Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
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 Michael Baker (AMEX: BKR), whose recent revenue and earnings are plotted below.
10 Best India Stocks To Own For 2015: Patterson-UTI Energy Inc.(PTEN)
Patterson-UTI Energy, Inc., through its subsidiaries, provides onshore contract drilling services to oil and natural gas exploration and production companies in the United States and Canada. The company offers pressure pumping services that consist of well stimulation and cementing for completion of new wells and remedial work on existing wells, as well as hydraulic fracturing, nitrogen, cementing, and acid pumping services in Texas and the Appalachian Basin; and contract drilling services primarily in Texas, New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi, Colorado, Utah, Wyoming, Montana, North Dakota, Pennsylvania, West Virginia, Ohio, and western Canada. It also owns and invests in oil and natural gas assets located primarily in Texas and New Mexico. As of December 31, 2011, it had a drilling fleet of 330 marketable land-based drilling rigs. Patterson-UTI Energy, Inc. was founded in 1978 and is headquartered in Houston, Texas.
Advisors' Opinion:- [By Elliott Gue]
Our investment thesis: Patterson-UTI Energy (PTEN) continues to upgrade its fleet of drilling rigs, replacing older units with advanced APEX Walking rigs.
- [By Jon C. Ogg]
Patterson-UTI Energy Inc. (NASDAQ: PTEN) was reinstated as Buy with a $27 price target at Bank of America Merrill Lynch.
Pharmacyclics Inc. (NASDAQ: PCYC) was started as Overweight with a $142 price target at J.P. Morgan. Deutsche Bank also started it with a Buy rating and a $170 price target.
- [By Lee Jackson]
Patterson-UTI Energy Inc. (NASDAQ: PTEN) is another name in which the Deutsche Bank team sees tremendous upside. With strong cash flow generation and continued share repurchases to help as activity levels accelerate, the stock has solid potential for investors at this level. Deutsche Bank has a $30 price target and the consensus figure is at $23.50.�Patterson closed Monday at $25.47. Investors are paid a 0.8% dividend.
Hot Income Companies To Invest In Right Now: Balchem Corp (BCPC)
Balchem Corporation incorporated on Jan 30, 1967, is engaged in the development, manufacture and marketing of specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical and medical sterilization industries. The Company operates in three segments: Specialty Products, Food, Pharma & Nutrition and Animal Nutrition & Health. The Company sells its products through its own sales force, independent distributors and sales agents. The Company operates five wholly owned domestic subsidiaries, such as BCP Ingredients, Inc., Aberco, Inc., Balchem BV, Balchem Trading BV and Balchem Italia Srl.
Food, Pharma & Nutrition
The Food, Pharma & Nutrition (FPN) segment provides microencapsulation solutions to a variety of applications in food, pharmaceutical and nutritional ingredients to enhance performance of nutritional fortification, processing, mixing, and packaging applications and shelf-life. Major product applications are baked goods, refrigerated and frozen dough systems, processed meats, seasoning blends, confections, and nutritional supplements. The Company also markets human grade choline nutrient products through this segment for wellness applications.
Specialty Products
The Company's Specialty Products segment operates in industry as ARC Specialty Products. Ethylene oxide, at the 100% level, is sold as a sterilant gas, primarily for use in the health care industry. It is used to sterilize a wide range of medical devices because of its versatility and effectiveness in treating hard or soft surfaces, composites, metals, tubing and different types of plastics. The Company's 100% ethylene oxide product is distributed in uniquely designed, recyclable, double-walled, stainless steel drums. Contract sterilizers, medical device manufacturers, and medical gas distributors are the Company's principal customers for this product. In addition, the Company also sells single use canisters with 100% ethylene oxide for uses in medical dev! ice sterilization.
The Company markets and sells propylene oxide as a fumigant to aids in the control of insects and microbiological spoilage and to reduce bacterial and mold contamination in shell and processed nut meats (except peanuts), processed spices, cacao beans, cocoa powder, raisins, figs and prunes. The Company distributes its propylene oxide product primarily in recyclable, single-walled, carbon steel cylinders The Company also sells propylene oxide to customers seeking smaller quantities and whose requirements include utilization in various chemical synthesis applications, to make paints more durable and for manufacturing specialty starches and textile coatings.
