Retirement Q&A: 'To' or 'through'?

Q: My target-date fund gained about 1% last year, even though the Standard and Poor's 500-stock index rose nearly 30%. What happened?

A: You now understand the difference between "to" and "through."

Target-date funds gear their investments toward your retirement date. As you get closer to retirement, the fund becomes more conservative, decreasing its investments in stocks and increasing its holdings in bonds and money market securities, or cash. After all, when you don't have employment income, you can't make up your losses by adding more money from your income.

The average target-date fund geared toward 2015 gained 9.3% in 2013, according to Lipper, which tracks the funds. The top-performing fund, the American Funds 2015 Target Date Retirement fund, gained 15.3% last year. The worst fund, Pimco RealRetirement 2015, eked out a 0.09% gain.

The difference? Traditionally, retirees moved much of their assets to bonds and money market securities when they stopped working. When you retire, you want your investments to throw off as much income as possible to augment your Social Security and other sources of retirement income. These funds manage your assets to retirement.

Pimco's fund, alas, seems to have simply missed much of the U.S. stock market rally. But John Hancock Retirement Choices at 2015 (ticker: JRFOX), represents the "to" camp. It aims to have about 18% of its portfolio in stocks, with the rest in bonds and money market funds, at its target date. Not surprisingly, the fund gained just 2.2% last year.

But when you retire, you can expect to live another 30 years or so, which argues that a target-date fund should manage your money through retirement. The American Funds 2015 offering that approach has 45% in growth and growth-and-income funds, 20% in equity-income and balanced funds, and 35% in bond funds.

Best Oil Stocks To Own For 2015

Which is better? If you want an in! come fund the moment you retire, then put yourself in the "to" camp. But if you want your fund to manage your assets throughout two or three decades of retirement, the "through" camp is the way to go.

Federal Reserve releases inside details of…

Five years after the 2007-2008 financial crisis and its damaging fallout, the Federal Reserve is providing an inside glimpse of how it kept financial markets from collapsing to avert the worst economic crisis since the Great Depression.

The Federal Reserve on Friday released transcripts of 14 policy and emergency meetings beginning in January 2008, when then-Federal Reserve Chief Ben Bernanke and other Fed officials candidly expressed fears that the economy was continuing to slide, investment banks remained at risk of failing, and the financial fallout was spreading from financial sector stocks to global markets and economies.

The transcripts, which cover Fed discussions through December 2008, are the most intimate look at how Fed officials were dealing with the crisis in real time, debating how best to help investment banks and protect the economy – from continued cuts in interest rates to bailouts of troubled investment banks, such as Lehman Bros. It's also clear from hundreds of pages of Fed transcripts that officials faced a crisis that may have been deeper, more widespread and more problematic to solve than previously disclosed - and that officials frequently struggled in the wake of conflicting economic signals, lagging data and the potential fallout on Wall Street and Main Street.

"The data have been on the whole negative,'' Bernanke said at Federal Open Market Committee conference call in January, a month in which the Dow Jones Industrial Average was being pummeled. "The markets in part are suffering from just simple uncertainty about whether the Fed is willing to be proactive in addressing downside risks."

William Dudley, head of the Fed's Bank of New York, said financial markets, already roiled the previous quarter, feared that risks "remain severe and may have even intensified."

"Put simply, market participants believe that the macroeconomic outlook has deteriorated significantly and financial asset price movements broadly reflect that shift in expectations,! '' Dudley said.

With stocks continuing to plunge, continued credit woes and recession fears swelling, Bernanke pressed fellow Fed officials for a big, bold interest rate cut during an emergency conference call Jan. 21, according to Fed transcripts, urging that the Federal Funds rate be lowered to bring benchmark lending rates down to 3.5% from 4.25% a week ahead of the Fed's normally scheduled meeting.

"There are times when events are just moving too fast for us to wait for the regular meeting," Bernanke said. "I know it is only a week away, but seven trading days is a long time in financial markets."

Bernanke wasn't sure if the surprise rate cut would help, but argued that not acting would be worse. "We have to address this crisis. We have to try to get it under control. If we can't do that, then we are just going to lose control of the whole situation," he said.

Then Vice chairman Tim Geithner backed the move, hinting that more accommodation would be needed. The Fed's rate cutting would eventually extend into December 2008. In all, the Fed cut rates eight times in 2008.

The financial crisis was rooted in the August 2007 collapse of the housing market, when consumers who had bought homes with low-interest loans from subprime lenders could not keep up with higher payments as loan rates rose.

