Sen. Akaka to File Fiduciary Duty Amendment to Financial Reforms Bill

Wealth Manager has obtained a draft of the amendment. It mandates the extension of the fiduciary standard as it applies to investment advisors under the Investment Advisers Act of 1940, to broker/dealers who provide, "personalized investment advice about securities to a retail customer (and such other customers as the Commission may by rule provide)..."

It calls for the SEC to write rules:

"to provide that, with respect to a broker or dealer, when providing personalized investment advice about securities to a retail customer (and such other customers as the Commission may by rule provide), the standard of conduct for such broker or dealer with respect to such customer shall be the same as the standard of conduct applicable to an investment adviser under section 211 of the Investment Advisers Act of 1940.

The receipt of compensation based on commission or other standard compensation for the sale of securities shall not, in and of itself, be considered a violation of such standard applied to a broker or dealer. Nothing in this section shall require a broker or dealer or registered representative to have a continuing duty of care or loyalty to the customer after providing personalized investment advice about securities."

The amendment also calls for additional authority for the SEC to:

* require broker/dealers to disclose the "range of products offered"
* prohibit or restrict "certain sales practices, conflicts of interest, and compensation schemes for brokers, dealers, and investment advisers that the Commission deems contrary to the public interest and the protection of investors."
* enforce "violations" of these rules with broker/dealers.

It also requires that advice givers:

* "act in the best interest of the customer"
* that "any material conflicts of interest shall be disclosed"
* and that, "the Commission will facilitate the provision of simple and clear disclosures to investors regarding the terms of their relationships with brokers, dealers, and investment advisers, including any material conflicts of interest"

Comments? Please send them to kmcbride@wealthmanagerweb.com. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.

Look Out Below! Patriot Coal (PCX) & VirnetX Holding (VHC) in Technical Trouble

There are really only two schools of thought in the world of stock-picking.... trade them based on what they should be doing, and trade them based on what they are doing. The former feels right, but it's the latter that tends to put the most money in your pocket. Enter VirnetX Holding Corporation (AMEX:VHC) and Patriot Coal Corporation (NYSE:PCX), stage right. Regardless of whatever pro/con arguments are being made for either, both PCX and VHC have dropped key technical hints that say the trading masses have their pitchforks and torches in hand.

Not that Patriot Coal Corporation was on the mend just yet, but after finding a floor at $6.86 last week for the third time since October, it was at least beginning to look like the bleeding stopped. Wrong. PCX has fallen 8.0% today, reaching $6.34 in the process and opening up a whole new door of bearish territory that up until now had been closed. And, given the way the 50-day and 100-day moving averages have been pressing down the whole time, it's not like there's a lot of hope for a quick fix now.

At the heart of the problem for PCX is falling coal prices. Coal prices have been sliding since early 2011, but the tumble started to reach 'in earnest' levels in January. Although coal's tumble may finally be coming to an end - thermal coal has been hovering $60-short ton since late January, and coking coal is getting in a groove around $200/tonne - it's down again today. Investors seem to be uninterested in waiting it out any longer with Patriot Coal Corporation simply because there's no end in sight for the slacking demand.

As for VirnetX Holding Corporation, a couple of months ago it looked like this pseudo-technology stock was ready to make a bullish run. We had just s! een VHC win a hard fought battle to get back above all of its key moving averages as well as a key resistance line. And, traders were getting excited about owning it again; the company had just been awarded a favorable ruling in a patent infringement case that stood to start generating some solid recurring revenue. Since then though, a reopening of the USPTO patent case has exposed this company's vulnerability in the mobile patent game.

To put it in technical trading terms, VHC has fallen back under all of its key moving averages, and back under that key ceiling at $24.09.... and it's still moving lower. We're also close to seeing a so-called 'death cross' of the 50-day moving average line (purple) under the 200-day moving average line (green), which would suggest the momentum for VirnetX Holding is bearish is multiple timeframes - the last thing any owner wants to see.

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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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:
Romney
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
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
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.

These Are the Retailers to Watch This Earnings Season

There are a handful of savvy retailers that prepared for the tough economy by positioning themselves to profit - and now they're being rewarded with blockbuster earnings.

So far this earnings season, more than half of retailers have beat analysts' estimates for same-store sales, according to a Thomson Reuters survey.

These earnings season winners have streamlined inventories and catered to the consumers who are still spending - and the efforts have paid off. They're exceeding sales expectations, watching their stocks climb, and are expected to continue the streak in future quarters - meaning profit opportunities for investors.

Here are the companies coming out on top of the retail sector.

Discounters Deliver Profits

Discount retailers continue to profit from price-conscious consumers, and many chains saw a solid boost from a healthy back-to-school shopping season.

"Despite being buffeted by the winds of inflation, [Hurricane] Irene and unemployment, this back-to-school season was the best since 2006," Craig Johnson, president of retail consultant Customer Growth Partners, told Reuters.

One of the best performing discount retailers so far has been Family Dollar Stores Inc. (NYSE: FDO), which reported record sales and earnings for the fourth quarter and fiscal year ended Aug. 27. Net sales for the quarter were up 9.1% from the year before to $2.13 billion, with sales totaling $5.55 billion for the whole year.

At a time of weak consumer sentiment, Family Dollar saw comparable store sales increase 5.5% for the year. The retailer expects another 4% to 6% jump in the first quarter of fiscal year 2012.

Now it plans to open 500 stores and remodel 1,000 in 2012.

