Monthly Archives: January 2017

Top 5 Blue Chip Stocks To Watch For 2017

American Express (AXP) has jumped 9% today after reporting better-than-expected earnings, and since it’s a component of the Dow Jones Industrial Average, you’d expect the blue-chip benchmark to be soaring. You’d be wrong, thanks toTravelers Companies (TRV), which has tumbled 5.2% after reporting earnings of its own.

Agence France-Presse/Getty Images

Now Travelers has a market cap of $33.2 billion, compared to American Express’ $56.6 billion market capitalization. The Dow, however, is price weighted, which means that the higher the price, the greater the stock weighting. American Express is trading at $66.77, while Travelers is trading at $110.22. That makes the move in Travelers count nearly twice as much as the one in American Express. Travelers has subtracted 41.16 points from the Dow Jones Industrial Average, while American Express has added 37.80 points.

Top 5 Blue Chip Stocks To Watch For 2017: Ritchie Bros. Auctioneers Incorporated(RBA)

Advisors’ Opinion:

  • [By Scott Rubin]

    Big gainers on the session included Ritchie Bros. Auctioneers (NYSE: RBA), which added 24 percent, and Potash Corporation of Saskatchewan (NYSE: POT), which climbed almost 11 percent on the day. Losers included Abercrombie & Fitch Co. (NYSE: ANF), which lost more than 20 percent after disappointing earnings results, and G-III Apparel Group, Ltd. (NASDAQ: GIII), which also fell 20 percent on the day.

  • [By Benzinga News Desk]

    Raymond James has downgraded Ritchie Bros. Auctioneers Inc (USA) (NYSE: RBA) common stock to Market Perform

    Loop Capital's Betsy Van Hees sees storage, networking, and connectivity as the 3 reasons why Marvell Technology Group Ltd. (NASDAQ: MRVL) will return to top-Line growth. She reiterated her Buy rating and $18 price target. 

Top 5 Blue Chip Stocks To Watch For 2017: Palo Alto Networks, Inc.(PANW)

Advisors’ Opinion:

  • [By Chris Lange]

    Palo Alto Networks, Inc. (NYSE: PANW) released its fiscal first-quarter earnings report after the markets closed on Monday. Although the financial results were close to estimates, in fact beating on the bottom line, Palo Alto still suffered this quarter. Compared to Mondays closing price the stock trades near 57-times expected fiscal 2017 earnings, which could offer some explanation as to why investors seem so shaken on mixed earnings.


    On Monday, Cramer said, he’ll be looking out for Tyson Foods (TSN) , Jack in the Box (JACK) and Palo Alto Networks (PANW) . Tyson is good, but out of favor, Cramer said while remaining bullish on Jack and Palo Alto.

  • [By Lisa Levin]

    Palo Alto Networks Inc (NYSE: PANW) was down, falling around 12 percent to $130.81 as the company issued disappointing forecast for the current quarter. The company also reported in-line earnings for its third quarter, while sales exceeded analysts’ estimates.

Top 5 Blue Chip Stocks To Watch For 2017: Annaly Capital Management Inc(NLY)

Advisors’ Opinion:

  • [By Boniface Murigu]

    It’s no secret that mREITs such as American Capital Agency (NASDAQ: AGNC  ) (NASDAQ: AGNC  ) (NASDAQ: AGNC  ) , Annaly Capital Management (NYSE: NLY  ) (NYSE: NLY  ) (NYSE: NLY  ) ,and CYS Investmentshave gone through a very turbulent trading period, with all major players losing a sizable share of market value.

  • [By Amanda Alix]

    It was just about one year ago that QE3 made its debut, and mortgage REITs, particularly agency-only players like Annaly Capital (NYSE: NLY  ) , Armour Residential (NYSE: ARR  ) , and American Capital Agency (NASDAQ: AGNC  ) began moaning about the increased competition for mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.

  • [By Amanda Alix]

    This development will likely give battered mREITs like Annaly Capital (NYSE: NLY  ) , Armour Residential (NYSE: ARR  ) , and American Capital Agency (NASDAQ: AGNC  ) a huge boost as investors begin to feel less panic regarding a tapering of the current QE3 program. Markets have responded to the Summers announcement by soaring skyward, apparently feeling relief and confidence about the fate of the taper.

