Why You Should Close Your Savings Account

Alamy Checking is the new savings, according to a WalletHub report last month, which found interest-bearing checking accounts pay as much as five times more interest on balances up to $50,000 than savings and money market accounts. But that only scratches the surface of the changes undergone by the banking industry in recent years, according to the report's findings. While certificates of deposit are still best for long-term saving, their interest advantage over online checking accounts isn't as substantial as you might think. For example, locking away $10,000 in a five-year CD will only get you 0.98 percent, on average, compared to 0.53 percent from the average online checking account. A hierarchy has emerged for checking accounts. The average online checking account charges less per month than the average full-service checking account ($4.34 vs. $5.07) and offers 119 percent more interest (0.54 percent average percentage yield vs. 0.25 percent APY). What's more, 39 percent of online checking accounts are interest-bearing, compared to just 11 percent of traditional checking accounts. What we have, as a result, is a new age of banking where online checking accounts are at the top of the food chain. Consumers unhappy with their cash-based interest earnings should therefore consider moving their reserves into a new online checking account, especially if they are reticent to invest in the stock market. We all need to make our money work for us, after all, and traditional long-term savings vehicles aren't cutting it in the current environment. But what caused this shift in banking dynamics, and is this the new normal or just a temporary trend? There are a number of likely contributing factors: Low Fed rates. You can't expect much from long-term savings products when the Federal Reserve is keeping rates near zero to promote borrowing and stimulate the economy through increased spending. Money crunch. People simply might not have enough money to be saving in any substantial fashion. The average household has $6,700 in credit card debt; 30 percent of Americans say they don't pay their bills on time; and insufficient savings tops the average person's list of financial concerns, according to studies from CardHub and the National Foundation for Credit Counseling. So it might just be that people simply have more demand for everyday banking tools like checking accounts than they do for savings-related products at this point in time.

Planning 2014’s Taxes with Your 2013 Tax Return

Best Low Price Stocks To Invest In Right Now

Taxes are one of your largest retirement expenses. Your 2013 federal income tax form is a guide to reducing those taxes in 2014. Before filing away the return for last year's taxes, take a few minutes to study it. A careful review of the return can point the way to opportunities for decreasing your taxes and increasing after-tax wealth.

Most of the opportunities for those in or near retirement to reduce income taxes are on the front page of the Form 1040. On the back page there are itemized deductions (mortgage interest, charitable contributions, medical expenses, and a few others) plus tax credits. These offer limited planning opportunities for most people. Also, the stealth taxes that increase the burden of many of those in or close to retirement are imposed on adjusted gross income (AGI) or modified adjusted gross income. AGI is the last line of the front page of Form 1040. Examples of stealth taxes based on AGI are the surtax on Medicare premiums, the new net investment income tax under Obamacare, taxes on Social Security benefits, the phaseout of personal exemptions, and the reduction in itemized expenses.

The best opportunities for reducing the special retiree taxes are to reduce gross income and thereby adjusted gross income. Consider these strategies.

Reduce investment income. Does your taxable investment income exceed spending needs? If so, seek ways to shelter the excess. Consider moving money from conservative income investments into deferred fixed annuities. You'll earn a similar yield, and the income will compound tax-deferred. Or you could contribute some of the money to a Roth IRA. You won't receive current tax benefits, but the income will compound tax-free and also be tax-free when you withdraw it, reducing your taxes now and in th! e future..

Stocks paying qualified dividends also are worth considering. These are more volatile than conservative income investments, but the dividends are subject only to a maximum 20% rate, plus most companies that pay dividends increase the dividends each year. This has been a popular sector of the stock markets, so you might want to defer this strategy until valuations are more attractive or carefully choose the stocks.

Consider tax-exempt bonds. Most states and localities are in decent financial shape and aren't likely to default on their bonds. But tax-exempt bonds declined sharply in 2013 because of rising interest rates and an overreaction to the bankruptcy filing of Detroit. In most tax brackets, you earn a higher after-tax return from highly-rated tax-exempts than from treasuries or even investment-grade corporate bonds. You can buy individual bonds, mutual funds, or closed-end funds to capture the opportunity.

Manage your taxable investments. Reviewing your portfolio a few times a year and making some simple transactions can reduce your tax bill. Most investors don't do this and leave dollars on the table.

Harvesting investment losses means selling investments that have paper losses to lock in the losses. Deduct these against capital gains (including mutual fund distributions). If your losses exceed capital gains for the year, up to $3,000 of additional losses can be deducted against other income. Any leftover losses after that are carried forward to future years.

Harvesting losses doesn't mean keeping the investment out of your portfolio forever. If you still like the investment, you can buy it back. With stocks, mutual funds, and some other securities you have to wait more than 30 days to repurchase if you want to deduct the loss in the year of the sale. Or you can buy right away investments that aren't substantially identical. For example, sell one mutual fund and buy another at a different mutual fund family that has the same strategy.

Co! nsider tax! es before selling investments with gains. You save significant tax dollars by holding the investment for more than one year so the gain qualifies as long-term with a maximum tax rate of 20%. Sell a day early and it will be a short-term gain taxed at your ordinary income tax rate.

Even when a gain will be long-term, consider the full picture before selling. A long-term capital gain increases your adjusted gross income. It might be enough to trigger higher taxes on Social Security benefits, higher Medicare premiums, reduction of itemized deductions, and other tax penalties. That's why I say to consider the full picture before deciding to take a capital gain. Understand the full tax cost.

In other words, don't trade your investments too much. This is one area in which good tax strategies and investment strategies complement each other. One of the most frequent investment mistakes is trading too much, through either impatience or trying to time the market. A common tax mistake also is to trade too much, racking up taxable gains and missing the advantage of long-term gains.

Look for tax-advantaged investments. We already discussed tax-exempt bonds. You also should consider master limited partnerships. These pay high distributions. In the first 10 or so years you own them, about 85% of the distributions are tax-free. But the tax-free distributions reduce your tax basis, increasing taxes in the future. MLPs also make your tax returns more complicated, and some people avoid them for that reason. But they're worth considering.

Rental or investment real estate also is worth a look. This is more of a business than investment, because work is involved, and some of it is at inconvenient times. But it has tax advantages that make the efforts worthwhile for some people. You have to meet various requirements, such as being actively involved in management of the real estate, to reap all the benefits. Be sure you know the rules.