Animal Nutrition & Health
The Company's Animal Nutrition & Health (ANH) segment provides the animal nutrition and health markets with products derived from the Company's microencapsulation, chelation, and basic choline chloride technologies. Commercial sales of REASHURE Choline, a microencapsulated choline, NITROSHURETM, a microencapsulated urea, and NIASHURETM, the Company's microencapsulated niacin for dairy cows, boosts health and milk production in transition and lactating dairy cows, delivering nutrient supplements that survive the rumen and are biologically available, providing required nutritional levels. The Company's AMINOSHURE-L product, a rumen-protected lysine for use in dairy rations, gives nutritionists and dairy producers a precise and consistent source of rumen-protected lysine. The Company also markets chelated mineral supplements for uses in animal feed throughout the world. ANH also manufactures and supplies basic choline chloride, an essential nutrient for animal health, predominantly to the poultry and swine industries. The ANH segment also includes choline and certain derivatives manufactured and sold into various industrial applications, predominately as a component for hydraulic fracturing of shale natural gas wells, and methylamines which are a primary building block fo! r the man! ufacture of choline products and are also used in a wide range of industrial applications.
Advisors' Opinion:- [By Jake L'Ecuyer]
Equities Trading UP
Balchem (NASDAQ: BCPC) shares shot up 15.27 percent to $60.08 after the company announced its plans to acquire SensoryEffects for $567 million. - [By Lisa Levin]
Balchem (NASDAQ: BCPC) surged 13.56% to $59.19. The volume of Balchem shares traded 499% higher than normal. Balchem announced its plans to aquire SensoryEffects for $567 million.
- [By John Udovich]
Small cap ingredients stock Balchem Corporation (NASDAQ: BCPC) jumped 22.76% yesterday on news about an acquisition, meaning its worth taking a closer look at the stock along with potential peers like small cap MGP Ingredients Inc (NASDAQ: MGPI) and the PowerShares Dynamic Food & Beverage ETF (NYSEARCA: PBJ).
Hot Income Companies To Invest In Right Now: Invesco Plc(IVZ)
Invesco Ltd. is a publicly owned investment manager. The firm primarily provides its services to individuals, typically high net worth individuals. It also manages accounts for institutions. The firm manages separate client focused equity, fixed income, balanced portfolios. It also launches equity, fixed income, and balanced mutual funds for its clients. The firm invests in the public equity and fixed income markets across the globe. It invests in core, growth, and value stocks of small-cap, mid-cap, and large-cap companies. The firm employs a fundamental and quantitative analysis with a bottom-up stock picking approach to make its investments. It conducts in-house research to make its investments. Invesco Ltd. was founded in December 1935 and is based in Atlanta, Georgia.
Advisors' Opinion:- [By M. Joy Hayes]
In early 2012, representatives from Aguilar's former employer, Invesco (NYSE: IVZ ) , met with Aguilar to present its argument� that the proposed regulations were "extreme," that the "current reforms are working," and that the new regulations would "disrupt market functioning and damage a fragile economic recovery."
- [By Bryan Murphy]
It may not be as big as Invesco Ltd. (NYSE:IVZ) or as high-profile as BlackRock, Inc. (NYSE:BLK), but WisdomTree Investments, Inc. (NASDAQ:WETF) offers something to investors right now that IVZ and BLK don't ... a lot of near-term upside potential after a big tumble between January and May.