  • [By Ben Levisohn]

    Hatteras Financial (HTS) has jumped 9.4% to $15.60 after agreeing to be purchased byAnnaly Capital Management (NLY) for $1.5 billion.Annaly Capital Management has dropped 1.1% to $$10.30.

  • [By Dan Caplinger]

    Another tax-law provision gives favorable tax status to real-estate investment trusts. REITs make investments in real estate-related assets, and they’re required to pay out almost all their income to their shareholders annually. Simon Property Group (SPG) is one of the biggest REITs, focusing on shopping malls and paying a 3 percent yield. But other specialty areas of the REIT universe pay much higher dividends, with REITs like Annaly Capital (NLY) that invest in mortgage-backed securities topping the list with double-digit percentage yields.

Top 5 Blue Chip Stocks To Watch For 2017: Rhino Resource Partners LP(RNO)

Advisors’ Opinion:

  • [By Alexis Xydias]

    Investors are regaining confidence, squeezing pessimists who say the economy remains sluggish outside of Germany and point to record-low trading volume as a lack of conviction in the Euro Stoxxs 61 percent rally of the past two years. Besides gains in stocks from Banco Bilbao Vizcaya Argentaria SA to Renault SA (RNO), yields on Spanish and Italian bonds have declined to a two-year low compared with German bunds and the euro has strengthened 4.6 percent to $1.35 in the past six months.

Top 5 Blue Chip Stocks To Watch For 2017: SK TELECOM ADR EACH REP 1/9 KRW500(CIT)

Advisors’ Opinion:

  • [By Lisa Abramowicz]

    There was this maturity wall that people were terrified of, said Neil Wessan, the group head of New York-based CIT Group Inc. (CIT)s capital markets unit. Thats been spread out over a much broader period of time.

  • [By Ben Levisohn]

    We will admit that these latter assumptions are somewhat arbitrary, but nevertheless we cannot help escape the view that in 2017 everything will likely be at least a little adverse to prior expectations. On average our estimate reductions are 8%, and range from 3% at CIT Group (CIT) to 13% at Goldman Sachs. With that, we are lowering our PT of Bank of America,Citigroup andGoldman Sachs from $20, $70 and $243 to $18, $63 and $214, respectively…

Nokia Is Playing With Fire With Its Patent Infringement Case Against Apple

Yesterday the talk of the town was that Nokia (NYSE:NOK) sued Apple (NASDAQ:AAPL) in the U.S. and Europe for patent infringement (NOK’s PR release here).

However, what went totally unnoticed (in fact every major news organization missed it) was that 24 hours before NOK’s lawsuit, Apple filed an antitrust case against Acacia (NASDAQ:ACTG) and other PAEs (patent assertion entities) that act as a proxy for NOK.

Below is AAPL’s filing (Dec. 20th), and you can read the entire 43-page document here (hat tip Florian Mueller).

Click to enlarge

Now, let me give you some background information on what is actually going on here.

NOK first sued AAPL back in 2009, claiming that it was infringing on 10 NOK patents for wireless transmission technologies. AAPL settled in 2011, claiming that the agreement was “limited in scope”:

“Apple and Nokia have agreed to drop all of our current lawsuits and enter into a license covering some of each other’s patents, but not the majority of the innovation that makes the iPhone unique,” Apple said. “We are glad to put this behind us and get back to focusing on our respective businesses.”

While no one knows the terms of the settlement, speculation has it that the sum was small in size, perhaps several hundred million dollars.

However, since that settlement, NOK has been trying to milk AAPL for additional money. If one reads the Nokia press release, it is evident.

As one of the world’s leading innovators, and following the acquisition of full ownership of NSN in 2013 and Alcatel-Lucent in 2016, Nokia now owns three valuable portfolios of intellectual property. Built on more than EUR 115 billion invested in R&D over the past twenty years, our tens of thousands of patents cover many important technologies used in smartphones, tablets, personal computers and similar devices.

Since agreeing a license covering some patents from the Nokia Technologies portfolio in 2011, Apple has declined subsequent offers made by Nokia to license other of its patented inventions which are used by many of Apple’s products.

