and Industrial Solutions.

The Company is focused on the removal, treatment, recycling, transportation and disposal of restricted solids, fluids and hydrocarbons for E&P customers. It also provides a one-stop-shop for energy recovery, re-refining and recycling of used motor oil and oily wastewater; plus a closed loop spent antifreeze program for retail, automotive and manufacturing customers. Nuverra specializes in providing environmentally compliant and sustainable solutions to a national footprint of customers.

Shale Solutions

Shale Solutions provides environmental solutions for unconventional oil and gas exploration and production, including the delivery, collection, treatment, recycle, and disposal of restricted environmental products used in the development of unconventional oil and natural gas fields. The Company operates in select shale areas in the United States, including the Marcellus/Utica, Eagle Ford, Bakken, Haynesville, Barnett, Permian, Mississippian Lime and Tuscaloosa Marine Shale areas. It serves customers seeking fresh water acquisition, temporary water transmission and storage, transportation, treatment or disposal of fresh water and complex water flows, such as flowback and produced brine water, in connection with shale oil and gas hydraulic fracturing drilling or hydrofracturing operations. The Company also transports fresh water for production and provides services for site preparation, water pit excavations and remediation.

Industrial Solutions

Industrial Solutions provides environmental and waste recycling solutions to its customers through collection and recycling services for waste prod! ucts, including UMO, which the Company processes and sells as RFO, oily water, spent antifreeze, used oil filters and parts washers, and provision of complementary environmental services for a diverse commercial and industrial customer base. Industrial Solutions operates a scalable network infrastructure of 34 processing facilities, approximately 385 tanker trucks, vacuum trucks and trailers and over 200 railcars. With a geographic presence in 19 states in the Western United States stretching from Washington to Texas, Industrial Solutions provides its services to a diverse range of more than 20,000 commercial and industrial customer locations.

Advisors' Opinion:

• [By Brian Stoffel]

  Nuverra Environmental Services (NYSE: NES  ) ��formerly known as Heckmann ��is a tiny company trying to carve out lucrative niche in the U.S. energy industry. And with today's announcement of a partnership with Halliburton (NYSE: HAL  ) , that niche just became more solidified.

• [By Matt DiLallo]

  If you listen to a company like Heckmann (NYSE: NES  ) , which is an environmental service company with a substantial Bakken presence, it doesn't see the current slowdown as any indication of a future trend. When the company reported its fourth-quarter earnings last month it noted that the current rig count in the Bakken was 193. However, it noted that forecasts from the North�Dakota�Mineral Resource Department sees rig counts up over 200 by this coming June.�

Top 10 Oil Companies For 2014: MGM Resorts International(MGM)

MGM Resorts International, through its subsidiaries, primarily owns and operates casino resorts in the United States. The company?s resorts offer gaming, hotel, dining, entertainment, retail, and other resort amenities. It also owns and operates golf courses and a golf club. As of December 31, 2010, the company owned and operated 15 properties located in Nevada, Mississippi, and Michigan; and has 50% investments in 4 other casino resorts in Nevada, Illinois, and Macau. In addition, MGM Resorts International has an agreement with the Mashantucket Pequot Tribal Nation, which owns and operates a casino resort in Connecticut, to carry the ?MGM Grand? brand name. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was founded in 1986 and is based in Las Vegas, Nevada.

Advisors' Opinion:

• [By Travis Hoium]

  Even if a federal bill does pass, there's no guarantee Zynga would win. Online poker is all about gaining a critical mass of users, and it's a uphill battle. MGM Resorts (NYSE: MGM  ) and Boyd Gaming (NYSE: BYD  ) have already partnered with bwin.party for a U.S. online gaming venture. Bwin.party is one of the largest real-money online poker companies in the world, and with PokerStars likely shut out of the U.S. in the near future, this would be a formidable opponent. Caesars Entertainment (NASDAQ: CZR  ) has also had its eyes on online poker for some time, and with the World Series of Poker brand, it has a big draw for players. Caesars thinks so much of online poker that it's spinning off its "growth" assets, and online games are a key part of the new company.

Top 10 Oil Companies For 2014: Apache Corporation(APA)

Apache Corporation, together with its subsidiaries, engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids. The company has exploration and production interests in the Gulf of Mexico, the Gulf Coast, east Texas, the Permian basin, the Anadarko basin, and the Western Sedimentary basin of Canada; and onshore Egypt, offshore Western Australia, offshore the United Kingdom in the North Sea, and onshore Argentina, as well as on the Chilean side of the island of Tierra del Fuego. Apache Corporation sells its natural gas to local distribution companies, utilities, end-users, integrated oil and gas companies, and marketers; and crude oil to integrated oil companies, marketing and transportation companies, and refiners. As of December 31, 2009, it had total estimated proved reserves of 1,067 million barrels of crude oil, condensate, and natural gas liquids, as well as 7.8 trillion cubic feet of natural gas. The company was founded in 1954 and is based in Houston, Texas.