Hot Income Companies To Invest In Right Now: Selectica Inc.(SLTC)
Selectica, Inc. provides contract management and sales configuration software solutions that allow enterprises to manage sell-side business processes. It offers Selectica contract lifecycle management (CLM) solution, a contract authoring, analysis, repository, and process automation product that is offered on-premise or hosted basis enables customers to create, manage, and analyze contracts in a single repository. The company also offers Selectica sales configuration (SCS) solution, which consolidates configuration, pricing, and quoting functions into a single application platform. It provides SCS solutions to manufacturers, service providers, and financial services companies to streamline the opportunity-to-order process. In addition, the company provides professional implementation and customization services; on-demand hosting services for CLM solutions; and complex product configuration modeling services for SCS solutions. It sells its CLM products primarily through its direct sales force and strategic and OEM partners, as well as SCS products primarily through partnership relationships in the United States, Canada, India, New Zealand, Switzerland, and the United Kingdom. The company was founded in 1996 and is headquartered in San Jose, California.
Advisors' Opinion:- [By The GeoTeam]
Our recent 2013 articles on SaaS companies Selectica (SLTC), E2open (EOPN), Responsys (MKTG), Vocus (VOCS), and ExactTarget (ET) highlighted such opportunities. The average return since the inception of our coverage currently stands at around 34% (55% at their highs).
Hot Income Companies To Invest In Right Now: Gold Fields Ltd (GFI)
Gold Fields Limited (Gold Fields) is a holding company. Gold Fields is engaged in gold mining and related activities, including exploration, extraction, processing and smelting. Gold Fields is a producer of gold and holder of gold reserves in South Africa, Ghana, Australia and Peru. In Peru, Gold Fields also produces copper. Gold Fields is primarily involved in underground and surface gold and copper mining and related activities. Gold Fields also has an interest in a platinum group metal exploration project in Finland. Gold bullion is its principal product, which is produced in South Africa, Ghana and Australia and sold in South Africa and internationally. In addition, Gold Fields has gold and other precious metal exploration activities and interests in Africa, Eurasia, Australasia and the Americas. The Company holds 34.9% interest in Rand Refinery Limited.
On June 22, 2011, Gold Fields acquired the 18.9% interest of IAMGold Corporation (IAMGold), which increased Gold Fields��interest in each of the Tarkwa and Damang gold mines from 71.1% to 90.0%. On April 15, 2011, it acquired further interest in Gold Fields La Cima S.A.A. (La Cima). During the year ended December 31, 2011, the Company acquired a 21.8% interest in Timpetra Resources Limited.
KDC Operation
The KDC mine is located in the Gauteng Province of South Africa in the Far West Rand mining district, some 60 kilometers southwest of Johannesburg. KDC is consists of the Driefontein and Kloof mines. In 2011, KDC produced 1.1 million ounces of gold. KDC is consists of 13 producing shaft systems that mine different contributions from pillars and open ground, five gold plants of which two process mainly underground ore and three process mainly surface material. The KDC operation is engaged in both underground and rock dump mining. In total, during 2011, there were 13 fatalities at KDC. Of these, five were due to seismic related falls of ground, five resulted from gravity related falls of ground, two related! to tramming operations and one related to a person falling from height.
Beatrix Operation
The Beatrix operation is located in the Free State Province of South Africa, some 240 kilometers southwest of Johannesburg, near Welkom and Virginia, and consists of the Beatrix mine. Beatrix operates under mining rights covering a total area of approximately 16,800 hectares. Beatrix is an underground only operation. Beatrix has four shaft systems, with five ventilation shafts to provide additional up-cast and down-cast ventilation capacity and is serviced by two metallurgical plants. It is a shallow to intermediate-depth mining operation, at depths between 700 meters and 2,200 meters below surface. In 2011, Beatrix produced 0.347 million ounces of gold. Beatrix is managed as three operational sections: the North Section, the South Section and the West Section. The Beatrix mine is engaged in underground and surface mining. It had five fatalities at Beatrix, in 2011.
South Deep Operation
South Deep is situated adjacent to KDC, in the Gauteng Province of South Africa. South Deep is a capital project and remains a developing mine. South Deep is engaged in underground mining and is consists of one metallurgical plant and two operating shaft systems, the older South Shaft complex and the newer Twin Shaft complex. The South Shaft complex includes a main shaft and three sub-vertical (SV) shafts, two of which are operational. The Twin Shaft complex consists of a single-barrel shaft and an adjacent bratticed ventilation shaft, or the Twins Main Ventilation Shaft. While the Twin Shaft complex forms the center of production and capital development activities, opening up, equipping and diamond drilling operations are being conducted in the South Shaft area in order to access new mining areas.
