Stock market may not perform, stocks do

Hot Financial Companies To Own For 2014

Are you an investor in the stock market? Are you worried about the fact that two key market indices; Nifty and Sensex have not grown since January, 2008 when they reached their all time high? If so, then it is time to think, analyse and act.

While there is no doubt that Sensex and Nifty represent the broad market performance in the stock market, the returns offered by these indices are deceptive and hide the opportunity that the stock market offers.

Many investors, who have left stock market thinking that market has consistently failed to generate returns in the past five plus years, need to look at the market from a different perspective. 

Even if stock market does not perform, stocks will continue to perform. Out of several stocks constituting Sensex and Nifty, some of them have done wonderfully well.

Let us look at some examples to understand this. On January 10, 2008; Sensex touched an all time high of 21,206. On the same date ITC touched a high of Rs.232 before closing at Rs. 219.7. Currently ITC trades at close to Rs. 330. It is pertinent to note that ITC had given a bonus of 1:1 in the year 2010 and if this is taken into consideration the stock price will be Rs. 660.

So in the same period in which broad market index has failed to generate any positive return ITC has given almost 200 percent return if dividend is also taken into consideration. Similarly HDFC 's stock price closed at Rs. 3128 on the date when stock market touched all time high. Currently the price is Rs. 833.

If the face value change is taken into consideration, adjusted stock price will be around Rs.4150. So HDFC stock has also offered positive return for stock market investors.

There is other side of the story too. ICICI Bank reached Rs.1399 on 10th January, 2008 while today it trails below this level. Same is the story with some other stocks which are part of Sensex and Nifty.

So what is the lesson learnt from performance of these stocks? The lesson is very obvious. Even when the stock market is not performing, stocks will continue to do well. The investors need to be selective and identify the stock which have potentially to do well rather than expecting market to deliver in general.

Another important learning which comes out from last five years of experience in the stock market is that stock picking is extremely critical in a flat or non moving market.

While in a rally phase many stocks deliver, during testing times only those stock perform who have excellent business model accompanied by a good management.

Erickson Gets Contract Extensions - Analyst Blog

Evergreen Helicopters, Inc. – a wholly-owned subsidiary of Erickson Air-Crane Inc. (EAC) – has received two contract extensions with Special Operations Command Africa/SOCAFRICA.

Per the contract, Evergreen Helicopters will provide a fleet of fixed and rotary wing aircraft for personnel and cargo transport for the Department of Defense in Central Africa. The aggregate value of the contract option is more than $8 million.

Founded by aviation pioneer Delford Smith, Evergreen Helicopters is a diversified provider of air transport services worldwide for cargo and personnel to government and commercial customers.

On May 2013, Erickson Air-Crane − the renowned operator and manufacturer of the Erickson S-64 Aircrane heavy-lift helicopter − acquired Evergreen Helicopters. Recently, Evergreen Helicopters extended its contract with Fluor Corp. The value of the contract is more than $100 million. Per the contract, the company will provide multiple rotary wing aircraft for cargo as well as transport mission requirements. These aircraft will be used by Afghanistan forces. This contract extension would continue to meet significant, urgent and ongoing needs of various aviation services work in Afghanistan.

Erickson Air-Crane also extended its contract with the U.S. Transportation Command to provide essential services to support overseas operations in Afghanistan.

The company is of late generating substantial revenues from contract renewals, which provide visibility to future growth. Strategic acquisitions, going forward, would also continue to strengthen Erickson's leading position in the heavy-lift market.

Erickson Air-Crane's stand-alone business combined with the Evergreen acquisition is expected to provide the company with an incremental fleet of 64 aircraft comprising helicopters and fixed-wing airplanes. The diverse fleet serves a wide range of customers and provides significant passenger transport and airlift services for the U.S. military.

The com! pany presently retains a short-term Zacks Rank #1 (Strong Buy). Other stocks to consider are The Boeing Company (BA), Northrop Grumman Corporation (NOC) and Embraer SA (ERJ), all with a Zacks Rank #2 (Buy).

Top 10 Bank Companies To Invest In Right Now

On February 24, 2013, I posted a piece called "Bernanke is Underwriting the Wealthy".

Confirming evidence has just been published on Bloomberg.

Matthew C. Klein, the author of the piece, writes:

"…there is no academic consensus about the distributional impact of monetary policy as it is currently conducted. Researchers at the International Monetary Fund studied the impact of "monetary policy shocks" in the U.S. since 1980. They found that 'a contractionary monetary policy shock raises the observed inequality across households.' This was true even when the early 1980s were removed.

On the other hand, when the Bank of England studied the impact of its recent asset-purchase programs, it admitted that the bulk of the benefits went to wealthier households. Markus Brunnermeier and Yuliy Sannikov, two economists at Princeton, have argued that asset purchases work precisely because they redistribute wealth to banks and other holders of long-duration instruments.

Top 10 Bank Companies To Invest In Right Now: Federal National Mortgage Association (FNMA.OB)

Federal National Mortgage Association (Fannie Mae) is a government-sponsored enterprise (GSE) chartered by the United States Congress to support liquidity and stability in the secondary mortgage market, where mortgage-related assets are purchased and sold. The Company�� activities include providing market liquidity by securitizing mortgage loans originated by lenders in the primary mortgage market into Fannie Mae mortgage-backed securities (Fannie Mae MBS), and purchasing mortgage loans and mortgage-related securities in the secondary market for its mortgage portfolio. Fannie Mae operates in three business segments: Single-Family business, Multifamily Business (formerly Housing and Community Development (HCD)) and Capital Markets group. Its Single-Family Credit Guaranty and Multifamily businesses work with its lender customers to purchase and securitize mortgage loans customers deliver to the Company into Fannie Mae MBS.

The Company obtains funds to suppo rt its business activities by issuing a variety of debt securities in the domestic and international capital markets. Fannie Mae acquires funds to purchase mortgage-related assets for its mortgage portfolio by issuing a variety of debt securities in the domestic and international capital markets. It also makes other investments. Fannie Mae conducts its business in the United States residential mortgage market and the global securities market. It conducts business in the United States residential mortgage market and the global securities market. During the year ended December 31, 2011, the Company��

Single-Family Business

Single-Family business includes mortgage securitizations, mortgage acquisitions, credit risk management and credit loss management. Single-Family business works with the Company�� lender customers to provide funds to the mortgage market by securitizing single-family mortgage loans into Fannie Mae MBS. Its Single-Family business also works with its Capital Markets group to facilitate th! e! purchase of single-family mortgage loans for the Company�� mortgage portfolio. Fannie Mae�� Single-Family business prices and manages the credit risk on its single-family guaranty book of business, which consists of single-family mortgage loans underlying Fannie Mae MBS and single-family loans held in its mortgage portfolio. Single-Family business and Capital Markets group securitize and purchase primarily single-family fixed-rate or adjustable-rate, first lien mortgage loans, or mortgage-related securities backed by these types of loans.

The Company securitizes or purchases loans insured by Federal Housing Administration (FHA), loans guaranteed by the Department of Veterans Affairs (VA), and loans guaranteed by the Rural Development Housing and Community Facilities Program of the Department of Agriculture, manufactured housing loans, reverse mortgage loans, multifamily mortgage loans, subordinate lien mortgage loans and other mortgage-related securities. I ts Single-Family business securitizes single-family mortgage loans and issues single-class Fannie Mae MBS. Fannie Mae�� Single-Family business securitizes loans solely in lender swap transactions, in which lenders deliver pools of mortgage loans to the Company, which are placed immediately in a trust, in exchange for Fannie Mae MBS backed by these loans. Generally, the servicing of the mortgage loans held in its mortgage portfolio or that backs its Fannie Mae MBS is performed by mortgage servicers on the Company�� behalf. Lenders who sell single-family mortgage loans to Fannie Mae service these loans for the Company. For loans it owns or guarantees, the lender or servicer must obtain its approval before selling servicing rights to another servicer.

Fannie Mae�� mortgage servicers collect and deliver principal and interest payments, administer escrow accounts, monitor and report delinquencies, perform default prevention activities, evaluate transfers of own ership interests, respond to requests for partial releas! es o! f s! ecurit! y, and handle proceeds from casualty and condemnation losses. Its mortgage servicers are the primary point of contact for borrowers and perform implementation of its homeownership assistance initiatives, negotiation of workouts of troubled loans, and loss mitigation activities. Mortgage servicers also inspect and preserve properties and process foreclosures and bankruptcies.

Multifamily Mortgage Business

Multifamily business works with the Company�� lender customers to provide funds to the mortgage market by securitizing multifamily mortgage loans into Fannie Mae MBS. Through its Multifamily business, Fannie Mae provides liquidity and support to the United States multifamily housing market principally by purchasing or securitizing loans that finance multifamily rental housing properties. It also provides some limited debt financing for other acquisition, development, construction and rehabilitation activity related to projects that complement this business. Fannie Mae�� Multifamily business also works with its Capital Markets group to facilitate the purchase and securitization of multifamily mortgage loans and securities for Fannie Mae�� portfolio, as well as to facilitate portfolio securitization and resecuritization activities.

The Company�� multifamily guaranty book of business consists of multifamily mortgage loans underlying Fannie Mae MBS and multifamily loans and securities held in Fannie Mae�� mortgage portfolio. Revenues for Fannie Mae�� Multifamily business are derived from a variety of sources, including guaranty fees received as compensation for assuming the credit risk on the mortgage loans underlying multifamily Fannie Mae MBS and on the multifamily mortgage loans held in its portfolio and on other mortgage-related securities; transaction fees associated with the multifamily business, and other bond credit enhancement related fees. As with the servicing of single-family mortgages, multifamily mortgage servicing is performed by the ! lenders !! who sell ! the mortgages to the Company. Fannie Mae�� Multifamily business is organized and operated as an integrated commercial real estate finance business.