Manage retirement plan distributions. Distributions ! from IRAs! and 401(k)s are taxed as ordinary income. Limit withdrawals from retirement plans and annuities to only the amounts needed for spending and required by law or contract. 

Take business loss deductions. Losses from businesses also reduce AGI. Losses can come from a sole proprietorship, partnership, limited liability company, or subchapter S corporation. You might be able to turn a hobby into a business. You have to run the activity like a real business, not a hobby, to meet the IRS’s rules for deducting losses.

Deductions for AGI. There are some deductions you can take on the front page of the 1040 that reduce AGI. They aren't practical for many people age 55 and over, especially those already retired. The deductions include health savings account contributions, moving expenses, the deductible part of self-employment taxes, self-employed health insurance premiums, and some self-employed retirement plan contributions. There are a few others that don't involve much planning, such as alimony payments.

By all means, maximize these deductions to the extent you can. But they don't offer significant planning opportunities for most of those who are in or near retirement.

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Or to ask a general question, please go to the main Stock Talk page found under the Resources menu for each publication.

5 Stocks Ready to Skyrocket Higher

DELAFIELD, Wis. (Stockpickr) -- No matter what the market is doing on a day-to-day basis, there's always some pocket of strength developing in individual stocks. Once you know what setups to look for from a technical standpoint, then you can develop a list of stocks that have the potential to get explosive and skyrocket higher. Again, it doesn't matter what the market is doing, these setups show up on a daily basis.

One of my recent ideas that soared to the upside very quickly was health care player TearLabs (TEAR), which I featured in Feb. 12's "5 Stocks Under $10 Set to Soar" at $6.50 share. That chart was showing an extremely oversold condition and shares of TEAR were starting to reverse its recent downtrend and move within range of triggering a near-term breakout trade. That breakout triggered, and shares of TEAR exploded to the upside and hit an intraday high on Tuesday of 8.14 a share. That's a fat gain in a very short timeframe for anyone who bought the breakout and played that high-probability setup.

Shares of TEAR still have the potential to go much higher from current levels. Traders should now watch for this stock to take out its 50-day moving average of $8.29 a share soon with high volume. That's what will be needed to spark the next leg higher for TEAR.

Some of my favorite places to look for these explosive setups are in sectors such as biotech, pharmaceuticals, advanced technology and any stock that trades under-$10 that has a technically bullish chart. These are the places that I find the next stock that's setting up to skyrocket higher and make me some quick cash.

With that in mind, here's a look at five stocks that could be setting up to make explosive moves to the upside soon.

Catalyst Pharmaceutical Partners

One specialty pharmaceutical player that could be setting up to skyrocket higher is Catalyst Pharmaceutical Partners (CPRX), which focuses on the development and commercialization of novel prescription drugs targeting rare neuromuscular and neurological diseases and disorders. This stock has been in play with the bulls over the last three months, with shares up around 16%.

If you consult the chart for Catalyst Pharmaceutical Partners, you'll notice that this stock has been trading sideways inside of a range for the last two months and change, with shares moving between $1.73 on the downside and $2.29 on the upside. Shares of CPRX are just starting to flirt with its 50-day moving average of $1.97 today, and that move is quickly pushing shares of CPRX within range of triggering a big breakout trade. That breakout would send shares of CPRX above its recent range, which could lead to a powerful move higher.

Traders should now look for long-biased trades in CPRX if it manages to break out above some near-term overhead resistance levels $2.04 to $2.20 a share and then above $2.29 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average volume of 886,151 shares. If that breakout triggers soon, then CPRX will set up for a monster move higher that could see the stock re-fill some of its previous gap-down-day zone from October that started near $2.80 a share. If that gap gets filled, then CPRX could easily trend well north of $3 a share.

Traders can look to buy CPRX off any weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $1.75 to $1.73 a share. One can also buy CPRX off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Crystal Rock

One consumer goods player that could be setting up for an explosive move higher soon is Crystal Rock (CRVP), which engages in producing, marketing and distributing bottled water; and distributing coffee, ancillary and office products, and other refreshment products in New England, New York and New Jersey. This stock is off to a monster start for the bulls in 2014, with shares up sharply by 28%.

If you take a glance at the chart for Crystal Rock, you'll see that this stock has been uptrending strong over the last month and change, with shares moving higher from its low of 82 cents per share to its recent high of $1.33 a share. This stock recently pulled back right to its 50-day moving average of $1.01 a share and then subsequently found buying interest that has now pushed the stock back above $1.20 a share. That move is quickly pushing shares of CRVP within range of triggering a major breakout trade.

Traders should now look for long-biased trades in CRVP if it manages to break out above its 52-week high at $1.33 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average volume of 46,364 shares. If that breakout materializes soon, then CRVP will set up to enter new 52-week-high territory, which is bullish technical price action. That could set this stock off an explosive path higher that pushes shares of CRVP towards $2 to $2.50 a share.

Traders can look to buy CRVP off any weakness to anticipate that breakout and simply use a stop that sits right below $1 a share. One can also buy CRVP off strength once it blows past $1.33 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

ThermoGenesis

Another biopharmaceuticals player that could be setting up here to skyrocket higher is ThermoGenesis (KOOL), which designs, develops and commercializes devices and disposable tools for the processing, storage, and administration of cell therapies. This stock has been roaring to the upside so far in 2014, with shares up a whopping 120%.

If you take a look at the chart for ThermoGenesis, you'll quickly see that this stock has been trending sideways and consolidating over the last month, with shares moving between $2.01 on the downside and $2.65 on the upside. This range bound trading pattern is coming after shares of KOOL recently exploded higher from $1.04 to $3.24 a share with heavy upside volume. Shares of KOOL could now be setting up again to make a monster move higher if this stock can take out some key near-term overhead resistance levels with volume.

Traders should now look for long-biased trades in KOOL if it manages to break out above some near-term overhead resistance levels at $2.40 to $2.58 a share and then once it clears $2.65 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1.42 million shares. If that breakout gets underway soon, then KOOL will set up to explode higher and possibly re-test or take out its 52-week high at $3.24 a share. Any high-volume move above $3.24 will then give KOOL a chance to rip towards $4 a share.

Traders can look to buy KOOL off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.13 to $2.01 a share. One could also buy KOOL off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Ocera Therapeutics

Another biotechnology player that could be setting up for a monster move higher is Ocera Therapeutics (OCRX), which focuses on the development and commercialization of therapeutics for patients with acute and chronic liver disease. This stock has been on fire over the last six months, with shares up huge by 115%.

