Abenomics Leading To Crisis? Post-'Collective Security,' With Support Plunging, Abe Gambles On Casinos

"People are beginning to lose confidence in Abenomics," intones the Financial Times' Long View Columnist John Authers, introducing his interviewee, Charles Dumas, chief economist at Lombard Street Research in a provocative FT video posted on June 17.

Dumas argues that Abenomics' devaluation strategy has severely suppressed real wages, hurting consumers and thereby suppressing growth, even as it has boosted stock prices by inordinately boosting corporate profits, without, however, motivating Japanese corporations to invest or distribute profits to shareholders.

Dumas asserts that the Bank of Japan's blow-out monetary stimulus, that is, the 10% plus of GDP bond- and other financial asset-buying QE program being pursued under Abe's minion, BOJ governor Kuroda Haruhiko, will not be effective in achieving structural change (as it has proven not to be in other places, like Germany).

Notwithstanding this prospect, Dumas believes that Abenomics means further devaluation as BOJ strives toward its 2% inflation goal, which will weaken Japan more and set the stage for a possible (probable?) financial crisis.

The crisis will occur after the 2% inflation goal is achieved and BOJ retreats from QE.  Japanese government bond (JGB) yields will then return to their historical real 1.5-2% average (meaning, under 2% inflation, 3.5-4% nominal) yields.  What has so far saved Japan is deflation and its accompanying super low interest rates.

140405-D-BW835-631 (Photo credit: Secretary of Defense)

Dumas proposes a radically interventionist, anti-market "recommended" new policy prescription–which would be to punish corporations for hoarding earnings with special taxes–but admits the likelihood of its adoption is "nil." (Good thing too, if you believe in free markets.)  But he may be right about the risks to the economy and investors in the direction where Abenomics seems to be headed.

None of Dumas' scenarios precludes rises in the Japanese stock market in the near term. In fact, he predicts further upside. And, indeed, during the past month, the Nikkei 225 has tracked the Dow Industrial Average heading up.

The Nikkei 225 closed on Friday July 25 at 15,457 yen, up 173 yen or 1.13% for the day.  This level is still below the peak of 16,291 which marked the end of the rally begun a month before Abe took office in December 2012, but it is up from the slump to 13,910 yen plumbed on April 14 this year, in what seemed a post-Abenomics binge hangover.  We are now up 11% from the YTD low.

The market's occasionally precipitous declines through April and slow recovery since have to a great degree reflected market disappointment with Abe's "third arrow" reformist growth strategy and accompanying proposals (see sidebar).  The recent climb back probably reflects anticipation that a rabbit in the form of a substantial reduction in the corporate tax rate will be pulled out of a hat.

Abenomics has done little if anything to improve the economics of most Japanese households, whose purchasing power has also been eroded by April's three point, to 8 percent, rise in the consumption tax.

A public opinion poll published in the July 27 Nihon Keizai Shimbun reports that public support for the Abe government has dropped to a worst-ever 48%, a precipitous 5 point drop in one month. Some 38% of respondents voiced non-support for his government, up 2 points.

This is the first time since Abe assumed the Prime Minister's office that support has fallen below 50%.  The surveyed drop was particularly pronounced among respondents in their 20s and 30s, down 10 points, and 40s, down 9 points.

The disapproval expressed by young Japanese was probably must less about disappointment with Abenomics than with Abe and his nationalist clique's muscling into "policy"–though not yet law–"collective security" (see side bar) through his cabinet's "reinterpretation" of Japan's "peace constitution."  Abe's policy putsch overturned a constitutional interpretation that had been unchallenged over successive governments since 1972 when it was presumed to have been "settled."

Public opinion surveys have shown that a majority of Japanese oppose expanding Japan's defense policy to include "collective security"–whereby its Self-Defense Forces will inevitably need to develop offensive doctrines, forces, and weapons–and will run much greater risks of getting involved in hot wars, including those where Japan's security is not directly threatened.

Many Japanese and foreign analysts who believe Abe's push for "collective security" is a profound mistake, reflecting a counter-productive, mistaken, and dangerous vision of Japan's security position and needs.  I agree with this view as far as it goes, but suspect that it does not go far enough.

Social Security Bankrupt in 2033; Medicare Outlook Brightens: Trustees’ Report

Unchanged from last year’s projection, Social Security’s combined retirement and disability programs have dedicated resources sufficient to cover benefits for the next 19 years, until 2033. However, the projected depletion date for Social Security's Disability Insurance Trust Fund is much sooner, according to the Social Security and Medicare Trustees report released Monday.

“Social Security’s disability program alone has dedicated funds sufficient to cover all scheduled benefits for only two years,” said Treasury Secretary and Managing Trustee Jacob Lew during a press briefing to discuss the annual report. “As was true last year, beginning in 2016, projected tax income will be sufficient to finance about 80% of scheduled benefits. Legislation will be needed to avoid disruptive reductions in benefit payments to this vulnerable population.”

While the projections in this year’s reports for Social Security are essentially the same as last year, the projections for Medicare have shown some improvement. 

According to the report, the Medicare Hospital Insurance Trust Fund will have sufficient funds to cover its obligations until 2030, four years later than was projected last year, and 13 years later than was projected in the last report issued prior to passage of the Affordable Care Act.

“As today’s reports make absolutely clear, Social Security and Medicare are fundamentally secure, and they will remain fundamentally secure in the years ahead,” Lew said. “The reports also remind us of something we all understand: we must reform these programs if we want to keep them sound for future generations.” 

Social Security

 “The long-term looks very similar to last year, but the short term picture has grown more urgent.” In public trustee Charles Blahous’ statements on Social Security during the public hearing, he said,

In the 2014 annual report to Congress, the Trustees reported that the combined trust fund reserves are still growing and will continue to grow through 2019. Beginning with 2020, though, the cost of the program is projected to exceed income. And, as projected, when the combined trust fund reserves become depleted in 2033, there will be sufficient income coming in to pay 77% of scheduled benefits. Once exhausted, the report stated, the annual revenues from the dedicated payroll tax will be sufficient to fund three-quarters of scheduled benefits through 2088.

Program costs are projected to exceed noninterest income throughout the remainder of the 75-year period, as this year’s report projected the actuarial deficit over that time to be 2.88% of taxable payroll, 0.16 percentage point larger than in last year’s report.