The collapse led to massive loan defaults and a meltdown among subprime lenders. That spread to investment banks and hedge funds, which had repackaged loans in secondary markets for other financial instruments, allowing them to heavily leverage investments.

The Fed and other central banks began slashing interest rates in 2007 and also provided emergency funding for investment banks to keep them from collapsing. Lehman Brothers wound up filing for bankruptcy, Bear Stearns was acquired by JP Morgan Chase, Merrill Lynch was acquired by Bank of America, while lenders Fannie Mae and Freddie Mac were put under government control.

Minutes from a crucial Sept. 16, 2008, FOMC! meeting ! underscored continued worries.

Caught between stormy financial markets, building inflation and weak economic conditions, they debated whether to again lower interest rates.

"Either the financial system is going to implode in a major way," which would lead to lower interest rates, "or it is not," Dudley said.

Atlanta Fed chief Dennis Lockhart said he sensed a "quite weak" economy. "I am concerned that the downside risks to growth may be gathering force," he said.

Fed Chair Janet Yellen, then chief of the San Francisco Fed, was perhaps the most prescient in the group. "Recent data also suggest that labor markets are weakening across the board-- a development that will cast a pall on household income and spending," she said.

But other Fed officials were far more concerned about the budding risks of high inflation.

"At some point, before the unemployment rate begins to improve substantially, I believe this committee will need to raise rates in order to deliver on our inflation objectives," says Charles Plosser, president of the Philadelphia Fed.

Bernanke, for his part, expected the economy to weaken further but didn't anticipate the recession. "I think that we are in for a period of quite slow growth," he said.

The Fed left interest rates unchanged at that meeting.

Fed officials at that meeting were also worried that lenders were pulling away from a critical financing source for the banking system known as "tri-party repos."

"That is a frightening scenario," Richmond Fed President Jeffrey Lacker said.

Fed officials also discussed their efforts to keep American International Group from collapsing. AIG had sold derivatives called credit default swaps designed to cover loan defaults but was on the hook for billions of dollars.

"AIG is in a situation in which (the parent company) it is basically going to run out of money – today, tomorrow, Thursday or very, very soon,'' Dudley said.

Top 10 Tech Companies To Own For 2015

If a company in your portfolio issues a profit warning should you sell, buy more or just stay invested?

That is exactly the question I asked myself after experiencing quite a few profit warnings recently. I wondered if there wasn�� a tested rule I could follow that for example says sell immediately after the profit warning is announced and buy the position back in a few months��time.

I decided to take a look at a research studies on profit warnings to see if there is not a strategy that will make you come out ahead.

The first, and most practical, study I found was a research note written in September 2008 by James Montier when he was still with Societe Generale called Maximum Pessimism, Profit Warnings and the Heat of the Moment.

The study was also published in James��excellent book called "Value Investing: Tools and Techniques for Intelligent Investment."

In the note James argues that humans are very bad at making decisions and procrastinate under pressure and thus it would be best if you have predetermined rules to help you make the best decision under pressure. And profit warnings are just such a high pressure situation. To find out what the best decision you can make James looked at 2004 study by G. Bulkley R. Harris and R. Herrerias from the University of Exeter called Stock Returns Following Profit Warnings: A Test of Models of Behavioural Finance.

Top 10 Tech Companies To Own For 2015: NetLogic Microsystems Inc.(NETL)

NetLogic Microsystems, Inc., a fabless semiconductor company, together with its subsidiaries, designs, develops, and sells processors and integrated circuits used in mobile wireless infrastructure, data center, enterprise, metro Ethernet, and edge and core infrastructure networks. Its product portfolio includes multi-core communications processors, knowledge-based processors, high-speed 10/40/100 gigabit Ethernet physical layer devices, network search engines, and ultra low-power embedded processors. These products are designed into various systems, such as switches, routers, wireless base stations, access aggregation, radio network controllers, security appliances, networked storage appliances, service gateways, and connected media devices offered by original equipment manufacturers. The company markets and sells its products through its direct sales force and distributors, as well as through independent sales representatives worldwide. NetLogic Microsystems, Inc. was fou nded in 1995 and is based in Santa Clara,, California.