Capital Markets

Capital Markets group's primary business activities include mortgage and other investments, mortgage securitizations, structured mortgage securitizations and other customer services, and interest rate risk management. Capital Markets group manages the Company�� investment activity in mortgage-related assets and other interest-earning, non-mortgage investments. It funds its investments primarily through proceeds the Company receives from the issuance of debt securities in the domestic and international capital markets. Its business activity is focused on making short-term use of its balance sheet rather than long-term investments. Activities Fannie Mae is undertaking to provide liquidity to the mortgage market include whole loan conduit, early funding, real estate mortgage investment c onduit (REMICs) and other structured securitizations and dollar roll transactions. Whole loan conduit activities include its purchase of both single-family and multifamily loans principally for the purpose of securitizing them. During the year ended December 31, 2010, it was engaged in dollar roll activity. A dollar roll transaction is a commitment to purchase a mortgage-related security with a concurrent agreement to re-sell a similar security at a later date or vice versa.

Fannie Mae�� Capital Markets group is engaged in issuing both single-class and multi-class Fannie Mae MBS through both portfolio securitizations and structured securitizations involving third party assets. Its Capital Markets group creates single-class and multi-class Fannie Mae MBS from mortgage-related assets held in its mortgage portfolio. Fannie Mae�� Capital Markets group may sell these Fannie Mae MBS into the secondary market or may retain the Fannie Mae MBS in its investment portf olio. The Company�� Capital Markets group cr! eates sin! gle-c! lass and ! multi-class structured Fannie Mae MBS, for its lender customers or securities dealer customers, in exchange for a transaction fee. The Company�� Capital Markets group provides its lender customers and their affiliates with services that include offering to purchase a range of mortgage assets, including non-standard mortgage loan products; segregating customer portfolios to obtain optimal pricing for their mortgage loans, and assisting customers with hedging their mortgage business.

Although the Company�� Capital Markets group�� business activities are focused on short-term financing and investing, revenue from its Capital Markets group is derived primarily from the difference, or spread, between the interests it earns on its mortgage and non-mortgage investments and the interest it incurs on the debt the Company issues to fund these assets. Its Capital Markets revenues are primarily derived from the Company�� mortgage asset portfolio. Capital Markets gro up funds its investments primarily through the issuance of a variety of debt securities in a range of maturities in the domestic and international capital markets. Investors in the Company�� debt securities include commercial bank portfolios and trust departments, investment fund managers, insurance companies, pension funds, state and local governments, and central banks.

The Company competes with Freddie Mac, FHA and Ginnie Mae.

Top 10 Bank Companies To Invest In Right Now: New York Community Bancorp Inc (NYCB.N)

New York Community Bancorp, Inc. is a bank holding company and a producer of multi-family mortgage loans in New York City, with an emphasis on apartment buildings that feature below-market rents. It has two bank subsidiaries: New York Community Bank (the Community Bank),New York Commercial Bank (the Commercial Bank. The Community Bank has 241 branches and operates through seven divisional banks. The Commercial Bank has 34 branches in Manhattan and operates 17 of its branches under the divisional name Atlantic Bank.

During the year ended December 31, 2011, all of the one-to-four family loans the Company originated was sold to government-sponsored enterprises (GSEs). In New York, the Company serves its Community Bank customers through Roslyn Savings Bank, with 55 branches on Long Island; Queens County Savings Bank, with 34 branches in the New York City borough of Queens; Richmond County Savings Bank, with 22 branches in the borough of Staten Island, and Roose velt Savings Bank, with eight branches in the borough of Brooklyn. As of December 31, 2011, in the Bronx and neighboring Westchester County, the Company had four branches that operated directly under the name New York Community Bank.

In New Jersey, the Company serves its Community Bank customers through 51 branches that operate under the name Garden State Community Bank. In Florida and Arizona, where it has 25 and 14 branches, respectively, the Company serves its customers through the AmTrust Bank (AmTrust) division of the Community Bank. In Ohio, the Company serves its Community Bank customers through 28 branches of Ohio Savings Bank. Customers of the Community Bank and the Commercial Bank have access to their accounts through 261 of its 285 automatic teller machines (ATMs) locations in five states. The Company also serves its customers through three Websites, which include www.myNYCB.com, www.NewYorkCommercialBank.com and www.NYCBfamily.com.

Lendi ng Activities

The Company�� principal asset i! s loans. Its loan portfolio consists of three components: covered loans, non-covered loans held for sale and non-covered loans held for investment. As of December 31, 2011, the balance of covered loans was $3.8 billion, of which $3.4 billion were one-to-four family loans. Non-covered loans held for sale consists of the one-to-four family loans that are originated for sale, primarily to GSEs. At December 31, 2011, the held-for-sale loan portfolio totaled $1.0 billion

As of December 31, 2011, loans held for investment consisted of loans that it originates for its own portfolio, and totaled $ 25.5 billion.

In addition to multi-family loans, loans held for investment include commercial real estate loans (CRE); acquisition, development and construction (ADC) loans; commercial and industrial loans (C&I), and one-to-four family loans. As of December 31, 2011, its multi-family loans represented $17.4 billion, or 68.3%, of total loans held for investment, and repr esented $5.8 billion, or 64.1%, of the total loans that it originated for investment. The multi-family loans it originates are typically secured by non-luxury apartment buildings in New York City. It also makes multi-family loans to property owners who are seeking to expand their real estate holdings by purchasing additional properties.

As of December 31, 2011, CRE loans represented $6.9 billion, or 26.9%, of total held for investment; ADC loans represented $445.7 million, or 1.7%, of total loans held for investment. Its ADC loan portfolio consists of loans that were originated for land acquisition, development, and construction of multi-family and residential tract projects in New York City and Long Island.

C&I loans represented $600.0 million, or 2.4%, of total held for investment. It also offers a range of loans to small and mid-size businesses for working capital (including in! ventory a! nd receivables), business expansion, and the purchase of equipment a nd machinery. Non-covered one-to-four family loans totaled $! 127.4 mil! lion at December 31, 2011.

Investment Activities

The Company�� securities portfolio primarily consists of mortgage-related securities, and debt and equity (other) securities. Its investments include GSE certificates, GSE collateralized mortgage obligations (CMOs) and GSE debentures. The Community Bank and the Commercial Bank are members of the Federal Home Loan Bank of New York (FHLB-NY), one of 12 regional Federal Home Loan Banks (FHLBs) consisting of the FHLB system. As of December 31, 2011, the Company�� securities represented $4.5 billion, or 10.8%, of total assets. As of December 31, 2011, 93.7% of its securities portfolio consisted of GSE obligations; held-to-maturity securities represented $3.8 billion, or 84.0%, of total securities, and its investment in bank-owned life insurance (BOLI) was $769.0 million.

Source of Funds

The Company has four primary funding sources. These include the deposits that it added thr ough its acquisitions or gathered through its branch network, and brokered deposits; wholesale borrowings, primarily in the form of FHLB advances and repurchase agreements with the FHLB and various brokerage firms; cash flows produced by the repayment and sale of loans, and cash flows produced by securities repayments and sales. As of December 31, 2011, deposits totaled $ 22.3 billion, which included certificates of deposit (CDs) of $7.4 billion; negotiable order withdrawal (NOW) and money market accounts of $8.8 billion; savings accounts of $ 4.0 billion, and non-interest-bearing accounts of $2.2 billion. As of December 31, 2011, the Company�� borrowed funds totaled $14.0 billion, loan repayments and sales generated cash flows of $15.0 billion, and securities sales and repayments generated cash flows of $4.2 billion.

Subsidiary Activities

As of December 31, 2011, C! ommunity ! Bank had 34 subsidiary corporations. Of these, 22 are direct subsidiaries of the Community Bank and 12 are subsidiaries of Community B! ank-owned! entities. The 22 direct subsidiaries of the Community Bank include DHB Real Estate, LLC, Mt. Sinai Ventures, LLC, NYCB Community Development Corp., NYCB Mortgage Company, LLC, Eagle Rock Investment Corp., Pacific Urban Renewal, Inc., Somerset Manor Holding Corp., Synergy Capital Investments, Inc., 1400 Corp., BSR 1400 Corp., Bellingham Corp., Blizzard Realty Corp., CFS Investments, Inc., Main Omni Realty Corp., NYB Realty Holding Company, LLC, O.B. Ventures, LLC, RCBK Mortgage Corp., RCSB Corporation, RSB Agency, Inc., Richmond Enterprises, Inc. and Roslyn National Mortgage Corporation.

The 12 subsidiaries of Community Bank-owned entities include Bronx Realty Funding Company, LLC, Columbia Preferred Capital Corporation, Ferry Development Holding Company, Peter B. Cannell & Co., Inc., Roslyn Real Estate Asset Corp., Walnut Realty Funding Company, LLC, Woodhaven Investments Inc, Your New REO, LLC, Ironbound Investment Company, Inc.,The Hamlet at Olde Oyster Bay, LLC, The Hamlet at Willow Creek, LLC and Richmond County Capital Corporation.

The two direct subsidiaries of the Commercial Bank include Beta Investments, Inc., and Gramercy Leasing Services, Inc. The two subsidiaries of Commercial Bank-owned entities include Omega Commercial Mortgage Corp. and Long Island Commercial Capital Corp.