If you take a look at the chart for Ocera Therapeutics, you'll see that this stock recently sold off sharply from its high of $19.94 to its low of $12.01 a share. Following that selloff, shares of OCRX have started to snapback and push above its 50-day moving average of $13.74 a share. This stock has also formed a major bottoming pattern at around $12 to $13 a share over the last month. Shares of OCRX are now starting to trend within range of triggering a major breakout trade above some key near-term overhead resistance.

Traders should now look for long-biased trades in OCRX if it manages to break out above some near-term overhead resistance at $15.05 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 67,487 shares. If that breakout gets sparked soon, then OCRX could explode higher and make a run at its 52-week high of $19.94 a share.

Traders can look to buy OCRX off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $13.01 to $12.01 a share. One can also buy OCRX off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

IsoRay

My final idea that could be preparing for an explosive move higher here is IsoRay (ISR), which develops, manufactures, and sells isotope-based medical products and devices for the treatment of cancer and other malignant diseases primarily in the U.S. This stock has been trading strongly to the upside over the last three months, with shares up big by 41%.

If you look at the chart for IsoRay, you'll notice that this stock recently formed a major bottoming chart pattern, after shares of ISR found buying interest over the last month each time it traded down towards 66 to 67 cents per share. So far, those levels have held and now shares of ISR are starting to push within range of triggering a major breakout trade above a key downtrend line.

Traders should now look for long-biased trades in ISR if it manages to break out above some near-term overhead resistance levels at 75 to 78 cents per share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 940,443 shares. If that breakout hits soon, then ISR will set up to rip sharply higher and potentially tag 90 cents to $1 a share, or even trend north of $1 a share.

Traders can look to buy ISR off any weakness to anticipate that breakout and simply use a stop that sits right below those major support levels at 67 to 66 cents per share. One can also buy ISR off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

To see more stocks that could be setting up to skyrocket higher soon, check out the Skyrocket Stock Watchlist portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Stocks Getting Ready to Break Out This Week

>>4 Chinese Stocks With Big Upside

>>5 Rocket Stocks to Buy for Big Gains

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

VFC Stock is Worth Trying On for Investors

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Welcome to the Stock of the Day!

Shares of VF Corporation (VFC) retreated after the apparel maker reported fourth-quarter results. VF has been one of my top clothing picks for some time, so let’s see what was behind the pullback and whether this was a kneejerk reaction or truly a sign of tougher times to come.

Company Overview

With over $11 billion in annual sales, VF is the world’s largest apparel company, and it’s easy to see why. The company is responsible for at least 30 major brands, including Lee, Wrangler, the North Face, Timberland and Vans. The company’s largest and fastest-growing business is its Outdoor & Action Sports segment, which accounts for half of global revenues.

In addition, the company also runs Sportswear, Contemporary Brands, Jeanswear and Imagewear businesses. This company employs 58,000 worldwide and its products are sold in more than 150 countries.

Earnings Rundown

VF reported a profit of $367.7 million, or 82 cents per share, on $3.29 billion in sales. Compared with Q4 2012, this represents 10% earnings growth and 8.5% sales growth. Analysts had forecast earnings of 84 cents per share on $3.34 billion in sales, so VF posted missed these consensus estimates by 2%.

What’s Next for VFC?

Looking ahead to FY 2014, management expects earnings in a range of $3.00 to $3.05 per share and 7% to 8% annual sales growth. This came below the Street view, which calls for $3.09 EPS on 9% annual sales growth.

While VFC didn’t meet expectations, I’m maintaining my buy recommendation for now. One reason is that VFC remains committed to its shareholders. The company has pledged to return $1 billion to its shareholders in 2014, $700 million of which will go towards stock buybacks. VFC also declared a quarterly dividend of 26.25 cents per share. Shareholders of record on March 10 will be paid on March 20.

Current Ratings

Before you buy any stock, you should always run it through my free Portfolio Grader ratings system. VFC stock has improved significantly over the several months—in April 2013, VFC was a C-rated hold. Since then, the company has firmed up several of its financial metrics; its operating margin and earnings growth as well as cash flow and return on equity all receive top marks.

However, the company could stand to improve its earnings surprises track record as well as earnings momentum. What really makes VFC stock a strong buy is its top-notch level of buying pressure.

Bottom Line: As of this posting VFC is an A-rated strong buy. The stock should bounce back because the company still has solid sales and earnings. And with the abnormally cold winter, the company’s outerwear business should continue to do well.

Sound Off: What do you think about VFC? Are you a buyer at current prices? Let me know what you think by posting on our wall on Facebook.

For more stock grades and commentary, please visit NavellierGrowth.com!

Hot Gas Stocks To Own For 2014

Enterprise Products Partners (EPD), based in Houston, it is the country�� largest master limited partnership (MLP).

By creating a pipeline network for the transportation of domestic oil and gas -- including Bakken oil -- Enterprise Products is in the sweet spot of the new energy bull market.

Enterprise gathers natural gas from wellheads from the Rockies to the offshore Gulf of Mexico. Enterprise operates gas processing plants and provides storage and fractionation for natural gas liquids (NGLs) to the petrochemical industry.

Export capacity almost doubled from 4 million barrels per month to 7.5 million barrels per month at its propane export terminal in Texas. Capacity could grow to 10 million barrels per month by 2015.

Hot Gas Stocks To Own For 2014: Paradigm Oil and Gas Inc (PDGO)

Paradigm Oil And Gas, Inc.( Paradigm), incorporated on July 15, 2002, is engaged in the exploration, development, acquisition and operation of oil and gas properties. The Company participates in the oil and gas industry through the purchase of small interests in either producing wells or oil and gas exploration and development projects. As of December 31, 2010, the Company held 100% working interests in certain oil and gas leases along with certain Oil and Gas production equipment in the State of Texas, United States of America, and is engaged in the rework and development of those properties. As of December 31, 2010, Intergrated Oil and Gas Solutions Inc. is the 100% owned subsidiary of the Company. Effective August 5, 2013, Paradigm Oil & Gas Inc acquired a majority interest in CAM Trucking & Well Service, a trucking company, from A Feezel Corp.