Top 10 Tech Companies To Own For 2015: Radware Ltd.(RDWR)

Radware Ltd. provides application delivery solutions and network security solutions to banks, insurance companies, manufacturing and retail, government agencies, media companies, and service providers worldwide. The company offers AppDirector Intelligent Application Delivery Controller for data center optimization and to eliminate traffic surges, server bottlenecks, connectivity disconnects, and downtime for business continuity; and Alteon Application Switch application delivery controller that supports local, global, and transparent load-balance, multi-homing network load-balance, and bandwidth management capabilities. It also provides AppXML, which offers XML and Web services communications for mission-critical applications; AppWall, a Web application firewall (WAF) appliance that secures Web applications; LinkProof that manages wide area networks and Internet traffic for networks; Content Inspection Director, a smart redirection and dynamic policy enforcement device to meet contemporary carrier needs; and Session Initiation Protocol Director, an application delivery controller for application vendors, telecom equipment manufacturers, and system integrators. In addition, the company offers DefensePro Intrusion Prevention and Denial of Service products that protect against worms, bots, viruses, malicious intrusions, and DOS attacks; Inflight, a hardware device that provides online and network-based monitoring solutions; and APSolute Vision, an appliance-based management and monitoring system for information technology staff to centrally manage distributed devices and check the performance and security of enterprise wide application delivery infrastructures. It markets and sells its products primarily through distributors and resellers in North America, Europe, and Asia, as well as directly to select customers in the United States. Radware Ltd. was founded in 1996 and is headquartered in Tel Aviv, Israel.

Advisors' Opinion:

• [By Evan Niu, CFA]

  Rival ADC vendor Radware (NASDAQ: RDWR  ) also issued disappointing preliminary results this morning, with its own revenue projected at $45 million -- also below its guidance. Radware said sales were strong in the U.S. market but cited weakness in EMEA and China for its weakness.

• [By Evan Niu, CFA]

  What: Shares of Radware (NASDAQ: RDWR  ) have fallen by as much as 24% after the company announced disappointing preliminary earnings for the first quarter.

• [By Seth Jayson]

  Radware (Nasdaq: RDWR  ) reported earnings on July 25. Here are the numbers you need to know.

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

Hot Heal Care Stocks To Invest In Right Now: Ktl Global Limited (EB7.SI)

KTL Global Limited, an investment holding company, supplies rigging equipment and related services to customers primarily in the offshore oil and gas, and marine and construction industries. The company�s products include wire rope for offshore, such as crane wire rope, pennant lines, towing bridles, and wire rope for pipe lay operations; and heavy lift slings and grommets consisting of cable laid slings and grommets, kimflex braided slings and grommets, and ultra short grommets. Its products also include rigging equipment, including shackles for specialized applications, blocks and sheaves, sockets and wire rope clips, hooks and swivels, and thimbles and turnbuckles; mooring systems comprising anchors and chains, deck equipment and machinery, and mooring equipment; and synthetic ropes, such as polypropylene, nylon, puget sound ropes, and composite ropes. It also provides kim track, magnetic rope testing, wire rope spooling, testing, inspection and certification, and wire rope lubrication services; KimLift rigging services; and delivery and project management, research projects, and technical training services. The company was incorporated in 2007 and is headquartered in Singapore.

Top 10 Tech Companies To Own For 2015: Northamber(NAR.L)

Northamber plc engages in the distribution of information technology equipment in the United Kingdom. It supplies computer hardware, computer printers and peripheral products, computer telephony products, and other electronic transmission equipment. The company?s products include desktops and servers, portable computing devices, storage and memory products, monitors and projectors, printers and scanners, networking equipment, audio visual products, and personal computer build products, as well as software solutions. Northamber plc is headquartered in Chessington, the United Kingdom.

Top 10 Tech Companies To Own For 2015: Blackbaud Inc.(BLKB)

