While the DJIA and S&P500 are hitting new highs on a daily basis, it is worth noting that the broad energy sector, as measured by the SPDR Energy ETF (XLE), has severely underperformed the overall market. The energy sector has lagged the broad market (DJIA) by some 25 percentage points over the past 5 years. And this in spite of the outperforming refining and MLP sectors within the energy space.

What if energy stocks joined this rally? I think they will. And I think the DJIA and S&P500 could easily move up another 2-3% on the back of an energy sector rally. Here's why.

DIA data by YCharts

According to Standard & Poor's, the energy sector now composes only 10% of the S&P500. According to Bespoke Investment, this is down from 15.3% in 2008. There have been a number of reasons for the energy sector's contraction

Below are companies that have recently had large insider buying in excess of $200,000 worth of stock. As a caveat, please only consider this as a starting point in your investment research as these are only the opinions of this blogger:

Walter Energy (WLT) is predominately focused on producing and exporting coal for the steel industry. The stock's performance has not been pretty the past year where it currently sits just above its $16.08 52-week low and far from its $58.06 52-week high. Nevertheless, board director Joseph Leonard sees the stock moving higher ,purchasing a sizeable 16,700 shares on May 6. This equates to $475,000 worth of stock. The stock has become more of a value stock as it now trades at just .5x price to sales and 1.2x price to book value. Moreover, it did smash consensus estimates in its most recent quarter, while analysts are expecting

SalesForce.com (CRM) announces earnings after the close on Thursday, May 23, 2013. The company provides enterprise cloud computing solutions to various businesses and industries worldwide. Founded in 1999, it sports a market cap of $24 billion even though it has never showed a profit.

Not showing a profit makes it difficult to calculate a P/E ratio, forcing analysts to look at revenue as an alternative proxy to measure enterprise value. YOY revenue growth has been high, about 32%, which gives some justification for its forward P/E of 74. This compares to its competitors' forward multiples of 12 for Oracle (ORCL) and 20.5 for SAP (SAP). CRM seems pretty pricey, even if the company turns the corner to profitability.

Here are the results after the earnings announcement for the past four quarters, with the stock price change from the close on the day before the announcement until the closing price

As the market continues to seemingly move higher every day, investor complacency appears to be on the rise. The recent CBOE equity put/call ratio is at a low level of .50. Like other sentiment indicators, this measure tends to be more accurate at extremes. On April 20th, we wrote about the elevated put/call ratio and wondered if the market was excessively bearish. Since the time of that post, the market has advanced over 7%.

Additionally, fixed income assets as a percentage of all mutual fund assets recently began to decline. Are investors now warming up to equities in spite of the strong advance that has occurred year to date? On the other hand, given the low level of interest rates, bond investors are having a difficult time finding fixed income assets that provide adequate yield without taking on maturity and/or credit risk.

The fundamental story surrounding the eurozone reflects a region where countries are either falling into recession or already there. GDP data released last week showed France and Italy continuing to contract and Germany on the brink of negative growth. The U.S. - German yield differential is pointing to a lower euro (FXE), which could benefit the region by facilitating export-led growth.

May 15th's release of European economic data proved to be disappointing. France and Italy's GDP both contracted, putting France into a technical recession. France's first quarter GDP declined by 0.2% compared to the 0.1% expected and 4th quarter GDP was revised lower to -0.2% from the -0.3% expected by economists. Italy contracted by 0.5%, lower than expectations.

These negative reports give fuel to the thesis that the ECB will make good on its threat to lower interest rates further, and potentially put them on a path that is

Procter and Gamble (PG) was a favorite stock pitched by hedge fund manager Bill Ackman at The Ira Sohn Conference. His $12B hedge fund holds over 27.9 million shares of PG, making up almost 19% of his portfolio. Ackman believes PG, currently trading at $79.77 with a market cap of $219B, is undervalued- investors have not priced in improvements to PG's currently underperforming revenue and EBIT growth, and gross margins, compared to its competitors. Should we agree with Ackman? Short answer, yes. But only if you believe management can expand growth and continue their success with their cost-cutting program. Even if management's earnings growth strategies are not effective, PG still has benefits to value investors.

Value Play

Even without efficiency or growth improvements, PG is a great company for value investors, paying a 3% dividend yield (and has, historically, increased its nominal payout annually) with consistent cash flows. Alongside, PG

Let me say right from the start that one of the most important things for investors to know at this time is that the Federal Reserve is not likely to stop its stimulus program in the near future, as some reports are theorizing.