So, in other w ords, even if NOK won a settlement in 2011, it felt that it was not enough. The question is why now? Why didn’t NOK take AAPL to court all these years?

One answer might be that whatever was agreed upon in 2011 is expiring now, and AAPL would not give into NOK’s claims.

Now while this may be true, it’s also worth noting that NOK filed its lawsuit right after AAPL filed its antitrust case against Acacia and other PAEs as mentioned above. I mean, there has to be some reason, because I find it too much of a coincidence.

This is what I think has happened…

Back when Nokia sold its smartphone assets to Microsoft (NASDAQ:MSFT), Joaquin Almunia, Europe’s top regulator, warned NOK not to try to “extract higher returns” from its patent portfolio.

From the Associated Press via Yahoo, we read:

AMSTERDAM – Europe’s top regulator has warned Nokia not to try to become a “patent troll” after the Finnish company sold most of its cellphone- making business to Microsoft Corp. this year but retained its patent portfolio.

Joaquin Almunia said in a speech in Paris on Monday he had approved the $7.2 billion sale as not presenting problems on Microsoft’s side, but there is a danger Nokia will now attempt to “extract higher returns” from its patent portfolio. “In other words…behave like a patent troll, or to use a more polite phrase, a patent assertion entity.”

Almunia, in charge of competition at the European Commission, the executive arm of the European Union, warned he will open an antitrust case against the company if it attempts to take “illegal advantage” of its patents.

So, in other words, NOK was warned by the EC (European Commission) that it would bring an antitrust case against the company in the event that it tried to bully the smartphone space with its patents.

Can the EC do this? In theory yes, regulators have been known to intervene in the market from time to time to break up monopolies. The case of the Baby Bells many years ago in the U.S. is but one example.

So I am guessing NOK stayed low all these years, not wanting to agitate the EC, because the EC might actually take the company to court on antitrust grounds.

As part of staying low, Nokia tried to force Apple into some kind of an agreement, but at the same time, had several patent entities (patent trolls as they are also called), harassing AAPL just to keep the heat on.

So Apple got tired of being harassed, and acted by filing an antitrust case against these patent entities, but also indirectly at Nokia, because the above companies listed are all NOK patent trolls (more on that below).

So getting back to the issue as to why now, NOK was simply responding to AAPL’s first move. And as you will read in the introduction of Apple’s complaint below, behind the companies mentioned lies NOK.

So, let’s see what AAPL is accusing NOK and the other patent assertion entities of (the link to the document above):

Apple Inc. (“Apple”) brings this action to remedy a continuing anticompetitive scheme. Acacia Research Corporation and its subsidiaries (collectively, “Acacia”) and Conversant Intellectual Property Management Inc. (“Conversant”) and its subsidiaries (collectively, “Conversant”) have respectively colluded with Nokia Corporation (itself and through its affiliates Nokia Solutions and Networks Oy and Nokia Technologies Oy (collectively “Nokia”)) to obtain from Nokia thousands of patents as part of a plan to extract and extort exorbitant revenues unfairly and anticompetitively from Apple and other innovative suppliers of cell phones, and ultimately from the consumers of those products. Acacia, Conversant, and many other patent assertion entities (“PAEs”) have conspired with Nokia to use unfair and anticompetitive patent assertions to improperly tax the innovations of cell phone makers.

This conduct is all the more pernicious because it unfairly and anticompetitively evades binding commitments that Nokia made to license declared standard essential patents (“SEPs”) on fair, reasonable, and non-discriminatory (“FRAND”) terms. Nokia positioned itself to claim that its patents cover technologies included in telecommunications standards by repeatedly assuring standard-setting organizations that it would license its patents fairly. Yet Acacia and Conversant are now conspiring with Nokia in a scheme to diffuse and abuse such patents and, as the PAEs and Nokia fully intended, monetize those false promises by extracting exorbitant non-FRAND royalties in ways Nokia could not.

