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Duke Energy: A Good Buy?

Summary Duke Energy has had an incredible year so far. The company has shown tremendous growth over the course of the year 2014. Net income for Duke Energy during the third quarter of 2014 amounted to $1.27 billion, up by 27% compared to $1 billion in the third quarter of 2013. International Energy and Commercial Power divisions are expected to contribute more toward Duke Energy’s growth, owing to global and domestic expansion and investments into several high-end power projects. Duke has investments of up to $2 billion lined up over the next 7 years which include a major natural gas pipeline in North Carolina. The current period of sliding share prices will represent an ideal entry point for potential investors since Duke Energy has set solid growth prospects in place. Duke Energy (NYSE: DUK ) has had an incredible year so far. The company has shown tremendous growth over the course of the year 2014 with revenues as well as earnings rising. The company has also managed to outperform analysts’ consensus estimates consistently in the quarters so far. The company benefited significantly from the energy boom in the US economy. As the US economy continues to grow, demand for energy has surged incredibly by the industrial sector in particular. Investors have remained confident in Duke’s ability to generate growth. The energy company’s share prices clearly indicate the positive investor sentiment generated by Duke during the year 2014. The prices have been rising consistently over the course of the year, extending the course of their upward climb to almost 5 years. The last 5 years have been highly rewarding for Duke as the energy sector has gained considerable momentum during this time period as well. Share prices for the company have grown from $68 in January 2014 to a five-year high level of $86.83 in December . The company’s shares are currently trading near the $84 mark. Overview of Duke’s Last Reported Financial Performance Duke Energy last reported its earnings back in November. The energy company reported its financial results for the third quarter of fiscal year 2014. During the quarter, the company generated revenues of $6.4 billion, up by a slight margin of 3% as compared to $6.2 billion in the year ago quarter. Operating income for Duke during the quarter amounted to $1.62 billion, down slightly from $1.66 billion in the same quarter of the previous year. Operating incomes fell on account of higher selling costs as well as higher depreciation charges. Net income for Duke Energy during the third quarter of 2014 amounted to $1.27 billion, up by an incredible 27% as compared to $1 billion in the third quarter of 2013. Earnings per share for Duke during the quarter thus amounted to $1.27. It is important to note that Duke Energy continued its strong dividend payout tradition during the quarter and rewarded investors with a dividend of $0.80 per share. Dividends rose from $0.78 per share in the year ago quarter. Future Outlook for Duke Energy Duke Energy has been able to generate tremendous growth during the year owing to a positive market for energy companies. With the growing US economy, energy companies have been facing high demand, and they have been facilitated in meeting that demand as a result of booming crude oil and coal output globally as well as domestically. The company’s Regulated Utilities division has been the principal driver behind its growth and has accounted for more than half of the company’s revenues over the years. However, going forward, the company’s International Energy and Commercial Power divisions are expected to contribute more toward Duke Energy’s growth, owing to global and domestic expansion and investments into several high-end power projects. With demand growth in the US expected to slow down in the coming years, Duke Energy, through its International Energy segment, can generate growth by focusing on its overseas operations. Latin America in particular is expected to show considerable demand growth for electricity over the coming years. Electricity demand in Brazil is expected to grow almost 5% as the manufacturing sector of the country expands. Duke can also look towards the European market for further global expansion. Duke also plans to take advantage of the latest trends in electricity generation with wind and solar power projects in the pipeline that stand to generate 500 MW of electricity. Moreover, Duke has investments of up to $2 billion lined up over the next 7 years which include a major natural gas pipeline in North Carolina. The company’s share prices are currently following a declining trend, but that was because investors had sold shares as prices reached the five year high level. However, with revenues as well as earnings expected to rise in the coming years as the company generates positive returns from its power projects, share prices have a definite upside. Earnings are expected to grow 5% on average over the next 5 years. Conclusion Duke Energy has generated incredible growth over the course of the last 5 years, owing to a favorable US market and enhanced operational efficiency. The company is looking towards overseas operations in order to compensate for slowing demand growth in the US economy. Duke has effectively modified its portfolio in order to account for the latest trends in the energy sector with wind and solar power projects lined up for the future as well. The company also remains committed towards further enhancing operational efficiency and cutting down costs to further fuel earnings growth. The current period of sliding share prices will represent an ideal entry point for potential investors. Investors will gain significantly owing to the solid growth prospects that Duke has to offer. Now that you’ve read this, are you Bullish or Bearish on ? Bullish Bearish Sentiment on ( ) Thanks for sharing your thoughts. Why are you ? Submit & View Results Skip to results » Share this article with a colleague