Current projections in this year’s report show that the “annual cost of Social Security benefits expressed as a share of workers’ taxable earnings will grow rapidly from 11.3% in 2007, the last prerecession year, to roughly 17.1% in 2037, and will then decline slightly before slowly increasing after 2050.”

Medicare

According to this year’s Medicare report, after the projected depletion date of the Medicare Hospital Insurance (HI) Trust Fund in 2030, the projected portion of scheduled benefits that can be financed with dedicated revenues is 85% in 2030 and declines slowly to about 75% in 2050 and beyond.  (The HI Trust Fund covers hospital, nursing, home health and hospice care under Medicare Part A).

Also improved from last year’s report, the 75-year actuarial deficit in the HI Trust Fund is projected at 0.87% of taxable payroll, down from 1.11% in the previous year. According to the report, “this improved outlook for HI is primarily due to lower than expected spending in 2013 for most HI service categories, which reduced the base period expenditure level and contributed to the Trustees’ decision to lower projected near-term spending growth.”

Medicare spending per beneficiary has grown slowly over the past few years and is projected to continue to grow slowly,contributing to the improved outlook.

“The outlook for Medicare has consistently improved since the passage of the Affordable Care Act, and this year, the Trustees have reduced the projections for near-term spending growth,” Lew said during his statement. 

As stated in the report, per capita Medicare spending growth has averaged 0.8% annually for the past four years, which is much slower than the average 3.1% annual increase in per capita GDP and national health expenditures over the same period.

The report also states that both supplementary medical insurance (Part B), which pays doctors’ bills and other outpatient expenses, and prescription drug coverage (Part D) are “projected to remain adequately financed into the indefinite future because current law automatically provides financing each year to meet the next year’s expected costs.”

The Board of Trustees comprises six members. Four serve by virtue of their positions with the federal government: Jacob J. Lew, Secretary of the Treasury and Managing Trustee; Carolyn W. Colvin, Acting Commissioner of Social Security; Sylvia M. Burwell, Secretary of Health and Human Services; and Thomas E. Perez, Secretary of Labor. The two public trustees are Charles P. Blahous III and Robert D. Reischauer.

---

Related on ThinkAdvisor:

Worst Things to Buy Before Your Kid Heads Back to School

Whether your child is heading off to kindergarten or college, you don't want to send him or her to the classroom without the necessary supplies. So you visit your favorite online retailers or head to the mall to buy notebooks, pencils, folders, clothing and maybe even big-ticket electronic items. But buying all the items you think your child needs before he or she heads back to school can be a mistake.

SEE ALSO: 10 Ways to Save on Back-to-School Shopping

Some school-related items won't drop in price until after the back-to-school sales are over. Plus, if you rush to buy everything now, you might discover that many of those purchases weren't even necessary once school starts. So to avoid spending more than you have to, here are seven things you should avoid buying before your child heads back to school.

Fall apparel. Fall clothing already is appearing in stores, and some retailers might offer small discounts on some items during back-to-school sales or over the long Labor Day weekend. But markdowns of 40% or more likely won't show up until mid- to late fall. Not only will you spend more than necessary if you buy fall clothes for your kids now, you might end up purchasing things your kids decide aren't cool enough because the other kids are wearing something else, says Kristin Cook, managing editor of Ben's Bargains. If your kids need clothes, she recommends taking advantage of ongoing clearance sales on summer clothes that can be worn the first month or two of school when it's still hot outside.

HDTVs. You might not consider a television as a back-to-school purchase. But if your child is heading off to college, she might ask for a small HDTV for her dorm room or apartment. The summer months are usually a bad time for TV deals, though, says Mark LoCastro, spokesperson for DealNews.com. Wait until November when HDTV prices are the lowest of the year during Black Friday sales.

School supplies. Wait until you get a supply list from your child's teacher before purchasing anything. Otherwise you could end up with the wrong type of supplies or an abundance of things your child won't use. If possible, try to get by for a couple of weeks with what your child still has from the previous year because big-box retailers such as Target and Wal-mart will dramatically mark down school supplies after Labor Day, Cook says.

Smart phones. Even elementary-age kids are taking phones to school now. So if your child has been pestering you to buy one, hold off until later in the fall. After new models are revealed, older versions will be available for deep discounts, says Jon Lal, founder and CEO of BeFrugal.com. In particular, don't rush to buy the new Amazon Fire Phone, LoCastro says. DealNews.com research shows that Android phones, even popular ones, see discounts of about 50% within the first two to three months after release. There's a good chance that Amazon will discount its Android phone in order to remain competitive in a crowded market, LoCastro says.

Tablets. You won't see deals on many tablets now because demand is high, says Joe Warner, assistant managing editor of Ben's Bargains. Wait until Black Friday (the day after Thanksgiving) to find deals, he says. Or consider buying your child a laptop, instead, especially if he's heading off to college. With so many sales on laptops now through the start of school, they're cheaper and more practical than tablets, LoCastro says.

Textbooks. Don't buy textbooks for your college students until they've attended one class and are sure they won't drop it, says Trae Bodge, senior editor of RetailMeNot.com. Look for used, rather than new, textbooks on sites BigWords.com and CampusBooks.com. See How to Cut Your Textbook Costs in Half – or More for more ways to save.

Trendy gear. If you buy your child a backpack or lunchbox before school starts, you run the risk of having your child change her mind about what she wants after she sees what the other kids are using to bring their books and lunch to school, says Regina Novickis, savings expert at PromotionalCodes.com. Encourage your child to use her current gear for a few weeks. Then you can make a safe investment knowing your child has what she wants, Novickis says. Plus, by waiting, you might score discounts on items that didn't sell during the back-to-school rush.

Tesla Motors: Catalysts Aplenty for Second-Half Gains, Baird Says

Baird’s Ben Kallo and Tyler Frank are feeling good about Tesla Motors (TSLA) heading into its earnings on July 31, despite their belief that third-quarter estimates need to come down:

AP

We reiterate our Outperform rating and $275 price target ahead of Tesla's Q2 report. We believe production could be stronger than expected which should set Tesla up for a solid 2H:14, and are estimating 7,565 Model S deliveries. That said, we believe street estimates need to come down for Q3:14 to account for higher operating expenses and Tesla's lease program. Although we’re cautious heading into the quarter because of Q3 consensus estimates, Tesla remains our top pick for 2H:14 with several upcoming catalysts…

Upcoming catalysts include gigafactory site selection, partner announcements and ground breaking, the marketing campaign for the Model X, as well as updates on Tesla's second production line and global  demand trends.

