Table of Contents

1.  Market Wrap -- Rally Picks Up Steam
2.  Himax Technologies (HIMX)
3.  Nuclear Power
4.  Recent Winners
5.  Additional Investing Ideas -- XKN, International ETFs, Foreign Paper
6.  Industry Winners/Losers
7.  Analyst Upgrades/Downgrades
8.  Earnings Calendar
9.  Financial Education -- Window dressing

Today's Top Stock Picks

This Taiwanese Manufacturer Boasts 9.7% Yield and Strong Growth Potential
This company has a commanding share of the rapidly expanding market for the computer chips that power popular electronics.  Read More. . .

Profit from the Global Nuclear Power Renaissance
A world hungry for inexpensive energy has ignited a boom in the nuclear energy industry. Capacity is expected to increase by at least +25% in the coming years. Read More. . .

Market Wrap:  Rally Picks up Steam

With tumbling crude prices deflecting lingering economic concerns, the major averages have just put together one of their strongest weekly showings in months.

Early uneven trading gave little hint of that. Traders were greeted Monday with disconcerting news from the Commerce Department that consumer spending rose just +0.6% in June -- respectable, before considering that prices for goods and services jumped +0.8%. Spending actually dipped -0.2% on an inflation-adjusted basis, even with the aid of tax rebates.

Lackluster July same-store sales tallies from Wal-Mart (NYSE: WMT) and other retailers suggest that the situation has not improved in recent weeks.

Fortunately, there was good news on other fronts. Factory orders were up, pending home sales showed a surprise uptick, and the critical service sector of the economy rebounded at a much brisker pace than expected last month. The key catalyst, though, has been the continued freefall in crude prices.

After peaking at near $150 per barrel, oil prices have retreated precipitously -- falling all the way back below $116 on Friday. There have been several factors behind the pullback: a strengthening dollar, a larger than expected build in crude stockpiles, even a benign path by Tropical Storm Edouard away from any major production facilities in the Gulf.

Whatever the reason, Wall Street has cheered the dramatic turnaround. Suddenly, market leadership has now flip-flopped, with consumer discretionary stocks racing forward and the energy sector in full retreat.

Thanks to a pair of hefty triple-digit gains, the Dow Industrials finished the week with a solid gain of more than 400 points (+3.6%), and tech stocks were even stronger.
 

Since climbing as high as $4.11 per gallon, average gas prices have slid more than $0.25 nationwide. That's a lot of quarters going back into the pockets of everyday shoppers, welcome news for a host of consumer-oriented companies -- including Himax Technologies (Nasdaq: HIMX, $3.62). As our High-Yield International editor Nick Lanyi explains below, booming sales of mobile phones, navigation systems and other electronic devices have spelled massive growth (and a hefty 9.7% yield) for this growing semiconductor manufacturer.

After that, Market Advisor editor Paul Tracy discusses just a few of the reasons why nuclear power is making a powerful comeback around the world. If you're looking for ways to plug your portfolio in to this sudden resurgence, we have a few high-voltage ideas below.

Good Investing!
 

-- Paul Tracy
Chief Investment Strategist
StreetAuthority.com

Himax Technologies (Nasdaq: HIMX, $3.62) is a leading producer of semiconductors used in flat-panel displays found in computer monitors, laptops, mobile phones, digital cameras and car navigation devices. The company is in the middle of an expansion that will allow it also to manufacture semiconductors used in flat-panel TVs.

Thanks to strong demand for flat-panel devices of all kinds, Himax's revenue has grown considerably in recent years: from US$57 million in 2002 to US$918 million in 2007. Operating income has more than tripled over the past three years. That makes Himax one of the fastest-growing semiconductor companies in the world.

In the first quarter of this year, Himax's earnings doubled and revenue rose +25% year-over-year. Its recent return on equity was 29% -- an extremely promising sign for future price performance. Successful stocks are often correlated with high returns on equity, which measures management's ability to generate a profit from its shareholders' investment.

Dividend: Himax began paying an annual dividend of $0.20 a share in 2007, and increased it by +75%, to $0.35, in 2008. But even after the increase, the payout ratio is only 50% -- the company is expected to post earnings per share of $0.70 in 2008 -- so further increases are a definite possibility.

Taiwan withholds 20% of dividends paid to foreign shareholders, but this money can be recaptured by filing for a foreign-tax credit with your federal income-tax return.

Outlook: Himax's expertise in a fast-growing field positions the company very well for long-term growth. That's especially true because the company has a reputation for innovation -- it holds hundreds of patents to its name -- and is teaming up with global multi-nationals to develop display systems.

Earlier this year, for example, Himax and 3M (NYSE: MMM) unveiled a partnership to create projection flat-panel technologies for mobile devices using Himax's LCOS microdisplay technology. This technology allows the production of high-quality images on mobile phones, TVs -- even goggles and glasses -- that Himax says is superior to LCD or plasma image quality.

And while rapid growth may slow, strong revenue and earnings increases are likely for Himax, as analysts look for global flat-panel sales to grow +25-30% annually in the coming three to five years. As well, the purchasing power of China's middle class will create a market for higher-end electronics in close proximity to Himax's manufacturing plants.

Himax's shares have fallen in recent weeks, along with those of other semiconductor makers, on concerns that the slowing economy in the U.S., Europe and Japan is curtailing demand for electronic devices. At recent prices, Himax trades at a P/E of slightly more than 5.5 -- extremely low for a company expected to grow +20% annually over the next five years. And with the stock yielding 9.7%, this is a bargain that's hard to pass up.