The only caveat to this reality is if an unforeseen event or calamity takes place that would change the policies of the American central bank. One of those events would be a huge change in the jobs numbers, whereby the unemployment rate plunged to levels approaching the stated goal of 6.5 percent. There is nothing to suggest that will happen any time soon. Another would be rising inflation, which would betray the inevitable effects of the loose money policies the Fed is engaged in. Either of those two scenarios would bring a rapid response from the Federal Reserve.

Interestingly, many economists and business writers neglect the fact

The price of natural gas (short term delivery) bounced back during last week. According to the recent EIA report, last week's buildup in natural gas storage remained higher than the five year average. Will natural gas continue its upward trend? Let's examine the recent changes related to the natural gas market.

During last week, the future price of Henry Hub (short term delivery) rallied by 3.71%. Moreover, United States Natural Gas (UNG) also increased by 3.4%. As of last week, the Henry Hub future price was nearly $1.56 per million BTUs higher than the price during the same week last year. The recent rise of natural gas may have also slightly contributed to the rally of shares of major natural gas and oil producers such Chesapeake Energy Corporation (CHK). During last week, Chesapeake's stock rose by 0.6%. If natural gas keeps increasing, it could raise the expected revenues of

After its tumultuous IPO exactly one year ago, the reviews of Facebook's (FB) latest imbroglio, Facebook Home, are rolling in. And they don't sound encouraging. Among tech bloggers, they trend all the way from John Gruber's opinion that it was a bad idea from the beginning all the way to Marco Arment's that it "was flat-out badly designed" in the end. A bad idea coupled with bad execution for a strategy that is potentially critical to Facebook's long term viability should leave investors wondering where this company is headed.

But don't just listen to the geek elite: what about all the regular smart phone-toting, sharing-obsessed folks that comprise Facebook's target audience? It's hard to say. Thousands of one star reviews have accumulated in the Google Play store, and download volume has been low. Disgruntled users complain of Home's limited functionality, intrusive design, battery-draining behavior, and the general lack

The elevator industry is highly concentrated with just four companies accounting for two-thirds of the global market. The these companies are:

1. Otis, part of United Technologies of the U.S.A.

2. Kone of Finland

3. ThyssenKrupp, part of the conglomerate by the same name of Germany

4. Schindler of Switzerland

Some of these firms can be considered as the world's top "least popular" transportation companies. They can be considered as least popular since not many people think of elevator makers as transportation companies. However, in reality they offer a form of transportation that is simply vertical or horizontal in a fixed location such as a high rise building or an airport or a mall. These companies offer a service that is so important yet mostly under appreciated by people. For example, Schindler moves 1 billion people per day according to its site. To put this figure in perspective, the total world population

The SPRD Euro Stoxx 50 (FEZ) and the Euro (FXE) began to decouple at the beginning of May.

(click to enlarge)

This is a significant break from the past, with the 3 week daily correlation at a 4 year low of -0.5092.

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This relationship breakdown is part of a long line of shifting relationships in the capital markets. These breakdowns in correlation include the Aussie dollar (FXA) with the S&P500 (SPY), oil (USO) with the SPY, the U.S. dollar (UUP) with the SPY and Gold (GLD) with everything. I see all these breakdowns as confirmation of a larger shift out of commodities and the end of an era, the commodity super cycle circa 2002.

The Implications of the Divergence Between FEZ and FXE

What is especially surprising of the divergence between the FEZ and FXE is that the data in Europe has been all but inspiring. Taking

By Dr. Osman Gulseven

The April 2013 crash of gold (GLD) and silver (SLV) prices triggered a wave of panic across the globe. As large institutional investors dumped holdings in gold ETFs, prices for both precious metals spiraled downward. Even bullish gold fanatics were forced to dissolve long-term positions due to margin calls and stop-loss orders coming into play.

Silver, with its affinity to gold prices, also saw its prices tumble down over the same period. The white metal had already entered a bear market in early April when prices reached 27.47 an ounce. By the time gold prices had crashed, silver dropped almost 40% to the $22 mark from its 2012 high. On the other hand, gold fell roughly 20% from its October 2012 peak, signaling perilous times ahead for the two commodities.

Those still holding onto gold and silver assets, including government reserves worldwide, saw

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 130.2, down slightly from last week's 131.0. The WLI annualized growth indicator (WLIg) dropped to 7.0% from 7.4% last week, an upward revision from 7.3%.