"I think the most important thing is that the remodeled stores are positioned much better to provide customer service and it's a m! uch more compelling place to shop," said Family Dollar Chief Financial Officer Kenneth T. Smith. "That's evidenced by not only the customer surveys that we received, but also the fact that they're buying more. This program is positioning us nicely with our customer, and we feel great about it as indicated by our decision to continue the very aggressive pace of the program."

The bright outlook prompted analyst Dan Wewer of Raymond James & Associates last week to raise the stock's rating to "Strong Buy" from "Outperform." Family Dollar stock is up more than 8.5% for the year.

Upcoming earnings to look out for in the discount-retailing sector include big-name competitors Target Corp. (NYSE: TGT) and Wal-Mart Stores Inc. (NYSE: WMT). Both are expected to report higher sales.

Wal-Mart executives said Wednesday at the company's annual meeting that the discount giant was ready to end its streak of declining sales. After nine straight quarters of lower sales at U.S. stores open at least a year, Wal-Mart is expected to report an increase when it releases earnings next month.

Wal-Mart has some catching up to do because while it was struggling to reach positive sales numbers, chief competitor Target forged ahead.

Target has started to focus on consumable items as a strategy to generate more same-store sales and it's paying off.

Since hitting a 52-week low of $45.28 in June, Target has climbed more than 16% to close Thursday at $52.69. Target's September sales were up 6.5% from last year, boosting sales so far this quarter up 6% year-over-year.

"Target's got a better shopping experience, they understand their consumers better, and I think it's a clean place to go," said Money Morning Chief Investment Strategist Keith Fitz-Gerald. "They're not even getting started in international sales so they've still got that opened to them as well."

Target will release earnings Nov. 14 aft! er its t hird quarter ends Oct. 31.

Also expect Dollar General Corp. (NYSE: DG) to beat analyst expectations when it announces third-quarter earnings at the end of November. The discount chain on Aug. 30 reported record second-quarter sales and earnings, and its stock since then has gained 8%. It's up 25% year-to-date. Sales were up 11.2% from the prior year, and adjusted net income rose 25%. The company expects total sales to rise 12% to 14% for its fiscal year 2011 ending Feb. 3, 2012.

High-End Earnings

On the other end of the retail spectrum, high-end companies are appealing to wealthier consumers who continue to spend more, despite fears of a double-dip recession.

"We've been seeing in these more challenging times that the high-end retailers have been doing very well because those who can afford it are opening their purses," Steve Riordan, global managing director for PRGX Global Inc, told MarketWatch.

Burberry Group PLC reported a 44% increase in retail sales for its fiscal first half. The result was a 30% jump in revenue, which came to $1.3 billion (830 million pounds).

And Coach Inc. (NYSE: COH) in August reported a 10.6% jump in same-store sales of for the 2011 fiscal year.

High-end retailer earnings to watch for this quarter include Tiffany & Co. (NYSE: TIF), reporting Nov. 29. The luxury brand's second-quarter revenue was 24% higher year-over-year, same-store sales rose 22% and earnings climbed 33%. The company adjusted earnings per share to 86 cents, 20% higher than analysts expected.

Tiffany's stock is up about 11% since its last earnings release. Analysts' average 12-month price target is currently $83.44, an 18.25% premium to Thursday's $70.26 closing price.

Also, look for men's clothing manufacturer Jos. A Bank Clothiers Inc. (NASDAQ: JOSB) when it announces third-quarter earnings Nov. 28. The company's profits rose 25% in the second quarter and its stock is up 21.5% f! or the y ear.

The company has consistently raised sales and revenue by appealing to consumers with amazing deals like "buy one, get two free" promotions and 70% discounts. The initiatives have helped sales grow 20% annually the past few years and allowed the company to open 110 U.S. stores since 2008.

Barnes & Noble Settles With Burkle–To What End?

Failing bookstore company Barnes & Noble (NYSE: BKS), maker of the also-ran e-reader, the Nook,? has settled with raider Ron Burkle, who bought enough shares in the company so that he could claim that he needed a board seat.
The Wall Street Journal reports that “As part of the settlement, Barnes & Noble will add two independent directors to the board, in addition to a director affiliated with Yucaipa Cos., the investment firm run by Mr. Burkle, these people said.”
Burkle believed that the founding Riggio family, which holds a controlling interest in the firm, would act in their interests and not those of other shareholders. Burkle will end his proxy fight against the company in exchange for those board seats and support the re-election of chairman Leonard Riggio. Apparently, Barnes & Noble will pay the raider’s legal costs for his challenge. It is hard to imagine why this is a good deal for shareholders who will watch Burkle pick the company’s pocket in exchange for a seat at the table.
Riggio is already acting in his best interests and those of Burkle as well by putting the book company up for sale. Riggio has indicated that he may be a buyer, probably with a private equity firm which could borrow most of the purchase price from unwitting banks which have already lost tens of billions of dollars on LBOs.
Barnes & Noble has been thrashed by Amazon.com which has sold books online for more than a decade and does not have the costs of maintaining store locations. Amazon has also launched its Kindle e-reader which controls that market with a share that is estimated at 70% or better.
Even with a potential private sale of the company, its shares are only up to $14.48, well below their 52-week high of $25.07 and their five-year high of $48 reached in May 2006 when selling books out of physical locations was as good a business as selling DVDs from stores. Blockbuster found out the hard way that its sales would s! uffer wh en DVD sales moved to the Internet and the same now holds true of books, both paper and digital.
It is hard to see what Burkle gains by his new-found seat at the table. Barnes & Noble can hardly be broken up. The company’s online business many be attractive, but its stores are an albatross which have very little value at all.
Burkle may regret that he got what he wanted.