Saturday, March 24, 2012

Home Properties Beats Estimates on Top and Bottom Lines

Home Properties (NYSE: HME  ) reported earnings on Feb. 9. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Home Properties beat expectations on revenues and earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share improved significantly.
Gross margins dropped, operating margins increased, and net margins grew.
Revenue details
Home Properties notched revenue of $153.3 million. The 13 analysts polled by S&P Capital IQ hoped for sales of $147.2 million on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $133.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS details
EPS came in at $0.29. The eight earnings estimates compiled by S&P Capital IQ forecast $0.23 per share. GAAP EPS of $0.29 for Q4 were 61% higher than the prior-year quarter's $0.18 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
Margin details
For the quarter, gross margin was 62.7%, 170 basis points worse than the prior-year quarter. Operating margin was 32.0%, 50 basis points better than the prior-year quarter. Net margin was 9.1%, 400 basis points better than the prior-year quarter.
Looking ahead
Next quarter's average estimate for revenue is $151.0 million. On the bottom line, the average EPS estimate is $0.23.
Next year's! average estimate for revenue is $617.4 million. The average EPS estimate is $1.14.
Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 55 members out of 108 rating the stock outperform, and 53 members rating it underperform. Among 40 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 21 give Home Properties a green thumbs-up, and 19 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Home Properties is outperform, with an average price target of $62.93.
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Apple Has More Growth Potential Than You Think

The following video is part of our "Motley Fool Conversations" series, in which analyst Joe Tenebruso and analyst Paul Chi discuss topics across the investing world.
Many investors look at Apple (Nasdaq: AAPL  ) and see a company with a $500 billion market cap and question whether it can continue to grow. Analyst Joe Tenebruso explains why Apple still has a tremendous opportunity to gain market share in one of its core products, and why the stock can continue to make new highs.

If you're one of the thousands of investors riding Apple to spectacular gains, you're doing yourself a disservice by not looking across the whole variety of companies benefiting from the same trends making Apple the most valuable company in the world. The Motley Fool has just released a free report on mobile named "The Next Trillion Dollar Revolution" that details a hidden component play inside mobile phones that's also absolutely dominating the exploding tech market in China. Inside the report, we not only describe why the mobile revolution will dwarf any other technology revolution seen before it, but we also name the company at the forefront of the trend. Hundreds of thousands have requested access to previous reports, but you can be among the first to access this just-released report by clicking here -- it's free.

Friday, March 23, 2012

Dendreon Falls as Provenge Sales Weaken

Dendreon (DNDN) stock fell 20% in afternoon trading after saying in its fourth quarter earnings report that sales of its prostate cancer drug Provenge have been weak in the first quarter.
Sales of Provenge could rise in the low single digits in the first quarter, as fewer patients have enrolled for treatments.
“We are looking toward potential changes to Provenge’s sales trajectory beyond ‘modest quarter over quarter growth’ and believe the company will get there but maintain our stance on the sidelines currently,” wrote Roth Capital Partners analyst Joseph Pantginis.

More schools are finally teaching personal finance classes

Ever since public schools began, they've been teaching kids knowledge, in hopes that they'd be able to find good jobs and make money.

Now, they're finally starting to teach kids to keep their money.

There have been states that have been teaching personal finance for a while now. According to a National Council on Economic Education survey conducted in 2007, 28 states were teaching personal finance on some level in schools, but only seven states required students to take a personal finance course as a high school graduation requirement (in 1998, only one state required that).

But there seems little doubt about it. Some sort of movement, even if an unorganized one, is going on in some school districts around the country.

For instance, right now:
  • In Altoona, Wisconsin, the class of 2010 can only graduate if they take a half-credit personal finance course.
  • The state school superintendent in Indiana is discussing the idea of making their students learn financial literarcy.
  • A bill is making its way through the New Jersey legislature that would require high school students to take personal finance classes. Kansas and Virginia are also debating similar bills.
  • Michigan just passed a bill that allows students to fulfill part of their high school math requirements with a personal finance class.
I don't think I'm saying anything revolutionary or controversial when I say: it's about time... or well past time.

I remember on several occasions throughout my 20s thinking, "Boy, if I had some personal finance class before I bought that bogus car insurance... or before I bought my first car, which I couldn't afford... or before I signed up for all those credit cards."

I don't know! if a cl ass would have kept me from making some dunderheaded decisions in the 1990s when I was in my 20s, but it might have. In any case, these classes can't hurt, and judging from some of the decisions that have been made in Wall Street in recent years, it seems evident that schools better start educating the masses about how to manage their money.

Thursday, March 22, 2012

U.S., Britain Say EU Proposals Will Damage Hedge Fund Industry

The European Union (EU) on Thursday defended its sweeping hedge-fund reform proposals against criticism from the United States and Britain.

British Prime Minister Gordon Brown met with French President Nicolas Sarkozy Friday in hopes of compromising on the proposed regulation.

Many EU countries are determined to change the hedge fund industry, which is often murky. The use of derivatives, such as credit-default swaps have been linked to the downfall of Lehman Bros. and exacerbating Greece's sovereign debt difficulties.

The new rules in question aim to increase transparency in the financial system: Hedge funds would report their trades and debts to regulators, hold a minimum level of capital to cover losses, and disclose trading strategies, risk management systems, and how they value and store assets.

However, the United States and Britain feel the overhaul would invoke unneeded barriers.

Britain is afraid the new regulations, if implemented, would hurt both London investors and fund managers, causing further harm to a hedge fund and private equities market already suffering from an investment decline.

Fearing proposals were close to receiving EU approval, U.S. Treasury Secretary Tim Geithner on March 1 sent a letter to EU internal market commissioner Michel Barnier asserting that some of the EU proposals - which have been a discussion topic for six months now - are protectionist, and discriminatory against U.S. firms.