Advisors' Opinion:

• [By Taylor Muckerman]

  What else is there?
  For investors, there are several other companies that have shown a willingness to engage with Argentina in hopes of turning this black gold into greenbacks.�Apache (NYSE: APA  ) �is one global energy company that has carved out a sizable chunk for itself of the Neuquen basin, which houses the Vaca Muerta field. The company currently owns around 1.3 million acres here, or around half of what YPF has marked off for itself. The EIA has said that up to 800 million barrels of recoverable shale oil could be produced in this area. Apache estimates that its proven reserves in Argentina total 102 million barrels of oil equivalent, or around 3% of its global total. As overall estimates continue climbing, Apache's business there probably will as well. Its plans to spend around $200 million there this year could be just the start.

• [By Matt DiLallo]

  Apache (NYSE: APA  )
  Soros invested $8.4 million in Apache during the quarter, as the billionaire was probably drawn to its cheap valuation. The company has a diverse asset base that includes some intriguing international assets. Apache also has a long-term track record of steady growth, as its production has grown at a compound annual rate of 12% over the past 20 years while cash flow and adjusted earnings per share have grown by a compound annual rate in the high teens over the past decade.

• [By Matt DiLallo]

  Globally, unrest in Egypt has been a big factor in oil's recent rise. Believe it or not, Egypt is a big deal in the global oil market as it's the largest non-OPEC oil producer in Africa. In fact, U.S. oil and gas producer Apache� (NYSE: APA  ) �is actually Egypt's top oil producer, creating over 363,000 barrels of oil equivalent per day. The concern is that this oil production, as well as oil being transported through the important Suez Canal, could potentially be shut off if unrest in the country turns into an all-out civil war. The global oil markets are simply factoring this potential disruption into the price of oil.

Top 10 Oil Companies For 2014: Occidental Petroleum Corporation(OXY)

Occidental Petroleum Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company primarily in the United States. The company operates in three segments: Oil and Gas; Chemical; and Midstream, Marketing, and Other. The Oil and Gas segment explores for, develops, produces, and markets crude oil, natural gas liquids, and condensate and natural gas. Its domestic oil and gas operations are located in Texas, New Mexico, California, Kansas, Oklahoma, Utah, Colorado, North Dakota, and West Virginia; and international oil and gas operations are located in Bahrain, Bolivia, Colombia, Iraq, Libya, Oman, Qatar, the United Arab Emirates, and Yemen. As of December 31, 2010, this segment had proved reserves of approximately 3,363 million barrels of oil equivalent. The Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, and ethylene dichloride products; vinyls, such as vinyl chloride monomer and polyvinyl chloride; and other chemicals comprising chlorinated isocyanurates, resorcinol, sodium silicates, and calcium chloride products. The Midstream, Marketing, and Other segment gathers, treats, processes, transports, stores, purchases, and markets crude oil that includes natural gas liquids and condensate, as well as natural gas and carbon dioxide. This segment also involves in the power generation; and trades around its assets comprising pipelines and storage capacity, as well as oil and gas, other commodities, and commodity-related securities. Occidental Petroleum Corporation was founded in 1920 and is based in Los Angeles, California.

Advisors' Opinion:

• [By Eric Volkman]

  The long dividend pipeline of Occidental Petroleum (NYSE: OXY  ) continues to flow. The company has declared its latest distribution, which is to be $0.64 per share paid on October 15 to shareholders of record as of September 10. That amount matches both of the firm's previous two disbursements, the most recent of which is set to be paid on July 15. Prior to that, Occidental was less generous by $.10, handing out $0.54 per share.

• [By Kelley Wright]

  Based on this criteria, here are our current Timely Ten selections:

  Chevron Corp. (CVX)��ielding 3.3%
  
  CVS Caremark (CVS)��ielding 1.6%
  
  Coca-Cola (KO)��ielding 2.9%
  
  Baxter International (BAX)��ielding 3.0%
  
  Walgreen (WAG)��ielding 2.3%
  
  McDonalds Corp. (MCD)��ielding 3.3%
  
  PepsiCo (PEP)��ielding 2.8%
  
  ExxonMobil (XOM)��ielding 2.9%
  
  Occidental Petroleum (OXY)��ielding 2.7%
  
  Wal-Mart Stores (WMT)��ielding 2.5%
  
  

  Subscribe to Investment Quality Trends here��/P>

• [By Achilles Research]

  Marathon Oil has been doing well for shareholders with the second best performance in the peer group. Anadarko Petroleum (APC), which I have rated as a Sell recently because the share price has run away from its fundamentals, has returned 186% over five years. Marathon Oil achieved 124%, Occidental Petroleum (OXY) 105%, Suncor Energy (SU) 63%, Apache Corp. (APA) 20% and Devon Energy (DVN) 14%. As a value investor with a contrarian tilt I naturally look at underperformers because they often offer the best risk/reward ratio and asymmetric pay-off profiles. I also just recently added to my positions in Devon Energy and Apache Corp. as they are just too cheap to ignore (thesis here and here). Apache was extraordinarily hit on overblown fears of potential oil production interruptions in Egypt and corresponding asset sales.

• [By Eric Volkman]

  Addressing market speculation and media reports,� Occidental Petroleum's (NYSE: OXY  ) board of directors has categorically denied that there is a CEO succession tussle within the company. In a statement posted on the company's website, it said there is no "fight at the top" over the leadership of the firm.