Shares of Tesla Motors have dipped 0.1% to $222.26 at 11:12 a.m.

MSFT Stock Up on Job Cut News, More Gains Ahead

Microsoft Corp. (Nasdaq: MSFT) Chief Executive Officer Satya Nadella announced today that the company will be cutting 18,000 jobs, a move that will eliminate 14% of the company's workforce. Following the news, Microsoft stock was up 3% in morning trading.

In an email to employees, Nadella noted that the first 13,000 jobs will be cut within the next six months. He also said that 12,500 of the cuts will come from its Nokia division, which MSFT officially acquired in April. More details about the cuts will be announced when Microsoft makes its public earnings call Tuesday.

"It's important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas," Nadella said.

In the email, it's clear that the layoffs are meant to streamline Microsoft's business. Nadella also contends that the job cuts will help Microsoft modernize its engineering processes.

"First, we will simplify the way we work to drive greater accountability, become more agile, and move faster," Nadella said.

"[W]e plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making. This includes flattening organizations and increasing the span of control of people managers. In addition, our business processes and support models will be more lean and efficient with greater trust between teams. The overall result of these changes will be more productive, impactful teams across Microsoft."

Nadella previously hinted that Microsoft would be making organizational changes last week in an employee memo.

Since then, Microsoft stock has climbed 9% in just five trading sessions. Yesterday, MSFT stock closed at $44.08, its highest value since 2000. In 2014, Microsoft stock is up more than 21%. It's gained more than 27% in the last 12 months.

Today's job cut announcement sent shares to 52-week highs, but now the big question is if MSFT stock can maintain its momentum.

Here's why things look good for the tech giant...

Where Microsoft Stock Is Headed

According to Barron's, MSFT stock has seen an influx of September $44 calls from options traders in the last 10 days, meaning investors are bullish on Microsoft stock long-term.

Typically, calls that expire close to an important date are purchased by options traders looking to capitalize on a specific event. The fact that many investors are buying September calls, even when Microsoft reports earnings Tuesday, indicates that investors are bullish on MSFT well past its earnings date.

Currently, there are approximately 55,000 outstanding contracts on MSFT stock.

"If the stock were to hit $50, for example, the calls now trading around 64 cents would be worth $6," Barron's Steven M. Sears said yesterday. "Most of the calls traded at the asking price, which indicates they were probably bought by institutional investors."

Insider or institutional buying is another bullish sign for a stock, because it indicates optimism among the company's inner circle.

"There's really only one good reason for insiders to be buying shares of their company - they believe better times are ahead and that the stock is destined to rally," Money Morning's Defense and Tech Specialist Michael A. Robinson said. "In fact, spotting insider buying is a good way to consistently beat the market. Basically, this is about as bullish an indicator of a company's future as you can find."

Robinson said after the last MSFT earnings report in April that the company - under Nadella's leadership - was making progress in multiple areas now.

"I'm feeling a lot more optimistic about [Nadella] as a leader... he's come out like gangbusters, and has great reviews from analysts across Wall Street," Robinson said. "Microsoft needs to continue driving down costs and keeping its margins up."

And slimming its workforce by 14% today was a major step toward driving down costs.

"At this point, it's all about execution," said Robinson. "They need to do everything well."

Today's announcement created a nice bump for MSFT shares, and if Tuesday's earnings report show strong forward guidance figures, another bump is likely. But that may just be the beginning in a new era for MSFT stock.

"[T]he interest in September expiration suggests investors are taking a longer view of Microsoft, and positioning for the new CEO to continue to announce investor-friendly news..." Sears said.

Share this story on Twitter @moneymorning and @KyleAndersonMM using #Microsoft.

If you follow the headlines, you'd think the last place to invest your hard-earned money is in healthcare. But that's not the case. Here's why you shouldn't wait to invest in this industry boom...

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Barron's: Microsoft Earnings: Options Market Optimistic

Economists Sharply Cut Forecasts for U.S. Growth

Julie Jacobson/AP WASHINGTON -- U.S. business economists have sharply cut their growth forecasts for the April-June quarter and 2014, though they remain optimistic that the economy will rebound from a dismal first quarter. The average forecast for growth in the second quarter has fallen to 3 percent, according to a survey released Friday by the National Association for Business Economics. That's down from 3.5 percent in a June survey. Growth in 2014 as a whole will be just 1.6 percent, they project, sharply below a previous forecast of 2.5 percent. If accurate, this year's growth would be the weakest since the Great Recession. The lower 2014 forecast largely reflects the impact of a sharp contraction in the first quarter. The economy shrank 2.9 percent at an annual rate, the biggest drop in five years. That decline will weigh heavily on the economy this year, even if growth resumes and stays at 3 percent or above, as most economists expect. The economists reduced their second-quarter forecast largely because they expect consumers spent at a much more modest pace. They now expect spending will grow just 2.3 percent at an annual rate in the second quarter, down from a 2.9 percent estimate in June. Spending rose just 1 percent in the first quarter, the smallest increase in four years, a sign consumers are still reluctant to spend freely. Many retail chains are feeling the pain. The Container Store (TCS) said Tuesday that sales at stores open for at least a year slipped 0.8 percent in the first quarter. "We are experiencing a retail 'funk,' " Kip Tindell, chief executive of The Container Store, said Tuesday. "While consumers are buying homes and automobiles and even high ticket furniture, most segments of retail are, like us, seeing more challenging sales than we had hoped early in 2014." Family Dollar Stores (FDO) and clothing retailer the Gap (GPS) also reported lower sales this week. Another factor weighed heavily on the first quarter: A big drop in exports widened the nation's trade deficit and accounted for about half the contraction. Exports picked up in May and trade is unlikely to be as big a drag in the second quarter. But the NABE survey found that economists expect exports will now rise just 2.5 percent this year, down from June's estimate of 3 percent. The weaker figures reflect sluggish economies in Europe and slower growth in China. The NABE did a special survey after the government announced the dismal figures at the end of June. The group typically surveys economists quarterly. Despite the downgrades, the survey underscores that economists are mostly optimistic about the rest of this year. Analysts largely blame the first quarter shrinkage on temporary factors, such as harsh winter weather and a sharp slowdown in inventory restocking. When companies restock their inventories at a weaker pace, it slows demand for factory goods and lowers production. Jack Kleinhenz, president of the association and chief economist at the National Retail Federation, said that most other recent economic data, particularly regarding hiring, has been positive. Employers have added an average of 230,000 jobs a month this year, one of the best stretches since the recession. In addition, consumers are more confident and government spending cuts and tax increases are exerting less of a drag. In 2013, a Social Security tax cut expired and government spending cuts were implemented. The combined effects slowed growth by 1.5 percentage points, economists estimate. "Many of the fundamentals are there for growth," Kleinhenz said. As a result, the 50 economists who responded to the survey see the chances of a recession this year or next as pretty low. Sixty percent said the odds were 10 percent or lower, and more than 90 percent said they were 25 percent or lower.

