The following are the most important contract announcements for the week of July 9th till July 13nd.

Boeing (BA) the aerospace company producing commercial airplanes and defense systems announced that it received a $14.7 billion order from United Continental Holdings (UAL) for 150 narrow-body 737 aircrafts. Deliveries will be made between 2013 and 2022. The 737 MAX 9 version will achieve fuel emission reductions of an estimated 13% compared to the current version. The order was announced at the UK Farnborough air show last week. Typically the headline figure overestimates the actual value of the order as airliners get discounts compared to catalogue prices. The order which stretches over a 10-year period compares to Boeing's 2011 annual revenues of almost $69 billion. Shares of Boeing ended the week flat.

Noble Corporation (NE) the offshore drilling contractor for the oil and gas industry announced that it signed a drilling contract with Anadarko Petroleum Corporation (APC) for a new ultra-deepwater drillship. The drillship is currently under construction in South Korea and is expected to be operational by 2013 when it will be used in the Gulf of Mexico. The three year deal is likely to generate $677 million in revenues and includes provisions for higher operating costs. The three year deal represents roughly a quarter of Noble's annual revenues of $2.7 billion. Investors react positively on the news of the announcement, sending shares 4% higher which marks year to date returns of 14%.

Babcock & Wilcox (BWC) the technology innovator in power generation systems announced that its subsidiary Babcock & Wilcox Nuclear Operations Group received three US Naval Reactors contracts totaling approximately $73 million. Babcock will provide "technology development and nuclear manufacturing in support of US Navy training operations and other naval nuclear-related programs." The program represents roughly 2.5% of the company's 2011 annual revenues of $2.9 billion. Despite the nice contract, shares of Babcock fell 2% over the last week, marking year to date returns of 3%.

United Technologies (UTX) the provider of high technology products for building systems and aerospace industries announced that its subsidiary Sikorsky Aircraft received a new five year contract from the US army. The new contract valued at $8.5 billion provides the baseline for 653 Black Hawk and Seahawk helicopters through December 2017. Under the contract the government has an option to order 263 more aircraft, which could possibly expand the order value to $11.7 billion. The five year contract represents roughly 15% of United Technologies 2011 annual revenues of $58.2 billion. Shares of United Technologies hardly reacted on the news, trading flat so far in 2012.

Sterling Construction (STRL) the heavy civil construction company announced that the company was awarded the US 380 Project with a bid of $39 million. The company will start working on the project on March 2013 and it will construct five bridges for the project in the coming 36 months. The project represents roughly 8% of Sterling Construction's 2011 annual revenues of $501 million. Investors were modestly enthusiastic about the announcement of the project sending shares 2% higher over the week.

Harris Corporation (HRS) the international communications and information technology company focused on governmental customers announced that it has been selected by the Department of State Bureau of Consular Affair's Development to work on its IT-systems. The one-year contract which includes four one-year options has a total ceiling value of $750 million. Harris will provide, maintain and modernize the IT of the Department. The contract represents roughly 13% of Harris' 2011 annual revenues. Shares in Harris fell 3% this week despite the sizable contract announcement, marking year to date gains of 13%.

VeriFone Systems (PAY) the provider of electronic payment solutions announced that it was awarded a five year contract to place payment systems in Washington D.C. cabs. The five year contract is worth between $35 and $45 million and will provide GPS location services and automated trip reporting on little tablets within 6,500 cabs. The contract represents roughly 3% of Verifone's 2011s annual revenues of $1.3 billion. Shares of VeriFone ended the week 12% higher on the back of the modest size contract.

Bristow Group (BRS) the provider of helicopter services to the offshore energy industry announced that it has secured a new $2 billion contract with Norway. Under the multi-year contract it will supply S-92 and EC225 helicopters which will support Norway's growing oil production in the North Sea. The multi-year contract approximates one and a halve times Bristow's annual revenues of $1.3 billion and send shares more than 5% higher over the last week. Year to date shares in Bristow have fallen 8% after the company was forced to lower its full year earnings guidance.

Level-3 (LLL) a prime contractor in command, control, communication and intelligence systems announced that the company was awarded a contract by the US Special Operations Command. Under the five-year $500 million contract, Level-3 will "provide tactically deployed Special Operations Forces (SOF) users with worldwide communications connectivity." The value of the five year contract represent roughly 3.3% of Level-3's annual revenue of $15.2 billion. Shares of Level-3 ended the week roughly flat, trading up 8% so far this year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

While consumers and governments across the world are strapped for cash, corporations have plenty. Rather than signal long-term trust and pay more generous long-term oriented dividends, many of them have adopted share repurchases to buy back their own stock. Investors welcome these announcements, as they boost earnings per share and provide a lot of support for the share price during the repurchase periods.