The EU argues these provisions are not discriminatory and are in line with previously decided Group of Twenty (G20) policies to tighten financial regulation.

The most contested topic is a "third country" issue, outlining how and if alternative investment fund managers (AIFMs) operating outside of the EU could market to EU countries' investors.

Britain is Europe's biggest hedge fund country - 70% of EU hedge funds are London-based - and it stands to suffer mo! re than its EU counterparts if hedge funds that hold money in accounts outside the EU are treated differently than funds with inside-EU accounts.

Another Geithner-opposed provision is that hedge funds obtain authorization from each EU country in which they seek to secure investors. Both the United States and Britain supported a "passport" provision that would only require approval from one EU jurisdiction to do business with the whole region. The current proposal only gives passport rights to EU-based financial services providers.

"All the guys here are very worried about the free flow of capital," said Javier Echarri, director-general of European Private Equity & Venture Capital Association, at a Geneva investors' forum.

Spain, who currently holds the EU presidency seat, is working on a text for Tuesday's finance ministers meeting but not all details are available. The text supports foreign funds' access to the EU, provided there are "appropriate co-operation arrangements for the purpose of systemic risk oversight and in line with international standards ... in place between the competent authorities of the member state where the fund is marketed and the competent authorities of the AIFM", according to The New York Times.

Most countries - excluding Britain - were expected to support the proposals at Tuesday's meeting. Before becoming a law, the legislation would need to be approved by the European Parliament, a process that could take months.

Commissioner Barnier will visit the U.S. shortly and hedge funds are one of the top discussion priorities.

"We need to ensure any regulation is sensible and proportionate. There have already been significant improvements to the EU proposal since it first emerged last year and we'll keep working with our European partners to improve it further," a U.S. Treasury spokesperson told the Financial Times.

Oil prices and Greece threaten stock rally

NEW YORK (CNNMoney) -- Can the market sustain its rally, or will prospects of a Greek default shatter investors' risk appetite?

The Dow Jones Industrial Average (INDU) closed at its highest level since 2008 Friday. For the year, the Dow is up almost 6%, and the S&P 500 (SPX) is up more than 8%. The Nasdaq (COMP) has made an impressive 13% run.
Yet, the possibility of a Greek default looms large over world markets. European finance ministers will meet Monday, and are expected to sign off on Greece's latest economic reform proposal.
Greece needs that sign off from Europe's finance ministers to avoid defaulting on a €14.5 billion bond payment due March 20. Another delay is unlikely to rattle the markets, but if it becomes clear that Greece will default, markets strategists fear a sharp sell-off.
"Markets have priced in a positive outcome," said Joseph Tanious, global market strategist at J.P. Morgan Asset Management.
All three indexes posted solid gains for the week, as investors largely ignored concerns over Greece and focused squarely on better-than-expected economic reports in the United States. The S&P was up 1.4%.
With few key economic reports on the agenda this week, and U.S. markets closed Monday in observance of Presidents' Day, investors will keep an eye on quarterly earnings from major retailers to assess the health of the American consumer.
"There will be a heightened sensitivity to retailers and their earnings to either confirm that the U.S. economy is picking up and recovering or cast a doubt on the consumer's appetite," said Tanious.
On Tuesday, retailers Barnes & Noble (BKS, Fortune 500), Home Depot (HD, Fortune 500), Macy's (M, Fortune 500), Wal-Mart (WMT, Fortune 500) and Saks (SKS) will report quarterly results.
On Thursday, Kohl's, Sears (SHLD, Fortune 500), Target (TGT, Fortune 500) and Gap (GPS, Fortune 500) will report.
On Friday, J.C. Penney (JCP, Fortune 500) will release ! its earn ings.
Other quarterly earnings due out next week include Dell (DELL, Fortune 500) and Kraft (KFT, Fortune 500) on Tuesday and Hewlett-Packard (HPQ, Fortune 500) on Wednesday
Meanwhile, investors will continue to monitor developments in Iran to determine whether concerns over the country's nuclear program will drive up the price of oil.
U.S. crude oil rose 3% last week to close at $102.35, and economists worry that further increases in oil prices could threaten the global economy.
"I'm watching oil with trepidation," said Ram Bhagavatula, partner at the hedge fund Combinatorics Capital. "It's the one thing that could threaten the recovery."

Will 2012 be the year of the contrarian?

BOSTON (MarketWatch) � The Mayans have Dec. 21 penciled in for the end of the world, but after the first few weeks of 2012, there�s one question to ask on Wall Street.
Can the conventional wisdom last that long?
Already the new year is shaping up to be more interesting than most people realize.
So far this year, the contrarians have been on top and Wall Street�s conventional wisdom has been knocked about badly.
/quotes/zigman/87598/quotes/nls/nflx NFLX 105.19, -1.94, -1.81%

Netflix, year-to-date
This week Netflix NFLX �skyrocketed as quarterly results trounced expectations.
A few days earlier, retailer Sears Holdings SHLD �boomed as chairman Eddie Lampert bought about $170 million in shares. There are rumors he may try to take the company private.
What did those two stocks have in common? Easy. At the start of the year, Wall Street hated them both.
Both Netflix and Sears Holdings were on the list I published a few weeks ago, of the 10 stocks Wall Street analysts hated the most coming into 2012. Read �Should you buy Wall Street�s top stocks for 2012?�
/quotes/zigman/95136/quotes/nls/shld SHLD 73.90, +0.48, +0.65%

Sears Holdings, year-to-date
So far this year Netflix is up 68%, Sears 38%. (Oh, and Netflix started 2011 as one of the stocks analysts loved the most, and promptly collapsed).
Overall, Wall Street�s �10 most hated stocks,� as compiled with the help of Reuters, is up 14% since Dec. 31.
That�s twice the return from the 10 stocks analysts actually liked the most. Google GOOG , which made analysts swoon, is already down 11%.
And the 14% return is nearly three times the 5% gain you would have made just from owning the Standard & Poor�s 500 index SPX .
Click to Play !