Top 10 Oil Companies For 2014: ATP Oil And Gas Corp (AOB)

ATP Oil & Gas Corporation, incorporated in 1991, is engaged in the acquisition, development and production of oil and natural gas properties. As of December 31, 2011, the Company had estimated net proved reserves of 118.9 Million barrels of crude oil equivalent (MMBoe), of which approximately 75.9 MMboe (64%) were in the Gulf of Mexico and 42.9 MMBoe (36%) were in the North Sea. The reserves consisted of 78.6 Million barrels (MMBbls) of oil (66%) and 241.5 billion cubic feet (Bcf) of natural gas (34%). Its proved reserves in the deepwater area of the Gulf of Mexico account for 62% of the Company�� total proved reserves and its proved reserves on the Gulf of Mexico Outer Continental Shelf account for 2% of its total proved reserves. During the year ended December 31, 2011, the Company acquired three licenses in the Mediterranean Sea covering potential natural gas resources in the deepwater off the coast of Israel (East Mediterranean). On August 17, 2012, ATP Oil And Gas Corp filed for Chapter 11 bankruptcy protection.

The Company�� natural gas reserves are split between the Gulf of Mexico (57%) and the North Sea (43%). Of its total proved reserves, 8.3 MMBoe (7%) were producing, 19.0 MMBoe (16%) were developed and not producing and 91.6 MMBoe (77%) were undeveloped. The Company�� average working interest in its properties at December 31, 2011, was approximately 81%. The Company operates 92% of its platforms. At December 31, 2011, in the Gulf of Mexico, it owned leasehold and other interests in 38 offshore blocks and 49 wells, including 23 subsea wells. The Company operates 43 (88%) of these wells, including 100% of the subsea wells. In the North Sea, it also had interests in 13 blocks and two Company-operated subsea wells. As of March 15, 2011, the Company owned an interest in 13 platforms, including two floating production facilities in the Gulf of Mexico, the ATP Titan at its Telemark Hub and the ATP Innovator at its Gomez Hub. It operates the ATP Innovator and the ATP Titan.

Advisors' Opinion:

• [By John Emerson]

  Most of the Chinese companies that I purchased now reside on the Pink Sheets or have disappeared altogether, but at one time they all traded on major US exchanges. One of them (AOB), even received the honor of ringing the opening bell at the New York Stock Exchange in 2007, and people say that crime does not pay.

Top 10 Oil Companies For 2014: Noble Corp (NE)

Noble Corporation is an offshore drilling contractor for the oil and gas industry. The Company performs contract drilling services with its fleet of 79 mobile offshore drilling units and one floating production storage and offloading unit (FPSO) located globally. As of December 31, 2011, its fleet consisted of 14 semisubmersibles, 14 drillships, 49 jackups and two submersibles. Its fleet includes 11 units under construction, which include five ultra-deepwater drillships, and six jackup rigs. As of February 15, 2012, approximately 84% of its fleet was located outside the United States in areas, which included Mexico, Brazil, the North Sea, the Mediterranean, West Africa, the Middle East, India and the Asian Pacific. During the year ended December 31, 2011, it completed construction on the Noble Bully I, a drillship, owned through a joint venture with a subsidiary of Royal Dutch Shell plc; completed construction on the Noble Bully II, a drillship, and it completed construction of Globetrotter-class drillship. As of February 15, 2012, it had 10 rigs under contract in Mexico with Pemex Exploracion y Produccion (Pemex).

During 2011, the Company conducted offshore contract drilling operations, which accounted for over 98% of its operating revenues. It conducts its contract drilling operations in the United States Gulf of Mexico, Mexico, Brazil, the North Sea, the Mediterranean, West Africa, the Middle East, India and the Asian Pacific. During 2011, revenues from Shell and its affiliates accounted for approximately 24% of its total operating revenues. During 2011, revenues from Petroleo Brasileiro S.A. (Petrobras) accounted for approximately 18% and 19% of its total operating revenues. Revenues from Pemex accounted for approximately 15%, 20% and 23% of its total operating revenues.

Semisubmersibles

Semisubmersibles are floating platforms which, by means of a water ballasting system, can be submerged to a predetermined depth so that a substantial portion of the hull is b! elow the water surface during drilling operations. As of December 31, 2011, the semisubmersible fleet consisted of 14 units, including five Noble EVA-4000 semisubmersibles; three Friede & Goldman 9500 Enhanced Pacesetter semisubmersibles; two Pentagone 85 semisubmersibles; two Bingo 9000 design unit submersibles; one Aker H-3 Twin Hull S1289 Column semisubmersible, and one Offshore Co. SCP III Mark 2 semisubmersible.

Drillships

The Company�� drillships are self-propelled vessels. These units maintain their position over the well through the use of either a fixed mooring system or a computer controlled dynamic positioning system. Its drillships are capable of drilling in water depths from 1,000 to 12,000 feet. The maximum drilling depth of its drillships ranges from 20,000 feet to 40,000 feet. As of December 31, 2011, the drillship fleet consisted of 14 units, including four drillships under construction with Hyundai Heavy Industries Co. Ltd. (HHI); three Gusto Engineering Pelican Class drillships; two Bully-class drillships to be operated by it through a 50% joint venture with a subsidiary of Shell; one dynamically positioned Globetrotter-class drillship that left the shipyard during the fourth quarter of 2011; one Globetrotter-class drillship under construction; one moored Sonat Discoverer Class drillship capable of drilling in Arctic environments; one NAM Nedlloyd-C drillship, and one moored conversion class drillship.