The Company is an exploration company focused on developing North American oil and natural gas reserves. It focuses on the exploration of its land portfolio consists of working interests in prospective acreage in the State of Texas and in the Southern Alberta Foothills area in Canada; and North Central Alberta, Canada. On June 22, 2010, Intergrated Oil and Gas Solutions Inc. acquired the Corsicana lease. On June 25, 2010, Intergrated Oil and Gas Solutions Inc. acquired two additional Chilson leases, known as Chilson B.

The oil and gas properties are consists of four leases totaling approximately 934 net mineral acres, all located in the State of Texas, United States of America. Chilson Property covers 80 acres in the County of Wichita carry with a 87.5% net revenue interest. There are seven existing wells on the property that have previously produced. Approximately 69 new wells can be drilled to depths that vary between 800 to 5,000 feet. Lumpkin Property 692 acres in Kaufman County, carry a 80% Net Revenue Interest. This lease is considered an exploration field with existing production nearby. 17 new wells can be drilled to 9,000 ! feet. Lett Finley Property, Consists of two leases-40 acres located in the County of Wood, carry a 75% Net Revenue Interest, and 122.37 acres located in the County of Henderson carry a 81.25% Net Revenue Interest There are two existing wells on the properties that have previously produced. Two new offset wells can be drilled to 9,500 feet and another seven infield wells can be drilled.

Hot Gas Stocks To Own For 2014: Helmerich & Payne Inc (HP)

Helmerich & Payne, Inc., incorporated on February 29, 1944, is engaged in contract drilling of oil and gases wells for others and this business. The Company's contract drilling business is composed of three reportable business segments: U.S. Land, Offshore and International Land. During the fiscal year ended September 30, 2012 (fiscal 2012), the Company's U.S. Land operations drilled in Oklahoma, California, Texas, Wyoming, Colorado, Louisiana, Pennsylvania, Ohio, Utah, Arkansas, New Mexico, Montana, North Dakota and West Virginia. Offshore operations were conducted in the Gulf of Mexico, and offshore of California, Trinidad and Equatorial Guinea. During fiscal 2012, the Company's International Land segment operated in six international locations: Ecuador, Colombia, Argentina, Tunisia, Bahrain and United Arab Emirates. The Company is also engaged in the ownership, development and operation of commercial real estate and the research and development of rotary steerable technology. Each of the businesses operates independently of the others through wholly owned subsidiaries. The Company's real estate investments located exclusively within Tulsa, Oklahoma, include a shopping center containing approximately 441,000 leasable square feet, multi-tenant industrial warehouse properties containing approximately one million leasable square feet and approximately 210 acres of undeveloped real estate. The Company's subsidiary, TerraVici Drilling Solutions, Inc. (TerraVici), is developing rotary steerable technology. As of September 30, 2012, it had 176 rigs under fixed-term contracts. During fiscal 2012, the Company leased a 150,000 square foot industrial facility near Tulsa, Oklahoma for the purpose of overhauling/repairing rig equipment and associated component parts.

U.S. Land Drilling

As of September 30, 2012, the Company had 282 of its land rigs available for work in the United States. During fiscal 2012, the Company's U.S. Land operations contributed approximately 85% of the Compan! y's consolidated operating revenues. During fiscal 2012, rig utilization was approximately 89%. During fiscal 2012, the Company's fleet of FlexRigs had an average utilization of approximately 97%, while the Company's conventional and mobile rigs had an average utilization of approximately 11%. As of September 31, 2012, 231 out of an available 282 land rigs were working.

Off Shore Drilling

During fiscal 2012, the Company's Offshore operations contributed approximately 6% of the Company's consolidated operating revenues. During fiscal 2012, rig utilization was approximately 79%. During fiscal 2012, the Company had eight of its nine offshore platform rigs under contract and continued to work under management contracts for four customer-owned rigs. During fiscal 2012, revenues from drilling services performed for the Company's offshore drilling customer totaled approximately 56% of offshore revenues.

International Land Drilling

During fiscal 2012, the Company's International Land operations contributed approximately 9% of the Company's consolidated operating revenues. During fiscal 2012, rig utilization was 77%. As of September 30, 2012, the Company had nine rigs in Argentina. During fiscal 2012, the Company's utilization rate was approximately 52%. During fiscal 2012, revenues generated by Argentine drilling operations contributed approximately 2% of the Company's consolidated operating revenues. The Argentine drilling contracts are with international or national oil companies. As of September 30, 2012, the Company had seven rigs in Colombia. During fiscal 2012, the Company's utilization rate was approximately 79%. During fiscal 2012, revenues generated by Colombian drilling operations contributed approximately 3% of the Company's consolidated operating revenues. During fiscal 2012, revenues from drilling services performed for the Company's customer in Colombia totaled approximately 1% of consolidated operating revenues and approximately 16% of inter! national ! operating revenues. The Colombian drilling contracts are with international or national oil companies. As of September 30, 2012, the Company had five rigs in Ecuador. During fiscal 2012, the utilization rate in Ecuador was 97%. During fiscal 2012, revenues generated by Ecuadorian drilling operations contributed approximately 2% of consolidated operating revenues. As of September 30, 2012, the Company had two rigs in Tunisia, four rigs in Bahrain and two rigs in United Arab Emirates.

Advisors' Opinion:

• [By Ben Levisohn]

  As a result, the knives have come out. Cowen’s analysts downgraded six stocks–Baker Hughes (BHI), Cameron International (CAM), Nabors Industries (NBR), CGG (CGG), Superior Energy Services (SPN) and Helmerich & Payne (HP)–and cut their estimates on even more. Its analysts explain why:

• [By Jon C. Ogg]

  Helmerich & Payne Inc. (NYSE: HP) was reinstated as Buy with a $82 price target at Bank of America Merrill Lynch.

  HomeAway Inc. (NASDAQ: AWAY) was downgraded to Equal Weight from Overweight by Morgan Stanley.

• [By Robert Rapier]

  My opinion is that in this space Helmerich & Payne (NYSE: HP) looks better with respect to most metrics and pays a 3 percent dividend to boot. We recommended HP to subscribers in February, and it has returned more than 25 percent since. UNT hasn’t done too badly by comparison; it is up nearly 14 percent over the same time frame. But I would still favor HP today when I stack it up against UNT. HP’s debt is lower, its price/earnings ratio is lower, its volatility is lower, and its profit margin is higher than UNT’s.          