Blackbaud, Inc. provides software and related services for nonprofit organizations. The company offers The Raiser?s Edge, a software application to manage constituent relationship management (CRM) and fundraising activity; Blackbaud CRM, a Web-based CRM solution that addresses the needs of mid-size, large, and federated chapter based nonprofit organizations; eTapestry, a software-as-a-service (SaaS) donor management and fundraising solution for smaller nonprofits; Blackbaud NetCommunity, an Internet marketing and communications tool to build interactive Websites and manage email marketing campaigns; Sphere eMarketing, a SaaS that provides applications to manage e-marketing, communications, programs, services, and online fundraising; Everyday Hero, an event-based online fundraising solution; and BlackbaudNow for developing an online presence and accepting online donations. It also provides The Financial Edge, an accounting application; The Education Edge, a student informa tion management system; Blackbaud?s Student Information System, which links student information across various campus offices, as well as organizes the admissions and registrar?s processes; and Blackbaud for Small Schools, a SaaS solution that helps schools with their registration process, as well as gives parents, students, and faculty an online access to school information. In addition, the company offers The Patron Edge, a ticketing management solution; Blackbaud Direct Marketing that helps in managing direct marketing campaigns with various media and channels; Sphere Friends Asking Friends software product to launch and manage online event fundraising Websites; and Altru, a SaaS solution that helps general admissions arts and cultural organizations in their operation. Further, it provides consulting and education, analytics, maintenance, and payment processing services. Blackbaud, Inc. was founded in 1981 and is headquartered in Charleston, South Carolina.

Advisors' Opinion:

• [By Seth Jayson]

  Blackbaud (Nasdaq: BLKB  ) is expected to report Q1 earnings on May 1. Here's what Wall Street wants to see:

  The 10-second takeaway
  Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Blackbaud's revenues will expand 20.7% and EPS will expand 11.8%.

Top 10 Tech Companies To Own For 2015: Redknee Solutions Inc (RKN.TO)

Redknee Solutions Inc. provides communication software products, solutions, and services to wireless, wireline, broadband, and satellite network operators. It offers Real-time Converged Billing, a cloud-enabled converged billing and customer care platform, which provides real-time unified billing, rating, and charging for the operator�s data, voice, and messaging services; customer care capabilities; subscriber promotions and loyalty programs; and self-care options for prepaid, postpaid, and hybrid subscribers. The company also provides Brand Challenger, a cloud-based end-to-end converged billing solution for mobile network operators, mobile virtual network enablers, and mobile virtual network operators. In addition, it offers Wholesale Settlement, an interconnect, wholesale, roaming, MVNO, franchise management, and content settlement software solution that provides operators with visibility into network transactions for achieving converged settlement and interconnect bil ling. Further, the company provides related hardware and services, including maintenance, support, and professional services, as well as learning, managed, and advisory services. It operates in North America, South America, the Caribbean, Europe, the Middle East, Africa, and the Asia Pacific. The company distributes its products and services through direct sales force and resellers. Redknee Solutions Inc. was founded in 1999 and is headquartered in Mississauga, Canada.

Top 10 Tech Companies To Own For 2015: Novellus Systems Inc.(NVLS)

Novellus Systems, Inc., together with its subsidiaries, develops, manufactures, sells, and supports equipment used in the fabrication of integrated circuits. The company operates in two segments, Semiconductor Group and Industrial Applications Group. The Semiconductor Group segment provides equipment used in wafer processing, advanced wafer-level packaging, and light-emitting diode (LED) manufacturing. Its deposition systems use chemical vapor deposition (CVD), physical vapor deposition (PVD), and electrochemical deposition (ECD) processes to form transistor, capacitor, and interconnect layers in an integrated circuit; and High-Density Plasma CVD (HDP-CVD) and Plasma-Enhanced CVD (PECVD) systems employ chemical plasma to deposit dielectric material within the gaps formed by the etching of aluminum, or as a blanket film that can be etched with patterns for depositing conductive materials into the etched dielectric. This segment?s CVD Tungsten systems are used to deposit co nductive contacts between transistors and interconnects; PVD systems are used to deposit conductive aluminum and copper metal layers by sputtering metal atoms; and Electrofil ECD systems are used for depositing copper to form the conductive wiring on integrated circuits using copper interconnects. The Industrial Applications Group segment provides grinding, lapping, and polishing equipment for fine-surface optimization. It offers products for use in the semiconductor and LED manufacturing, automotive, aerospace, medical, green energy, and glass and ceramics industries, as well as manufacturers of products, such as pumps, transmissions, compressors, and bearings. The company markets its products through direct sales force and manufacturer?s representatives primarily in Europe, the United States, Korea, Japan, China, Taiwan, and southeast Asia. Novellus Systems, Inc. was founded in 1984 and is headquartered in San Jose, California.