Investing: When Time Really Is Money

You have probably often heard this business dictum: "Time is money!"

It's meant to light a fire under employees who miss opportunities to sell more or otherwise help a business grow. More than most people, a business owner understands completely how inertia actually costs capital, while energy expended can grow it.

When it comes to retirement investing, we are far removed from the actual making of the money. It can all seem mystical. Put money into an investment. Wait. Take money out.

What happened in between? To put it simply, your money grew because of time.

Growing capital

Businesses issue stock and bonds in order to raise capital. They then use that capital to make more. For them, stock is just another way to borrow.

If the business succeeds, its earnings grow. The number of investors who want that stock rises, and thus the stock price rises as well.

Businesses also generate cash, money which many of then distribute back to shareholders in the form of dividends.

Added together, capital appreciation (a rising stock price) and dividend payments equals total return. The only reason people buy and hold stocks is because, historically, the total return for stock ownership has been higher than straight lending, such as through a bond.

That rate of return varies, of course, but here's the thing about long-term investing. You're going to be at it long term. All you really need to do is make sure that your risk levels are appropriate to your goals, and that your return is both reasonably high and reasonably steady.

The steadiness comes from own a mix of stocks, bonds and other asset classes, together in the form of a portfolio. Rebalancing — selling investments that have gained and using the proceeds to buy the ones that are "on sale" in comparison — is a nifty way to pick up extra return you otherwise miss.

Magnifying money

Now the tricky part: The longer you invest, the more money you have. Why? Because all of your incoming cash, as rebalanced gains, interest payments and dividends — magnifies your portfolio through compounding.

If you double your money from $1 to $2, the next double the total jumps to $4, then $8. Compounding is how retirements happen, and time is the motor that drives the whole thing. Time literally is money.

How can you harness time? First, save enough. Second, invest it prudently. Third, wait. Compounding is a powerful force, and it's the way you can assured of reaching your retirement with more.

5 Best Ways For Investors To Immigrate To The United States

Question: What is the best U.S. immigration plan for a foreign investor and their family?

Here are your top five U.S. investor immigration options:

1.  EB-5 Regional Center Investment

Pro: Low $500,000 U.S. payment for a green card, passive involvement Con: Money is managed by someone else

Invest $500,000 U.S. in an EB-5 government-approved regional center for a period of about five years. In around 18 months, you obtain conditional green cards that entitle you and your immediate family to enter the U.S. You can live, work and study anywhere in the country and there are no education, age or English language requirements.

This is a passive investment in which your money is invested in someone else's commercial project, such as a hotel, residence complex or office tower. The catch here is that your money, through the project, must employ 10 or more American workers for a period of two years. Once this requirement is established, you can then apply for permanent resident green cards. At the end of five years from the date of your U.S. entry, the money is returned to you.

These are commercial enterprises and therefore your money is at risk. However, the EB-5 program has been in place for over 20 years and it has an excellent record.

See my video on the EB-5 program for more details. 

2.  EB-5 Direct Investment

Pro: Complete control of the money Con: High payment of $1 million for a green card, active involvement required

This one is a bit different than the passive EB-5 option above. This time, it's your shop.

To get conditional green cards for you and your family, you invest $1 million U.S. in your own business and directly employ a minimum of 10 people for two years.

Processing takes about 18 months, although if you combine this with the E-2 visa below, you may be able to enter the U.S. in about six months.

After demonstrating that you have complied with the two-year employment of a minimum 10 workers and maintained your minimum $1 million invested, you can qualify for permanent green card status.

If you invest in a high unemployment area of the United States, the amount required to qualify may be only $500,000 U.S. This is a good option to combine with a possible franchise scenario, as with a restaurant or hotel chain.

3.  Inter-corporate Transferee

Pro: Cheap way to get a green card Con: Requires support of a petitioning company

If you are transferred from your company abroad to an affiliated U.S. company to work as a manager, executive or person with specialized knowledge, you may be entitled to obtain a green card. Think of a Toyota manager going to the U.S. to run a subsidiary plant.

There are a couple of particulars before you can make a transfer. 1. You must have worked for the affiliated company abroad for a period of at least one year in the last three years. 2. Your job in the U.S. must be similar to the job you were performing at home.

Processing time for inter-corporate green card transferees is about 18 months.

4.  E-2 Work Visa

Pro: Fastest way to get into the USA to work Con: Complicated to get permanent residence without the EB-5 direct addition.

How about hiring yourself to work in the U.S.?

If your country of citizenship has an investment treaty with the United States, you may be eligible to obtain an E-2 visa to work for a company you form in the United States. Basically, you are the sponsor as well as the immigrant employee.

3 Tech Stocks Spiking on Big Volume

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

 

 

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

 

 

With that in mind, let's take a look at several stocks rising on unusual volume recently.

 

Move

 

Move (MOVE) operates an online network of Web sites for real estate search, finance and moving and home enthusiasts in North America. This stock closed up 2.6% at $14.96 in Monday's trading session.

 

Monday's Volume: 879,000

Three-Month Average Volume: 649,437

Volume % Change: 50%

 

From a technical perspective, MOVE jumped notably higher here right above its 200-day moving average of $14.05 with above-average volume. This spike higher on Monday is starting to push shares of MOVE within range of triggering a major breakout trade. That trade will hit if MOVE manages to take out some key near-term overhead resistance levels at Monday's intraday high of $15.07 to $15.46 with high volume.

