Yesterday, our Premium service Featured Trade from August 2009, Systemax (SYX), delivered a phenomenal quarterly earnings report after-the-bell. Systemax reported Q4 EPS of $.46 vs a $.33 analyst consensus. Moreover, revenue grew 15% year-over-year and the tech retailer delivered record quarter and annual sales. The pick hit the first profit target after-hours yesterday, and there are two more targets ahead.

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Coinstar (ticker: CSTR) is fast-becoming an emerging momentum play. The company is approaching a $1 billion enterprise due to their red hot Redbox located at the front of every grocery store all over the country.

Redbox dishes out DVD rentals for only a $1 with plenty of feature titles licensed from Paramount Home Entertainment, a division of Viacom (see: http://www.hauteliving.com/blog/viacom-kicks-off-the-new-decade-with-viable-strength/). Gary Cohen, SVP of Redbox, said, “From road warriors to moms on the run, the iPhone app from Redbox helps customers rent and reserve at any of the thousands of neighborhood locations nationwide.”

Recently, the iPhone app from Redbox surpassed 1 million downloads. Keep a close eye on Coinstar as they steal more business from Blockbuster.

Meanwhile, Netflix (ticker: NFLX) has a market cap over 3 times that of Coinstar. Founder and CEO Reed Hastings possesses the key leadership quality of adaptability — a quality he must have learned while serving in the Peace Corps in his younger days.

His company’s stock has doubled over the past year and grown to serve over 12 million subscribers. Analysts forecast Netflix to double their subscriber base by 2016. A key catalyst is their continuing investment in streaming online movies, ultimately the customer’s next destination for viewership.

On the flip side, Blockbuster (ticker: BBI) was just too late to the online game. The company is now a penny stock! Blockbuster is like an old-fashioned travel agency in the early 90s that didn’t see the Internet boom coming. Eventually, the old-fashioned, traditional travel agencies were run over by online travel agencies like Expedia, Orbitz and Yahoo! Travel. Lesson learned by Blockbuster: adapt to change, otherwise get left behind.

Lastly, keep your eye on TiVo (ticker: TIVO). This week, TiVo announced they are ready to release new DVRs this spring. Unlike the current models, critics are calling the new device a solution to integrating TV and Internet content.

The TiVo Premiere is the answer to the company’s urgency to spark the growth of its stagnant 1.5 million customer base. Price could be an issue, as the new DVRs will range from $299-$499 in addition to required subscription fees ranging from $12.95 a month to $299 for three years.

TiVo CEO Tom Rogers said, “We’re moving toward get anything you want whenever you want it.” A search for Penelope Cruz on the new TiVo DVRs would bring up her movies that are showing soon on TV, available for rental or purchase through Amazon.com (ticker: AMZN), as well as related YouTube videos. Sounds like a convenient one-stop shop library for those willing to pay.

Furthermore, TiVo just won an intellectual property case worth $300 million against EchoStar Communications Corp. (ticker: SATS) the parent company of Dish Network Corp. (ticker: DISH). The win means companies like Comcast Corp. (ticker: CMCSA) and DirecTV (ticker: DTV) must enter into commercial arrangements with TiVo which will yield future licensing fees.

Three new pioneering options are unfolding before our eyes. Which one will you integrate into your experience? Your answer may lead to a great investment.

Disclosure: No positions in the companies mentioned.

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In case you were distracted by Ben Bernanke’s testimony last week, an interesting trend in consumer behavior is taking shape during this year’s tax-filing season.

Based on news from the top tax service companies, you will see individuals are in a very cost conscious state-of-mind. Consumers are quickly selecting the cheaper of the two options: preparing your own tax forms.

In this week’s Edge, we look at H&R Block, Intuit, as well as a quick snapshot of Jackson Hewitt.

H&R Block (HRB): $17.28 The “Hamburger Helper” of Tax Prep

Shares were crushed last Wednesday after the company warned they would miss their puffed up 2010 earnings outlook. H&R Block had expected fiscal 2010 earnings from continuing operations to amount to $1.60 to $1.80 a share. The consensus estimate from analysts polled by Thomson Reuters is at the low end of that range, $1.61 per share.