Jackups

As of December 31, 2011, the Company had 49 jackups in its fleet, including six jackups under construction. The rig hull includes the drilling rig, jacking system, crew quarters, loading and unloading facilities, storage areas for bulk and liquid materials, helicopter landing deck and other related equipment. All of its jackups are independent leg and cantilevered. Its jackups are capable of drilling to a maximum depth of 30,000 feet in water depths up to 400 feet.

Submersibles

The Company has two su! bmersible! s in the fleet, which are cold-stacked. Submersibles are mobile drilling platforms, which are towed to the drill site and submerged to drilling position by flooding the lower hull until it rests on the sea floor, with the upper deck above the water surface. Its submersibles are capable of drilling to a depth of 25,000 feet in water depths up to 70 feet.

Advisors' Opinion:

• [By Rich Duprey]

  For the second time in five years, oil giant Noble (NYSE: NE  ) wants to pick up stakes and move. It announced today that its board of directors approved a move from its current location in Switzerland to a new home in the United Kingdom. The move would need to be approved by shareholders.�In 2008, the Houston-based driller had been incorporated in the Cayman Islands and moved to Switzerland to take advantage of preferential tax treatments there.

• [By Travis Hoium]

  Noble (NYSE: NE  ) also has 14 ultra-deepwater rigs, including five under construction. The challenge for Noble is that it still has 49 jackup rigs, which drag on earnings as shallow-water drilling slows. This market has been less of a drag recently, and the new drillship construction will help help drive earnings, but the company isn't as leveraged to ultra-deepwater as Seadrill and Transocean.

Top 10 Oil Companies For 2014: Halliburton Company(HAL)

Halliburton Company provides various products and services to the energy industry for the exploration, development, and production of oil and natural gas worldwide. It operates in two segments, Completion and Production, and Drilling and Evaluation. The Completion and Production segment offers production enhancement services, completion tools and services, cementing services, and Boots & Coots. Its production enhancement services include stimulation and sand control services; completion tools and services comprise subsurface safety valves and flow control equipment, surface safety systems, packers and specialty completion equipment, intelligent completion systems, expandable liner hanger systems, sand control systems, well servicing tools, and reservoir performance services; cementing services consist of bonding the well and well casing, while isolating fluid zones and maximizing wellbore stability, and casing equipment; and Boots & Coots include well intervention services , pressure control, equipment rental tools and services, and pipeline and process services. The Drilling and Evaluation segment provides field and reservoir modeling, drilling, evaluation, and wellbore placement solutions that enable customers to model, measure, and optimize their well construction activities. Its services comprise fluid services, drilling services, drill bits, wireline and perforating services, testing and subsea services, software and asset solutions, and integrated project management and consulting services. The company serves independent, integrated, and national oil companies. Halliburton Company was founded in 1919 and is headquartered in Houston, Texas.

Advisors' Opinion:

• [By Arjun Sreekumar]

  However, some of these challenges can be mitigated by products and services provided by foreign oilfield services companies. Take water shortages, for instance. Halliburton (NYSE: HAL  ) , through its water management services, can help operators reduce unwanted water production and treat produced water for disposal or reuse through offerings that range from chemical and mechanical conformance tools to custom water treatment.

Top 10 Oil Companies For 2014: Falcon Oil & Gas Ltd (FO)

Falcon Oil & Gas Ltd. (Falcon) is an energy company engaged in the business of acquiring, exploring and developing petroleum and natural gas properties. The Company focuses on the acquisition, exploration and development of conventional and unconventional petroleum and natural gas projects in Central Europe (specifically Hungary), Australia and South Africa. Falcon holds 100% interest in 245,775 acres in a production license in the Mako Trough, southern Pannonian Basin in Hungary. Effective July 18, 2013, Falcon Oil & Gas Ltd raised its interest to 96.9% from 72.68%, by acquiring a further 24.22% interest in Falcon Oil & Gas Australia Ltd, from Sweetpea Petroleum Corp Pty Ltd, a unit of PetroHunter Energy Corp. Effective September 19, 2013, Falcon Oil & Gas Ltd acquired the remaining 3.1% stake, which it did not already own, in Falcon Oil & Gas Australia Ltd, a oil and gas exploration and production company.

GM's French Connection Goes Sour

The success of new Opel models like the Mokka SUV, a sibling of GM's Buick Encore, has GM thinking that the long-troubled Opel might be able to succeed on its own. Photo credit: General Motors Co.

Analysts were surprised when General Motors  (NYSE: GM  ) took a 7% stake in French automaker PSA Peugeot Citroen (NASDAQOTH: PEUGY  ) early in 2012. It was clear what troubled Peugeot got out of the deal -- some cash, and a lifeline -- but what was in it for GM?

GM executives hoped that Peugeot and GM's German subsidiary, Opel, could do some parts-sharing and joint development deals -- deals that could help GM end years of losses at Opel. But Peugeot turned out to be a very troubled company, and GM balked when the Peugeot family suggested that the Detroit giant buy out their stake.

That led to a very messy situation, involving the French government, tough unions -- and now, a Chinese automaker riding to the "rescue." In this video, Fool contributor John Rosevear looks at the latest developments with GM's French connection -- and explains why GM shareholders might be better off if the whole deal goes sour.