3 Worst Global ETF Investments Of 2014

2014 was a relatively sluggish year for international markets. While the U.S. indices were setting new all-time highs seemingly year round, most international economies were reeling under global pressures. Per MSCI, the World ex-USA index is down 5.9% so far this year, while countries within the European Monetary Union ( EMU ) have turned out to be one of the most beaten down markets, having shed about 8.7% in the time frame. Emerging nations were also no better having retreated about 4.4% YTD. These were in stark contrast to the 11.9% gain seen in North America. Deflationary worries in Europe, apparent failure of Abenomics in Japan, prolonged slowdown in the world’s second largest economy China, massive crash in crude and the ensuing currency woes (as well as the broader commodity market rout) rattled investors’ faith over international investing in 2014. As the year is drawing to a close, we handpick 3 global ETFs which have severely underperformed in 2014. These ETFs should be closely watched if the macroeconomic backdrop takes longer to turn around in the New Year. AdvisorShares Accuvest Global Opportunities ETF (NYSEARCA: ACCU ) The ETF is a good choice for long-term investors seeking a broad global exposure. The fund doesn’t track any particular index and instead looks to identify countries that may outperform other equity markets on the world stage based a top-down method that considers 40 different factors. The product is structured as a fund-of-funds and holds other ETFs in its basket in order to give investors global exposure. This AdvisorShares fund is unpopular and illiquid with just $4.2 million of assets and about 20,000 shares of average daily trading volume. While low trading volume can result in higher trading costs, the use of the fund-of-funds technique and the active management strategy render the fund quite expensive with an expense ratio of 1.25%. Presently, the iShares MSCI China ETF (NYSEARCA: MCHI ) (19.69%), the iShares MSCI Sweden ETF (NYSEARCA: EWD ) (17.90%) and the iShares MSCI Thailand Capped ETF (NYSEARCA: THD ) (14.78%) occupy the top three spots. The fund is heavy on emerging Asia (33%), Developed Europe (28%) and North America (25%). Sector-wise, financials takes the top spot with a 33.8% allocation, followed by 15.7% exposure to information technology and a 10.1% allocation to industrials. The fund lost the most in the global equities space in 2014, slumping about 15.3%. AdvisorShares Athena International Bear ETF (NYSEARCA: HDGI ) This one too is an active ETF from the same issuer, AdvisorShares. The ETF seeks to generate capital appreciation through short sales of international equities. Stocks are selected using the portfolio manager’s patented behavioral research, which measures manager behavior, strategy consistency and conviction. The research also evaluates stocks to be placed in top and bottom relative weight positions within the equity universe. Additionally, the portfolio manager also utilizes equity manager and investor behavior factors to determine the most attractive markets and capitalization ranges for their short choices. Once this is done, the stocks that rank the lowest from the conviction holdings list receive allocations in the fund, based on market cap. This intensive investigation results in a higher annual fee of 1.50%. The product is fairly overlooked by investors as depicted by its AUM of only $1 million and average daily volume of about 5,000 shares. The ETF was down 15% in the 2014 time frame. WisdomTree Commodity Country Equity ETF (NYSEARCA: CCXE ) Commodities had a rough stretch this year due to a stronger dollar, favorable weather and soft demand owing to a patchy global recovery. The product is a high-yield option looking to track the stock market performances of dividend-paying companies hailing from commodity-rich nations. The product tracks the WisdomTree Commodity Country Equity Index and results in a portfolio of 161 securities with an expense ratio of 58 basis points a year. This ETF assigns 26.3% of its asset base to financial stocks followed by 20.3% in energy, 15.9% in telecom and 11.9% in material. As the name suggests, the fund looks to invest in resource-dominant nations, including New Zealand, Canada, Norway, Australia, Chile, Brazil and Russia. Regional weights vary in the range of 10.95-14.76%. The fund appears to be spread out among companies, as no firm accounts for more than 4.97% in the fund. StatoilHydro ASA (NYSE: STO ), Telecom Corp of New Zealand Ltd, and Ambev S.A. (NYSE: ABEV ) take the top three positions in the fund with asset investment of 4.97%, 3.68% and 2.73%, respectively. The fund was down 11.2% on the year.