Past quarter earnings are due out after the bell on March 8th. The current estimate of analysts polled by Thomson Reuters is for a profit of $.16 cents per share on revenue of $959.2 million.

CEO Russ Smyth said, “We believe industry filings are down significantly due to the recession and sustained, high levels of unemployment … the weak economic conditions have also contributed to a greater shift to do-it-yourself tax preparation methods among first-half clients.”

Comment: The Kansas City-based tax services giant has prepared 6.3 percent fewer tax returns — 10.06 million — through Feb. 15 than during the same span last year (10.7 million tax returns prepared). H&R Block will just have to bear the brunt of less clients and more empty desks at their retail locations this season.

Intuit (INTU): $32.36 The Do-It-Yourself Software Provider

The maker of Turbo-Tax earned $.34 cents per share vs. $.26 cents per share in the same period a year ago. Consensus estimates were expected to be $.32 cents per share, an upside beat for Intuit.

Revenue in the most recent quarterly report increased 8%, better than analyst expectations.

President and CEO of Intuit Brad Smith said on the quarterly conference call, “We’re off to a good start and we’re on track to deliver better than expected revenue and earnings growth for fiscal year 2010.”

Sales of best-in-class TurboTax products jumped 11%. Intuit reported selling 10.97 million TurboTax products compared to 9.9 million in the same period a year ago. The web-based version of the product saw a 23% gain in sales, a sign that online tax preparation is leading the way this season.

Comment: Management recently raised full-year guidance estimates for revenue and profits. Also, It’s important to note that Director David Batchelder purchased a sizable insider stake of over 12.5 million shares on December 15, 2009 when the stock was around $30 per share — only slightly lower than today’s price of $32.36 per share. Initial signs show Intuit with a strong start in capturing the demand for do-it-yourself tax prep.

Jackson Hewitt (JTX): $2.44 The Franchise with Ugly Financials

Fiscal 2010 3rd Quarter earnings results are scheduled for March 11, 2010.

Comment: JTX is quickly burning cash. The company has only $60K in cash remaining relative to $311 million in debt obligations. I would steer clear of this company until the financials improve; otherwise, you might get caught holding the bag as this company files for bankruptcy in the near future or becomes a penny stock.

Among the three tax preparation players highlighted above, Intuit is definitely the safest trend play, while H&R Block and Jackson Hewitt are the contrarian higher-risk pullback plays. Jackson Hewitt is definitely the weakest of the three companies, but still possesses a recognized brand name in the marketplace. Consumers do not mind the hold-your-hand service when they have the extra cushion. However, companies like H&R Block are coming to realize the cushion is either minimal or non-existent for most individuals filing taxes this year.

Disclosure: No positions in the companies mentioned.

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What do Leonardo DiCaprio, Steven Colbert, ‘Snooki,’ John Stewart, ICarly, ‘The Situation’ and Tom Cruise all have in common? They are all entertainers delivering eye-catching content under the Viacom Inc. (ticker: VIA-B) umbrella.

With more people at home (i.e. less people working), the entertainment content business is seeing a resurgence. Viacom’s Paramount Pictures recently released a Martin Scorsese thriller last weekend, “Shutter Island,” starring Leonardo DiCaprio. The movie delivered the best weekend debut ever for both the director and star actor, opening with $41.1 million in revenues.

In its most recent quarterly report, Viacom’s profit quadrupled year-over-year, surpassing Wall Street consensus estimates. Viacom Inc. earned $1.14 per share vs. $0.28 cents per share in the same quarter a year ago. Chief Executive Philippe Dauman recently said, “We do see growing signs of strength … the tone is clearly more positive.”

Viacom Inc. was receiving plenty of flack for the fledgling ratings at MTV until hit show ‘Jersey Shore’ came along. Ratings at MTV increased 20% in the first five weeks of 2010. Additionally, worldwide home entertainment revenue climbed 12% on robust DVD and Blu-ray sales of such titles as “Star Trek” and “Transformers 2: Revenge of the Fallen.”

On a philanthropic note, Diddy, Queen Latifah, and Pharrell took the stage recently hosting a two-hour concert and telethon to benefit earthquake relief efforts in Haiti, titled “SOS Saving OurSelves — Help for Haiti” on Viacom’s BET, MTV and VH1.