The "no choice" auto revolution is coming. Are you ready?
An under-the-radar auto company has giants such as Ford, GM, and Toyota clamoring for access to its revolutionary technology. Many forward-thinking car enthusiasts are plowing money into this little-known stock... because they know it holds a key to the explosive profit power of the coming "no-choice fuel revolution." Luckily, there's still time for you to get on board if you act quickly. All the details are inside an exclusive report from The Motley Fool. Click here for the full story!

Is Twitter cheap or expensive?

Is Twitter (TWTR)  cheap or expensive? After the microblogging company announced this week the price range for its initial public offering, many analysts said it was lower than expected, a sign that Twitter wanted to ensure a successful start to its life as a public company.

Yet, even with its more cautious pricing, the company still will be overvalued, according to at least one common valuation model. Twitter is a good example of why cautious investors should steer clear of young and hot technology companies.

To be sure, determining a fair price for Twitter isn't easy, according to Malcolm Baker, a professor at Harvard Business School, as is the case for almost all young growth companies. "The long-run case for investing in Twitter has to be based on the expectation that it will experience a huge growth rate in revenues and profits," he says.

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Google (GOOG)  comes to mind, of course. Its sales have risen from $1.5 billion in the year before its 2004 IPO to more than $40 billion in its most recent year, and its stock price has skyrocketed from an IPO of $85 to over $1,000. But most newly public companies don't expand as fast as the Internet search giant did, and there is no way of knowing whether Twitter will follow in Google's footsteps.

"Unless you have had a really clear sense that you can differentiate a Google from another company that won't experience the phenomenal growth necessary to support its stock price, then — given their potential for overvaluation — staying away from emerging-growth companies has been the best strategy," Baker says.

This potential for overvaluation is particularly elevated "when investor demand for IPOs is high, as reflected in a large number of IPOs coming to market," says Martin Kenney, a professor at the University of California, Davis, and an expert on IPOs. And now may be just such a time, he says: "There have been a lot of IPOs coming out over the last three to four months. Venture-capital firms appear to be just shoving them out the door."

According to investment bank Renaissance Capital, in fact, there were 60 deals in this year's third quarter, more than double the 26 in last year's third quarter. "The U.S. IPO market is on track to see record levels of post-tech-bubble issuance," the firm said.

Click to Play Twitter IPO: $11.1 Billion Valuation

Twitter set its price range for its initial public offering at $17 to $20 a share, in a deal that values the company at up to $11.1 billion. WSJ's IPO reporter Telis Demos reports. Photo: Getty Images.

Twitter's market capitalization at IPO will be $12.9 billion, assuming its shares will be priced at the midpoint of the $17 to $20 range contained in a filing this past Thursday. Note carefully that this total reflects, as it should, the number of shares from stock options and restricted shares.

We can't judge whether this $12.9 billion market cap is a fair valuation in terms of a price/earnings ratio, though, as the company is losing money. In fact, its losses are accelerating, with Twitter posting a $64.2 million loss in its September quarter versus a $42.2 million loss in the prior quarter.

It isn't particularly unusual for technology companies to be losing money when they come to market, since firms at early stages of their growth cycle often sacrifice earnings in order to invest in future growth. That is why, according to University of Florida finance professor Jay Ritter, many analysts focus on sales when valuing startups and IPOs — specifically, the ratio of a company's market cap to its total sales.

Since Twitter's sales over its most recent four quarters totaled $534 million, the company's price/sales ratio would be 24.1. That would be almost as high as Facebook's 25.8 ratio at its IPO.

In fact, according to data compiled by Ritter, a 24.1 price/sales ratio, or PSR, would be the third highest of any IPO since 1980 of any company that, like Twitter, had significant sales at the time it came to market. (Ritter determined which companies qualified for this comparison by calculating which ones had trailing four-quarter sales at IPO that were at least $500 million, in 2013 dollars.)

Besides Facebook, the only other new issue that had a higher ratio at IPO was Palm, the hand-held device maker, whose PSR at its March 2000 IPO was 29. Like Facebook, Palm's stock fell sharply over its first six months as a publicly traded company.

Palm's experience is more the rule than the exception for IPOs with high PSRs. The 15 with the highest PSRs when coming to market lost an average of 5% over their first six months, according to Ritter.

One reason that a high PSR creates such headwinds for a company's shares following its IPO is that the ratio almost always declines as the company matures, often markedly. The S&P 500's current PSR, for example, is 1.4. And as the PSR declines, revenue has to rise that much faster for the stock price to just stay even.

Consider, for example, what Twitter's market cap would be in five years' time should its revenue increase at the average pace of new companies that did IPOs between 1996 and 2005. That average five-year revenue growth is 212%, according to research conducted by Ritter and Kenney and Donald Patton, a research associate at the University of California, Davis. If Twitter's revenue were to grow at that rate, its revenue in the fall of 2018 would be $1.7 billion.

Internet companies tend to trade at higher PSRs than the broad market, so — to be generous — let's assume that Twitter's will be the same as other Internet companies on the fifth anniversary of their IPOs. According to FactSet, the median PSR of the companies in the Dow Jones U.S. Internet Index on their fifth birthday was 5.87.

Given these revenue-growth and PSR assumptions, Twitter's market cap in November 2018 would be $9.8 billion, or 24% below the $12.9 billion market cap the company will have assuming its IPO is priced at the midpoint of its indicated range.

