In an article I wrote recently, I made the argument that in contrast to what the media and analysts have been opining, the stock market has not been increasing at a 36% annualized rate since November because of good and improving economic data and earnings, but more likely as a result of continued accommodation from the Federal Reserve bank.

Most pundits, even the cautious ones, will argue that as long as the Federal Reserve remains accommodative, interest rates will remain at record lows and stocks will climb to historical highs. In other words, you win no matter what, all you have to do is play. Can that be right? Unlikely.

In 1975, Milton Friedman wrote a book entitled "There's No Such Thing As A Free Lunch". Considering the current Federal Reserve runs monetary policy out of an economics 101 textbook, you might think that the voting members would have

It is hard to turn away from the financial news cycle. Of late, the purveyors of news and commentary have quieted discussions regarding how Quantitative Easing could be the culprit of higher stock prices and instead are going public with the narrative that stock prices are going higher because the economic data are good and getting so much better. Below are a sprinkling of data points that highlight why I am skeptical of this new found view.

Skeptical that the economy is strong and strengthening and skeptical that the parabolic move in stock indexes since the end of November is grounded in reality at all. Since hitting a low of 1,343 on November 16, 2012, the S&P 500 (SPY) has rallied greater than 15% while the Russell 2000 (IWM) has rallied 23% in the same period.

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Looking at the new homebuilding numbers below, you can see that

Long-term investors are familiar with the chart below and the story that goes with it, but for those that are not familiar, I will go into a brief explanation. From the time Quest Diagnostics (DGX) went public in 1996 to 2006, investors were rewarded with a compound annual gain of 33%. These gains were largely the result of a string of acquisitions and the successful integration of said acquisitions. For the past seven years, the stock has been completely flat, logging a performance similar to the S&P 500. So what happened to the extraordinary growth the company's stock price had been experiencing?

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The table below illustrates the difference in effect that acquisitions had over the past six years when compared to the ten years prior to that. Even though the company spent 65% more on acquisitions in the more recent period, its sales growth was a small

Since I wrote last summer that Enzo Biochem (ENZ) made an attractive investment opportunity in light of recent M&A in the space, the stock is up 35%, respectable, but not what I had in mind.

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Since then, the company has reported four quarters of results. While the clinical lab business, which I called out as their most attractive asset, has performed alright, the products business has declined in every consecutive quarter.

Starting with the clinical lab, sales in 3 of the past 4 quarters have been encouraging. In the latest quarter reported, the company's results suffered from the effects of Hurricane Sandy, however, even excluding the hurricane, it appears revenues would have declined slightly year over year. Additionally, gross margins in the clinical lab business have been slowly deteriorating since hitting a recent high in the fourth quarter of their fiscal 2011 year. Management stated on

On November 21st of last year, I wrote an article articulating why I thought that Best Buy (BBY) was no J.C. Penney (JCP). What I thought then, and still believe, is that new management at Best Buy had a sound strategy in place to win back business. At its investor day last November, the company explained that it was investing in its associates to help better educate and engage their customers. Additionally, the company announced a price matching policy that ended up becoming more permanent after proving successful over the holidays. My contention then, and it is now, that if consumers know they can get the best price by shopping at a store near them, why would they bother going online to look for the best price?

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I think there have been three primary catalysts that have catapulted shares of Best Buy:

• Domestic Same

Over the past 18 months, when shares of Albany Molecular (AMRI) were at $2.50, I wrote two articles articulating that the company was priced for liquidation, when in reality, there was significant value remaining in the company.

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For those investors not familiar with the story, Albany Molecular is a contract manufacturer for the pharmaceutical and biotechnology industries. Heading into the recession, the company was growing consistently, however, when the credit bubble burst in 2008, a lot of companies pulled back funding for their early stage projects, which left Albany Molecular with less revenue and excess capacity.

Contract Revenue (In $ Millions)

In addition to a difficult end market, the company invested its cash on hand in a couple of acquisitions that did not work out. While the acquisitions were supposed to be accretive to the company, one of the acquired companies lost a major customer

In November of 2011, I wrote an article arguing that as a result of the significant cash on their balance sheets and the amount of money spent on competing against one another, companies in the aesthetic laser light industry should merge. Today's merger of two of the largest players in the industry, Cynosure (CYNO) and Palomar Medical Technologies (PMTI), was the merger I had in mind, though I did not state as much as it would have been pure speculation. For the remainder of the article, I will refer to the combined company as "NewCo".