5 Best Heal Care Stocks To Invest In Right Now: FirstMerit Corporation(FMER)

FirstMerit Corporation operates as the bank holding company for FirstMerit Bank, N.A. that provides a range of banking, fiduciary, financial, insurance, and investment services to corporate, institutional, and individual customers in northern and central Ohio, and western Pennsylvania. The company?s commercial business offers commercial term loans, revolving credit arrangements, asset-based lending, leasing, commercial mortgages, real estate construction lending, letters of credit, cash management services, and other depository products. Its retail business provides various financial products and services, including consumer direct and indirect installment loans, debit and credit cards, debit gift cards, residential mortgage loans, home equity loans and lines of credit, fixed and variable annuities, and ATM network services, as well as deposit products comprising checking, savings, money market accounts, and certificates of deposit. The company?s wealth business provides a sset management, private banking, financial planning, estate settlement and administration, and credit and deposit products and services. FirstMerit Corporation also offers trust and investment services, including personal trust and planning, and investment management; retirement plan services; retail mutual funds, other securities, variable and fixed annuities, personal disability and life insurance products, and brokerage services; and private banking services, including credit, deposit, and asset management solutions. As of December 31, 2009, it operated a network of 160 full service banking offices and 182 ATMs. The company was founded in 1855 and is headquartered in Akron, Ohio.

Top 10 Bank Companies To Invest In Right Now: Goldman Sachs Group Inc.(The)

The Goldman Sachs Group, Inc., together with its subsidiaries, provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, restructurings, and spin-offs; and underwriting securities, loans and other financial instruments, and derivative transactions. The company?s Institutional Client Services segment provides client execution activities, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as commissions and fees from executing and clearing institutional client transactions on stock, options, and fu tures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations. Its Investing and Lending segment invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, and power generation facilities. This segment also involves in the origination of loans to provide financing to clients. The company?s Investment Management segment provides investment management services and investment products to institutional and individual clients. This segment also offers wealth advisory services, including portfolio management and financial counseling, and brokerage and other transaction services to high-net-worth individuals and families. In addition, it provides global investment research services. The company was founded in 1869 and is headquartered in New York, New York.

Top 10 Bank Companies To Invest In Right Now: HDFC Bank Ltd (HDB)

HDFC Bank Limited (HDFC Bank), incorporated in August 1994, is a banking company engaged in providing a range of banking and financial services, including commercial banking and treasury operations. The Bank has overseas branch operations in Bahrain and Hong Kong. The Bank operates in four segments: treasury, which primarily consists of net interest earnings from the Bank�� investment portfolio, money market borrowing and lending, gains or losses on investment operations and on account of trading in foreign exchange and derivative contracts; retail banking, which serves retail customers through a branch network and other delivery channels; wholesale banking, which provides loans, non-fund facilities and transaction services to corporate, public sector units, government bodies, financial institutions and medium scale enterprises, and other banking business, segment includes income from para banking activities, such as credit cards, debit cards, third party product distribution, primary dealership business and the associated costs. Revenues of the retail banking segment are derived from interest earned on retail loans, net of commission (net of subvention received) paid to sales agents and interest earned from other segments for surplus funds placed with those segments, fees from services rendered, foreign exchange earnings on retail products.

Retail Banking

The Bank is a financial services provider of various deposit products, of retail loans (auto loans, personal loans, commercial vehicle loans, mortgages, business banking, loan against gold jewellery), credit cards, debit cards, depository (custody services), investment advisory, bill payments and several transactional services. Apart from its own products, the Bank distributes third party financial products, such as mutual funds and life and general insurance. As of March 31, 2012, the Bank had 2,544 branches in 1,399 Indian cities. The Bank had 8,913 automated teller machines (ATMs) during the fiscal year ended March 31,! 2012. In addition to the Bank does home loans in conjunction with HDFC Limited. Under this arrangement the Bank sells loans provided by HDFC Limited through its branches. HDFC Limited approves and disburses the loans, which are booked in their books, with the Bank receiving a sourcing fee for these loans. HDFC Limited offers the Bank an option to purchase up to 70% of the fully disbursed home loans sourced under this arrangement through either the issue of mortgage backed pass through certificates (PTCs) or by a direct assignment of loans; the balance is retained by HDFC Limited. It also distributes life, general insurance and mutual fund products through its tie-ups with insurance companies and mutual fund houses.

Wholesale Banking

The Bank provides its corporate and institutional clients a range of commercial and transactional banking products. The Bank�� commercial banking business covers the corporate sector, the emerging corporate segments and some small and medium enterprises (SMEs). The Bank has a number of business groups catering to various segments of its wholesale banking customers with a range of banking services covering their working capital, term finance, trade services, cash management, foreign exchange and electronic banking requirements. The Bank�� financial institutions and government business group (FIG) offers commercial and transaction banking products to financial institutions, mutual funds, public sector undertakings, central and state government departments. The main focus for this segment is offering various deposit and transaction banking products to this segment besides offering funded, non-funded treasury and foreign exchange products.

The Bank provides its customers both working capital and term financing. The Bank�� corporate banking business includes cash management and vendor and distributor (supply chain) finance products. The Bank has a wholesale banking branch in Bahrain, a branch in Hong Kong and two representative offic! es in the! United Arab Emirates (UAE) and Kenya. The branches offer the Bank�� suite of banking services including treasury and trade finance products to its corporate clients. The Bank offers wealth management products, remittance facilities and markets deposits to the non-resident Indian community from its representative offices.

Treasury

The treasury group is responsible for compliance with reserve requirements and management of liquidity and interest rate risk on the Bank�� balance sheet. On the foreign exchange and derivatives front, revenues are driven primarily by spreads on customer transactions based on trade flows and customers��demonstrated hedging needs. The Bank offers Indian rupee and foreign exchange derivative products to its customers. The Bank enters into foreign exchange and derivative deals with counterparties after it has set up appropriate counterparty credit limits based on its evaluation of the ability of the counterparty to meet its obligations in the event of crystallization of the exposure. The Bank also deals in Indian rupee derivatives on its own account, including for the purpose of its own balance sheet risk management.

Other banking business

The Bank has two subsidiaries: HDFC Securities Limited (HSL) and HDB Financial Services Limited (HDBFS). HSL is primarily in the business of providing brokerage services through the Internet and other channels. As of March 31, 2012, HSL had a network of 184 branches across the country. HDBFS is a non-deposit taking non-bank finance company (NBFC). Apart from lending to individuals, it grants loans to small and medium business enterprises and micro small and medium enterprises, the principle businesses of HDBFS include loans, which offers a range of loans in the secured and unsecured loans space that fulfill the financial needs of its target segment; insurance services, HDBFS is a corporate agent for HDFC Standard Life Insurance Company and sells insurance products ,as well as products, ! such as L! oan Cover and Asset Cover, and collections-BPO services, which runs six call centres. These centres cover collection requirements at over 200 towns through its calling and field teams. As on March 31, 2012, HDBFS had 180 branches in 135 cities in order to distribute its products and services.

Advisors' Opinion:

• [By Halah Touryalai]

  The largest privately owned retail bank in India with a network of 1,986 branches in 996 cities across the country. The bank has a strong deposit franchise and technology backbone.  EPS has grown at a rate of 26% per year, over the past 10 years.

Top 10 Bank Companies To Invest In Right Now: Signature Bank (SBNY.O)

Signature Bank (the Bank) is a full-service commercial bank with 25 private client offices located in the New York metropolitan area serving the needs of privately owned business clients and their owners and senior managers. The Bank offers a variety of business and personal banking products and services through the Bank, as well as investment, brokerage, asset management and insurance products and services through its wholly owned subsidiary, Signature Securities Group Corporation (Signature Securities), a licensed broker-dealer and investment adviser. Through Signature Securities, it also purchases, securitizes and sells the guaranteed portions of the United States Small Business Administration (SBA) loans. The Bank offers a variety of deposit, escrow deposit, credit, cash management, investment and insurance products and services to its clients. As of December 31, 2011, the Bank maintained approximately 78,000 deposit accounts, 6,900 investment accounts, 8,600 loan a ccounts and 14,300 client relationships. In April 2012, it formed a new subsidiary, Signature Financial, LLC.

The Bank offers a range of products and services oriented to the needs of its business clients, including deposit products, such as non-interest-bearing checking accounts, money market accounts and time deposits; escrow deposit services; cash management services; commercial loans and lines of credit for working capital and to finance internal growth, acquisitions and leveraged buyouts; permanent real estate loans; letters of credit; investment products to help better manage idle cash balances, including money market mutual funds and short-term money market instruments; business retirement accounts, such as 401(k) plans, and business insurance products, including group health and group life products. It offers a range of products and services oriented to the needs of its high net worth personal clients, including interest-bearing and non-interest-bearing checking accounts, with optional features, such as debit/ a! u! tomated teller machine (ATM) cards and overdraft protection and, for its clients, rebates of certain charges, including ATM fees; money market accounts and money market mutual funds; time deposits; personal loans, both secured and unsecured; mortgages, home equity loans and credit card accounts; investment and asset management services, and personal insurance products, including health, life and disability.

Lending Activities

The Bank�� commercial and industrial (C&I) loan portfolio is consisted of lines of credit for working capital and term loans to finance equipment, company owned real estate and other business assets, along with commercial overdrafts. Its lines of credit for working capital are generally renewed on an annual basis and its term loans generally have terms of 2 to 5 years. The Bank�� lines of credit and term loans typically have floating interest rates, and as of December 31, 2011, approximately 61% of its outstanding C&I loan s were variable rate loans. As of December 31, 2011, funded C&I loans totaled approximately 15% of its total funded loans. The Bank�� real estate loan portfolio includes loans secured by commercial and residential properties. It also provides temporary financing for commercial and residential property. As of December 31, 2011, funded real estate loans totaled approximately $5.74 billion, representing approximately 80% of its total funded loans. It issues standby or performance letters of credit, and can service the international needs of its clients through correspondent banks. As of December 31, 2011, its commitments under letters of credit totaled approximately $235.7 million. Its personal loan portfolio consists of personal lines of credit and loans to acquire personal assets. As of December 31, 2011, its consumer loans totaled $11.8 million, representing less than 1% of its total funded loans.