After a short-lived separation, Tom Cruise re-unites with Viacom’s Paramount for Mission Impossible IV, a guaranteed blockbuster slated for release in 2011. So, continue to stay tuned to the star-studded and action-packed reality show called Viacom.

Disclosure: No positions in the VIA.

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On Friday evening, the Associate Press released yet another story about banks failure. It reminds me of the end of ‘08 all over again. Obviously these failures are on a smaller scale, but we have the same pattern of bank failures being announced on Friday nights when everyone is away from the desk and thinking about a fun-filled weekend.

The number of bank failures in 2010 climbed 25% last week, trailing the failure total of 25 in ‘08 by 5 banks and bringing the overall total to 185 bank failures since the crumbling began in at the start of 2008.

The 20 Bank Failures of 2010

This past week:

#20: La Jolla Bank FSB in La Jolla, CA: 10 branches, $3.6 billion in assets and $2.8 billion in deposits.

#19: George Washington Savings Bank in Orlando Park, Ill.: 4 branches, $412.8 million in assets and $397 million in deposits.

#18: Marco Community Bank in Marco Island, FL: 1 branch, $119.6 million in assets and $117.1 million in deports

#17: La Coste National Bank in La Coste, TX: 1 branch, $53.9 million in assets and $49.3 million in deposits.

The other February Bank Failure:

#16: 1st American State Bank of Minnesota in Hancock, MN: $18.2 million in assets and $16.3 million in deposits

The January Bank Failures:

#15 American Marine Bank in Bainbridge, WA: $373.2 million in assets and $308.5 million in deposits

#14: First Regional Bank in Los Angeles, CA: $2.18 billion in assets and $1.87 billion in deposits

#13: Community Bank and Trust in Cornelia, GA: $1.21 billion in assets and $1.11 billion in deposits

#12: Marshall Bank in Hallock, MN: $59.9 million in assets and $54.7 million in deposits

#11: Florida Community Bank in Immokalee, FL: 11 branches, $875.5 million in assets and $774.6 million in deposits

#10: First National Bank of Georgia in Carrolton, GA: $832.6 million in assets and $757.9 million in deposits

#9: Columbia River Bank in The Dalles, OR: $1.1 billion in assets and $1.0 billion in deposits

#8: Evergreen Bank in Seattle, WA: $488.5 million in assets and $439.4 million in deposits

#7: Charter Bank in Santa Fe, NM: $1.2 billion in assets and $851.5 million in deposits

#6: Bank of Leeton in Leeton, MO: $20.1 million in assets and $20.4 million in deposits

#5: Premier American Bank in Miami, FL: $350.9 million in assets and $326.3 million in deposits.

#4: Barnes Banking Company in Kaysville, UT: $827.8 million in assets and $786.5 million in deposits.

#3: St. Stephen State Bank in St. Stephen, MN: 1 branch, $24.7 million in assets and $23.4 million in deposits

#2: Town Community Bank and Trust in Antioch, Ill.: $69.6 million in assets and $67.4 million in deposits.

#1: Horizon Bank in Bellingham, WA: $1.3 billion in assets

Last year, the federal deposit insurance fund fell into the red. The FDIC expects the cost of resolving failed banks to grow to about $100 billion over the next four years.

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One of your favorite posts was when I covered Brazil in “Bright Signs of an Early Carnival for Traders Utilizing Brazilian ETFs“. So, with the Winter Olympics in full-throttle I want to shine the light on some safe and steady Canadian investments.

As of this morning, the U.S., Germany and France lead the Olympics with the most medals per country, respectively. Meanwhile, this year’s Olympics host, Canada, is tied for 4th place. Canada may not be placing first in the Olympics, but they are economically benefiting from the attention on Vancouver and the wallets being opened in surrounding areas right now.

iShares MSCI Canada Index ETF (EWC): The case of higher lows

EWC is an exchange traded fund that allows you to invest in a diversity of Canadian holdings. Companies such as Royal Bank of Canada (RY), Suncor Energy (SU), Barrick Gold (ABX), Canadian Natural Resources (CNQ), fertilizer leader Potash Corp. of Saskatchewan (POT) and Toronto Dominion Bank (TD) are just a sampling of strong large-cap companies moving the needle for EWC. Financials, energy and industrial materials make up the majority sector weighting in EWC, and all stand to gain from the Olympics currently in Canada.