Action to Take --> Himax takes advantage of Taiwan's engineering and design resources to create sophisticated electronic components while manufacturing them in lower-cost areas, including mainland China. Further liberalization of economic links between Taiwan and China would facilitate Himax's business plan by lowering limitations on its ability to invest in China.

The company is respected in the business, technologically innovative and carries a strong balance sheet. And as mentioned above, its P/E is low while its yield is high.

Himax recent second-quarter earnings rose +41%, but investors punished the shares after its CEO said the third quarter would be difficult on softer consumer demand. This simply has created an even more compelling buying opportunity.  

The earliest nuclear power plants were built back in the first half of the 1950s. Early proponents predicted atomic energy would be an abundant source of cheap electricity. In fact, in 1954 the chairman of the U.S. Atomic Energy Commission, Lewis Strauss, famously stated that nuclear energy would provide power "too cheap to meter."

Utilities the world over seemed to agree with Strauss; the 1970s and early 1980s brought a building boom for nuclear power. In 1971, nuclear power accounted for about 2% of total global electricity production. By 1987 that figure was closer to 17%.

But after 1986, the construction of new plants slowed to a crawl. The primary culprit for the end of the building boom: the Chernobyl nuclear power plant accident in April 1986. In the wake of that disaster, many European countries stopped building nuclear power plants in the face of an outpouring of consumer opposition.

But atomic power is making a comeback. There are currently 439 nuclear reactors operating in 32 countries; as my chart indicates, nuclear power is the world's third-largest source of electricity behind conventional coal-fired plants and hydroelectric capacity. In some countries, nuclear is even the dominant source of power. For example, France generates nearly 80% of its electricity using atomic energy. The European Nuclear Society reports there

are 35 plants under construction globally. Seventy more are in the advanced stages of planning. Together, this is equivalent to nearly one-quarter of current capacity. A new nuclear building boom is underway.

Demand for electricity is surging globally, with most of that growth coming from fast-growing emerging markets like China and India. In fact, according to the Department of Energy, Chinese and Indian power demand is expected to nearly triple between now and 2030.

These nations (and many others) are choosing to expand their nuclear power plant capacity to meet some of that demand. China has been aggressively opening new plants in recent years and has plans to open dozens more in an effort to triple nuclear's share of electricity supply by 2030.

India has plans to open up as many as 15 plants over the next 20 years; the nation has been pursuing deals with the U.S. to import more advanced nuclear power technology. In India, nuclear power is expected to jump from 2.4% of supplied electricity today to more than 8.5% in 2030.

Russia also has plans to open as many as 40 new reactors over the next 20 years in an effort to reduce consumption of natural gas; Russia would like to earmark more of its gas for export to Europe.

And nuclear energy continues to grow in the developed world as well. France, for example, is building new plants to replace its aging fleet. Meanwhile, U.S. utilities are expected to file as many as 34 new permits for nuclear plants in the coming years.
 
Italy and Britain have recently announced plans to expand their nuclear power plant capacity and replace existing models with newer reactors. In both countries, polls have indicated that the population is turning more friendly toward nuclear power, reversing the trend witnessed in the immediate years after Chernobyl. All told, the Energy Information Administration (EIA) is looking for nuclear power consumption to rise by +43% from 2005 to 2030. And the EIA has been consistently revising its outlook for nuclear power's growth higher in recent years.

My staff and I see a few major reasons for nuclear power's resurgence:

Rising Confidence in Safety -- In the immediate aftermath of Chernobyl, many countries in Europe experienced a strong reaction against nuclear power.

But subsequent examination of the Chernobyl accident suggests the main cause was a reactor with a known defect coupled with an inexperienced operating crew. Even worse, the reactor lacked the sophisticated safety features designed to contain radiation and automatically power down a plant in danger of a meltdown.

The only nuclear accident to occur in the developed world was at Three Mile Island. But while the plant's core melted down, there were no deaths attributed to the accident, and radiation levels near the plant never increased appreciably. The plant's safety measures totally contained the risk.

Finally, the newest reactors being installed around the world incorporate advanced safety features and technologies designed to automatically shut a plant down in the event a meltdown is possible. Thus, public sentiment toward nuclear plants and safety is improving globally.

Rising Cost of Fossil Fuels -- The prices of natural gas, coal and oil have all surged in recent years, raising the cost of producing power. Most of the cost of electricity from natural-gas and coal-fired plants is attributable to the cost of the fuel itself -- as commodity prices soar, so does the cost of generating power.

The cost of nuclear power is more stable over time. The main expense is in the construction of plants -- uranium accounts for only a fraction of the cost of nuclear power. According to the World Nuclear Association, the cost of fuel, operation and maintenance for a U.S. nuclear power plant totals 1.72 cents per kilowatt hour, compared to 7.51 cents for a natural-gas plant and 2.21 for a coal-fired one. One thing to note: These statistics are based on data from 2005. The rise in gas and coal prices since that time make nuclear look even more attractive.

Environmental Concerns -- Coal is a cheap source of electricity, and coal plants are less expensive than nuclear plants to build. However, coal is also a dirty fuel that releases pollutants such as sulfur dioxide and nitrous oxide. In addition, coal-fired power plants are a major source of global carbon-dioxide emissions.

Most countries control emissions of these pollutants; over time, regulations governing these emissions have become gradually tighter. The European Union already seeks to limit carbon-dioxide emissions. Other countries, including the U.S., are likely to institute carbon-dioxide regulations in the coming years. This is a problem for coal-fired plants.

However, nuclear power plants are totally emissions free, producing no carbon dioxide, nitrous oxide or sulfur dioxide. As regulations on emissions become more stringent, nuclear power plants become more attractive leading to the potential for increased profits...