• [By Seth Jayson]

  Helmerich & Payne (NYSE: HP  ) is expected to report Q3 earnings on July 26. Here's what Wall Street wants to see:

  The 10-second takeaway
  Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Helmerich & Payne's revenues will expand 3.1% and EPS will compress -2.2%.

Top Cheap Stocks To Watch Right Now: Shell Refining Company (SHELL)

Shell Refining Company (Federation of Malaya) Berhad is principally engaged in refining and manufacturing of petroleum products. The Company operates primarily in Malaysia. Its operations also include the gas to liquids (GTL) plant of its kind in Bintulu, Sarawak, and a refinery in Port Dickson, Negeri Sembilan. Its upstream operations focus on the development and extraction of crude oil and natural gas offshore Sarawak and Sabah. In downstream its main activity is in refining, supply, trading and shipping of crude oil and petroleum products through the sales and marketing of transportation fuels, lubricants, specialty products and technical services. The Company is also a partner in two joint ventures that convert natural gas to liquefied natural gas. Royal Dutch Shell plc is its holding company.

Hot Gas Stocks To Own For 2014: North American Energy Partners Inc. (NOA)

North American Energy Partners Inc. provides heavy construction and mining, piling, and pipeline installation services to customers in the Canadian oil sands, industrial construction, commercial and public construction, and pipeline construction markets. The company operates in three segments: Heavy Construction and Mining, Piling, and Pipeline. The Heavy Construction and Mining segment focuses on providing surface mining support services for oil sands and other natural resources. Its activities include land clearing, stripping, muskeg removal, and overburden removal to expose the mining area; the supply of labor and equipment to supplement customers� mining fleets supporting ore mining; and provision of general support services, such as road building, repair and maintenance for mine and treatment plant operations, and hauling of sand and gravel. This segment also engages in the construction related to the expansion of existing projects-site development and infrastructure ; and the provision of environmental and tailings management services. In addition, it provides industrial site construction for mega-projects; and underground utility installation services for plant, refinery, and commercial building construction. The Piling segment installs driven, drilled, and screw piles, as well as caissons and earth retention, and stabilization systems. It also designs, manufactures, and sells screw piles and pipeline anchoring systems worldwide, as well as provides tank maintenance services to the petro-chemical industry in Canada and the United States. The Pipeline segment provides small and large diameter pipeline construction and installation services, as well as equipment rental to energy and industrial clients. The company�s fleet includes approximately 900 pieces of diversified heavy construction equipment supported by approximately 750 pieces of ancillary equipment. North American Energy Partners Inc. was founded in 1953 and is headquartered i n Calgary, Canada.

Hot Gas Stocks To Own For 2014: BMB Munai Inc (BMBM)

BMB Munai, Inc., incorporated in July 1981, focuses on oil and natural gas exploration and production in the Republic of Kazakhstan (Kazakhstan) through a wholly owned operating subsidiary, Emir Oil LLP, (Emir Oil). Emir Oil holds an exploration contract that allowed exploration drilling and oil production in the Mangistau Province in the southwestern region of Kazakhstan. On February 14, 2011 the Company entered into a Participation Interest Purchase Agreement (the Purchase Agreement) with MIE Holdings Corporation (MIE), and its subsidiary, Palaeontol B.V (Palaeontol), pursuant to which the Company agreed to sell all of its interest in Emir Oil to Palaeontol (the Sale). On September 19, 2011, the Company completed the sale of all of its interests in Emir Oil LLP to a subsidiary of MIE Holdings Corporation. The operations of Emir Oil LLP is classified as discontinued.

The initial distribution amount was determined after giving effect to the estimated closing adjustments, Escrow amount, repayment of the Convertible Senior Notes, and after providing for the payment of or reserve for other anticipated liabilities and transaction costs. In February 2012 the Company entered into a Management Services Agreement (Services Agreement) with Lakeview International, LLC (Lakeview). Pursuant to the Services Agreement, Lakeview is providing management, administrative and support personnel and services to the Company.

Hot Gas Stocks To Own For 2014: New Zealand Energy Corp (NZ.V)

New Zealand Energy Corp. (NZEC) is an oil and natural gas company engaged in the exploration, acquisition and development of petroleum and natural gas assets in New Zealand. The Company�� major assets are located in the Taranaki Basin and East Coast Basin of New Zealand�� North Island. NZEC has drilled 10 exploration wells in the Taranaki Basin and made six oil discoveries. In the Taranaki Basin, NZEC holds a 100% interest in Petroleum Exploration Permit 51150, a 65% interest in PEP 51151 in partnership with L&M Energy Limited, and a 60% interest in PEP 54867. In October 2013, Origin Energy Ltd announced the completion of the divestment of Tariki, Ahuroa, Waihapa and Ngaere (TAWN) licenses, as well as the Waihapa Production Station and associated gathering and sales infrastructure in New Zealand, to New Zealand Energy Corp (NZEC).

Hot Gas Stocks To Own For 2014: ConocoPhillips(COP)

ConocoPhillips operates as an integrated energy company worldwide. The company?s Exploration and Production (E&P) segment explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids. Its Midstream segment gathers, processes, and markets natural gas; and fractionates and markets natural gas liquids in the United States and Trinidad. The company?s Refining and Marketing (R&M) segment purchases, refines, markets, and transports crude oil and petroleum products, such as gasolines, distillates, and aviation fuels. Its Chemicals segment manufactures and markets petrochemicals and plastics. This segment offers olefins and polyolefins, including ethylene, propylene, and other olefin products; aromatics products, such as benzene, styrene, paraxylene, and cyclohexane, as well as polystyrene and styrene-butadiene copolymers; and various specialty chemical products comprising organosulfur chemicals, solvents, catalyst s, drilling chemicals, mining chemicals, and engineering plastics and compounds. The company?s Emerging Businesses segment develops new technologies and businesses. It focuses on power generation; and technologies related to conventional and nonconventional hydrocarbon recovery, refining, alternative energy, biofuels, and the environment. This segment also offers E-Gas, a gasification technology producing high-value synthetic gas. ConocoPhillips was founded in 1917 and is based in Houston, Texas.

Advisors' Opinion:

• [By Wallace Witkowski]

  Plus, more than 120 companies on the S&P 500 report next week with notable releases from Apple Inc. (AAPL) and Biogen Idec Inc. (BIIB) �on Monday; Gilead Sciences Inc. (GILD) �and Allergan Inc. (AGN) �on Tuesday; Starbucks Corp. (SBUX) �, General Motors Co. (GM) , and Comcast Corp. (CMCSA) �on Wednesday; along with MasterCard Inc. (MA) �and ConocoPhillips (COP) �on Thursday.