Netflix recovers subscribers

After a summer price hike, Netflix added 610,000 U.S. subscribers as it worked to regain footing with customers, Ian Sherr reports on digits. Photo: Getty Images.
Who wanted Bank of America BAC �stock coming into 2012? Nobody. People on Wall Street wouldn�t been seen dead owning this stock.
So far it�s up 32%. No kidding. Citigroup C , another leper on the Street of Shame, is up 16%.
The only bank it was respectable to own was Wells Fargo WFC . It�s up a much more modest 7%.
Strange times? OK, maybe not. The 10 most hated stocks frequently beat the 10 most loved.
But you probably wouldn�t normally expect such a big gap so soon.
Conventional wisdom is there to be overturned. When everyone is betting one way, the shrewd move is often to look for opportunities to go the other way.
Everyone still hates the euro, European equities, and Japanese equities. They love U.S. stocks. They hate bonds, and like equities. Hardly any investors own any gold. Make of it what you will.

Wednesday, March 21, 2012

ONEOK, Inc at its Peak Price of the Year - NYSE:OKE

ONEOK, Inc (NYSE:OKE) achieved its new 52 week high price of $80.48 where it was opened at $79.96 UP 2.03 points or +2.61% by closing at $79.76. OKE transacted shares during the day were over 868,366 shares however it has an average volume of 761,322 shares.
OKE has a market capitalization $8.21 billion and an enterprise value at $13.40 billion. Trailing twelve months price to sales ratio of the stock was 0.56 while price to book ratio in most recent quarter was 3.66. In profitability ratios, net profit margin in past twelve months appeared at 2.29% whereas operating profit margin for the same period at 7.22%.
The company made a return on asset of 5.15% in past twelve months and return on equity of 16.97% for similar period. In the period of trailing 12 months it generated revenue amounted to $14.33 billion gaining $135.79 revenue per share. Its year over year, quarterly growth of revenue was 22.20% holding 9.10% quarterly earnings growth.
According to preceding quarter balance sheet results, the company had $154.22 million cash in hand making cash per share at 1.50. The total of $5.55 billion debt was there putting a total debt to equity ratio 150.66. Moreover its current ratio according to same quarter results was 0.78 and book value per share was 21.23.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 1.02% where the stock current price exhibited up beat from its 50 day moving average price $75.61 and remained above from its 200 Day Moving Average price $71.17.
OKE holds 102.99 million outstanding shares with 96.59 million floating shares where insider possessed 0.96% and institutions kept 67.80%.

Charity on the campaign trail

NEW YORK (CNNMoney) -- President Barack Obama and Oval Office hopefuls Newt Gingrich and Mitt Romney have all released at least one year of tax returns. And they all gave big money to charity.
But their donation patterns differ substantially, and in some cases provide a window into the candidate's political priorities.
Obama gave $245,075, or 14.2% of his $1.7 million in income to charity in 2010, the only year tax returns are available for all three candidates. Romney donated almost $3 million, or 13.8% of his income, while Gingrich gave $81,133, or 2.6% of his income, to charity.
Compared to peers with similar income, Obama and Romney did far more than most.
"Romney and Obama are very generous charity-wise," said CharityWatch president Daniel Borochoff. Gingrich is still doing pretty well, but Borochoff said his giving level is "more like an average donor for the income."
Rick Santorum and Ron Paul have yet to release their tax returns, but here's a breakdown for the president and the two Republican frontrunners:
In addition to his 2010 return, Romney has released an estimate for 2011.
The deep-pocketed former Bain executive gave $2.98 million in 2010, and $4.02 million the following year. That works out to 16.4% of his $42.6 million in aggregate income over the two-year period.
"This is a huge percentage of his income," said Russell James III, a professor who teaches charitable planning at Texas Tech. "But when you look at the number as a percentage of his total assets, it's not that dramatic."
Romney, with an estimated net worth between $85 million and $264 million, directed large portions of his donations to the Church of Jesus Christ of Latter-day Saints, also known as the Mormon church.
In 2011, the Romney's gave $2.6 million in cash contributions to the church, and in 2010 they gave $1.5 million.
All Mormons in good standing with the Church of Jesus Christ of Latter! -day Sai nts are required to give 10% of their salaries as a tithe.
Borochoff said that as a result of his religious background, Romney comes from "a tradition of generosity."
"Mormons are generous people with their charity," Borochoff said. "You don't have to guess which state gives most per capita. It's Utah."
The Romney's also gave substantial cash and non-cash gifts to their family foundation, called the Tyler Foundation.
In 2010, the foundation -- which has assets of $10 million -- made donations to the Mormon church, Harvard Business School, City Year, the George W. Bush Library and the Boys and Girls Club of Boston, among others.
James said it is not uncommon for very wealthy individuals to establish foundations, a strategy that gives them more control over how the money is used.
Obama has released tax returns for at least 11 years, dating back to 2000.
All told, Obama donated 6.3% of his income to charity over the period, which works out to a total of $1.1 million. The pace of those donations has increased in recent years, a trend that mirrors an uptick in the president's income.

