Best Safest Stocks To Watch For 2014

BALTIMORE (Stockpickr) - Don't let your guard down. The S&P 500 may be poking holes in new all time highs and the nonsense on Capitol Hill may even be resolved, but that doesn't meant that you should keep hanging onto everything in your portfolio.

That's because even the biggest, "safest" blue-chips could be toxic to your performance in the final quarter of this year.

There's no question that the big indices are still in bull mode, but it's worth noting that the Dow Jones Industrial Average looks materially weaker than the S&P right now. The big names that tend to dominate the Dow are starting to show some cracks -- well, some of them are, anyway.

That's why we're taking a closer look at five "toxic" stocks you should be selling in October. To be fair, the companies I'm talking about today aren't exactly "junk."

By that, I mean they're not next up in line at bankruptcy court. But that's frankly irrelevant; from a technical analysis standpoint, they're some of the worst positioned names out there right now. For that reason, fundamental investors need to decide how long they're willing to take the pain if they want to hold onto these firms this summer. And for investors looking to buy one of these positions, it makes sense to wait for more favorable technical conditions (and a lower share price) before piling in.

Top 10 International Companies To Watch In Right Now: iShares Core S&P Small-Cap ETF (IJR)

iShares Core S&P Small-Cap ETF, formerly iShares S&P SmallCap 600 Index Fund, seeks investment results that correspond generally to the price and yield performance of the Standard & Poor's SmallCap 600 Index (the Index). The Index measures the performance of publicly traded securities in the small-capitalization sector of the United States equity market. The Index serves as the underlying index for the S&P 600/Citigroup Growth and Value Index series. The component stocks are weighted according to the total float-adjusted market value of their outstanding shares. The component stocks in the Index have a market capitalization between $300 million and $1 billion (which may fluctuate depending on the overall level of the equity markets), and are selected for liquidity and industry group representation. The Index is adjusted to reflect changes in capitalization resulting from mergers, acquisition, stock rights, substitutions and other capital events.

The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. iShares S&P SmallCap 600 Index Fund�� investment advisor is Barclays Global Fund Advisors.

Advisors' Opinion:

• [By Chris Ciovacco]

  In Thursday's ETF analysis, evidence is presented that supports increasing demand for assets that get a tailwind from a weak U.S. dollar, including emerging markets (EEM) and foreign stocks (EFA). Casting a wider economic net, our market model told us to start buying stocks last week even with the threat of a U.S. default. Wednesday, we continued with our incremental allocation shifts by adding some exposure to the energy sector. Thursday, we sat tight holding long positions in small caps (IJR), Europe (FEZ), emerging markets and technology (QQQ). The upper bounds of the bullish S&P 500 trend channel shown below may offer some resistance to the market's near vertical ascent.

• [By Tom Aspray]

  I still think the emerging markets may be the surprise in 2014 as the technical outlook has improved but a bottom has not yet been confirmed. The more active investor should consider investing in several index-tracking ETFs, but in volatile areas, like the emerging markets, the percentage commitment should be kept low. One should consider not only the large-cap S&P 500 but also the small-cap sectors like iShares S&P 600 Small-Cap (IJR), which I recommended last Wednesday.

Best Safest Stocks To Watch For 2014: PowerShares Dynamic Large Cap Growth Portfolio (PWB)

PowerShares Dynamic Large Cap Growth Portfolio (the Fund) seeks investment results that correspond generally to the price and yield of an equity index called the Dynamic Large Cap Growth Intellidex Index (the Intellidex). The Fund will normally invest at least 80% of its assets in common stocks of large-cap companies. A company is considered to be a large-cap company if it falls within the Intellidex model. The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Intellidex. The Intellidex consists of 50 United States large-cap growth stocks selected principally on the basis of their capital appreciation potential as identified by the AMEX (the Intellidex Provider) pursuant to its Intellidex methodology.

The Fund, using an indexing investment approach, attempts to replicate the performance of the Intellidex. The Fund generally will invest in all of the stocks comprising the Intellidex in proportion to their weightings in the Intellidex. The Fund�� investment advisor is PowerShares Capital Management LLC.

Advisors' Opinion:

• [By Paul Ausick]

  Two ETFs to watch are Guggenheim Solar (NYSEMKT: TAN), which is up more than 80% so far this year, and PowerShares WilderHill Clean Energy (NYSEMKT: PWB), up more than 40%. Both are less liquid than the company shares and their gains have been smaller, but both should do well if the solar stocks keep running up.

Best Safest Stocks To Watch For 2014: J.C. Penney Company Inc. Holding Company(JCP)

J. C. Penney Company, Inc., through its subsidiary, J. C. Penney Corporation, Inc., operates department stores in the United States and Puerto Rico. The company sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products, and home furnishings. It also provides various services, such as styling salon, optical, portrait photography, and custom decorating. The company also sells its products through its Internet Web site, jcp.com. J. C. Penney Company, Inc. has strategic alliance with Martha Stewart Living Omnimedia, Inc. As of December 7, 2011, it operated approximately 1,100 department stores. The company was founded in 1902 and is based in Plano, Texas.