If you really want exposure to the Internet, a better strategy might be to invest in more established companies. Several within the Dow Jones U.S. Internet Index (DJINET)  are currently recommended for purchase by at least two of the three dozen advisers on the Hulbert Financial Digest's monitored list who have beaten the Wilshire 5000 index (XX:W5000)  over the last 15 years.

On the list are Google and web portal Yahoo (YHOO)  . To be sure, since both companies' P/E ratios currently are at 20, versus 16.2 for the S&P 500, neither is especially cheap. But their PSRs are far lower than Twitter's is slated to be at its IPO: Google's is 6.0, according to FactSet, and Yahoo's is 7.3.

Also receiving at least two buy recommendations from these market-beating advisers are two non-U.S. companies: Yandex (YNDX)  , the Russian search engine, and Qihoo 360 Technology (QIHU)  , the Chinese Internet company. Both also sport P/Es that are well above the market: Yandex's is 28 and Qihoo's is 51. Yet their PSRs are also lower than Twitter's, at 12 and 15.9, respectively.

Have the Worries Returned to Broad and Wall?

After finishing in the green nine of the last 10 days, it wasn't exactly surprising to see the bears attempt to get back in the game on Wednesday and for the stock market to pull back a bit.

After all, the S&P had stepped lively to a gain of six percent in just two weeks and 11.5 percent since late-June, which is the very definition of an overbought condition.

In short, it was only a matter of time before something came along to give the bears a raison d'être and cause the buyers to stand aside.

Is Anyone Left to Buy?

One of the problems with just about everyone in the game having access to news, data, and charting tools at the drop of a hat (well, okay, the data actually hits screens much faster than the time it takes for a hat to fall to the floor - think about that for a while!) is that everybody under the sun knows that the trend is up and has been for two weeks. Everybody knows that the stochastics are screaming about an overbought condition. Everybody knows there is a gap on the chart of the S&P 500 at 1733.45 and that it will likely be filled sooner rather than later. And everybody knows that the move has become extended.

When a trend moves in a straight-up fashion, the issue becomes who is left to buy? Okay, perhaps that's more of an old school view. Nowadays, the better question might be who in their right mind would chase stocks higher at this juncture?

Today's market participants tend to be more trading oriented than the soccer mom's trading internet stocks in the late 1990's. Today, everyone wants to be the "fast money." As such, today's traders are well aware when markets become overbought and have been trained to wait for a pullback before committing fresh capital to the long side.

A Self-Fulfilling Move

After a straight-up move such as has been seen over the past two weeks, the idea of a pullback becomes a bit of a self-fulfilling prophecy. Everybody knows that only the "dumb money" buys high. No, today's sophisticated traders only buy t! he dips!

So, Wednesday's little dip was not at all surprising. In fact, the only real surprise is that stocks didn't finish down more. With the buyers waiting for a dip, the sellers would appear to have the upper hand in this type of situation. Thus, today's action could be quite telling. But more on that in a minute.

The Worries

Whenever the bulls are on a roll, something usually comes out of the woodwork to trigger the start of a pullback, a correction, or at the very least, a "sloppy period." And Wednesday was no exception.

Here's the run down on the issues traders were suddenly fretting about.

Money Market Rates in China: Money market rates in China jumped by the highest amount since July after regulators suggested that cash conditions could be tightened to address the risks of inflation stemming from the ongoing run-up in house prices.

Chinese Bank Write-offs: A Bloomberg report noted that China's large banks had tripled the amount of bad loan write-offs compared to the levels seen in the first half of the year.

European Banks (Yes, Again): The ECB put the focus back on Europe's shaky banking system by outlining some details of the stress tests the central bank wants to apply to all eurozone banks. The European bank index dove nearly 2 percent on the report.

Earnings Disappointments: While the earnings season has been largely positive, there was some spin in the press yesterday about high-profile earnings misses. Caterpillar (NYSE: CAT) let the charge here by missing the EPS estimate by 13 percent, missing on revenues, and guiding lower. In addition, semis were under attack all day thanks to Altera's (NASDAQ: ALTR) report, which resulted in a decline of 13.5 percent. Even a former consumer discretionary leader, Panera Bread (NASDAQ: PNRA) got into the act by falling 5.7 percent on the session after cutting both its Q4 and full-year outlooks.

Overbought Conditions: This was touched on above. But to drive the point home, Bespoke Investment Group r! eported t! hat all ten S&P 500 sectors closed Tuesday in extreme overbought territory (defined as at least two standard deviations above 50-day moving averages). Bespoke noted that going back to 1990, there have only been two days when there has been a similar reading. Thus, the "overbought condition" seemed to be one of the go-to excuses for the session.

Something Serious or Just Excuses Du Jour?

So there you have it; the reasons that the Citadels of the world were likely running "ignition algos" to the downside yesterday. However, the question of the day is if any of the issues detailed above are worthy of traders' full attention for more than a day or two.

Since using a crystal ball is not a strong option for most investors, it is probably best to simply watch the action closely for the rest of the week. If stocks are hit hard, then one could argue that the recent joyride to the upside has ended. However, if the pullback is weak and the buyers appear anxious to get back to work, there could easily be some additional upside ahead.