With the active collaboration of Acacia and Conversant, Nokia avoids licensing its own portfolio directly and transparently, though it is fully competent to do so. Instead, Nokia has 6 divided its patent portfolio and distributed portions of it among Acacia, Conversant, and other PAEs, while retaining an interest in revenues generated by those PAEs. Nokia then enlists mercenary PAEs including Acacia and Conversant – that have offered their services aggressively to threaten, sue, and thereby extract exorbitant, above-market royalties from cell phone makers, including for declared SEPs. The reasons why Conversant and Acacia have conspired with Nokia are clear. The PAEs can take advantage of the fact that-unlike Nokia, which now focuses on the network business-they produce nothing at all and therefore have no desire or need for “patent peace,” and can impose disproportionate discovery and litigation costs on the product companies they sue. By conspiring with Nokia in a scheme to disperse the Nokia portfolio to the PAEs, Acacia and Conversant can obtain more royalties from product companies than Nokia cold have obtained through direct and transparent licensing, and then share with Nokia the ill-gotten fruits of their illegal exploitation.

This is serious stuff. Can Apple prove this? I think so, because most (if not all) of the patents in question belong directly to Nokia.

So, in reality, it was not Nokia that sued Apple yesterday. Everyone has it all wrong. It was Apple that sued Nokia, and the latter immediately counter-sued the former, because it had no choice. It finally had to come in the open after staying low all these years.

Does this mean anything for AAPL or NOK shares?

As for Apple, I doubt it. Even if Apple is forced to pay, it will not mean much, considering the company has over $200 billion in cash on its books.

As for NOK, if it does manage to milk AAPL in any way, it might mean a lot for its stock. NOK’s market cap is currently about $27 billion. So, for example, if a $5 billion settlement is reached, it might mean a jump of at least 20% in NOK’s stock price.

Bottom line

Personally, I don’t think Nokia will get a dime. Apple is know for its hard-ball tactics in court, and the only thing Nokia will manage to do is to spend many years in court and hundreds of millions in lawyer fees that it cannot afford.

Furthermore, this case will also bring to life the tactics of patent assertion entities, by which many companies try to exert patent fees, without directly being involved themselves.

In fact, this whole thing might backfire against Nokia, because if the EC files antitrust charges against the company, regulators might force a settlement, and I doubt if it will come out as winner.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Under Armour: Opportunity With The Confusing Ticker Changes

Despite a big rally, Under Armour (NYSE:UA)(NYSE:UAA) is back below key support. The recent corporate action has done very little to change the business climate that is impacting the stock.

Now the investment question is probably more perplexing than the last research opinion. In fact, the recent shift in stock tickers likely confused the general investment community at a time when tax-loss selling possibly pushes the stocks to new lows.

Due to a huge discrepancy in the prices of the A and C shares, Under Armour made the corporate decision to change the ticker symbols and make the C shares previously under the UA.C ticker more appealing to investors. Of course, a prime reason being the wish of CEO Kevin Plank to sell the shares without losing voting power.

Effective December 7, Under Armour changed the tickers as following:

Class A shares shifted from UA to UAA – voting power Class C shares shifted from UA.C to UA – non-voting power

Changing t he C shares ticker made sense, but moving the shares to the original ticker made no sense. The logical move was to change that ticker to the available UAC.

The goal was to remove the discount gap between the two shares that in reality have no difference. Under Armour created the C shares without voting power back in April via splitting the Class A and B shares via an equal distribution of C shares.

CEO Kevin Plank controls the voting power in the stock so the voting power is only a useful right a decade or more away, if ever.

One possible reason to confuse investors with the ticker change is due to the CEO selling shares. At the end of August, Plank filed to unload 2.075 million Class C shares. Selling those shares at a huge discount has to be frustrating. See details on these moves and my opinion on those shares here.

The reason the A and C shares have no real difference is that Plank owns 34.45 million B shares with ten votes per share. For that reason, he controls 65.3% of the voting power of Under Armour.

The other downside pressure on Class C shares is that Plank owns over 32 million more shares that will be the first sold of what he owns. The shares traded at these following differences.