 

Traders should now look for long-biased trades in MOVE as long as it's trending above its 200-day at $14.05 or above more near-term support at $13.50 and then once it sustains a move or close above those breakout levels with volume that's near or above 649,437 shares. If that breakout triggers soon, then MOVE will set up to re-test or possibly take out its next major overhead resistance levels at $17 to $18, or even its 52-week high at $18.36.

 

Mellanox Technologies

 

Mellanox Technologies (MLNX), a fabless semiconductor company, designs, manufactures and sells interconnect products and solutions. This stock closed up 6.1% at $36.67 in Monday's trading session.

 

Monday's Volume: 751,000

Three-Month Average Volume: 479,653

Volume % Change: 65%

 

From a technical perspective, MLNX ripped sharply higher here right above its 50-day moving average of $33.57 with above-average volume. This big spike to the upside on Monday is quickly pushing shares of MLNX within range of triggering a near-term breakout trade. That trade will hit if MLNX manages to take out its 200-day moving average of $37.06 to some more near-term overhead resistance at $38.03 with high volume.

 

Traders should now look for long-biased trades in MLNX as long as it's trending above Monday's intraday low of $34.60 or above some more near-term support at $33.33 and then once it sustains a move or close above those breakout levels with volume that's near or above 479,653 shares. If that breakout begins soon, then MLNX will set up to re-test or possibly take out its next major overhead resistance levels at $40.80 to $44.14.

 

Barracuda Networks

 

Barracuda Networks (CUDA) designs and delivers security and storage solutions. This stock closed up 2% to $34.56 in Monday's trading session.

 

Monday's Volume: 298,000

Three-Month Average Volume: 185,126

Volume % Change: 72%

 

From a technical perspective, CUDA jumped notably higher here with above-average volume. This move higher on Monday is starting to push shares of CUDA within range of triggering a major breakout trade. That trade will hit if CUDA manages to take out some key overhead resistance levels at $35.15 to $35.59 and then once it clears $36.46 with high volume.

 

Traders should now look for long-biased trades in CUDA as long as it's trending above some key near-term support at $32 and then once it sustains a move or close above those breakout levels with volume that hits near or above 185,126 shares. If that breakout triggers soon, then CUDA will set up to re-test or possibly take out its next major overhead resistance levels at $42 to its all-time high at $44.40.

 

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

 

-- Written by Roberto Pedone in Delafield, Wis.

 

RELATED LINKS:

 

>>3 Huge Stocks on Traders' Radars

 

>>5 Toxic Stocks You Need to Sell in July

 

>>3 Stocks Under $10 Making Big Moves Higher

 

Follow Stockpickr on Twitter and become a fan on Facebook.

 

At the time of publication, author had no positions in stocks mentioned.

 

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Teen nabs selfie with Buffett and McCartney

The billionaire and the Beatle went out for Italian and then ice cream in Omaha. NEW YORK (CNNMoney) Forget Ellen's epic Oscar selfie: A teen in the Heartland snapped the latest buzzworthy celeb selfie.

On Sunday night, Twitter user @WHITE_estkid, aka Tom White, posted a pic of himself on an Omaha, Neb., sidewalk -- standing in front of Warren Buffett and Paul McCartney sitting casually on a bench in the background.

"Chillin with my homies" said the tweet that linked to a copy of the image on Instagram.

White, who has been "Making the world a better place since 1997," according to his Instagram account's bio, is giving a big toothy grin and a thumbs-up in the picture, while the Berkshire Hathaway (BRKA) CEO and Sir Paul sit casually on a bench in the background.

White has not responded to efforts to reach him. Of course, there's always the possibility that @WHITE_estkid is just really good with photoshop, but there's plenty of evidence that the pair had in fact been socializing that evening.

Earlier in the evening, the billionaire and the Cute Beatle had dinner at Avoli Osteria, an Italian restaurant in the Dundee neighborhood of Omaha, according to Omaha.com.

Next, the two headed to eCreamery, a local ice cream shop, according to co-owner Becky App.

"Warren comes in here quite a bit, but he's never brought Sir Paul as a guest before, so it was pretty exciting," App said.

Tom Becka, a local radio host, also grabbed a blurry pic of McCartney in town on Sunday. But Becka, 58, says he wished he'd jumped in like White.

"It kills me that I didn't think of that," Becka said. "Different generation: The selfie didn't occur to me."

McCartney will be playing in Lincoln, Neb., on Monday night, according to his website.

Stocks: One Step Forward, Two Steps Back

What goes down must go up? It sure seems that way.

REUTERS

After two days of losses, the S&P 500 has gained 0.5% to 1,972.83 today, while the Dow Jones Industrial Average rose 0.5% to 16,985.61 and the Nasdaq Composite jumped 0.6% to 4,419.03. The small-company Russell 2000, however, ticked up just 0.1% to 1,172.97.

The big news of the day: The minutes from the last Federal Reserve meeting. After initial dip, buyers stepped in and pushed stocks up towards a new high of the day. Citigroup’s Steven Englander explains why:

The Fed Minutes did not deliver anything new. In practice this is dovish as almost all market participants who expected a shift  from the Statement/Press conference were on the hawkish side. No one expected a more dovish message so the hawks are caught offside. However we are talking smalls here.

Of course, today was also the first trading day of earnings season, following Alcoa’s (AA) beat after the yesterday’s close. Mizuho’s Carmine Grigoli and Ujjal Basu Roy think earnings growth will accelerate during the second half of the year:

We are confident that earnings growth will accelerate over the balance of the year. Macroeconomic data suggest to us that analysts may be underestimating the level of prospective improvement in the second quarter. Our outlook calls for the S&P 500 to post a year-over-year gain of 7% in net income in the second quarter followed by 8% – 12% gains in the second half.

Goldman Sachs’ Amanda Sneider  and team explain which kinds of companies are most likely to beat earnings forecasts:

Companies where analysts revise down quarterly earnings estimates during the quarter are less likely to beat expectations than stocks with positive revisions or no change to estimates. Likewise, stocks with negative revisions are more likely to miss. Companies with negative revisions are rewarded more for beating expectations and penalized less for missing.