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Barnes & Noble Bids Goodbye to CEO Lynch

When, in my youth, I left a job, I imagined that the whole thing fell into a shambling chaos immediately afterward. In reality, things probably got better. So I guess I feel the pain that William Lynch must be feeling the day after his resignation hit the press. Overnight, the market reacted in typical fashion, plunging the share price into a spiral, and, at the time of this writing... Barnes & Noble (NYSE: BKS  ) was up almost 4%. Ouch.

By comparison, when lululemon athletica CEO Christine Day announced her departure -- which isn't even happening until later in the year -- the stock fell 16% overnight. Lynch's time hasn't been a total wash, but the company will likely be fine without him.

A brief history of William Lynch
Lynch took the CEO role three years ago with much fanfare. Prior to that, the company had been run by founder Leo Riggio's younger brother, Steve Riggio. The younger Riggio had been in the position since 2002, and had helped the company expand during the big-box boom times. Lynch came over from his position as head of Barnes & Noble's website, a role which he had only held for a year at that point.

Before Barnes & Noble, Lynch had been managing the HSN website. His background was firmly planted in digital sales, and his transition to the top of Barnes & Noble signaled the company's move to push digital content. It also coincided with the rise of the e-reader, which ultimately proved to be Lynch's undoing.

After overseeing the rise of the Nook tablet, Lynch watched seemingly helplessly as the tablet failed to gain market share last year and slowly slipped into decline. By the end of the year, the business was looking incredibly weak, and it shouldn't have been a surprise to see it killed off -- or transitioned away -- earlier this year. As the Nook rises and falls, so does its champion.

Barnes & Noble without Lynch
Now that Lynch has left, the company is in a holding pattern while it figures out what comes next. Earlier in the year, Leo Riggio offered to buy the company's nondigital business, taking it private in an attempt to turn things around. With the lead proponent of digital now out the door and the Nook being managed by a third party, Riggio might be in a position to take another shot.

If he doesn't go for it, there are others in the business who would make more sense at the CEO post, now that the business is moving back to focusing on retail. Mitchell Klipper is the current CEO of the company's retail operation, and he has been with the company for decades. Klipper is leading the reimagining of the company's retail spaces, including its store-count reduction.

While Lynch had some successes during his period at the top, the company's failure to make something more out of the Nook meant that he had to go. With a solid secondary team of executives, the company won't have to go far to find a new CEO. I'd be shocked if an external candidate was chosen to fill the position, as the company desperately needs some continuity. For now, as we bid a fond farewell to a man who tried, investors should be eagerly awaiting his replacement.

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Criteo: Brings Maximum User Response And Business

The offer:

Criteo S.A. (CRTO) is offering 7,200,000 ADSs in the price range of $23.00 and $26.00 per share. The expected listing date is October 31, 2013, on Nasdaq. (Source: IPO prospectus)

Business overview:

The company is a French company that operates in the online advertisement industry. It enables e-commerce companies to deliver ad impressions that expects to bring maximum user response and business. Its solution includes the Criteo Engine (includes proprietary predictive software algorithms), its data assets, access to display advertising inventory, and its advertiser and publisher platforms including Publisher Marketplace, or PuMP. It prices its advertising campaigns on a cost per click, or CPC, basis. 99.0% of its revenue in each of 2010, 2011 and 2012 was derived from the advertising campaigns sold on a CPC basis.

Data assets:

Its data assets include the data that it collects from any individual website regarding consumer behavior on that website. It uses its proprietary predictive software algorithms to process this website specific data in real time and deliver the ad impression that expects to bring maximum user response and business.

Criteo Engine:

The company's prime asset is its Criteo Engine, which is capable of processing data on a real time basis and also on a very large scale. This engine can process data and deliver the desire output in a very quick time normally in 150 milliseconds and can deliver up to 25,000 advertisements per second.

Financials:

Consolidated Statement of Income ($ in thousands)
	FY 2012 (12 months)	H1 FY 2013 (6 months)
Revenue	353,683	252,732
Traffic acquisition costs	-205,177	-152,116
Other cost of revenue	-16,473	-14,155
Gross profit	132,033	86,462
Operating expenses:
Research and development	-18,585	-17,165
Sales and operations	-75,519	-52,148
General and administrative	-26,291	-19,769
Total operating expenses	-120,395	-89,082
Income (loss) from operations	11,639	-2,620
Financial income (expense)	-2,028	-3,311
Income (loss) before taxes	9,610	-5,931
Provision for income taxes	-8,529	-461
Net income (loss)	1,081	-6,392
Net income (loss) available to shareholders.	1,276	-6,243
ADSs to be outstanding after this offering		54,415,638
Balance sheet ($ in thousands) as on June 30, 2013 (Pro forma)
Cash and cash equivalents	222,061
Total assets	377,521
Trade receivables, net of allowances	85,992
Total financial liabilities	17,698
Total liabilities	140,811
Total equity	236,710

Industry size and growth: (source: IPO prospectus)

"According to ZenithOptimedia, the global display advertising market totaled approximately $33.2 billion in 2012 and is projected to grow at 19.8% per year from 2012 to 2015." (so! urce: IPO! prospectus)

Key point:

Key positives:

Proprietary technology.Rapid revenue growth.Customer quality and growth in customer base.Industry growth.Client retention and revenue retention rate.Entry in mobile segment.Infrastructure.Geographically diverse operations and global reach.