The South Shaft complex operates to a depth of 2,650 meters below surface and the Twin Shaft complex operates to a depth of 2,995 meters below surface. In 2011, South Deep! produced! 0.273 million ounces of gold. During 2011, the South Deep plant treated an average of 0.2 million tons per month (excluding Kloof mine toll treatment) consisted of an average of 167,000 tons per month of underground material and 31,000 tons per month of surface material from South Deep.
Ghana Operations
Gold Fields Ghana Limited (Gold Fields Ghana), which holds the interest in the Tarkwa mine. The Tarkwa mine is located in southwestern Ghana, about 300 kilometers by road west of Accra. The Tarkwa mine consists of several open pit operations on the original Tarkwa property and the adjacent southern portion of the property, together with a heap leach facility, referred to as the North Plant Heap Leach Facility. The capacity of the facility is 3.3 million tons per annum. The total treatment capacity including the North Plant, the High Pressure Grinding Roll Facility and the carbon in leach (CIL) Plant is estimated to be 24 million tons per annum. The Tarkwa mine operates under mining leases with a total area of approximately 20,800 hectares, the entirety of which are surface operations. In 2011, Tarkwa produced 0.717 million ounces of gold, of which 0.576 million ounces were attributable to Gold Fields.
Abosso Goldfields Limited (Abosso), which owns the interest in the Damang mine. The Damang deposits are located in the Wassa West District in southwestern Ghana approximately 330 kilometers by road west of Accra and approximately 30 kilometers by road northeast of the Tarkwa mine. The Damang mine consists of an open pit operation with a semi-autogenous grinding (SAG) mill and CIL processing plant. Damang operates under a mining lease with a total area of approximately 8,100 hectares. In 2011, the Damang mine produced 0.218 million ounces of gold, of which 0.175 million ounces.
Australia Operations
Gold Fields owns the St. Ives and Agnew gold mining operations in Australia. St. Ives is located 80 kilometers south of Kalgoorlie and 20 kilometer! s south o! f Kambalda, straddling Lake Lefroy in Western Australia. It holds exploration licenses, prospecting licenses and mining leases covering a total area of approximately 97,700 hectares. St. Ives is both a surface and underground operation, with a number of open pits, four operating underground mines, a metallurgical carbon in pulp (CIP) plant and a heap leach facility. In 2011, St. Ives produced 0.465 million ounces of gold. St. Ives sources production from a variety of underground and surface operations. Exploration activities are continuing with a view to extending the life of the mine.
Production at the Argo underground mine continued throughout, during 2011. Greater Revenge Complex operation utilizes open pit and lake sediment mining methods. Cutbacks of the Agamemnon and Mars Minotaur Link pits were mined, during 2011. The Belleisle deposit lies in the Greater Revenge Area adjacent to the depleted Mars open pit. The final 20,000 ounces were mined from Belleisle, in 2011 and the mine was closed, in May 2011. Cave Rocks is located approximately six kilometers to the west of the Kambalda West township. The Leviathan open pit is based on the expansion of a pre-existing open pit located approximately two kilometers southeast of the Lefroy processing plant. The mine utilizes conventional truck and shovel mining practices.
Construction at the Athena mine reached commercial levels of production, in July 2011. The first ore extraction from Hamlet occurred, in November 2011. As of December 31, 2011, Athena ahd a life of mine of four years and Hamlet had a life of seven years with prospects of extensions to those lives. Underground mining activities at Belleisle, Cave Rocks and Argo were undertaken under an agreement with Carlowen Proprietary Ltd, which trades as GBF Underground Mining (GBF). Leighton Contractors Proprietary Limited (Leighton) performs the surface mining at St. Ives under an alliance agreement. Leighton provides employees and equipment for mining ore and waste from the! open pit! mines. Agnew is located 23 kilometers west of Leinster, approximately 375 kilometers north of Kalgoorlie and 630 kilometers northwest of Perth, Western Australia.