Investment and Asset Management Products and Services

Investment and asset management products and servi! ces a! re! provid! ed through the Bank�� subsidiary, Signature Securities. Signature Securities is a licensed broker-dealer. Signature Securities is an introducing firm and, as such, clears its trades through National Financial Services, Inc., a wholly owned subsidiary of Fidelity Investments. Signature Securities is also registered as an investment adviser in New York, New Jersey, Pennsylvania and Florida. It offers an array of asset management and investment products, including the ability to purchase and sell all types of individual securities, such as equities, options, fixed income securities, mutual funds and annuities. The Bank offers transactional, cash management type brokerage accounts with check writing and daily sweep capabilities. It also offers retirement products, such as individual retirement accounts (IRAs) and administrative services for retirement vehicles, such as pension, profit sharing, and 401(k) plans to its clients. Signature Securities offers wealth management servi ces to its high net worth personal clients. Together with its client and their other professional advisors, including attorneys and certified public accountants, it develops a financial plan that can include estate planning, business succession planning, asset protection, investment management, family office advisory services, bill payment, art and collectible advisory services and concentrated stock services.

Sources of Funds

The Bank offers a variety of deposit products to its clients. Its business deposit products include commercial checking accounts, money market accounts, escrow deposit accounts, lockbox accounts, cash concentration accounts and other cash management products. Its personal deposit products include checking accounts, money market accounts and certificates of deposit. The Bank also allows its personal and business deposit clients to access their accounts, transfer funds, pay bills and perform other account functions over the Inte rnet and through ATM machines. As of December 31,! 2011, it! m! aintained! approximately 78,000 deposit accounts representing $11.70 billion in client deposits, excluding brokered deposits.

Insurance Services

The Bank offers its business and private clients an array of individual and group insurance products, including health, life, disability and long-term care insurance products through its subsidiary, Signature Securities. The Bank does not underwrite insurance policies. It only acts as an agent in offering insurance products and services underwritten by insurers.

Top 10 Bank Companies To Invest In Right Now: Itau Unibanco Holding SA (ITUB)

Itau Unibanco Holding S.A., incorporated on September 9, 1943, is a bank in Brazil. The Company has four operational segments: Commercial Banking, Itau BBA, Consumer Credit and Corporate and Treasury. Commercial banking, including insurance, pension plan and capitalization products, credit cards, asset management and a variety of credit products and services for individuals, small and middle-market companies). Itau BBA includes corporate and investment banking. Consumer credit includes financial products and services to its non-accountholders. Corporate and treasury includes the results related to the trading activities in its portfolio, trading related to managing currency, interest rate and other market risk factors, gap management and arbitrage opportunities in domestic and foreign markets. It also includes the results associated with financial income from the investment of its excess capital.

On October 24, 2010, Itau Unibanco completed the integration of customer service locations throughout Brazil. In total, 998 branches and 245 customer site branches (CSB) of Unibanco were redesigned and integrated as Itau Unibanco customer service locations, thus creating a network of approximately 4,700 units in the country under the Itau brand. The Company is a financial holding company controlled by Itau Unibanco Participacoes S.A. (IUPAR). As of December 31, 2010, it had a network of 3,747 service branches throughout Brazil. As of December 31, 2010, it operated 913 CSBs throughout Brazil. As of December 31, 2010, it operated 28,844 automated teller machines (ATMs) throughout Brazil.

Commercial banking

The commercial banking segment offers a range of banking services to a diversified base of individuals and companies. Services offered by the commercial banking segment include insurance, pension plan and capitalization products, credit cards, asset management, credit products and customized products and solutions. The commercial banking segment comprises the specialized! areas and products, such as retail banking (individuals); public sector banking; personnalite (banking for high-income individuals); private banking (banking and financial consulting for wealthy individuals); very small business banking; small business banking; middle-market banking; credit cards; real estate financing; asset management; corporate social responsibility fund; securities services for third parties; brokerage, and insurance, private retirement and capitalization products.

The Company�� credit products include personal loans, overdraft protection, payroll loans, vehicles, credit cards, mortgage and agricultural loans, working capital, trade note discount and export. Its investments products include pension plans, mutual funds, time deposits, demand deposit accounts, savings accounts and capitalization plans. Its services include insurance (life, home, credit/cash cards, vehicles, loan protection, among others), exchange, brokerage and others. Its core business is retail banking, which serves individuals with a monthly income below R$7,000. In October 2010, it completed the conversion of branches under the Unibanco brand to the Itau brand and as of December 31, 2010, it had over 15.2 million customers and 4,660 branches and CSBs. Its public sector business operates in all areas of the public sector, including the federal, state and municipal governments (in the executive, legislative and judicial branches). As of December 31, 2010, it had approximately 2,300 public sector customers. Itau Personnalite�� focus is delivering financial advisory services by its managers, who understand the specific needs of its higher-income customers; a portfolio of exclusive products and services; special benefits based on the type and length of relationship with the customer, including discounts on various products and services. Itau Personnalite�� customer base reached more than 600,000 individuals as of December 31, 2010. Itau Personnalite customers also have access to Itau Unibanco netwo! rk of bra! nches and ATMs throughout the country, as well as Internet banking and phone.

Itau Private Bank is a Brazilian bank in the global private banking industry, providing wealth management services to approximately 17,951 Latin American clients as of December 31, 2010. The Company serves its customers��needs for offshore wealth management solutions in major jurisdictions through independent institutions in the United States through Banco Itau Europa International and Itau Europa Securities , in Luxembourg through Banco Itau Europa Luxembourg S.A. , in Switzerland through Banco Itau Suisse , in the Bahamas through BIE Bank & Trust Bahamas and in Cayman through Unicorp Bank & Trust Cayman. As of December 31, 2010, it had over 565 very small business banking offices located throughout Brazil and approximately 2,500 managers working for over 1,235,000 small business customers. Loans to very small businesses totaled R$5,981 million as of December 31, 2010. As of December 31, 2010, it had 374 small business banking offices located nationwide in Brazil and nearly 2,500 managers who worked for over 525,000 companies. Loans to small businesses totaled R$28,744 million as of December 31, 2010.

As of December 31, 2010, it had approximately 115,000 middle-market corporate customers that represented a range of Brazilian companies located in over 83 cities in Brazil. The Company offers a range of financial products and services to middle-market customers, including deposit accounts, investment options, insurance, private retirement plans and credit products. Credit products include investment capital loans, working capital loans, inventory financing, trade financing, foreign currency services, equipment leasing services, letters of credit and guarantees. The Company also carries out financial transactions on behalf of middle-market customers, including interbank transactions, open market transactions and futures, swaps, hedging and arbitrage transactions. It also offers its middle-market custom! ers colle! ction services and electronic payment services. The Company is able to provide these services for virtually any kind of payment, including Internet office banking. It charges collection fees and fees for making payments, such as payroll, on behalf of its customers.

The Company is engaged in the Brazilian credit card market. Its subsidiaries, Banco Itaucard S.A. (Banco Itaucard) and Hipercard Banco Multiplo S.A. (Hipercard), offers a range of products to 26 million customers as of December 31, 2010, including both accountholders and non-accountholders. As of December 31, 2010, it had approximately R$16,271 million in outstanding real estate loans. As of December 31, 2010, it had total net assets under management of R$291,748 million on behalf of approximately 2.1 million customers. The Company also provides portfolio management services for pension funds, corporations, private bank customers and foreign investors. As of December 31, 2010, it had R$184,496 million of assets under management for pension funds, corporations and private bank customers. As of December 31, 2010, the Company offered and managed about 1,791 mutual funds, which are mostly fixed-income and money market funds. For individual customers, it offered 154 funds to its retail customers and approximately 287 funds to its Itau Personnalite customers. Private banking customers may invest in over 600 funds, including those offered by other institutions. Itau BBA�� capital markets group also provides tailor-made mutual funds to institutional, corporate and private banking customers.

The Company provides securities services in the Brazilian capital markets. Its services also include acting as transfer agent, providing services relating to debentures and promissory notes, custody and control services for mutual funds, pension funds and portfolios, providing trustee services and non-resident investor services, and acting as custodian for depositary receipt programs. The Company also provides brokerage services to inte! rnational! customers through its broker-dealer operations in New York, through its London branch, and through its broker-dealers in Hong Kong and Dubai. Its main lines of insurance are life and casualty (excluding Vida Gerador de Benefucio Livre), extended warranties and property. Its policies are sold through its banking operations, independent local brokers, multinational brokers and other channels. As of December 31, 2010, it had 9.9 million in capitalization products outstanding, representing R$2,620 million in liabilities with assets that function as guarantees of R$2,646 million. The Company distributes these products through its retail network, Itau Personnalite and Itau Uniclass branches, electronic channels and ATMs. These products are sold by its subsidiary, Cia. Itau de Capitalizacao S.A.