Advisors' Opinion:

• [By Sean Williams]

  On the flipside we have the recently ousted CEO of J.C. Penney (NYSE: JCP  ) , Ron Johnson. Johnson's plan to completely phase out discounting at the retailer while introducing a mini-shop format within its stores alienated its thriftiest consumers and sent same-store sales plummeting nearly 32% in the fourth quarter. I cannot state enough how important a good CEO is to a company's growth and well-being.

• [By Jon C. Ogg]

  J. C. Penney Company, Inc. (NYSE: JCP) may be an index departure stock now, but if this crummy turnaround retailing stock can get a boost from an upgrade then any other one can too. Piper Jaffray raised the retailer to Overweight with an $11 price target, nearly an unimaginable move based upon recent trends. Shares were up over 3.6% at $$7.64 in the final seconds of the day.

• [By Jeremy Bowman]

  Not all CEOs are created equal
  According to polls, most Americans think CEOs are overpaid, but Lululemon's share price drop following Day's exit is a reminder that often, the talent and direction occupying the executive chair is a bargain for these companies. The problem with CEO compensation is that terrible leaders are often paid as much as the great ones. Take J.C. Penney (NYSE: JCP  ) , for example, which is coming off one of the worst years in the history of retail. In 2011, the company paid more than $150 million, including stock awards, to beckon Ron Johnson and three of his henchmen into the executive suite. All four are now gone, and that awards package is proof that the board of directors may deserve just as much blame as Johnson and his team does for last year's debacle.

• [By Ben Levisohn]

  UBS analyst Michael Binetti and team worry that “an optimistic recovery” is already price in to JC Penney’s (JCP) stock:

  Getty Images

  Our recent checks point to sluggish 3Q sales for JC Penney, and we fear commentary on sales trends could be a negative catalyst for the stock. If near-term [same-store sales, or] SSS are decelerating, we believe the credibility of any sustained EBITDA recovery would be damaged severely. Further, any SSS concerns would likely shift focus back to valuation��hich we believe currently assumes a sustained multi-year recovery. Even in an optimistic scenario with sustained +5% SSS and gross margins rebounding to 37% (from 34.5% in ’14E), we est EBITDA will only reach $650m in 3 yrs��hich would only get JC Penney back to FCF breakeven (w/$400m/yr int exp + $250m/yr minimum maint capex).

Best Safest Stocks To Watch For 2014: Popeyes Louisiana Kitchen Inc (PLKI)

Popeyes Louisiana Kitchen Inc, formerly AFC Enterprises, Inc. incorporated on July 27, 1992, develops, operates, and franchises quick-service restaurants (QSRs or restaurants) under the trade names Popeyes Chicken & Biscuits and Popeyes Louisiana Kitchen (collectively Popeyes). Within Popeyes, it manages two business segments: franchise operations and ompany-operated restaurants. Within the QSR industry, Popeyes distinguishes itself with a Louisiana style menu, which features spicy chicken, chicken sandwiches, chicken tenders, fried shrimp and other seafood, red beans and rice and other regional items. As of December 25, 2012, the Company operated and franchised 2,104 Popeyes restaurants in 47 states, the District of Columbia, Puerto Rico, Guam, the Cayman Islands and 26 foreign countries. As of December 25, 2012, of its 1,634 domestic franchised restaurants, approximately 70% were concentrated in Texas, California, Louisiana, Florida, Illinois, Maryland, New York, Georgia, Virginia and Mississippi. Of its 425 international franchised restaurants, approximately 60% were located in Korea, Canada, and Turkey. Of its 45 Company-operated restaurants, approximately 80% were concentrated in Louisiana and Tennessee. In November 2012, the Company acquired 27 restaurants in Minnesota and California.

As of December 25, 2012, the Company had 340 franchisees operating restaurants within the Popeyes system. During the fiscal year ended December 25, 2012 (fiscal 2012), the Popeyes system opened 141 restaurants, which included 75 domestic and 65 international restaurants. During fiscal 2011, the Popeyes system permanently closed 75 restaurants, resulting in 66 net restaurant openings, compared to 65 net openings. As of December 25, 2012, it leased 12 restaurants and subleased 44 restaurants to franchisees. In addition, it leased three properties to unrelated third parties. Of the restaurants leased or subleased to franchisees, 29 were located in Texas and 16 were located in Georgia. On November 7, 2012,! the Company entered into a new agreement with the King Features Syndicate Division of Hearst Holdings, Inc., licensor of the Popeye the Sailorman and associated cartoon characters.