Top 10 Tech Companies To Own For 2015: Oracle Corporation(ORCL)

Oracle Corporation, an enterprise software company, develops, manufactures, markets, distributes, and services database and middleware software, applications software, and hardware systems worldwide. It licenses of database and middleware software, including database management software, application server software, service-oriented architecture and business process management software, data integration software, business intelligence software, identity and access management software, content management software, portals and user interaction software, development tools, and Java; and applications software comprising enterprise resource planning, customer relationship management, enterprise performance management, supply chain management, business intelligence applications, enterprise portfolio project management, Web commerce, and industry-specific applications software. The company also offers customers with rights to unspecified software product upgrades and maintenance releases; Internet access to technical content; and Internet and telephone access to technical support personnel. In addition, its hardware systems products consist of computer server and hardware-related software, including the Oracle Solaris Operating System; and storage products, such as tape, disk and networking solutions for open systems and mainframe server environments. Its hardware systems support solutions include software updates for the software components. Further, the company offers consulting solutions in business and IT strategy alignment, enterprise architecture planning and design, initial product implementation and integration, and ongoing product enhancements and upgrades; cloud services, including Oracle Cloud Services and Advanced Customer Services; and education solutions comprising instructor-led, media-based, and Internet-based training in the use of its software and hardware products. The company was founded in 1977 and is headquartered in Redwood Ci ty, California.

Advisors' Opinion:

• [By Anders Bylund]

  This week, Oracle (NYSE: ORCL  ) found and patched a huge amount of security holes in its Java plugin for Web browsers. While it's never a bad idea to plug security holes, the update comes after a well-documented spree of Java hacks.

• [By Jeff Reeves]

  To be clear, it�� not just IBM swimming upstream right now. Enterprise spending has been tough for everyone from Accenture (ACN) to Oracle (ORCL), and the current government shutdown and looming debt ceiling debacle aren�� making businesses any more eager to spend big in Q4.

• [By Keith Speights]

  Quality Software Services, which is owned by UnitedHealth Group (NYSE: UNH  ) , was the contractor to which Campbell alluded. However, a key link in the component that Quality Software Services developed came from Oracle (NYSE: ORCL  ) . Early finger-pointing suggested that the Oracle Identity Manager was a cause of the major technical problems. That prompted Oracle to strongly deny that its software wasn't working.

Top 10 Tech Companies To Own For 2015: Loral Space and Communications Inc.(LORL)

Loral Space & Communications Inc. operates as a satellite communications company. The company?s Satellite Manufacturing segment designs and manufactures satellites, space systems, and components used for fixed satellite services, direct-to-home (DTH) broadcasting, mobile satellite services, broadband data distribution, wireless telephony, digital radio, digital mobile broadcasting, military communications, weather monitoring, and air traffic management applications in commercial and government sectors. Loral Space & Communications Inc.?s Satellite Services segment provides broadcast, enterprise, and consulting services. This segment owns and leases a satellite fleet that provides high-bandwidth services to broadcasters, cable networks, and DTH service providers. It also offers satellite transmission services for the broadcast of news, sports, and live events coverage enabling broadcasters to conduct on-the-scene transmissions. In addition, this segment operates very smal l aperture terminal (VSAT) networks in North America, and manages various VSAT terminals at customer sites, as well as provides the installation and maintenance of the end user terminal, the VSAT hub, and satellite capacity services. Further, it offers Internet protocol-based terrestrial extension services; Ka-band two-way broadband Internet services; satellite capacity and end-to-end services for data and voice transmission to telecommunications carriers; fixed satellite services to the United States and Canadian governments; and satellite consulting services. The company also owns and operates an X-band satellite, which provides X-band communications services to government users. As of December 31, 2011, it had 12 in-orbit satellites and 2 satellites under construction. The company operates in the United States, Canada, Europe, the Middle East, Africa, Asia, Australia, Latin America, and Caribbean. Loral Space & Communications Inc. was founded in 1996 and is headquartered in New York, New York.

Frontline: Small-Cap Standout

Small-cap stocks may have outperformed their mid- and larger-cap peers on a year-over-year basis, yet opportunities within the sector can often go overlooked by investors for bigger-name plays; observes Karee Venema of Schaeffer Investment Research.

One equity that falls under the small-cap umbrella, and looks poised to benefit from a contrarian boon is shipping concern Frontline Ltd. (FRO).

Shares of Frontline have more than doubled in value since hitting a decade-plus low of $1.71 last May. In fact, the stock tagged a new annual high of $5.18 in early January.

The equity entered a brief period of consolidation after notching this notable mark, but the pullback was contained by its 50-day moving average—a trendline that served as support last September.

Not everyone on the Street has bought into FRO's momentum, though, which could translate into a contrarian boost down the road.