Itau BBA

Itau BBA is responsible for its corporate and investment banking activities. As of December 31, 2010, Itau BBA offered a portfolio of products and services to approximately 2,400 companies and conglomerates in Brazil. Itau BBA�� activities range from typical operations of a commercial bank to capital markets operations and advisory services for mergers and acquisitions. As of December 31, 2010, its corporate loan portfolio was R$ 76,584 million. In investment banking, the fixed income department was responsible for the issuance of debentures and promissory notes that totaled R$18,888 million and securitization transactions that amounted to R$4,677 million in Brazil in 2010. In addition, Itau BBA advised 35 merger and acquisition transactions with an aggregate deal volume of R$16,973 million in 2010.

Itau BBA is also active in Banco Nacional de Desenvolvimento Economico e Social (BNDES) on-lending to finance large-scale projects, aiming at strengthening domestic infrastructure. In consolidated terms, total loans granted by Itau BBA under BNDES on-lending represented more than R$9,010 million in 2010. Itau BBA focuses on the products and initiatives in the international ! business ! unit, such as structuring long-term, bilateral and syndicated financing, and spot foreign exchange. In addition, in 2010 Itau BBA continued to offer a large number of lines of credit for foreign trade.

Consumer Credit

As of December 31, 2010, its portfolio of vehicle financing, leasing and consortium lending consisted of approximately 3.8 million contracts, of which approximately 71.1% were non-accountholder customers. The personal loan portfolio relating to vehicle financing and leasing reached R$60,254 million in 2010. The Company leased and financed vehicles through 13,706 dealers as of December 31, 2010. Sales are made through computer terminals installed in the dealerships that are connected to its computer network. Redecard S.A. (Redecard) is a multibrand credit card provider in Brazil, also responsible for the capturing, transmission, processing and settlement of credit, debit and benefit card transactions. As of December 31, 2010, the Company held approximately 50% interest in Redecard�� capital stock.

The Company competes with Bradesco, Banco do Brasil S.A. (Banco do Brasil), Banco Santander, Caixa Economica Federal (CEF), BNDES, HSBC, Banco Citibank S.A, Banco de Investimentos Credit Suisse (Brasil) S.A., Banco JP Morgan S.A., Banco Morgan Stanley S.A., Banco Merrill Lynch de Investimentos S.A., Banco BTG Pactual S.A., Banco Panamericano S.A, Citibank S.A., Banco GE Capital S.A. and Banco Ibi S.A.

Top 10 Bank Companies To Invest In Right Now: Banco Bradesco SA (BBD)

Banco Bradesco S.A. (the Bank), incorporated on November 5, 1943, is commercial bank. The Bank offers a range of banking and financial products and services in Brazil and abroad to individuals, large, midsized and small companies and local and international corporations and institutions. It operates in two segments: the banking, and the insurance, pension and capitalization bonds. Its products and services encompass banking operations, such as loans and advances and deposittaking, credit card issuance, purchasing consortiums, insurance, leasing, payment collection and processing, pension plans, asset management and brokerage services. The main services it offers through Bradesco Expresso are receipt and submission of account applications; receipt and submission of account applications; Social Security National Service (INSS) benefit payments; checking and savings account deposits, and receipt of consumption bills, bank charges and taxes. In May, 2011, the Bank acquired Banco do Estado do Rio de Janeiro S.A. (BERJ).

Banking

The Banking segment includes deposit-taking with clients, including checking accounts, savings accounts and time deposits; loans and advances (individuals and companies, real estate financing, microcredit, onlending BNDES funds, rural credit, leasing, among others); credit cards, debit cards and pre-paid cards; management of receipts and payments; asset management; services related to capital markets and investment banking activities; intermediation and trading services; custody, depositary and controllership services; international banking services, and purchasing consortiums.

The Bank offers a variety of deposit products and services to our customers through its branches, including Non-interest bearing checking accounts, such as Easy Account, Click Account, Academic Account and Cell Phone Bonus Account; traditional savings accounts; time deposits, and deposits from financial institutions. As of December 31, 2011, it had 43.4 million savings a! ccounts. It offers its customers certain additional services, such as identified deposits and real-time banking transfers. Its loans and advances to customers, consumer credit, corporate and agricultural-sector loans, totaled R$263.5 billion as of December 31, 2011.

The Bank�� loan portfolio consists of short-term loans, vehicle financings and overdraft loans on checking accounts. It also provides revolving credit facilities and traditional term loans. As of December 31, 2011, it had outstanding advances, vehicle financings, consumer loans and revolving credit totaling R$58.0 billion, or 22.0% of its portfolio of loans and advances. Banco Bradesco Financiamentos (Bradesco Financiamentos) offers direct-to-consumer credit and leasing for the acquisition of vehicles and payroll-deductible loans to the public and private sectors 'in Brazil. Supported by BF Promotora de Vendas Ltda. (BF Promotora), and using the Bradesco Financiamentos brand, the Bank operates through its network of correspondents in Brazil, consisting of retailers and dealers selling light vehicles, trucks and motorcycles, to offer financing and/or leasing for vehicles. Through Bradesco Promotora brand, it offer payroll-deductible loans to social security retirees and pensioners, public-sector employees, military personnel and private-sector companies sponsoring plans, and other aggregated products (insurance, capitalization bonds, cards, purchasing consortiums, and others).

As of December 31, 2011, the Bank had 63,156 outstanding real estate loans. As of December 31, 2011, the aggregate outstanding amount of its real estate loans amounted to R$15.9 billion, representing 6% of its portfolio of loans and advances. As of December 31, 2011, it had 69,491 microcredit loans outstanding, totaling R$62.8 million. Its BNDES onlending portfolio totaled R$35.4 billion as of December 31, 2011.

The Bank provides traditional loans for the ongoing needs of its corporate customers. It had R$85.8 billion of outstand! ing other! local commercial loans, accounting for 32.5% of its portfolio of loans and advances as of December 31, 2011. It offers a range of loans to its Brazilian corporate customers, including short-term loans of 29 days or less; guaranteed checking accounts and corporate overdraft loans; discounting trade receivables, promissory notes, checks, credit card and supplier receivables, and a number of other receivables; financing for purchase and sale of goods and services; corporate real estate financing, and investment lines for acquisition of assets and machinery. As of December 31, 2011, the Bank had R$11 billion in outstanding rural loans, representing 4.2% of its portfolio of loans and advances. The Bank conducts its leasing operations through its primary leasing subsidiary, Bradesco Leasing and also through Bradesco Financiamentos.

The Bank offers electronic solutions for receipt and payment management solutions, which include collection and payment services and online resource management enabling its customers to pay suppliers, salaries, and taxes and other levies to governmental or public entities. The global cash management concept provides solutions for multinationals in Brazil and/or domestic companies operating abroad. It manages third-party assets through mutual funds; individual and corporate investment portfolios; pension funds, including assets guaranteeing the technical provisions of Bradesco Vida e Previdencia, and insurance companies, including assets guaranteeing the technical provisions of Bradesco Seguros.

The Bank�� subsidiaries Bradesco S.A. CTVM and Agora S.A. CTVM (or Bradesco Corretora and Agora Corretora, respectively) trade stocks, options, stock lending, public offerings and forwards. They also offer a range of products, such as Brazilian government securities (under the Tesouro Direto program), BM&F trading, investor clubs and investment funds.

The Bank offers a range of international services, such as foreign exchange transactions, foreign tr! ade finan! ce, lines of credit and banking. As of December 31, 2011, its international banking services included New York City, a branch and Bradesco Securities Inc., its subsidiary brokerage firm, or Bradesco Securities United States, and its subsidiary Bradesco North America LLC, or Bradesco North America; London, Bradesco Securities U.K., its subsidiary, or Bradesco Securities U.K.; Cayman Islands, two Bradesco branches and its subsidiary, Cidade Capital Markets Ltd., or Cidade Capital Markets; Argentina, Banco Bradesco Argentina S.A., its subsidiary, or Bradesco Argentina; Banco Bradesco Luxemburgo S.A. its subsidiary, or Bradesco Europe; Japan, Bradesco Services Co. Ltd., its subsidiary, or Bradesco Services Japan; in Hong Kong, its subsidiary Bradesco Trade Services Ltd, or Bradesco Trade, and in Mexico, its subsidiary Ibi Services, Sociedad de Responsabilidad Limitada, or Ibi Mexico.

The Bank�� Brazilian foreign-trade related business consists of export and import finance. In addition to import and export finance, its customers have access to a range of services and foreign exchange products, such as purchasing and selling travelers checks and foreign currency paper money; cross border money transfers; advance payment for exports; accounts abroad in foreign currency; cash holding in other countries; collecting import and export receivables; repaid cards with foreign currency (individual), and structured foreign currency transactions through its foreign units.

Insurance, pension plans and capitalization bonds

The Bank offers insurance products through a number of different entities, which it refers to collectively as Grupo Bradesco Seguros. It offers life, personal accident and random events insurance through its subsidiary Bradesco Vida e Previdencia. It offers health insurance policies through Bradesco Saude and its subsidiaries for small, medium or large companies. It provides automobile, property/casualty and liability products through its subsidiary Bradesco Auto! /RE. It a! lso offers certain automobile, health, and property/casualty insurance products directly through its Website.