August 1: UAA $39.44, UA $35.50 = $3.96 September 1: UAA $39.75, UA $35.70 = $4.25 November 25: UAA $30.60, UA $24.14 = $6.46 December 6: UAA $30.47, UA $25.41 = $5.06 December 23: UAA $29.29, UA $25.23 = $4.06

The key dates being that the price gap was around $4 before the CEO entered a trading plan. The gap surged to around $6.50 prior to changing the ticker symbols leaving the current gap back closer to the previous levels. The gap was constantly on the rise since the symbol split back in April.

UAA Chart

UAA data by YCharts

Logically the new Class C shares under ticker UA have nearly equal value to the Class A shares under ticker UAA, but the C shares have the additional selling pressure of the CEO. The amount of shares available for sale aren’t a massive amount in comparison to the average volume of 1.9 million shares.

The key investor takeaway is that neither identified issues with the Class C shares justify the huge gap in the share price. Neither the CEO shares for sale or the lack of voting power should make one prefer the nearly $4 premium for the standard UAA shares.

The UAA shares broke strong support around $30 questioning whether one wants to jump into the UA stock before a bottom is reached. At the very least, investors should be willing to buy on any dips below this key support though the reference points are all jumbled up based on the constant switches in tickers.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.

Hot Low Price Stocks To Own For 2017

Raymond James analyst Christopher Raymond and team sayAbbVie (ABBV) is “not your father’s biotech company” as they initiate coverage with an Outperform rating:

Kevin Hagen for The Wall Street Journal

Initiating coverage of ABBV shares with an Outperform rating and an $82 price target as we think uncertainty over Humira’s intellectual property (IP) creates an opportunity to own this name at a significant discount to its peers before the full extent of the drug’s revenue tail becomes reflected in the stock. Coupling that with a rapidly diversifying portfolio, numerous upcoming value-enhancing catalysts, and a decent dividend yield, we think shares can continue to work higher over the next several quarters.

Not your father’s biotech company. Having spun out of Abbott Laboratories (ABT) in 2013, and based in North Chicago, IL, AbbVie comes with a decidedly different pedigree than most biotechs. Indeed, most investors we speak with tend to lump the company in with large pharma – simply by virtue of this legacy. However, with a growth profile, product offering, and pipeline that is every bit that of a biotech company, we think this name should increasingly be viewed through such a lens…

Hot Low Price Stocks To Own For 2017: Avanir Pharmaceuticals Inc(AVNR)

Advisors’ Opinion:

  • [By Paul Ausick]

    Stocks on the move: Galena Biopharma Inc. (NASDAQ: GALE) is down 15.4% at $1.93 after pricing a secondary offering of 17.5 million units at $2.00. Safeway Inc. (NYSE: SWY) is up 6.1% at $28.21, after an analysts upgrade which sent shares to a new 52-week high of $28.88 earlier. Avanir Pharmaceuticals Inc. (NASDAQ: AVNR) is down 18.2% at $4.08.

Hot Low Price Stocks To Own For 2017: Pilgrim's Pride Corporation(PPC)

Advisors’ Opinion:

  • [By John Udovich]

    Thanksgiving is almost here but the exit of both Pilgrim’s Pride Corporation (NYSE: PPC) and Smithfield Foods (NYSE: SFD) to focus on their chicken or pork businesses (the latter was also acquired by the Chinese) leaves just two big Thanksgiving turkey stocks, Hormel Foods Corporation (NYSE: HRL) and Seaboard Corporation (NYSEAMEX: SEB), for investors to consider. According to the American Far Bureau, a 16-pound turkey will (on average) come in at a total of $22.74 this year or roughly $1.42 per pound for a decrease of 2 cents per pound or a total of 30 cents per whole turkey, compared to 2015. The price drop may be a transition back to the norm as the significant bird flu outbreak last year hurt the nations supply of both turkey and eggs.

  • [By Ben Levisohn]

    BMO Capital Markets analysts Kenneth Zaslow and Patrick Chen took a look at the valuations of Tyson Foods (TSN) and Pilgrim’s Pride (PPC) and decided they were afraid of heights. They explain why they cut Tyson Foods to Market Perform from Outperform…

Hot Low Price Stocks To Own For 2017: DragonWave Inc(DRWI)

Advisors’ Opinion:

  • [By Monica Gerson]

    DragonWave (NASDAQ: DRWI) dropped 17% to $2.05 after the company priced US$25 million public offering of units.