For starters, not one of the five covering analysts deems the stock worthy of a "buy" or better rating. Plus, the average 12-month price target of $1.78 stands at a steep discount to the equity's current perch.

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The stock could see some fuel added to its fire, should any of these skeptics follow in the footsteps of Jefferies, which raised its price target for the stock.

Elsewhere, despite short interest falling 4.1% in the last two reporting periods, it still accounts for one-fifth of the security's available float.

If FRO maintains its upward trajectory, a continued capitulation by short sellers could create some additional buying power for the stock.

On the fundamental front, Frontline is slated to unveil its fourth-quarter earnings report on Friday, February 28. Following its last turn in the earnings confessional in November, the equity tacked on nearly 10% in the subsequent session.

Subscribe to Schaeffer Investment Research here…

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BNP Paribas hit by $1.1 billion legal provision

PARIS—BNP Paribas SA Thursday announced an unexpected slump in fourth-quarter profit after it set aside a $1.1 billion provision against possible penalties for allegedly violating U.S. laws that restrict financial transactions with countries under economic sanctions.

The Paris-based lender said that during an internal probe conducted by the bank over the past few years it had found "a significant volume of transactions that could be considered impermissible under U.S. laws and regulations including, in particular, those of the Office of Foreign Assets Control."

The surprise provision pushed fourth-quarter net profit down 76% to €127 million ($172.8 million) from €519 million a year earlier, well short of analyst forecasts putting the figure at €959 million.

"The bank has presented the findings of this review to U.S. authorities and commenced subsequent discussions with them," the bank said.

Bloomberg

The amount of the potential fines has, however, not yet been discussed with U.S. authorities, it said, and could be "different, possibly very different, from the amount of the provision." The timing too, is "uncertain," the bank said.

BNP Paribas is one of several banks that over the past year have disclosed talks with regulators about potential sanctions breaches. Many such investigations have involved alleged violations of U.S. sanctions on Iran, where the U.S. government has for decades restricted financial transactions.

U.K.-based Standard Chartered PLC agreed in December 2012 to pay $327 million in penalties for alleged violations of U.S. sanctions against Iran, Libya and other nations.

The French bank didn't say which countries these potential breaches involved.

As with many other lenders in Europe, muted economic growth and rising legal costs due to greater oversight by regulators have squeezed BNP Paribas's profit.

The bank plans to give further details Thursday of a new strategy aimed at lifting its return on equity to above 10% in 2016 from 7.7% in 2013.

An extended version of this story can be found in The Wall Street Journal.

Gilead Going to $90, or $110

Gilead Sciences Inc. (NASDAQ: GILD) is rising on Monday after two analysts made positive calls on the biotech giant. As a reminder, Gilead is now the world’s largest pure-play biotech as the market cap is closing in on $125 billion.

Positive calls were seen from both Credit Suisse and from Argus on Monday. Credit Suisse was more positive with a $100 price target versus $90 from Argus. Both firms have the equivalent of Buy ratings in Gilead – Outperform at Credit Suisse and Buy at Argus.

Argus raised the price target to $90 from $84 in the call. That represents 27-times its own 2014 earnings estimate, and reflects expectations for revenue and earnings growth from Atripla, Truvada, and Stribild. Argus called it a compelling growth story and said,

Gilead delivered strong sales growth in 4Q13, reported on February 4. In addition to sales from existing antiviral and cardiovascular drugs, Gilead's top line benefited from the launch of Sovaldi, its hepatitis C drug, which generated sales of $136 million in December. In issuing guidance for 2014, Gilead notably excluded any sales from Sovaldi, even though it has been approved in the U.S., Canada and Europe. It expects 2014 sales from core products, excluding Sovaldi, of $11.3-$11.5 billion, an increase of 6%-8% from 2013. It also projects a product gross margin of 75%-77%.

We are raising our 2014 EPS estimate to $3.35 from $3.25, and establishing a 2015 estimate of $5.10. Our revised earnings model includes contributions from Sovaldi and Idelalisib as well as ongoing growth from core pharmaceutical products. We also note the favorable impact from Sovaldi sales on Gilead's gross margin and tax rate.