Rich, Gingrich and crazy rich

From 2000 to 2004, the Obamas gave around only 1% of their income to charity. From 2005 to 2009, their donations jumped to between 4% and 7% of income, before increasing to 14% in 2010.
After winning the Nobel Peace Prize in 2009, the president requested his $1.4 million in winnings to be donated to various charities, a gift that was not reported as income on his tax returns.
From that prize, the president gave $250,000 to Fisher House, $200,000 to the Clinton-Bush Haiti fund, $125,000 to the United Negro College Fund, $125,000 to the Appalachian Leadership and Education Foundation, among others.
In recent years, Obama has spread his donations around, giving to groups as diverse as the American Red Cross, the University of Hawaii foundation, the National AIDS Fund and the Gr! eater Ne w Orleans Foundation.
Gingrich has released only one year of tax returns so far this election cycle, which makes it difficult to determine how the former speaker's charitable habits have changed over time.
According to his 2010 return, he gave $81,133 to charity while earning $3.2 million in income.
It's mostly unclear which organizations he donated to.
The only obvious one: Gingrich and his wife Callista donated $9,540 to the Basilica of the National Shrine of the Immaculate Conception in Washington.
The tax return also shows Callista received $5,918 in income from the church, where she is a member of the choir.
Gingrich, who donated 2.6% of his income to charity, is pretty much in line with his millionaire peers when it comes to charitable giving, according to Borochoff and James.
And while Obama and Romney appear to be even more generous, it's difficult to tease out motivations when it comes to charity, especially for politicians.
"It's a basic psychological reality that if you know several million people are going to be looking at your tax returns, you are going to give more than is typical in the general population," James said.

Tuesday, March 20, 2012

(NHPR, XUE, CLNO, PRO, PSE) Stock Updates by

National Health Partners, Inc. (NHPR)
National Health Partners, Inc. (NHPR), a leading provider of unique discount healthcare membership programs, announced that it has entered into agreement with a major Hispanic marketing group for the sale of its CARExpress programs. The company also sees growth in new sales of memberships of more than 300% thru the remainder of the year.
Under the new agreement, this national Hispanic marketing group will be promoting the company’s CARExpress discount healthcare membership program to Hispanic communities located across the United States, with particular focus on cities and regions containing a large number of Hispanics. With the previously announced plans to increase monthly sales by 75% with its newest and most successful marketing partner, the company now expects sales of new members to grow more than 300% thru the remainder of the year.
In America, there are two forces driving an immediate need for reform of U.S. healthcare. First is the large number of uninsured. Millions of citizens do not have access to primary care. In the advent of a pandemic, this situation could prove catastrophic. Also, having this many people neglecting basic care requirements may cost the economy billions of dollars annually in lost productivity.
And the second one High healthcare costs. The U.S. system of health care is expensive and does not produce the best health care results. They spend a higher portion of its gross domestic product than any other country but still its ranking is low according to its performance.
National Health Partners, Inc. is a national healthcare savings organization that provides discount healthcare membership programs to uninsured and underinsured people through a national healthcare savings network called “CARExpress.”CARExpress is one of the largest networks of hospitals, doctors, dentists, pharmacists and other healthcare providers in the country and is c! omprised of over 1,000,000 medical professionals that belong to such PPOs as CareMark and Aetna. The company’s primary target customer group is the 47 million Americans who have no health insurance of any kind. The company’s secondary target customer group includes the millions of Americans who lack complete health insurance coverage.
Please visit its website at
Xueda Education Group (NYSE:XUE) announced that it plans to release its unaudited second quarter 2011 financial results on August 17, 2011, before the market opens. The Company will hold a conference call at 8:00 am, Eastern Time, on August 17, 2011, which is 8:00 pm, Beijing time on August 17, 2011, to discuss the second quarter 2011 financial results and answer questions from investors. A webcast of the call will be available at Listeners may access the call by dialing: US Toll Free: 1-866-510-0705, US Toll/International: 1-617-597-5363, Hong Kong Toll Free: 800-963-844, Hong Kong Toll: 852-3002-1672, South China Toll Free (China Telecom): 10-800-130-0399
Xueda Education Group provider of tutoring services for primary and secondary school students in China with a focus on offering personalized tutoring services.
Cleantech Transit, Inc. (CLNO)
Cleantech Transit Inc. was founded to capitalize on technology advances and manufacturing opportunities in the growing clean energy public transportation sector. The Company has expanded its focus to invest directly in specific green projects. Recognizing the many economic and operational advances of converting wood waste into renewable sources of energy, Cleantech has selected to invest in Phoenix Energy ( This project could benefit the Company’s manufacturing clients worldwide.
Cleantech Transit, Inc. (CLNO) is pleased to announce it has met its funding requirement to secure the Company’s ability to ear! n in 25% of the 500KW Merced Project.
The Company is in the final stages of closing its initial interest in the Merced Project and is currently working on completing the necessary documentation and expects closing the transaction soon. As previously announced Cleantech has the option to earn up to 40% of the Merced Project and the Company plans to continue to work towards increasing its interest in the Merced Project as they move ahead.
It is important to note that biofuel production and consumption, in and of itself, will not reduce GHG (greenhouse gases) or conventional pollutant emissions, lessen imports or consumption of petroleum, or alleviate pressure on exhaustible resources. Biofuel production and use must coincide with reductions in the production and use of fossil fuels for these benefits to accrue. These benefits would be mitigated if biofuel emissions and resource demands augment, rather than displace, those of fossil fuels.
For more information about Cleantech Transit, Inc. visit its website
PROS Holdings, Inc. (NYSE:PRO) announced that one of Israel’s largest data-mining and business intelligence firms has joined its reseller channel. GSTAT, headquartered in Tel Aviv, is a systems integrator and operates one of Europe’s largest data-mining centers of excellence.
PROS Holdings, Inc. provides pricing and margin optimization software worldwide.
Pioneer Southwest Energy Partners L.P. (NYSE:PSE) announced financial and operating results for the quarter ended June 30, 2011. Pioneer Southwest reported second quarter net income of $53 million, or $1.59 per common unit. Net income included unrealized mark-to-market derivative gains of $28 million, or $0.84 per common unit. Without the effect of this item, adjusted income for the second quarter was $25 million, or $0.75 per common unit. Cash flow from operations for the second quarter was $31 million. Oil and gas sales for the second quarter! average d 6,689 barrels oil equivalent per day (BOEPD), an increase of 4% compared to the second quarter of 2010, reflecting the success of the Partnership’s two-rig drilling program.
Pioneer Southwest Energy Partners L.P. engages in the ownership and acquisition of oil and natural gas properties in the United States.