• [By Isac Simon]

  The recently spun off E&P major ConocoPhillips (NYSE: COP  ) is another key operator in the Eagle Ford region. With 227,000 net acres under its belt, the company is sitting on an estimated 1.8 billion barrels of oil equivalent. Over the next five years, Conoco is expected to invest $8 billion in this region and add 130,000 barrels of oil equivalent.

• [By Aaron Levitt]

  Finally, BP is getting some love here at home in the U.S.A. The energy stock found a discovery in the Gulf of Mexico that promises to be huge. The Gila well — which is co-owned with ConocoPhillips (COP) — was found in the Paleocene region of the Gulf.

Hot Gas Stocks To Own For 2014: Mechel Steel Group OAO (MTL)

Mechel OAO, together with its subsidiaries, engages in mining and steel businesses in the Russian Federation, other CIS countries, Europe, Asia, the Middle East, the United States, and internationally. The company operates through four segments: Mining, Steel, Ferroalloys, and Power. The Mining segment engages in the production and sale of metallurgical and steam coal, coke, iron ore, and limestone, as well as chemical products, such as coal tar, naphthalene, and other compounds. The Steel segment produces and sells semi-finished steel products, carbon and special long products, and carbon and stainless flat products, as well as metal products, including wire products, forgings, and stampings. The Ferroalloys segment is involved in the production and sale of nickel ore, low-ferrous ferronickel, ferrochrome, and ferrosilicon. The Power segment engages in the generation and sale of electricity and heat energy from steam coal; and power distribution activities. The company, f ormerly known as Mechel Steel Group OAO, was founded in 2003 and is based in Moscow, the Russian Federation.

Advisors' Opinion:

• [By Fede Zaldua]

  According Citigroup's analysts its about time to start accumulating Mechel's (MTL) shares. The reason for the sharp upgrade (from sell to buy) was Mechel's recent deal with some of its creditors to ease part of the company's huge debt burden. More specifically, the Russian metals and mining company managed to seal a deal with the state controlled VTB Group through which it managed to get covenant holidays and a debt restructuring. That said, I don�� think Mechel is out from the woods and I do not think its time to buy the company's shares, even when the are down by 67% year-to-date (ytd).

Hot Gas Stocks To Own For 2014: Occidental Petroleum Corporation(OXY)

Occidental Petroleum Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company primarily in the United States. The company operates in three segments: Oil and Gas; Chemical; and Midstream, Marketing, and Other. The Oil and Gas segment explores for, develops, produces, and markets crude oil, natural gas liquids, and condensate and natural gas. Its domestic oil and gas operations are located in Texas, New Mexico, California, Kansas, Oklahoma, Utah, Colorado, North Dakota, and West Virginia; and international oil and gas operations are located in Bahrain, Bolivia, Colombia, Iraq, Libya, Oman, Qatar, the United Arab Emirates, and Yemen. As of December 31, 2010, this segment had proved reserves of approximately 3,363 million barrels of oil equivalent. The Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, and ethylene dichloride products; vinyls, such as vinyl chloride monomer and polyvinyl chloride; and other chemicals comprising chlorinated isocyanurates, resorcinol, sodium silicates, and calcium chloride products. The Midstream, Marketing, and Other segment gathers, treats, processes, transports, stores, purchases, and markets crude oil that includes natural gas liquids and condensate, as well as natural gas and carbon dioxide. This segment also involves in the power generation; and trades around its assets comprising pipelines and storage capacity, as well as oil and gas, other commodities, and commodity-related securities. Occidental Petroleum Corporation was founded in 1920 and is based in Los Angeles, California.

Advisors' Opinion:

• [By Sean Williams]

  In the Permian Basin, Occidental Petroleum (NYSE: OXY  ) has been a big rail transport beneficiary, since it produced as much oil in 2011 as the No. 2, No. 3, and No. 4 producers combined! Being able to pilfer a few extra dollars per barrel can mean hundreds of millions of dollars extra for companies like Occidental with huge oil exposure.

• [By Tyler Crowe, Taylor Muckerman, and Joel South]

  For investors, what this translates to is that consumers of natural gas will be looking to do business with companies that have strong balance sheets, and that will be around for the long term. When thinking about strong balance sheets,�Occidental Petroleum (NYSE: OXY  ) certainly comes to mind. The company's debt-to-equity ratio below 20% makes it one of the most debt averse of all producers out there right now, which just happens to translate into a respectful 2.5% dividend.

Hot Gas Stocks To Own For 2014: Nexen Inc.(NXY)

Nexen Inc. operates as an independent energy company worldwide. The company?s Conventional Oil and Gas segment explores for, develops, and produces crude oil and natural gas from conventional sources. This segment operates in the United Kingdom, Canada and the United States, and offshore West Africa, Colombia, and Yemen. Nexen?s Oil Sands segment develops and produces synthetic crude oil from the Athabasca oil sands in northern Alberta. The company?s Shale Gas segment explores for and produces unconventional gas from shale formations in northeastern British Columbia. Nexen Inc. was founded in 1971 and is headquartered in Calgary, Canada.

Hot Gas Stocks To Own For 2014: Tiger Oil and Energy Inc (TGRO)

NA

Yellen, Not Debt Ceiling Debate, to Spark Washington Fireworks

Washington watchers looking for some sizzle to come out of upcoming events in the nation’s capital this week should look to new Federal Reserve Board Chairwoman Janet Yellen’s House testimony on Tuesday and not to a crisis-level debate on a pending debt ceiling fix.

Yellen is set to face hostile territory as she gives her first report on monetary policy Tuesday before the House Financial Services Committee; both the committee’s chairman, Rep. Jeb Hensarling, R-Texas, and Rep. Scott Garrett, R-N.J., chairman of the Capital Markets Subcommittee, are outspoken Fed critics. Yellen will face a more friendly crowd Thursday when she testifies before the Senate Banking Committee.

Both Hensarling and Garrett have committed to push for legislation that changes how the Fed operates. In December, the House Financial Services Committee announced its “Federal Reserve Centennial Oversight Project,” which Hensarling said would include “an aggressive series of hearings during 2014 that will culminate with the development of legislation to reform how the nation’s central bank operates.”