The Canadian Dollar (FXC): An anti-dollar hedge

If you are concerned about Bernanke’s printing presses spinning galore at zero interest policy and flushing the market with more and more U.S. dollars, then look no further than the Canadian Dollar. Consider the Rydex CurrencyShares Canadian Dollar Trust, or FXC. If you think a currency is representative of a country’s share price, then this curreny-based ETF (FXC) is a simple way to play the Canadian dollar. The Canadian banking system has been rather healthy in comparison to other countries across the globe. Further, the country’s debt to GDP ratio has remained stable and commodities continue to perform and drive upside for FXC.

In the words of highly respected chief economist and native Canadian David Rosenberg, “We’re still in this post-bubble rollercoaster ride and the theme for 2010 will be the return of volatility … focus on high quality companies with dividend yield … global economic growth is going to be disappointing over the next 4-6 quarters.”

Stay warm and stay nimble. Continue to enjoy the Olympics, where each country all over world showcases their athletic prowess on the center stage in Vancouver, Canada.

Disclosure: No positions in the stocks mentioned.

To see our Featured Trade in February’s Premium Newsletter, get your feet wet with a 14-day complimentary trial by visiting here:

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2010 is in the red, more people watched the Super Bowl than ever before (i.e. unemployment still must be high), the Saints finished with a story book ending to the post-Katrina rollercoaster that New Orleans faced, and the DOW recently cracked below 10,000 for the 1st time in 3 months.

Today, I’m going to dig a little deeper into the Battle of the Beverage Behemoths: Coke (KO) vs. Pepsi (PEP):

Coca-Cola (KO): Still the Real Thing

Earnings: $.66 cents per share compared to $.43 cents per share in the same period a year ago. The consensus analyst estimate was $.66 per share, in-line with expectations.

Revenue increased 5.6% to $7.5 billion from $7.1 billion. Analysts expected revenue of $7.2 billion, an upside surprise for KO.

On the conference call, CEO Muhtar Kent said, “”Compared to this time last year, there’s a lot more clarity in terms of what the consumer is seeing. Not all good, but there’s a lot more clarity.”

Comment: Coca-Cola said it gained market share globally in the non-alcoholic ready-to-drink beverage category for the 10th straight quarter. KO sold 5% more beverages worldwide in its 4th quarter, with stronger sales in China and India. North America saw a 1% decline in case volume, an evident sign the U.S. consumer is still less willing to spend than once before. Coca-Cola is focused on its international growth, as international sales now consist of 75% of total company revenue. KO seems more focused on ‘opening happiness’ in other parts of the world, since North American happiness has experienced a plateau over the past couple years.

PepsiCo (PEP): Super Bowl Dorito Domination

Earnings: $.90 cents per share compared to $.46 cents per share in the same period a year ago. The consensus analyst estimate was $.91 per share, a minor expectation miss for PEP.

Net revenue increased 4.5% to $13.3 billion from $12.7 billion. PepsiCo positively nudged analyst expectations of $13.26 billion.

Comment: The true winner of cheers and laughter during the Super Bowl commercial showdown clearly goes to ‘Keep Yo Hands off my Momma and my Doritos.’ The post-game commercial buzz is still lingering the Doritos commercial, and the sign of a true win for PEP’s Super Bowl investment. Today’s quarterly earnings release proved PepsiCo’s snacks business to be a major catalyst for growth. Like Coca-Cola, the reiterated theme from PEP management was a focus on accelerating growth in developing, overseas markets since PepsiCo’s North American beverage revenue also declined. On a bright note, PepsiCo forecasted an 11-13% growth rate for core constant currency Earnings per Share for fiscal 2010. As PepsiCo hopes to complete the $7.8 billion acquisition of its two largest bottlers by the end of the month, patience will pay you with more clarity into PEP’s future numbers.

The markets are displaying heavy volume down days, an ominous sign that the recent ‘Great Recession’ bear market rally is no longer dancing, but wobbling with shaky legs. Capital preservation is never a losing a proposition during turbulent times like these.