Top 10 Bank Companies To Invest In Right Now: HSBC Holdings PLC (HBC)

HSBC Holdings plc (HSBC), incorporated on January 1, 1959, is a global banking and financial services organizations. As of December 31, 2010, it provided a range of financial services to around 95 million customers through two customer groups, Personal Financial Services (PFS), including consumer finance, and Commercial Banking (CMB), and two global businesses, Global Banking and Markets (GB&M), and Global Private Banking (GPB). Its international network covers 87 countries and territories in six geographical regions; Europe, Hong Kong, Rest of Asia-Pacific, the Middle East, North America and Latin America. As of December 31, 2010, the Company had an international network of some 7,500 offices in 87 countries and territories in six geographical regions; Europe, Hong Kong, Rest of Asia-Pacific, the Middle East, North America and Latin America. PFS incorporates the Company�� consumer finance businesses, which include HSBC Finance Corporation (HSBC Finance). In April 2011, the Company closed its retail banking operation in Russia. In July 2011, the Company sold its unsecured written-off personal loan and credit card portfolio to J M Financial Asset Reconstruction Co. Pvt. Ltd. On May 20, 2012, HSBC Holdings PLC's wholly owned subsidiary HSBC Bank USA, N.A. and other wholly owned subsidiaries, sold 195 retail branches to First Niagara Bank, N.A. (First Niagara). In May 2012, the Company�� 70.03% owned subsidiary, HSBC Bank Malta plc, sold its card acquiring business to HSBC Merchant Services Ltd. In June 2012, the Company�� indirect wholly owned subsidiary, HSBC Iris Investments (Mauritius) Ltd, sold its 4.73% interest in Axis Bank Limited and 4.74% interest in Yes Bank Limited. In July 2012, its subsidiary, HSBC Europe (Netherlands B.V.), sold its 100% interest in HSBC Credit Zrt, to CentralFund Kockazati Tokealap. On March 31, 2013, Enstar Group Ltd�� subsidiary completed the acquisition from Household Insurance Group Holding Company of HSBC Insurance Company of Delaware and Household Life Insur! ance Company of Delaware, as well as its three subsidiary insurers.

The Company�� principal banking operations in Europe are HSBC Bank plc in the United Kingdom, HSBC France, HSBC Bank A.S. in Turkey, HSBC Bank Malta p.l.c., HSBC Private Bank (Suisse) S.A. and HSBC Trinkaus & Burkhardt AG. Through these operations it provides a range of banking, treasury and financial services to personal, commercial and corporate customers across Europe. HSBC�� banking subsidiaries in Hong Kong are The Hongkong and Shanghai Banking Corporation Limited and Hang Seng Bank Limited.

The Company offers a range of banking and financial services in the People�� Republic of China, mainly through its local subsidiary, HSBC Bank (China) Company Limited. It also participates indirectly in the People�� Republic of China through its four associates. Outside Hong Kong and the People�� Republic of China, it conducts business in 22 countries and territories in the Rest of Asia-Pacific region, through branches and subsidiaries of The Hongkong and Shanghai Banking Corporation, with coverage in Australia, India, Indonesia, Malaysia and Singapore.

In the Middle East, the Company has network of branches of HSBC Bank Middle East Limited, together with HSBC�� subsidiaries and associates. Its North American businesses are located in the United States, Canada and Bermuda. Operations in the United States are conducted through HSBC Bank USA, N.A., which is concentrated in New York State, and HSBC Finance, a national consumer finance company based near Chicago. HSBC Markets (USA) Inc. is the intermediate holding company of, inter alia, HSBC Securities (USA) Inc. HSBC Bank Canada and HSBC Bank Bermuda operate in their respective countries.

The Company�� operations in Latin America consists of HSBC Bank Brasil S.A.-Banco Multiplo, HSBC Mexico, S.A., HSBC Bank Argentina S.A. and HSBC Bank (Panama) S.A. In addition to banking services, it operates insurance businesses in Brazil, Mexi! co, Argen! tina, Panama and a range of smaller markets.

Personal Financial Services

PFS offers the Company�� products and services to customers based on their individual needs. Premier and Advance services are for customers who value international connectivity and benefit from its global reach and scale. It offers a range of banking products and services reflecting local requirements. In addition, it issues card globally, offering HSBC branded cards, co-branded cards with selected partners and private label (store) cards. Its customer offerings include personal banking products, including current and savings accounts, mortgages and personal loans, credit cards, debit cards and local and international payment services, and wealth management services, including insurance and investment products and financial planning services.

HSBC Premier provides preferential banking services to high net worth customers and their immediate families with a relationship manager, wealth advice and solutions. Customers can access emergency travel assistance, telephone banking and an online global view of their Premier accounts globally with free money transfers between them. HSBC Advance provides a range of preferential products and services customized to meet local needs. With a telephone service, access to wealth advice and online tools to support financial planning, it gives customers an online global view of their Advance accounts with money transfers between them. Wealth Solutions & Financial Planning process designed for global individual customer needs to help its clients to protect, grow and manage their wealth through investment and wealth insurance products manufactured by in-house partners, including Global Asset Management, Global Markets and HSBC Insurance, and by selected third party providers. During 2010, PFS provided 92 million individual and self-employed customers with financial services in over 60 markets globally.

Commercial Banking

The Company ! segments ! its CMB business into Corporate, to serve both Corporate and Mid-Market companies, and Business Banking, to serve the small and medium-sized enterprises (SME��) sector. It provides support to companies as they expand both domestically and internationally, and ensures a focus on the business banking segments. It offers a range of financing, both domestic and cross-border, including overdrafts, receivables finance, term loans and syndicated, leveraged, acquisition and project finance. Asset finance is offered in selected sites, focused on leasing and instalment finance for vehicles, plant and equipment. It is a provider of domestic and cross-border payments and collections, liquidity management and account services globally, delivered through its e-platform, HSBC net. It provides international trade products and services, to both buyers and suppliers, such as export finance, guarantees, documentary collections and forfeiting to improve efficiency and help mitigate risk throughout the supply chain.

CMB customers are volume users of its foreign exchange, derivatives and structured products. Capital markets & advisory is raising capital on debt and equity markets and provide advisory services. Commercial cards issuing helps customers enhance cash management, credit control and purchasing. Card acquiring services enable merchants to accept credit and debit card payments in person or remotely. CMB offers key person, employee benefits and a range of commercial risk insurance, such as property, cargo and trade credit. Direct channels include online and direct banking offerings, such as telephone banking, HSBCnet and Business Internet Banking.

Global Banking and Markets

GB&M provides tailored financial solutions to government, corporate and institutional clients and private investors globally. Managed as a global business, GB&M operates a long-term relationship management approach to build a understanding of clients��financial requirements. Sector-focused client service! teams co! nsisting of relationship managers and product specialists develop financial solutions to meet individual client needs. GB&M is managed as four principal business lines: Global Markets, Global Banking, Global Asset Management and Principal Investments.

Global Markets operations consist of treasury and capital markets services. Products include foreign exchange; currency, interest rate, bond, credit, equity and other derivatives; government and non-government fixed income and money market instruments; precious metals and exchange-traded futures; equity services; distribution of capital markets instruments, and securities services, including custody and clearing services and funds administration to both domestic and cross-border investors. Global Banking offers financing, advisory and transaction services. Its products include capital raising, advisory services, bilateral and syndicated lending, leveraged and acquisition finance, structured and project finance, lease finance and non-retail deposit taking; international, regional and domestic payments and cash management services; and trade services for large corporate clients.

Global Asset Management offers investment solutions to institutions, financial intermediaries and individual investors globally. Principal Investments includes its relationships with third-party private equity managers and other investments. GB&M is a global business, which provides financial solutions to government, corporate and institutional clients globally.

Global Private Banking

GPB works with the Company�� high net worth clients to offer ways to manage and preserve wealth. HSBC Private Bank is the principal marketing name of its international private banking business, GPB. GPB works with its clients to offer both ways to manage and preserve wealth while optimising returns. GPB accesses six advisory centers in Hong Kong, Singapore, Geneva, New York, Paris and London. Private Banking services consist of multi-currency depo! sit accou! nts and fiduciary deposits, credit and specialist lending, treasury trading services, cash management, securities custody and clearing. GPB works to ensure that its clients have access to other products and services available in HSBC, such as credit cards, Internet banking, corporate banking and investment banking.

Private Wealth Management consists of both advisory and discretionary investment services. A range of investment vehicles is covered, including bonds, equities, derivatives, options, futures, structured products, mutual funds and alternatives (hedge funds, private equity and real estate). Corporate Finance Solutions helps provide clients with solutions for their companies, working in conjunction with GB&M. Private Wealth Solutions consist of planning, trustee and other fiduciary services to protect wealth and preserve it for future generations. Its expertise includes trusts, foundation and company administration, charitable trusts and foundations, insurance, family office advisory and philanthropy.

Other

The Company�� Other contains the results of certain property transactions and unallocated investment activities. It also includes centrally held investment companies, movements in fair value of own debt, HSBC�� holding company and financing operations.

Top 10 Bank Companies To Invest In Right Now: Canadian Imperial Bank of Commerce(CM)

Canadian Imperial Bank of Commerce provides various financial products, services, and advice to individual, small business, commercial, corporate, and institutional clients in Canada and internationally. The company offers retail markets services comprising personal banking, business banking, and wealth management services, as well as investment management services to retail and institutional clients. It also provides wholesale banking services, including credit, capital markets, investment banking, merchant banking, and research products and services to government, institutional, corporate, and retail clients. The company provides its services through its branch network, automated bank machines, mobile banking, and online banking site. As of June 3, 2011, it operated approximately 1,100 branches and 4,000 automated bank machines in Canada. The company was founded in 1867 and is headquartered in Toronto, Canada.

Advisors' Opinion:

• [By ETF Authority]

  Canadian Imperial Bank of Commerce (NYSE:CM): Up 0.89% to $69.33. Canadian Imperial Bank of Commerce provides banking and financial services to consumers, individuals, and corporate clients in Canada and around the world.

Tentative Markets Ahead of Big Data - Ahead of Wall Street

5 Best Low Price Stocks For 2014

Tuesday, July 30, 2013

The overall mood in the market is expected to remain tentative in today's session as well despite the modestly positive open on positive home price numbers. The economic calendar goes into over drive later this week with the Fed announcement and GDP reports tomorrow and the jobs report on Friday. The market is looking for confirmation that the U.S. economic outlook is improving in a backdrop of continued Fed support.