Fracking and Water: A New Way To Profit from the Industry's Biggest Problem

While oil and water don’t mix, for the fracking industry... the two go hand-in-hand.
You see, while WATER is one of the oil industry’s biggest threats – it's also one of investors’ biggest opportunities.
Consider this:  Each horizontal well in North America that uses hydraulic fracturing, or fracking, uses 2-6 MILLION gallons of sweet fresh water. And the entire North American industry will use an estimated 72 BILLION gallons in 2012.
The cost involved in handling that water could be in the billions of dollars within a couple years.
That's why a multi-billion dollar Water Services industry is emerging right now in the oil patch.
It’s a huge opportunity for some great capital gains — but changing regulations, and a very attentive mainstream audience questioning business practises which have been in effect for decades, will make it choppy water for investors.
“In 2008 there were 25 billion barrels of water handled (by the oil and gas industry) in the US—even at 60 cents a barrel it’s a multibillion dollar business,” says Jonathan Hoopes, President of GreenHunter Energy Inc. (GRH-AMEX). “With the big growth in unconventional since then, it’s likely another 5-6 billion barrels.”
GreenHunter is a pure play on the fast growing water market in the oil patch, along with companies like Heckmann Corp (HEK-NYSE), and Ridgeline Energy Services (RLE-TSXv; RGDEF-OTCQX). There are also many private technology companies with new water treatment processes.
Ridgeline is developing a water purification and recycling technology for the oil and gas sector. CEO Tony Ker says the industry is just beginning to put a formal cost structure on their water, and it’s not always easy to see through the mist to a simple business model.
“Customers in the oil and gas industry are finding their way into the water ind! ustry,&r dquo; he told me in a recent interview. “Two years ago customers didn’t know what the water business meant. At some point they knew they would have to clean and re-use it, but didn’t understand how to do it.
“Now we’re watching it form as we speak. Customers are now starting to define what the water business will be. Before, it had no shape or form. Now we’re seeing various companies put cost structure on the business; put costs on storage, treatment, transportation.”
In the Marcellus Shale, they say it costs $3 + per barrel (/bbl) to dispose of water — and $7-$10/bbl to haul it away. If a horizontal well uses 4.2 million gallons of water to frack (that would be a slightly bigger than average well, but it makes my math easy ;-)), then that’s 100,000 barrels (42 gallons=1 barrel).
If you get 30% of that back in the first year, that’s 30,000 barrels x $10+ per barrel hauling and disposal costs=$300,000 in water costs per well. But that’s $300,000 in water REVENUE for the right company. Then there’s another 30% of that water you get back over the life of the well—assuming costs are constant, that’s $600,000 in revenue.
And there are thousands of wells getting drilled in North America each year; more than 80% of them are now horizontal, and most of those require fracking. The dollar value of managing that water multiplies out fast.
GreenHunter is estimating that the 2011 water disposal market in the Marcellus alone was $1.3-$1.7 billion, and in 10 years the market will be $15-22 billion.
In the Eagle Ford shale play in Texas, they’re quoting a disposal fee of $0.80+/bbl and an average $3.00 – $6.00 /bbl hauling fee. And with an estimated 800 new oil & gas wells drilled there in 2011, the market just keeps getting bigger. In 2011 the water disposal market was estimated to be $500-$800 million, and in 10 years they are guesstimating that local market wi! ll be wo rth $6-9 billion.
The Bakken oil formation – they estimate – will be a $10.6 billion market within 20 years.
And there is just storing all that water until it is ready to be used. With the new pad drilling, where producers drill multiple wells that splay out in different directions from one pad, millions of gallons water can be stored in one spot for up to and over one year. Just storing that water has turned into a $150 million + business with incredible profit margins—in just one year. And it continues to have hyperbolic growth.
“I believe in two years you will see moderate sized water facilities of 50,000 to 100,000 barrels a day, that are permanent, that will process water for re-use,” says Dennis Danzik, a director of Ridgeline and the inventor of their water purification technology.
There are other major revenue sources as well. Sourcing water is a revenue business as municipalities and landowners in the western US sometimes sell their water to the industry for fracking.
Hoopes believes that regulation around water will develop to the point where producers and service companies will have to supply “cradle-to-grave” monitoring of water to prove it is either recycled or disposed of properly–which is great news for GreenHunter and Heckmann.
It’s clear to me in speaking with water company executives that their customer base, the producers, truly want to be green—and not just because it’s good for business. But everyone also says it has to make sense economically to recycle and re-use that water.
And when it comes to trucking out water to disposal wells or recycling at the well site, Hoopes says it will come down to simple economics:
“It will be the lowest cost option that wins.”
Ridgeline's Danzik agrees, saying that cost pressures in the US are intense. “Most of the companies entering the water sector have unreasonable pricing expectations.&rdqu! o;
I think there will be regulatory and public pressure for producers to recycle more water.
That will potentially be a HUGE market that somebody—or somebodies—is going to fill. But the low cost technology isn’t in the market…yet.
GreenHunter and Heckmann Corp (HEK-NYSE) — another pure play in the fast-growing water market — have more diversified water management systems, vs. more niche lines like Ridgeline. When I look at their financials I see EBITDA margins ranging from 15%-30%. (The niche players have bigger margins.)
But the water treatment business model could be more exciting, as it will likely be based on throughput—customers will get charged so much per litre, gallon or barrel of water put through whatever recycling system is used.
With tens of billions of barrels of water being used, that could be the Holy Grail of the water sub-sector — a per gallon charge.
The reality is, however, that the growth in drilling in the major US shale plays is way ahead of how fast the water recycling/treatment industry can hope to develop. So the simple (but highly regulated) disposal of water through UICs/SWDs will be here for a long time.
Danzik adds that each oil and gas basin in North America has different needs; so solutions will obviously be different.
“Pennsylvania has water but no place to put it; Texas has no water but can dispose of it.”
“In the Marcellus, they’re in trouble, and that will increase as summer gets closer. In the North-east you have a real problem with disposal. The salt water disposal has been moved west; it has to be disposed of in western Ohio and Indiana and Virginia. They’re putting it in pits. They have to do something.”
“They (the producers) will have to pay full price per truckload, as much as $5,000 to $6,000. That will be the disposal charge. That will equal hundreds of millions of dollars.”
Again, that will ! be music to the ears of one lucky service provider in the new water sector… and their investors.
Longer term, Danzik sees the trucking industry as the most vulnerable to the changes happening in the fast growing water industry, as well-site water treatment increases market share (that’s his business, after all.)
It’s a variable, high-cost service, and local residents don’t like the traffic or the sight of literally hundreds of trucks delivering water tanks and water around their area.
Hauling or recycling water, storing or disposing of it—Hoopes says that the water business is growing so fast that for awhile, everybody in the space should be a winner.
“Everybody’s market share is a small percentage; this is not a winner take all scenario yet.
It’s too early. We’re all taking water management systems to a more mature status. I think there is a lot of potential to grow market share before we start butting heads too hard.”
By. Keith Schaefer