1. Proprietary technology:

The company uses its proprietary technology to collect and process data and also to deliver ad impressions. The effectiveness of the technology is evident from its rapid revenue growth, its client's quality, growth in its client base and high customer retention rate. Its technology yields excellent results for its clients as seen in the following statement:

"Criteo delivered over 2 billion advertisements in June 2013 on Yahoo Japan, up from 500 million at launch in September 2012. Criteo's display ads have performed significantly better than standard display ads shown on the Yahoo Japan sites, with a click-through-rate that is thirty times higher than the average for other banners shown on Yahoo Japan's sites." (Source: IPO prospectus)

2. Rapid revenue growth:

The company is showing rapid revenue growth since last few years. Its revenues increased from €65.6 million ($65.6 million US) in 2010 to €143.6 million ($143.6 million) in 2011 and €271.9 million ($271.9 million) in 2012.

For the six months ended June 30, 2013 its revenues increased to €194.3 million ($194.3 million) from €113.1 million ($113.1 million) for the six months ended June 30, 2012.

3. Customer quality and growth in customer base:

The company serves some of the biggest and most demanding clients like Yahoo JAPAN, Expedia Staples, Macy's, etc. The company showed a rapid growth in the number of customers it serves, from 832 in FY 2010 to 4199 during H1 FY 2013 (see the chart below).

4. Industry growth rate (explained above).

5. Client ! Retention! and revenue retention rate:

It holds relationships with the leading RTB internet display exchanges, and more than 6,000 publisher partners, including exclusive access to the premium inventory of Yahoo JAPAN. Moreover, it holds a direct relationship with over 76.2% of its advertiser clients.

Client retention rate and revenue retention rate both are the measure of client satisfaction and effectiveness of the company's solution.

Its client retention rate, in each of 2010, 2011 and 2012, was approximately 90%.

For the years ended December 31, 2011, and 2012 and the twelve months ended June 30, 2013, its revenue retention rate was 159%, 155% and 145%, respectively.

"We define our revenue retention rate with respect to a given twelve-month period as (1) revenue recognized during such period from clients that contributed to revenue recognized in the prior twelve-month period divided by (2) total revenue recognized in such prior twelve-month period." (Source: IPO prospectus)

6. Infrastructure:

Its global infrastructure includes over 3,000 servers and 160-node Hadoop clusters, providing a storage capacity exceeding six petabytes.

7. Entry in mobile segment:

In the first quarter of 2013, it launched a solution for mobile advertising and further enhances it with its recent acquisition of Ad-X, a technology company that allows businesses to track and optimize mobile display advertising campaigns delivered to smartphones and tablets.

8. Geographically diverse operations and global reach:

The company generates its revenues from geographically diverse locations (see the chart below). The company has a significant global presence as it operates globally in 37 countries. This geographic spread, to some extent, shall save it from any region specific slowdown.

Negatives:

Highly competitive industry.Loss making entity.Normal business risks! .Change i! n the online customer privacy regulations.

1. Highly competitive industry:

The market for online display advertisement is highly competitive. Its prominent competitors include Amazon (AMZN), eBay (EBAY) and Google (GOOG).

2. Declining growth rate (see the table below):

The company's revenue growth rate is coming down, though some slowdown in the revenue growth rate is acceptable due to the higher base effect. Its gross margins are also coming down due to high traffic acquisition costs which may be a cause of concern.

(click to enlarge)

3. Normal business risks:

Normal business risks like emergence of new competitors with better product/service offerings, any adverse change in Govt. regulations, any economic slowdown, etc.

4. Change in the online customer privacy regulations:

Any change in regulations regarding online privacy of customers can limit its ability to collect data and can reduce the effectiveness of its technology significantly.

Valuations:

At $24.5 (mid range of offer price) the company's valuations stand at $1.3 billion.

At $24.5, the company is available at P/S of about 2.9 ("TTM"), without traffic acquisition costs, the company is available at P/S of about 7.21 ("TTM").

Conclusion:

The company operates in the rapidly evolving, fragmented and competitive industry where it competes with some of the world's biggest companies, like: Google, Yahoo (YHOO), Amazon and eBay. These companies are much bigger than the company, but the success in the industry is technology driven, not size driven, so even a small company with a better technology can easily compete with much bigger companies. Its past growth and clientele tells a lot about the quality of its solution but on the negative side it has a limited operational history

The company is in its growth phase so the operating expenses are on the ! higher si! de and is expected to increase in the near future, at least in absolute terms. Its recent entry in the mobile space will do well for its future and will accelerate its growth rate. Another thing that will add more sheen to the company is its financial position, its balance-sheet is healthy and its income statement shows profit for the last few years (though the company reported a loss for the latest six months).

The company deals in the online advertisement industry and can process big data on a real-time basis. The online advertisement industry and big data processing capabilities both are expected to create lots of enthusiasm among investors due to its future growth potential.

Data source: IPO prospectus.

Disclaimer: Investments in stock markets carry significant risk, stock prices can rise or fall without any understandable or fundamental reasons. Enter only if one has the appetite to take risk and heart to withstand the volatile nature of the stock markets.

This article reflects the personal views of the author about the company and one must read offer prospectus and consult a financial adviser before making any decision.

Source: Criteo: Brings Maximum User Response And Business

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)