Advisors' Opinion:

• [By Rick Aristotle Munarriz]

  Alamy Fried chicken and waffles is a staple menu item at countless soul food and comfort food restaurants, but that's not stopping Burger King (BKW) from trying to give the meal a fast-food spin. Burger King is testing a new sandwich in the Northeast that takes the breaded chicken patty used in its Classic Crispy Chicken Sandwich from its King Deals Value Menu and replaces the bun with a split waffle. Burger King's Chicken & Waffle Sandwich isn't as hearty as the meal that it's based on. It's selling for as little as $2.29. But the chain's latest attempt to turn heads with a unique menu item will at least attract curious nibblers if it does decide to broaden the offering across the country. Waffling About Burger King isn't the first popular chain to attempt to reinvent this classic dish. As Nation's Restaurant News points out, last summer, Popeyes Louisiana Kitchen (PLKI) offered Chicken Waffle Tenders -- consisting of chicken tenders dipped in a vanilla maple-scented waffle batter, served with a honey maple dipping sauce. DineEquity's (DIN) IHOP did it three years ago by combining its chicken strips with Belgian waffle quarters. Yum! Brands (YUM) tried to breathe new life into its breakfast business last summer by testing a Waffle Taco -- an egg, sausage, and waffle breakfast sandwich. Even if it doesn't succeed -- and some of the early taste tests haven't been very flattering to the chain's new sandwich -- it's at least comforting to see that Burger King isn't just copying McDonald's (MCD) the way that it has for the past couple of years. Burger King followed McDonald's in offering fancy coffee drinks, fresh fruit smoothies, and popcorn chicken. It has gone on to roll out doppelgangers of the Egg McMuffin and McRib sandwiches. In November, it introduced the Big King, which any patron will quickly recognize as a body double to the Big Mac. Then again, it's not as if following McDonald's lead is such a clever idea right now. The world's largest re

• [By Sue Chang]

  Popeyes Louisiana Kitchen Inc. (PLKI) �is expected to report first-quarter earnings of 45 cents a share.

• [By Mark Yagalla]

  As the fast-food wars heat up, restaurants are getting more creative with their menu items. One item that is getting a lot of attention is the waffle. Two restaurant chains that have introduced their own variations of the waffle are Taco Bell, owned by Yum! Brands (NYSE: YUM  ) �and Popeyes Louisiana Kitchen (NASDAQ: PLKI  ) . Taco Bell has made the Waffle Taco a centerpiece of its new breakfast menu. Meanwhile, Popeyes is bringing back its popular Chicken Waffle Tenders. Could the waffle be the answer and boost same-store sales for these restaurants? If it is the answer, expect to see more variations of the waffle on many more menu boards.

• [By Steve Symington]

  With the taste of last quarter's�solid performance�still fresh on investors' palates, Popeyes Louisiana Kitchen (NASDAQ: PLKI  ) just served up another plate of mixed quarterly results. But this time, the quick-service restaurant chain added a little extra kick with its guidance.

Best Safest Stocks To Watch For 2014: Sanmina-SCI Corporation(SANM)

Sanmina-SCI Corporation provides integrated electronics manufacturing services worldwide. It offers product design and engineering services, including initial development, detailed design, prototyping, validation, preproduction, and manufacturing design; volume manufacturing of complete systems, components, and subassemblies; final system assembly and testing services; direct order fulfillment and logistics services; and after-market product service and support services. The company also manufactures various system components and subassemblies consisting of printed circuit boards, printed circuit board assemblies, backplanes and backplane assemblies, enclosures, cable assemblies, precision machine components, optical components and modules, and memory modules. It provides its services to original equipment manufacturers primarily in the communication, enterprise computing and storage, multimedia, industrial and semiconductor capital equipment, defense and aerospace, medica l, clean technology, and automotive industries. The company was founded in 1980 and is based in San Jose, California.

Advisors' Opinion:

• [By Evan Niu, CFA]

  What: Shares of Sanmina (NASDAQ: SANM  ) have popped today by as much as 16% after the company reported earnings.

  So what: Revenue in the fiscal second quarter was $1.43 billion, and non-GAAP earnings per share came in at $0.30. That top-line result was in line with consensus estimates while the bottom-line was a beat relative to�estimates. CEO Jure Sola said the company continues to face a "soft market environment" but that Sanmina continues to invest in technology and services, with new program ramps on the horizon.

• [By Seth Jayson]

  Calling all cash flows
  When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Sanmina (Nasdaq: SANM  ) , whose recent revenue and earnings are plotted below.

• [By Eric Volkman]

  After being in the red last quarter, Sanmina's (NASDAQ: SANM  ) bottom line has swung into positive territory. In the company's Q2 results, net sales amounted to $1.43 billion, down from the $1.46 billion in the same period the previous year. The bottom line came in at $21.2 million ($0.25 per diluted share) from Q2 2012's net loss of $1.4 million ($0.02) according to GAAP standards.

• [By Seth Jayson]

  Sanmina (Nasdaq: SANM  ) reported earnings on April 22. Here are the numbers you need to know.

  The 10-second takeaway
  For the quarter ended March 30 (Q2), Sanmina met expectations on revenues and beat expectations on earnings per share.