Monday, March 19, 2012

Drafting Sound At-Work Social Media Policy

Employers have a few different options when it comes to regulating the use of social media like Facebook, Twitter and LinkedIn at work, but applicable laws and National Labor Review Board directives must be considered before taking any course of action. Employers may completely block the use of social media as well as monitor employee use, although employees must be notified of the policy. If employers do allow its use, specific guidelines should be drafted that pertain to posted content involving the company and other employees. For more on this continue reading the following article from JDSupra.

Facebook. LinkedIn. Twitter. These and other social media sites have created fast-paced opportunities for individuals to network and for information to spread. However, with these opportunities come potential hazards, particularly in connection with the workplace. By formulating social media practices and policies that comply with recently issued U.S. legal standards, U.S. employers have the ability to minimize, if not eliminate, the challenges posed by employee use of social media.

Social “NOT-working”

As the phrase suggests, the over 600 million Facebook users who log in to Facebook on a regular basis often do so from the office. Instead of focusing on their work, many social media users waste time keeping up to date with their Facebook “friends,” or “tweeting” their followers with details of what they ate for lunch. In sum, it is no secret that use of social media in the workplace is distracting and has the potential to greatly decrease worker productivity.

Employers are legally permitted to completely block employee access to social media sites at work. In fact, 29% of all U.S. employers have already adopted this practice, although most do so based on fears that hackers will invade company systems and wreak havoc, including loss of crucial data.

Companies that consider the ! practice of completely blocking employee access to social media sites at work as too drastic a measure may lawfully monitor employee use of social media at work, both in terms of the amount of time spent by a particular employee logged onto social media sites, and in terms of the content posted by the employee; provided that the employer clearly communicates to the employee the employer’s monitoring practice. The employee’s acknowledgement of this practice should be clearly documented in order to confirm that the employee’s expectation of privacy has been eliminated. As employers who have adopted such a system can attest, employees who know that their social media time and content is being monitored at work tend to spend very little time logging onto social media sites during work hours.

If either of the above options seems overly aggressive, an employer should, at a minimum, issue a policy informing employees that they are expected to use their discretion with respect to use of social media in the workplace, and that logging onto social media sites should be kept to a minimum during work hours.

Negative Posts

Social media has become a venue for individuals to express their opinions, thoughts and frustrations at an unprecedented pace to a vast number of people.

Consider, for example, the Walmart employee who came home after from work, after having had an altercation with his direct manager, and posted on Facebook derogatory comments about Walmart’s management and poor customer service.

The employee’s Facebook “friends,” including three co-workers, expressed their sympathy for the employee’s lousy day.  Unfortunately for the employee, one Facebook “friend” was not sympathetic, printed out the negative posting and handed it over to Walmart’s management.

Whether Walmart was then entitled to take adverse employment action against the employee revolved around the ! question of whether the employee’s Facebook posting qualified as “protected concerted activity” under the National Labor Relations Act. As explained by the Associate General Counsel of the National Labor Relations Board (“NLRB”) in a report issued on August 18, 2011: adverse employment action may not be taken against an employee when the content of employee speech made via social media was made between employees (of the same employer) in earnest discussion of the terms and conditions of employment as a means of facilitating group action on the part of such employees. This principle applies to both unionized and non-unionized employees.

In the above case, the post was made to a wide range of Facebook “friends,” rather than to only a restricted group of co-workers, and was characterized by an individual venting and expressing gripes, rather than by a call for group activity and constructive desire to improve the group’s working conditions. Therefore, even though some co-workers did happen to
respond sympathetically to the employee’s post, the NLRB held that the Walmart employee’s Facebook posting did not rise to the level of “protected concerted activity.” Walmart therefore had the right to take adverse employment action against the employee. Walmart, Case No. 17-CA-25030, 2011 NLRB GCM LEXIS 34 (July 19, 2011).

Social Media Policy

Obviously, employers would rather not be faced with the unpleasantness of chastising employees for spending excessive amounts of time logged onto social media sites at work, or with the nasty business of considering whether to terminate a frustrated employee who simply failed to think through the implications of posting confidential or negative information in a public forum.   A social media policy which clearly establishes guidelines and boundaries, and is unequivocally communicated to employees, enables employees to anticipate company expectations and ther! eby prev ent such predicaments in the first place.