The two interconnected drivers of the improved U.S. growth outlook relative to the rest of the world include the labor and the housing markets. We will get the latest pulse of the labor market from Friday's July non-farm payroll reading, which is expected to show 'headline' gains around recent monthly levels of a little under 200K. Some acceleration from this level will be highly beneficial, but even sustained gains around current levels should help support steady improvement in consumer spending, the mainstay of the U.S. economy.

The housing momentum is for real as well, but housing is a very interest rate sensitive sector and remains vulnerable to further interest rate increases. The roughly 100 basis point jump in long-term interest rates over the last two months may be just a sign of things to come if the Fed's 'Taper' plan gets underway. The strong gains in this morning's Case-Shiller home price index appear to run counter to these interest rate concerns. We should keep in mind, however, that this home-price measure is essentially meaningless in gauging current home-pricing conditions as it's so backward looking – today's report is for the month of May which only partly overlaps with the period when interest rates started moving up.

Tomorrow's Fed announcement isn't expected to shed any fresh light on the 'Taper' issue and the growth picture emerging from the Q2 GDP report in the morn! ing isn't expected to pack many surprises either. The consensus expectation is for GDP growth of about +1% in Q2 after the +1.8% increase in Q1. But the GDP data will be accompanied by revisions to prior data and there could plenty of surprises on that count. It will be interesting to see how the growth numbers for recent quarters and the last few years, particularly since the start of the recovery in 2009, appear with updated numbers.

Accurate data about the recent past is useful, but the markets care far more about forward-looking numbers and the expectation on that front is for the U.S. growth picture to start improving from Q3 onwards. We haven't seen much evidence of such improvement yet, but that's what consensus expectations reflect. Similar expectations underpin earnings estimates for the second half of the year and next year as well, though estimates for Q3 have started coming down under the weight of predominantly negative guidance from management teams on the ongoing Q2 earnings calls.

There is some debate in the market as to whether to label the Q2 earnings season as 'above average', 'average' or 'below average'. Market bulls cite the record total earnings tally in the quarter, the improved beat ratios on the revenue side relative to the prior quarter and the positive earnings growth picture as reasons for calling it an 'above average' reporting season. All of this is true – total Q2 earnings are on track to make a new quarterly record and more companies have beat on the top-line compared to the extremely low level seen in Q1. But the aggregate earnings growth picture is misleading as it primarily reflects gains in one sector – Finance. The growth picture is extremely weak once Finance is excluded from the aggregate numbers. I label the Q2 earnings season as 'below average' because of this weak earnings growth picture and the preponderance of weak guidance.

Including this morning's results from Pfizer (PFE), Merck (MRK), Coach (COH), Ae! tna (AET)! and others, we now have Q2 results from 302 S&P 500 members or 60.4% of the index's total membership. Total earnings for these 302 companies are up +2.9%, with 65.9% beating earnings expectations. On the revenue side, we have a growth rate of +3.4%, with 49.7% coming ahead of top-line expectations. This compares to total earnings growth rate of +1.8% on +3.7% higher revenues in Q1 for the same group of 302 companies. In terms of beat ratio, 68.2% of these 302 companies had come out with positive surprises in Q1, while only 40.1% had beat on top-lines in Q1. What this tells us that the earnings beat ratio is a bit soft relative to Q1, while favorable top-line surprises are a bit more common.

This aggregate Q2 picture changes materially once the Finance sector is excluded. Total earnings growth turns negative (-3.5% excluding Finance vs. +2.9% including Finance) and even the beat ratios are far less numerous. This lack of breadth in the growth picture is troubling given loftier growth expectations from these sectors in the coming quarters. Given what we have seen outside of Finance in Q2, we will have to bring those expectations down to more realistic levels. That process may have started already, but it still has plenty of room to go.

Sheraz Mian
Director of Research




Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Can Carl Icahn Push Apple Stock Higher?

With shares of Apple (NASDAQ:AAPL) trading around $498, is Apple an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Apple designs, manufactures, and markets mobile communication and media devices, personal computers, portable digital music players, and a variety of related software, services, peripherals, networking solutions, third-party digital content, and applications. The company's products and services include the iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud, and a variety of accessory, service, and support offerings. Apple also delivers digital content and applications through its iTunes, App, iBook, and Mac App stores.

Apple has grabbed the attention of activist investor Carl Icahn, who revealed yesterday via Twitter that he has a $1.5 billion stake in the company. Icahn said in an interview cited by the Wall Street Journal that he believes Apple's stock is highly undervalued and the company should begin a share buyback as soon as possible. Icahn believes the stock is worth $625 a share.

T = Technicals on the Stock Chart are Strong

Apple stock been exploding higher over the last several years. The stock is currently breaking above a base established in the last few months. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Apple is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Apple options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Apple Options	28.54%	46%	43%

What does this mean? This means that investors or traders are buying a significant amount of call and put options contracts as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
September Options	Flat	Average
October Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Apple’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Apple look like and more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	-19.85%	-17.97%	-0.43%	23.03%
Revenue Growth (Y-O-Y)	0.86%	11.27%	17.65%	27.22%
Earnings Reaction	5.13%	-0.16%	-12.35%	-0.90%

Apple has seen mixed earnings and rising revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings about Apple’s recent earnings announcement.

P = Weak Relative Performance Versus Peers and Sector

How has Apple stock done relative to its peers, Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), BlackBerry (NASDAQ:BBRY), and sector?

	Apple	Google	Microsoft	BlackBerry	Sector
Year-to-Date Return	-7.02%	23.91%	20.72%	-4.80%	11.13%

Apple has been a poor relative performer, year-to-date.

Conclusion

Apple strives to provide innovative products and services that consumers and companies  love to own. Activist investor Carl Icahn has revealed that he has a big stake in the company. The stock has been surging higher in recent years and is now breaking above a base that was formed this year. Over the last four quarters, earnings have been mixed while revenue figures have been rising which has led to mixed feelings among investors in the company. Relative to its peers and sector, Apple has been a weak year-to-date performer. Look for Apple to OUTPERFORM.

Global Asset Managers’ Revenue Passes 2007 Peak

A benchmarking analysis released Wednesday by Casey, Quirk & Associates showed that the global asset management industry’s revenue last year passed its previous 2007 peak, lifted by market appreciation.

Median pretax operating margins rose to 32% in 2012, the highest since 2007, for participants in the study’s survey of 101 privately held, publicly traded and wholly or partly owned firms with assets under management ranging from below $50 billion to more than $1 trillion in assets.

In aggregate, these managers invest $23 trillion for institutions and individuals.

However, the study also showed net inflows of 1.2% last year, compared with 3.7% in 2007. This, along with increasing fee pressure and a widening economic divergence among firms, points to growing industry challenges, according to the analysis.

“With annual net flows of under 1% anticipated through 2017 these findings, based on one of the largest industry surveys of asset management economics, indicate managers must adapt and innovate to keep up let alone to continue thriving,” Kevin Quirk, a partner at Casey Quirk, said in a statement.

According to the analysis, conducted with compensation consultant McLagan, traditional investment products will continue to be challenged, while outcome-oriented and higher alpha strategies will result in the highest net flows. The latter include hedge funds, balanced strategies, global tactical asset allocation and multi-asset class solutions, emerging-market debt and global equities.

The benchmarking study showed that privately held and publicly listed asset managers expanded at average annual rates of 8.4% and 7% respectively during the 2007–2012 period.

Firms owned by larger financial institutions had average annual growth rates of 4.3% over the same period, while revenue at affiliates of asset management holding companies fell on average 4.6%.

Of the firms surveyed, those in the middle managing assets between $50 billion and $200 billion saw their operating margins rebound most strongly, to 32% in 2012 from a low of 15% in 2009. They were also most consistent in attracting net flows between 2007 and 2012.

---

Check out 5 Ways Wealth Managers Must Adjust With the Times on AdvisorOne.

The Gap’s Gap: Share’s Fall 3% on Disappointing Sales, Susquehanna Downgrade

The Gap (GPS) reported disappointing sales yesterday–disappointing enough that investors ignored its profit projections to force the stock lower today.

Bloomberg

The Wall Street Journal has the details:

[For] the four weeks ended Aug. 3, same-store sales rose 1%, falling short of the 1.6% consensus view. Gap stores posted a 7% rise when 1.7% growth was expected, while Banana Republic’s same-store sales declined 1%, compared to expectations for a 1.6% decline. Old Navy recorded a 5% decline in same-store sales, missing expectations for 2.4% growth…

For the quarter ended Aug. 3, the retailer said it expects per-share earnings of 62 cents to 64 cents, topping the 59 cents estimated by analysts polled by Thomson Reuters. Net sales for the quarter rose 8% to $3.87 billion, also topping analysts’ projections of $3.8 billion.

As a result of the announcement, the Gap’s shares have dropped 3.4% to $43.96, after opening down 1.8%, far cry from the big gain following its June report.

Many analysts were far more positive than the market, however. Janney Capital Market’s Adrienne Tennant and Gabriella Carbone, for instance, blame the sputtering sales on difficult comparisons. They write:

…we continue to remain encouraged by solid traffic trends seen across all divisions and expect sustainable positive comps going forward. A key initiative for 2013 is to drive increased revenues through new brands, channels, and geographies, such as Athleta, Gap China, Old Navy Japan, franchises, and global outlets. GPS also has planned to start franchising Old Navy in 2014 in key international markets and are exploring the opportunities to add company-operated Old Navy and Banana Republic stores in China. We believe the new global brand management structure of the business will continue to build upon overall brand strength, help attain greater speed and efficiencies, as well as fuel future long term growth. Overall, we continue to believe the company will benefit from ongoing momentum at all three divisions.