Ride The January Effect With These ETFs And Stocks

January is usually a pretty strong month for stocks, suggesting that many could see large gains to start the year if historical trends hold true yet again. This is largely attributed to the ‘January Effect’. What is the January Effect? The January Effect is a historically observed increase in stock prices in the month of January due largely to year-end tax considerations. It is a seasonal anomaly in which investors redeploy their capital in the stock market in January after a sell-off in December to create tax losses. This phenomenon pushes the stock market higher in the first month of the year. While large caps tend to perform better, small-cap securities have historically proven their outperformance in January. According to some market experts, the January Effect actually runs from mid December through February, with the small caps continuing to outperform their large-cap cousins. January Effect Never Looked More Good While most of the developed and developing economies are now struggling to reinvigorate growth and fighting deflation in this fear-ridden world, the U.S. economy is growing at a faster rate not seen in more than a decade. Given this, small caps seem to be the perfect choice in the present scenario where the American economy is way ahead of the others. This is because these pint-sized stocks are closely tied to the U.S. economy and generate most of their revenues from the domestic market making them great choices in a trending U.S. market. Further, these companies are small and are poised to grow higher than their already tapped out large-cap counterparts. These fundamentals will support the surge in the small-cap space going forward and the outperformance is likely to be more evident in the first month of the year if history is any guide. For investors seeking to capitalize on the opportunity of the January Effect in basket form, the following small-cap ETFs and stocks could be solid pure play choices if it materializes in 2015. ETFs to Consider While there are several options in the small-cap ETF space, we have highlighted those that have gained strong momentum last month and this trend is likely to continue in the first month of 2015 given their favorable Zacks ETF Rank of 3 or ‘Hold’ rating. iShares Micro-Cap ETF (NYSEARCA: IWC ) This ETF tracks the Russell Microcap Index, holding a large basket of 1,426 mini securities. The fund is widely diversified across each security as none of them holds more than 0.87% of total assets. From a sector look, financials and health care take the top two spots with 25.4% and 23.9% share, respectively, while information technology, consumer discretionary and industrials round off the top five. The fund has amassed $973.5 million in its asset base and trades in volume of less than million shares per day. The ETF charges 60 bps in annual fees and gained nearly 5% over the past one month. First Trust Small Cap Core AlphaDEX ETF (NYSEARCA: FYX ) This fund follows an AlphaDEX methodology and ranks stocks in the space by various growth and value factors, eliminating the bottom ranked 25% of the stocks. This approach results in a basket of 448 stocks that are well spread out across each security with none holding more than 0.56% of assets. Sector wise, the product is highly diversified with industrials, information technology and financials making up for the top three sectors. FYX is rich in AUM of $600.5 million and sees moderate volume of around 72,000 shares a day. Expense ratio came in at 0.66% and the ETF is up 4.2% over the past month. RevenueShares Small Cap ETF (NYSEARCA: RWJ ) This product tracks the RevenueShares Small Cap Index and offers exposure to about 600 stocks that are weighted by revenues instead of market capitalization. SYNNEX Corp. (NYSE: SNX ) occupies the top position at 2.13% in the basket, while other firms hold less than 1.50% of assets. In terms of industrial exposure, consumer discretionary and industrials are the top two sectors at 23.8% and 21.2%, respectively, closely followed by consumer staples (18.1%). The fund has amassed $325.1 million in its asset base, while it charges 54 bps in fees per year from investors. Volume is light coming under 28,000 shares a day on an average. The ETF added 4.1% in the last month. Stocks to Consider In the stock world, it is difficult to identify the stocks that will outperform in 2015. As such, we have screened for a number of criteria with the help of our Zacks Screener and have emerged with a handful of great picks for January. The eligible benchmarks include a Zacks Rank # 3 (Hold) or better, positive industry Zacks Rank, upward earnings estimate revisions and above-average returns in the last month. Bio-Reference Laboratories Inc. (NASDAQ: BRLI ) Based in Elmwood Park, NJ, Bio-Reference Laboratories is the third largest full service clinical diagnostic laboratory in the U.S. providing testing services for the detection, diagnosis, evaluation, monitoring, and treatment of diseases primarily in the greater New York metropolitan area. The company has seen rising earnings estimates by 4.4% for 2014 over the past one month. The stock gained 12.7% last month and has a Zacks Rank #1. It comes under an industry that has a solid Zacks Industry rank in the top 33%, suggesting their outperformance in the coming weeks. Moelis & Company (NYSE: MC ) Based in New York, Moelis & Company is a leading global independent investment bank offering strategic and financial advisory services in the United States and internationally. The company has seen positive earnings estimate revision of 3.5% for 2014 over the past one month. The stock gained over 4% last month and is expected to continue to rise given that it has a Zacks Rank #2 and an industry Rank in the top 23%. Regis Corp. (NYSE: RGS ) Based in Edina, MN, Regis Corp. is the beauty industry’s global leader in beauty salons, hair restoration centers, and cosmetology education. It is the owner, operator, and franchiser of hairstyling and hair care salons for men, women, and children in the United States, the United Kingdom, Canada, and Puerto Rico. The company sees impressive earnings estimate revisions of 20% for 2014. It added 2% last month and has a Zacks Rank #3 with a strong industry Zacks Rank in the top 12%. Bottom Line January is truly the time to get in on small-cap securities, assuming that the historical trend holds true in 2015. The above-mentioned ETFs and stocks have outperformed the broader market by a wide margin last month. This trend is likely to continue with an improving economy and a booming stock market that has boosted the appeal of these pint-sized products.