However, a social media policy must be carefully drafted in order to comply with the NLRB’s recently issued directives, which prohibit employers from placing excessive restrictions on the content of employee social media postings.   While each employer should create a social media policy tailored to the particular employer’s industry and workplace, the following are some bright line rules:
  • Clearly communicate to employees whether social media use in the workplace will be unequivocally prohibited, monitored by the company, or discretionary within reasonable time limits. The main prerequisite from a legal standpoint is that the employee who is being monitored be made aware (and ideally sign an acknowledgement) of this practice, so that it is clear that the employee’s expectation of privacy has been eliminated.
  • Provide clear boundaries with respect to prohibited social media content:
  • No disclosure of confidential information about the company, co-workers, clients or customers.
  • No posting on behalf of the company unless the employee is clearly authorized to do so.
  • Do NOT excessively restrict the content of employee social media postings to the extent that “protected concerted activity” among the company’s employees would be prohibited. For example, a social media policy should not ban “inappropriate discussions” about the company, management, working conditions or co-workers.
  •  Caution that violation of the company’s social media policy may result in adverse employment action, up to and including termination of employment.
Practice Pointers

As a means of addressing the issue of employee social media use, an employer should:

1.    Decide which social media practice will work best in the employer’s particular workplace:
  • Co mpletely eliminating employee access to social media sites;
  • Monitoring employee use of social media (upon clearly acknowledged notice); or
  • Permitting social media use within reasonable time limits.
2.    Circulate a Social Media Policy among employees, and obtain a signed
acknowledgement from each employee that s/he has read and understands the

3.    Prior to taking any adverse employment action against an employee on account of
the content of his/her social media posting, consider whether the employee’s
  • were posted on a public site accessible to a large number of people;
  • disclosed confidential information about the company, its employees, customers or clients; or
  • were directed at co-workers in a serious effort to discuss working conditions, or were simply a venue for the employee to vent personal frustration.
Most cases will not be clear cut and will involve a detailed analysis of the above and other factors, including a balance of the company’s legitimate business interests and the employee’s rights. Any decision to take adverse employment action against an employee on account of social media use should be made in consultation with legal counsel.

Meira Ferziger is the head of the labor and employment practice at Schwell Wimpfheimer & Associates LLP and has significant experience in drafting policies, agreements, employee handbooks and guidelines in compliance with U.S. federal and state law.   Meira functions as an integral part of the day to day operation of corporate clients by counseling them through their employment-related practices and decisions, and also advises clients as to employment issues that arise from corporate transactions, such as restructurings or acquisitions. She can be reached at or at 646 328 0794.

This SWA ! publicat ion is intended for informational purposes and should not be regarded as legal advice. For more information about the issues included in this publication, please contact Meira Ferziger. The invitation to contact is not to be construed as a solicitation for legal work. Any new attorney/client relationship will be confirmed in writing. 

6 Stocks that Could Profit from the Natural Gas Revolution

I've received quite a few emails recently from my Scarcity & Real Wealthsubscribers regarding hydraulic fracturing, or fracking. It's clear that many of them have been reading up on the subject.
And they should. Because even with stricter regulatory burdens on the horizon, this could well be the most profitable and rewarding subsector of the entire energy universe.
In order to understand why, let me take you back a few years in order to understand where we once stood on the natural gas landscape.
"The era of inexpensive natural gas is over."
Back in 2005, Hurricane Rita struck the Texas coast, Microsoft (Nasdaq: MSFT) released the Xbox 360 console, the Chicago White Sox won the World Series, and the United States seemed to be running out of natural gas.
At least, that's what everybody thought.
Gas supplies were dwindling, and the only hope for meeting the U.S.'s growing need appeared to be purchases from overseas. In fact, liquefied natural gas (LNG) imports had surged nearly 30% the prior year, and companies were investing heavily in new import terminals.
In its annual report to shareholders, Chenier Energy (NYSE: LNG) boldly declared "the era of inexpensive North American gas is over." So investors and consumers braced for a day when domestic natural gas reserves ran dry and incoming tankers hauled in supplies from distant lands.
That day never came.
It turns out the United States isn't running out of natural gas -- it is actually swimming in it. It won't need to borrow from its neighbors. Quite the opposite. Stockpiles are overflowing with surplus supply that can be sold overseas. So those import terminals are now being converted to export facilities.
That's an amazing 180-degree turnaround in a relatively short period of time. So what happened? Did somebody suddenly discover the lar! gest gas reservoir this side of Qatar? Not exactly.
The credit for the natural gas revolution belongs almost entirely to one of the most controversial -- yet indisputably successful -- drilling techniques ever devised: hydraulic fracturing.
Whether you love it or hate it, one thing is for sure -- you better not ignore it.
A 100-Year Supply of Fuel
The Energy Information Agency (EIA) now believes there is a staggering 2,543 trillion cubic feet of recoverable gas in the United States. The country burns about 25 trillion cubic feet a year, give or take. So that inventory means we have ample supply on hand to last for the next century.
Notice I emphasized the word "recoverable."
Much of North America's oil and gas is locked within geologically challenging formations such as the Barnett Shale in Dallas, the Marcellus Shale in Pennsylvania, and the Eagle Ford Shale in south Texas, just to name a few.
These aren't new discoveries. In most cases, geologists and energy producers have known about these fields for decades. But knowing the gas is there and actually recovering it from two or three miles below the surface are two very different things. That's particularly true when the gas is trapped inside dense rock and can't move.
The productivity of a reservoir is determined largely by two factors: porosity and permeability. The more porous, the more empty space available to store oil and gas. And the more permeable, the easier fluid can flow through and be captured. Some prolific oil fields have porosities of 30%.
But shales are a whole different ballgame. In North Dakota's Bakken play, porosity is just 5% (95% rock). So while there is plenty of oil, bringing it to the surface is a daunting task. Oil men have been hunting in this region as far back as 1951. Most had nothing but dry holes to show for their efforts.
The same problem frustrated energy companies trying to tap into tight formations all around the! country . Hydraulic fracturing proved to be the answer to this vexing problem.
The facts on fracking
Fracking involves pumping high-pressure fluids deep below ground to fracture the rock and prop it open. The procedure creates a network of tiny cracks that can stretch hundreds of feet, providing a pathway for oil and gas to flow into the well bore.
In a nutshell, fracking helps artificially create the fissures and channels that Mother Nature put in conventional reservoirs. This technological breakthrough has made it possible to efficiently drain hydrocarbons from basins that were previously considered inaccessible and out of bounds.
Fracking has technically been around since the 1940s. But like most technologies, it has improved dramatically over time. The practice really took off about a decade ago when pioneers paired it with horizontal drilling in the Barnett Shale. The results were nothing short of amazing.
In just 10 years, Barnett production zoomed from nothing to five billion cubic feet (Bcf) of gas per day. Incidentally, it took just three years for fracking crews and producers to reach the same production milestone in Louisiana's Haynesville Shale -- so we continue to perfect the process.
Investment opportunities abound
Despite potential environmental drawbacks, there's no denying that hydraulic fracturing is a boon for the energy industry.
Shale gas now accounts for one-third of the nation's overall gas production, a 30-fold increase since 2000. And don't forget about oil. Following the widespread introduction of fracking, the Bakken Shale produced 113 million barrels in 2010. That's more in one year than the cumulative total from the prior 55 years combined.
That's what fracking can do.
No wonder just about every unconventional gas well undergoes multi-stage fracking services these days. And it isn't cheap. By some estimates, fracking can account for up to 30% of the total dri! lling an d completion cost of a well -- even more in busy shales. Yet companies still can't keep pace with demand.
Just look at Frac-Tech, which is partially owned by Chesapeake Energy (NYSE: CHK). Last year, the company reported that every one of its service units had been deployed in the field, without a day off, since November 2009. And through the first half of 2011, revenue surged 143% from a year earlier to crack the $1 billion mark.
And that's just in the United States. Don't think for a second that we're the only country with untapped shale resources. Bloomberg estimates that China holds 1,275 trillion cubic feet of shale gas reserves. And Canada holds vast supplies of oil and gas inside the Horn River basin and other spots.
Fracking is the key that unlocks these geologic treasure chests.
In the table below, I've listed a few prospects that warrant further research by investors.