Kingold Jewelry (KGJI) the designer and manufacturer of gold jewelry in China has announced a $10 million share repurchase program. The program is sufficient to retire approximately 12.5% of Kingold's shares outstanding. Kingold will finance the plan with its current cash balances. CEO Hi Hong Jia commented on the share repurchase: "The company recently contemplated a secondary offering to help accelerate our growth, but given the decrease in our share price after the announcement of the offering, our management and Board determined that this was not in the best interest of the company or its shareholders." Shares have returned 33% year to date, trading Friday at $1.52 per share. Shares peaked around $2.50 in May and June, but given up 40% in recent weeks.

Acme Packet (APKT) the provider of session delivery network solutions announced a $200 million share repurchase program. The program is sufficient to retire approximately 18.0% of Acme's shares outstanding. The company is taking advantage of a significant decline in its share price. Shares which traded as high as $80 per share in April 2011 have fallen 80% ever since to $16 per share. Shares of Acme rose 3% after the announcement this week, as the buyback signals trust of management in the business. The company ended its first quarter with $376 million in cash and equivalents and operates without any debt.

Group 1 Automotive (GPI) the operator of automotive dealerships and collision centers announced a $50 million share repurchase program. The program is sufficient to retire 4.4% of Group 1's outstanding shares. The new program will replace any amount remaining under the current authorization and by June the 30th. Operating cash flows from Group 1's operations will provide the necessary funds for the repurchases and the company expects to hold the shares in Treasury, rather than cancel them. As such they remain readily available for sale again, if deemed necessary. So far in 2012 shares have traded within the $45-$60 trading range marking year to date losses of 4%.

During the last holiday week, repurchase activity dropped to very low levels, as many corporations did not schedule any announcements for the week. Total announced deal size came in just at $250 million, making it a rather inactive week in terms of buyback activity.

Cash-rich companies still refuse to significantly raise long-term dividends. Rather, they use one-time repurchase agreements with far less signaling power as a dispersion tool of excess cash to their shareholders

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Thomson Reuters (TRI) the provider of information for businesses and professionals announced the acquisition of FXall (FX) for $22 per share, or $625 million in total. FXall is a leading independent global provider of electronic foreign exchange trading solutions for some 1,300 businesses and asset managers. FXall's Chairman Weisberg and its CFO Cooley which combined hold 32.5% of the company's shares have already agreed to tender their shares. Both firms hope that the combination of their activities will provide its customers with its services throughout the lifecycle of trades. The $22 bid per share represents a 40% premium compared to the close on the day before the announcement, marking year to date gains of 62%. FXall generates $118 million in annual revenues on which it earns $12 million per year. The acquisition which is expected to close in the third quarter of this year, will add merely 1% to Thomson Reuters' $13.8 billion in annual revenues. Shares of Thomson Reuters rose 2% this week, marking year to date gains of 8%.

WellPoint (WLP) the health care insurer announced the acquisition of Amerigroup Corporation (AGP) in a deal valuing the company at $4.9 billion. WellPoint is offering $92 per share for the company, a premium of roughly 42% compared to the day before the announcement. The combination will provide Medicaid to 4.5 million members, making it the largest Medicaid provider of the country. WellPoint, known from its Blue Shield coverage program, decided to make a knock-out offer for the company to avoid a bidding war. WellPoint expects the deal to be accretive to 2013's earnings and add over $1 per share to 2015's earnings. Analysts already predicted a consolidation wave after "Obamacare" survived in the Supreme Court a couple of weeks ago. The acquisition of Amerigroup which generates $6.3 billion in annual revenues will result in pro-forma revenues of $67 billion for the combination. Investors react positively and shares of WellPoint rose 3.5% on the day of the announcement on Monday.

Campbell Soup (CPB) the manufacturer of convenience foods announced the acquisition of Bolthouse Farms for $1.55 billion in an all-cash transaction. The company which holds leading positions in the markets for fresh carrots, salad dressings and premium beverages is currently owned by Madison Dearborn Partners LLC. The acquisition of Bolthouse Farms creates a $1.2 billion platform in healthy beverages when combined with Campbell's "V8" beverages. Bolthouse generated annual revenues of $689 million on which it reported adjusted EBIT of $92 million. In comparison, Campbell Soup generated annual revenues of $7.7 billion for 2011, on which it net earned $805 million.