The Company holds exploration licenses, prospecting licenses and mining leases covering a total area of approximately 54,000 hectares. Agnew operated both an underground and the Songvang open pit, in 2011. Underground mining is conducted from the Waroonga Underground Complex which consists of multiple ore zones. Agnew has one metallurgical plant. Agnew is serviced by sealed road infrastructure to the mine gate. In 2011, the operation produced 0.194 million ounces of gold. The principal production source, in 2011, at Agnew was the Waroonga underground mining complex. The northern cutback of the Songvang open pit commenced, in 2011. The Waroonga Underground Complex includes underground mining of the Kim South, Rajah and Main Lode ore bodies. The mining method involves longhole open stoping with paste filling. Waroonga underground performance averaged 52,000 tons per month, in 2011.
Peru Operation
Gold Fields owns 98.5% economic interest in the Cerro Corona mine through its shareholding in La Cima. Cerro Corona mine forms part of a porphyry copper-gold deposit situated within the Hualgayoc Mining District in northern Peru. It is located in the part of the Western Cordillera of the Andes, in northern Peru, close to the headwaters of the Atlantic continental basin. Cerro Corona is located approximately 80 kilometers by road north of the City of Cajamarca. Cerro Corona holds mining leases covering a total area of approximately 1,600 hectares and the project was developed over an area of 940 hectares. In 2011, the operation produced 0.161 million ounces of gold and 38,641 tons of copper for a total of 0.383 million gold equivalent ounces, of which 0.159 million ounces of gold and 38,061 tons of copper for a total of 0.377 million gold equivalent ounces were attributable to Gold Fields.
Advisors' Opinion:- [By Jonathan Yates]
And this news now results in dividend-paying gold stocks, such as Yamana Gold (NYSE: AUY), Gold Fields (NYSE: GFI) and Newmont Mining (NYSE: NEM) being attractive as both short-term and long-term investments.
- [By Itinerant]
Mining companies are most likely to report Cash Operating Costs or Total Cash Costs, except for Gold Fields (GFI), who invented their own cost measure called Notional Cash Expenditure (NCE) in 2008. Presently an industry group is working on the definition of a new cost measure with a work-in-progress name of All-In-Sustaining-Costs or AISC. This is not an entirely new concept since many analysts have been using a similar measure for their work. Various gold mining companies including most majors have started to report their costs as AISC preempting the release of the new standard.
- [By Rich Duprey]
Mining operations have long been subject to the vagaries of strikes and violence in South Africa. Harmony Gold (NYSE: HMY ) suspended its operations at�Kusasalethu because of security concerns, Gold Fields (NYSE: GFI ) lost 35,000 ounces of production and had its credit rating reduced by Standard & Poor's because of labor unrest (and reduced its full-year production forecast by 200,000 ounces), and Xstrata has had to halt activity several times as a result of union violence.
Hot Income Companies To Invest In Right Now: Otelco Inc (OTEL)
Otelco Inc. provides a range of telecommunications services on a retail and wholesale basis. These services include local and long distance calling; network access to and from its customers; data transport; digital high-speed and dial-up Internet access; cable, satellite and Internet protocol television; wireless, and other telephone related services. The principal markets for these services are residential and business customers residing in and adjacent to the exchanges the Company serves in Alabama, Massachusetts, Maine, Missouri, Vermont and West Virginia. In addition, the Company serves business customers throughout Maine and New Hampshire and provides dial-up Internet service throughout the states of Maine and Missouri. In January 2014, the Company acquired Reliable Networks, a provider of cloud hosting and managed services for companies who rely on mission-critical applications.