Sunday, March 18, 2012

Ironwood Gold Announces Appointment of Keith P. Brill to Board of Directors

SCOTTSDALE, AZ–(CRWENEWSWIRE) - Ironwood Gold Corp. (OTC.BB:IROG.OB) (”Ironwood” or the “Company”) wishes to announce that effective immediately, the Company is pleased to announce and welcomes the appointment of Keith P. Brill to the Board of Directors.
Mr. Brill brings financial acumen and extensive management experience from a career which includes financial management, analytics and operational advisory services most recently provided as the owner & managing director of the Brill Group, LLC. Previously he was the CFO/CIO for Amtrust Realty Corp. a commercial property firm based in New York with holdings in many major US cities. Prior to this, he was a management consultant with PA Consulting Group, Inc., a leading global consulting firm providing multinational Fortune 500 companies with consulting advice on topics including cost reduction, operational efficiency, and IT strategy. Mr. Brill has extensive experience in conducting ROI analysis, developing business cases, and providing strategic financial advice on major business transformation programs.
Mr. Brill received an International Master of Business Administration (IMBA) from the Moore School of Business, University of South Carolina in May 2005. He graduated from the South Carolina Honors College, University of South Carolina in May 2003 with a Bachelor of Science, magna cum laude, major in Economics and Finance, minor in Spanish.
Commenting on the appointment of Mr. Brill, Ironwood’s CEO Bezhad Shayanfar stated, “Keith’s financial expertise and numerous contacts in the financial arena will be of great benefit to Ironwood as we move ahead during a planned period of transition. We look forward to his input and approach to invigorating shareholder value.”
Additional details regarding the Company and its agreements are filed as part of the Company’s continuous public dis! closure as a reporting issuer under the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission’s (”SEC”) EDGAR database. For more information visit:
Ironwood Gold Corp. is a mineral exploration and development company building a portfolio of prospective properties containing known deposits of strategic precious metals in politically stable, mining-friendly North American districts with recognized production histories. For more information visit:
Notice Regarding Forward-Looking Statements
This news release contains “forward-looking statements” as that term is defined in Section 27A of the United States Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the development, costs and results of new business opportunities. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects and development stage companies. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the ri! sk facto rs disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

Do Smokers Know How Much They Spend on Cigarettes?

The average smoker burns through 13 to 16 cigarettes a day, or four to six packs a week. That adds up. The average smoker forks over at least $1,500 a year, while here in New York City, it's closer to $3,300.

But because smoking, like takeout food and store-made coffee, hits our wallets in a series of small purchases, it can be easy to overlook how much you're spending. Still, it has a psychological impact: One of many reasons governments implement cigarette taxes is to reduce smoking among price-conscious consumers.

It works: Research shows that people smoke less as cigarettes get more expensive. As tobacco giant Philip Morris (PM) stated in its 10-Q for the Securities and Exchange Commission on Nov. 3, 2008, "Tax increases are expected to continue to have an adverse impact on sales of tobacco products by our tobacco subsidiaries, due to lower consumption levels."

Smokers will have a lot to ponder in coming months, as the Department of Health and Human Services implements its new packaging policy requiring warning labels that include graphic photos of the health damages caused by smoking. In the meantime, we wanted to know how sensitive smokers are to the price of their cigarettes, so we hit the streets of Manhattan during lunchtime to find out.