Greg Valliere of Potomac Research notes in his Monday commentary that Hensarling has “assembled a cast of naysayers who will testify after Yellen about the evils of dovish Fed policies.” Valliere says that he anticipates no policy changes to be announced by Yellen, however.

With the House GOP caucus set to meet at 5:30 p.m. Monday regarding the debt limit extension, analysts at Washington Analysis are optimistic that a bill will indeed pass prior to the Feb. 27 deadline set by the Treasury Department “with little to no impact on the financial markets.” This prediction comes despite the fact that both chambers are set to leave Washington for 10 days on Wednesday, and return on Feb. 26. “Progress needs to be made sooner rather than later, or lawmakers will have to cancel the President’s Day recess,” the analysts say.

The analysts predict the most “likely way forward will be a ‘clean’ debt limit extension passing with Democratic support. Given the looming midterm elections and Republican hopes of reclaiming the Senate, the risk, or even threat, of default is extremely low following the political fallout that stemmed from last year’s government shutdown.”

Valliere adds that Congress could indeed reach a deal before leaving Wednesday, but “House GOP leaders still haven’t decided what — if anything — to attach to the bill.” His prediction: Lawmakers “probably will seek a nine-month ‘doc fix’ and abolition of a [cost of living adjustment] provision in the 2014 budget deal that hit military personnel.”

Top 10 Gas Utility Companies To Invest In Right Now

(A doc fix is a measure to stop Medicare from cutting payments to doctors).

It’s been reported that House Speaker John Boehner wants his GOP colleagues to demand a restoration of recently cut military benefits in exchange for a one-year borrowing extension.

While “there’s no crisis brewing” in getting to a debt ceiling deal, Valliere says that “a delay until late February could become an annoyance for the markets.”

---

Check out 4 Key Dates for Investors to Watch: Andy Friedman on ThinkAdvisor.

Mario Gabelli Shares His Stock Picks for 2014

Hot Industrial Conglomerate Stocks To Own Right Now

Are you ready for Mario Gabell's top stock picks for 2014?

They are as follows:

- Weatherford International (WFT) which is a services company and a direct beneficiary of the boom in horizontal drilling and fracturing in the U.S.

- National Fuel Gas (NFG) for its great land position in the Marcellus shale play. He expects NFG to spin out its utility division and maybe do a joint venture on its big land position.

For a third pick watch the video below:

About the author:Canadian Valuehttp://valueinvestorcanada.blogspot.com/

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Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool

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Moody's downgrades Puerto Rico credit rating

SAN JUAN, Puerto Rico — Puerto Rico's credit rating was dealt its second blow in a week when Moody's Investors Service announced Friday it had downgraded the U.S. territory's debt to junk status.

The downgrade of two notches came just days after Standard & Poor's downgraded the island's debt by one notch, prompting the local government to file new legislation aimed at shoring up the economy as it prepares to re-enter the bond market this month.

Moody's said Puerto Rico's government took strong and aggressive actions to control spending and reduce debt issuance, among other things, but that it remained concerned about its liquidity and ability to access the market.

"While some economic indicators point to a preliminary stabilization, we do not see evidence of economic growth sufficient to reverse the commonwealth's negative financial trends," the agency said. "Without an economic revival, the commonwealth will face difficult decisions in coming years, as its debt and pension costs rise."

A spokeswoman for Gov. Alejandro Garcia Padilla said he would soon release a statement regarding the downgrade.

Garcia and other top officials have pledged that they would continue to reduce the debt and present a deficit-free budget next fiscal year. Garcia also has said he will strengthen the liquidity of Puerto Rico's Government Development Bank, which decreased sales of new bonds late last year because of high interest rates.

Puerto Rico's bonds are popular with U.S. investors because they are exempt from federal, state and local taxes, and investors have become increasingly concerned about its ability to repay its debt. Puerto Rican debt is held by roughly 70% of U.S. municipal mutual funds, according to Morningstar.

Alan Schankel, managing director of Janney Capital Markets in Philadelphia, said Moody's announcement does not change the market dynamic in a significant way because many expected it.

"It doesn't close the door, but it probably makes a new issuance ma! rginally more challenging," he said.

Puerto Rico is struggling with $70 billion in public debt accumulated over several decades. The island of 3.67 million people also has entered its eighth year in recession and faces a 15.4 percent unemployment rate, higher than any U.S. state.

Fast and Cheap UAE Portability Plan

The ability to switch between mobile carriers, without having to change phone numbers, may seem commonplace in the US, but the introduction of this portability is an exciting new development in the UAE, writes Shereen El Gazzar, of The National.

Customers who want to switch between Emirates Integrated Telecommunications Co. (DFM:DU) and Emirates Telecommunications Corp. (ABU:ETISALAT) under the country's new system of mobile number portability will be able to do so in a single day with no loss of service, du said.

Mobile number portability is to be introduced in the UAE on December 22. It is meant to give customers the freedom to change their service provider without having to change their phone number. It is also meant to improve the quality of service by encouraging competition between the nation's two operators.

"The porting time must be less than one working day," said Carin Johansson, the manager of commercial programs at du, at an information session on Monday, December 4.

She said the new system would not come at any great cost to consumers." Any active number in the UAE is able to be ported free of charge or for a very low fee."

Other details of the new system from du's December 4 session:

To avoid any embarrassment, customers breaking up with their old phone company are not required to pay a visit in person. Instead, they can simply visit their new provider's premises to request the move. "The old operator is not allowed to ask the customer not to leave," Ms. Johansson noted.

For prepaid users, any remaining credit would be lost during the shift. Also, any credit or balance remaining on a postpaid account will not be transferred.

Post-paid users will be able to switch between Etisalat and du without restrictions on settling their debt, except if their line was under service suspension during the shift. However, they will still be obligated to pay any outstanding debts to the old operator after the move has taken place. "The details of this will be later discussed between Etisalat and du," Ms. Johansson said.

Customers who cannot make up their minds will be allowed to move back to the old provider within the first three days after switching. Otherwise, they will have to wait 30 days before moving back.

Mobile number portability has been on the agenda of the federal Telecommunications Regulatory Authority for about three years, but was delayed because of technical difficulties.

The World Trade Organization and the World Bank say portability is a way to open up the telecoms sector for competition. As of today, mobile number portability is available for fixed lines and mobile in 75 of 193 UN member-states. Oman and Qatar were the most recent Arabian Gulf countries to introduce the service.