The combination of Cynosure and Palomar represents a combination of two of the best managed companies in the industry. In addition to the merger creating significant opportunities for the company to grow further, the valuation is reasonable when compared to Med-Tech peers.

To begin, both companies are based in the same town of Waltham,

Judging from the charts below, Digirad (DRAD), has done a fine job of disappointing investors since its IPO in 2004. In addition to a dismal performance in the stock market, the company has seen its book value and sales decline substantially. However, shares may finally be bottoming for the company.

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Digirad is one of the leaders in solid state and nuclear screening equipment and services in the United States. Since the last recession, the company's service business has held up better than its product business, as major purchasers of the company's equipment pulled back on capital equipment purchases. Also, reimbursement from Medicare to run scans for the company's customers has declined significantly in recent years, resulting in a price decline for Digirad.

All of the company's cardiac gamma cameras employ single proton emission computed tomography (SPECT). While the company's technology has been widely used

By most accounts, Best Buy (BBY) has experienced many challenges in its business over the past 24 months. Among them are increased competition from Amazon.com (AMZN) and others, a decrease in the average size of televisions purchased and a shift away from notebooks (where the company had experienced much success in the past) and towards tablets. As a result of these conditions, the company's results have deteriorated and investors are calling into question the viability of the company's business model. I am more constructive on the company and its prospects going forward.

Intense competition is nothing new in the retail space. J.C. Penney (JCP) is an important example of how competition left unattended can cause serious damage. The company's sales peaked back in 2008 and now the company struggles to hold on to profitability. Conversely, sales at competitors' Kohl's (KSS) and The TJX Companies (TJX) have increased 10% and 25%,

While a majority of clinical lab work is still done overnight at hospitals and independent laboratories including Quest Diagnostics (DGX) and Laboratory Corporation of America (LH), over the past five years, there has been an increasing move to be able to test the patient on site in areas such as cardiac and infectious disease.

While the traditional market for clinical tests has grown at less than 2% per annum since 2007, the cardiac point of care market has doubled. The number one complaint that people have upon entering the emergency room is chest pain. While Electrocardiogram has been one of the historical methods used to determine whether or not an emergency is present, there have been an increasing number of tests that are more sensitive and specific to whether or not a person is at serious risk for a near term heart event, the most significant of which is to

Since the company's initial public offering, CardioNet (BEAT) has done a consistent job of disappointing investors, with shares off their 2008 highs more than 90%. While cardiologists appear to utilize the company's technology and find value in it, there has been debate among insurance companies over whether or not to cover it and at what price. Additionally, fewer doctors visits since the great recession began in 2008 have led to lower utilization. On a corporate level, the company has been distracted with shareholder lawsuits and management turnover. However, over the past two years, the company has settled those suits and should be complete with management turnover. Importantly, CardioNet spent $40 million in purchasing three companies in its core competency of monitoring over the past two years.

As revenues have been declining since 2009 the company implemented $7 million of cost savings initiatives that, when combined with synergies from the recent

Over the past ten months, I've written several articles suggesting that home health companies were trading at extremely low valuation levels and that investors should consider looking at them. Since then, while most of the names are up 20% on average, Gentiva (GTIV) is up an exceptional 175%. In the past 30 days alone Gentiva has doubled. Most of this move can be attributed to the company's earnings release on August 2nd.

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On August 2nd, Gentiva announced that they made $0.35 per share for the quarter on an adjusted basis and maintained its full year EPS guidance of $1.00-$1.20 per share for 2012. The second quarter was the first quarter to truly show the success of the company's efforts to cut costs. As can be seen in the chart below, gross margin returned to its highest level in over a year while the company posted its lowest

It may seem appealing to purchase shares of a company that are trading at $4 that once traded that once traded at $50, but resist the temptation. Based on Supervalu's (SVU) most recent quarterly report, investors need to remain on the sidelines until signs of optimism appear. Here are the reasons why.

• While shares might appear inexpensive on a price/free cash flow basis, they are not cheap on an enterprise value/cash flow. If the company continues its current earnings trajectory for the remainder of the year, shares trade at about 15x EV/ Free cash flow. That is far from a deal for a company who has not seen a year over year increase in sales for more than three years.

• In the company's most recent quarterly earnings release, one of the highlights includes accelerating price investments, which is another way to say that they are lowering prices. Whenever

In an article I wrote earlier in the month, I pointed out that short sellers were taking significant risk in being bearish at the time. The most important factor cited was the significant accumulation of shares from a couple of unrelated parties. An additional filing was issued last week showing greater purchases by these entities. At first blush, investors have seen this factor as a big positive. Not only does it show that one or more institutional holders have significant confidence in their China Medical (CMEDY) holdings, but the sheer accumulation of shares by these holders has sent shares higher.