Companies that have had earnings revisions rise during the second quarter and are likely to beat earnings include Wyndham Worldwide (WYN), CBRE Group (CBG), Consol Energy (CNX), McKesson (MCK) and Boston Properties (BXP), Sneider says.

Can China's Large Corporations Take The World?

China's large corporations are continuing their multi-year ascent in the global economy.

According to this year's list of Fortune Global 500 Companies, 95 Chinese corporations made the list, up from 89 last year, 73 two years ago, and 34 in 2008. Three companies made it to the top ten, beating the US and Japan—Sinopec Group (NYSE:SHI), China National Petroleum, and State Grid.

The multiyear-ascent of Chinese corporations supports and reinforces China's continued rise in the global economy, and has helped the country gain clout among world leaders like Angela Merkel and Vladimir Putin, who visited China recently.

Does it mean that Chinese corporations are ready to take the world, as Japanese corporations did back in the 1980s?

Not soon. Getting bigger doesn't necessarily mean getting better—or more competitive. Chinese companies have yet to develop matching clout in the world economy, by gaining a competitive edge against their American, European, and Japanese counterparts.

In fact it's hard to find a major segment of the world economy dominated by China's corporations.

One reason for this discrepancy between size and clout is the ownership structure of Chinese corporations. Most of the companies that climbed onto the list are state-owned enterprises (SOEs) like Sinopec Group, China National Petroleum (9937.TW) and State Grid. State ownership constrains quick growth overseas for Chinese corporations through high profile acquisitions, as was the case with Japanese corporations in the 1980s.

For a simple reason: acquisitions like these create too much political heat.

In 2005, for instance, CNOOC failed to acquire the American oil company Unocal, due to political opposition. The same is true for Huawei's failed acquisition of 3Com, and Chinalco's failure to acquire a stake in Rio Tinto.

Another reason is that Chinese companies have yet to make the great leaps forward which come from the movement from imitation to innovation, as I argued in China Against Herself, which I co-authored with Yuko Arayama. Chinese companies are nowhere to be found in Forbes World's Most Innovative Companies list.

It comes as no surprise, therefore, that Chinese companies have yet to gain the respect of institutional investors.

That's the finding of a recently released Barron's 2014 survey of the World's Most Respected Companies—consistent with the findings of the 2012 and 2013 surveys.The top of the list is filled mostly with American companies. The middle of the list is also filled with American companies, though it includes a good number of European, Japanese, and Brazilian companies.

Only three Chinese companies, China Mobile, Tencent Holdings, and China Construction Bank (HKSE:0939 HK) made — it near the bottom of the list, the same number as last year.

Though the survey doesn't provide any specific reasons for the low ranking of the Chinese corporations, it outlines the five most important criteria for including companies: strong management, sound business strategy, ethical business practices, competitive edge, and revenue and profit growth.

Obviously, Chinese corporations are lagging behind their American and European counterparts in all of these attributes, as discussed in a previous piece.

BOTTOM LINE: Chinese companies have a long way to go before they can compete effectively in world markets, gain the respect of investors, and conquer the world.

Abner Herrman Is Increasing Position in the Pharmaceutical Sector

Over the past days hedge funds have been filing their form 13-F, which is a quarterly report of equity holdings by filed institutional investment managers with at least $100 million in equity assets under management, as required by the United States Securities and Exchange Commission (SEC). In this article, let´s concentrate in one particular hedge fund and try to see the principal holdings in its portfolio. I will look into Abner Herrman & Brock LLC, which provides portfolio management for high net worth individuals, endowments, and corporate retirement plans.Recently the fund reported its equity portfolio, as at the end of June. The total value of the portfolio amounted to $331.2 million, up from $311.3 million disclosed at the end of the previous quarter. Consequently, the fund's total return was 6.4% in the last quarter. The filing revealed that at the end of June, the fund added 4 new positions to its equity portfolio, and sold out of 3 other companies. The top ten portfolio holdings as of the end of the quarter represented 30.85%. The largest changes from previous 13-F´s fillings are in the energy sector (3.5%) followed by the reduction of financials and industrials.In this article, we have selected three companies, in which the fund holds the largest stakes, in terms of market value.The first on the list is Merck & Co. (MRK), in which the fund disclosed a $15.2 million stake with over 263,570 shares. The company is a leading global drugmaker, producing a wide range of prescription drugs in many therapeutic classes in the U.S. and abroad. It has improved earnings per share by 9.6% in the most recent quarter compared to the same quarter a year ago. With respect to price performance, this stock has enjoyed a rise of 26.85% which was in line with the performance of the market. It has a proven commitment to returning cash to investors, with a current dividend yield of 3.0% which is considered good to protect investor´s purchasing power. Other hedge fund gurus have also been active in the! company.. Steven Cohen (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and David Dreman (Trades, Portfolio) have bought in it in the first quarter of 2014.The Boeing Company (BA) comes in next, the fund owning over 107,170 shares, worth $13.635 million. The company is the world's largest manufacturer of commercial jets and the second largest military weapons maker. It reported earnings per share declined by 11.1% in the most recent quarter compared to the same quarter a year ago. This is another company which returns cash to investors. The current dividend yield is 2.2%, which is considered quite good enough to protect the purchasing power. Other hedge fund gurus have also been active in the company. Paul Tudor Jones (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Bill Frels (Trades, Portfolio), Sarah Ketterer (Trades, Portfolio) and Murray Stahl (Trades, Portfolio) have taken long positions in it in the first quarter of 2014.In The Walt Disney Company (DIS) the fund disclosed ownership of over 119,540 shares, worth $10.25 million. This media and entertainment conglomerate has diversified global operations in theme parks, filmed entertainment, television broadcasting and consumer products. It has reported strong earnings growth of about 30% and the stock has surged by 36.64% over the past year. Other hedge fund gurus have also been active in the company. Joel Greenblatt (Trades, Portfolio), Steven Cohen (Trades, Portfolio), David Tepper (Trades, Portfolio), Sarah Ketterer (Trades, Portfolio), John Buckingham (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) have taken long positions in it in the first quarter of 2014.Final CommentIn the next chart we can appreciate the stock's price movements. Since 2009, the three stocks have an upward trend.All of the stocks still have good upside potential despite the fact that they have already risen in the past year. The thr! ee stocks ! are certainly attractive for fundamental investors and make it a worthy investment for Abner's portfolio. In future articles we are going to calculate the intrinsic value of these stocks to determine if they are a good buy in terms of valuation.Disclosure: Omar Venerio holds no position in any stocks or funds mentioned.Also check out: Joel Greenblatt Undervalued Stocks Joel Greenblatt Top Growth Companies Joel Greenblatt High Yield stocks, and Stocks that Joel Greenblatt keeps buying Paul Tudor Jones Undervalued Stocks Paul Tudor Jones Top Growth Companies Paul Tudor Jones High Yield stocks, and Stocks that Paul Tudor Jones keeps buying

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Gilead Sciences: How Big a Beat?