Last year, ECRI switched focus to its version of the Big Four Economic Indicators that I routinely track. But when those failed last summer to "roll over" collectively (as ECRI claimed was happening), the company published a new set of indicators to support their recession call in a commentary entitled The U.S. Business Cycle in the Context of the Yo-Yo Years (PDF format). Late last month the company added its most recent publicly available commentary on its website: Nominal GDP Growth Falls Again.

Essentially ECRI is sticking to its call that a recession began in mid-2012, although the company calls it a "mild" recession, which is quite

April was a fair IPO month, with a total of 13 deals priced versus 11 in March. There were 19 new filings in April. A few of them started marketing immediately and priced their deals within the month.

For a full recap of the pricings with brief descriptions and links to the archived presentations, please refer to our April Archive Update post.

There are ten deals in active marketing as we enter the first full week of May. With Q1 earnings behind us, this should be productive month. There is a loud chorus of "sell in May and go away" in many market circles, but nobody knows if this year will be true to that pattern or not. If we do see a summer swoon, a word to the wise would be to start looking for a rebound in early August, since many investors try to get a jump

Not long ago it seemed that the "smart money" was invested in hedge funds which generated outsized returns for investors. When broad markets fell by 40% in the crash of 2008 and 2009, hedgies like John Paulson, who bet against mortgage-backed securities, made fortunes. In 2007, Paulson made $3.7 billion. In 2010, he made $5 billion.

Now that the financial crisis has abated, such returns for Paulson and his fellow superstar hedgies appear to be a thing of the past. And, with the recent rash of insider trading prosecutions by the Feds against hedge fund managers, investors must seriously question the value of putting their money with these folks.

The saga of SAC Capital may ultimately show that the only reason hedge funds realized outside returns was through illegal insider trading on confidential information. And the bad news around SAC and its manager, Steve Cohen, continued to get worse

There was a time when people either chose an Apple (AAPL) smartphone or, if they thought it was too expensive, they'd settle for an Android smartphone. Being able to afford it was the defining factor.

While at times, spec-wise, Apple was selling about the same devices as the Android competition, people still opted for Apple at a higher price. That is the very definition of Apple having a moat, and its incredible margins thus being sustainable.

I am afraid that increasingly, that isn't the case anymore. There are growing signs that people are starting to opt for either Apple or (some) Android phones as if they were on equal grounds even if they carry about the same price and specs. This is a tremendous change in attitude, and could represent a breakdown of Apple's traditional moat.

Case in point, the Samsung S4

Enter the Samsung S4 (SSNLF.PK). With the

Today, I want to pit two Magic Formula Investing gun stocks against one another: Smith & Wesson (SWHC) and Sturm Ruger (RGR). What is behind the gun stocks' appearance in MFI? Do they look like attractive investments at current prices? Which of the two is better? Let's put them under the scope.

Boom, Boom, Boom

Like it or not, firearms are woven tightly into American history and culture. The founding fathers found gun ownership so important that they protected it in the second amendment to the U.S. constitution. Some of the world's most famous guns and gunmakers, from the Colt Single Action to the Remington 870 to the M16, have come from America. At about 40% personal ownership and over 300 million guns, the U.S. easily has the most armed citizenship in the world.

Recently, the gun industry has enjoyed record demand, with

The Mid-cap Blend style ranks seventh out of the twelve fund styles as detailed in my Style Rankings for ETFs and Mutual Funds report. It gets my Dangerous rating, which is based on aggregation of ratings of 17 ETFs and 307 mutual funds in the Mid-cap Blend style as of May 2, 2013. Prior reports on the best & worst ETFs and mutual funds in every sector and style are here.

Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the style. Not all Mid-cap Blend style ETFs and mutual funds are created the same. The number of holdings varies widely (from 20 to 3004), which creates drastically different investment implications and ratings. The best ETFs and mutual funds allocate more value to Attractive-or-better-rated stocks than the worst, which allocate too much value to Neutral-or-worse-rated stocks.

To identify the best and

By: The ETF Professor

In less than two months a dizzying array of global central banks have lowered interest rates. The European Central Bank, the Reserve Bank of Australia, the Reserve Bank of India, the Bank of Israel, the Central Bank of Turkey and the list goes on.

When the domino effect will end is anyone's guess, but it does not appear the end is near. The U.S. and Japan have little or no room for further rate cuts, but plenty of other countries do. Many are emerging markets economies where central banks' hands are being forced due to strengthening currencies.