Local Services
The Company is a provider of wireline telephone services in seven of the 11 RLEC territories it serves. Local services enable customers to originate and receive telephone calls. The amount that it can charge a customer for certain basic services in Alabama, Maine, Massachusetts, Missouri, Vermont and West Virginia is regulated by the Alabama Public Service Commission (APSC), the Maine Public Utilities Commission (MPUC), the Massachusetts Department of Telecommunications and Cable (MDTC), the Missouri Public Service Commission (MPSC), the Vermont Public Service Board (VPSB) and the West Virginia Public Service Commission (WVPSC). It also has authority to provide service in New Hampshire from the New Hampshire Public Utilities Commission (NHPUC). The revenue derived from local services includes monthly recurring charges for voice access lines providing local dial tone and calling features, including caller identification, call waiting, call forwarding and voicemail. It also receives revenue for providing long distance services to its customers, billing and collection services for o! ther carriers under contract, and directory advertising. The Company provides local services on a retail basis to residential and business customers.
The Company offers long distance telephone services to its local telephone customers who do not purchase a local service bundle. It resells long distance services purchased from various long distance providers. It derives revenue from other telephone related services, including leasing, selling, installing, and maintaining customer premise telecommunications equipment and the publication of local telephone directories in certain of its rural local exchange carrier territories. It also provides billing and collection services for interexchange carriers through negotiated billing and collection agreements for certain types of toll calls placed by its local customers.
Network Access
Network access revenue relates primarily to services provided by the Company to long distance carriers (also referred to as interexchange carriers) in connection with their use of its facilities to originate and terminate interstate and intrastate long distance, or toll, telephone calls. As toll calls are generally billed to the customer originating the call, network access charges are applied in order to compensate each telecommunications company providing services relating to the call. Network access charges apply to both interstate and intrastate calls. The Company�� network access revenues also include revenues it receives from wireless carriers for terminating their calls on its networks pursuant to its interconnection agreements with those wireless carriers. Blountsville, Hopper, Mid-Maine, Mid-Missouri, Pine Tree and War also receive Universal Service Fund High Cost Loop (USF HCL) revenue, which is included in the Company�� reported network access revenue.
Cable Television Services
The Company provides cable television services over networks with 750 megahertz of transmission capacity in or by Interne! t Protoco! l TV ( IPTV) in its Alabama service area. Its cable television packages offer from 20 to 200 channels. It is a licensed installer of satellite television and has deployed these services to customers in its Missouri territory. In 2011, it converted its Missouri cable customers to satellite television.
Internet Services
The Company provides a variety of internet access data lines to its customers, including bulk broadband data access to support large corporate users; digital high-speed data lines in varying capacity speeds for business and residential use; and residential dial-up connectivity. Digital high-speed Internet access is provided through digital subscriber line (DSL) cable modems or wireless broadband, depending upon the location, in which the service is offered and through fiber connectivity to business customers. The Company charges its Internet customers a flat rate for unlimited Internet usage and a premium for higher speed Internet services. In Maine and Missouri, it provides legacy dial-up Internet services throughout the state.
Transport Services
The Company�� competitive local exchange carriers (CLECs) receive monthly recurring revenues for the rental of fiber to transport data. and other telecommunications services in Maine and New Hampshire. Its businesses and telecommunications carriers are 423 mile owned and leased fiber route.
Network Assets
The Company�� telephone networks include carrier grade advanced switching capabilities provided by traditional digital, as well as software based switches, fiber rings and routes and network software supporting specialized business applications. Its networks enable the Company to provide traditional and Internet Protocol ( IP), wireline telephone services and other calling features; long distance services; digital Internet access services through DSL and cable modems and circuits; and specialized customer specific applications. It offers digital signals, high-d! efinition! program content, digital video recording capability through its traditional cable plant and IPTV.
The Company competes with AT&T, Verizon, Charter Communications, Inc. and Time Warner Cable.
Advisors' Opinion:- [By Laura Brodbeck]
Monday
Earnings Releases Expected: Sotheby�� (NYSE: BID), Otelco (NASDAQ: OTEL), Rackspace Hosting, Inc. (NYSE: RAX), Red Lion Hotels Corporation (NYSE: RLH) Economic Releases Expected: Italian industrial production, Mexican industrial production, Portuguese trade balanceTuesday
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