UBS analyst Matthew Roden and team are feeling pretty bullish on Gilead Sciences (GILD) heading into earnings on July 23:

Special to The Chronicle

In the large caps, estimates look beatable across the board, none more than GILD, where we are now 26% ahead of consensus (we raise our PT to $115)…Based on strong Rx trends for Gilead’s Sovaldi, we increase our 2Q sales est. by $1.3bn to $3.25bn (that's not a misprint), $650m above consensus. Also not fully appreciated is the 3Q settlement of the 2014 convert in cash, amounting to a 39m share repo…

Gilead’s not the only biotech benefiting from Roden’s largess. He expects a beat from Biogen Idec (BIIB) and raised his target to $130. He predicts good things from Amgen (AMGN), as well.

Shares of Gilead Sciences have dropped 0.9% to $86.41 at 10:01 a.m. today, while Biogen Idec has fallen 1.4% to $321.25 and Amgen has ticked down 0.1% to $120.06.

15 Oil and Gas Stocks to Sell Now

Popular Posts: Hottest Technology Stocks Now – IGTE GTAT PRLB BBRYHottest Healthcare Stocks Now – MNKD INO ACAD INCY8 Biotechnology Stocks to Buy Now Recent Posts: 9 Oil and Gas Stocks to Buy Now 7 Internet and Web Service Stocks to Buy Now 15 Oil and Gas Stocks to Sell Now View All Posts 15 Oil and Gas Stocks to Sell Now

The ratings of 15 oil and gas stocks are down this week, according to the Portfolio Grader database. Each of these rates a “D” (“sell”) or “F” overall (“strong sell”).

Crescent Point Energy Corp. () ratings are on the decline this week as the company earns an F (“strong sell”). Last week, it received a D (“sell”). The stock also earns F’s in Portfolio Grader’s specific subcategories of Earnings Revisions, Earnings Surprise, Cash Flow and Margin Growth. The stock has a trailing PE Ratio of 118.50. .

This week, Golar LNG Partners () falls to a D (“sell”), worse than last week’s grade of C (“hold”). Golar LNG Partners owns floating storage and regasification units and liquefied natural gas carriers. .

This is a rough week for Cosan Limited Class A (). The company’s rating falls to F from the previous week’s D. Cosan is a fully integrated company in the renewable energy and infrastructure segments in Brazil. The stock gets F’s in Cash Flow and Margin Growth. The stock’s trailing PE Ratio is 41.30. .

The rating of Goodrich Petroleum Corporation () declines this week from a C to a D. Goodrich Petroleum explores, develops, produces and acquires oil and natural gas properties. The stock gets F’s in Earnings Growth, Earnings Revisions, Equity and Cash Flow. As of July 3, 2014, 31.5% of outstanding Goodrich Petroleum Corporation shares were held short. .

EXCO Resources, Inc. () is having a tough week. The company’s rating falls from a D to an F. EXCO Resources is an oil and natural gas company involved in the exploration, exploitation, development and production of onshore North American oil and natural gas properties. The stock gets F’s in Earnings Surprise, Equity and Cash Flow. As of July 3, 2014, 11.1% of outstanding EXCO Resources, Inc. shares were held short. .

This week, Calumet Specialty Products Partners, L.P.’s () rating worsens to an F from the company’s D rating a week ago. Calumet Specialty Products produces hydrocarbon products in North America. The stock receives F’s in Earnings Growth, Earnings Momentum and Earnings Revisions. Cash Flow and Margin Growth also get F’s. .

The rating of Plains All American Pipeline, L.P. () slips from a C to a D. Plains All American Pipeline is involved in interstate and intrastate crude oil pipeline transportation and crude oil terminalling storage activities. The trailing PE Ratio for the stock is 26.50. .

TransCanada Corporation’s () rating weakens this week, dropping to an F versus last week’s D. TransCanada develops and operates energy infrastructures, including natural gas pipelines. .

Enbridge () earns an F this week, falling from last week’s grade of D. Enbridge is in the business of transportation and distribution of crude oil and natural gas primarily in Canada and the United States. The stock gets F’s in Earnings Growth, Earnings Momentum and Cash Flow. The stock currently has a trailing PE Ratio of 70.30. .

StealthGas () gets weaker ratings this week as last week’s C drops to a D. StealthGas offers marine transport services for liquefied petroleum gas producers and users. In Earnings Growth, Earnings Revisions, Earnings Surprise and Cash Flow the stock gets F’s. .

Ultrapar Participacoes S.A. Sponsored ADR () experiences a ratings drop this week, going from last week’s D to an F. Ultrapar Participacoes is engaged in the fuel distribution and chemical businesses in Brazil. Shares of the stock have been changing hands at an unusually rapid pace, twice the rate of the week prior. .

This is a rough week for Gevo (). The company’s rating falls to F from the previous week’s D. Gevo operates as a technology development company for biobutanol. The stock gets F’s in Equity, Cash Flow and Sales Growth. As of July 3, 2014, 11.6% of outstanding Gevo shares were held short. .

PDC Energy () experiences a ratings drop this week, going from last week’s C to a D. PDC Energy is an oil and gas company with drilling and production operations in the Rocky Mountains, the Appalachian Basin and Michigan. The stock gets F’s in Earnings Revisions and Cash Flow. As of July 3, 2014, 11.3% of outstanding PDC Energy shares were held short. .

Slipping from a D to an F rating, Chevron Corporation () takes a hit this week. Chevron is an integrated energy company with operations in countries located around the world. .