Lazard’s Jennifer Davis, meanwhile, believes the Gap will be able to “maintain sales momentum though 2H despite more difficult compares.” She raised her price target to $52 from $50.

Even a downgrade from Susquehanna’s Thomas Filandro–he cut the stock to Neutral from Positive–was done executed because the stock had gotten too expensive. Filandro writes:

Another well executed quarter for GPS. Although we are once again raising our EPS projections and increasing our price target, we are downgrading to Neutral from Positive based entirely on valuation. Since November 2011, GPS shares have appreciated 137%. We applaud management’s execution of the business, distribution of excess cash to shareholders and focus on building an omni-channel global presence. We are raising our 12- month price objective to $49.

Sterne Agee’s Ike Boruchow and Tom Nikic, however, worry that margins might have peaked. They write:

Daily ETF Roundup: Stocks End Narrowly Mixed; KOL And ...

U.S. equities finished narrowly mixed in today's lackluster trading session, following a slew of earnings reports and an underwhelming  manufacturing report. According the the Federal Reserve Bank of Richmond, manufacturing activity in the central Atlantic region contracted in July, falling to -11 (an above zero reading indicates expansion). On the corporate front, Travelers (TRV) earnings rose 85%, while UPS (UPS) posted lower profits but met EPS estimates .



Global Market Overview: Stocks End Narrowly Mixed, KOL And IYM PopFollowing today's earnings and economic reports, only one major U.S. equity indexes managed to close in positive territory. The Dow Jones Industrial Average ETF rose 0.16%, lifted by strong performances from United Tech and Boeing. The S&P 500 ETF traded 0.21% lower, while the tech-heavy Nasdaq ETF fell 0.74%.

In Europe, markets were broadly lower as a disappointing report on U.S. manufacturing outweighed upbeat economic news from France; the Stoxx Europe 600 slipped 0.3%. Meanwhile, Japan's Nikkei Stock Average rose 0.8% after the Japanese government increased its economic outlook, and China's Shanghai Composite rallied 2.0% following reports that Premier Li Keqiang said China's growth needs to be kept above 7%. 

Bond ETF Roundup

U.S. Treasuries fell today despite an average government auction of 2-year notes. Yields on 10-year notes rose 2 basis points, while 30-year bonds and 2-year note yields rose 2.5 and 0.5 basis points, respectively .

Commodity Roundup

Crude oil futures traded higher today, settling above $107 a barrel, ahead of this week's crude oil supply data. In other energy trading, gasoline and natural gas futures also traded higher. Meanwhile, gold futures slipped 0.1% after posting its biggest percentage gain in more than a year during Monday's session.

ETF Chart Of The Day #1: The Market Vectors Coal ETF was one of the best performers today, gaining 2.31% during the session. Aft! er Peabody Energy (BTU) beat Q2 expectations, this ETF gapped significantly higher at the open. KOL eventually settled at $18.64 a share .

Click To Enlarge

ETF Chart Of The Day #2: The U.S. Basic Materials ETF also posted a strong performance today, gaining 0.49% during the session. After DuPont (DD) reported a decline in earnings (though it beat analyst estimates), this ETF gapped significantly higher at the open. IYM eventually settled at $71.416 a share .

Click To Enlarge

ETF Fun Fact Of The DayThe best-performing themed strategy over the trailing 13-week period has been the High Tech ETFdb Portfolio which has gained 10.15%.



Disclosure: No positions at time of writing.

ANGO Beats on Earnings, Loss Narrows - Analyst Blog

AngioDynamics' (ANGO) adjusted earnings of 7 cents per share for the fourth quarter of fiscal 2013 surpassed the Zacks Consensus Estimate by 2 cents and increased more than twofold year over year. Adjusted earnings in the reported quarter exclude one-time expenses such as product recalls, Quality Call to Action program expenses, LC Beads, acquisition and restructuring charges.

The N.Y.-based therapeutic and diagnostic devices maker reported a net loss of $0.9 million (or 2 cents per share) compared with a net loss of $7.0 million (or 27 cents per share) in the year-ago quarter.

For fiscal 2013, adjusted earnings of 35 cents per share (up 66.7% year over year) beat the Zacks Consensus Estimate of 34 cents. Results achieved the higher end of the company's guidance. AngioDynamics reported a net loss of $0.6 million (or 2 cents per share) in fiscal 2013 versus a net loss of $5.1 million (or 21 cents per share) in fiscal 2012.

Revenue Analysis

Revenues declined 2% to $90.0 million on a pro forma basis, exceeding the Zacks Consensus Estimate of $89 million. Pro forma results include the Navilyst acquisition and exclude the LC Beads sales. Results were lower due to difficult year-over-year comparisons. However, management is upbeat with the increased adoption of the company's latest offering, AngioVac.

Geographically, U.S. revenues dropped 6% on a pro-forma basis to $71.3 million and accounted for roughly 79% of total sales. International sales increased 14% to $18.8 million, led by strong results in Fluid Management, Vascular Access across the board and microwave performance.

For fiscal 2013, adjusted revenues edged down 0.8% to $342 million below the Zacks Consensus Estimate of $346 million. Results surpassed the guidance provided by the company.

Segment Results

The company's larger Vascular business continues to disappoint with revenues dipping 4% on a pro forma basis to $75 million in the quarter. Within Vascular, revenues from the Periph! eral Vascular unit inched down 1% year over year to $48.0 million due to soft Fluid Management and Venacure EVLT sales, partially offset by solid AngioVac sales. Vascular Access revenues dropped 10% on a pro forma basis to $27 million in the quarter, as the lack of a tip location capability continues to affect the business.

Revenues from the Oncology/Surgery division (15% of total revenue) surged 18% to $13.5 million on a pro forma basis. Growth was driven by strong sales of microwave offerings and lower RF cannibalization along with impressive sale of NanoKnife in the U.S. (up 30%).

Supply Agreement revenues were $1.6 million in the reported quarter, down 31% on a pro forma basis.

Margins

Gross margin fell to 49.1% from 53.3% a year ago, primarily due to negative capacity variances driven by tempered demand in the latter half of the fiscal. Management does not expect cost reduction until the second and third quarter of fiscal 2014, despite efforts to reduce overhead structure.

Selling and marketing along with general and administrative expenses, as a percentage of sales, was 29.6% versus 37.3% in the prior year quarter. Research and development expenses (as a percentage of sales) edged down to 7.1% from 9.1%. Adjusted operating margin in the quarter was 16.2% versus 16.3% in the year-ago quarter.

Financial Health

AngioDynamics ended the quarter with cash and cash equivalents and marketable securities of $24.0 million, down 36.3% from the year-ago level. Total long-term debt (including current portion) was $142.5 million, down 5%. The company generated healthy cash from operations of $10.8 million and $7 million of free cash flow in the fourth quarter.

Guidance

AngioDynamics divulged its fiscal 2014 guidance. Revenues for fiscal 2014 are expected in the range of $346–$352 million, up 3% at the top range from the previous guidance. This represents a 0.6% increase from the Zacks Consensus Estimate of $347 million.

Adjusted ear! nings per! share are expected in the range of 31–35 cents for the fiscal, taking into account the impact from the medical device tax. The current Zacks Consensus Estimate falls at the lower end of the said band. Excluding amortization, adjusted earnings per share are expected in the band of 61−65 cents.

For the first quarter of fiscal 2014, management expects to generate revenues in the range of $81 million–$84 million, flat year over year at the top end. Adjusted earnings per share are anticipated between 2−4 cents. Excluding amortization, adjusted earnings per share are expected in the range of 10 cents and 12 cents.

The current Zacks Consensus Estimate for revenues and earnings per share for the first quarter of fiscal 2014 of $85 million and 7 cents, respectively exceed the guided range.

Recent Developments

AngioDynamics has won regulatory approval for two of its port offerings, which came in as a major boost to its vascular access franchise. The U.S. Food and Drug Administration (FDA) have cleared the company's Xcela Plus Port family, with Pressure Activated Safety Valve (PASV) technology. Similarly, Health Canada provided the Medical Device License for its Smart Port CT family of power-injectable ports, featuring Vortex port technology.

The U.S. FDA has also cleared an Investigational Device Exemption (IDE) to begin a clinical trial of the NanoKnife System for the ablation of focal prostate cancer. The company plans to start patient enrollment in the second quarter of fiscal 2014.

The BioFlo peripherally inserted central catheter (PICC) was displayed at the Premier healthcare alliance's 2013 Breakthroughs Conference and Exhibition in Jun 2013.

Our Take

We are encouraged with AngioDynamics' better-than-expected fourth-quarter results. We take note of the gains in the Oncology, Peripheral Vascular and international businesses. The company is poised to grow on the back of new products, innovative pipeline, acquisitions as well as managem! ent's e! fforts to leverage operational activities. Shares of this therapeutic and diagnostic devices maker increased 3.4% to $12.34 on Thursday, Jul 11.

However, pressure on the Vascular Access product category is a cause of concern. Moreover, the company expects headwinds in its core business in fiscal 2014. We are cognizant regarding the ongoing macroeconomic difficulties in the medical device industry.

The company currently carries a Zacks Rank #3 (Hold). While we prefer to remain on the sidelines on AngioDyanmics, other medical instrument companies such as Cepheid (CPHD), Globus Medical (GMED) and MAKO Surgical (MAKO) warrant a look. All these stocks carry a Zacks Rank #2 (Buy).