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Credit Suisse based its target price on 19.5-times its 2015 earnings estimate and a 40% premium to the S&P 500 Index. Three take-home factors include the following:

(1) Whilst this survey suggested a higher patient share for ABBV’s/ENTA’s combination (20-30%/30-40% treatment naïve/experienced – vs. consensus which is ca15%) (2)…it also pointed to significant warehousing and concomitant patient tracking, which is likely to result in a market-wide faster and larger patient treatment ramp upon the launch of all-oral, interferon-free regimens in the second half of 2014; (3) On pricing, we still consider a ca$100k/ treatment course gross price as obtainable in the US for the initial all-oral, interferon-free regimens; our survey work did highlight the market share sensitivity to pricing. We are still focused on both near term and longer term pricing.

Credit Suisse also put its 2014 to 2018 Hepatitis C vaccine franchise sales higher at $3.9 billion in 2014; $7.9 billion in 2015; $10.4 billion in 2016; $11.3 billion in 2017; and $11.6 billion in 2018.

We wanted to see what the different takes were here because the consensus Gilead price target was up at $99.50. Both of these reports were positive but one was way above the consensus and one is below the consensus. Gilead shares were up almost 3% at $81.00 in the final hour of trading versus a 52-week range of $40.16 to $84.40.

Biglari Considers “Quixotic” Bid for Cracker Barrel, Ducks and All

Three times Sandar Biglari has tried to get on Cracker Barrel’s (CBRL) board, and three times he’s been rebuffed. Now, he’s trying to buy the company.

The Tennessean has the details on Biglari’s latest maneuver for Cracker Barrel:

In the letter dated Dec. 24, Biglari continued to push for a sale of the restaurant company, saying he is willing to buy it himself. However, under Tennessee law, Biglari — who owns nearly 20 percent of the company's shares — is prohibited from making a bid.

"As you are well aware, Tennessee law currently restricts our ability to engage in such a transaction," the letter said. "Thus, we request that the Board support our efforts to seek an amendment to the state law that would give all shareholders the ability to decide the future of their Company."

To help drive home the point, he questioned the chain's handling of the controversy over "Duck Dynasty."

Biglari continues to argue that current management is not creating enough value for shareholders.

Miller Tabak’s Stephen Anderson calls Biglari’s pursuit of Cracker Barrel “quixotic.” He writes:

It is not unheard of for a smaller company in the restaurant space to acquire a larger peer, as evidenced by IHOP’s purchase of the much larger Applebee’s in 2007; the combined entity became DineEquity (DIN), and the deal was financed by a mix of debt (which [DineEquity] still is paying off) and proceeds from the sale of company-owned Applebee’s to franchisees. However, we view BH’s cash flow generation as not sufficient to cover any potential [Cracker Barrel] acquisition, and think Board members will scoff at the idea of selling off highly profitable company-owned sites to franchisees.

Shares of Cracker Barrel have gained 0.9% to $113.29 and Biglari Holdings (BH), Sandar Biglari’s holding company, has fallen 0.4% to $516.96, on a day when DineEquity has advanced 1% to $85.03, Red Robin Gourmet Burgers (RRGB) has risen 0.5% to $76.64 and Denny’s (DENN) is up 0.7% at $7.45.

Dividend Stocks Doing Fine But Utilities Looking Dim

Excerpted from the Dec. 13 Top 25 issue of Forbes Dividend Investor.

On Friday, December 6, stocks cheered the strong November jobs report and the major equity indexes rallied to new highs, but then hit a four-day skid going into last Friday.  A strong catalyst for the profit taking: the two-day Federal Open Market Committee policy meeting on Tuesday and Wednesday.

The fear is that the raft of upbeat economic data will prompt the Fed to slow its current pace of $85 billion in monthly purchases of long-term U.S. Treasury bonds and agency-backed mortgage securities, putting upward pressure on interest rates, which have already moved sharply in the past 17 months. The yield on the 10-year U.S. Treasury note has more than doubled to 2.87% from 1.40% in July 2012—and it's up from 1.6% just since May 1 of this year.

Higher rates have certainly been toxic for longer maturity bonds.  Since May 1, the iShares Barclays 20+ Year Treasury Bond (TLT) ETF is down -15.3%. Stocks have been a good place to be, with the S&P 500 up 13.7%, but not all equities, especially dividend stocks, have handled higher rates with aplomb.

Tough Time For REITs & Utilities

The chart below shows performance of ETFs representing different segments of the stock market since interest took flight in early May. Note that DJ Select Dividend (DVY) has lagged the SPDR S&P 500 (SPY). That's because you'll find a lot of utility stocks in the DVY. Utilities—tracked by the XLU—tend to get treated like bonds because they usually offer income with a miniscule growth component.