    SmartPros (NASDAQ: SPRO) dropped 11.82% to $1.79. SmartPros’ trailing-twelve-month ROE is -16.31%.

  • [By Lisa Levin]

    DragonWave, Inc.(USA) (NASDAQ: DRWI) shares shot up 94 percent to $4.28 after the company announced a deal with Sprint Corp (NYSE: S). DragonWave said Sprint has opted for its microwave backhaul equipment as part of maximization and densification strategy. The telecom firm has opted to deploy networking equipment to enhance the performance and the customer experience.

Hot Low Price Stocks To Own For 2017: U.S. Bancorp(USB)

Advisors’ Opinion:

  • [By Lawrence Meyers]

    The big winning sector was finance, which saw earnings rise 30% on an increase of 8.5% in revenues. Banks like Citigroup (C) and JPMorgan Chase (JPM) have bounced back very strongly from the financial crisis, while banks like U.S. Bancorp (USB) continue to make inroads, and impress with good management. So these guys are all benefiting from their diversified streams of revenue generation, and strong revenue from B2B services.

  • [By Ben Levisohn]

    Who is positioned for the most capital return? We expect Morgan Stanley, Regions Financial (RF), Goldman Sachs, Fifth Third Bancorp (FITB), PNC Financial Services Group (PNC), and U.S. Bancorp (USB) to be approved for the most amount of capital return during 2016 (ranging between 80-100% of estimated 2016 earnings).

  • [By Ben Levisohn]

    Berkshire’s QTD returns primarily reflected outperformance in technology and financials (International Business Machines (IBM), Moody’s (MCO), U.S. Bancorp (USB), and American Express (AXP)), partly offset by underperformance within energy, healthcare, and consumer-nondurables (Phillips 66 (PSX), Coca-Cola (KO), and DaVita HealthCare Partners (DVA)).

  • [By Ben Levisohn]

    1) Bad news may not have a lasting impact on valuation. Post crisis, there have been instances where the market was surprised by a material event. However, in several cases, valuations returned to historical levels (we point to Bank of America (BAC), JPMorgan Chase (JPM), M&T Bank (MTB) and U.S. Bancorp (USB) as examples). 2) Wells Fargos valuation is attractive, trading at 11.1x our 2017e and 11.5x if we haircut our 2017e by 4%. The 11.5x represents a 13% discount to other high return peers (BB&T (BBT)/M&T Bank/PNC Financial Services Group (PNC)/U.S. Bancorp) despite similar ROTCE.Wells Fargo trades in line with JPMorgan Chase, but with a higher ROTCE. 3) Before this issue,Wells Fargo shares had underperformed the banks this year by 630bps through 9/6. While estimates have come down by 5% forWells Fargo over the past 6 months, this is in line with large regional peers (and half the drop for mkt sensitives). Its possible some of the news was b eing priced into the market (even though it wasnt widely known before 9/8). 4) As noted above, EPS trends have been and are likely to remain sluggish. However, this is an issue for the overall industry as we expect just 4% growth for large regionals in 2017 and even less for high return peers. We expect 5% EPS growth atJPMorgan Chase in 2017…

  • [By Ben Levisohn]

    Securities account for ~23% of earning assets for our coverage and carried a median ~2.4% yield as of Q116. Banks with the highest investment securities yields as of Q116 included Fifth Third Bancorp (FITB) (3.12%),JPMorgan Chase (3.10%),Wells Fargo (3.00%), PNC Financial Services (PNC) (2.72%), and M&T Bank (MTB) (2.58%). Companies with the most securities exposure as a percentage of earning assets includeBank of America (29%), U.S. Bancorp (USB) (28%),Wells Fargo (25%), KeyCorp (KEY) (24%), and BB&T (BBT) (24%).

Hot Low Price Stocks To Own For 2017: On Assignment Inc.(ASGN)

Advisors’ Opinion:

  • [By Jim Robertson]

    On Thursday, our Under the Radar Moversnewslettersuggested suggested small cap employment services stockOn Assignment, Inc (NYSE: ASGN) as a short trade thats already turned profitable for us:

Caring about your job is in your financial interest

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Youre supposed to care about the success of your employer.