Coke (KO) or Pepsi (PEP)? Who do you think won the battle of Super Bowl Ads?

Disclosure: No positions in the stocks mentioned.

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News Corp. (NWSA): Avatar and Ad Dollars lift the Big Media Ship

Earnings: Earned $.10 per share in the quarter ending Dec. 31st compared to a loss of $2.45 per share in the same period a year ago.

Revenue grew 10% this quarter, doubling analysts’ expectations.

News Corp. chairman and chief executive Rupert Murdoch said, “We continue to reap the benefits from the restructuring and cost containment measures we instituted before the downturn began.”

Comment: There is much anticipation surrounding the content payment model being tossed around for WSJ and other NWS properties. Rupert Murdoch reiterated that content shall have a price tag for access in the brave new world of iPads and other devices. Avatar was a tremendous success to the NWS top line this quarter. Additionally, on the conference call, Rupert Murdoch said he expects a sequel to ‘Avatar,’ which means you can expect another legendary revenue generator for NWS in the future. It might take the next decade to create the sequel, so think long-term with your NWS investment.

Polo Ralph Lauren (RL): Revenues miss; shares sink

Earnings: Earned $1.10 per share in the recent quarter compared to $1.05 per share in the same period a year ago.

Net revenue declined .6%, missing analyst expectations and further showing consumer weakness. Polo said it expects fiscal 2010 net revenue to decline by a low-single-digit rate.

Tracey Travis, CFO of Polo Ralph Lauren, said on the conference call, “Overall traffic trends in our stores remained challenging during the third quarter especially in the US.”

Comment: The trend toward online purchases continued as RalphLauren.com online sales rose 13% over the quarter. Put RL on your watchlist until the fears of unemployment are eased. No jobs = less consumers at retail.

Time Warner (TWX): A pure play content company?

Earnings: In its first release since spinning off AOL, Time Warner said it earned $.53 cents per share, compared to $.19 cents per share in the same period a year ago.

Revenue slightly rose 2% from the prior year’s quarterly revenue.

On the conference call, John Martin, CFO at Time Warner, said, “We are seeing improved trends virtually across the board.”

Comment: The company’s board raised the quarterly dividend by 13% and improved Time Warner’s ability to make stock repurchases from $1 billion to $3 billion. With the AOL spinoff, TWX flexes a leaner operation and foresight of new media adaptability (i.e. the future of Sports Illustrated: http://www.youtube.com/watch?v=ntyXvLnxyXk). Alas, both TWX and AOL can shine their true colors as separately standing entities!

Disclosure: No positions in the stocks mentioned.

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On Tuesday morning, January 19th, I spoke to CNNMoney during the pre-markets and said we were in for “somewhat of a reality check” as a slew of bank earnings reports were slated for release. The markets were at their highs for the year.

Fast forward to today, and the DOW and S&P are in negative territory for 2010, Bernanke is continuing to keep the printing presses roaring as he wins his 2nd term, Obama is calling for financial reform (broken record), and economic reports continue to disappoint (i.e. jobless claims rising and housing sales declining).

One bright spot amidst all the bad news is innovation and technology companies that are the cream-of-the-crop performers so far in 2010.

Today, I breakdown earnings from three leaders in the technology sector: Apple (AAPL), Amazon (AMZN) and Microsoft (MSFT) …

Apple (AAPL): The iPod, iMac, iPhone and now iPad. But will the iPad be a winner at $499?

Earnings Info: Earned $3.67 per share, compared to $2.50 per share in the same quarter a year ago. Analysts were expecting $2.07 per share, a huge upside surprise.

Revenue jumped 32% to $15.68 billion, beating analyst expectations of $12.06 billion.

Comment: AAPL announced record earnings — its most profitable quarter in history. AAPL beat expectations with ease on both earnings and revenues. Everyone loved the iPod, the iPhone, and iMacs. Although questions remain around the iPad, given the successful track record and hot streak that Steve Jobs has been blazing during the ‘lost decade,’ Apple should continue to impress as a media company with a best-of-breed product line that just keeps expanding.

AMZN (AMZN): The Kindle is changing the game of book consumption.

Earnings Info: Earned $.85 per share this quarter, a 71% year increase in earnings compared to the same quarter a year ago. AMZN’s earnings beating analyst estimates of $.72 for the quarter.