For REITs, it's been ugly.  The Cohen & Steers Realty Majors (ICF) is down 14% and the mortgage REITs in the REM have been hammered nearly 20% lower as rates have moved higher.

It's important to note that not everything with a fat yield has a hard time with higher interest rates.  The Alerian MLP Index (AMLP) is up better than 2% in price since May 1, while business development companies, tracked by BIZD, are up 6.7%.

In the Forbes Dividend Investor Top 25 new money buys, you'll find two BDCs, THL Credit (TCRD) and Prospect Capital (PSEC), yielding 8% and 12%, respectively.  Three diverse MLPs are also recommended again this week: Hi-Crush Partners (HCLP), Susser Petroleum (SUSP) and AllianceBernstein (AB), an investment management partnership.

Note, too, that regional banks in the KRE have been stellar performers. Among the peewees of the financial sector looking good now are Ames National (ATLO) and Oritani Financial (ORIT).

Top Oil Stocks To Watch Right Now

Since July 11, 2012, our 234 recommendations of dividend-paying stocks and subsequent sell recommendations have produced a total return of 24.1% with a 5.7% average yield at time of purchase.  If you had instead bought and sold the SPDR S&P 500 (SPY) at each of the same times, you would have earned 19.2% total return with an average yield of 1.94%.

Below is the Top 25, ranked by score on our model.  Other recommendations may also be suitable for fresh buying, but these 25 stocks rank highest along the criteria by which they were originally chosen. The three columns on the far right show each stock's percentage discount from five-year average multiples on ratios of price to sales, book value and earnings. The average yield of these stocks is 5.0%. –JD

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For the complete Top 25 and new dividend stock recommendations every Monday and Wednesday, click here for a special offer from Forbes Dividend Investor.

Market Comeback Fails: It’s Never Enough

The bad news: Major stock indexes finished lower today. The good news: The damage was not as bad as it could have been, as Walt Disney (DIS), International Business Machines (IBM), 3M (MMM), Walgreen (WAG) and Genworth Financial (GNW) rose.

Bloomberg

The S&P 500 fell 0.2% to 1,751.64 today after falling by as much as 1% earlier in the day. The Dow Jones Industrial Average, meanwhile, finished little changed at 15,440.23 after falling by as much as 0.7%.

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Instinet’s Frank N. Cappelleri assesses the half empty/half full trading day:

…it was good seeing 1740 hold, but I would have like to have seen yesterday’s high broken on this afternoon’s strength, as well…The more times the market fails at leveraging this oversold condition, the higher the likelihood that this current pattern turns into another bearish flag formation, in my opinion. We’ll just have to see of the bulls can follow through on the demand that did appear today.

U.S. Bank Wealth Management’s Terry Sandven isn’t worried by the market’s recent weakness:

In our view, equities seem likely to continue to trend higher in 2014, but at a more moderate pace compared to 2013. Following the recent price decline, the risk/reward profile has arguably improved. The extent to which the extreme cold weather conditions have negatively impacted the economy near term is not likely to be determined until after another round of readings are released between now and early March. This may imply a generally sideways-trending market in February as investors maintain a wait-and-see approach.

Shares of Walt Disney rose 1% to $71.76 ahead of this evenings results (it beat), while International Business Machines gained 0.8% to $174.24 and 3M advanced 0.5% to $127.36 after announcing a new plan to buy back its stock. Walgreen gained 3.4% to $57.85 after its same-store sales rose 2.9%, beating analyst forecasts, while Genworth Financial advanced 2.8% to $14.93 after beating earnings.

Finra moves to allow arbitrators call for enforcement midcase

A hotly debated rule change that the Financial Industry Regulatory Authority Inc. has proposed to the Securities and Exchange Commission could allow arbitrators to direct cases to Finra's enforcement division before the case has closed.

Currently, arbitrators must wait until the case has concluded before they can report concerns to Finra's Department of Enforcement, which is responsible for suspending, sanctioning or taking other disciplinary action against firms and individuals.

But Finra said that making arbitrators wait could delay the ability to take action against a bad actor or hamper its ability to collect evidence.

“Finra is concerned that the current rule's requirement that arbitrators in all instances must wait until a case is concluded before making a referral could hamper Finra's efforts to uncover threats to investors as early as possible,” according to the proposed rule change. “Finra is proposing, therefore, to broaden the arbitrators' authority under the Codes to make referrals during the hearing phase of an arbitration in those extremely rare circumstanc