No, I didnt just leave an underwhelming experience with a disgruntled retail worker. And Im not just some middle-aged man griping about a high school kid who mumbled to me at the local electronics store.Ill air those grievances to the appropriate audience at the appropriate time (Christmas eve with my family). Instead, Im a person in the financial industry who sees the negative impact of not caring.

Its inyour best interest to truly care about your job and your employer. Personal pride is reason enough, but sadly it doesnt have enough teeth these days. At the most elementary level, you should care about the success of your employer so you can keep your job. The basic employment construct illustrates this point. You, theworker, gives yourtime and effort to your employer. Then, youremployer compensates youfor your time and effort. As long as your efforts result in profits, you keep your job.

Its almost always been this way. But little do you know how much the importance of your caring has changed.

Prior to the 1980s, your retirement success was mostly dependent upon the company you worked for, primarily in the form of adefined benefit plan (pension). You worked your entire life for the company, and when you hung-up your work boots or your briefcase, the company kept paying you a significant portion of your work income, until the day you died, And after you died, they paid your spouseuntil your spouse died. Because your employer made the contributions to the pension, your only role in the retirement equation was to keep your job, and to stay interested in the ongoing success of the company. In 1975, nearly 88 percent of workers in the private se ctor had a pension and thereality I just described.

The company needed you to care so they could remain profitable and fund your retirement. Then, along came the 1980s andthe shift to defined contribution plans (401k, etc). The company still needed you to care, because they still needed to remain profitable, so they could continue to exist and you could continue to have a job. But the retirement onus completely shifted to the American worker. Prior to this shift, you could successfully retire without having really done anything to contribute to a successful retirement.

You cant get away with that today.Its been nearly 40 years, but no one seems to have figured this out. Retirement plan participation rates and contribution levels prove workers dont understand their own role in their own retirement, dont care, or are simply masochists.

Caring matters a lot more now. You need your employer to hit their numbersso you can retire. But of course, its not nearly that simple.

 (Photo: Provided)

Your employer knows their numbers (revenue and profit goals), and they need you to buy into them emotionally. Workplace culture expert Kevin Kruse writes this is the definition of employee engagement the emotional commitment an employee has to the organization and its goals.

As an employer, Id love for my employees to care about our company and our goals. But I realize in order for my employees to care about the financial goals of my company, I need to care about their financial goals. Remember, when pensions were commonplace, our successes were directly linked. Today, successes are indirectly linked a gigantic problem which has contributed greatly to the retirement crisis. The American workers retirement is no longer automatically funded when the employer thrives. Retirement is only funded when the worker funds it.

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How to plan ahead to handle rising costs before they push you over the edge

The company wants you to care deeply about their financial goals. But why would an employee care about his companys goals when the company doesnt care about his goals?

I call this the circle of engagement. You want the company to care deeply about your financial goals. However, like millions of Americans, you havent accepted the fact that your chances at retirement success fall solely on you, thus you havent set specific financial goals to achieve retirement success. At this point the circle of engagement breaksdo wn, because your employer cant possibly care about goals you havent even defined for yourself. By the way, Id like to retire someday isnt a goal. Its a vague idea.

Welcome to my world the world of financial wellness. Financial wellness fixes the broken circle of engagement. It helps employees define their financial goals, put together a plan to fund them, then shows employers how to rally around them. Your employer asks you to care about their goals, you ask them to care about your goals, and everyone complies. They care because you care. Or you care because they care. It doesnt really matter. Its a circle, its beautiful, and it works.

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Savers too scared to invest have 81% chance of dying broke

Its worth noting, fixing the circle of engagement is what a good financial wellness program does. Unfortunately, a majority of workplace financial education programs are still caught-up in showing people who to increase their credit scores and other parlor tricks which serve no one. If a financial wellness program doesnt establish goals, create a plan to achieve them, and drive net worth higher, its a waste of time and money.

As bold as it may be, the next time your employer asks for buy-in on their goals, ask them for buy-in on your goals. Youll both be better for it.

Peter Dunnis an author, speaker and radio host, and he has a free podcast: Million Dollar Plan. Have a question about money for Pete thePlanner? Email him