Revenues skyrocketed 42% to $9.5 billion from a year ago.

CEO Jeff Bezos said, “We now sell 6 Kindle Books for every 10 physical books.”

Comment: Once again, AMZN proved they are here to stay and the Kindle is altering our world during the exciting shift in the book publishing landscape. AMZN was even bold enough to raise their forward outlook expectations above analyst estimates. Be careful they don’t inflate the balloon of estimates too fast too soon. AMZN has been known to not keep up with the outlooks it puts out to market, so ideally wait for pullbacks (if possible) as buying opportunities.

MSFT (MSFT): Windows 7 creates satisfied PC enthusiasts … making up for the VISTA buzz-kill.

Earnings Info: Earned $.74 per share compared to $.47 per share in the same period a year ago. Consensus estimates among analysts were $.60 per share in the quarter, so Microsoft beat expectations.

Revenue rose 14% to $19 billion from $16.6 billion quarter-over-quarter. Revenue jumped 70% in the Windows division due to the Windows 7 launch in October ‘09.

Comment: Microsoft beat expectations on earnings, but missed on revenue growth. However, MSFT still managed to impress Wall Street with a double-digit revenue increase! MSFT said it still sees no signs of big companies increasing their spend on technology yet. MSFT is expected to release a new version of Office later this year, which will need to be a catalyst for the company as the ever-competitive Google is creeping up with improving business software.

Disclosure: No positions in the stocks mentioned.

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This week, I decided to hand pick three stocks within the restaurant sector displaying best-of-breed characteristics of expansion and growth during what was a dismal ‘09. Although other restaurants saw revenue declines, these three restaurants satisfied an increasing appetite in cities all over the country. Moreover, these restaurants proved they are off to a great start in the Next Decade.

B-Dubs: Buffalo Wild Wings (BWLD): ~$46/share

Why is there a line out the door? The demand: a great sports bar experience with chicken wings and a variety of sauces.

• BWLD sports a P/E of 28 and a Market Cap of $830 Million.
• Financial position: $52 Mill in cash and zero debt.
• Employs over 1,200 people.
• 620 stores in 41 states at the end of December ‘09 vs. 560 stores in 38 states at the end of December ‘08.

The earnings estimate is $.50/share vs. actual earnings of $.43/share the same quarter a year ago — a 16% year-over-year increase. B-Dubs’ quarterly earnings will be released February 11th, 2010.

Chipotle (CMG): ~$98/share

Why is there a line out the door? The demand: quick-service burritos, tacos, fajitas, and ‘burrito bowls’.

• CMG sports a P/E of 28 and a Market Cap of $3.11 Billion.
• Financial position: $238 million in cash and nearly zero debt on the books.
• Potential for a short squeeze if Chipotle surprises to the upside in their earnings report. As of December 31st, 2009, there is 42% short interest in the stock.
• Employs over 20,000 people.
• 911 restaurants as of the end of Q3 2009 vs. 837 stores of current restaurants in 33 states as of Dec. ‘08. In 2010, Chipotle plans to open about 120-130 new stores.

The earnings estimate is $.79/share vs. actual earnings of $.52/share the same quarter a year ago — a 52% year-over-year increase. Chipotle’s quarterly earnings report is slated to be released on Feb 8th, 2010.

Panera Bread (PNRA): ~$68/share

Why is there a line out the door? The demand: ‘fast casual’ hand-crafted breads, sandwiches, salads and drinks.

• PNRA sports a P/E of 25 and a Market Cap of $2.15 Billion.
• Financial position: $173 million in cash and zero debt.
• Employs about 10,000 people.
• 1,362 stores as of the end of Q3 2009 vs. 1,325 stores as of Dec. 30th, 2008. In 2010, Panera plans to open 80-90 new stores.

The earnings estimate is $.88/share vs. actual earnings of $.84/share the same quarter a year ago — a 5% year-over-year increase. Panera’s quarterly earnings will be released on Feb 11th, 2010.

These rising restaurants have displayed three important growth measures during the past year: increasing revenue, expanding their number of stores, and maintaining healthy balance sheets during an unhealthy economy.

Disclosure: No positions in the stocks mentioned.

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