The deal which values Bolthouse at 2.2 times annual revenues will be funded by short and long term borrowings and is expected to close by the end of the summer. Campbell expects that the acquisition increases 2013's annual earnings per share by $0.05-$0.07, excluding transaction costs. Shares of Campbell Soup hardly reacted on the news with shares trading roughly flat for the week and the year.

Last week was a reasonably active week in terms of active levels and deal size. The total announced deal size in the sample above came in around $7 billion. Merely 3 large acquisition have been announced, including some larger deals.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Allegiant Travel Company

Deutsche Bank raised its advice for Allegiant Travel Company (ALGT) from hold to buy with a $90 price target. Analysts see some 25% upside for shares in the leisure travel company. Analysts at Deutsche Bank note, "the past 18 months has been a period of transition for Allegiant Travel as it introduced a new aircraft type, gained ETOPS approval, commenced service to Hawaii, and increased its MD-80 seating density. We expect margin expansion through 2012 and into 2013." Deutsche Bank raised its 2013 earnings per share estimate from $4.00 to $5.00 and applies a 18 times earnings multiple to its forecast. Shares of Allegiant Travel Company rose 4% last week on the back of the upgrade from Deutsche Bank, marking year to date gains of 38%.

Equinix

Deutsche Bank initiated its advice for Equinix (EQIX) with a buy recommendation and a $225 price target. Analysts see some 30% upside for the connector of worldwide data centers. Deutsche Bank's analyst said, "Our bullish view is based on two key factors. First, a positive outlook for global data center demand. Second, despite Equinix's outperformance year to date, current valuation does not appear to price in any upside from a REIT conversion, which we view as likely in 2014." Shares of Equinix did not manage to gain ground on the back of the upgrade this week, ending the week 3% lower. Year to date, shares have returned 67% already.

Questcor

Bank of America/Merrill Lynch rated Questcor (QCOR) with a new buy and a $60 price target. Analysts at Bank of America see some 40% upside potential for the biopharmaceutical company. Analysts of the bank comment: "We believe Questcor has uniquely favorably fundamentals, due to 19 legacy indications for Acthar, orphan drug pricing, rapid revenue growth, low operating expenses and high margin-driven share repurchases. However, Acthar has no patent protection and we believe the risk of generic competition will remain an overhang." Shares of Questcor lost 14% over the week after "Citron Research", known from its short selling ideas issued a single digit stock price target for the next 18 months. Year to date shares of Questcor returned 4%.

Panera Bread

KeyBanc rates Panera Bread (PNRA) as a new buy with a $175 price target. Analysts see some 20% upside potential for the national bakery company. KeyBanc's analysts note: "Consistent with our favorable bias toward dominant brands with relevant niches, we believe Panera is well positioned to sustain 20% annual EPS growth. We expect the growth to come from expanding system units, same store sales growth and margin expansion." Shares of Panera rose more than 3% over the past week, trading with modest gains of 4% year to date, near the midpoint of its $140-$160 trading range.

American Express

Nomura upgraded American Express (AXP) from hold to buy with a $69 price target. Analysts see almost 20% upside potential for the global payment service provider. Analysts of the Japanese bank note, "American Express is well positioned for growth as the pool of US card industry profits shrinks. The company has evolved into a lower-risk, higher-return business. We are bullish on fee-based initiatives expected to be a meaningful contributor of revenues by 2014 with expense management likely be the driver of the next wave of earnings growth." Shares of American Express ended the week 1% lower as banking colleagues of UBS issued a negative stance for the global payment sector. Year to date shares of American Express delivered returns of 23% already.