Other prime candidates for additional rate-cutting are developed markets with significant commodities and/or emerging markets exposure. What is clear is the path of least resistance for international interest rates is lower in the near-term and the following country-specific equity-based ETFs stand to be affected.

iShares MSCI Turkey Investable

Intel (INTC) looks like a company that we may not recognize five years from now. With the new CEO and the transition into chips for tablets and smartphones, this is only the beginning. The company will start focusing on new technology and also explore new markets that it has not been in to help generate its multibillion dollar revenue stream in the future. Let's take a look at some of the journey that we will experience with Intel in the near future.

Brian Krzanich Says Move to Mobile will be Quick

The new CEO says that the company is focused on accelerating its move into the mobile chip market. Intel has found it a bit hard to move into the land of Qualcomm (QCOM) and the $85.4 billion mobile chip market.

Mr. Krzanich was appointed as the new CEO this year but has been with the company since 1982 starting

By: The ETF Professor

Highlighting fourth-quarter 13F filings with the Securities and Exchange Commission, it was noted hedge fund legends David Einhorn and George Soros held sizable stakes in the largest gold miners ETF, the Market Vectors Gold Miners ETF (GDX).

To be fair to Soros, during the fourth quarter, he pared his stakes in GDX and the Market Vectors Junior Gold Miners ETF (GDXJ) by 800,000 and 400,000 shares, but he still owned 1.5 million shares of GDX and about two million shares of GDXJ at the end of the quarter.

At the end of the first quarter, Soros held 2.66 million shares of GDX, according to the latest 13F, meaning his stake in the ETF almost doubled. The filing also shows Soros still holds 1.2 million shares of GDXJ and initiated a new options position in that ETF.

As for Einhorn's Greenlight Capital,

It is incredibly important to consider how unusual this year has become. Much of the advance had been led by low

France Telecom (FTE) is facing harsh competition amid a sluggish European economy. The increase in Eurowide tax rates further added to the issues, causing the French economy to post slow growth. This greatly affected France Telecom, as well. The company reported declining revenues and net losses. While it continuously gave out yearly dividends to its shareholders, the payout amount is decreasing.

France Telecom-Orange is still one of the biggest telecom operators across the globe. In fact, the French postal and telecom regulars ARCEP named Orange as the number one mobile network in France. The company offers the highest speed in mobile broadband. It also bested its competitors for mobile network quality.

In spite of that, its feat in France and its extensive global footprint did not reflect its performances on the trading floor. FTE shares continue to ride downhill. Many shareholders holding FTE for its dividend yield are

Procter & Gamble (PG), which is the world's leading household and personal care firm, still has a lot to offer in terms of long-term shareholder value creation. This article discusses the reasons to be bullish on P&G and consider fresh exposure to the stock on any meaningful market correction.

Just to put things into perspective, P&G has returned $88 billion of cash to shareholders in the last ten years through dividends and share repurchase. In terms of stock returns, measuring from the end of each quarter starting in 1980, rolling 10-year returns have exceeded both the S&P 500 and the Dow Jones Industrial Average in 82 out of 88 periods, or 93% of the time. And rolling 20-year returns have exceeded both the S&P 500 and the Dow Jones Industrial Average in 46 out of 48 periods, or 96% of the time. For sure, the company has rewarded shareholders

Shares of Cisco Systems (CSCO) are trading with gains of up to 14% in Thursday's trading session. The internet infrastructure giant reported its third quarter earnings on Wednesday after the close.

The company reported solid third quarter results coming in a slightly ahead of consensus estimates. Given the weak results of some of its colleagues in recent weeks, the market was positively surprised by the report.

Third Quarter Results

Cisco Systems generated third quarter revenues of $12.22 billion, up 5.4% on the year before. Revenues were up 1.0% compared to the second quarter and beat consensus estimates of $12.19 billion. Net earnings rose by 14.5% to $2.48 billion. Diluted earnings per share rose by a similar 15.0% to $0.46 per share.

Non-GAAP earnings rose by merely 4.7% to $2.7 billion, coming in at $0.51 per diluted share. Non-GAAP earnings beat consensus estimates of $0.49 per share.

During the

Many Seeking Alpha contributors who post articles on portfolio construction filter their searches using either or both of two mechanical stock selection methods. One method is considering only stocks which appear on lists of companies which have increased their dividends every year for a certain number of years. Another is considering only stocks which yield more than a certain threshold, usually ranging from 2% to 4%. While these common filters certainly shield dividend growth investors from many egregiously bad mistakes, and have the virtue of being very easy to apply (especially with a working knowledge of Exce and a ready-made spreadsheet such as David Fish's CCC list), I am going to argue that they leave many stones unturned, particularly for an investor in the "accumulation" phase. I have no problem with the idea that dividend increases and good yield are important fundamental criteria in stock selection for an