On further examination, the continued accumulation of shares by these interests does pose risks. As most investors know, any time an investor(s) has greater than 50% control of voting stock, the biggest risk is that a limited number of entities have voting power over the entire company. This includes

Since the federal reserve began quantitative easing in 2009, every time the economic data in the U.S. pulls back, so do stocks. It is about that time that rumors are circulated and created, by investors and federal reserve officials, that more quantitative easing is on the way. As these rumors circulate, high beta stocks take off in anticipation of greater returns in the stock market. In the chart below, you can see the effect of the first program in March 2009, with a 100% gain from the bottom in the S&P 500 (SPY), 2010 brought a 30% gain from the bottom and 2011-2012 also brought a 30% gain from the bottom.

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While the effect of quantitative easing on the stock market is simple to understand, investors should not assume that there is an indefinite relationship between when the federal reserve decides to ease and when stocks go

Some of the most important tools an active investor has are being confident that you have all of the relevant facts and that you have objectively analyzed all of the information that you could find. This is true whether an investor is considering taking a long or short position.

When it comes to China Medical Technologies (CMEDY), a handful of articles have been written on SeekingAlpha since the company's shares were halted and subsequently delisted. Of them, three were positive, two were negative and one (written by myself) was neutral. The positive articles have been focused on the fact that there has been significant volume in the company's shares which have sent them up from $0.60 when trading resumed in shares to greater than $5.00 today. Also mentioned was the fact that China Medical's auditor should be considered reputable based on its audit history. In addition, the author believes that

Stocks in the home health care sector are down greater than 50% on average from their summer 2011 peak. Since then, there have been peaks and troughs that have sent these stocks up and down 30% within a short period of time. The sector has gone through a senate finance committee investigation and subsequent report, a 2%-4% rate cut for 2012 and the expectation that rate cuts in this industry should be expected as par for the course for the foreseeable future.

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With that being said, most of the home health companies were able to manage the rate cuts in the first full quarter with a decline in reimbursement. Although earnings were down across the board, cost cutting measures mitigated what otherwise could have been disastrous results. For the most part, cost cutting to date has included closing unprofitable branches, reducing layers of management and administration and

In an article published on February 16th , I wrote that for a number of reasons, investors were likely better off staying away from the big two labs, namely, Quest Diagnostics (DGX) and Labcorp (LH). Instead I recommended investors take a look at two of the three remaining publicly traded clinical labs at the time, Medtox (MTOX) and Enzo (ENZ). My reasoning at the time was that while Quest and Labcorp were struggling to see organic volume growth, Enzo and Medtox had seen double digit growth over the past few years.

On Monday, Labcorp announced the purchase of Medtox for $27 per share or $241 million. On a trailing twelve month basis, the purchase price equates to 2.2x sales, 47x EPS and 27x free cash flow. At first blush, this looks like a pretty expensive acquisition, however, when looked at more critcally, investors can see why Labcorp was willing

In November of last year, I wrote about the prospects for shares of Albany Molecular (AMRI) given that the stock was down 50% year to date and the company initiated actions to turn its operations around. Nearly seven months later, the stock is flat vs. a 5% rise in the S&P 500 (SPY). Sine then, however, there has been a host of good news that should, eventually, provide catalyst for the stock to move higher.

The company reported earnings on May 9. In fact, it's the first time since the first quarter of 2010 that investors actually saw earnings in the quarterly report. This was largely due to the company's efforts to right size its capacity in the face of the realization that management can't be sure when the industry will start to turn around strongly enough to justify the excess capacity. Additionally, the company stopped its active

On Monday morning, the Anderson family, majority shareholders of Books A Million (BAMM) , made a takeover offer for the 47% of shares it does not currently own for $3.05 per share in cash, representing a 13% premium over the average stock price the past 90 days and a 35% discount to the 52 week high. After topping out at $3.27 the day of the merger, shares have settled at the offer price of $3.05.

The fortunes of Books A Million have been in question for at least the past two years as consumers are increasingly purchasing their books online and in electronic format on sites such as Amazon.com (AMZN) and BarnesandNoble.com (BKS). Accordingly, sales have declined every year since 2008, and with it, the company's profitability.

Books A Million Sales, in $ Millions

The bankruptcy of Borders last year completely changed the book retailing landscape. Initially, the clearance sales