Conclusion

Stock markets ended the trading week flat as investors are digesting the first corporate earnings reports for the second quarter. Despite some disappointing earnings reports, brokers have sent out favorable research reports again to clients. Many of the recommendations were made after the release of earnings reports, and often come after a large move to the upside. However, on the day of the announcement, analyst recommendations can still move the stock price significantly.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Lexmark International

Barclays lowered its advice for Lexmark International (LXK) from equal weight to underweight with a $21 price target. Analysts at Barclays cite as main reasons behind the second downgrade in a two day time span: "Lexmark's pre-announcement was even below our recently lowered estimates in our downgrade note yesterday... citing weaker than expected demand in Europe and negative currency headwinds as reasons for the lower guidance." Analysts cut their full year 2012 earnings per share forecast from $4.16 to $3.53, while cutting their full year revenues estimate from $3.89 billion to $3.73 billion. Other major US technology companies with sizable activities in Europe including Advanced Micro Devices (AMD) and Applied Materials (AMAT) already warned for disappointing results as a consequence of bad performance of their European activities. Shares of Lexmark had a terrible week losing a quarter of their value in just five days after the company warned for a difficult 2012. Year to date shares have lost almost 40%.

Delta Air Lines

Goldman Sachs initiated its advice for Delta Air Lines (DAL) as a new sell accompanied by a $9.30 price target. Analysts at Goldman see some 15% downside potential for commercial air plane operator. Goldman's analysts have issued a second quarter earnings guidance below consensus estimate as analysts expect "weaker-than-expected traffic growth and a deceleration in yield gains." Additionally, analysts are worried about the acquisition of the Trainer Refinery, given the execution risks related to operating an oil refinery and the industry's cyclicality. Shares of Delta Air Lines ended the week largely unchanged, marking year to date gains of 33% on the back of falling oil prices.

Boston Beer

UBS lowered its advice for Boston Beer (SAM) from neutral to sell with a $103 price target. Analysts at the Suisse based bank see some 10% downside potential for the craft brewer known from its Samuel Adams brand. Analysts at UBS cite that "70 percent of Boston Beer's recent growth has come from its Twisted Tea line and seasonal craft beer program. Slowing distribution gains for Twisted Tea and the lack of new seasonal offerings in the Samuel Adams portfolio will slow the current year to date trajectory." Shares in Boston Beer had a rough week, ending about 8% lower to $114 at the moment, primarily driven by UBS's downgrade. Year to date, shares managed to squeeze out a small gain of 5%.

Mastercard

UBS lowered its advice for Mastercard (MA) from neutral to sell with a $403 price target. Analysts at UBS see some 7% downside potential for the global payment and technology company as they cite that "slower consumer spending in the US and a weak global economy are putting a drag on the company's prospects. Although Mastercard is a attractive safe haven in the financial industry, the exposure to weakening consumer spending makes a slowdown in key metrics simply unavoidable in the coming months." Shares in Mastercard ended the week almost 3% lower on the back of the downgrade and the news that the company, Visa (V) and a group of US banks settled a litigation case for $7.25 billion. US retailers sued the banks and the payment operators for illegally fixing the "swipe" fees that merchants pay to accept debit and credit cards. Year to date, shares of Mastercard advanced 15%.

Eaton Vance

Bank of America/Merrill Lynch downgrades Eaton Vance (EV) from neutral to underperform with a $29 price target. Analysts at the bank see few reasons to hold shares in the investment fund manager and advisor of high net worth individuals, but still place their target price 7% above the current stock price. Analysts of Bank of America note that "Eaton Vance has suffered from uneven flows for some time. We forecast July quarter outflows to worsen to -$1.7 billion, equivalent to a -3.4% annualized loss rate vs. basically flattish flows in the April quarter." Shares of Eaton Vance trade flat for the week, up 13% so far this year after shares benefited from the rally in equity markets in the first quarter of the year.

Family Dollar Stores

Bank of America/Merrill Lynch downgrades Family Dollar Stores (FDO) from neutral to underperform with a $60 price target. Analysts see some 12% downside potential for the retail discount chain. Analysts at Bank of America are cutting the full year 2013 earnings estimate on concerns that margins and earnings will disappoint. "Given the performance that the stock has had, expectations are very high... but execution risk is even higher, in our view." Shares of Family Dollar Stores have returned 17% so far in 2012, but fell 3% over the last week as a result of the downgrade. Shares had a decent run so far in 2012 after the company raised its full year earnings outlook and boosted its dividend.

Conclusion

As is well known, analysts research reports tend to be heavily biased towards the buy side. This makes any sell side research much more interesting, as banks do not have to please their corporate customers in order to win investment banking deals. Unfortunately, some of the recommendations come after the fact (often after an earnings release).

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The rule

The rule of 72 simply gives you a rough estimate how long it takes before your money doubles at a stated interest rate. When interest rates are 6% it takes you 72/6 = 12 years to double you money. If you receive 4% it takes you 18 years, 2% requires 36 years of waiting and at 1% it is unlikely that you can even double your savings ahead of retirement as it takes you a staggering 72 years to double your money. Please remember that these are approximations.