Read more from The National here…

A Very Scary Graphic

For today’s column, I had intended to discuss the energy policy reform proposals of Senate Finance Committee Chairman Max Baucus (D-MT). But I am going to postpone that for another week to deal with a breaking story. Last week The Wall Street Journal published a story called Big Oil Companies Struggle to Justify Soaring Project Costs. That story contained a VERY SCARY GRAPHIC that has many people talking:

Source: The Wall Street Journal

Much of the subsequent commentary treated this graphic as the face of peak oil: Oil companies spending more and more for modest production gains (or even declines). There is some truth to that narrative. As the easy oil is depleted the capital costs increase for the harder stuff (which is why high oil prices are here to stay). But there’s more to it than that, and I always strive to deliver the rest of the story (which hopefully is a benefit to readers).

What’s missing from the graphic? Revenues and profits. This is important, because if you miss this you can come to some inappropriate conclusions. Revenue is important because it was the huge surge in revenues as oil prices rose that fueled the capital expenditures. A decade ago, ExxonMobil’s (NYSE: XOM) revenue was under $300 billion. By 2008 it had surged to $477 billion, and after two years of weakness due to a collapse in oil prices (also aided by XOM’s ill-timed purchase of natural-gas producer XTO), revenues for 2011 and 2012 were above $480 billion. XOM’s net income showed a similar trend. It surged from $25 billion in 2004 to $45 billion in 2008, pulled back in 2009 and 2010, and then reached $48 billion in 2012.  

Big oil companies found themselves with very big piles of money, which they used to invest in new projects (and to buy back shares). Because of the size of these oil companies and the amount of revenue they generate, they either have to invest in a tremendous number of small projects, and/or a small number of megaprojects.

What you see in the WSJ graphic is largely a function of spending on megaprojects that in most cases turned out to be costlier than expected, but that also aren’t yet complete and producing.

As an example, in 2009 Chevron (NYSE: CVX), Shell (NYSE: RDS.A) and ExxonMobil teamed up on the Gorgon natural gas project in Australia. The Gorgon and Jansz-Io gas fields are estimated to contain 40 trillion cubic feet of natural gas, which will supply natural gas to the growing Asia Pacific market for decades. Chevron has invested more than $18 billion, and the total project cost has risen to $52 billion (40 percent over budget). That’s a lot of capital spent on something that hasn’t yet shown up as production, but once it does it will produce for many years.

The Kashagan oil field in Kazakhstan is another example, where ExxonMobil and Shell have each invested billions to produce the 13 billions of oil that are estimated to be economically recoverable. But this project has also suffered from cost overruns and delays, and the first oil just began to flow in Q4 2013.

So it’s important to keep in mind that there is often more to a story than meets the eye, and that is certainly the case here. Yes, projects are costing more these days for supermajors like ExxonMobil, but surging revenues are driving the project spending. When projects are delayed and costs escalate, there can be a short-term impact to earnings. We are seeing this impact now with earnings disappointments from many of the oil supermajors — but history has shown this to be a buying opportunity.

There is always a delay between spending on a project, and seeing that spending bear fruit. That delay can be three to five years, or even longer with some of the more complex projects. Recall that oil prices surged from 2005 until 2008, but oil production remained relatively flat during that time. This fueled much speculation that oil production had peaked. But the surge in oil prices spurred new projects, and as those projects came online they began to move the production needle. In the US, this has resulted in five straight years of increasing domestic oil production.

Remember, Warren Buffett isn’t a naive investor. In November, his Berkshire Hathaway (NYSE: BRK.B) disclosed that is had taken a $3.45 billion stake in ExxonMobil. He clearly believes that there is still life left in that supermajor. Many investors followed his lead, and bought into XOM as its share price rose throughout November and December. But with the recent pullback you can actually buy ExxonMobil for less than what Warren Buffett paid. You could do a lot worse than that.   

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)

The Six Best States to Flip a House

In 2013, investors bought more than 156,000 homes, only to fix them up and quickly resell them for an average profit of $58,081. Home flipping became increasingly popular as the housing market began to recover. However, While the number of U.S. home flips increased in 2013 compared to 2012, home flips as a proportion of all home sales declined from 7.1% of sales in the fourth quarter of 2012 to just 3.8% of sales in the fourth quarter of 2013.

Daren Blomquist, vice president at home data site RealtyTrac, explained, "We saw this surge in flipping that corresponded with the market bouncing off the bottom. And now that home prices are beginning to moderate, flippers are beginning to pull back on their activity. I think another thing causing flippers to pull back is there's not as much inventory available, particularly distressed inventory at a discounted price."

Where homes are available, however, substantial profits can still be made. In six states, home flippers made an average profit of considerably more than $80,000 in 2013. In Massachusetts, the gross profit on a flipped home was more than $100,000. 24/7 Wall St. examined the six states where home flipping was most lucrative in 2013.

Buying homes to flip when market prices are relatively high may mean more overhead, but the fact remains that the states and metro areas with the largest average profits on home flips were the more expensive housing markets. All of the six most profitable states to flip a home in 2013 had among the highest average purchase prices that year. For example, California homes intended to be fixed up and resold for a profit cost an average of $284,650, nearly $100,000 more than similar houses across the U.S. Of course, they were then resold for an average price of $381,221. "High prices result in higher profits," confirmed Blomquist. "These states are basically the highest-priced markets in the country."

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Two of the markets on this list, New York and New Jersey, may be lucrative and popular because a large number of properties became available to flip when the region was struck by superstorm Sandy in October, 2012. Notably, the second-most lucrative housing market to flip last year was Ocean City, New Jersey, where several hundred homes were flipped for an average profit of more than $158,000. "I would suspect Sandy had some impact."

Blomquist added. "We saw a big increase in foreclosure activity in these areas, and some of that is related to properties homeowners were walking away from. Those homes are prime candidates for flippers. They probably have some damage that other buyers would shy away from, but a flipper would be willing to take on."

24/7 Wall St. examined the six states with an average gross home flip profit of at least $80,000 in 2013, based on data from RealtyTrac. RealtyTrac also provided average flip price, average gross profit, and the proportion of all home sales that were flips for 2011 and 2012, and Q4 2013 for States and U.S. Metro areas. We also reviewed RealtyTrac's foreclosure rates for 2013.

These are the six best states to flip a house.