This week, Kinder Morgan, Inc. Class P’s () rating worsens to an F from the company’s D rating a week ago. Kinder Morgan is a pipeline transportation and energy storage company. The stock has a trailing PE Ratio of 31.60. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

A Euphoric Stock Market Setting All-Time Highs Built on Air

NEW YORK (TheStreet) -- Another new all-time closing high for the DJIA and the S&P 500 on Thursday. Is anyone surprised? I did not think so.

The DJIA closed up 92.02 at 17068.26 while the S&P 500 was higher by 10.82 at 1985.44. The Nasdaq climbed 28.19 to close at 4484.92 and the Russell 2000 finished up 8.65 at 1208.15.

The Russell 2000 is the only index that has not surpassed its March 2014 highs. It is very close but still a fraction away.

Thursday's holiday-shortened close had the same exact feel that the other trading days have had. The stock market was higher on air.

>>FIFA World Cup Still a Huge Draw Without U.S. Team The S&P 500 Trust Series ETF (SPY) volume closed at 52.5 million shares traded. One year ago today, July 3, 2013, the SPY closing volume was 75.2 million shares. I will continue to highlight this trading volume fact because it will become a huge issue. That issue will come to the forefront when the short hedge funds are at the end of their "throw in the towel, cover at any cost" mindset. I suspect we are closer to that reality than any perma-bull may think. The amount of chest pumping, euphoric excitement over this bull stock market is now at the extreme level. One issue that has been extraordinarily important in this bull run to all-time highs with no correction has been the shear number of hedge funds that have been short the S&P 500. Hopefully, these past few days, with this no-volume melt up, took down some of the two-year highs in S&P futures/options net short positions. I suspect that is what occurred this past week.

Time will tell, but the internal evidence, according to my algorithm process, is confirming this phenomena. The lack of trading volume is also suggesting no players in the stock market other than hedge funds. For the first time since I started time-stamping my stock trades according to my algorithm process for the world to see, which is one year ago this month, I have "0" large-cap stocks on my extreme oversold scans. That is unprecedented and a sure sign of a bubble. The amount of negative divergences within the stock indexes is another reason for concern. I will continue to point out these internal indicators. These are the indicators that will cause the downside avalanche in stock prices. So, I will continue to be extremely cautious on the buy side and use my indicators opportunistically. They all point to stocks that are extraordinarily overbought, both small cap and large cap. On Thursday I closed out the remaining short position in Twitter (TWTR) for another win and started a long position in the UltraPro Short QQQ (SQQQ). SQQQ is extremely oversold. My positions, all 760 trades, are time stamped at www.strategicstocktrade.com. At the time of publication the author was long SQQQ. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Buy InvenSense For Its Future Opportunities and Reasonable Valuation

For investors, Wall Street's short-sighted nature can be a blessing in disguise. Motion chip specialist InvenSense (INVN) has been having a volatile run on the Street after the company missed earnings estimates for the fourth quarter as it decided to ramp up research and development initiatives. InvenSense reported earnings of just $0.07 per share, while analysts were expecting $0.10.

Company Background

Let me take a minute here to tell you more about InvenSense. The company is a producer of MotionTracking (company trademarked) products that are used in consumer electronic devices such as smartphones, tablets, wearables, gaming devices etc. The motion sensors are becoming a sensation among users of these devices as it provides an intuitive way to users for communicating seamlessly with the device. The primary function of these sensors is to translate the motions of the users in free space to executable input commands. Samsung (SSNLF) represents one of InvenSense's biggest clients with its technology being used in Samsung's flagship products like Galaxy S5, Gear 2 and Gear Fit.

After the results

InvenSense is going all out to tap opportunities across several end-markets such as mobile and wearable devices. As such, the company increased R&D spending to bolster product development. However, analysts were not impressed, as they saw short-term gains instead of long-term prospects. Since InvenSense could be a key beneficiary of Google's (GOOG) (GOOGL) Project Ara, and it could land a spot in Apple's (AAPL) smart devices, the recent drop has opened a window of opportunity for investors to buy more shares.

Android markets under its command

InvenSense is known for its motion-tracking sensors and has managed to create a solid position for itself in the Android universe. Samsung's Galaxy Note 3 and Galaxy S5, Google's Nexus 5, and Amazon's Kindle Fire all contain InvenSense chips.

Analysts at Baird are of the opinion that InvenSense is selling a larger number of gyroscopes to Samsung for the latest flagship than originally expected. Coupled with the fact that the Galaxy S5 is selling at a faster pace than its predecessor, there's is a good chance that InvenSense could see more orders from the South Korean giant going forward. Also, Samsung expects to sell approximately 126 million high-end phones this year. Since InvenSense's products are inside Samsung's high-end phones, the company's growth should pick up going forward.

Project Ara is going to be big for InvenSense

Reports suggest that the Project Ara smartphones will cost just $50, and the technology giant will deploy kiosks for feature additions after the device is purchased. The modular smartphone will be 3D-printed, allowing for a high level of customization by users. Moreover, considering that low-cost phones are in great demand in emerging markets, this ambitious move by Google can improve growth in smartphones going forward.

InvenSense is deeply embedded in flagship Android devices. It has also partnered with Google on the Nexus platform, so it's likely that it could become a key partner in Project Ara.

A game-changing product

Earlier this year, at the Mobile World Congress, InvenSense announced a seven-axis MEMS motion tracking platform. The ICM-20728, as the chip is known, has a three-axis gyroscope, three-axis accelerometer, and a pressure sensor on a single chip, along with a digital motion processor. This chip allows motion tracking with absolute and relative altitude changes for navigation, health, and fitness applications, as reported by SlashGear. According to InvenSense, this chip is the first of its kind, wherein all information is available on a single platform.

This chip is intended for wearable devices such as smart watches and fitness bands. Additional features such as its self-calibrating nature and altimeter to enable indoor and outdoor 3-D navigation further strengthen InvenSense's chances of adding Apple to its client list.

Final words

InvenSense has two big opportunities -- Google's Project Ara and Apple's next round of devices. The company did the right thing by investing in product development. Driven by a strong product portfolio and big clients, InvenSense can hit new highs going forward, so the stock's current valuation presents an attractive entry point to investors

About the author:Riddhi KharkiaA practicing Chartered Accountant based out of India. I have keen interest in analyzing tech stocks that are driven by value.

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