The great non-linearity of compounding interest, which is interest over interest, triggered Albert Einstein in calling it the "the most powerful force" in a lifetime.

Record low interest rates

The Federal Reserve Discount rate, the official rate set by the Federal Reserve Board, has been cut from 6.25% in 2007 to record lows around 0.25% at the moment. While this has resulted in large subsidies for the banking sector in order to improve the financial stability, it has been detrimental for savers and retirees. Many retirees have seen a drop in investment income as they tend to invest money in fixed income securities. Many retirees have postponed their retirement or found temporary jobs to provide them with meaningful income during their retirement period. At the moment 10 year government bonds are earning merely 1.6%. So what are your options to retire comfortably?

Save more, earn longer or earn more

In general people have started their work careers at the age of 20 for blue collar work and 25 for white collar work. Retirement ages vary between 60 for people doing hard manual labor and 65 which is the official retirement age. In recent years many people have been working until their seventies to fill up their shortage in retirement funds. It seems fair to say that most people tend to work for about 40 years over the last decades.

401k

To give us a clue about how the average prospective retiree is doing, 401k plans give us a great deal of information. Remember that many employees do not even take part in these private-employer plans as they simply lack to see how important retirement is. Fidelity Investments and Vanguard are among the largest mutual fund managers looking after these 401k plans. By 2011 the average balance of a 401k with each of these firms came in at $75,000 and $78,000, respectively. Worrying is that median balances are much lower at $23,000 and $25,000 respectively.

So how long to you have to safe for?

According to data from the Center of Disease Control the average US life expectancy in 2010 is about 79 years. Note that you should not prepare to save for just 14 years if you plan to retire by age of 65. Given that you reached the age of 65 your conditional life expectancy has risen to an actual 83 years, suggesting that on average you should save for 18 years of retirement.

A Base Case

So let's assume you are 65 and you end up with an average 401K balance of about $75,000 which earns 2% given today's low interest rate environment and dismal returns on equities. How much can you withdraw on a monthly basis from age 65 onwards? Just a mere $413 according to the annuity calculator from bankrate.com

Remember that these rates are not adjusted for inflation and $413 at the time of retirement will not buy you the same as it does today. If this is not enough to live on besides your social security benefits you can do the following:

1. Double your contributions

Starting retirement with a higher balance, linearly increases your monthly payout. So a starting balance of $150,000 will get you $826 a month in payouts. If you work on average 40 years during your life you have time enough to increase your savings. And you should, because deductions into retirement funds are tax-free up to certain levels and often your employer will make matching contributions!

2. Obtain higher investment returns

During you working period (or your saving period) higher returns allow you to start with a higher initial balance. Even if you manage to increase your returns from 2% to 4% during retirement you could increase your $413 in monthly income to $486. Increasing returns to 6% allows you to withdraw $566 in monthly benefits.

Diversify your investments into a diversified portfolio of blue-chips paying out high dividend yields. Many top notch companies pay dividend yields far surpassing the yield on 10 year government bonds. Exxon Mobil (XOM) pays 2.8% in annual dividend yield, General Electric (GE) 3.5%, AT&T (T) 5.1%, Johnson & Johnson (JNJ) 3.9%, Procter & Gamble (PG) 3.6%, Intel (INTL) 3.2%, Philip Morris (PM) 3.7% and Verizon Communications (VZ) 4.7%. On top of the superior dividend yields, equities allow you even more upside in the form of capital gains.

3. Shorter your retirement period

Don't go the easy and dangerous route by lowering your expected life expectancy but postpone retirement by a year or two. Retiring at age 66 instead of 65 allows you to withdraw $433 instead of $413 per month. Retire another year later and you can withdraw $456 in monthly income.

4. Combine it all!

Save more during your working period, obtain higher investment returns and postpone retirement. Starting your retirement with $150,000 in capital, obtain investment returns of 6% and retire at age 67 allows you to obtain $1,211 in monthly income, almost three times as much as our basecase scenario.

It is important to familiarize yourself, how boring or far away the topic might be. Recognizing issues early on allows you to make adjustments so you can comfortably retire. Remember that you have options, just make sure you recognize them in time and you have the discipline to save enough to enjoy a well-earned retirement.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.